MyMoneyMinute.com

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

We paid off our car!

It is definitely tough economic times out there for everyone, so I wanted to share a bit of positive news on the home front.

While the Lovely Miss H has permanent employment, I have been working in project-based, temporary employment.  The bad news is that it is temporary.  The good news is I can work nearly as many hours as I want.  So the past few months I’ve worked a lot of hours.  I finally figured out how much we had spent compared to our February budget, and the surplus was enough to finish paying off my wife’s car, a 2004 Saab 9-3.  I just logged off of an internet chat with a bank representative confirming we had paid in full, and that the title will be mailed within 10 business days!

Consumer debt is gone

Just want to send a small thank you to Dave Ramsey and his debt snowball methodology.  Yes, there may be mathematical flaws within a particular snowball of debt, but the psychology of “quick wins” in reducing debt cannot be denied, particularly when you’re married and you need two people to consent to a financial plan!

After 26 months, through full employment & layoffs, over-spending & saving, emergencies & good times, our consumer debt is now gone.  We haven’t been the best at paying down our bills, but we remained true to the overall goals & financial principles.

So now you’re rich, right?

No, far from it!  We’ve got so much educational debt, that I think our student loans took out student loans.  A married couple both going through college and grad school without a financial plan will do that to you!

Our next step is to build up an Emergency Fund to a reasonable level.  My car has 185,000 miles on it, hers is over 100,000.  We both commute about 75 miles round-trip each day.  We will need those replaced at some point, so I’d like to be ready with enough money to pay cash for our vehicles.  Now that our vehicles are paid off though, it makes me want to drive my lovely 2000 Nissan Maxima until it dies.  Instead of impressing people with a nice car, I’ll be impressing myself with how long this car can stay around.  This shift in thinking is much easier on the pocketbook.

The Journey Continues

There are always hiccups, bumps, and bruises along the way, but we will enjoy this minor victory, and use it as motivation to keep focused on our long-term goals.

What about you?  Have you had any financial victories or setbacks lately?  Tell me where you are in your journey.

Follow Me on Twitter!!

photo by dreamweaver1619

Personal Finance baby emergency fund, Budget, Cars, consumer debt, dave ramsey, debt, emergency fund, snowball

This is quite a Thursday-Friday-Saturday combination of events.  Thursday was the 200th birthday of both Abraham Lincoln and Charles Darwin.  Today is Friday the 13th.  Saturday is Valentine’s Day.  Let’s get a personal finance quick-hit on each!

Abraham Lincoln:  Preserve the Union

Lincoln knew that ultimately for the nation to succeed, the Union and it’s ideals needed to be preserved at all costs.  In his judgment, both the Civil War and Reconstruction of the South were necessary to move forward.  Nearly 150 years later, our Union remains solid.

In our own lives, we have many trials.  Money mistakes, family break-ups, fights, competition, recessions — they all take their toll.  Take Lincoln’s advice and preserve your ideals.  What fundamentals are  you willing to fight for to preservation of your financial Union? Is it preserving your marriage by communicating on money issues with your spouse?  Paying down debt to enable you to weather the storms that lay-offs and recessions bring?  The tenants of your faith which prompt you to help those in need?  Teaching your children financial responsibility so the fundamentals of your Union are passed on to the next generation?

Charles Darwin:  Survival of the Fittest

Darwin was instrumental in documenting the theory of natural selection.   Favorable traits are passed on as a need for survival, while unfavorable traits die off as they can’t compete.  We don’t need to have a debate on the theory of evolution to take away one huge concept:  the world is vastly changing, and we need to adapt or we’ll be left behind.

So what are ways you are adapting to survive in these tough economic times? In our household, I do contract work, so I’m working as many hours as I can to bank up money.  These project-based jobs do not last forever, and who knows when another will come up?  With the sacrifice of longer hours comes extra income, which we can use to pay off debts, build an emergency fund, and overall reduce risk to our household should our household income take a hit.

Americans are saving more.  It seems that with this credit crunch crisis, we’re getting back to the basics of getting rich slow, building wealth moderately, and saving money.  Get prepared — put aside those unfavorable traits and survive!

Friday the 13th — my 13th Post!

Well it’s my 13th post, and it falls on Friday the 13th!  I wish I could take credit for the stunning coincidence, but I can’t.    So is having a 13th post on Friday the 13th the digital equivalent to crossing the path of a black cat, breaking a mirror, or stepping on a crack?  Stick around and find out!

Do you have any superstitions?  Share them in the comments below!

Valentine’s Day

Yes, I made that heading red on purpose

With the big day of romance tomorrow, the pressure is on.  Do you have anything planned for Valentine’s Day?

Actually, the Lovely Miss H is taking a few single friends out to hang with tomorrow.  She’s a great friend, isn’t she?  Also a great wife, because I’m off the hook for coming up with plans!  We’ll have dinner out tonight and keep it low-key.  Besides, every day is Valentine’s Day with me, right H?

Any Valentine’s Day plans?  Do you feel like your significant other places unhealthy expectations on this holiday?

photos by:

chainedreactions

CATR

Zanastardust

geishaboy500

Personal Finance darwin, emergency fund, friday the 13th, fundamentals, lincoln, superstition

I posted an article over the weekend, so today I’ll give you a few links to check out instead of a detailed post.  Hope your Monday is off to a solid start!

Links

My article asking How Would You Invest the Economic Stimulus Portfolio was included in the 191st Carnival of Personal Finance.  Thanks to Brooke at Dollar Frugal for the inclusion!

Bargaineering has a great article with tips on satisfying requirements for high-interest checking accounts.

Michael James Money shares what he learned about money from poker.  Read the comments too — great discussion and insight!

Scordo debates the strategy of using a HELOC as an Emergency Fund.  Personally, I think using debt to bail you out of a financial mess is not the first option I’d pursue; but read the article and contribute to the discussion — on my page or Scordo’s!

Hope your week is off to a great start!

Photo by lizjones112

Links O' The Week carnival, checking, emergency fund, HELOC, poker, stimulus

Pet Emergency

Odie, a 2 year-old runt of a mutt, is our youngest of three dogs.  Earlier this week, he began to refuse food and not hold it down when he did manage to eat a bit.  Tuesday’s trip to the vet resulted in a few prescriptions, but not any diagnosis of the problem.

Yesterday, with Odie still rarely eating, and having dropped about 5 of his 33 pounds, we took a 2nd trip to the vet.  Bloodwork was done that eliminated pancreatitis.  Then, after two x-rays, they found an obstruction in his intestine.  The vet said it was probably a hard piece of plastic, or possibly a piece of metal.  Odie had swallowed the object, it had traveled through the stomach, but was lodged in the intestine on the way out.  The only way to retrieve the obstruction was to perform a surgery called a gastrotomy.

Odie’s gastrotomy surgery was yesterday afternoon.  The vet said it went well.  Oh, and the obstruction blocking his intestine?  A SOCK.  Not a hard plastic, not a piece of metal, a SOCK; apparently one that’s 12-18 inches long too!  I guess our lovable mutt skipped over the smaller ankle socks and went straight for the quality threads.

Odie is staying the night at the vet, resting comfortably, and we hope he makes a speedy recovery without any complications.

Life Happens

All this stress with Odie reminds me that life happens, and we can’t control when we will have emergencies.  Kids break arms, cars break down, and funerals happen three states away.

While we can’t prevent emergencies, we can do our part to plan for them.  WHEN (not IF) emergencies will happen, we need to be prepared.  An adequate Emergency Fund has 3 to 6 month’s worth of your household expenses.  We all know this is a down economy and we’re battling through a recession.  But even if you don’t yet have an adequately-funded Emergency Fund, anything is better than nothing!  It’s never too late to start — do what you can to put aside some money to help WHEN the bad times strike.  This will help you avoid credit card debt or medical bills, which drag you down with monthly payments.

Diversifying our Emergency Portfolio

Luckily in our situation, we have a few options to help cover the costs of Odie’s sock surgery:

• Any extra money remaining at the end of the month that would have been applied to our debt snowball.
• A line-item in our monthly budget for our dogs’ medical care.  Any remaining balance each month carries over to the next (kind of like cell phone “rollover” minutes), which helps us build a dog medical fund for annual check-ups and emergencies like this one.
• Stopping our debt snowball payment for a month and applying it to our vet bill.
• A $1,000 “baby” Emergency Fund.

Do you have a crazy pet story?

What options do you use to prevent debt accumulation when emergencies happen?

Pets, emergency fund baby emergency fund, Budget, debt snowball, emergency fund, Pets

It’s never too late to be who you might have been.

George Eliot – English novelist (1819 – 1880)

The New Year has come and gone.  The world keeps on moving.  Headlines depict stories of airplanes landing in the Hudson and presidential inaugurations, and they provide us with fuzzy memories of those resolutions we vowed to uphold oh so long ago.  What, if anything, can we do about it?  Here are some tips & thoughts on New Years Resolutions.

The Bad News

Resolutions alone do not work!

All a “resolution” does is merely promise to do something.  It is a declaration of intent; or a statement that you resolve to act upon something.   Especially when coupled with the New Year, resolutions are almost wishful thinking from the start if you examine a person’s attitudes — and I’m as guilty as the next guy!  Here’s some typical New Years resolutions (with their corresponding underlying motivation included):

• I really should quit smoking; I know it’s bad for my health.
• I need to lose some weight and eat healthier.
• I need to start working out.
• I gotta get a handle on these bills and start saving for retirement.
• I’d like to spend less time at work & more time with my family.

The Good News

You will succeed if you create a Plan to follow through with your resolution.

A resolution identifies your wishes.   A plan adds integrity to your words by providing a detailed course of action.  A good plan will keep you on track and give you a sense of purpose.

Tips for Setting Goals

Like others, I advocate setting S.M.A.R.T. goals, where your goals are:

• Specific — be particular about what exactly you want to accomplish
  
• Measurable — make it something that you can tangibly evaluate.  Give yourself check-points or building blocks that you can use as markers of success.
  
• Attainable — (see below)
  
• Realistic — similar to Attainable, make it something within reach.  If a goal is too lofty to begin with, you will quit because you don’t give yourself the psychological boost of accomplishment.
  
• Time-based — set a time by which you accomplish your goal; a goal with an open-ended time frame will put you back at “resolution” status.
  

However, I would alter the “A” to stand for Accountability.  When setting goals, accountability is key.  If you’re married, a spouse is the perfect accountability partner for your household finances.  Working out with a buddy is a great way to stick with your fitness goals.

My Financial Goals for 2009

In discussing this year’s overall financial outlook with The Lovely Miss H, we’ve come up with a few financial goals we hope to attain and we have a plan for success:

1.  Pay off H’s Car Loan

Back in 2006, we bought a 2004 Saab 9-3 on eBay (a post for another day!).  With an expected bonus, the remainder of this note will be paid off no later than February!  This is personally exciting to me, because this will be the final consumer debt remaining on our snowball.  Only student loans to go!

S.M.A.R.T. approved

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.

S.M.A.R.T. approved

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’re about to pay 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.

S.M.A.R.T. approved

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.

S.M.A.R.T. approved

5.  Begin saving for future car

I drive a 2001 Nissan Maxima with 180,000 miles on it.  It’s been a decent car for me, but eventually we will need to replace it.  In order to avoid getting back into car payments, we need to start saving.  Unfortunately, this remains in the “resolution” department, because no specific time-frame has been put on this goal.  Just proves that even us cool kids on the Internet aren’t perfect either!

NOT S.M.A.R.T. approved

It’s Never Too Late!

The beauty of the New Year is that it makes a great marker on the calendar to begin anew.  But like the quote above says, it is never too late to get started!  If you have a Plan that puts integrity to your Resolution, any day is a great day to start!
What are your experiences with New Years Resolutions?

Personal Finance consumer debt, debt, emergency fund, goals, new year, resolution, S.M.A.R.T., student loan