Monday, 04 January 2010
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Personal Finance Tips You Don't Always Hear About
Wisebread.com had a great article last year with 5 personal finance tips that usually get left out among the usual advise of start an emergency fund, set a budget and tracking your spending. While the post is from January 2009, it's been making the rounds online again and the information is just as useful now as it was then.
So in addition to the financial basics we talk about all the time, the writers at Wisebread want to remind us of a few things. The headings and basic ideas are theirs, but we've added some of our own input as well:
- Save For Your Child's Education Now: Granted, we don't all have children, but for those that do, the cost of a college education is never going to get cheaper, so the sooner you invest in something like a tax-free 529 college savings account, the easier things will be down the road.
- Get Your Own Education: I know paying for school can be expensive, but we've all heard those numbers by now that drive home how much more money you'll make with a college degree than with a high school degree. But the post is quick to point out that additional education just mean going back to college. It can also be taking random courses in your community that teach a new skill or improve one you already have. Computer skills are particularly important nowadays, and it's never too late to learn your way around one. Community colleges and local libraries are great resources for classes like these.
- Skip the Extended Warranties: The bottom line is that most of your products will come with a warranty, whether its 90 days or 3 years, and if the product is going to break, it'll most likely happen during that time. Just make sure you buy quality products and you can skip padding the stores' pockets by buying the extended warranties.
- Question Your Loyalty: Consumers tend to build up loyalty to various technological service providers, from cable companies to internet and mobile service providers. It can be something of a hassle, but keep an eye on your plan and what's out there. The changes are good that you're paying way more than you need to just by staying with one company. This is especially true with cell phone companies and their rapidly shifting service plans. Make sure you're still paying for what you need.
- Prioritize Your Health: Try to make sure you have appropriate health insurance coverage because medical bills can hit your savings hard and fast. Whether that means an employer-provided plan or finding one on your own. And remember, just because a plan is cheapest, doesn't mean it's the best for you. Really pay attention to what is covered and chose what's best for your lifestyle. After all, if you aren't healthy and kicking, what's the use of having a bunch of money saved up?
What are some financial tips you practice that doesn't get much publicity? Do you have any you'd add to this list? Have you had success following the tips listed here?
You can check out the original article here: http://www.wisebread.com/5-personal-finance-tips-you-dont-always-hear-about
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Comments (19)
Good points.
The one exception I've experienced in my life: My mac laptop. I purcahsed a macbook pro, which came with something like a 6 month warranty, but for $200 extra I could get it extended to 2 years, where they would replace any part that broke, no questions asked. Let me tell you, this saved me about $2000 overall from replacement parts. I've heard from friends with similar stories. I'd call this extended warranty totally worthwhile.
@PixelDOT@xanga - that makes me never want to buy a Mac! They are expensive to begin with and to know that they often have problems like that makes me wonder how long they will stay popular!
@der_lila_Stern@xanga - exactly. but i will play both sides. if you aren't really computer savvy, and you have a reasonably expensive computer (mac or pc), i'd go for a reasonable warranty plan. But if you know your way around a computer, you can basically skip the warranty and fix it yourself--and most of the time upgrade the parts.
My mother suggested I start a savings account for my future children's college fund.
Even if I don't end up using it for their college, I could use it for something else like my wedding or my first home.
I'm not planning on giving birth for another seven years, but I think her suggesting that is stemming from the withering
funds we have for my own current college education- she doesn't want me to be in the same position when I have children.
Also, the continuing studies program at my college has 1,000 more applicants than last year. People are realizing how much
an education can benefit their careers and are enrolling in night and online classes.
interest on credit card > interest from savings... unless you're debt free, ignore the advice to save.
@snowandstarstone@xanga - LOL.. i completely agree. Its really strange how people really think they have a "savings account" when they carry debt (any debt..car loan, school, credit card.)
I know it isn't much, but any loose change I find in my pockets, at the bottom of my purse, or even when I'm cleaning the apartment, I put in a glass, one gallon jar.
Also, I have what's called a "vacation account." This particular account is a savings account, and I can make as many deposits as I want. However, I can only make four withdrawals per year. The limited withdrawals and access I have to my savings account, [I don't have a credit/debit/ATM card] really forces me to think about what I'm purchasing, and whether or not it's really worth taking out of my savings account...
I love video games, and I'm very much a gamer, but as any and every gamer knows, new releases run about 60 bucks a pop. Waiting for the price to go down is generally a good idea, because you could save yourself 20-30 dollars.
Another good idea is renting games, too. I know gamefly.com is a lot like netflix, but with video games.
Another suggestion I can make too, is those membership cards that certain stores carry. They're not necessarily credit cards or anything like that; you apply for the card, and every time you make a purchase you get a small discount. I know Electronics Boutique has one. Sam Goody has one too, and Sam Goody is in association with Suncoast, so that's two stores with one card. At least, that's how it used to be...
I can't really think of anything else right now.
I know some people that save cans and turn them in for a few dollars...
Have automatic deductions every month come out of your checking account into your savings account. That way you pay yourself first, as they say.
@der_lila_Stern@xanga - Yeah, I won't lie, the hardware is shody work. Everything, from the lock keeping the laptop shut to the entire logic board has broken. I often joke that I have a franken-laptop, because it's made up of bits from other computers, I don't think anything but the keyboard plate is original anymore.
But I will say that I've had it for nearly 3 years, and it still runs as fast as the day I got it, despite having no virus protection or malware watches, I have had 0 viruses. So it does well there.
@HachiR0ku@xanga - there are times when you can pay less on a car loan especially than the interest you earn with it in a savings account. That has been true for my husbands loan. So there are times that taking a loan actually makes more sense than paying cash for things!
@PixelDOT@xanga - we have a PC that we have had for approximately the same length of time. We did have an issue with the screen dying - but that was within the original warranty period. It is the only time I have heard of anything like that happening. We have had no other issues with it. So I think in general, the system on all computers is good. It is mostly a matter of what you do with it and how much crap you keep on it that you dont need!
@der_lila_Stern@xanga - and i agree because there are special promotions of 0% interest and no down payment for certain months, but this is often the case for "domestic cars" only. (ford, gmc, chevy etc)... Hence, that is WHY america's auto industry is in the gutter and many are going bankrupt (saturn, pontiac etc). Overall, if a person is capable of making timely payments and complete the repayment of the loan within the given timeframe, then yes, taking a car loan is reasonable. But i can't help be pessimistic because america's auto industry is totally destroyed, and this is one of the main reasons (taking car loans that are never honored).
@HachiR0ku@xanga - A lot of the advertisements you are thinking of are for leases. That is a whole different ball game than purchasing a car. And as far as which car manufacturers you can get those kinds of loans from? My husband drives a Honda. You can also get them for Kias or luxury cars such as Lexus. The details of loans are just advertised less because they push leases - the dealers make a LOT more money that way. Those loans have nothing to do with why the car manufacturers where in trouble.
My point was that for personal finances - since that is what this blog was about - having a loan isnt always the worst option. It is all a game. You have to look at what the end number will be from all of your resources.
@der_lila_Stern@xanga - no, i was specifically referring to promotional offers that domestic car manufactures were 'handing out'. ie: 0% interest loans. You don't see them anymore because of the reason i already stated, the companies are in huge debts. But to elaborate and fortify your post, i agree, SOME car loans can be classified as "good debt" IF the % of interest is reasonable (anything below 3%). For your husband, he may have had good credit, coupled with a promotional APR of 1-2.5% interest, which in car loan terms, is great, especially for foreign cars. As for luxury brand cars, particularly imports...I will surely say, there has never been, nor will there ever be 0% interest on car loans.
Still, car loans are generally referred to as "Bad Debt"...unless you have 0-2% APR.
@HachiR0ku@xanga - I must be hallucinating then, because I do still see those types of loans advertised. Constantly.
What, then, would you classify as 'good debt'?
@der_lila_Stern@xanga - you probably do see those ads, and by those ads i'm referring to are the "lease ads" that you are referring to. but the 0% interest on CAR LOANS? i don't think so, but maybe for domestic cars. And a good debt is a home mortgage. And yes, it may sound ironic because that's why america's economy is in the gutter because of it, but its good debt because its for 30 years (fixed.. not adjustable rates) and is tax deductible.
I agree with saving for your child's education now. I'm 18 years old and struggling to figure out how I'm going to pay for college. My parents just put off making a savings account, it just never happened for us. I would start the minute you plan on having children. Small amounts over 18 years can really add up. While your kid is young, put all birthday and Christmas money into the account or even a piggy bank. If you collect loose change for yourself, I would put half of all the loose change I found into the piggy bank. When it's full, put it into the savings account. I keep a small mason jar of change that fills up every month or so and I hardly ever have less and $10 in it. Can you imagine how much change you would accumulate over your child's life? At this point, every little bit counts.
Donate your eggs? LOL
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