Simple Money Advice For The College Student

Image via WikipediaMy wife and I just got back from taking my step-son back to college. He is starting his 3rd year and has taken a lot of my advice on how to be smart with money. I have seen many of his friends fall into the easy trap of getting into credit card debt. So far he has heeded my warnings and stayed away form credit cards.

When the student is away at school and not under the influence of mom and dad all those great lessons learned can be forgotten. A little independence can sometimes short circuit good money lessons. So before leaving for college it's good to plan ahead.

A budget is necessary for managing your money. A written budget or one done online at personal finance websites like Mint.com can help in managing a budget and also track spending. It's important to put in the budget items that money will be spent on every month. Budget items like food, entertainment, clothing, gas, and essentials. It's important to track spending to see if the amount budgeted is adequate, we don't want anyone broke by Thanksgiving.

Getting a job. There are two good reasons for getting a job while at school. The first one is that the money earned will contribute to providing necessary funds to help support the student. It shouldn't be all up to mom and dad to support junior. Also the lessons of showing up for work on a regular basis is necessary in instilling the work ethic. A job teaches the responsibility of taking care of one self. Also having a job during the summer is important to maintain the students responsibility toward his own money needs.

Saving money. Just because the student has a job it doesn't mean all that money is to be spent. Some of that money should go into a savings account for unexpected or future expenses. It is thought by some students that their money goes toward all the fun things in life and the parents money goes toward paying the students school and living expenses. This is wrong because it teaches an entitlement mentality. Connecting the lesson that work = money is a life lesson all students need to learn.

Checking and Savings accounts. Setting this up before hand is critical to setting up a ground work for spending and is essential to staying on budget. The account should be one that would allow the parents to deposit money into it as needed. It doesn't hurt to use the joint access, of a checking account, to keep an eye out on what the student is spending money on. Once you check out the spending habits of the student and see everything is working well you usually won't have to check very much. This ability to take a peek at the account will be a natural incentive to the student to stay on track because they know the parents are looking in from time to time.

Credit Cards. This is one way students can get into trouble. The excuse to have a credit card for the student is that what if there were some unforeseen emergency. With the checking account mom and dad will be able to deposit money into it if any emergency arises. Another excuse for the card is the students are told that to build your credit score you must have one. The debate, if that is true or not, can discussed another time but for the student today, they can wait for when they graduate to build their credit. There is no need for a credit score while they are in school.

But if you insist on having a credit card you do not have to have it in the students name. The parents credit card company can issue a card for the student to use if necessary. This way you can monitor it's use. If the card must be used, it can only be for emergencies and with the consultation of the parents.

With a little planning and communication the finances of the college journey can be easily planned and carried out. This can give the parents a worry free school year and the student can concentrate on their studies.

For Many Seniors Retirement May Never Come

The Wall Street Journal had a good article about how because of the the economy and small retirement savings, some seniors will never be able to retire. For many, to make ends meet, seniors are postponing their retirement or have no plans to quit working. They see their retirement accounts at a level that is to low to tap. Prices of everything continue to rise. The returns on safe investments at all time lows and prospects for higher rates of interest being low for many years to come.

Many have no choice but to continue working to pay the bills. They never saw this day coming. Most of their money is in their home and selling the home couldn't be done because of the falling prices in home sales.

This months battered market is just a reminder of how much of a hit retirement savings has taken over the last few years. With interest rates almost at zero, Treasurys and certificates of deposit provide almost no income. According to the Federal Reserve, they intend to keep rates at historical lows at least until 2013.

More than three in five U.S. workers in their 50s and 60s plan on working past 65 -- and 47% of that group say they'll do so because they'll need the money or health benefits, according to a 2011 study from the nonprofit Transamerica Center for Retirement Studies.

Is there any way make the situation better?

All you can do is just continue at your current place of work. But now more than ever you must be a better employee. You are competing with younger employees who are making less of a wage than you. They are less experienced than the older worker but when times get tough whose job will the boss cut. Even with greater experience the boss has to make the bottom line work. So you have to be more valuable than ever. You should take on more projects and work. Making yourself a valuable asset of the company will be reason to keep you over another employee.

What if I have to start over?

It's going to be tough to find work for the older worker. You have to prove yourself all over again. Try to stay in the same industry where your skills will shine the most. If you can't stay in the same industry find a place where your skills can also be used affectively. Some employers are known to hire senior citizens. AARP (aarp.org) has a directory. Search for "National Employer Team." Some temporary-employment agencies, including Kelly Services and Adecco, specialize in placing seniors.

Starting your own business.

If you continue to find yourself not earning enough from your job or finding yourself unemployed, another path you could try is starting your own business. It is possible to transfer your present jobs skill set to a self-employment plan. Also to start yourself off in the direction of a completely new trade which you have always wanted to try.

The sad truth is most seniors can't do anything about their situation. They will have to continue struggling and waiting for the federal government to help them out. That help will never come because the cupboards are bare in Washington and it will get worse before it will get better.

The 4 Ways to a Better Emergency Fund

Image by lism. via FlickrThe worst mistake people make in their journey to a better financial future is failing to create a fully funded emergency fund. Many people get into credit card trouble because when that inevitable emergency comes they have to go into debt to take care of the problem. They don't have the money to pay off their debts and the cycle repeats till they are over their heads in major debt. An emergency fund is your insurance to staying out of debt.


If you are a fan of Dave Ramsey you know his first "Baby Step" is to save up a $1,000 emergency fund before ever starting to pay off debt. That emergency fund is the number one way to be prepared for what trouble life hands you.


A rainy day fund or emergency fund is a cushion of money that keeps us afloat when times are tough but actually building one is sometimes harder than paying off debt. To get started building the fund you need a plan.


Create a Plan. The rule of thumb for an emergency fund is it must be at least three months worth of expense. So add up your mortgage or rent, utilities, food, health insurance, etc., multiply it by three, and that's your minimum goal for emergency savings. If you spend $3,000 a month, you will want to have at least $9,000 in your emergency fund. Having more than that depends on if you are self-employed or have any other issues that may affect you losing your job or any health issues. Another way to determine the size of the fund is your "sleep well" ratio. If you don't sleep well at night because your worried about a future layoff or other expense issue, maybe raise the amount of the fund till you can sleep well. It's a common indicator of satisfaction and peace.


Make it Automatic. It's hard to save money every month if you are doing manually. You may forget or be distracted by some work or family problem. It's best to make the process automatic. Set up a payrole deduction at work that adds money to you emergency fund automatically. If not at work set up an automatic transfer of money from your checking account to a savings account. It will all be simple and painless and won't be forgotten.


Where is the Right Place to Put it? It would be a good idea to put the money in a place where it could make some interest. But in today's savings environment a good place is hard to come by. The place has to be somewhere that it is completely safe and guaranteed not to lose principle. Today's low interest environment is bad for now but it may be better in the years to come. Accessibility is key for a good emergency fund.


Don't Touch it. The only real reason to access this money is for a true emergency. A true emergency is any event where you where you could not have predicted it's occurrence. It's not to fix that broken washing machine. You know that baby will someday breakdown, it doesn't qualify. An emergency fund is for a dire event not one that you are temporarily uncomfortable.

Credit card delinquency rates at a record 17 year low

Image via WikipediaCredit card users have gotten serious about their debts, this new found responsibility has driven down the credit card delinquency rate to a 17 year low of 0.6%. This according to credit reporting agency TransUnion.

"National credit card delinquency rates have fallen to levels not seen since 1994 as consumers continue to tighten their spending," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit.

              Link to TransUnion's Infographic Of State By State Delinquency

The 0.6% delinquency rate, which reflects borrowers 90 or more days past due is down from 0.74% in the prior quarter and 0.92% a year earlier. TransUnion also reported that even though the average credit card debt per borrower rose 0.42%, it still is down 5.1% as compared to one year ago.

Of all the states, Alaska, North Dakota and Iowa showed the lowest delinquency rates. The highest delinquencies were in Nevada, Georgia and Florida.

Why does Florida rank at the lower end of the scale?

Like Nevada, Florida has more of a problem with it's real estate market. Residents have found themselves more devastated by the real estate bubble bursting. With home values rising the highest and in result falling the farthest, many homeowners find themselves either in foreclosure or without a job. This explains how the average household is juggling between the paying of their mortgage or their credit cards. 

TransUnion's explanation for the falling delinquency rate is people are treating their debts more seriously and paying them off more quickly. Also lenders are more selective to who they give credit to.

Still Florida's stagnant real estate problems are a big drag on the local economy.The construction business is as important to Florida as it's tourist business which is also stumbling. Much of the population counts on these businesses for their livelihood, along with the supporting businesses. These statistics are not going to change until we can get people back to buying homes and spending money.

Florida has grown by a constant influx of people who wish to live in our great climate and vacation here. The climate is not broken just our economy. Florida is like the tail on the dog, get the country back to work and Florida will be where they spend their money.

Citi ThankYou Preferred Card $200 Bonus Review Update

The Citi ThankYou Preferred Card is offering 20,000 bonus points after making $700 in purchases within the first 3 months. The 20,000 bonus points is worth $200 in gift cards at top retailers. The card has no annual fee and it comes with 0% APR for 7 months on purchases and balance transfers.

The 20,000 bonus points, redeemable for $200 gift cards, is what caught my attention. You can easily make $700 in transactions the first month and pocket the $200 or use it for your Christmas shopping. As a bonus you get 7 months of 0% APR on balance transfers or purchases.

You can also earn points when you shop, 1 point for every $1 spent for all your purchases. Don't worry about your points expiring; as long as you make one purchase in a 12 month period they will never expire. Also earn 100 points for signing up for paperless statements and 100 points for enrolling in your online account. There is also a an Anniversary Bonus each year up to 3% which is calculated as a percentage of ThankYou Points earned from purchases during that year.

What's great is you can redeem your ThankYou points for gift cards, music, cash, electronics, etc, through the Citi ThankYou network. For a cash reward of $50 you must have 8,000 points.

There are security benefits such as $0 Fraud Liability Protection on unauthorized purchases, identity theft solutions, personal photo on card option, fraud and security protection services, lost or stolen card reporting, emergency cash or card replacement, various internet account services, and many more.

Without doubt The Citi ThankYou Preferred Card has a great $200 bonus to get you started and 7 months 0% intro APR interest. Citi also gives you retail purchase protection, price protection and extended warranty on the things you purchase. And don't forget no annual fee.

If You Can't Sell That Empty Nest, Repurpose It

Image via WikipediaI think a lot about retirement. I have been working full time in the construction business since I graduated college and I look enthusiastically toward retirement. It's still 10 to 15 years away but it's often on my mind. One part of my retirement plan is to downsize on my home. We have a fairly large home because we were raising six kids, now 3 are in college and 2 are on their own. I like the home, I like the space, and the neighborhood. But eventually we will sell just to save the money. Moving to a condo or an apartment rental isn't for me, I would like a small 3 bedroom 2 bath home, something easy to take care. If I sold my home the equity I have would be enough to pay cash on a smaller home.

I believe most people have the same goals as I do. But in todays housing market prices have dropped so low it may pay to wait. In my area the real estate market is terrible. Not many homes are for sale. When I drive through my neighborhood, I would be lucky to see a hand full of for sale signs, people are just not selling now. My neighbor had a for sale sign out for 3 months and the only offers he got were investors looking to steal the home. It's definitely a bad time to sell.

Eventually, I believe prices of homes will begin to rise. It definitely will take years at the rate we are going. So what do people do till the home makes sense to sell?

Many innovative homeowners are reinventing their homes for comfort and to save money. It's going to be a waiting game so why not be a little more comfortable. When all our kids are gone we will have 3 empty bedrooms to repurpose. I can think of a few ideas to try out.

A Home Office. My home office today is in a room barely bigger than a closet. Taking one of the empty bedrooms redecorating with a coat of paint, a few new shelves, and a nice desk would be perfect for dad. It would be a great place to get some work done. Sorting the mail and managing the home finances, or even a hobby or craft. There could be a nice open work surface, generous storage spaces, comfortable seating and ample lighting. I could eliminate the clutter and chaos of a small shared space and create a dedicated office all in one room.

A Sewing or Hobby Room. If mom likes to sew,having a dedicated sewing room will allow you layout your projects in a comfortable place. You won't have to use the kitchen or dining room table anymore. Also this could be a crafts room for the hobbiest in the family. When the grandkids come over this could be a great room to make crafts in. All the hobby equipment could be in one room with a dedicated closet containing all the paraphernalia that goes with it.

A Great TV Room. This would be great for mom or dad to have a special place only for TV viewing. A rectangular room with a nice 42" LCD panel hanging on one wall with two comfortable recliners on the other. Of course satellite or cable hooked up. Watching a nice movie with some popcorn would make a great evening. It would be easy to decorate with a fresh coat of paint and minimum furniture.

The Ultimate Guest Bedroom. Your guests won't have to sleep on the couch anymore. The decorator of the family would have a field day decorating this room for comfort. Guest would be knocking down the door to stay over night here. This is where you can go over budget to make a show room with a comfortable bed with nice bedspread and tons of pillows. Lots of wall decorations, really go all out. You won't have the kids around to mess it up. Make it a fun room.

With all this re-purposing you may decide to never sell your home, it will be so comfortable. Many people as they get older lose a spouse or special someone. Even in my family I have a couple of Aunts who have decided to share expenses. One aunt sold her home and moved in with the other. They share the home expenses. They both are saving money and the bonus is they have each other for company. There are ways to make the home you are in now work for your situation.