Archive for the ‘Personal Finance Coaching’ category

Budgeting get a 30% raise

January 17th, 2011
Various Federal Reserve Notes, c.1995. Only th...
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When I started using a budget I thought it was going to be a huge sacrifice.

Turns out it was like getting a 30% raise.  I have heard the same thing over and over again from my personal finance clients too.

I decided to look at why this is true.  What I found is that when we spend unconsciously we spend a lot of money and have no idea where it went.

When we have a written budget we are spending consciously and not wasting money on unconscious spending.

Thus it feels like getting a huge raise.

It’s been reported that that nearly 98% of companies surveyed in a recent compensation survey said they plan to give raises in 2011.

That’s the good news.  The bad news is that the average raise will amount to about $38 per paycheck if you make $50,000 per year.

The choice is yours; a 2.8% raise or a 30% raise.

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Debt it can be avoided

January 17th, 2011
Toyota Cavalier
Image by Hugo90 via Flickr

Is debt really ‘Tricky”?

A recent blog post I was reading at called auto debt “tricky”.

Saying that financial planners agree that you shouldn’t borrow money to buy things that go down in value, BUT…it just can’t be avoided.  After all who can afford to pay cash for a new car?

Yes new cars are expensive.  And you don’t need a new car.  A good used car will do just fine and they don’t depreciate like new cars.

Here is my advice as a personal finance coach: Pay cash for your car.  Even if it means driving a POS for awhile. My wife and I bought a Toyota Camry with about 100,000 miles on it for $6,000.

Better yet, if available, use a car sharing service like Zipcar so that you don’t have to pay for car insurance and maintenance. When you need to go on a long road trip rent a car. Put the miles on the rental car.

Some day when you are financially independent you can buy the new car of your dreams.  Till them, be like the Millionaire Next Door and drive a used car.

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Personal Finance Advice: get off the credit card treadmill

January 17th, 2011
Johnson T7000 Treadmill @ TaiSPO 2006.
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The last thing that someone who is struggling financially needs is more debt.

And yet credit card offers to subprime borrowers are back. reports that credit card offers to borrowers with less than perfect credit are up 300% since June 2010.

These credit card offers carry an average interest rate of 20% and an average annual fee of $39.  You can stop credit card offers by following the advice of the FTC.

As a personal finance coach my advice is to get off the credit card treadmill.  Start using a debit card and cash.

There is nothing you can’t do with a debt card that you can do with a credit card…except get into debt.

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