Frugality is a Means, Not an End

September 15, 2011

I’ve been remodeling the second floor of my house for three years now. If I had some sage wisdom for someone starting out from scratch it would be that the right tool can save you time and headaches. That’s why I’ve convinced my wife to let me purchase and build up some tools of my own through the process. I haven’t gone crazy, but I’ve purchased a few things that I use constantly, like a miter saw and a nail gun. They’ve paid off in saved time and resulted in better quality workmanship. I like my tools. I like that they make me feel all manly and that I know how to use them to build something that may outlast me, but those cool tools that I’ve bought pale in comparison to how much I’m going to enjoy and cherish the remodeled second floor. I know this sounds a...

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Why This is Smart Family Finance; Not Simple Family Finance

September 14, 2011

  In many ways, I work against finance simplification, but for good reason. Nearly a week ago, Eric J.Nisall of DollarVersity said something to me in a comment that was prolific and resulted in a lot of rethinking about this blog. He had done a post about the housing market crash and as is my custom, I flashed some of my favorite academic research on the subject. He replied: I learned a long time ago, if you put things in simple terms, it’s easier for people to comprehend and right now, people need basic knowledge more than complicated formulas, terminology, and industry ramblings. More than “needing,” I realized that most personal finance blog readers “want” and are looking for finance simplification, because finance is all very, very complicated. I’ve been toying with the idea of writing an ebook for families facing the age-old “should, where, how to go to...

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Frugal Tips That Don’t Save You Money

September 9, 2011

This is a guest post written by Corey at 20′s Finances. He writes about personal finances for those who want to save money and also gives suggestions to plan for the future. Do you want creative ways to save money? Do you think you have mastered the technique of frugal living? If so, this post is just for you. If you look closely at common ways to save money, you will find that several tips don’t actually save you money. Find out which ones are costing you more. It Happened to Me… It was just last week that I was enjoying the cookies-n-creme ice cream from my homemade ice cream maker. If you have never made home made ice cream before, you are missing out! My wife and I got this ice cream maker as a gift for this past Christmas and absolutely love it! Immediately when I got...

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Are You Ready to Be Your 20-Something’s Financial Advisor?

September 8, 2011

Like it or not, parents; you’ve got the job! PNC Bank’s recent study on 20-Something’s financial independence revealed an interesting statistic. Parents were listed as the most common source of financial information for 20-somethings. On average, 34% of 20-Somethings relied on their parents for financial information as opposed to 7% who relied on financial advisors. In fact, parents were more likely to be a trusted source of financial advice than banks, financial advisors and friends put together. You’ve tackled role model, CEO and finance manager for years, are you ready to add financial advisor to your list of family job responsibilities? Today, Krant Cents noted the attention personal finance classes have received in the wake of the Great Recession and the shortcomings of relying on those classes for financial education. I’ve covered the need for parental involvement myself. However, parents seem lukewarm when it comes to filling the role....

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Georgetown Study: What are the Odds of a High School Graduate Out-Earning Someone With a College Degree?

September 7, 2011
Georgetown Study: What are the Odds of a High School Graduate Out-Earning Someone With a College Degree?

For those that choose not to go to college, the odds are worse than a roll of a die. In high school, when I tried to talk a close friend into going to college, he informed me that “(name redacted) doesn’t have a college degree and she’s making tons of money!” At the time, I brushed the comment aside and assumed my friend was in denial. However, I do know several people who have never gone to college and make a very good living.We know this can’t be the norm, so what are the odds of a high school graduate out-earning someone with a college degree? There is an answer to this question, although as a college graduate, I vastly underestimated high school graduates. Georgetown did a study called “The College Payoff” which analyzed how education level affects income and provided the chart below to show the odds of one education level out-earning another....

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How Do You Plan to Send Your Children to College?

September 6, 2011

…Or more specifically, how do you strike that delicate balance of providing financial support for college so that your child can take advantage of opportunities without encouraging irresponsibility? My education and professional finance experience guides me competently through most aspects of family finances. But, how to appropriately arrange to send my children to college is one plan still tenuously un-finalized. I’m certain that I want to at least provide some sort of support, so I’ve started 529 plans for my youngest and eldest tax deductions. What confounds me is how much do I want to contribute? Without a goal in mind, saving is extremely difficult. Here are some of the considerations that keep me from making a decision: Would a Free Education Encourage Poor Career Planning? Only 54% of those that start a four-year degree attain that degree in six years. On average, college students spend only 3.6 hours...

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Easy Online Contests: Win an iPad, an Amazon Gift Card, an 8×10 Canvas Photo and an Apple TV by Commenting on Blogs

September 6, 2011

Sometimes the planets in the blogiverse align and provide a number of opportunities for you to win lots of good stuff. Right now is one of those times! As I pointed out a few weeks ago, running free contests can be a great way to drive traffic to your blog. That’s why personal finance bloggers regularly offer free stuff for little more than commenting on a blog, liking on facebook, tweeting and RSS subscriptions. While I have yet to win one of these contests, I’m confident that my luck will soon change, because right now there are bunch of contests running at the same time. Life and My Finances Life and My Finances is turning one year old and celebrating its blogiversary by giving away a plethora of excellent prizes. The top prize being an iPad 2. Here’s a list of the other 9 items offered: 2) Win a...

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Homemade Toys: 4 Purchases You Should Avoid Buying for Your Children

September 2, 2011

Why do you purchase things? Some reasonable answers to this question would be that you lack the knowledge, expertise or time to build or make a product. But, then there things that we purchase because we are ignorant to the fact we possess skill, knowledge and time. Unfortunately, Play-Doh is one of those purchases. Developed in the 1950’s to clean wallpaper, Play-Doh exploded as a child toy sensation when marketers realized it could be used as modeling clay. Since then, Hasboro has sold nearly 2 billion cans of Play-Doh. But, the classy, artsy clay of my youth comes at a steep price for any family trying to maintain a reasonable budget. Four and a half pounds of Play-Doh sells for $13.54 at Walmart. It also can be made in about ten minutes, using four common household ingredients and for less than $1. Recipe: 2 cups flour 2 cups warm...

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Avoid Paying Taxes on Savings Bonds Using Tax Strategies

September 2, 2011

I and EE might sound like gibberish, but they are official names…for a savings bond. Buy them or receive them as gifts, you should know that these are unusual investments that have uncommon tax options. Some of these tax considerations can be leveraged using tax avoiding or shifting strategies. That is correct! I said avoid taxes, which is very different than evade taxes. Avoiding taxes occurs when you legally take advantage of tax rules in order to lower your tax liability. Evade taxes is the illegal process of subverting the law. Tax shifting is when you defer or shift taxes to other entities or tax periods. Ways to Record Interest Income for a Savings Bond Federal savings bonds are only taxable at the federal level and are exempt from state and local income taxes. However, the federal government has two ways to record the interest income. You can either...

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The Power of the Yakezie Challenge

August 31, 2011
The Power of the Yakezie Challenge

Yakezie is the most effective blogging community in the blogiverse. I don’t make that statement lightly. Yakezie is a powerful tool in the hands of a newbie personal finance blogger, which is why I’m taking up the Yakezie Challenge. The Brilliance of Yakezie Yakezie is all about Alexa. Alexa is a website ranking system driven by how many visitors with an Alexa toolbar visit a given site. These rankings are noticed and respected by media and bloggers alike. That’s why Yakezie members and challengers work together improve their rankings. While Alexa is universally recognized as a useful ranking system, the system has a serious flaw. Websites with a great deal of Alexa traffic can easily outrank sites that have much larger volume of overall hit counts. For example, I write for two political blogs that earn between 1 and 2 million hits a year and their Alexia rankings are...

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Saveaholics Anonymous: Cash Hoarding Would Be the Other Major Spending Problem to Avoid

August 30, 2011

If the personal finance blog author is honest, you’ll always find two versions of financial remorse bleeding from their narratives. One type is the shame, guilt and consequence of indulging in finance irresponsibility; being counted among the multitude who have heeded the siren call of spending and accumulation of stuff. The other, more subtle regret, is turning from the call of spending to the seductive illusion of control found in over-saving. The reality of these two spending extremes has not gone unnoticed in science. The NY Times reported on a spending study conducted on buyer’s and saver’s remorse: Splurging on a vacation or a pair of shoes or a plasma television can produce an immediate case of buyer’s remorse, but that feeling isn’t permanent, according to Ran Kivetz of Columbia University and Anat Keinan of Harvard. In one study, these consumer psychologists asked college students how they felt about...

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Margins for Wine Sold in Restaurants

August 27, 2011

My latest article at the Houston Chronicle Small Business section deals with the spread between costs and beverage profits when alcoholic drinks are sold at restaurants. I cover how to calculate gross margins, but more importantly, what factors will drive gross margins on alcohol sales up or down. For example, price demand and costs. If you have any interests in selling alcohol in restaurants, you should give the article a quick read.

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Why Gross Margins Differ Between Industries

August 24, 2011

Every industry faces a different challenge with regards to consumer, their suppliers and costs to acquire or make goods. As a result, gross margins can vary greatly from industry to industry. I tackle the concept of gross margins, what are the key business factors in driving gross margins and which industries have a higher gross margin in my latest article published at the Houston Chronicle.

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Sick of Credit Card Offers, Opt Out! Phone solicitations too!

August 23, 2011
Sick of Credit Card Offers, Opt Out! Phone solicitations too!

gggggrrrrrrrrrhhhhhhhaaaaaaaaaawwwwwwwwaaaaaaaahhhhhhhhhrrrrrrrrrrrrummm. That is my best impression of my paper shredder, which is working overtime ever since I started cleaning up the mail. I can’t count the number of offers I get for Chase Freedom, or Capital One, or American Express. These offers are more than annoying, there are a number of ways in which they are costly. They Take Up My Time The last time I responded to a credit card solicitation is never. I will never reply, and never will, because if I’m going to apply for a new credit card, I’m going to research and search out the card that is right for me. Since I find offers useless, they are nothing more than a nuisance that must be destroyed before they clutter my house. They Could Be a Temptation So, I’ll never respond to a credit card solicitation. But, they must be effective for attracting someone’s...

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What’s the Average Family Budget?

August 22, 2011

Even professional football players need to budget. There is no x-amount of dollars in income you can earn that will one day alleviate the task. The easy part is totaling how much money there is to spend. The inevitable question is: now what? A good starting place is to see what other families are doing; leading me into another one of my trademark “average family articles” that are so popular with google. We can guess at the average family budget by looking at the 2009 Bureau of Labor Statistics report on household consumption. Cleaning up the mess of numbers for you (because I’m magnanimous like that), you’ll find the same report below, but expenses are arranged from largest percent of the family budget to smallest: Expense  Annual Amount % of Budget Income before taxes  $  62,857.00   Total Expenses (i.e. likely after tax income)  $  49,068.00   Housing  $ ...

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Is a Career as a Wedding Dress Consultant Right for You?

August 21, 2011

I love being able to write about a vast array of business and personal finance topis at the Houston Chronicle Small Business site. Please check out my latest article about the average pay for a wedding dress consultant. Thanks to Kleinfeld Bridal and Say Yes to The Dress, I’m sure there are many people interested in getting into wedding dress consulting. However, unless you are working for Kleinfeld, you probably won’t make as must as you’d hoped.

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What’s the Average Cost of a Camping Trip: Plus, Tips for Saving Money on Your Camping Trip

August 19, 2011

Bug spray, deodorant and coffee, these are my staples when it comes to staying the night in the great outdoors. Clearly I’m not much of a lumberjack-mountain man, but I’m cautiously optimistic about my camping trip this weekend. I think my daughter is going to have a great time and who doesn’t love a campfire? But, just because I’m not much of a nature lover doesn’t mean I can’t put my money blog talents to work. With the pending trip, I’m wondering, just how much the average family spends on a camping trip and what frugal ideas can I come up with to save an extra dime? I spent some time asking the Google Oracle “what does the average family spend on a camping trip.” I didn’t find my usual, well-rounded statistics, but I found some numbers and a possible estimation for you. According to USA Tourist, it costs...

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Back to School Taxes: What can be deducted?

August 18, 2011

Families will spend, on average, $68.8 billion buying supplies for grade school and college. With so much money being spent on the inevitable return to school. Is there anything that can be deducted? Forbes focused on some of the common questions surrounding what back to school expenses are deductible: School uniforms are not deductible, no matter how ugly they are. The IRS does not allow deductions for school uniforms, even if required, for public or private schools. The cost of private school is not deductible. This includes both traditional private and parochial schools though exceptions apply in some circumstances such as for special needs children and when it serves as child care (see #3 immediately below). The cost of private kindergarten – and some upper grades for students up to the age of 13 – may be deductible. Okay, I know I just said that the cost of private...

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What the Average Family Will Spend on Vacation

August 17, 2011
What the Average Family Will Spend on Vacation

So long as my wife keeps me away from the firewood, we should have no problem with the campfire this weekend. It’s been a long time since my family has taken a camping vacation and I can’t wait to see what my daughter things about it. If everything goes well, the food will be great, the fire warm and no one will be eaten alive by mosquitoes. But, before we head off into the wilderness, I was wondering what the average family spends on a vacation? The Bureau of Labor Statistics has a number and it’s $1,415 or 3% of a family’s annual expenses. Of the family travel budget, 44% is spent on transportation, 23% on food and beverages, 23% on lodging and 10% on entertainment. Below is one of those graphs my economics degree has taught me to love so much. If you were to break down the...

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