Smart Family Finance

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

September 7, 2011

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....

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...

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...

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...

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...

The Power of the Yakezie Challenge

August 31, 2011

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...

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...

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.

Biggest Corporate Social Media Fails for Every Major Medium

August 25, 2011

The job screening process of the today: Drug screening? Passed. Background check? Passed. Credit report? Passed. Social media background check? Errrr…ummmm…social media background check? We knew it was only a matter of time and that time has come. Human resource departments now have access to companies that provide social media background checks. These background checks seek out your photos, your comments and facebook updates to inform prospective employers as to what job applicants are doing on the internet playground. I’ve never wept for those who foolishly post inflammatory or inappropriate things on the internet. However, this trend in corporations becoming more interested in what employees are doing online seems a bit hypocritical. After all, some of the biggest social media mistakes come not from prospective employees, but the company’s own marketing department and I have the stories to prove it. I’ve scoured the internet to share with you the...

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.

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

August 23, 2011

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...

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 $ ...

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.

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...

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...

What the Average Family Will Spend on Vacation

August 17, 2011

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...

Fast Debt Consolidation – How Fast Can You Repay Your High Interest Debts?

August 17, 2011

The following article is a contribution from reader Jack Hudson. A number of households are drowning in an ocean of high interest debt. Juggling multiple high interest credit card bills can often become stressful and costly. With the present debt situation in the US, many are looking for fast debt consolidation services that can assist them in eliminating their debt issues. If you’re someone who is looking for ways to exterminate your debt issues, it’s high time that you take some solid steps towards eliminating your credit card balances. Although it is not possible to repay your debts as fast as you may think, there are ways in which you can facilitate your debt repayment procedure through debt consolidation. The time that you take to repay your debts will solely depend on the principal amount that you need to repay and the monthly payments that you’re making. Read on...

Summer College Benefits: Should High School Children Work Over the Summer?

August 16, 2011

1989 was the last time 60% of those aged 16-19 worked over the summer. According to the Bureau of Labor Statistics, the summer employment rate for this age group has fallen by nearly 50% as 2010 numbers indicate only a 31.3% employment rate. But, is this a bad thing? Should high school students be folding clothes at retail apparel stores and waiting tables at restaurants over their summer vacation? My initial reaction to hearing this data was to opine the ever increasing persistence of helicopter parents who simply refuse to let their children grow up. Having worked since I was 15, I’ve been an avid proponent of a “kids need to work for the summer” policy. This was until I found out that declines in summer employment have corresponded with increasing summer school enrollment. Over the same 1989-2010 time period, summer school enrollment of those 16-19 increased from 14.5%...

Successful Blog Contest by Design: Interview with Andrea of So Over Debt

August 15, 2011

This interview is part of a weekly series that publishes every Saturday. If you enjoy, please join us next week or check out past interviews. 50% of bloggers earn over $100 per year for their blogging efforts. That was the result of a survey by six-figure earning Problogger. Making a little money from blogging is easy. Smart Family Finance has already earned its first google ad check thanks to the excellent, quality readership (big thanks to you all!). 30 hits a day is all it has taken so far. However, there is a big difference between making a little money blogging and making a lot of money blogging. Blogging offers the potential to dramatically supplement or even replace your income with online writing, but it takes time and effort. It is the monumental task of the successful blogger to produce excellent content every day and then find a way...

Improve Your Financial Decision Making With These Financial Tools

August 14, 2011

Would you be willing to use a little math if it meant evaluating your financial decisions like a professional financial analyst? The only difference between you and the experts are a few concepts and a calculator. Using these financial tools will alleviate some of the difficulty in decision making, while at the same time, improving your decisions. Opportunity Cost After all that talk about math and calculators, I let you down by leading off the topics with one that does not require much math. However, opportunity cost can be useful in any financial decision. An opportunity cost is an implicit cost of foregoing one option to go with another option. A good example of a decision where this is useful is whether or not you should go to college. If your salary with only a high school diploma is $25,000, but you’d make $35,000 with a college degree; the...