Are You Ready for “The Future of Retirement?”

August 23, 2012

In her blog post last week, Linda Robertson wrote about her experience at this year’s ISCEBS Employee Benefits Symposium and in particular, a presentation by former U.S. Comptroller General David Walker about “The Future of Retirement.” Walker spoke about the growing national debt and the impending insolvency of the Social Security, Medicare, and Medicaid programs. He then argued that it will take a combination of both tax increases and benefit cuts to dig our way out of the hole. To the degree that we don’t take these steps, we could see higher inflation by either the government trying to print money to cover the debt and/or investors dumping the U.S. dollar in anticipation of or reaction to a devaluation of the US dollar. So what does this all mean for us? Continue reading “Are You Ready for “The Future of Retirement?””

What To Know If You’re Considering Bankruptcy

August 16, 2012

In his blog post last week, Michael Smith wrote about a woman who was able to overcome tens of thousands of dollars in medical debt by giving up a variety of comforts, working a second job, and even having her friends host a local fund raiser on her behalf. When Michael last spoke to her, she was only 3 months away from paying off all the debt. This is a truly inspiring story about what can be achieved through sheer willpower and determination. Continue reading “What To Know If You’re Considering Bankruptcy”

The Best Cell Phone Carriers You’ve Probably Never Heard Of

August 09, 2012

A couple of months ago, I wrote a blog post titled “Is Your Cell Phone Contract Becoming Obsolete” about how you can save lots of money each month on your cell phone bill using a prepaid service. Since then, there have been several innovations that have made prepaid carriers even more attractive, especially some of the lesser known ones that you probably haven’t even heard of. If you’re thinking of breaking free from the Big Four contract carriers (Verizon, AT&T, Sprint, and T-Mobile) but aren’t sure which alternative might be best for you, here are some questions to consider: Continue reading “The Best Cell Phone Carriers You’ve Probably Never Heard Of”

What Eating the World’s Largest Lollipop Can Teach Us About Spending Money

August 02, 2012

Last week, my fellow Financial Finesse planner Michael Smith wrote a blog post titled “What the World’s Largest Lollipop Has to Do With Our Financial Problems” about how the “bigger is better” mindset can lead us down the path of debt. The problem is that a desire for growth and improvement in all areas of our life, including materially, is arguably ingrained in our culture, if not our very DNA. Don’t we always want to become more fit and healthy, more educated and knowledgeable, more liked and respected, more financially secure and yes, more materially comfortable? Continue reading “What Eating the World’s Largest Lollipop Can Teach Us About Spending Money”

Why I Don’t (Always) Hate Debt

July 26, 2012

In his blog post last week titled “Why I Hate Credit Scores,” my colleague Michael Smith wrote about his aversion to debt and why he wants to get to a point where he doesn’t care about his credit score. I generally agree. Debt can really get people (as well as businesses and governments) into a lot of trouble. We see that all the time in the people we help. That being said, I don’t think all debt is bad debt. Instead, I would argue that there are circumstances where debt can be a good thing. Continue reading “Why I Don’t (Always) Hate Debt”

Should You “Ditch Your Retirement Plan?”

July 19, 2012

I’ve written before about the Early Retirement Extreme concept, in which people save as much as 75% of their after-tax income in order to become financially independent in as little as 5 years. I recently came across a post in Forbes called Why You Need to Ditch Your Retirement Plan that was surprisingly written by another financial planner who argues essentially the opposite: that people should stop worrying about saving for retirement and enjoy life now. That could mean taking a lower paying job that you like more or working fewer hours, even if it means saving less and retiring later. He points out that working longer wouldn’t be so bad if you love what you’re doing. Continue reading “Should You “Ditch Your Retirement Plan?””

Is the iPad Really Worth It or Just a Waste of Money?

July 05, 2012

I write a lot in this blog about ways to save money and live frugally. However, I do have to admit that I have a weakness for technological gadgets (this is one area where analysis paralysis actually works in my favor by stopping me from buying a lot of things I’m tempted to buy). Yet despite this, I’ve never bought an iPad or one of its many would-be competitors. Frankly, I just don’t get it. Continue reading “Is the iPad Really Worth It or Just a Waste of Money?”

Painless Ways to Pay off High Interest Debt

June 28, 2012

Are you struggling with credit card debt? If so, you’re not alone. Paying off credit cards and other higher interest debt is one of the most common goals that people try to save for. Unfortunately, having to pay off a large amount of debt with ridiculously high interest rates can make you feel hopeless, especially if your budget is already stretched. But it turns out that you don’t necessarily need to make huge sacrifices to become debt free much sooner than you may have thought was possible. Continue reading “Painless Ways to Pay off High Interest Debt”

Is it the Right Time to Buy a Home?

June 21, 2012

With both home prices and mortgage rates still near historic lows, is now the right to buy a home? That’s a question many would-be first time home buyers are asking themselves, myself included. For most of the first few years of my career, I was working on a full-commission basis and my unstable income and need to maintain a large savings account balance made me reluctant to commit to the upfront costs and monthly mortgage payments associated with home ownership. By the time my income was more stable, I was living in NYC, where buying just didn’t make sense to me, and then I was in law school with barely any income at all. As a result, I missed both the rise and the collapse of the real estate bubble. Continue reading “Is it the Right Time to Buy a Home?”

Is Your Cell Phone Contract Becoming Obsolete?

June 14, 2012

Back in January, I wrote a post about ways to save money on your phone bill. One of the things I mentioned was using a much cheaper prepaid cell phone plan instead of a more expensive contract with one of the big 4 carriers: Verizon, AT&T, Sprint, and T-Mobile. A lot of the prepaid plans actually use the same network as one of the big 4 so you’re essentially getting the same coverage for a lower price and with the flexibility of not being tied into a contract. Continue reading “Is Your Cell Phone Contract Becoming Obsolete?”

Want to Make Better Financial Choices? Know Thy Future Self

June 07, 2012

In his last two blog posts, my colleague Michael Smith wrote about two young guys in their early 20’s who are earning about the same amount of money but making very different choices about what to do with it. One is living frugally so he can save for emergencies and a down payment on a home and contribute 15% of his income to his 401(k). He is on track to have a home with no mortgage and $1 million in his 401(k) by age 50. Continue reading “Want to Make Better Financial Choices? Know Thy Future Self”

Why I Didn’t Invest in Facebook

May 31, 2012

No, it’s not because I’m a Facebook hater. In fact, I think I’m one of the few Facebook users who actually really likes Facebook (yes, even the timeline). I wish I could say that I anticipated the company’s weakened growth forecast but it’s not that either. Nor is it because I necessarily think that the growing shift to mobile will turn Facebook into the next MySpace. The reason I didn’t buy Facebook stock is because I simply don’t buy any individual stocks. Period. Continue reading “Why I Didn’t Invest in Facebook”

Which Credit Cards Give You the Most Bang For Your Buck?

May 24, 2012

After a recent workshop, someone asked me if I use credit cards. She seemed genuinely surprised when I said yes.  Credit cards are like fire. If you misuse them, you can get really burned. But if you use them responsibly by paying off the balance in full and on time (you can have the balance automatically deducted from your checking account so it acts like a debit card), you can earn lots of benefits. These come in the form of everything from straight cash to airline miles to some very strange and unique perks like adult band camp and weightless flight.

Personally, my favorite is cash because of the flexibility it offers. Other rewards too often tempt you to get something you don’t really need instead of saving money. The trick to maximizing your cash back is to pick the right card for each kind of purchase. While there are lots of sites that rank the “top” rewards cards, I’ve found that they usually don’t have the cards with the best offers since they’re generally limited to those that pay or share revenues to be on the site. (In that sense, they’re kind of like commissioned stockbrokers.) Here are the best credit cards I’ve found to earn cash back on each kind of purchase:

Gas and Groceries

These are two expenses that we’ve seen rising in price lately. You can at least get some of that money back with the Pentagon Federal Credit Union Visa Platinum rewards card. The card gives 5% cash back on gas purchases, 3% on groceries, and 1% on everything else. Even if you’re not a Pentagon employee, you can become a member of the credit union by signing up with one of a number of affiliated civilian organizations.

Food and Entertainment

The Citi Forward® Visa card provides 5% back (in the form of cash or reward points) on purchases from restaurants (including fast food), bookstores, music stores, video rental stores, and movie theaters. You also get additional points every billing period that you pay on time and stay within your credit limit.

Rotating categories

The Chase Freedom Visa pays 5% cash back on categories of purchases that rotate every 3 months and 1% on everything else. That means you have to keep track of the changing categories to get the most from it. For example, right now the bonus categories are grocery stores and movie theaters until the end of June.

General Purchases

For everything else, there’s the Fidelity Investment Rewards American Express card, which deposits cash equal to 2% of your purchases into a Fidelity brokerage account with no limits or annual fees. You can also get cards that deposit into a Fidelity 529 or retirement account if you prefer. (In any case, having it deposited into any of those investment accounts has the additional advantage of discouraging you from wasting it.) This is the highest general cash back offer I’ve seen so it’s probably the best card for making purchases that aren’t covered by one of the above categories.

Cash back isn’t the only reward you can get with credit cards. Here are a few others that can have a high cash value for certain types of users:

Future GM car buyers

If your next car will be from GM, you may want to consider the GM Mastercard, which offers a 5% rebate on purchases towards a new GM car. Of course, you have to actually want to buy a GM car to make this card worth it. Otherwise, it doesn’t make much sense.

Frequent hotel guests

The Starwood Preferred Guest American Express card won last year’s SmarterTravel® award for “Best Traveler Rewards Card” and is often cited by travel aficionados for a rewards program that can be worth more than 5% if redeemed for hotel rooms.

Future college students and their friends and family members

The Upromise World Mastercard can pay up to 3% on eligible online purchases and 11% on eligible grocery purchases. The catch is that you need a Upromise account since that that is where the money is deposited and you must shop from their list of eligible merchants to earn rewards. You can also have the money go to the Upromise account of a friend or family member.

I’m sure this list isn’t exhaustive. Do you know any other credit cards with rewards over 2% in cash value? (If it’s less than 2%, you might as well go with one of the Fidelity cards I started with.) If so, let us know about them in the comment section below.

Who’s More Frugal? Me vs. Mr. Extreme Saver

May 17, 2012

Last week, one of our guest bloggers, Mr. Extreme Saver posted a great blog post about how he is able to live in NYC on only a $1k a month of spending. That got me thinking. A lot of spending consists of “trying to keep up with the Joneses.” But what if instead of competing on how much we can spend (which is a lose-lose scenario), we were to compete on how little we spend? Here is my budget and how I stack up to Mr. Extreme Saver: Continue reading “Who’s More Frugal? Me vs. Mr. Extreme Saver”

Is Graduate School a Good Investment?

May 10, 2012

Are you or someone you know thinking about going back to school? If so, you’re not alone. With the job market still weak, more and more people are wondering if it makes sense to go to grad school as a way to make themselves more employable. Continue reading “Is Graduate School a Good Investment?”

How Much is Your Financial Advisor Costing You?

April 12, 2012

When a friend of mine recently told me that she had a financial advisor, I asked her how much he was charging her. At first, she didn’t think he was charging her anything. When she realized that he probably wasn’t helping her out of the goodness of his heart, she acknowledged that she had no idea how or what she was paying him and didn’t remember him ever discussing this with her. Continue reading “How Much is Your Financial Advisor Costing You?”

Is Your Debit Card Putting You at Risk? What to Watch Out For

April 05, 2012

I recently read this Forbes article called “Why You Should Never Use Debit Cards.” One of my rules of thumb is that you should never say never (including now so it’s actually that you should rarely say never). However, the article makes a good point. The idea is that fraud protections are much weaker for debit cards than credit cards. That’s because if you dispute a charge on a credit card, you don’t have to pay it until the investigation is over. If the bank determines that the charge was indeed fraudulent, you may not need to pay anything at all. Continue reading “Is Your Debit Card Putting You at Risk? What to Watch Out For”

5 Financial Rules You May Need to Break

March 15, 2012

There are certain guidelines that we financial planners tell people to help keep them out of trouble. Most of the time, they’re right on. But there’s almost always an exception to the general rule. Here are some of those rules, why they usually make sense, and when they might not. Continue reading “5 Financial Rules You May Need to Break”