Broke Piggy

What Should I Do Before I Buy A Car?

Grant Baldwin — Tue, 17 Nov 2009 22:00:17 +0000

Thinking of buying a car? It can be an exciting time. But buying a car is also a huge investment. Before you commit, check out these tips to make the most of your time and money.

Research, research, research – Once you’ve determined the general type of car that fits your lifestyle and budget, take the time to find the makers and models that represent the best buys. Which car has better gas mileage? Better maintenance records? Convenient service hours? Better trade in values? Websites like Edmunds.com and KBB.com can help you sort through these details, including average costs for new and used cars. Local libraries will have copies of Consumer Reports’ car buying guides.

Prepare, prepare, prepare – In my opinion, the only way to buy a car is to pay cash for it. That may mean that you can’t get the car you want right now, but it does mean that you’re going to avoid going into debt for a vehicle that will go down in value. Buy a car that you can afford, but then continue to save up, so that once you have a more shekels in the bank, you can continue to move up to the car that you really want.

Drive, drive, drive – Even though you’ve found the virtual dream make and model, it’s essential to drive the actual car. Is there enough leg and headroom? Is the seat high enough? Are the buttons and gadgets in logical places? Is the car responsive? Is there anything that just doesn’t feel right to you? Remember, you may be driving this car every day for years—know what you’re willing to compromise on.

By preparing for this purchase well, you’ll know when you’ve gotten a good deal, and can drive away happy.

YOUR 2 CENTS – What other questions do you have about buying a car?

Can I Use My Savings Account The Same Way I Use My Checking Account?

Grant Baldwin — Mon, 16 Nov 2009 21:00:59 +0000

This is a great question. Many adults don’t even know there are major differences between checking and savings accounts.

Checking accounts are known as deposit accounts. This means money can be moved into and out of these accounts as many times as you want. Well almost, you can only take out money as long as there is money in the checking account. There generally are no limits on the ways money can move into and out of a checking account either.

When it comes to savings accounts there are federal limitations at play. Savings accounts are not deposit accounts. The purpose of a savings account is to hold money so it can earn interest over time. As a result the Fed uses regulation D to limit the types and frequency of transactions that can occur on a savings account.

You can still make deposits and withdrawals from your savings account. In fact, you can make as many deposits and withdrawals as you’d like at the teller window or at an ATM. Unfortunately, this freedom stops there.

You are limited to only six electronic transactions per statement cycle and only three of those can be used to pay or receive money from a third party. Even transfers between your checking and savings are limited by this rule. If you go over the six transaction limit, your bank can either freeze your account or charge you a fee for each additional transaction.

Best advice: Plan your transfers from checking to savings in advance to avoid account holds and fees.

Is There An Easy Way To Create A Budget If I Don’t Have Online Banking?

Grant Baldwin — Fri, 13 Nov 2009 22:00:16 +0000

Good question. While sites like Mint.com are a godsend for those who have online banking, it leaves the rest without such privileges out in the cold. Don’t worry MS Excel has your back.

MS Excel has budget templates that allow you to manually enter in your income and expenses. The best part is that these templates do all of the math for you.

Go to http://office.microsoft.com, select “Templates” and search for “budget”. There are different types of budget templates you can choose from. Just pick the one that fits your needs best and download it.

If you have MS Excel 2007 just click on the Office button, select “New”, and select budget from the templates section. These templates are the same Excel templates found online, this is just an easy way to access them. Choose the one that fits you best and download it.

A good template for teens to use is the Bi-Weekly Budget template especially if your after school and summer jobs pay every other week. For teens who just entered into college the College Budget template may work best for you as it includes tuition, rent, lab fees and other college expenses you will need to keep track of.

These templates give you a better feel of how to create a budget manually – that is if you really want to – and your account details are not shared with a third party.

Is There A Free Online Budget Site I Can Use?

Grant Baldwin — Thu, 12 Nov 2009 21:00:15 +0000

While there are plenty of online budgeting tools available, the biggest and probably the best would be Mint.com.

Mint.com is a free personal finance tool that helps you manage your checking and savings accounts, along with investments, credit card accounts and student loans. The one prerequisite is that you need to be signed up for online banking with your bank to use Mint.com.

Signing up is easy:
1. Provide your e-mail address
2. Zip code
3. Create a password
4. Agree to the terms of service
5. Enter your banks name or url
6. Login to your online banking account using Mint.com’s secure login.
7. Mint.com will pull up your accounts with that bank and banking history.
8. If you have more banks you can repeat steps 5 thru 6

Once you have entered in all of your banking information you can update your profile or go to your overview page. This is where you will see all of the accounts you entered along with your net totals for each institution. The best feature of this site is that it tracks your spending habits and creates a budget for you based upon the average deposits made to the account the average amount spent on categories like shopping, dining out, groceries, gas, etc.

Based upon your transaction history Mint.com breaks down a budget for how much to spend in each category. The grey area of this site is for checks written. You will need to manually enter in the check information such as what the check was for and categorize it. If you want to increase or decrease your budget amounts for certain categories you can always edit them.

So if making a budget isn’t your thing, let Mint.com do the work for you.

Am I Ready For A Credit Card?

Grant Baldwin — Wed, 11 Nov 2009 21:00:55 +0000

Having a credit card is a big responsibility, and truth be told, it’s not wise for everyone to have one. Some people are more disciplined than others and would be committed to paying off a credit card balance each month to prevent receiving penalties and fees. Others people…not so much.

So, how do you know if YOU are ready for a credit card? This is something you can figure out for yourself by answering a few questions.

Do I have a steady flow of money coming my way? The best way to secure a steady flow of money is via a job. If you maintain a part time job during the school year and take on full time hours during the summer, then your cash flow is steady. Babysitting every now and then is not steady.

Do I spend wisely? Are you the type to plan out how your money will be spent (aka a budget) or are you more of a free spirit with your money? If you’re a wild spender, a credit card will be a pain in the butt to you.
Are you responsible and organized? If your parents give you a curfew, are you home on time? When you get a homework assignment, do you turn it in on time? The more responsible and organized you are, the more likely you’re ready to handle a credit card.

If you can honestly answer YES to all three questions then you may be ready for a credit card.

Keep in mind that credit cards are a form of debt, meaning you are using borrowed funds to make a purchase when you use a credit card. As a result, you will have to repay the money you borrowed. So if you do not have steady money coming, are prone to over extend yourself with spending and are generally unorganized and irresponsible, then you probably are not ready for a credit card.

Contract or Prepaid: Which Cell Phone Plan is Best?

Grant Baldwin — Tue, 10 Nov 2009 20:00:22 +0000

Let me first say that neither plan is better or worse on its own. The best plan is the one that fits your finances and lifestyle the best. Let’s break each type of plan down so you can determine which is appropriate for you.

Contract or Agreement Plans
Cons

You are obligated to fulfill either 1- or 2-year wireless agreement. If you cancel before the term ends, you may be charged a hefty cancellation fee.
If you do not pay your bill for 2 to 3 consecutive months your service will be disconnected.
Late payments are reported to the major credit reporting agencies

Pros

Most contract plans offer the latest phone model for free when you enter into a wireless contract for typically a 2 year term.
Free activation generally comes with new contracts.
You do not pay a bill until the next billing cycle arrives
Most plans offer free in-network calling.
You can add additional lines and wireless broadband service.

Prepaid Plans
Cons

You have to pay for your phone (and thus may not get as nice of a phone as you’d like).
You may be charged for activating or reactivating your service.
You pay for service before you use it.
Typically you are charged for every call made and received along with data usage and every text message sent.
If you do not prepay for month of service or refill your minutes you will be disconnected.

Pros

You are under no obligation to keep service.
If you don’t pay for a month or refill your account, it will not be reported against your credit.
You only pay for what you use with most prepaid plans.

YOUR 2 CENTS – What’s your preference?

How Can I Make More Time For Myself?

Grant Baldwin — Mon, 09 Nov 2009 22:00:05 +0000

Have you met the time vampire? It sucks essential time out of your schedule, leaving you scrambling to get things done. Here are some of the time vampire’s favorite ways to make you waste time, giving you less opportunity to do what you really want.

Disorganized time. You know your class schedule, but have you really planned when you’re going to study for your econ test? When is that study session the teacher is having? It’s often too hard to remember everything, so it’s essential to write down all of your scheduling commitments. By planning it out, you’ll know how much time you’ll need to study and whether you’ll have time to go out for pizza afterwards.

Interruptions. Email, texting, Facebook, technology, etc. Yes, we love it too. But stopping to answer every message that comes in while trying to write a lab report is just plain inefficient. Instead, set aside specific times for email, IM, phone calls, Facebook and other types of technology interactions. But for right now, get that paper finished.

Multitasking. For years we’ve heard the praises of doing several things at once. But for some people, that may actually make the tasks take longer. Try single tasking—doing one thing at a time—getting that done, then moving to the next.

Losing stuff. How much time do you spend looking for a document you thought you had in your backpack before you went to your group meeting, but must have left in your room? How often do you spend time looking for your car keys? Try putting the things you need in a reliable place. Hang up your keys on a hook on the wall, every time. Backup your documents or use tools like Google docs so your paper will be accessible from any computer.

By spending a little time upfront, you can increase your savings later.

YOUR 2 CENTS – Can you share any time saving tips that have been valuable for you?

How Does A Teenager Create A Budget?

How Can I Save Money On Food And Eat Healthy At The Same Time?

Grant Baldwin — Fri, 06 Nov 2009 22:00:36 +0000

What’s for dinner?

Sure, you could grab fast food or pizza, but if you want to save money and calories, there’s a smarter way: preparing your own food. While it takes a little planning and time to shop and cook, think of the time you’ll save in the gym later, not having work off those extra junk food pounds.

If you’re making most of your own meals, here are some tips:

1. Plan your week’s menu ahead of time. Look for coupons and sales in the newspaper, and make your list based on what’s marked down. Make sure it’s something you’ll actually eat, or it will just go to waste. See if there’s a food co-op in your town, where you can get food even cheaper. Farmer’s Markets often have choice selections of produce much cheaper than your local grocery store. For meal planning, my wife and I personally use E-Mealz.com and highly recommend it.

2. Buy in bulk if you have room and if you’ll actually use the items before they expire. Twelve rolls of toilet tissue—yes. Four loaves of bread for just you—no.

3. Make a recipe book of 15 no fail, easy recipes and rotate them over a three-week period. Look for ones that call for 5 ingredients or less, and that have some similar ingredients (i.e. pasta with a variety sauces). Recipe sites like allrecipes.com have tons of suggestions.

4. While being thrifty, don’t forget to stock up on fruits and vegetables. Although a bunch of bananas may be more expensive than a candy bar, it’s worth the nutritional investment.

5. When things get crazy, simplify: breakfast for dinner can be as easy as cereal, milk and fruit, or a peanut butter and banana sandwich on whole grain bread.

Try to fix dinner at least five nights a week. Both your wallet and your waistline will thank you.

How Do I Decide Which Bills To Pay If I Don’t Have Enough Money?

Grant Baldwin — Thu, 05 Nov 2009 22:00:27 +0000

Sometimes, despite our best efforts, our bills add up to more than we have. Although it’s tempting to ignore the problem, that will only cause more difficulty. Here are some tips on how to handle this short-term emergency.

1. Make a list of every payment owed, when it is due, how much is owed and any interest rate and any late fee charges.

2. Looking at your list, decide which bill collectors are most likely to come after you first? Typically rent, mortgage and auto payments have little leeway for lateness. Credit card companies may charge exorbitant late fees, but a cycle or two may pass before your information is turned over to a collection agency.

3. Look at your list again. Which creditors can take away an essential that you need? Landlords can evict you. Banks can repossess your car. Utility companies can turn off the heat. Cable companies can disconnect your line.

When you look at # 2 and # 3, you can see that paying the debt for your absolute essentials and to the people who are most likely to come after you first (which often intersects), would be the smartest start.

4. Contact your creditors. Explain the situation and when you expect it to be resolved. Try to negotiate for more time to pay, or for smaller installments. While you still may end up paying penalties, you are showing responsibility and a willingness to make things right. Even so, your credit record may be affected by late or non-payments.

And once those bills are all paid? Make a realistic budget and start a rainy day savings fund so you never have to sweat over this again.

If I’m In Middle School, Do I Need A Checking Account?

Grant Baldwin — Wed, 04 Nov 2009 22:00:01 +0000

I was thinking it would be cool if I got a Checking Account. Now, I’m only 14, but do you think that I should have a checking account? Do you think at my age I could be responsible with one? – Stephanie

This is a great question not just for students but for parents, since ultimately they are the ones who will have to help you set up the account. Let’s basically cover 3 parts to the question: need, responsibility, and setting it up.

The only real need for a checking account is if you have two sides to the equation…income and expenses. The amounts for either don’t matter. So even if you get $10 a week as an allowance and occasionally spend a few bucks at the mall, a checking account is worth having. But if you don’t have an income (job, allowance, selling your sister on eBay, etc) and you don’t have any expenses, you really don’t have a need for a checking account.

So assuming you do need one, then you have to determine if you can keep up with it. You and your parents have to decide if you’re responsible enough to handle it. Someday when my daughters are your age, I’ll allow them to have a checking account under a couple of conditions.

It’s their responsibility. I’ll help them and support them, but it’s their account, not mine. Meaning if they need to make a deposit, let me know and I’ll happily take you to the bank. It’s their responsibility to keep track of how much is in that account and if they spend more than what’s in there and have overdraft fees, remember what we established: it’s their account, not mine. Now I don’t want to sound like some mean, jerk-face dad, and I’ll definitely give them all the help they need, but they have to learn to be responsible with that account if they want to have one.

So assuming you need one, are responsible to keep up it, then you need to actually set it up. I’d recommend just setting up an account at your parent’s bank. You can probably get a free checking account with a debit card and no minimum balance requirements. Because you are under 18, your parents will need to sign some of the account paperwork as well.