Who Can Invest in Hedge Funds and Hedge Fund-Like Alternatives?

For the beginner investor, hedge funds can be very intimidating.  Hedge funds are basically a lump sum of money from many investors that gets invested into securities or other investments in hopes of getting positive returns.  The hedge fund can also be described as a “private partnership” between different individual investors that is managed by an individual person (i.e. a money manager).  Hedge funds are set up this way so that in the event the company in which the investments lie goes bankrupt, collectors can’t go after the individual investors for money.

Who can invest in hedge funds?

Investing in hedge funds is no simple task.  It is certainly something that requires a lot of prior research before jumping in head first.

In general, there are a few different ways you can invest in hedge funds, many of which are going to require that you have a lot of assets or a large income in order to invest.

The Accredited Investor

First, most of the time, if you want to invest in hedge funds you need to become an accredited investor.  According to the U.S. Securities and Exchange Commission, an accredited investor is one who:

• …“earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the two prior years, and reasonably expects the same for the current year” …OR…
• …”has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence)”.

In addition to individuals that met these criteria, other entities that can become accredited investors are banks, partnerships, corporations, nonprofits, and trusts. In order for any of these entities to be considered accredited investors, they must fulfill these criteria:

• …”any trust, with total assets in excess of $5 million, not formed to specifically purchase the subject securities, whose purchase is directed by a sophisticated person”….OR…
• …”any entity in which all the equity owners are accredited investors”.

Note: A “sophisticated person” is basically someone that is highly knowledgeable about investing and about the company in which the investors are putting their hedge funds.

Aside from becoming an accredited investor, you still might not be able to get your hands dirty with hedge fund investing.  For example, hedge fund partners can allow whoever they want into their “circle”, so even if you’re an accredited investor, they can easily say “no”.

Also, even if you meet the requirements to become an accredited investor, you still might not meet the minimum requirements for specific hedge funds themselves.  Some require a $100,000 minimum, which if you become an accredited investor you obviously fulfill, but some hedge funds require upwards of a $25 million minimum investment, so if that’s the hedge fund you want, you won’t be able to invest if you don’t have those kinds of funds.

Hedge Funds For The Not-So-Super-Rich

For the longest time, hedge funds were only available to those with significant funds or assets as described above.  However, in the more recent past, other opportunities to invest in hedge fund-like programs have become available for people who may not have the significant cash flow as tradition requires.

Now, these opportunities are not true hedge funds by SEC definition, however, for those people wishing to invest in hedge funds but simply can’t since they don’t qualify to become accredited investors, these similar programs may be a good way to increase their net worth so that one day they may qualify.

Alternative Mutual Funds

Dubbed “Hedge Fund Lite” by the Wall Street Journal and many others, these alternative mutual funds are probably as good as it gets for those people wanting to invest in hedge funds but can’t due to lack of funds.  Similar to hedge fund strategies, these alternative mutual funds use long/short investing strategies.  They allow you to invest in individual stocks that are “going up” and profit from individual stocks that are “going down”.

While these “hedge fund lite” programs don’t require the high performance fees that hedge funds do, they do require annual management fees that can reach upwards of 4% of your assets.

Replicating Returns

Sometimes called “liquid beta” or “replication funds”, replicating returns programs are another way for individuals to invest in a similar manner as hedge funds without requiring the massive income as assets as required for accredited investors.

These “liquid beta” fund programs try to follow a similar path as hedge fund benchmarks by “’backtest[ing]’ their portfolios of stocks, bonds, currencies, and other assets…until they approximately copy the trailing returns of the average hedge fund as tracked by research firms” (Source: WSJ).

Copycat Investing

Copycat investing is basically a way for non-hedge fund investors to act like hedge fund investors.  With copycat investing, you in essence are shadowing the investing behavior of real hedge fund investors and trying to move investments the way you see them moving their investments.  One issue here becomes is that once you get the information regarding what the real hedge fund investors did, it may be too late for you to perform the same action, thus potentially putting your assets in jeopardy of going bye-bye.

Conclusions

Unless you meet the requirement of becoming an accredited investor, which means you have to have a very large income and assets, you can’t truly invest in hedge funds.  However, there are some similar types of investment strategies like the ones briefly described above, that can allow people without significant sums of money to invest in similar hedge fund-like manners.

8 Ways to Get a Free College Education Even If Obama’s Free Community College Proposal Fails

The following post is by MPFJ staff writer, Melissa Batai.  Melissa is a freelance writer who covers topics ranging from personal finance to business to organics to food.  She blogs at Mom’s Plans where she shares her family’s journey to healthier living and paying down debt.

If you’ve been to college, you know how expensive it can be.  I graduated from college 20 years ago, and even with a scholarship that paid all of my tuition and fees at a community college for two years AND generous grants when I transferred to a four year institution, I still, after graduate school, left college with $20,000 in student loan debt.  It took me 13 years to pay off that debt.

Now, college is even more expensive, and, unfortunately, out of reach for many perspective college students.  In his recent State of the Union address, President Obama said that he wants every student to have access to a free, two year community college education providing that they maintain at least a 2.5 GPA and take at least a half-time load of classes.

Most experts don’t think this will happen.

Even if it doesn’t, there are still ways that you can get your education for free or at a greatly discounted price.  Keep in mind, not all of these tips are simple, but they all do help you reach the end goal of a low-cost education.

Take advantage of a “Promise” opportunity  

Many locations are now offering free college tuition.  For instance, the Kalamazoo Promise offers all Kalamazoo, Michigan school graduates who reside in the district of Kalamazoo County a free college education at a Michigan college or university.  The student must have graduated from a Kalamazoo district high school and must maintain at least a 2.0 GPA in college.  The amount of tuition received is prorated based on the number of years a student attended a Kalamazoo public school.  (If the student only attended a Kalamazoo high school, he’ll receive 65% of his tuition paid.  If he attended K-12, he’ll receive 100% free tuition.)

However, Kalamazoo isn’t the only place offering this type of promise.  All El Dorado High School students in Arkansas are offered tuition in a program very similar to Kalamazoo’s.  In addition, there is the Pittsburgh Promise.  (CollegeSavings.com).

Sometimes an entire state offers free tuition including West Virginia and Tennessee.  What’s interesting about Tennessee’s Promise is that homeschool students are also eligible.

Become a resident of the state first

If you have your heart set on attending an out-of-state college, there are ways to overcome the high cost of out-of-state tuition.  If you’re willing to delay starting college, you can move to the state after high school and get a job.  Most states require that you live and work in the state for a year before being considered a resident for college application purposes.  After you’ve met the year requirement, apply for college.  If you’re accepted, you will only pay in-state tuition.

Work at the college you want to attend first

Another option is to work at the school that you want to attend.  Many colleges offer tuition discounts to employees.  If you work full-time at the college or university, you may be able to get your tuition for free.

Of course, you’ll still be working full-time while getting your degree, so you likely won’t finish in four year.  You may take as many as eight years to complete your degree, yet when you have it, you will likely be debt free.

Another option is to have a parent work at the university or college so that she can get free tuition for her dependents.  My husband is currently employed at a university, and our plan is for our children to attend the university that he works at so they can get their tuition for free.  Of course, our kids can decide to attend a different university, but we won’t be able to help them much financially.

Take advantage of employer-based tuition programs

Another option is to work for an employer that will help pay for your college education.  For instance, if you’re an elementary school teacher with a bachelor’s degree, your employer likely will help you pay for a master’s degree.  There are also many employers who will help their employees pay for a bachelor’s degree.

Consider an honors scholarship to a community college

There are many, many community colleges that offer honors scholarships.  I, myself, received one when I attended a community college.  I had to have an interview, write an essay, complete an application, and submit my transcript and ACT/SAT scores.  I was awarded free tuition for two years, which helped me financially.  I hate to think how much more I would have had in student loans if I hadn’t been accepted to this program.

Being in the program gave me the opportunity to take smaller honors classes with a lower student-to-teacher ratio.  In addition, the program, along with my GPA at the community college, helped me transfer to a top university in my state.

Apply for scholarships

You may think it’s not worthwhile applying for scholarships because you don’t have a 4.0 or higher GPA.  However, there are many scholarships available, and not all of them are based on grades alone.

You may be surprised how quickly the scholarships can add up, even if they are only for small amounts.  “One mother forced her daughter to apply for two scholarships every day as if it were her job.  She didn’t have great grades, but kept sending applications in—winning enough to pay for the first three years of college alone” (America’s Money Smart Family).

Attend a free college

Yep, you read that right.  There are free colleges out there.  Some of them include:

• College of the Ozarks,
• Berea College,
• Curtis Institute of Music,
• Alice Lloyd College,
• Webb Institute,
• Deep Springs College,
• United States Military Academy,
• United States Coast Guard Academy,
• United States Naval Academy,
• United States Air Force Academy,
• United States Merchant Marine Academy (US News).

As you may guess, admission to these colleges is highly competitive.

In addition, the old adage “Nothing in life is free” does apply to these schools.  For many of the colleges, students are required to work on campus 10 to 15 hours a week.  In addition, there are sometimes residency restrictions.  For instance, Alice Lloyd College only offers free tuition to students who live in the Central Appalachian service area.

Finally, those who get a free ride to the United States military academies must also serve in the military after graduation.

Join the military

If you are interested in the military but can’t get into one of the elite military academies, you can choose to join the military and, as a perk, benefit from tuition discounts or even free tuition.  How much you receive and when depends on many factors.

Another option is to join the military after you complete college.  The Army, Navy, and Air Force all have plans to help you pay off your loans.  For instance, “in the full-time-duty Army, soldiers can qualify to have their loans repaid by the Military at the rate of one-third of the loan for each year of full-time duty served (maximum loan repayment is $65,000)” (Today’s Military).

Even though, in 2012, 7 out of 10 students graduated with loan debt averaging $29,400 (The Institute for College Access and Success), it doesn’t have to be this way.  If you’re willing to compromise on your college choice and take a non-traditional path to college, you CAN graduate without college debt, regardless of the passage of Obama’s free community college tuition.

How about you all? How do you plan to, or how did you, keep your own college costs low?

Share your experiences by commenting below! 

***Photo courtesy of http://pixabay.com/en/dartmouth-college-campus-school-292587/

What Cars Hold Up Best Against Depreciation?

Have you ever wondered why it is that a new car loses (depreciates) 30% of it’s resale value the minute that you drive it off of the new car lot? I mean, after all, the car still has that new car smell, right?! 🙂

Well, it all comes down to the idea that some people take better care of their car than others, and new car buyers are simply willing to pay much more for the assurance that the car is in “pristine” shape / has not been mis-represented by the previous owner.

Going along with this idea, it is also well established that some cars (typically ones that are more reliable) hold up their resale value much better than others.

Back in 2012, I sold my 2004 Honda Accord (which my family purchased for around $15k new) for $5k to CarMax. We didn’t think this was too shabby since the car was 8 years old!

For future car purchases, it’s good to know which cars hold up their resale value so you can maximize the amount you receive on the back-end of your car-buying purchase when you decide to sell.

A good resource for this researching is Kelley Blue Book’s Best Resale Value list. These selected vehicles are being recognized for their projected retained value through the initial five-year ownership period.

The 2015 model-year brand and category winners of the annual Best Resale Value Awards are shown below. You can hop on over to KBB.com to view the full list.

For me, an intriguing finding of these results is how well Suburu did, earning the top resale value slot in most of the car categories, along with Lexus. Where I live in Colorado, Suburu is considered the “unofficial state car,” and my wife and I will likely purchase one when we go to purchase our next car. It’s good to know they are not only reliable, but also hold up their resale value after 5 years or so!

4 Reasons To Hire A Financial Advisor

The following is a guest post. Enjoy! 

The decision to hire a financial advisor is a big one – and one that shouldn’t be taken lightly. It’s a decision that is extremely personal and most people will approach it differently.

While I am not here to say whether hiring a financial advisor is a good idea or a bad idea, I am here to offer several examples that motivate people to go the professional route.

Let’s look at the list.

1 – It’s too complicated to do on your own

Just because something is easy to do, it doesn’t mean it is easy to do well. Financial planning is one of these things. On the surface it’s simple to start a financial plan. However, financial planning becomes increasingly complicated as your success evolves.

For example, contributing to a 401(k) is easy. Sign up with your company, review the mutual fund options and choose the best one for you. But understanding the planning opportunities and tax implications of net unrealized appreciation of company-owned stock in a 401(k) plan can be difficult. See what I mean… does that sentence leave you cross-eyed?

Receiving restricted stock from your employer is easy. But understanding the benefits and drawbacks of incentive stock options and how different execution strategies impact alternative minimum tax and long-term capital gain treatment is hard.

Setting up a will is easy. But equalizing the estate of a family-owned business when some family members are in the business and others aren’t is difficult.

It’s important to realize what pieces of your plan are self-manageable and what portions may need an expert’s guidance. Just because you have executed some planning doesn’t mean you have covered it all.

2 – You need a second opinion

If you are a do-it-yourselfer, it may make sense to have an expert look at your plan to confirm it’s in good order (review reason #1 for hiring a financial advisor). Even the best do-it-yourselfers can miss a strategy or idea that could benefit them dramatically.

Because of this, it may make sense to pay an expert to confirm or challenge your plan.

3 – You don’t know what you are talking about

“I haven’t looked at my investment statement in years.” “I don’t know what insurance I have.” “I have no idea how much I am contributing to my retirement.”

Comments like these may indicate you don’t understand personal financial planning. But not knowing is perfectly normal. If you’ve never been educated in the topics related to personal financial planning, why should you know?

I have said it before and I will say it again…

In my opinion the most successful people in the world know what they are good at, and more importantly they know what they aren’t good at.

What should you do when you acknowledge you are not good at something? You can spend the time and energy to learn and become an expert. Or, you can make an executive decision to delegate and bring in an expert to help.

In most situations when you don’t know what you are doing, it makes sense to delegate. Look for a professional in the industry, someone with experience and credibility. I would suggest, however, avoiding friends or family members who do investment research as a hobby.

4 – You don’t have time to do it

Most of our adult life is spent balancing the various commitments of work, family, friends and other activities. Rarely do we have ample extra time to do what we want. My guess is that when you do find free time, studying up on personal financial planning rarely bubbles to the top of your activities list.

However, you shouldn’t overlook personal financial planning. It is too important.

Developing a financial plan that coordinates your investments, insurance, estate, retirement and other goals takes time. Additionally, it takes a trained eye to stay current on changes to markets, laws and other outside factors that could affect the plan through the years. Hiring a CFP® professional also means that when life changes occur you have someone to help you update your financial plan. Becoming an expert in the required specialties, and remaining an expert, is a full time job.

Next steps

More than anything, you should be looking at your own financial plan to make sure you are “doing the right things.” For some that may mean a financial plan developed and managed by yourself. However, for the majority of people, hiring a professional to build a plan not only gets the ball rolling, but quite possibly could lead to a significantly improved outcome.

Practical Advice For Those Considering Law School

The following is a guest post by Nick from Millennial Finances. Enjoy! 

I graduated law school last May and wanted to pass along some practical advice to anyone considering law school.

Hopefully you read the news and know law school is not a safe route to a high-paying job. You should have significant concerns about about law school, and I’ll try to address them here:

Aren’t law schools producing more graduates than there are legal jobs?

Yes. Only 64.4% of recent law grads had jobs that actually required you to pass a bar exam. Median law graduate salaries (of those who reported their salaries) dropped to around $62,000, down from $72,000 in 2008.

The problem is law schools are cash cows – very inexpensive to run yet you can charge a lot of money thanks the ease of getting federal student loans. For-profit schools are especially predatory in leaving students with high debt, low bar passage rates, and even lower employment rates.

It’s crucial to scrutinize the data of the schools you want to attend. Where do their students end up employed? What are their areas of specialty? With how much debt, and at what salary? Many schools fight these important disclosures, or try skewing the numbers. Even prestigious schools magically increase their students existing GPAs to boost their employment numbers. Villanova’s dean resigned after a scandal involving doctored GPAs and LSAT scores.

So don’t just rely on whatever the law school tells you. Spend hours with Law School Transparency school reports. It’s a terrific resource that includes everything you should know your law school destination.

Will lawyers be as relevant in the future?

The legal industry is an arcane cartel doing its best to resist disruption. (It is illegal to practice law without being a member of the cartel, i.e. admitted to the bar.) The Supreme Court still refuses to allow its sessions to be videotaped. Laws and regulations are still bureaucratic mazes written by teams of lawyers that require even more lawyers to help others navigate them.

On the other hand, products like LegalZoom and FileRight and more are making inroads into the profession. Discovery work can be done more effectively by combining computers and outsourcing rather than having high-paid associates combing through paperwork.

I have no idea how rapidly things will change, but keep an eye on legal trends so you won’t be blindsided by them.

Is law school too expensive?

Absolutely. Paul Campos, a law professor at UC-Boulder, explains the skyrocketing tuition:

“Faculty salaries have doubled in real terms over the past 30 years. Administrative salaries have grown by much more, and the sheer number of administrative positions has exploded. Facilities are much nicer (this is known as the amenities race), and at law schools faculty-to-student ratios are much lower because of the pursuit of rankings. It’s just a crazy business model, all of which is enabled by no underwriting standards for student loans.”

The law school model is flawed, and even President Obama agrees three years is too long: “The third year [law students would] be better off clerking or practicing in a firm, even if they weren’t getting paid that much. [T]hat step alone would reduce the cost for the student.”

What can you do? Consider going only if you get a full or partial scholarship at a good law school. And look into graduating a semester early by taking on a busier course schedule.

I know that sounds extreme, but it’s also quite extreme to be out of the workforce for three years, then saddled with lots of debt, and not have a job. Take the time to read all the criticism of law schools. Everything Paul Campos has written on this issue, always backed up by reams of data, is good to know.

As for me, I went to a pretty good law school and passed my state’s bar exam. I was very fortunate to land a legal job in government as a third year student.

If you’re ready to apply, here is what I think every applicant should know about the admissions process:

Concentrate on your LSAT score and essays. Law schools care about their rankings, and LSATs play a big role. Most admissions committees won’t care if it took you two or three tries to get a high score, so consider sitting for multiple LSATs. 2nd time LSAT test takers score highest on average (mean improvement is 2.8 points). LSAT courses can be a great investment if your higher score gets you an extra $20,000 in scholarship money.

Customizing your essays are also critical to show the admissions committee you care about their law school and are a perfect fit. You can’t change your undergrad GPA, but you can still get a full scholarship with a great LSAT score and essay.

Study LawSchoolNumbers.com methodically. On this site, applicants self-report their data (GPA, LSAT score, demographic info, etc.) and show what schools accepted or rejected them. You get a rough idea of how likely you are to get into different schools, and more importantly, how much scholarship aid you can expect to receive.

Apply as early as possible. As you’ll see on LawSchoolNumbers, much more scholarship money is offered earlier compared to those applying near the deadline. Applying early can be difficult if you’re still waiting for better LSAT results, so try to take your LSAT well in advance of applying to law school.

Read the fine print of any scholarship. The classic scam is the unsavory law schools that gives 50% of the incoming class full rides, but rescind scholarships from those that don’t stay in the top 20% of the class. The ideal scholarship has no strings attached.

A legal career can be very rewarding if are able to avoid the ugliness of high debt and pervasive underemployment. I hope this has been helpful, and I’m happy to answer any questions in the comment section!

***Photo courtesy of http://commons.wikimedia.org/wiki/File:University_of_Notre_Dame_Law_Library.JPG

Home Improvement Projects That Provide The Best Return On Investment

The following is a post by MPFJ staff writer, Toi Williams, who is a professional personal finance blogger of Fine Tuned Finances. She has backgrounds in personal finance, sales, and real estate.

Home improvement projects can cost a lot of money when done correctly. Homeowners that are interested in selling their home for a profit in the future want to focus on home improvement projects that are going to provide them with the best return on their investment.

Larger endeavors like renovating kitchens and bathrooms are commonly chosen as the main projects to improve a home, but these projects can often cost much more money than you will get back when you sell your home. Focusing on home improvement projects that boost your property value is a smart way to ensure that your money continues to work for you, even after it has been spent on labor and materials.

According to research conducted by Remodeling Magazine (www.remodelingmagazine.com), which has been tracking these trends since 2002, here are the home improvement projects that will provide you with the best return on your investment.

Entry Door Replacement (steel) 96.6% (Entry Door Replacement (fiberglass) 70.8%)

According to the study, the single best investment that you can make in your home is replacing the entry door with a steel entry door. Homeowners that make this investment can expect a return of 96.6 percent on the money spent. The average price of the project investment is $1,162, making it a relatively low cost home improvement project to undertake. Replacing your entry door with a fiberglass entry door will only return 70.8 percent of your investment.

Replacing the entry door will also enhance the curb appeal of the home by transforming its appearance, potentially increasing the interest of potential buyers. If you are replacing a door that has been on the home for more than a decade, it may also give you significant energy savings by reducing the amount of air escaping your home from around the door.

Deck Addition (wood) 87.4% (Deck Addition (composite) 74.3%)

The addition of a wooden deck to the home is another home improvement project with an excellent return on investment, averaging an 87.4 percent ROI. Decks and patios are a great way to expand living space at a low cost, generally costing about a tenth as much as expanding rooms in a home. These are also versatile spaces that can be used throughout the year for different functions. The addition of a composite deck has an ROI that is a bit lower at 74.3 percent.

Siding Replacement (fiber-cement) 87.0% (Siding Replacement (vinyl) 81.6%)

Another good home improvement project with an excellent return on investment is replacing the siding on your home, which can significantly enhance the curb appeal of a home that is being sold. You want potential buyers to see siding that is clean and well cared for, giving them confidence that the rest of the home has been cared for as well. On the other hand, worn or damaged siding can reduce the value of your home by about 10 percent.

Replacing the siding on your home with new fiber-cement materials offers a return on investment of about 87 percent. Fiber-cement siding is generally viewed as high quality and quality is one of the most important traits considered by buyers when searching for a home to buy. Replacing damaged siding can also improve the energy efficiency of the home, resulting in savings on your utility bills after the project has been completed.

Vinyl siding is less expensive than fiber-cement siding and is easy to install, allowing many homeowners to tackle the product themselves with the help of a few friends or family members. The types of vinyl siding available today have long warranties and fade resistant finishes, guaranteeing that your siding will look great for years to come. Replacing the siding on your home with vinyl siding gives you a return on investment of about 81.6 percent.

Attic Bedroom 84.3%

Adding an extra bedroom to your home can result in a significant boost to your property value. Turning an attic into an attic bedroom is a great way to take a rarely used space and turn it into something that is functional for your family or for the people that will be purchasing your home from you. This project has an average return on investment of 84.3 percent and the project costs are generally low because the walls and ceiling of the room already exist.

Minor Kitchen Remodel 82.7%

Remodeling the kitchen area is a task that many homeowners undertake before attempting to sell their home. This is because the kitchen is one of the most used areas of the home, resulting in wear and tear on everything from the counters to the floor to the appliances. Doing minor remodeling to a kitchen area provides an average return on investment of 82.7 percent. Minor remodeling involves replacing the appliances, the lighting, the flooring, the countertops, or the cabinetry.

The average cost of the minor kitchen remodels in the report was $18,856, including labor costs. However, many of the tasks required for a minor kitchen remodel can be completed by the homeowner in a few hours, which can significantly decrease the cost of the remodel. Any tools that are needed can generally be rented from a home improvement store like Lowe’s or Home Depot.

Knowing which projects offer the best return on investment will help you make better decisions on where to invest your remodeling dollars. Whether making your space more livable for your family or improving your home to get a better sale price, focusing on the projects that give you the best return on investment is a smart way to increase the value of your property.

How about you all? Which home improvements projects have you completed which you felt like provided a good financial reward?

Share your experience by commenting below! 

Picture: http://en.wikipedia.org/wiki/Handyman#mediaviewer/File:FEMA_-_42428_-_Home_Repair_after_Flood.jpg

Saving Money On Holiday Gifts

With the holidays upon us and so many people to get gifts for, it can be difficult to actually save any money.  However, coupons make it a lot easier for you to get great deals on many gifts for nearly everyone on your list, and helps save you a lot of money while making your friends and family very happy during the holidays and beyond.

Here are just a few examples of how you can use coupons on gifts to help get you through the holidays without breaking the bank.

• Electronic Gifts

Electronics are on nearly everyone’s Christmas lists these days, it seems.  As you probably know already, many electronics are pretty expensive!  Getting these types of gifts for a bunch of family and friends can get really expensive, but thankfully coupons can be used to help you save some money.

• Weight Watchers Program Gift:

For those on your lists that are looking to shed a few pounds, avoid the dreaded holiday weight gain, or just trying to maintain a consistent healthy diet, there are a lot of coupons out there available for Weight Watchers, NutriSystem, or different gyms.  Get an early start on those New Year’s Resolutions and save money at the same time with these and other similar coupons.

• SkyMall gifts for the frequent flyer:

If you or anyone else on your Christmas list is like me when they are flying, the SkyMall is a frequently read and enjoyed magazine that helps pass the time away and gives you a lot of ideas for gifts for others or for yourself.  SkyMall offers  several different coupons for various sales and discounts, which will make SkyMall enthusiasts jump for joy.

• Kid-related gifts:

Did someone on your Christmas list just have a new baby?  There are lots of coupons out there for many kids stores and websites to help save Mom and Dad some much needed cash with their new bundle of joy.  From  deals with Diapers.com that will give 20% off coupons for new customers, 20% off Earth’s Best Baby Food, or 20% off of many different toys and games, you can find the right coupon for you or the kids on your list  Raising kids can be expensive, but it certainly doesn’t have to be with coupons!

From electronics to gardening and from kids to grown-ups, there are coupons for just about everyone on your list.  A great way to make your loved ones happy during the holidays and keep a little more green in your wallet!

 https://www.flickr.com/photos/jimmiehomeschoolmom/4165199870/in/

How I Saved $40 A Month By Reviewing My Cable Bill

The following post is by MPFJ staff writer Travis.  Travis is a customer blogger for Care One Debt Relief Services, and also appears weekly at Enemy of Debt.  Travis candidly shares his personal journey to pay off $109,000 of credit card debt and the tips he’s learned along the way. As a father and husband he provides a unique perspective on balancing debt, finances, and family.

“Dad, my TV stopped working,” said my son as he came down the stairs.  No investigation was necessary, because I knew exactly what had happened.

A letter had arrived a few weeks prior stating that our cable company was going completely digital, and as of a certain date every TV was required to have a digital cable box in order to receive the signal.  One box would be provided free for a year, but any additional boxes would cost $6.99 per month.

We currently have three televisions with cable boxes attached as part of our multi-room DVR system, but we have two TVs that did not; my son’s TV, and one in our guest bedroom.  I wasn’t particularly happy with the requirement to have a $6.99 a month box attached to every TV.  The reason given for dumping the analog signal is to free up bandwidth for more high definition stations and faster broadband service. Seems like progress, but with progress comes a price tag.

That afternoon, I picked up a cable box for my son’s room.  My wife and I decided that the guest room would no longer have a television, since it’s silly to pay $6.99 a month for cable to a room that is used only a couple times a year.  Even though our cable bill would not be changing due to the extra cable box for a year, we used this opportunity to review our cable package and see if there’s anything that we could do to decrease our overall bill.

I opened our latest cable bill, and went through it line by line.  We evaluated each service for value in relation to how much it cost and how much it was used.  Like an episode of Bar Rescue, I’ve agreed to open the books and share the process with you, the readers of My Personal Finance Journey.  Let’s get started.

• Cable TV Service Gold Package: $99.99
• DVR Service: $19.99
• Digital Receiver Rental: $27.96
• Internet Service: $49.99
• Phone Service: $19.99
• Taxes and Fees: $20.44

Total Bill:  $238.36

Package Summary:

We currently have a cable TV, broadband internet, and landline phone service bundle through Charter Communications.

TV Package Analysis:

Our cable company has really simplified its offerings in the last two years.  Gone are the seemingly limitless ala carte options to choose from.  We now have three packages to choose from:  Select ($79.99 per month), Silver ($89.00 per month), and Gold ($99.99).   We currently have the Gold package, giving us every channel offered by our cable company.  However, in reviewing the channels offered by each package, we only watch the channels in the Select package.  I can’t remember the last time I found something on the premium movie channels that I wanted to watch, and I never watch the obscure sports channels.  We have an opportunity to save $20 a month if we move to the Select package.

Equipment Rental Analysis:

Honestly, I was shocked to see how much I’m paying for the combination of the DVR service and the equipment rental.  We could dump the DVR service, but given the new requirement of having a digital converter on each TV, we’d just exchange the DVR boxes for basic digital tuner boxes which cost the same amount each month to rent.  We’d save the $20 a month without the DVR service, but we actually use that all the time.

Phone Analysis:

I honestly cannot believe we still have a landline.  I think the only reason I keep it is because we’ve had that number for close to 20 years now, and I’m afraid that someone won’t know how to get a hold of us.  But honestly, the only non-telemarketer that calls our home number is my parents and they could simply be told to call my cell phone number.

If we dump our landline, we’d save an additional $20 per month.

Broadband Analysis:

There’s really no option here.  My cable company used to have different speeds available for different prices, but that’s no longer the case.  We currently have 30mps service, and it’s scheduled to move to 60mps by the end of the year as part of their system upgrade.   The only other option we would have is DSL, which isn’t fast enough to support my connection to my employer.

Final Analysis:

Our analysis shows that we could easily cut $40 a month from our cable bill, and not even have to alter our lifestyle or television viewing habits.  That means that right now we’re really just wasting $40 each and every month.

The point of this article isn’t to debate whether cable TV is worth the money, or if we should go with a different solution.  That is a different post, one that I’ve already written and concluded that at this time, cable television fits our family’s lifestyle the best.  It is within our budget, and we consciously choose to spend our money on it.   It could very well happen that sometime in the future we may decide that cable TV is no longer worth the money we spend on it, and go in a different direction.  The point of this article is to drive home the fact that my wife and I periodically review all our expenses and look for ways to get as much value as we can out of the services we choose to have, and look for ways to maintain the lifestyle we want while not wasting money in doing so.

During this review cycle, we have identified $40 that we could cut from our cable bill without affecting our lifestyle at all.  Our family’s lifestyle and needs are constantly changing and evolving, meaning that evaluations of this kind are always a good idea from time to time.

Now, it’s time to give my cable company a call.

How about you, readers, do you periodically review your monthly expenses?  How often?

Share your experiences by commenting below! 

***Image courtesy of NayPong at FreeDigitalPhotos.net

How to Determine Which Home Improvement Projects to Tackle First

The following post is by MPFJ staff writer, Melissa Batai.  Melissa is a freelance writer who covers topics ranging from personal finance to business to organics to food.  She blogs at Mom’s Plans where she shares her family’s journey to healthier living and paying down debt.

We bought a house in August, and while it is a nice house overall, it is 18 years old.  There have been no significant renovations, so much of the house is out of date.  There is definitely room for improvement.

Here are some of the projects we’d like to tackle:

Replacing Broken and Green Blinds.  We bought the house with all the blinds included.  After the sale went through, the owners e-mailed and informed us that the large blind in the master bedroom and the blind in the guest room are broken, so they will fall down if you try to open them.  (We’d already discovered this with the guest room blind during the home inspection.)  The rest of the blinds work fine, but they are a deep hunter green.  In some rooms, that color works.  In my daughters’ pink and purple room?  Not so much.

Lack of Sun Screens.  Many houses in Arizona have sun screens on them.  These are dark screens that go on the outside of the house and keep out the intense UV rays, protecting items in your home from sun fading, and more importantly, reducing how much the sun can heat up your house.  With sun shades, your cooling bill can be reduced substantially.  Our house had no sun screens.

Our home had a few other issues too.

Faucet that Hangs to Low Over the Sink.  The space from the faucet to the bottom of the kitchen sink measures 10 inches.  That means it’s impossible to fill the sink with soapy water to wash and still be able to rinse the dishes.  Even without water in the sink, rinsing a large pot is nearly impossible and involves me putting water in my hands to splash the soap off the sides of the pot that I can’t reach.

Pale Pink Kitchen Cabinets.  The kitchen cabinets are a pale pink, and the finish is coming off in many places, exposing the wood.  It’s ugly, and I would like nothing more than to paint all of the cabinets white.  The cabinets also lack hardware, so I’d like to add handles and knobs, too.

Orange and Brown Sponge Painted Living Room.  Finally, the living room is sponge painted ala the 1990s decor style in shades of orange and brown.  No thanks.

Choosing What Renovations to Make on a Limited Budget

While I would like to make all of the changes to our home at once so I could live in the house I want, that’s not possible thanks to budget constraints.

We’ve created a hierarchy of renovations.

Those That Will Save Us Money

The renovations and improvements that we are making a priority are those that will save us money.

Sun Screens.  We had a few hundred dollars available when we first moved in, so we immediately bought sun screens for the five windows that receive the morning and evening sun.  Doing so helped keep those rooms cooler and saved us on our electric bill.

We are now saving so that in March, when the temperatures in Arizona ramp up again, we’ll be able to buy solar screens for the three windows that receive the afternoon sun and heat up the master bedroom.

Kitchen Faucet.  Water is precious everywhere, but even more so when you live in the desert like we do.  Having a kitchen faucet that gives us so little room to manipulate pots and pans underneath it wastes a lot of water.  This is another priority repair, though this renovation may have to wait until after we install the sun screens.

Those That Will Increase the Value of the House

Next on our list of renovations are those that will improve the value of the house.  (This is important because we know this isn’t our forever home.  We will likely move in the next 5 to 7 years to be closer to family.)

Painting the Kitchen Cabinets.  Our kitchen has a lot of great features–open concept, huge island, eat-in dining space.  However, the cabinets are a real eyesore.  We plan to DIY paint the cabinets white and also install knobs and handles on the cupboard doors.  Just doing this, assuming we do it well, will increase the value of our home when we get ready to sell it.

Painting the Living Room.  Remember that sponge painted living room in desert brown colors?  That definitely has to be repainted before we sell.  In fact, when we were house hunting and I saw the pictures of the home online, I didn’t even want to look at the property because the living room was so ugly.  The sponge painting didn’t look like sponge painting in the picture but rather like some hideous wallpaper.  Besides being aesthetically pleasing to us, painting the living room will make the house more marketable in the future.

Those Projects That Will Wait

The Blinds That Fall Down.  The guest room is rarely used, so for now, we will leave that blind and not replace it.  I do want to replace the blinds in the master bedroom, especially since the window with the broken blind is the one that brings in the most sun light.  However, there are only a few months of winter left now, and in the summer we don’t open that blind to help keep the house cool.  Therefore, this improvement will wait until at least next winter.

The Green Blinds.  I really hate the hunter green blinds, but they’re functional, so they’re at the bottom of our renovation/improvement list.

Renovating and improving your house on a budget requires a great deal of patience, especially when it seems like several projects are important.  It also requires discipline, because as much as I know that the sun screens are important, I would much rather have a living room that I like to look at!

Make Those Home Improvements That Increase the Value of Your House First

If you, too, have a list of home improvements you’d like to make, the best bet from a financial stand point is to first make the improvements that increase the value of your house.

In general, these areas offer the most bang for your buck:

1. Home systems. These include things like replacing hot water heaters, air conditioning/heating systems, and plumbing.  If you can replace the current model with an eco-friendly version without wrecking your budget, you’ll likely get even more value for your money.  However, don’t overspend for a “green” system because you won’t recoup that much.
2. Kitchens. The kitchen is the heart of the home, so you want to make it as nice as you can.  This is one area where you’ll definitely improve your resale value.  Minor upgrades like painting the cabinets and installing hardware don’t cost that much money yet can dramatically improve your house’s value.
3. Curb appeal. Finally, consider making your home more friendly from the outside.  Install outside lights, plant some greenery, consider adding a tree.  The front of the home is most important, and first impressions only happen once.

Deciding which home improvement project to tackle first is an individual decision, but financially, consider the one that will most improve the value of your home or will save you the most money.

How about you all? Do you own a home that needs or needed renovations or improvements?  If so, how did you decide which project to tackle first?

Share your experiences by commenting below! 

Saving Money For A Rainy Day – Prepare For Emergencies

The following is a guest post. Enjoy! 

With so much to pay for on a regular basis, it can be easy to look for quick fix solutions such as payday loans. Of course, tools will help you make informed decisions about your financial situation, but one of the best ways to prepare for the future is to save. Sure, you might have bills to pay left, right and center, but putting some money aside could prove extremely beneficial in an emergency, so here’s how to hold onto your hard-earned cash.

Make essential cutbacks 

Do you know exactly where your money’s going each month? If not, it could be time to take a closer look at your incomings and outgoings in order to set a strict budget. To do this, start by writing down all payments that need to be made on a regular basis, such as rent, council tax, utility bills and such like. Tally up the figure and ensure you have this amount safe and secure to avoid running into financial problems. Next, look at how much you spend on food, as while you need to eat there are many ways to cut the cost of your weekly shop. Finally, look at all your non-essential expenditure, such as expensive gym memberships, magazine subscriptions, days at health spas and such like, and see if there’s anything you could cancel. Put any money you manage to save into a savings account and you could be well on your way to building a nest egg.

Set a realistic savings goal 

In life, it’s important to be prepared for any unexpected expenses and changes in circumstance, such as losing your job. As a rule, it’s wise to save up to three month’s living costs in advance, including your rent, to ensure you have enough breathing space if something bad were to happen. To ensure this figure is correct, take the amount you spend on essentials every month and times it by three to get the sum you need – this will be your savings goal. By downloading a savings app and entering your targets, you’ll also be able to follow your savings progress and work out exactly how long it’ll take you to reach a certain figure, if you put a set amount aside over a specific period. Financial apps do all the hard maths for you, leaving you to focus on cutbacks, where possible.

Avoid common pitfalls and traps 

Many people think taking out payday loans and other quick fix solutions will help them overcome financial problems and get them back on the straight and narrow. Unfortunately, it can actually work in the opposite direction, as with high interest rates and short payback times it’s surprisingly easy for debt problems to spiral out of control. Instead, try to pay for things as you go, stick to the budget you’ve set yourself and save where you can. If you fail to put money aside one month, don’t worry too much. Simply put it behind you and try to save a bit more the following month to even things out.

Saving for a rainy day is easier than you might think, so follow these tips and look forward to a more secure financial future.