My Personal Finance Journey

$119.13 Giveaway – Community and Charity 10% Monthly Blog Income Give Back # 11 – August 2012 Edition

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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The 10% give back giveaway fun rolls on for the month of August! 

In case you missed the 10 editions of the 10% Blog Income Give Back, after doing some thinking at the beginning of October 2011 about what direction I want this blog to grow and evolve towards in the future, I decided that any income made from this blog would have more significance to me at a personal life values level if I knew that a portion were being given back to the following places:

  • 1) The readers – Obviously, without you here to read my articles and interact with my ideas, there would be no blog in the first place (let alone blog income). As such, it is only fitting that you receive a portion of any blog income.
  • 2) Charitable organizations – If you’ve read my blog before, you know that I’m a big believer in donating a portion of my money to charity. Each year, I donate between 5-10% of my income to the National Multiple Sclerosis Society as part of the Bike for MS fundraiser that I do. Beyond the good that is done by donating your money, getting used to contributing to charity is also a good practice to emulate the actions of affluent individuals (T. Harv Eker discusses this in his book, Secrets of the Millionaire Mind, which I would definitely recommend reading if you have a few hours).

Because of these considerations, I’ve decided that each month going forward, I’m going to give away 10% of my net (after-tax) blogging income/profit to My Personal Finance Journey readers (5%) and to charity (5%). Listed below is how the process will work:

  • After each calendar month passes, I’ll tally up my net blog income and determine what Dollar value correlates to 10%.
  • I’ll post the giveaway (similar to this post you’re reading now), and you’ll have approximately 2-3+ weeks to enter.
  • Once the giveaway is over, a grand prize winner will be announced, and that winner will then select what charity they’d like to have 5% of my blog income sent to. Once the giveaway entry window ends, I’ll send out the money to the blog reader winner(s) and personally drop off the charity donation.  
  • So far, I’ve been very happy with the success of the October 2011 – July 2012 give backs. Listed below is a summary of what we’ve accomplished so far with the give backs. 
    • Current total given to 8 different charities = $617
    • Current total given to blog readers = $639  

So, that’s the overall flow of things and a brief recap of what’s happened so far with the give back initiative. Now, let’s get in to the specific details for this month’s (August 2012) giveaway. 

Details of August 2012 10% Blog Income Giveaway
  • $119.13 total blog income to give away – $60 to a My Personal Finance Journey reader and $59.13 to the charity selected by the giveaway grand prize winner (see bullet point below for additional details on how the charity selection will work this month).
    • $60 in the form of one prize available to one reader as follows – 
      • 1) Grand Prize = $60 Amazon Gift Card or $60 cash via PayPal.
    • Because of the success experienced in the October 2011-July 2012 give backs with building relationships with local charitable organizations, I’ve decided that for August we’ll keep how we select the charity that receives the 5% blog income donation the same as last month. Continue reading below for more details:
      • Instead of having each entrant specify any charity in the world, the goal for this month will be for My Personal Finance Journey to develop a relationship with one of the 7 charities listed below. The Grand Prize winner will select which of these 7 organizations receives the donation on behalf of the blog.
      • All of these charities were selected because 1) they are high quality organizations who do very good things and 2) they all have a significant presence/office in the area in which I live and operate this website (Central Virginia). 
      • I have contacted the local offices of these organizations and told them that they are part of the 10% blog income give back. After the Grand Prize winner is selected and the selected charity announced, I hope to be able to visit the local office of the organization, meet their staff, and present them with the money personally.
      • It’s been very fulfilling developing a relationship with the local chapter of the National Multiple Sclerosis Society through the MS150 fundraising bike ride I do each year, and I’m hoping that this experience will be just as awesome! I look forward to seeing which organization is selected.

    How to Enter the Giveaway – Deadline to Enter is 11:59 PM, August 31st, 2012


    Like last month, I’ve decided to use the RaffleCopter giveaway management tool to handle sign-up facilitation for the August giveaway, so simply go through the steps listed in the widget below to enter the running for the prize and accumulate entry points.

    There is no limit to the amount of points you can earn. If you refer 10 subscribers – your name will have accumulated 170 entry points! Or, if you link to the giveaway more than once, you can accumulate those 7 entry points multiple times. You can also retweet the giveaway and/or share other My Personal Finance Journey articles via social media sites once per day. In the event of a tie, I will be using a random number generator to select the winner.

    Important instructions: After you complete an entry method, make sure to click and fill out the “I Did This” or “Enter” button in the widget so that I have a record of your points. 

    a Rafflecopter giveaway

    Remember, the deadline for entries will end at 11:59 PM, August 31st, 2012 (a little over 3 weeks from today – the start of the give back). Good luck to you all! Please contact me if you have any questions. After the deadline for entries passes, the winner (one with the most points accumulated) will be contacted via email to receive their prize and select this month’s charity organization for the donation.

    Tour de Personal Finance 2012 Post-Race Show – Awards Ceremony, Race Recap, and Goals for the 2013 Tour

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    Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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    On June 17th, I announced the coming arrival of the 2nd annual 2012 edition of the Tour de Personal Finance with an introductory post laying out several goals I had for the event. Over one month later, the 2012 Tour de Personal Finance has ended, a winner has been crowned, and I can decisively say that the 2012 edition of the event has been a great success! The success could not have been possible without tremendous support from the participants and readers/voters. A big round of applause is in order for all of you! **Cheers fill the streets!**

    AWARDS CEREMONY and Charity Selections

    In the Tour de France, there are 4 main winners’ jerseys that are fiercely contested. These include the Yellow Jersey (overall winner), Green Jersey (best sprinter), Polka-Dot Jersey (King of the Mountains), and White Jersey (best-placed young cyclist). 

    As such, along with crowning the overall winner with the Yellow Jersey and the 2nd and 3rd podium placements, the Tour de Personal Finance will recognize 3 additional winners, as described below:
    • Yellow Jersey – Winner of overall competition. Article voted “best” by readers. Way to go!
      • The Yellow Jersey winner for 2012 is Maria from The Money Principle with her article entitled, “Money for all seasons I: income, spending and age.” A brief description of the article is shown below:
      • Using the four seasons – spring, summer, autumn and winter – as a metaphor for the four different stages in our lives, I have set out some age related expectations regarding income, expenditure, investments and cash-flow. It is a common sense way to illustrate how our financial situation today carries into our future and that it is never late to change one’s financial trajectory.
      • As the Yellow Jersey winner, Maria received $75. However, she was very generous to donate all of her winnings to the Alzheimer’s Society of the UK. 
    • Yellow Jersey Charity Selection – As the Yellow Jersey winner, Maria also decides which charity she wants to have receive the $123.05 charity give back amount. 
      • As with her winnings, Maria elected for the $123.05 to be donated to the Alzheimer’s Society of the UK.
      • This is really a great cause to donate to and one that I feel very strongly about since I do Alzheimer’s disease drug research!
    • Podium Placings – The 2nd and 3rd placed articles that are on the podium with Maria are shown below. Congrats for making it so far in to the competition!
      • 2nd Place – Glen from Free From Broke (and last year’s Polka-Dot jersey winner!) with his article entitled, “Should You Charge Your Boomerang Kids Rent?” A short description of his article is shown below: 
      • It’s no longer a given that kids will move out on their own when college ends. In fact, there’s a term for this group – Boomerang Kids. Should you charge rent to these boomerang kids?
      • As the 2nd place podium finisher, Glen received $50. However, he was very generous to donate all of his winnings to the National Multiple Sclerosis Society. 
      • 3rd Place – Todd from Financial Mentor with his article entitled, “Pay Off Mortgage Early or Invest– The Complete Guide.” A brief description is as follows:  Should I pay off my mortgage early or invest? Forget the dangerous half-truths and over-simplified conventional wisdom about getting out of debt. Instead, learn the many dimensions to paying off your mortgage early in this complete guide so you can make a smart financial decision that perfectly fits your personal situation.
    • White Jersey – Goes to highest placing, new blog (blog that was started less than one year ago).
    • Green Jersey – Goes to the blog whose article wins a single stage “the fastest.” In other words, the Green Jersey goes to the blog who wins a single stage by the biggest margin against their competitor.
      • The Green Jersey winner for 2012 is Donna Freedman from Surviving and Thriving (and the winner of the 2011 Tour de PF I might add!). Her article entitled, “The value of work,” won one of the Stages in which it was competing by 32 votes over her competitor! Quite impressive! Nice work Donna! The sprinters of the Tour de France (such as Andre Greipel and Mark Cavendish) would be proud of you! Your next goal will have to be to win 6 stages like Cavendish did last year in the Tour de France! 🙂
    • Polka-Dot Jersey – Goes to the best placing blog article entered which details information on “climbing” out of the debt “mountain”.
      • The Polka-Dot Jersey winner for 2012 is Todd from Financial Mentor (also our 3rd place finisher for this year!) with his article entitled, “Pay Off Mortgage Early or Invest– The Complete Guide.”  Todd’s post made it to the 5th Round of competition and features a great walk-through of the decision between investing or putting extra money towards paying off your home loan debt! Nice work Todd!

    RACE RECAP

    The 2012 Tour de Personal Finance began on July 2nd (same day as the first Stage of the 2012 Tour de France) with 52 participants/blogs (up from 46 in 2011!).

    In order to start and finish in the same approximate time period as the actual Tour de France, the competition proceeded quickly through the first round with 8 blogs (4 intermediate sprints) per day. Each sprint was given 3 days for voting to occur. In the last two Rounds of competition, voting was extended, when possible, to a four day time period to give everyone a chance to vote.

    You can view the complete story of how each Stage played out by viewing the 2012 Tour de PF Bracket.

    When all was said and done, the month-long event featured the following statistics:

    • 18 total Stages
    • 32 blog posts
    • 544 total comments/votes – Wow! That is an awesome amount of participation! Thanks to everyone involved!
    • 1,798 page views of Tour de Personal Finance Stages and posts.
    • 1,500 unique visitors to Tour de Personal Finance Stages and posts.

    2012 REFLECTIONS AND GOALS FOR 2013 TOUR DE PERSONAL FINANCE

    As I mentioned above, I think that overall, the 2012 edition of this event went very well.

    Listed below are the things that I very much enjoyed about this event the past month:

    • It’s enabled me to interact and get to know many new bloggers and readers.
    • I’ve learned a lot by reading some of the best articles from each blogger’s site that have participated in this competition.
    • I liked how the race started and end of the race stages coincided with the start and finish of the 2012 Tour de France. I thought that was really cool!
    • We were able to get a larger number of blogs involved in the event this year (52 vs. 46 blogs/articles last year). 
    • Having done the event last year, I had more of a well-defined system for running this year’s event that made things go smoother. 
    • I was able to reserve the June and July 10% blog income charity and reader give back amounts as rewards and charity selection options for coming in first and second place in the competition. 
    • I was able to get experience putting together a sponsorship kit to attract potential supporters to the event.


    Listed below are some things that I see as areas for improvement:
    • First, in this year’s event, we had 52 participants. Even though this is a round number and event pairings/bracket placements were chosen with a random number generator, the participants in the “lower-half” of the bracket had one less Round of competition to get through. Even though I don’t think this ultimately affected the final placings, it is something I want to improve in the coming years.
      • Because of this, I’d like to start promoting the event earlier next year and get a total of 64 blogs involved to make everything evened out.
      • This year, I started gathering entries to the event about 2 weeks before the start. I figured this would be enough time, but have since realized that I need to give people more notice because a lot of people were on summer vacations. Lesson learned, so no worries! 🙂
      • Second, in the coming year’s of the Tour de Personal Finance, I need to be more proactive and get an earlier start on obtaining event sponsors. 
        • This year, I was actively seeking out platinum, gold, silver, and bronze sponsorships from various contacts in the PF realm throughout the entire month of June with a sponsorship kit I put together. 
        • The plan was to donate half of all sponsorship proceeds to a charity selected by the overall competition winner (Yellow Jersey). 
        • At first, it was looking fairly promising in that I had gotten a couple sponsors interested, but nothing was finalized in the end.
      • Third, increasing awareness of event prizes.
        • This year, I made the mistake of not spreading the word about the specific prizes on offer for the 1st and 2nd place finishers until the 2nd or 3rd Round. 
        • I think that if I finalize and share this information earlier on (even before the 1st Round), everyone will have a better idea about the ins and outs of the competition. 

      How about you all? What did you think of the 2012 Tour de PF? What would you like to see the different or the same for next year’s event? 



      Share your experiences by commenting below!

        ***Photo courtesy of http://www.flickr.com/photos/wyllphotographie/7645504308/sizes/l/in/photostream/

        Different Uses for Credit Cards

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        Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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        Credit cards have become very interwoven in to the fabric of today’s society and economy. In fact, it’s becoming almost an anomaly to actually pay for something with cash! Needless to say, credit cards, if used properly and paid in full each month, have a lot of utility.

        Listed below are some of the most common and powerful uses of credit cards:

        Building Credit History

        A very beneficial use of credit cards is to either start or continue to build up your personal or business credit history. By using a credit card for several purchases each month AND PAYING OFF THE BALANCE IN TIME, you can improve your credit score and thus, increase your chances of a getting a good quality loan for future needs.

        Reducing the Cost of Debt Payoff

        Credit cards can be a powerful tool by offering options to consolidate credit card balances on to one lower interest card.

        Generally, when you are searching for a new credit card, there are often very enticing deals that enable you to perform a balance transfer from your existing higher interest rate credit cards and then keep a 0-3% APR interest rate for a certain introductory period.

        There are several things to watch out for before embarking on this form of debt payoff. 

        • First, you have to watch out for fees that are incurred/charged for transferring balances. These can often be 3% of the balance transferred. So, you’ll need to make sure that the interest rate savings you receive on the new card is worth this balance transfer fee.
        • Second, you will need to make sure that you are able to pay off all of your debt that is transferred within the introductory, reduced rate time period. If you cannot, you will often find that your interest rate will be increased after the introductory period to a level that could cost you more than your previous card.
        • Third, performing balance transfers is by no means a ‘magic formula’ that will make it effortless to pay down debt. It will take long-term discipline and MOST OF ALL, changes in spending behavior, to fully pay off your debt balances. In fact, if you’ve already got a credit card that has a fairly low interest rate (say below 10%), you might even be better off simply sticking with your current card and paying off the balance aggressively.

        Obtaining Rewards and Cash Back

        Another one of my favorite uses of credit cards is to receive a portion of your purchase amount back in either the form of cash back or rewards points. Typically, the amount of cash or redeemable rewards points you can receive is around 1% of your purchases. However, you can often get good credit card terms that enable you to get 3-5% cash back in certain categories.

        In addition, credit cards often feature payment insurance protection on certain purchases. For example, if you pay for a rental car with a credit card, many cards offer insurance in the event that you get in an accident.

        Short-Term Payback Expense Account

        Another use of credit cards that is quite powerful (but that can easily get people in trouble if they don’t pay off their balances quickly) is providing some immediate access to funds to pay for expense items so that you don’t have to wait for money to be transferred from your savings to checking account.

        By using a credit card for most all of your purchases, you can keep a minimal amount of money in your non-interest bearing checking account and just transfer money from your interest bearing accounts as it is needed to pay for expenses that come up.

        A Bad Use of Credit Cards

        While I definitely believe there are a lot of good uses for credit cards, one inappropriate use that I feel is worthwhile to mention is the use of credit cards for things you actually do not have the cash to pay for. Once you get in to this cycle of overspending, you can rack up debt balances that compound daily and get you in to trouble faster than you think.

        How about you all? How do you use your credit cards? What is your favorite and least favorite feature about them? What credit card is your favorite?


        Share your experiences by commenting below!

        ***Photo courtesy of http://www.flickr.com/photos/76657755@N04/6881501238/sizes/l/in/photostream/

        Finding the Right Type of Credit Card to Suit Your Needs

         

        The following is a guest post. Enjoy! 

        Finding the Right Type of Credit Card to Suit Your Needs

        There are many good reasons (and perhaps, a few bad reasons) why someone would want to have a credit card. From desiring to improve/build your credit history to having a way to pay for everyday items without having to keep large amounts of money in your non-interest bearing checking account, credit cards, if used properly and paid off in full each month, can be a big help to a person’s life.

        After making the all-important first decision that you indeed want to get a credit card in the first place, the question then shifts to what type of card is going to be best for your specific circumstances and life.

        Listed below are several of the most popular types of credit cards and some of the deciding factors that can help you determine whether or not that specific type of card would be a good fit.   

        Cash-Back Credit Cards

        Cash-back credit cards, as you might imagine, are a very popular choice among credit card consumers because a certain percentage of EVERY purchase you make (regardless of the merchant) gets returned to you in the form of cash-back rewards. In other words, you get cold hard cash back as opposed to only getting a discount on future purchases at specific stores, as with some of the other rewards cards discussed below.

        The bottom line here is that cash-back cards are the best for someone that wants to see the rewards return on their purchases as soon as possible. 

        Airline, Points, and Gas Rewards Credit Cards

        This category that could be summarized as “other rewards” credit cards allows you to accumulate rewards points on all of your purchases (regardless of the merchant). However, you often get added benefits for making purchases from the card issuer. For example, if you have an American Airlines credit card, you get certain perks and additional rewards points for purchases that you make towards flights with that airline. For a review of some popular airline credit cards, click here. Once you’ve accumulated a certain number of points, you can then redeem them by getting a discount on a purchase with the card issuer.

        The bottom line here is that “other rewards” credit cards are good for someone that shops at one specific merchant VERY FREQUENTLY, or enough to make it worthwhile to be restricted to only redeeming the reward points with one merchant. 

        Student Credit Cards

        Student credit cards are generally low-balance starter credit cards for younger adults that are looking to get their first credit card that is not co-signed by Mom and Dad. These cards generally are typically somewhat “stripped down” in that they do not carry as good of rewards as other credit cards.

        The bottom line here is that student credit cards are great for someone 18-25 years of age who is looking to get their first credit card and doesn’t have a lot of credit history built up yet. 

        Pre-Paid Credit Cards

        The last category of card on the list today is pre-paid credit cards. In fact, these are not credit cards at all, in a strict sense, because you are not being loaned any money. Instead, you send in cash to the credit card company, which is then loaded on the card for you to spend. These cards generally come with higher fees than the other types of cards on this list, since you’re paying for an added service from the credit card company.

        The bottom line here is that pre-paid cards make sense for someone that has bad credit history and can’t yet get a regular credit card, but wants to start gradually restore their credit history. 

        How about you all? What type of credit card do you carry? Why did you pick that specific category of card?

        Share your experiences by commenting below!

        ***Photo courtesy of http://www.flickr.com/photos/68751915@N05/6722592957/sizes/l/in/photostream/

        The Essential Mortgage Loan Refinance Checklist

         

        The following is a guest post. Enjoy!

        The Essential Mortgage Loan Refinance Checklist

        Looking for a way to put more cash in your pocket? Refinancing your home is a great way to modify your home loan payment and make it better fit your budget. Whether you’re looking to take advantage of low mortgage refinance rates or to change the terms of your loan, it can be a smart move. Of course, refinancing requires some upfront fees, so you’ll want to do the math to be sure they’re covered by the eventual savings.

        Before you sit down to tackle your refinance application, be sure you’ve gathered all of the necessary documents and important information you’ll need to complete it. The mortgage refinance process will go more smoothly if you’re prepared upfront.

        Ready to refinance your mortgage? Use this helpful checklist.

         

        Information on your home and mortgage:

        ·         All properties you own, including addresses, estimated value, annual taxes and insurance.

        ·         The year you purchased the property you’re seeking to refinance.

        ·         The original cost of that property.

        ·         The amount you owe on any loans tied to this property. This includes all mortgages and home equity loans and lines of credit.

        ·         Any additional liens against the property, such as judgments.

        ·         Your most recent mortgage statement.

         

        Personal information:

        ·         Residential addresses for the last three years.

        ·         Social Security Number.

        ·         Driver’s license or state ID card.

        ·         Tax returns, W-2s, and pay stubs for the last two years.

        ·         Employer information, including name, address, and phone.

        ·         Financial assets, including checking and savings account balances, investments, life insurance, vehicles, jewelry, antiques, etc.

        ·         Documentation proving other income sources, like Social Security checks, retirement accounts, child support, alimony, rental income, dividends, etc.

        ·         Information on any bankruptcy proceedings or discharges.

         

        Of course, the documents required by your bank to refinance mortgage terms could vary somewhat from this list. But, this is still a good place to start when you’re preparing to refinance. Once you’ve completed the refinance process, you’ll have peace of mind knowing that your mortgage is best suited to your finances.

        How about you all? Have you ever refinanced your home loan? If so, do you still think it was the best decision financially?

        Share your experiences by commenting below!

        ***Photo courtesy of http://www.flickr.com/photos/alancleaver/4439276478/sizes/o/in/photostream/

        Improving Your Small Business Cash Flow

         

        The following is a guest post. Enjoy! 

        Improving Your Small Business Cash Flow
        Every small business owner is looking to improve their cash flow. This can be tough, especially if your business relies on invoicing customers, and then following up on the accounts receivable each month to make sure that payment has been made.  And, as your business and the amount of invoices grow, it will become harder to maintain, and sometimes, harder to collect.  That is where invoice factoring can come into play.

        What is Invoice Factoring?

        Invoice factoring is where a business sells its accounts receivable (i.e. invoices) to a third-party company at a discount to what is owed.  That company, however, provides the discounted amount of money up front, similar to a cash advance, with the collateral being the outstanding invoices.  There is also maturity factoring, where the cash isn’t provided up front, but instead, payment is paid on the average maturity date of the invoices on the purchased receivables.

        How Does Invoice Factoring Work?

        Invoice factoring is very different than getting a traditional bank loan because a bank looks at the value of the entire company before making a lending decision.  This can sometimes be hard for a small business or start-up, because there is not always a lot of data to make the banks happy.  However, with factoring, the amount paid is based on the value of the receivables, and it is not a loan.  The factoring company will actually purchase the financial assets that are the outstanding invoices in the accounts receivable.  The factoring company will then make money by the difference between the value of the receivables versus what it paid the business, as well as any commissions or fees charged.

        Is It Right For You?

        Invoice factoring can be a good solution to many businesses who have a lot of outstanding invoices and need cash flow now.  By selling the receivables, you can get that cash now to continue building your business, and basically let someone else deal with the invoices.

        How about you all? Has your business ever used invoice factoring? If so, did it work pretty smoothly?


        Share your experiences by commenting below!

        ***Photo courtesy of http://www.flickr.com/photos/23024164@N06/7222346312/sizes/l/in/photostream/

        What is Private Mortgage Insurance?

         

        The following is a guest post. Enjoy!

        What is Private Mortgage Insurance?
        Private mortgage insurance is an insurance product that is taken out by a borrower, but is payable to the lender.  It is insurance designed to offset losses in the case where a borrower isn’t able to repay the loan and the lender worries that it may not be able to recover its costs after foreclosure and sale of the property.
        Private mortgage insurance is typically used in situations where the borrower isn’t able to put enough down to satisfy the lender’s risk requirements.

        When You Need Private Mortgage Insurance

        Private mortgage insurance is used when the lender believes there will be risk in recouping the cost of the loan.  This typically applies when the down payment is less than 20% of the appraised value.  However, it can also change based on the loan term, loan type, total amount financed, and more variables.  It also is not needed for many government-backed loans, like FHA, since the loan is insured against loss by the government rather than the homeowner.

        How Private Mortgage Insurance Works

        Private mortgage insurance is typically required by lenders when there is not an 80% loan-to-value ratio on the property.  If you don’t meet this criteria, you will need to purchase private mortgage insurance.
        Private mortgage insurance typically costs around $55 per month for each $100,000 financed.  Usually, your loan servicer will provide a list of qualified mortgage insurance providers, and you will need to select one and have the policy in place upon close of escrow.
        You can cancel your private mortgage insurance when your loan has an 78% loan-to-value ratio.  This can occur either by principal repayment, or by the house appreciating in value (or both).  Only the servicer can decide if the 78% ratio has been reached, but you can ask them for an appraisal if you think it has been made.
        A great thing is that, since 2007, private mortgage insurance premiums are tax deductible, just like mortgage interest.  This made it cheaper for borrowers to get private mortgage insurance, instead of having to rely on complex financing.

        How about you all? Do you currently have insurance on your home mortgage loan? If so, does it provide you with any additional benefits aside from the implied financial protection?

        Share your experiences by commenting below!

        ***Photo courtesy of http://www.flickr.com/photos/68751915@N05/6869769579/sizes/l/in/photostream/

        5 Financial Planning Tips for Families

         

        The following is a guest post by Philip Reed. Enjoy!

        5 Financial Planning Tips for Families
        When economic growth is not quite as strong as it could be, sound financial planning takes on added importance for families. Although things have certainly improved over the past four years, it is important to remain vigilant in these uncertain times.Fortunately, there are a few simple tips that you can follow to ensure the financial well-being of your family.

        Save for College

        If you have children, they are probably growing up much faster than you would like. Before you know it, they will be heading off to college to get an accounting degree or to become a doctor. Unfortunately, tuition costs continue to skyrocket, and total student loan debt has already ballooned to more than $1 trillion. However, you can help your children – not to mention yourself – by taking advantage of 529 college savings plans, which can give you a way to save for future college expenses with a tax advantage.

         

        Establish an Emergency Fund

        Life is full of unexpected surprises. Whether your car breaks down or your kid needs braces, there are times when you will need quick access to cash and won’t necessarily want to utilize your credit card. And, quick access to cash is exactly what an emergency fund is designed to provide.

        However, nearly 30 percent of Americans do not have an emergency fund at all, and many other people have insufficient funds to protect themselves when unexpected problems arise. If you haven’t already started, set aside a small amount of money every month into a separate savings account; one day soon, you will be glad that you did.

         

        Cut Your Expenses

        Although making more money would be the ideal solution, that can be very difficult to do in an economy that is suffering from eight percent unemployment. Fortunately, there is another way to take control of your budget: reducing your spending. If you are not sure where you can save money, consider some of the following possibilities:

        • Make more meals at home
        • Borrow books and movies at the library
        • Buy gently-used items on sites such as Craigslist.org
        • Cancel subscriptions

        Review Your Asset Allocation

        There is no denying the fact that the past decade has been terrible for stock portfolios. Thankfully, it is hard to imagine another decade of such poor returns. However, you still need to ask yourself if you are comfortable with the amount of risk that you are taking in your portfolio. If not, consider increasing your allocation to bonds and other low-risk investments.

         

        Increase Your Savings Rate

        Thanks to a $20 trillion funding gap, future retirees will need to supplement Social Security with more of their own savings. Unfortunately, only 15 percent of people are saving enough in their 401(k) plans to retire comfortably. If you want to relax during your golden years, use some of the money that you save from cutting expenses to boost your retirement savings.

         

        Conclusion

        By following the tips listed above, you can avoid the major mistakes made by many families and put yourself on a path toward financial security. It will certainly take discipline and commitment on your part, but the rewards are worth it.

        How about you all? What financial planning initiatives are taking priority in your lives these days?


        Share your experiences by commenting below!

        ***Photo courtesy of http://www.flickr.com/photos/serpicolugnut/172616929/sizes/o/in/photostream/

        Financial Independence: Start With Your Savings Goal

         



        The following is a guest post. Enjoy! 

        How to Work Toward Financial Independence
        Financial independence is the ultimate goal of saving money. Being financially independent is defined as having enough money at your disposal so that you don’t have to work to pay for basic necessities. In other words, your investments and savings accounts bring in enough money for you to maintain your current lifestyle.
        It’s important to note that being financially independent is not the same as being rich. Instead, think of it as having the right amount of money; not necessarily an excessive amount of money. It takes financial discipline and smart decisions to achieve financial independence.
        You should consult with a financial planner to see which approach might make sense for your situation, but consider these three basic steps to get you moving toward financial independence.

        1. Get serious about your savings goal

         
        The key to financial independence is building wealth. To do that, you need to save more than you spend. If you’ve been lackadaisical about saving up until now, it’s time to assert your financial discipline and start saving regularly. Here are some ideas to get you started:
        • Set up an automatic savings account transfer to move a set percentage of your take-home pay into savings each month.
        • Set short-term and long-term savings goals with dates and dollar amounts to keep yourself on track.
        • When you save money on a purchase, move the difference into savings.
        • Transfer found money, bonuses, and commissions into savings.

        2. Make sound financial investment decisions

         
        After having accumulated a substantial sum in your savings accounts, you may be ready to look at long-term investments, whether they are stocks, bonds, mutual funds, real estate, investment groups, or other opportunities. These types of investments typically have much higher rates of return than traditional savings accounts. Of course, they also come with higher risks, which is why you should first consult a professional advisor and bear in mind their long-term nature.

        3. Always look for the best interest rates

         
        Whether it’s for your daily savings account or your stock portfolio, keep your eyes open for accounts that provide the best return on your investment. Staying on top of this can help you to build wealth more efficiently. It’s important to note that moving your funds from their current account may come with a fee, but that may be worth it if the ultimate return on the new account is substantial. Be sure to crunch the numbers to see if it’s a smart move or not.
        Of course, achieving financial independence will take years and an understanding not only of your investments, but also of the market forces, tax codes, and myriad of other factors. Working with a savvy financial planner can help you get a handle on all that is involved. But, you can start making smart decisions today by starting to use savings accounts to build wealth and reach your financial goals.

        How about you all? In your opinion, what is the first step towards becoming financially independent? Is this first step also the most important step, or is there another more important step further down the road that you need to overcome?


        Share your experiences by commenting below!

        ***Photo courtesy of http://www.flickr.com/photos/rvoegtli/6691093687/sizes/l/in/photostream/

        Tour de Personal Finance 2012 – Final Championship Sprint on the "Parisian Champs-Élysées" of Personal Finance

         

        The 2012 Tour de Personal Finance has been an absolute 100% success (far beyond anything I could have imagined!). A big thanks goes out to everyone that has participated in the Stages and to the hundreds of voters who have stopped by to support their favorite authors/articles.

        Later this week, I’ll write up a Tour de Personal Finance recap, post-race show, and awards ceremony to talk about what happened this year and how I envision the event growing in the coming years. But, that’s enough of that commentary for now!

        Without further ado, let’s continue on with the final, 18th Stage (the final championship sprint) of the 2012 My Personal Finance Journey Tour de Personal Finance (to follow all of the action, click on the Tour de Personal Finance category link and scroll down to read all the posts involved in this subject).

         

        AN IMPORTANT UPDATE ON PRIZES FOR THE COMPETITION

        As I mentioned in the introduction post for the 2012 Tour de PF, I have reserved the reader portion of my 10% monthly blog income give back event for both June and July as prize money to the Yellow Jersey winner and runner-up/second place podium finisher. The Yellow Jersey winner will also select a charity of their choice to receive the charity portion of the 10% monthly blog income give back.

        At the time that I mentioned these prizes, I did not yet know the exact quantities that they would be. However, I now have everything calculated, and the prizes will be as follows:

         

        • Prize to Yellow Jersey Winner – $75.00
        • Amount that will be given to a charity chosen by the Yellow Jersey Winner – $123.05 
        • Prize to 2nd place podium finisher – $50.00

         

         

        There are only 2 blogs/posts remaining in the 2012 Tour, so the competition should be quite interesting in this Stage! To view the most up-to-date brackets of the competition, click the following link – 2012 Tour de PF Bracket

        Going along with Tour de France cycling tradition, I’ve listed each competition within each stage as an “intermediate sprint” (one post versus another) along with the description provided by the blog author when the post was submitted.

        Also, if applicable, I will give a brief description of the stage of the Tour de France that took place the same day as the competition.

        How to Vote

        You can vote for the one article (since there’s only one intermediate sprint today) you’d like to see proceed in the Tour (i.e. WIN the Tour!) by commenting in the comments section below and telling which are your favorites.I’ve listed a keyword after each post title to make it easy to vote (as a made-up example, you can just comment: Sprint 1: Mutual; Sprint 2: 401k, etc.) Be sure to comment which one you like the best out of each set of two! Criteria for the best article is completely up to you, but you can use these factors as a guide: 1) post of your favorite blogger, 2) most interesting post, 3) most thought-provoking post, 4) most unique post, or 5) most actionable post.Here is today’s competitions:

         

        Voting will continue until July 26th for this Stage!

         

         

         

        Intermediate Sprint # 1

         

         

        • Should You Charge Your Boomerang Kids Rent? (Boomerang): It’s no longer a given that kids will move out on their own when college ends. In fact, there’s a term for this group – Boomerang Kids. Should you charge rent to these boomerang kids?

         

         

        VERSUS

         

         

        • Money For All Seasons I: Income, Spending, and Age (Seasons): Using the four seasons – spring, summer, autumn and winter – as a metaphor for the four different stages in our lives, I have set out some age related expectations regarding income, expenditure, investments and cash-flow. It is a common sense way to illustrate how our financial situation today carries into our future and that it is never late to change one’s financial trajectory.

         

         

         

        Tour de France Daily Recap

         

         

        Today is also the last Stage for the riders in the 2012 Tour de France, with the riders traveling 120 km from  Rambouillet to the Champs-Elysees in Paris.
        Barring a major accident out on the open road, the Brit, Bradley Wiggins, will end the day as the overall winner of the 2012 race.

         

        Wiggins took the race lead by doing a consistent ride throughout the high mountain stages and then throwing down the gauntlet with two STELLAR individual time trials to take the yellow jersey over his main rivals! The second place rider in the race is over 3 minutes behind him overall and is his own teamate! Cadel Evans, the pre-race favorite, finishes almost 15 minutes down! Quite a collapse!

        George Hincapie looks set to finish his 18th ever Tour de France, which I believe is a world record for most Tour finishes. Peter Sagan has pretty much clinched the green jersey competition, and Thomas Voeckler is ten points ahead of his nearest rival in the King of the Mountains competitions. So, those jerseys are pretty much wrapped up, and there shouldn’t be too many surprises on today’s Stage.

        ***Photo courtesy of http://www.flickr.com/photos/59920447@N04/7616350830/sizes/l/in/photostream/

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