Spend Less Money with Patience

by David@MoneyNing.com · 6 comments

Once in a while, we read an article that asks us to sell what we don’t need. The benefits are obvious because we can get some cash for the items that are otherwise sitting in our house and taking up space. While this is great advice, perhaps an even better one is for us to stop buying anything that we don’t need in the first place.

Now, I know how hard this is as I’m a victim of impulse buying too. We tell ourselves how much we really need that particular item and eventually we end up taking it home. So for those having difficulty controlling themselves, try these two tactics.

Setup a Buy Period of the Month
When I really want something, I will tell myself over and over again why I want to take the item home and why owning it is so important. I will go to a store and look at the actual merchandise, and I will end up really wanting to pull my credit card out. Therefore, I’ve created a rule for myself where I’m only able to buy things over $75 on the first 7 days of the month.

I was amazed at how effective this strategy is because once I let the decision sit for a few weeks, the urge to spend subsides. What’s even more amazing is now that I know I can only buy in the first 7 days, I can usually get through the wait period even if I wanted something during the first 7 days to give myself more time to think about the decision.

Buy On Sale or with Coupons Only
Some items are on sale constantly while others can be bought at a store that always issues coupons. Whenever I want to buy something that I know can be bought at a cheaper cost than what’s listed, I tell myself to wait until I see a coupon or sale from the store that carries the product. As with the beginning of the month rule, the idea is for me to wait. Once I wait a few weeks, I usually don’t want to buy it anymore. If I still end up making the purchase, it is much more likely that I will actually put whatever I’m buying in good use.

As you can probably tell, both these tactics help because they require me to wait. Once I can last a few weeks without the item I want to buy, the time I spent dreaming about ownership lessens and my desire for buying it decreases. This gives me much more time to determine whether it’s a real need or just a want, and the end result is that I keep more of my hard earned money.

The Truth About Credit Repair

by Guest Contributor · 10 comments

This is a guest post from Debt Lead, who has a debt consolidation website by Kimberly Credit Counseling.

Have you ever heard this before: “Credit Problems? No Problem.” “Your Bad Credit Erased…100% Guaranteed”?

Beware if you have ever read this type of advertisement. There are numerous companies throughout the United States that claim they can “fix” your credit reports for a fee. However, they do little and sometimes nothing in most cases to fix your credit reports. What ends up happening is these companies take your money and disappear with it and you’re left with the same “bad credit” and even less money. Many companies also claim that they can create a new credit file for you by getting you a “new” Social Security number. This is illegal and never actually works.

Your credit history is maintained by companies called credit bureaus. These are private companies that collect information reported to them by mortgage companies, banks, department stores and other creditors. These bureaus can legally report any accurate negative information for 7 years and bankruptcy information for 10 years. Any accurate negative items that are within the 7 (or 10) year reporting period cannot be erased from your report by anyone. This is true even for companies that advertise claiming they are able to “repair your credit”.

Time is the only way to heal your credit report. By making consecutive payments when they are due, you will be able to show a more positive rating on your report, but your negative marks will not be removed.

Steps to Check Your Credit
You are entitled by law to see any information that the credit bureaus have on file about you. To find out what is listed on your credit report, you can follow these simple steps:

  • Contact the local credit bureaus.
  • Obtain a copy of your credit report. There may be a small fee if you haven’t been denied credit within the last 30 days, during which time it is free.
  • You can visit the credit bureau office to review your credit report in person.
  • Look over the report and check for mistakes.

If you do not understand something, you can ask. By law, the credit bureaus are required to explain your report to you. If a mistake is found, notify the credit bureau of the mistake and provide them with as much information regarding that problem. A reinvestigation will be done to dispute the information (if legitimately incorrect) and all necessary corrections needed will be made. A corrected copy of your report should be sent to anyone who has received the incorrect version within the past 6 months.

Are You A Victim?
If you have ever encountered a serious problem with a credit repair company, you CAN report them. You can contact your local consumer affairs office or your state attorney general. Check with your local directory assistance to see if a toll-free number is available.

You can also contact the Federal Trade Commission (FTC) to report any situations. Although the Commission cannot rectify individual credit problems for the consumer, it can act against a company if they see a pattern of possible law violations. If you feel a company has engaged in credit fraud you can send complaints to:

Correspondence Branch
Federal Trade Commissions
Washington, DC 20580

Lastly, here’s one common myth about your credits that everyone asks so let’s clear this up right here.
Myth
Credit Clinics and/or Credit Repair Services can “clean up” your credit report.

Fact
No one can legally remove accurate information from a credit report. However, you can request a reinvestigation on any of the information in your file that you dispute as inaccurate or incomplete.

How I Started Buying My First Stock

by David@MoneyNing.com · 32 comments

invest online by yourself
One of the readers recently asked:

I see that you do quite a bit of trading via E*trade and I think it would be pretty cool to have a post about how you went about making your first stock purchase.

Naturally, I agreed to this because I would gladly share my experience with everyone. Let me know if you have any questions by posting a comment below.

As I think back, I’ve always been involved with the stock market unknowingly. As a kid, my parents bought me some mutual funds along with some CDs in an effort to help me understand money. At the time, I didn’t really know what money really was and meant but having the statements come every quarter was pretty exciting because the figure slowly became bigger.

Once I moved to the US a couple of years ago, I was living by myself which meant that I was on my own for many of the things that I took for granted while I was living with my parents. This included everything about money. I had the mutual funds and CDs, and I also have some cash saved up in an ING Direct online savings account.

By then, I’ve heard about online brokerages and stock trading but I was nervous about doing it by myself. However, I realized that most of the mutual funds are really about paying someone else to do what you can do yourself. It also didn’t help reading about the fact that most mutual funds perform worst than the S&P 500. I was thinking to myself “if they could do it, I could”.

With that in mind, I started frequenting financial websites like The Motley Fool and Yahoo Finance and within days, I signed up at ETrade through one of the advertising links there. I didn’t do any research on different brokerages because I told myself that I can always switch if I didn’t like it. Although I believe I was lucky and found that ETrade is one of the best brokerages, I do not recommend signing up for a brokerage account without doing any research. One thing I did though was that I transferred a small portion of my money into the account to limit the chances of me losing lots of money.

I am pretty familiar with how websites work, so signing up was a breeze and I familiarized myself with the account like a little kid with a new toy. I explored so many pages within the website and I was fascinated by all the performance metrics about the account. I didn’t know what most of the terms meant but that was fun because I was determined to learn.

Of course, I was impatient as always so without any research and based only on my personal experience with buying the company’s products, I bought my first stock. 70 shares of Intel (INTC) at $19.81 on March 27, 2006.

Fast forward to today. My brokerage account has become much bigger (as a matter of fact, my brokerage account has more money in it now than my net worth in 2006), my investment knowledge has grown tremendously and I’ve also found something to do that I really enjoy.

If you are thinking about trading stocks for the first time, I urge you to open an account in any of the well known brokerages. Start exploring the brokerage website and also the sites I listed earlier. Learn about how companies make and lose money. Get a feel about why prices go up and down based on supply and demand of that particular stock. DO NOT follow what I did and just blindly buy a stock thinking you would make money because you won’t. I was lucky because I started when the market was generally good but times are different right now.

Have the enthusiasm to start right away, but do enough research and make sure you understand why you are buying a particular stock before you put your money on the line. At the beginning, you will probably lose some money but understand why you lost money and try to adjust. Do that enough times and it could be a very profitable road for you in the future.

Resources:

Paying Credit Card Interest Is Like Throwing Cash Into the Fire

by Guest Contributor · 8 comments

This is a guest post from Tisha Kulak, a writer who writes about credit card offers, personal finances and credit card matters.

Credit card interest can be a financial killer if you are not handling your credit cards correctly. If you are only paying the minimum amount of money on your cards each month, you are setting yourself up for a large financial downfall. Imagine you carry a balance of $5,000 in credit card debt with an average interest rate of 16%, it would take you at least 12 years to pay off the balance. The balance would increase about $2,500 with interest fees, leaving you with a total bill of $7,500.

$2,500 could afford you many other things in life. That amount of money would pay for home repairs, a nice vacation, or an excellent deposit into a savings or retirement account. Paying that amount of money as an interest payment on credit cards is like using your cash for firewood.

There are steps you can take to help getting your credit card debt under control. Here are a few tips to keep you paying down your balances and not wasting your hard-earned money.

Stop Making New Purchases
You can never expect to pay down a balance if you keep adding new things to it. Use credit cards only for emergency purposes.

Get a Handle on What You Owe
Debt can be overwhelming and embarrassing; however, you will never be able to recover from debt without knowing how much you owe. Sit down with all of your bills and tally up your debt. Get a real picture of where you stand financially, no matter how bad the situation is.

Pay Card with the Highest Interest First
The cards you have with the highest interest rates will cost you the most over time. Start making your budget to include more than the minimum payment each month of the cards with the highest interest.

Keep Away from Penalties and Fees
Getting momentum to pay down your balances on high interest cards can be ruined if you are late. Being late or going over the limit on your card can cause your interest rate to skyrocket and therefore will thwart your plans for paying off your balance.

Consider a Transfer
If you have a low or 0% balance transfer credit card that can handle a balance transfer, it may save you a lot of money by transferring the high-interest balance to a card with a low or no interest.

Once you begin to realize the effect your effort makes on your debt, it will become easier to see the light at the end of the financial tunnel. Planning your family budget will be more realistic and you can anticipate a time period when your balance will be paid off. Once you have paid a balance in full, continue to use the amount you’ve been paying and pay towards the new balances of the other cards. If you do not have any other cards to pay off, take the payment amount you’ve been used to paying and stash the cash away in a savings account or other investment that is right for you.

Running Out of Ideas to Splurge

by David@MoneyNing.com · 12 comments

Lately, I have a hard time figuring out what to spend money on. It’s a strange feeling because my urge to buy something hasn’t gone away yet I can’t think of something to buy when I want to. I know I end up being able to keep my money in my bank account which is great but the urge to buy something is stronger each time that I’m afraid I will end up buying a huge ticket item one day.

I should correct myself. It’s not that I can’t think of something to buy. It’s just that the things I want to buy (LCD TV, car, house) cost so much that it’s outside my splurge comfort zone. I’m really afraid that one day the urge to spend money will be so great that I will just go out and get a new car.

Part of the reason that I’m feeling this way is because I have some money to splurge. Perhaps the stock market isn’t doing the greatest for many, but it’s been decent for me so far this year. The large influx of money every month through all my income streams have also contributed to my want (need) to splurge. To quote a famous movie, “with power comes responsibility”.

I’m beginning to appreciate the advantages of forced savings when someone buys a house. Even if it doesn’t make sense mathematically, the fact that home owners end up needing to be more frugal because they have a higher fixed expense (the mortgage payment) will force them to save more money.

In light of this new discovery, I should create a fixed expense for myself. Something I need to contribute to every month that I can put money in and forget about. 401k and Roth IRAs quickly come to mind but I’m already maxed out on those types of investments. A house is a good one as mentioned earlier but it might not be a good idea since I still feel that the housing market has ways to go before it will bottom, especially in Southern California where I live. Maybe I should look into commercial real estate, or perhaps investing in startups. I don’t know much about these two things, so I’m not sure if I can invest a small amount every month to a startup or something but that’s a place to start.

When I don’t feel rich, I should feel less of an urge to spend money.

Conserving as Much Energy as Possible to Save Money

by David@MoneyNing.com · 6 comments

conserve more energy

Today was really hot, which reminds me that summer is almost here. Over here in Southern California where we don’t really have heating bills, summer always means a much higher electric bill because of air conditioning. Although I always try to tough it out by not turning the A/C unit on, I think I will do it more often this year because I don’t want my wife to suffer with me.

So while I figure out how to save more energy and thus more money, here are some tips to get started.

Open The Window
This is a no brainer but I’m always amazed at how few people do this. In cooler mornings, open the windows and maybe even the door. Make sure that there’s a way for wind to come in the house one way and out the other for a good breeze. Once the house cools down in the morning, it will spend much less energy cooling it down in the afternoon even if we have to turn on the air conditioner.

Keep Yourself Cool
We don’t need any outside help if we feel cool already. To do so, we first should stay hydrated so store a bunch of cold water in the fridge. Popsicles are also an inexpensive way to stay cool and hydrated. For meals, eat more fruits and vegetables.

Turn Off Unused Electronics
Those appliances like TVs, DVD players, and Nintendo Wii consoles that stay plugged in are drawing power even if they aren’t turned on. One easy way to turn everything on and off is to plug all these devices into a power strip and just turn off the power strip when it isn’t used while we go to work. The only thing that will be gone is the clock that’s on our cable box but we won’t need it since we will be at work anyway.

Keep the Heat Out of the House
Cooking and using the microwave can really increase heat in our house. As a matter of fact, I always feel hot after I cook or use the laundry. During the summer, try to only do laundry or use the dishwasher during night time or early morning when it is cool. A night outside with the barbecue is also a great idea because it keeps the heat outside. Also try not to open the fridge door often. The more it is opened, the easier it is for heat to raise the temperature, causing the fridge to use energy to cool it back down.

Go Out and Have Fun
Lastly, summer is about going outdoors. There are plenty to do outside and I encourage everyone to go out and enjoy the sun. One of the nice activities in the summer is swimming. Not only are you getting a great exercise, you are also having fun and staying cool.

With these tips, hopefully we can all conserve some energy and save some money this summer. Do you have more ways to conserve energy for the rest of us? Share with us.

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