There’s something to be said about paying attention to signs.  On the roadways, they make sure you know how fast you can drive, when to stop and even where you are along your route.  Your doctor tells you to watch for signs of certain medical problems.  So as your financial counselor, I’m going to give you some signs to watch out for that may signal a looming financial disaster.

Living Paycheck to Paycheck

As I wrote in my book (shameless plug: From Debtor to Better is now available in paperback!), the average American is three weeks away from being bankrupt, unable to pay bills or put food on the table.  And “the average American” means roughly 70% of Americans based on the studies I found.  What happens when there’s a glitch in the company payroll or a bank error and your paycheck doesn’t get deposited on time?  For most of you, that’s a scary possibility. [Read more…]

When I was younger, I was sure I knew everything.  Sometimes I still fall back into that mode and then something happens to prove (usually quickly) how stupid that thought is.  However, if you’ll let it, experience and age bring wisdom and knowledge that just can’t be taught any other way.  That’s the premise for this post.

I have been privileged to hire an intern at work.  She is young – 18 – and VERY intelligent, but during one of our discussions, her comments reminded me that all the education in the world can’t beat out some good experience when it comes to learning about personal finance.  With that in mind, I compiled a list of 10 things I wish someone would have taught me when I was 18 and things I will convey to her – even though they have nothing to do with her assigned job duties.  I will admit many of them are not directly about money, but I included them because they had a very powerful impact on my financial life. [Read more…]

Last week I pumped you up about going to Disney World, which I realize for some of you was probably not ideal since your budget screamed you would be staying at home this year.  I get it.  That’s okay – we aren’t going on an extravagant vacation this year either because of some family responsibilities.  But in the spirit of making sure you are able to make the most of whatever your vacation plans are, I wanted to spend some time today offering some tips on how to save for a great vacation.

Getting Started

Let’s set the groundwork first.  To make sure you set goals that are within your limits, let me remind you of what a true and complete goal must be S.M.A.R.T.: [Read more…]

It seems there is an assumption out there that everyone in the universe should understand what interest is and how it works.  After counseling hundreds of folks in a mess of debt with no clue how they got there, I promise these concepts are not as widely known as every bank assumes.  Today I’m going to spend some time breaking down (in simplest terms possible) the concept of interest (simple and compounding) and how/why it can work for or against you.  Before you pass out from boredom, what if I told you I could make the next ten minutes worth $55,000?  Read on and I’ll teach you what you need to know to make that true.

What is Interest?

For someone borrowing, interest is the cost of borrowing money.  Usually expressed as a percentage (often measured in an Annual Percentage Rate or A.P.R.), interest is the amount of money you pay over and above the amount you borrowed to have the privilege to get that money and use it for a while. [Read more…]

Last week I shared some ways to becoming a millionaire and I’ll hit that topic from a few different angles in the coming weeks.  This week, I want to give you some simple ways to make the most of the income you already bring in, because if you can cut your expenses, it is pretty much the same thing as getting a pay raise.  Here are five ways to cut those expenses and resources that will help you maximize your income.

Look at Your Paycheck

I am privileged to see pay statements for lots of those folks I counsel.  As we’re reviewing the pay information, I always check to see what things are being taken out before the net (take-home) pay.  There are the usual suspects: federal and state taxes, health insurance, 401k, etc. But every now and then there’s something crazy in there.  I’ve seen everything from allowing the IRS to withhold an extra $500 per payday so you’ll get a big tax refund (which is a bad plan, by the way) to withholdings for some random, unclaimed benefit that the employee didn’t even know he/she had and didn’t want.  That’s money down the drain.  As obvious as it may sound, look over your most recent paycheck stub and make sure you’re not giving away any money you shouldn’t.  If you can’t understand everything on there, visit HR and ask them to explain it. [Read more…]