Most of us in the United States will be enjoying a 3 day weekend due to the Labor Day holiday. According to Wikipedia, Labor Day is often regarded as a day of rest. The holiday originated in 1882 as the Central Labor Union of New York City sought to create "a day off for the working citizens". Congress made the day a federal holiday in 1894. Labor Day also marks the beginning of the season for the NFL and NCAA College football.

I'm planning to go hang out on the lake with some friends today and I'll be having a day of rest tomorrow. Before I head out, I wanted to highlight some of the articles I've enjoyed from my Feedreader this past week.

• How to Pay For College When You're On Your Own @ One Caveman's Financial Journey
• Small Raise, Big Difference @ Fabulous Financials
• 10 Truths About Frugal Living Revealed by 5,000 Reader Comments @ Frugal Dad
• The Jerk Store Called..They Don't Want Your Checks Anymore @ Budgets are Sexy
• 10 College Money Myths @ My Dollar Plan
• People Here Don't Give A Crap What Car You Drive @ My Two Dollars
• Pay Credit Cards Before A Mortgage? What??? @ Gather Little by Little
• The Ease of Justifying Wants As Needs @ Paid Twice
• The Best Way to Handle a Windfall or Gift @ Mrs Micah

I wish all of you a safe and happy Labor Day. Remember, no drinking and driving!! I'll see you back here next week. If you are new here, take a moment to browse the site and consider subscribing to be notified when a new post is up.

Thursday August 28, 2008 Talkback Question:


What is your favorite charity? If you don't mind sharing, approximately how much do you donate per year?

** My favorite charity is the Atlanta Community Foodbank. I feel that no one should have to go hungry in this country. **

Feel free to share why you give to a particular charity.

Image Credit: Daquella Manera

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It looks like I am going to be eating rice and beans for the rest of the month. I just updated my budget for the month and out of the $4000 I've budgeted for expenses, I only have about $54 left to last me for the rest of the month. Thankfully, it's only 5 more days left in the month of August. Sure, I could go over my budget without any major damage to my finances but that's not how I want to handle my finances. I try to stick to a budget to make sure I continue to spend within my means.

How did I get so close to maxing out my expenses? I didn't go on any major shopping sprees. I didn't buy anything extravagant. The car repairs I had completed this past weekend came out of my auto maintenance savings account so that wasn't the cause of it.

I just went back through my check register and it looks like I made alot of small purchases that added up to a big hit on my budget. You know how they say those small amounts add up? As evident from my spending this month, yeah they really do. I went to Starbucks more times this month than I usually do. I try to limit myself to one or two times a month as a special treat. Oh yeah, I also took my car in for a much needed car wash and detail. There were also several more small purchases like the few times I treated myself to a $2 chicken biscuit from Chic-Fil-A and a few visits to Taco Bell. For the next couple of days, I will be watching my spending very closely to make sure I stay under budget for the month. Next month, I will pay more attention to those small purchases.



Image Credit: compujeramey

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I finally got around to taking my car to the shop this weekend for some past due maintenance and a couple of new tires. I've needed an alignment for some time now and I just haven't wanted to spend my day off waiting in the car repair shop. I took my vehicle to a local automobile repair shop and told them what I needed.

For my two new tires, an alignment and an oil change, the total came to just over $400. I gave them the ok to go ahead and start the work. While sitting in the waiting area, the manager comes over to me and tells me that I can go ahead and complete the instant credit form while I'm waiting and by the time my vehicle is ready, I'll know how much I am approved for. I politely told him no thanks and went back to watching the TV in the waiting room. He looked at me a little strange but didn't push the issue and went on his way.

About twenty minutes later, he came back in to give me an update on my car and to see if I was ready to submit my application. Again, I politely told him no thanks. Apparently, he was not taking no for an answer this time. He started to explain how short the application was and how I would more than likely be approved. By this time, he'd started to work on my nerves a little. So again, I told him thanks, but no thanks, and that I would be paying with cash. I told him I wasn't worried about getting approved but I just did not need any additional credit. When he started in on the 90 days same as cash, I lost it. I firmly, but politely, told him that I don't care how long the application was, how long it would take to get approved or how many days I could use their money, I DO NOT WANT TO APPLY FOR THEIR CREDIT CARD. Unfortunately, it took me having to be a little rude for him to stop the sales pitch.

Have you had a salesperson try to push a credit card on you? How did you handle it?

Image Credit: Larry Page

Thursday August 21, 2008 Talkback Question:

What is the minimum amount of a windfall you would need to pay off all of your debt and get out of the corporate rat race?

** For me, I would need a minimum of a cool million. I could pay off my mortgages and student loans and then invest the remaining money in something that would generate a reasonable income. I would probably even start a business of some sort. **

How much would you need? What would you do?

Have you subscribed to SingleGuyMoney yet?

Image Credit: stephend9

Thanks goes out to SingleMa for posting about this on her blog. I figured I would share it here too.

Image Credit: action datsun

The Huffington Post has the full list of the 600 Starbucks stores being closed broken down by state.

Is your favorite Starbucks location on the list?

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One of the most important aspects of personal finance is having and maintaining good credit. Your credit is so important because not only does it affect the rates you pay on home loans and insurance but it also can affect whether you get a job. More and more employers these days are using credit to determine if you get that job you are applying for; especially if the job involves handling money or dealing with sensitive personal and financial information of others.

Most companies correlate a good credit history with your level of responsibility and financial character. A good credit score would indicate to a mortgage company that you will be likely to pay your monthly mortgage payment on time every month. A good credit score to an insurance company would indicate that you will be less likely to file numerous insurance claims. A good credit score would indicate to an employer that you will be more trustworthy, show up for work and less likely to do something that would not be against the rules. Usually this is a pretty good indicator but not always the case. Someone with a low credit score could be just as trustworthy as someone with a high credit score.

The Credit Score.

If you apply for a mortgage, credit card, loan or insurance, most lenders will check a three digit score called your FICO score. This score ranges from 300 - 850. Of course, higher scores are better with anything over 720 considered excellent. According to MyFico, most consumers fall in the range of 650-799. Consumers with higher scores will get much better interest rates than those with a lower score.

How much could you save on your home loan with different credit scores?

• 30 Year Fixed Rate $200,000 Mortgage in Georgia
• Rate w/ 720 credit score - 6.474% - Monthly Payment $1261 - Total Interest $253,589
• Rate w/ 620 credit score - 8.283% - Monthly Payment $1507 - Total Interest $342,583
• The 100 point credit score difference will cost an additional $246 a month and you will pay an additional $88,725.
• With the current credit crunch, it will be alot harder to get a mortgage with a 620 credit score!

How do you get and maintain a good credit score?

• Pay Bills on Time. This is 35% of your Fico score. Having just one late payment can send your score into a downward spiral. Once single late payment can stay on your report for 7 years.
• Good Mix of Credit. This is 10% of your credit score. Having a good mix of installment loans, credit cards and mortgages is good for your credit score. This is really important if you have a short credit history. Obviously, you should not apply for new credit just to have different types of credit if you don't need it. This will actually hurt your credit in the short term.
• Debt to Credit Ratio. This is 30% of your credit score. The closer you are to maxing out your amount of available credit, the more negative the impact to your credit score
• Length of credit history. This is 15% of your credit score and is something that simply improves with age. The oldest credit line on my credit report is over 12 years old.
• New Credit. This is 10% of your credit score. Every time you apply for new credit, the lender checks your credit score. This causes an "inquiry" on your credit report and can decrease your score 2-3 points. Multiple inquires in a short amount of time can also send your credit score into a downward spiral. Shopping for a mortgage or car loan is considered as one inquiry if done within a 30 day time period.

Using the above tips, you should see a significant increase in your credit score within 6-12 months, if not sooner. If you plan to make a major purchase within the next few months, start now to make sure you have the highest score you can. As seen in the example above, having a higher score can reduce the interest rate on your loan and save you money in the long run.

Related Posts:

Personal Finance - Back to Basics (Part 1)

Personal Finance - Back to Basics (Part 2)

Image Credit: Mene Tekel

Most of the school systems here in the Atlanta area have already started back to school . Tomorrow, the last two large school systems in the area will start back to school. What does this mean for me? When I head in to work tomorrow, the traffic will be very heavy and the easy commutes I enjoyed over the summer will come to an end. During the summer, I could get to work in 15-20 minutes. Now that all the school systems are back in session, the same commute could take me anywhere from 45 minutes to an hour.

Here are some of the articles I've enjoyed from the past week:

Carnivals. I participated in one carnival this week and I appreciate the blog host for including my post.

No Debt Plan hosted the Carnival of Personal Finance #165: College Football Edition and included my post, Personal Finance - Back to Basics (Part 1).

Other posts worthy of a mention:

Fire Finance has released the updated list of the Top 100 Personal Finance Blogs Ranked by Traffic. SingleGuyMoney made #41 in the list.

I apologize for the short roundup but I have a large list of things I need to accomplish today so I going to get started on the list.

If you are new here, please be sure to subscribe to SingleGuyMoney.

In Part 1 of the Back to Basics series, we discussed checking accounts and overdraft protection. Today, we move to Part 2 to discuss savings accounts.

According to MSN Money, the personal savings rate has fallen to near zero. The personal savings rate is the lowest it has been since 2001. The United States is currently on track this year to record a savings rate below 1%. This will be the lowest since the Great Depression when the rate turned negative.

Why Save.

You can be pretty sure that if you aren't dependent on your parents or have a big trust fund, there will be those unexpected financial emergencies that can blow your budget. If you rent or own a home, own a vehicle, you can almost guarantee that there will be an an unexpected expense to arise at some point.

Don't think you need a savings account? Consider this: What will do you when your car dies and needs repairs. What will you do when the water heater goes out? What if you lose your job unexpectedly?

Sometimes, it not all about the bad things. There are also good things to save for. You may want to take a nice vacation but you don't have the money to pay right now. Break up the total amount and save until you have the amount you need for your trip.

Unfortunately, in the real world, things like this happen and you need to be prepared to handle the unexpected expense.

If you have a savings account, you can weather the financial emergency without a major blow to your finances (hopefully). Sure, it will suck that you have to watch your savings balance drop like a rock but at least you won't need to rely on credit to get your through the rough times. It's alot better to pay yourself back than having to pay a bank. If you borrow money from a bank, not only must you repay the original amount; you'll also need to pay them for the opportunity for using their money (aka interest). Why pay the bank when you can pay yourself??

Where to Save?

When it comes to where to open a savings account, you have numerous options. If you prefer to keep your money in a local brick and mortar bank, I recommend checking with your local credit union first. Not only do credit unions offer better rates, they usually offer better customer service. The bad thing about keeping your money local is that you will probably get a pretty low interest rate.

If you are looking for a better rate and have Internet access, you may want to check into online banks. Online banks like ING Direct and HSBC are a great place to open a savings account. ING is currently paying 3% APY and HSBC is currently paying 3.5% APY. These rates are among some of the highest rates being paid right now. There is no minimum balance and no fees to maintain the account. In addtion, the account is also FDIC Insured up to $100,000 so you don't have to worry about losing your money if the bank fails. If you have a Washington Mutual Bank in your area, they are currently offering a checking and high yield savings account combo. The savings account is currently paying a rate of 3.75%.

If you don't currently have a savings account start now. It may be $5 or it may be $500. It doesn't matter the amount. The important thing is that you get in the habit of saving for that rainy day.

Image Credit: kevindooley

Thursday August 14, 2008 Talkback Question:

If you had to drastically reduce your monthly expenses, what non-essential bills would you get rid of?

The first thing to go in my house would be cable tv and home phone service (packaged with cable and Internet). Right now, I pay around $180 for cable tv, phone service and Internet service thru Comcast.

Talk to me, I want to know you what expenses are a drain on your wallet.

For any of you that are in the Atlanta area, you know how beautiful it was on Saturday and Sunday is supposed to be just as nice. Before I head out to enjoy the day, I'd like to share some of the posts I've enjoyed this week from around the blogosphere.

Carnivals. I participated in 3 carnivals this week and I appreciate the blog hosts for including my post.

Squawkfox hosted the Carnival of Personal Finance: City Slickers Edition and included my post, Invest in Your 401k - Now.

Value For Your Life hosted the Carnival of Money Stories #71 - Wander Around the World With Me and included my post, I Bought an Iphone and I Love It!!

Greener Pastures hosted the Money Hacks Carnival #24 - Dog Days of Summer and included my post, My Power Bill is on a Budget.

From my Feedreader, I enjoyed:

Financial Ramblings created a great roundup of 150+ Personal Finance Blogs. If you are looking for some new blogs to add to your daily reading, this is an excellent place to look.

Frugal Dad presents Another Economic Stimulus Check Could Hurt the Economy. Frugal Dad is currently dealing with a family emergency so please be sure to keep him in your prayers.

Fabulous Financials presents Promises, Rewards and Working Relationships. If you've never visited Fabulous Financials, you are missing out on a great read.

No Credit Needed presents Monthly Checklist to Help Speed Up Your Debt Reduction and Increase Your Savings. I need to do a monthly checklist like this.

DebtFree Revolution presents Paid Tuition for Son's School. Wow, private school is expensive and yet another reason I'm glad I don't have kids.

Moolanomy presents Need A Mortgage? Check out FHA Home Loans.

Gather Little by Little presents Sales of Spam on the Rise. I remember eating Spam as a kid but I don't know if I could keep it down now. It's funny, I can STILL remember the taste.

BeingFrugal presents I'm One of Wal-Mart's Eleven Moms! This is a well deserved honor for Lynnae.

Cash Money Life presents Hard Credit Check vs. Soft Credit Check. Good information here!

Be sure to visit all of the great reads above. I'm headed out to go play a little tennis. I haven't played in awhile so hopefully, I won't break any bones!

If you are new here, please take a moment to subscribe to SingleGuyMoney.

If you are just starting out in the personal finance game, there are a some important basic concepts you need to know in order to be successful in the money game. Even if you've been in the personal finance game for a while, sticking to these basic financial concepts can help to improve your personal finances.

I feel part of the main reason people fail in their personal finances is that they fail to make sure they cover the basic concepts. Once you start making mistakes with your personal finances, the circumstances can haunt you for months or even years.

I'll cover the basics of personal finance in several parts so that it does not become too overwhelming. Let's get started with Part 1.

Once you start earning income or if you have any money at all, the first important concept is:

Spend less than you earn. This is one of the most important tips for handling your finances. If you spend more than you earn, you usually end up relying on credit to cover the difference. Spend less than you earn and you have money for those lean months or for the occasional perk.

Checking Account. If you deal with money in any way, it's best to have a checking account to manage your money. You will want to choose a checking account that is free to use and does not have a minimum balance requirement. You will want an account that does not "nickel and dime" you for every service and does not charge a monthly service fee.

If you frequently use an ATM, you will want to make sure you choose a bank that offers multiple ATMs that are closest to your home or office. There are numerous online banks that offer ATM fee refunds or they are affiliated with a large ATM network like Allpoint. Online banks like ING have partnered with the Allpoint Network which usually has ATMs in pretty common locations like Target, Costco, BP, Walgreens, etc.

You will want to make sure there are no fees for checks or you can at least get the first order of checks free. Most people write very few checks these days so the first order of checks should last for a long time. To make that first box of checks last longer, you will want to make sure they offer free online billpay.

Overdraft Protection. The fees for bouncing a check can be astronomical these days. The average fee these days can be around $25 but can go as high as $40. Most accounts offer the option of linking your checking account to a savings account and will transfer funds to your checking account if your balance falls below zero. Some banks charge for this service and some do not. Washington Mutual currently offers a checking and high-yield savings combo that you can open for $1.

Stay tuned for Part 2.

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When I was a young child, my uncle would amaze me will different kinds of magic tricks. One of the tricks he would do and the one I enjoyed the most was the old "quarter behind the ear" trick. Looking back on it, the trick was pretty cheesy and if I'd paid attention, I could have seen exactly how the "trick" was being performed.

It's been about 20 years or so since I've seen a magic trick involving money. Yesterday, I saw something that could have been described as a bad money trick.

This guy in front of me at the gas station purchased $90 in gas and $10 in lottery tickets and paid with a hundred dollar bill. In a matter of seconds, the hundred dollar bill was gone. I can't believe how quickly this guy went from having a hundred dollar bill to not having it.

If I want to giving my savings a boost, maybe I should switch to using cash only. I know it would be alot harder to spend cold hard cash versus putting the purchase on my debit card.

Image Credit: bdjsb7

Thursday August 7, 2008 Talkback Question:

Of your total assets, what percentage do you keep liquid(cash, savings, checking, CD's, Money Markets)? What percentage of your Networth is liquid?
If you are not familiar with the term, "liquid" , it generally refers to cash that you can get at pretty quickly whereas with investments, you would have to sell the asset and wait for the transaction to clear. Getting money from investments can take a few days or even weeks.

** Looking at my Networth report I created in an Excel spreadsheet, about 31% of my Networth is liquid and about 5% of my total assets are in liquid funds. **

How liquid are your assets?

CNN Money has a simple calculator on their site that allows you to input your age and yearly income. Put in the requested information and it will spit out where you should rank based on your age and income. Based on my age, my networth is over 35 times the median. For my income, I am roughly 70% of the median. It's always interesting to do this but I don't plan my finances around it.

Check it out and see where you stand. Are you above or below the median?

I received a pre-approved offer from Bank of America for their "CleanSweep" loan. Bank of America wants to help me get out of debt so bad, they are offering me up to $50,000 at an interest rate of 8.99% to 21.99% based on my "creditworthiness". I am so glad I have educated myself about my finances and will not fall for their offer to "help". Not only could my interest rate be 21.99% but in the fine print, their is a transaction fee for each advance. So if I took out the entire $50,000.00, I would immediately be over my limit as this would add an additional $1500 to the balance. This would jack up my interest rate to the default rate of 27.99%.

You've been a pretty good bank for me and I still maintain a checking account with a very small balance, just in case I can't find an ATM that is free to use with my credit union. I appreciate all of your concern for my personal finances but NO THANKS. The only remaining debt I have is my Mortgage and student loans. The student loans have already been consolidated to a low rate and I don't plan to take on any additional debt anytime soon.

Have you received one of these crazy loan offers?

Image Credit: The Consumerist

I'd like to thank everyone who sent traffic my way in the month of July. If you've referred traffic to me, linked to an article or sent traffic to me in any way, I thank you and it is sincerely appreciated. I'm not able to mention everyone here but even if your site isn't mentioned, I still thank you.

The top 10 blogs that sent the most traffic to SingleGuyMoney in July are:

1. Fabulous Financials
2. Frugal Dad
3. Moolanomy
4. Mrs Micah
5. Being Frugal
6. NCN Blog
7. Paid Twice
8. Cash Money Life
9. Frugal Bachelor
10. Today's Budget

Total Site Visitors in July: 9,596

RSS Subscribers as July 31, 2008: 687, up from 641 in June. If you haven't subscribed to SingleGuyMoney, you can do so here.

Top 5 Most Popular Articles in July:

1. If I Had Known Then What I Know Now
2. Most Reliable Used Cars
3. 10 Tips to Stretch Your Healthcare Dollar
4. Paid Off Debt and Credit Score Decreased
5. Increasing Credit Scores

Thanks again to everyone who refers traffic, visits and comments on SingleGuyMoney. Please visit often and tell all of your friends.

Assets:

• Primary Home - $196,000.00
• Rental Property - $137,000.00
• Car - $19,000
• Retirement - $40,758.09
• Cash (checking & savings) - $23,575.12
• Brokerage - $2119.76
• TOTAL ASSETS: $428,952.97

Liabilities:

• Primary Home Mortgage - $181,646.82
• Rental Property Mortgage - $148,140.28
• Student Loan - $22,500.00
• Credit Cards - $95.62
• TOTAL LIABILITIES: $352,382.72

Summary Report:

• Assets increased $2,156.19 (.51%)
• Liabilities decreased $328.09 (-.09%). I need to start paying more towards my debt!
• Overall, me Networth increased $2,484.24 (3.35%). Not bad considering the stock market.
• I was able to save over $2300 this month due to careful planning and an extra paycheck.
• Thanks to the extra paycheck this month, I was able to get my Emergency Fund back to my $20,000 minimum.
• I increased my yearend Networth goal by $10,000 to $85,000. I'd originally set a yearend goal of $75,000 by December 2008. Since that goal was met in July, I am increasing the goal to $85,000.
  

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Most companies these days offer 401k retirement plans to help you save money tax-free for your retirement. If you are offered a 401k plan through your employer and you are not taking advantage of it, DO IT NOW.

Now is a great time to start investing because the market is down right now. It's like your favorite department store is having a sale and you need to make your purchases before the prices start to go up.

What are the benefits of a 401k?

Tax Deferred Growth. The dollars you put into a 401k account are deducted from your pre-tax salary. You only pay taxes on the money when you start withdrawing money from the account (retirement).

Lower Taxes. The amounts you contribute to a 401k are deducted from your pre-tax salary. You are able to deduct this amount from your taxable income (up to the applicable limit).

Free Money. Most companies will match your 401k contributions up to a certain amount. For example, my companies offers a 3% match on the first 5%. Even when I was in debt, I made sure to contribute at least 5% into my 401k to make sure I took advantage of the free match from my employer.

Portable Money. If you leave your job, you have the choice of taking your money with you or your employer may allow you to leave your money in your former company's plan.

Don't wait until next week or next month to start investing in your 401k. Do it NOW! This is money that you will need to replace income from a job once you are retired.When you retire, don't you want to be hanging out on the golf course or travelling to your favorite places instead working?

Image Credit: bradipo