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When To Use Your Credit Card And When To Use A Debit Card

thinking woman holding credit cardIf you’re like most Americans you carry both a credit and debit card. If you’re typical you probably carry multiple credit cards. One survey recently found that the average American carries between five and 10 credit cards. We also have an average of 11 “credit obligations,” including credit cards, department store charge cards, gas cards and, of course, a debit card. This makes it unsurprising that the average American household owes $15,611 just in credit card debts.

The pros to credit cards

When you stop to think about it, credit cards are a lot like drinking wine. Using them sensibly and in moderation can be good for you just as drinking red wine in moderation can be a good thing. But using them to excess can cause serious problems.

On the upside using a credit card limits your liability to $50 in the event your credit card number or your entire identity is stolen. If you are ripped off the odds are that even the $50 liability will be waived. You should always use a credit card when buying online even if it’s a site you seriously trust. The old adage that it’s better to be safe than sorry definitely holds true when buying online.

Do you have recurring monthly payments such as a membership to a health club? It’s much better to put that recurring payment on a credit card. This is so that if you were to ever get into a dispute with the club you’d find it much easier to have the charge removed from a credit card then a debit card.

Avoiding holds

If you were renting a car or something from a home improvement store you’d be smart to use your credit card rather than that debit card. This is because the car rental company or the store might put a hold on your funds. By using a credit card you would still be able to access all the money in your checking account instead of seeing some of it frozen until the hold is released.
Its also possible to see a hold put on checks you deposit in your checking account as explained in this video.

When you’re booking travel it’s also better to use a credit card. This is for the same reason. If you use a debit card the money will be instantly deducted from your checking account the minute you make a reservation, or the travel company might put a hold on a certain part of your funds. If you use a credit card then you still have access to all of the money in your checking account. If you do need to or want to use your debit card to make travel reservations, be sure to ask how much if any of your funds the hotel or reservations company will hold. For that matter, most gas stations will put a hold on your funds. You could buy $30 worth of gas but the hold will be for $100. So before you use your debit card to buy gas it would be a good idea to make sure you understand what the station’s policy is regarding holds or use a credit card so that you’ll still be able to access all the money in your checking account.

Rewards points and travel miles

If earning cash back, rewards points or travel miles is important to you it would be best to put all or at least your major purchases on a credit card that has a rewards program. After all, if you’re using the card and racking up some debt you might at least earn some rewards.

When to use your debit card

As you have read there are many occasions when it makes better sense to use your credit card than a debit card. But there are, of course, times when its better to use your debit card for purchases. For one thing, using your debit card will keep you from racking up debt. This might not be a real difference if you pay off your balances at the end of every month but if not then consider using your debit card more and your credit card less. The problem with a credit card is that it just makes it so darn easy to buy things when you don’t have the money to pay for them. It’s also better to use a debit card if your credit card has a very low limit. This is because if you’re not careful you could exceed your limit, which would have a very negative effect on your credit score.

Money coming out of computer like ATMIf you need cash

If you need to make a withdrawal from an ATM it’s always better to use a debit card – assuming you have the money in your account. The reason for this is simple. When you take cash using a credit card you’re borrowing money and probably at a much higher interest rate than when you’re just making purchases. Plus, you start paying interest on that money the minute you take it out of the ATM.

Give a small business a break

If you do business with a small, local merchant you could give it a break by using your debit card instead of a credit card. Most merchants hate credit cards because of the fees they are required to pay to accept then. Of course, debit cards also come with fees but they are much smaller. So if you have a favorite local merchant you could give it a break by always using your debit card. You might also use your debit card when negotiating big purchases as offering to use it would relieve the merchant from the need to process a credit card, which could save it money. In other words this could be a bargaining chip.

When paying taxes

Your local and state governments as well as the federal government are allowed to charge what’s called a credit card convenience fee. It is typically about 2% of what you are paying. But when you use a debit card, there is just a flat fee of about three dollars. So if you’re making a tax payment of $150 or more, it will cost less to use your debit card.
If you’re offered a cash discount

Did you know that sometimes there are discounts available if you pay cash or use your debit card? As an example of this, gas stations sometimes show two prices – one for credit cards and a lower one for cash or debit cards. However, remember what we said earlier on in this article, which is that most gas stations will place a hold on your debit card for $100 that can keep your cash tied up for several days.

Use your debit card to pay utility bills

Finally, it’s best to use your debit card when paying your electrical, gas or water bill. The reason for this is the same as when paying taxes. Many public utilities are allowed to charge an additional fee when you use a credit card. You may also be charged a fee if you use a debit card but it will be much less. Plus, when you use a credit card to pay for your utilities you’re basically borrowing money to pay for them, which in most cases just isn’t a good idea.

50 Side Hustles Or Simple Things You Could Do On The Side To Pay Off Your Debts

If you’re awash in a sea of debt you must be pretty uncomfortable. The worst thing about debts is they just never go away. You could ignore a debt for six months and you might stop hearing from that particular lender but trust us. It will sell your debt to a third-party so it won’t have gone away. It will only have moved. And it will probably have moved to a debt collector. If you don’t already have debt collectors harassing you then get busy before the harassment starts. Debt collectors are like the cockroaches of life. They won’t stop making your life miserable until you settle the debt. If that particular debt collector gives up on you, which is seriously unlikely, that debt still won’t disappear. The collector will simply sell it to yet another collection agency and so on and so on.

The good news is that if you seriously want to get out of debt it’s not all that difficult. There is a bunch of “side hustles” or simple ways to make money on the side. Pick one or several of the 50 we’re about to share with you and you could be debt-free in practically no time at all.

Happy BusinessmanBe your own boss

You really don’t even have to work for someone, as there are there are easy businesses to start that you could run in your spare time. Some of these could even be fun as well as moneymakers.

#1: Get crafty

Craftsmen were dealt an awful blow by today’s mass production technology. But they’ve been coming back these days in a big way. Many people have become sick and tired of assembly-line stuff made in China. Thanks to the website you could set up shop and sell whatever it is that appeals to you and that your tools and skills can handle. We’ve seen people making simple things such as shaving brushes, lamps, personalized notebook covers and hundreds of other items – and making good money.

#2. Got a degree in English?

There’s a big market out there for people who can be proofreaders and editors. This is a great how to make money on the side because the only tool that’s required is your brain. You might be able to start working for friends or former classmates. But as you build your “creeds” you should be able to branch out and find work in Craigslist postings and independent/indie author’s forums.

#3. Personal chef or meal delivery

Got a knack for cooking? There was a time when only the rich could afford a personal chef but now more and more middle class people are jumping on the bandwagon. You could go into the home and make meals for them several times a week or prepare the meals in your house and then deliver them. One note of caution. If you want to fix meals in your own home and then deliver them, be aware that there may be laws that requirimg you to make the food in a kitchen that’s commercially-certified. And it can be costly to get that certification. You might be able to work around this if your city has a commercial kitchen where you could rent time.

#4. Pick up dog poop

This might sound like a nasty side hustle but it’s one of the easiest business to start. For that matter, some people actually do this full time. All dogs have to poop and there are people who don’t want to have to go over their yards every week looking for their dog’s droppings. Get as few as 10 customers a week at $30 a week and there’s a cool $300.

#5. Troubleshoot computersManager working diligently on the computer

If you’re one of those kind of, well, geeks that are not afraid to tear apart a computer to replace a motherboard or install a hard drive, this could be a way to pick up some real cash. Most people don’t know much about their computers except how to turn them on. Become a repair service for those people and you could earn $50 or more an hour by teaching them how to use their computers and then fixing them when they freeze up.

#6. Create blogs and websites

There’s hardly a business today that doesn’t need a website and maybe even a blog. Pick a couple dozen local businesses, go check out their websites and you’ll probably find most are dull, boring and static. You could not only help businesses by upgrading their sites but then charge extra to make those sites rank higher in the search engines to get the businesses new customers.

#7. Be a pet taxi service

There are many families these days where both the husband and wife work and maybe very long hours. They simply don’t have enough time to taxi their dogs or cats to the veterinarian or to get it groomed or get a medical check-up. You could be a pet taxi, pick up the animals and transport them to their appointments.

#8. Clean windows

Another way to be your own boss is to get a squeegee, some cleaning product and wash windows. This is another area where many people simply don’t want to have to face the task and are more than eager to let someone take it over for them.

car wash cartoon#9. Detail automobiles

Some people and I’m certainly not one of them prefer to detail their own cars. But there are plenty of people who will gladly pay you to take this task off their hands and make their vehicles shine like new.

#10. Create a blog

I’ll be honest and tell you it’s not easy to earn money with a blog but it is possible – if you don’t mind investing a lot of your time and sweat. But pick the right niche, generate a lot of good content, get a bunch of readers and you could make excellent money selling them products.

#11. Make music

Are you good on the keyboards or string instruments? A good side hustle would be performing at small business events and weddings. See, all that practice really didn’t go to waste.

#12. Teach music

You don’t have to be a performer to make money with music. You could become a music teacher. You could either give lessons in your home or go to people’s’ homes.

#13. Create family histories

There are numerous people who would love to know their family’s history but have neither the time nor the skills to do the work required. People sometimes even have software to do this but are still confused and don’t know how to use it. Your how to make money on the side could be to help them create their family trees.

#14. Sell you own t-shirts/posters/mugs

It seems like it was just a few minutes ago that to make your own T-shirts meant screen-printing them yourself. However, the cost to get started in this business is now practically zero what with all those sites that will print on demand and then ship your t-shirts or whatever for you. You could create designs and put them on everything from shirts to coffee mugs. These companies do everything for you including even the shipping. Of course, it’s up to you to do the graphic design. Be prepared for the fact that the printer will take a big cut leaving you with a much smaller net profit. But it’s a great way to get started in a new area to determine if there are people who would pay for your creations.

#15. Refurbish stuff

Do you like to refurbish your furniture? Then why not charge people to do theirs? You could even specialize in refurbishing certain items like furniture, clocks, phonographs or old-time radios.

#16. Make “artisan” jerky

Yes, you read that right. You could become a jerky maker. When women think of easiest business to start they almost inevitably think cupcakes. But we guys have jerky. There are a lot of independent makers of jerky and jerky artisans that have emerged in the past few years as an alternative to that low-quality, mass-produced jerky you find in grocery stores.

#17. Teachteacher a school

What could you teach? The list is almost endless. You could teach a foreign language, origami, drawing, or basic computer skills. All you would need is a place to hold your classes and some willing learners. If you have the right skills or expertise you could give a class through CE (continuing education) sites, libraries and rec centers. There is also the new site where it’s possible to host classes for students interested in your subject.

#18. Be a tutor

If you’re really proficient in math, language arts or the SAT test you could become a tutor as there is never a shortage of people willing to pay for this service. Finding these clients is fairly easy. Just call a few of your local public schools as many of them keep lists of available tutors to give the parents that need one for their children.

#19. Be a jack of-all-trades handyman

Do you live in an apartment complex Then you know there‘s that one guy that repairs all those small things that can go wrong. But people in homes have to call someone different to fix every different thing from the furnace to the dishwasher. One of the great side business ideas is to become a Jack-of-all trades handyman. You could actually try asking for a retainer where people pay you a fee monthly so they could call you whenever they needed you and for whatever reason just like in an apartment complex.

#20. Personal shopper

There are so many choices available today for just about every single item that finding the right one can be time-consuming and frustrating. Where could I find a sweater like this one? What’s the best computer for my needs? What’s the best-priced ticket for my flight later this month? Let your clients tell you what they need. You would then go to work sorting through all the available options and then present them the three best choices or, depending on their level of trust, make the purchase for them.

#21. Be a travel agent

Professional travel agents have sort of gone the way of the dodo bird leaving a wide-open niche for helping people find the best travel deals. You could even specialize by setting yourself up as that person who finds and books the best vacation packages.

cartoon cute girl shoot photo with camera#22. Shoot photographs

If you have a good DSLR, the requisite skills and experience you could set yourself up documenting people’s weddings, family moments and birthdays. You could also license the rights to your photos for commercial use as well as many other things. It’s easy to do this through Flickr.

#23. Become that dirty jobs guy

There’s just a ton of unpleasant stuff that people either don’t want to do or can’t do. If you’re not afraid to clean the cobwebs and old junk out of a basement or clean a shower that’s gotten so aeful looking that the owner is embarrassed to contact a maid service you could charge good money for this. Spend a few minutes thinking about all the gross things you could do. You’ll probably come up with a fairly lengthy list. Put up a listing on Craigslist and you might actually find yourself overwhelmed with work.

#24. Write content

Content has become the battle cry of almost all bloggers and website hosts as content is what attracts and keeps readers. You may not make a lot per 500-word article but if you can crank out a dozen or so a day it could be good money. Plus, traditional magazines also still pay top dollar for great stuff.

#25. Videography/video editorVideographer

Many people no longer want just photographs of their weddings. They want them professionally videotaped and edited. With more and more video being watched online the market for good videographers and editors is only going to keep going up. If you can make and edit short films, you could sell your service to people to “shoot” their wedding. Local businesses can also be clients. You might sell them on the idea of a brief video for or that the business could put on its webpage.

#26. Computer programmer

Practically everybody has that great, brilliant idea for a smart phone app that will make them a gazillion dollars. Fortunately for you very few of them have the skills necessary to create the app and reliable computer programmers are hard to find..

#27. Personal trainer/fitness expert

You would need to be certified to do this but once you get your creds you could help people with their workouts at their favorite health club. Or you could start what’s called a boot camp. There are people who need specialized workout programs to help them train for an event such as a triathlon. There are also people looking for good exercise without going to a gym. It seems to us that there is a really good market for people offering what you would call “off the wall” kinds of fitness programs.

mower#28. Landscaper and lawn care

One of the small business ideas for men is where you could make good money with just a mower, a pickup truck and an edging tool. Plus you could do it evenings and weekends. Our lawn care guy charges $30 a week. Get 10 customers and that’s $1200 a month.

#29. Do other people’s taxes

This is an easiest business to start because again all you need is your brain and the computer you already own. We know of people who do this for their friends and relatives and charge a just small percentage of their returns. If you were to charge $60 and do this for four people a week during tax season that would be $960 in a month. You could actually use TurboTax to do the work for you. This is just a perfect side hustle.

#30. Drop shipping on the Internet

Drop shipping is where you create a storefront on the Internet and sell products but then let the manufacturer or wholesaler fulfill the sale for you. This means you actually never touch the inventory. You won’t make as much money as if you were selling your own product because the wholesaler or manufacturer will take its cut. But the work is almost effortless and once you get rolling, it requires practically no more work on your part.

#31. Teach on Udemy

You could make an online course in just a few hours and then sell it on Udemy. We know of one guy who earned more than $10,000 in just a few months from an online course that took him less than seven hours to create

#32. Airbnb

Could you rent out your home while you’re away? This can be a great moneymaker. Alternately, if you have two bedrooms and your rent is $1000 a month you could rent out one of them at $70 a night. This could generate a profit of $1100 a month.

#33. Sell your services on Fiverr

If you can do something fast, whether it’s create a logo, make a jingle or do fan pages you could make good money selling your services on Fiverr. Of course, as you probably know you only make five dollars per “gig” but we’ve seen people making more than that by offering logical add-on services for another $20 or $30.Cooking girl holding cake

#34. Be a baker

Do you have a knack for baking cakes, cupcakes and the like? You could dominate your workplace. We know of one woman who loves to cook and started offering to make salads for her coworkers. She ended up turning this into almost a full-time business.

#35. Start a painting service

You might look down at painting services but the good ones charge $50-$70 a room. If you live in a college town you could paint student-housing complexes. Three rooms at $75 each means $225. Multiply that by 500 apartments and that’s a cool $112,500.

#36. Write and fine-tune cover letters and create resumes

Given the way hiring works these days people absolutely need great cover letters and resumes. But this is beyond the abilities of many people. Smart people will pay good money for great resumes and cover letters. You could charge more if you have to start from scratch but you could also make money just doing critical revisions.

#37. Be a mover

No, this isn’t like being a mover and shaker. If you live in a town where people seem to move around a lot, you could create a moving service with the help of one or two of your buddies. College towns are great for this because they generally have people moving around every several months.

#38. Pick up other people’s trash

People end up with a ton of junk in their homes because they don’t want to have to move it. Charge people to take the junk out of their homes and off their hands. If you don’t think this would be a good side hustle look at the money being earned by 1-800-got-junk.

#39. Be a tour guide

Do you come from another country or are you intimately familiar with a foreign country? You could start a small tour guide company for people who want to visit that country. We have one friend from Sweden who earns tons of money every summer tour guiding Americans through his nation.

cartoon bartender pouring cocktail#40. Tend bar

This is one where you probably would have to be certified and certification programs can cost $500 and up. However, some bars will actually teach you on the spot if they’re really desperate for help. The hourly pay here tends to be on the low side but where you really make the money is in tips. In addition, you get to meet a lot of people along the way, including people of the opposite sex (grin).

#41. Bike messenger

Do you own a bike and a backpack? That’s all you need to be a bike messenger. You would help companies (especially advertising and legal) that do business with each other and need to send original documents back and forth. Believe it or not even in this day and age of FedEx and UPS there is still the need for someone that can get an original document from a company to a customer in less than an hour.

#42. Plan events

Just because a person or a company wants to put on an event doesn’t mean they will know how to do it. There are banquets, anniversaries, baby showers, birthdays, weddings and anniversaries where people need help planning, coordinating and executing. If you enjoy doing this, there’ll always be events and you will always have business.

#43. Stage fundraisersbreast cancer design

Do you know of a nonprofit that wouldn’t like some extra money? We’ve personally never run into one. There are numerous websites that help nonprofits raise money online and then take a percentage of it. You could do the same if you can get to the right people in a room or put together a campaign or event that would help a nonprofit you believe in raise more money to do more good work.

#44. Do gardening

This is different than doing lawn work because you would actually be planting and caring for flowers and bushes. This is also a great repeat side hustle because once you create that garden and those flowerbeds you’ll have an ongoing job maintaining them.

#45. Assemble IKEA furniture

Can you read diagrams and are good with your hands? People buy furniture from IKEA, bring it home, open the carton and 100 pieces fall out. If you like building stuff you could put an ad on Craigslist offering to help people assemble IKEA stuff and other “shipped flat” items. All you really need is a wrench and a screwdriver.

#46. Life coaching

Are you that guy or gal your friends are constantly coming to for advice. Why not charge – other people – for the service. The reason why your friends and relatives come to you is because you’re a great listener and you appear to have everything together. People value this and will value you and your advice as a result of it.

#47. House sitting

People who are away from their homes for long periods of time often don’t like the idea of them sitting unoccupied. They might even have pets that need to be cared for while they are gone. Or they might live in a neighborhood that isn’t quite the safest. Whatever the reason might be, housesitting can be a great side hCleaning womanustle – especially if you’re a real homebody.

#48. Start a housekeeping service

While there are professional housekeeping services they can be pricey and pretty stringent about what they’re willing to do. You might be able to build a good side hustle business offering to do customized housecleaning where you do everything your customer requests and not just whatever can be done in four hours.

#49. Massage therapy

While you would need to be certified to do this it could be a great side job especially if you’re good with your hands. There are a lot of stressed-out people today and this stress tends to manifest itself in their backs, shoulders and other parts of their bodies. You could make a good deal of extra money by helping them work out those knots.

#50. Hairstyling

Did you grow up doing your sister’ hair? Did you develop a sort of a passion for it? Some people do and some people don’t. However, there is a ton of money in women’s hair care and design. Do a few friends a week and you could see your bank account fatten up considerably.

Store Credit Cards – Great Money Savers Or A Really Bad Idea?

Attractive woman holding small goldern scalesTis the season to be jolly and the season to be pressured by clerks to sign up for store credit cards. There you are at check out ready to pay for your purchase and the bright-eyed clerk asks, “Wouldn’t you like to sign up for our store credit card and earn this wonderful discount? After all, you’re buying the stuff anyway why not save some money?” We’ve seen discounts as deep as 25%, which could be a substantial savings if you’re buying $200 worth of kids’ toys. Or even better if you’re buying a $500 tablet.

Before you sign on the dotted line

As tempting as that discount might be here’s something to consider. One recent survey found that nearly half – 49% – of those that had signed up for a store credit card ended up wishing they hadn’t. Given this statistic it’s clear that you should think the matter through very carefully before you sign on the dotted line. And you should never feel unduly pressured to get that store credit card. If you see that one of your favorite stores is offering a great discount when you sign up for its card then think this through carefully while you’re outside the store and not when you’re at checkout. Don’t get us wrong. Signing up for a store credit card can actually be a very good decision. Or it can be a terrible one. What’s the difference? It will depend on how you pay your bills and your current financial situation.

Understand what you’re signing up for

If you sign up too hastily without understanding the card’s terms and conditions you could end up doing yourself a world of hurt. Store credit cards have seriously high interest rates or almost as high as the interest rates paid by subprime borrowers. Another survey done recently found that America’s largest retailers had an average APR of 23%. And this is about eight percentage points higher than the national average for all credit cards. What this means is that if you fail to pay off that purchase in a couple of months you’ll have basically given back the discount your earned by signing up for the card in the first place. As an example of this let’s suppose you put $1000 on that brand-new store card. If you pay just the minimum balance it would end up costing you $840 in interest and take you more than six years to pay off the balance. In fact, the retailer can actually make more money off the interest than in selling you the merchandise. Know this and you will understand why they are so eager to give you that discount when you sign up for their store card.

More stuff to consider

Do you pay off your credit card balances in full every month? If so and you’re not about to buy a car or take out a mortgage soon and you could save a lot of money by signing up for that store card, then maybe you should do it. In addition, getting a store card and using it to establish credit can be a good thing because our retailers are often more lenient about whom they let have their store cards than if you were to try for a Visa, MasterCard or Discover card. In fact, if you have a low credit score you have a much better chance of landing a store credit than one of those “universal” cards. If you keep your balance low and pay off your bill at the end of every month you’ll be well on your way to a better credit history.

Don’t get a bunch

No matter how much money you could save by signing up for a bunch of credit cards just in time for your Christmas shopping it’s like the old, “Just say no.” Why is this? Because it could seriously damage your credit score. And keep in mind that if you want to get a store card that’s co-branded with American Express, Visa, Discover or MasterCard, you’ll still need to have very good credit.

What if you don’t have good credit?

If you don’t have good credit than, as noted above, a store credit card could be a good choice but only if you use it sensibly and pay off either the entire or most of the balance at the end of every month. Beyond this, you should get to work improving your credit worthiness. Unfortunately, there’s very little that can be done about this short-term. A full 35% of your credit score is based on your credit history and there is nothing you can do about this. It is what it was. But 30% of your credit score is your credit usage and this is an area where you could do some good. Credit usage is quite simply how much credit you’ve used versus how much you have available. This is usually expressed as your debt-to-credit ratio. Let’s say you have $10,000 in total credit available and have used $5000 of it. Your debt-to-credit ratio would be 50%, which could have a negative impact on your score. If you could pay down some of that debt or get your credit limits increased so your ratio drops down to less than 30% this could cause a nice uptick in your credit score.

The other three components

The three other components of your credit score are length of credit history, new credit and types of credit used. Once again there’s not much you can do about your length of credit history but you could influence the types of credit used by getting a new auto loan, a personal loan or even a home mortgage. What new credit really means is the number of times you’ve applied for new credit. This gets back to the point made earlier about not applying for too many credit cards during this holiday season.

woman with laptop and credit cardBeyond this you will just need to make sure that you pay off each credit card at the end of the month if it all possible. One trick that’s helped many people is setting up alarms on their computers or smart phones to remind them when their payments are due. Other people have had success by taking all of their bills when they come in at the first of the month and then sorting them into two categories – those that need to be paid at the first of the month and those that need to be paid in the middle of the month. They then organize them in such a way that they pay about the same amount at the first of the month and at the 15th. If you have bills with due dates that don’t fit this scheme then contact your creditors’ customer service departments and you should be able to negotiate a change in due dates. Be sure to mark the bill paying days on your computer or smart phone – the first and the 15th. When the time rolls around reserve an hour or so to review your bills and get them paid. Finally, whenever possible, sign up for online bill pay as this will not only save you a stamp it could end up saving your credit score.

Finally, here are some more good tips for bill paying courtesy of National Debt Relief …

“Why Can’t I stay On My Budget?

We don’t know of a single financial expert that wouldn’t advise people to make a budget and stay on it – assuming you’re not one of that fortunate 1%. In that case you’re probably not reading this article anyway so it doesn’t matter.

Why is it important to have a personal budget?

It’s basically for the same reason that every successful business has a budget in the form of a business plan. It’s because without a budget, it’s practically impossible to know where you stand financially and what will happen to you and your family in the future.

How did you arrive at your budget?

One of the principle reasons why people fail to stay on their budgets is because they didn’t budget correctly. Maybe they tried to make a budget too hastily and without doing the homework first. The first rule of budgeting is that you must know where your money’s going so that you will know how to allocate it in the future. The only real way to do this is to track your spending for at least a month and by this we mean all of your spending – right down to that candy bar you bought at work. After those 30 days you will need to divide your spending into categories. There are a zillion online sites where you can find a list of these categories but the major ones all tend to be the same – food, clothing, utilities, transportation, medical expenses, debt payments, entertainment and so forth.

If you need help making a budget, watch this video from Bank of America …

Your budget is too inflexible

If you’re having a really hard time staying on your budget the reason may be that it’s too inflexible. The best way to think of a budget is like a football team’s game plan. While the team’s coach might have a complete game plan in mind, he will watch the game as it unfolds and then make changes accordingly. If you’ve become discouraged because you’ve “busted” your budget in several categories, don’t give up. Review the amount of money you’ve allocated to each category and then make adjustments. You’ll probably find a category or two where you didn’t spend as much money as you had anticipated. Take the money out of those categories and assign it to the ones where you were unable to stay within your budget. The important thing is to review your budget regularly and then make corrections just as a ship’s captain will tack and jibe as the winds change.

You failed to set goals

Your budget doesn’t exist in a vacuum. If you’re unable to stay on your budget the reason might be that it’s not linked to your goals. What are your goals? Is your goal to retire early, buy a second home, sail around the world or pay for your kids’ education? Since the real purpose of a budget is to save money you need to ask yourself why you’re saving it. When you have goals your budget will help you make progress towards achieving them, which can keep you motivated to stay on your budget. What’s best is to have both short- and long-term goals. You could then see you’re making progress towards realizing a short-term goal without becoming discouraged because you don’t see you’re making much progress towards achieving a long-term goal – especially when things get tough. As an example of this it can be discouraging if your only goal is early retirement and you suffer a setback in your career and feel you’re not saving enough money to achieve it. But if you also had a short-term goal of taking a nice two-week vacation next year and you see you have almost enough money saved to pay for it, you might feel less discouraged and more motivated.

Your partner isn’t onboard

There’s an old saying that it takes two to tango. It also takes two for a budget to work. If your spouse or partner isn’t interested in budgeting or consistently fails to stay within your budget for whatever reason, the two of you need to have a serious talk. You should sit down with your spouse or partner and try to determine what can be done to get them to buy in. You will need to discuss your financial philosophies and have all your numbers available. You might be able to show him or her that your budget isn’t terribly restrictive and that there is room to make changes. Try to get him or her to understand that your budget is a roadmap designed to get you to your important goals. If your spouse sees he or she won’t have to make drastic changes in their lifestyle you may get more cooperation. If you can stay calm during this discussion – without getting upset – you may find your spouse will be more willing to work with you.

There was no emergency fund

Every budget needs to include an emergency fund. This is so that when you run into an emergency and, trust us, you will eventually run into an emergency, you will have the money to pay for it without having to run up debt. Most financial experts say that you should have the equivalent of six months of living expenses in your emergency fund. If the idea of saving this much money seems too awful, try for at least three months worth. If you don’t already have an emergency fund, make it a line item in your budget so that you’re saving money for it every month. One easy way to do this is to have the money automatically withdrawn from your checking account and deposited into your savings account each month. You might think of your emergency fund as a personal life insurance policy but that the “premiums” are yours to keep.

You didn’t give it a sufficient amount of time

If you made your budget just a few months ago and feel it’s just not working then maybe it’s because you didn’t give it enough time. One way to overcome this is to consider those first few months to be a sort of beta test and now you’ve learned enough to make a real budget. It can take time to smooth out a budget and for you to make changes in your spending habits. Don’t beat up on yourself if you haven’t been able you stay on your budget for those first few months. Professional athletes didn’t get to be the way they are overnight so don’t get discouraged if you haven’t become a professional budgeter in just a few months.

You just hate budgeting

If you find you just hate budgeting what with all that software, columns and rows of numbers, you need to look at other ways to manage your money that would eliminate this. For example, you might withdraw the cash you need for a week or two weeks at a time with the idea that when it’s gone, it’s gone. Or you might try the program Mvelopes, which is based on the old envelopes strategy for budgeting. This is where you divide your paycheck into envelopes based on your categories. Then when that envelope is empty, that’s it. You can’t spend any more money in that category. Of course, with Mvelopes this all happens digitally on your computer and not in actual paper envelopes.

If neither of these options appeal to you and you just hate budgeting, what can you do? You will need to do some research to see if you can find a money management plan that would help you achieve your goals without that terrible demon called budgeting.

Improve Your Mortgage IQ By Learning These 8 Important Facts

Street of residential housesIf you are thinking about buying a house, you’ll undoubtedly need a mortgage. Mortgages can be complicated and have a language of their own. There are some important facts you need to know about mortgages that could save you money and keep you from getting in financial trouble. Here are eight of them.

Choosing an ARM could make good sense

An ARM or Adjustable Rate Mortgage is different from a conventional mortgage because its interest rate will move up and down each month as market interests change. These mortgages generally have a fixed rate that can range from a month to 10 years during which time the interest rate doesn’t change. Then there’s a longer period during which it can change at predetermined intervals. The standard for ARMs has become a 5/1. This loan has an initial fixed interest rate period of five years with the rate then adjusting annually after this. This is usually called a hybrid mortgage. Other popular hybrids are 3/1, 7/1 and 10/1.

If you believe you’ll be in the house for seven years or fewer an ARM could make good sense, as its lower interest rate would translate into a lower monthly payment. But if you were to choose a 5/1 where the interest rate would reset after five years, there starts to be a change in the math. This is because your interest rate typically would go up two points every year after that.

If you’re applying for a conventional loan be prepared to pay for PMI

The three most popular types of mortgages are VA, FHA and conventional mortgages. Both VA and FHA mortgages are backed by the federal government. This reduces the risk to the lender. Unfortunately, conventional mortgages are not federally backed and, therefore, represent more of a risk to the lender. In this case, the lender will likely require you to buy PMI or private mortgage insurance. This protects lenders against a loss if you were to default on the loans. If your loan has a loan-to-value (LTV) percentage in excess of 80%, most lenders will require you to buy private mortgage insurance. The good news for you as a borrower is that this would allow you to make a down payment of 3% to 19.99% in comparison with the 20% you would be required to put down without PMI. You would pay on your PMI every month until you have enough equity in your home that the lender would no longer consider you to be a high risk.

It costs no more to use a mortgage broker

A mortgage broker is different from a mortgage banker. When you use a mortgage broker it serves as an intermediary between you and the lender. It will gather all the paperwork from you and then pass it along to the mortgage lender for underwriting and approval. The funds for the mortgage are lent in the name of the mortgage lender and not the mortgage broker. However, a mortgage broker will collect an origination fee or a yield spread premium from the lender as compensation for its services In other words, using a mortgage broker is really no more expensive than using a mortgage lender. Which you choose will be mostly a matter of your personal preferences. Some people are just more comfortable going through a broker instead of having to deal directly with the bank or lender. Plus, brokers can sometimes smooth out the transaction and make things simpler and easier for the borrower.

An FHA loan almost always has a lower interest rate

FHA or Federal Housing Administration loans generally have lower interest rates than conventional loans because the federal government backs them. This reduces the risk to the lender. One of these loans can be a good choice for a first-time buyer that doesn’t have much money to put down, as the down payment can be as low as 3.5%. This means you could buy a $200,000 house for just $7000 down. However, the downside of FHA loans is that you would be required to buy two forms of private mortgage insurance. The first is an upfront mortgage premium that would be 1.75% or $3500. However, this can be added to the loan so you would not be required to pay it out of pocket. But there is also an annual mortgage premium. In this case with a down payment of less than 5% you would pay 1.35% of the total loan balance. This works out to be $214 per month on a $200,000 mortgage. If you continue paying on that mortgage for five years you’ll have paid $15,708 just in mortgage insurance and over the life of the mortgage you would pay an incredible $49,479.

There are times when you might want to pay points up front

If you don’t know what a point is, it’s a fee equal to 1% of the amount of your loan. As an example of this a 30-year mortgage $150,000 might have a 7% interest rate but also a charge of one point or $1500. Lenders can charge one, two or more points. These are called origination points. The lender charges them to cover the cost of making the loan. In comparison a discount point is prepaid interest on your loan. If you want to lower the interest rate on your loan you should pay more points. You can generally pay from one to three or four points. This will depend on how much you want to lower your interest rate.

The decision of whether or not you should pay points and how man will depend on a number of different factors including how much money you have to put down at closing and how long you intend to stay in your house. If you intend to be there for a while, paying points is prepaid interest will reduce your interest rate which could be an advantage. However, if your goal is to get the lowest possible closing costs that you should choose the zero-point option on your loan program.

The good news of discount points is that they are tax deductible.

You can refinance that mortgage as often as you like

Despite what a mortgage banker or broker might tell you, it’s possible to refinance a mortgage whenever the mood strikes you. Of course, there are always transactional costs involved with refinancing a mortgage so its best to refinance only when this would reduce your interest rate to the point where you could recoup the costs while you are still in your home.

You could buy a house as soon as three years after  bankruptcy

There is a common myth that if you file for bankruptcy you can’t buy another house for anywhere from 7 to 10 years. The truth is that if you’re a veteran you might be able to qualify for a VA loan in as soon as two years. If you’re not a veteran you might qualify for an FHA-insured loan after just three years or even fewer if you can prove extenuating circumstances such as a medical emergency. However, both Fannie Mae and Freddie Mac generally will not insure loans to people until after seven years if they had lost their homes to foreclosure.

It might take more than 10 years before you’re really paying down the principle on a conventional mortgage.

If you had a conventional mortgage and 3.5%, the first $.35 of every dollar of your mortgage payment goes towards reducing the balance of your mortgage and the amount slowly goes up from there. It’s not until you’ve made 123 payments that half of your payment goes towards paying off your principal. And of course the higher interest rate, the longer it will be before your paying off half of your principal.

Mortgage mistakes

There are mistakes that can be made in choosing a mortgage and it’s important not to make them as this will probably be your biggest expenditure ever.  Here’s a short video about these mistakes and  how to avoid  making them.

American Spending Habits? Apparently Still Impulsive

sad shopperAnalyzing American spending habits is important because you have to understand the factors that put us in our current situation. Regardless if you are in a bad or good financial situation, you need to identify the behavior that got you there. That is how you can chose which habits to replicate and those that you need to stop doing so you can successfully grow your personal wealth.

The thing about your spending behavior is that it is always affected by what you are going through. You may have habits that you have always practiced but one event in your life can change all that – at least, if you learned your lesson well enough.

According to, the Great Recession caused a lot of American consumers to change their spending habits. While we continued to spend for basic necessities like food, clothing and gas, these expenses were done at a minimum. That was because a lot of us had to deal with a lower income and huge amounts of debt. There was also a considerable change in certain purchases like cars and other durable items. It seemed that consumers cut back heavily on expenses that they do not need to cope with the financial crisis.

You would think that these habits would stick for at least one generation. After all, our debt level is still very high – despite the improving economy and job market. We still have a lot of financial recovery to go through.

However, one study revealed that not much has changed with the spending habits of Americans today and the pre-recession days.

Survey says: Americans still practice impulse buying recently published an article that revealed the results of a recent study that they did. This study was meant to gauge the buying behavior of consumers as of late. You would think that we are wiser now. But that is not the case.

Apparently, we are still a nation of very impulsive buyers.

In truth, our consumerist society would probably rejoice because our economy is known to be 70% dependent on consumer spending. However, if you look at our own personal financial growth, you might want to step back and analyze if this is the right habit that you should continue to develop.

The statistics revealed by the Credit Card survey is actually quite scary. The results mentioned that 3 out of 4 Americans are still impulse buyers. What makes this scarier is the fact that our mental state prompts us to give in to our impulsiveness. Our impulsive buying habits reveal an alarming lack of control and this is scary because it is what brought most of us down during the last financial crisis.

Here are important details revealed by this survey.

  • 75% of respondents revealed to have made not just an impulsive purchase, but also an expensive one. 16% revealed that they spent at least $500 while 10% spent at least $1,000 on an impulse buying spree.
  • 49% of respondents who gave in to impulse purchases said they were excited when they were making the purchase. Other reasons for the impulsive spending habits is boredom (30%), sadness (22%), anger (9%), and intoxication (9%).
  • Men bought bigger items ($1,000 purchases) on an impulse and did so while they are intoxicated. Women tend to give in to impulse buying habits when they are feeling sad, although their spending is a lot less compared to men ($25 purchases).
  • Half of the respondents said that they did not regret making the impulse purchase.
  • No particular group is exempt from impulsive spending habits. Whether rich or poor, city or rural dwellers, young or old and even Democrats or Republicans – all of these categories are prone to impulse buying every now and then.
  • Those who bought impulsively paid for them in various ways: cash (33%), debit card (32%), credit card (30%), and check (3%).

These data reveals that we are either slipping back into our old ways or we never really learned our lesson. The respondents said that the unplanned purchases were mostly for cellphone upgrades, a new computer or a trendy gadget.

The scary fact that might put us back where we were in 2007 is that one out of 3 Americans do not mind being in debt just to give in to these purchases. After all, 30% of the respondents admitted that they used their credit card to spend on these purchases.

How to control bad spending behavior

It is quite obvious from this survey that we have a long way to go when it comes to improving our spending habits. Have we really forgotten how messed up our finances were a few years ago? This is not something that we should take lightly. It is important that we start doing something about our impulsive buying behavior. While we may think that we deserve to spend our hard earned money, it should not be done at the expense of our future.

Here are a couple of things to remember when trying to curb your bad spending habits.

  • Budget what you spend. If you want to spend, you should make sure that it is a part of your budget for that particular month. Unless it is an emergency, do not spend on something that is not a part of your plans. Not only will your budget help you monitor your finances, it will also help you determine what you can afford to spend on and what you should forego. In case there is an important expense that you need to spend on, you should choose which of your planned expenses can be delayed to make way for this unexpected purchase. The goal here is to spend within your budget so you do not overspend. Because overspending means your expenses are beyond your income’s capabilities. Any difference between your expenses and income is debt. You do not want to incur debt every month as that will put your future financial situation is a bad light.
  • Keep your credit cards. While credit cards can really be a convenient purchasing tool, it can also be dangerous. It increases the chance of overspending your monthly budget. If you cannot control your spending, just keep your cards and do not bring them with you when you go on a shopping errand. You can only spend on your credit card if you are sure that you know your monthly limit and you can stick to that. If you are prone to give in to impulsive spending habits, then do not bring your cards with you.
  • Plan your spending. Do not confuse this with budgeting. You may budget what you spend but planning it is going beyond your monthly expenses. Make annual plan of your spending. THis is how you are able to prepare for them. Like the holiday spending that is probably on your mind right now. According to, 41% of consumers plan to spend $500 or more this holiday. That is an amount that you should have planned for beforehand. Where will you get your finances? How much will you spend? If you will use your credit card, how will you pay for it? You need to ask these questions way before you are to make the purchase. Do not do them right before you make a purchase.

Trying to change your spending habits will take some time but if you follow these three tips, your chances of making an unplanned purchases will be less likely to happen.

Tips For Controlling Your Holiday Spending

Young woman holds a gift wrapped in red paper, isolated on whiteIt’s that time of year to start holiday shopping. If you’re like most of us, you’ve created a budget and darn it all! You’re going to stick to it this year. You’ve made a list of everyone you need to buy for and you’ve assigned a dollar amount to each. Right? Well, probably not. Again if you’re like most of us you’re probably not that well organized. You might have a budget in terms of what you want to spend in total but then you get all caught up in the Christmas spirit and the urge to spend kicks in and you end up blowing your budget by spending a lot more than you had planned. You’re not alone, either. One recent study showed that the average consumer plans to spend $804 this year on holiday gifts for family, friends and others. In addition there are those decorations, holiday meals and other holiday paraphernalia. The bills come rolling in in January and ouch! You find you spent a lot more than you ever intended. I call it Christmas shopping remorse. So, what you can do to avoid this.

Make some new traditions

If the tradition in your family is to give each another expensive gifts you may want to try to start a new tradition. For example, instead of gifting one another you could take everyone out for a really great dinner during the holidays. It probably won’t take long for this annual dinner to become a family tradition. Part of the fun is introducing your family members to restaurants they wouldn’t have otherwise experienced. Since you’re doing this dinner in lieu of a lot of lavish presents you could afford to spend a fair amount of money and take the family to a really upscale restaurant such as Ruth’s Chris Steakhouse, Morton’s Steakhouse, the Melting Pot or the Palm. The Melting Pot could be a particularly good choice because it would be a way for all of you to spend three or four hours together in a fun environment dipping, eating and visiting.

Establish goals

For most people it’s not enough to just set a goal for their holiday spending. What you really need is a set of financial objectives that you can then align with your holiday spending. Let’s suppose that you and your spouse set a goal for buying a sailboat. You could then agree not to buy each other expensive gifts but to put the money away for that larger goal instead. You could feel a lot better about putting that money away to achieve that bigger goal then spending it now on a few lavish gifts that would likely be forgotten in just a few months. You might also think about making and giving homemade gifts. If you’re a guy that’s handy with your hands you might make your friends and some of your family members customized birdhouses. Women could knit or crochet something or bake up a batch of cookies or brownies and then put them in a decorative tin wrapped with a gift bow. I mean, who wouldn’t love to get homemade cookies?

Set expectations

Now that Black Friday is out of the way would be a good time to set expectations with your friends and family members. If your family insists on a gift exchange you might suggest instead of gifts you all make donations to a charity. This could be far better than gifts. We know of one family that decided to do this instead of exchanging gifts and ended up raising thousands of dollars to help provide clean water to people in Indonesia that hadn’t been able to access it. Alternately, you could get creative and give a gift such as a bottle of wine or coffee from a local roaster or experiences that can be shared like tickets to a concert, the cost of which might be a lot less than a lavish gift and yet would mean an unforgettable evening

Family at Christmas dinner Give great memories

There was a time when the whole idea of gift giving probably made good sense. But one thing you might do is ask yourself whether it still makes any sense. In this day and age it might not make much sense at all. It might feel more like a requirement that a true heartfelt kind of thing. The best gift could be a shared experience such as the family dinner mentioned above. People tend to remember shared experiences more than actual gifts. If you don’t believe this, try to remember the gifts that you received as a child. Now think about the actual holidays themselves. What stands out most in your mind – the gifts you received or those holiday meals and parties with your family members? If you’re typical what you’ll remember most vividly are those holiday meals and not the dozens of gifts you received.

How about consumables?

The real fact is that most of your friends and family members probably don’t really want anything you could afford to give them. The things they probably would like are stuff they typically can’t buy themselves like an Apple® or Windows® notebook computer or tablet, a 72” HDTV or a pool table. Once you understand this you can save a lot of money and yet please your friends and family members by making a donation to a child’s college fund, that charitable donation mentioned above or a consumable like a four-pack of their favorite wine or a gift basket from Omaha Steaks or Harry and David’s. One of the best things about giving a gift such as this is that one gift can cover an entire family. For example, if you have a brother that’s married and has two children, a box from Omaha Steaks could be a great gift for the entire family and yet cost $70 or less. Compare this to the $30-$50 you might have to spend on each of them and you can see why this type of gift could make good sense as well as dollars and cents.

Track your spending

If you feel you really must give gifts to your friends and family members make sure that you track all of your spending against whatever budget you made. Sit down every few days and review what you have spent and how much you have left in your budget. If you find you’ve spent 80% of your budget and have six people left you want to buy gifts for, you may have to find ways to cut back on their gifts. We understand this is hard to do because after all it’s Christmas and you do want to make everybody happy. But as you have read there are ways to make people happy – especially friends – without lavishing them with expensive gifts. Handmade items can be especially good because you’re not just giving a thing you’re giving a part of yourself in terms of the time you spent making it. In addition, the right handmade gifts tend to have a longer “shelf life” than stuff you just buy. If you consider the gifts you’ve received over the years, the odds are that you still have that knitted sweater, homemade tool box or handcrafted ceramic bird from 20 years ago while that expensive shirt and tie set you got just five years ago is long gone to the trash pile or Goodwill.

Finally, here courtesy of National Debt Relief is a helpful video with tips about controlling your holiday spending …


11 Technological Changes That Will Rock Your World

Man leaping with joy Rev 1Anyone over the age of 30 has already witnessed one technology that has reshaped our world and that is, of course, the Internet. And with the Internet has come social media such as Facebook, which has more than 1 billion users. Then there’s Twitter with its 6000 Tweets per second. Yes, that’s per second.
In the past 10 years we have also seen the emergence of the home wireless network where our homes now have an average of five devices connected to it. The Nest thermostat saves us money by learning our living patterns and adjusting our heat or air conditioning accordingly. It, too, can be connected to a home wireless network router and then adjusted remotely, provide energy reports and automatically get software updates.

But if you think this is all pretty great, you ain’t seen nothing yet.

There is a concept called disruptive technology. What this basically means is that a new technology comes along and disrupts or replaces an existing technology much as smart phones displaced landlines in many homes. The next big things may not disrupt existing technology so much as add to it. Here are 10 technological changes coming in the next five years that will rock your world. We leave it up to you to decide whether they are disruptive or just new.

1. The cloud has only just begun

You may have already taken advantage of cloud computing by storing your data or photos in the cloud. But as the Carpenters sang, it’s only just begun. The real power of the cloud is that it offers easy access to an unlimited amount of computing power at crazy, cheap prices. The cloud will eventually replace libraries with the exception of those that store historic documents. The day could come when you’ll be able to order custom-made shoes simply by putting your foot on your touchscreen. And you may be able to eventually access videos of experts that will help you with everything from repairing that big screen TV to which golf club to choose.

2. You will be able to hook your brain to your computer

This isn’t as far-fetched as it might sound because it’s already possible for a computer to type by monitoring the brain’s electrical activity. Technology will continue to advance and it will soon be possible for people with disabilities to operate their wheelchairs just by thinking about it.

3. Super analytics will put a panel of experts in your phone

Another of the next big things to come is super-analytics. This will be much like having a brain in the cloud. Analytics will sift through incredibly huge streams of data in real-time to come up with patterns or to answer specific questions. Google Future Trends and social media analysis are already a result of super analytics. But just think. Your golf coach could instantly match your mechanics to the world’s top golfers. Or on a more pedestrian level, analytics could search through audios and videos and provide the exact quote you need or help you with discussions on related topics.

4. We will mine metals from brine

New chemical processes are making large-scale desalinization economically feasible. In turn this will allow the mining of metals from brine or wastewater. This will not only be a new source of these metals but will also help our environment by cutting down on the need for mining.

5. Hadoop or big data technology will diagnose you

Hadoop is capable of scooping out a large amount of data, spread it across low-cost computers and then analyze it affordably and quickly. This technology has already made possible applications on Yahoo, Facebook, eBay, LinkedIn, Google and Zynga and many others. As an example of this, biomedicine applications could crawl the records of millions of patients as well as medical journals instantly to find just the right treatment or to even diagnose your illness. Or it might eventually create a personalized shopper for you that would be able to always find the best deals. How exactly does Hadoop work?  Here’s a video courtesy of National Debt Relief that explains Hadoop …

6. Nanostructured carbon composites will save create huge savings

How these composites are created is way too technical to discuss here. Suffice it to say that composites created from nanostructured carbon are lighter, stronger, more conductive and cheaper than their conventional counterparts. When cars are made from carbon fiber reinforced composites they will be 40% lighter, stronger and a lot easier to recycle than older models. This will make it possible to realize huge energy savings.

7. You’ll be able to talk to your house and it will talk back

Coming soon are very tiny, low energy sensors you will be able to attach to everything inside and outside of your house. There are already several of these available from Zigbee, Z-Wave and 61opan. They can run for many years on the same battery and will be attached to things such as railcars, traffic lights and your keys. Plus, they can be programmed to give you information. You will never again get stuck in a traffic jam because the traffic lights will reroute you. You will be able to attach a voice commands to just about anything. So the day could come when your dryer tweets you that it’s done and your clothes are ready

8. You will print your own computer mouse

There are now 3-D printers available at fairly reasonable prices. But the day will come when there will be a 3-D printer in every house just as there is now an inkjet or laser printer. Just imagine that instead of running to the hardware store to pick up that bolt or wrench you suddenly need, you could print out a copy using your 3-D printer. You say your child’s having a fit because she’s lost her favorite toy? No problem. Just print out another one. In fact, you’ll eventually be able to print out just about anything you can think up.

9.  There will be wearable electronics adapted to your body

There is already Fitbit, Apple’s iWatch, Microsoft Band and others. However, today’s technology that they be paired with a smart phone. A few years from now this will no longer be the case. You’ll have wearable electronics on your body, embedded in your clothes and even under your skin. These devices will track information such as your heart rate or stress levels so you will have real-time feedback about your health. This alone could save hundreds of thousands of lives by alerting people to a coming heart attack so they could go to the nearest hospital or clinic for treatment and never suffer the heart attack.

10. We will have safer, healthier cancer fighting drugs

If you’ve ever had a relative or friend treated for cancer you know that the toxic chemicals contained in chemotherapy can have serious side effects like nausea, extreme weakness and hair loss. But it’s believed that by 2025, the drugs used to treat cancer will be more exact and more precise and have fewer side effects. Drugs that are more targeted can bind to specific proteins and anti-bodies to cause a very specific action. When you pair this with our advancing knowledge of gene mutations, this is bound to mean better treatments for cancer.

11. Biodegradable packaging will replace those nasty plastic bags

In the very near future almost all packaging will be made from cellulosic materials that seem like plastic but are actually made from plant matter. This will make packaging biodegradable and better for the environment as they will replace the plastic bags currently used in grocery stores.

Should Your Child Opt For A Trade School Education?

electricianWe hear it said over and over that every child should have a college education. We believe this means is that every child should have the opportunity to get a college education but not that every child should actually get one. Children are no more alike than trees in a forest. Each has its own interests, abilities, goals and skills. In many cases this will mean they should, in fact, get a college education. But this isn’t true for everyone. One recent survey revealed that nearly 50% of those that began college failed to graduate. These students likely learned that college just wasn’t a good fit for them and had probably run up thousands of dollars in student loan debts before figuring this out.

The alternative – get a skill

For some children a better alternative than getting stuck on the idea they need a college degree is to determine what they really enjoy doing and if this aligns with a trade such as being an electrician, a plumber or auto mechanic. These trades pay very well, offer a high degree of job security and can be very satisfying for those that enjoy working with their hands and seeing tangible results for their efforts.

Four-year college vs. a trade school

On the average, it costs about $33,000 to get a degree from a trade school vs. the average $127,000 cost of a bachelor’s degree. But the differences don’t end there. It usually takes at least four years to get a bachelor’s degree vs. the one or two years required to get a trade school education. For many young people this would mean spending a lot less

What exactly is a trade school?

A trade or school is just that – a technical school or vocational school that teaches skills related to specific jobs. It focuses on getting students prepared for specific careers instead of teaching liberal arts, business or economics. The careers these schools focus on include jobs such as machinist, welder, electrician, mechanic, truck driver and plumber.

Not much of a difference in earnings

Believe it or not, there’s not much of a drop-off between salaries for those with a four-year degree when compared with those that went to a trade school. Trade school graduates earn an average of $42,000 a year. If you figure a 30-year career, the difference between this and those that got a four-year college degree is only about $90,000. In addition, trade school grad began working two years earlier than college graduates, which means two more years of income. At $42,000 a year, this adds $84,000 to the trade school graduates lifetime earnings so that at age 52, the typical college grad will have earned only about $6000 more.

The difference in student loans

Another important difference is the cost of financing a four-year college education vs. a trade school. If we assume that students finance their schooling with loans at an interest rate of 4% over 10 years, a bachelor’s degree will actually cost $154,000. On the other hand, a trade school education will cost only an average of $40,000, which means a savings of more than $100,000 just on the degree alone.

It’s tough to export plumbing jobs

A third benefit of going to a trade school is that the jobs your child would get as a result are very difficult to send to another country. It’s relatively easy to export jobs such as information technology or database engineering to somewhere else. But it’s much more difficult to export jobs that involve plumbing, electrical work, welding and the like.

Make sure you’re being realistic

Both you and your child need to be realistic about college. The harsh reality is that college isn’t for everyone. We have a grandson that never did exceptionally well in high school not because he wasn’t smart but because school simply didn’t interest him. When he graduated he chose to go to a trade school where he could learn automotive bodywork instead of going to college. He loves cars, is happy in his career and has received three promotions in the past two years. He is earning such good money that he and his partner have just bought a wonderful new home.

You can’t make it drink

You’ve undoubtedly heard the old adage that you can lead a horse to water but you can’t make it drink. In this case you could lead a child to choosing a trade school but you can’t force him or her to make that choice. But if you’re being realistic and you believe that, for whatever reason, your child just isn’t cut out to go to a four-year college, you can at least find ways to encourage him or her to choose a trade. Failing that, you might insist that he or she goes to a two-year community college where they could earn first- and second-year credits and then transfer to either your state’s university or some other college. Do this and your child might learn that a four-year college education just wasn’t a great choice and that learning a trade might be a better option. But even if your child goes on to a four-year college you will have at least helped him or her spend less on their education, which translates into graduating with less student debt.

Average salaries

If you’re wondering how much an electrician, plumber, welder or auto body repair person earns, the median hourly wage is $25.75 for an electrician, which translates into a median annual wage of $50,510. The median annual salary for a plumber was a bit less at $49,140 (in 2012) but the best of them earned $84.480. Auto body repairers have a median hourly salary of $18.66 or $38,800 a year, which is right below that of computer operators. And welders, cutters and braziers have a median hourly income of $17.66 or $36,700 a year. In comparison, a social worker with a four-year degree in sociology has a median annual salary of $47,121. A person with a fine arts degree – that is able to find a job as, say, a museum research worker – will have an annual median salary of just $48,401. If he or she becomes a painter/illustrator, their annual median salary will be $37,819. And if your son or daughter becomes an elementary school teacher, he or she will be looking at a median annual salary of $52,241. To put this another way, your son or daughter might be much better off becoming an auto bodywork repairer or an electrician than a social worker and definitely much better off than being a preschool teacher.

It’s not shamefulyoung woman thinking

Some parents might not want to encourage their children to go to a trade school, as they would feel embarrassed when their friends’ children go off to a four-year college. But there is really nothing shameful about going to a trade school. Our society would be a far worse place without electricians, plumbers and auto body repairers. These people perform very needed services. It’s what used to be called a good, honest living before we bought into the idea that everyone should go to college. Skilled workers are generally honest, hard-working and dependable people and should be admired for their work instead of being looked down on because they didn’t graduate from a four-year college.

8 Things You Should Know If Your Child’s Applying To Colleges

family with teenage daughterIf your child’s a high school senior we probably don’t have to tell you what an exciting but confusing time this can be. There are difficult decisions to be made, confusing applications to be completed and critical tests to be taken. There’s so much information that must be taken in and considered it could make both you and your child’s heads spin.

If you’re typical, you want your child to attend the best and most prestigious school possible. However, given the price of a college education today – especially at top-level schools – this could mean years and years or debt for your child. It’s important that you don’t get all excited and end up making a choice that costs your child dearly.

If you’re not aware of this, students are now graduating with an average of $33,000 in student debts, which can put a strain on a person’s life for many years to come. If you don’t want this to happen to your kid the best way to handle things is to approach choosing a college as a business decision. Given this, here are at eight things you need to know or do.

You need to have a budget

Determine the amount of money you could contribute to your child’s education and then be honest about this. He or she can then decide in advance how much they’re willing to borrow to get a degree. You might have them check out the starting salaries she or he could expect to earn after graduation and then compare this to the student loan payments they would probably be required to make monthly.

The school may not be as important as you imagine

Does how prestigious the school is play a big part in your child having a great career? Maybe not as much as you might think. If your child is applying for colleges in the top 10 or 20 of schools this might open the door to opportunities that wouldn’t be available otherwise. But there is actually not much of a disparity between the potential earnings of a student from one of these schools vs. other 4-year schools. The Department of Education did a study that found the prestige of a school made only a 2% to 3% difference in the earnings of men and 4% to 6% among women. Compare this with the difference in cost between, say, your state university and an Ivy League school. When you take this into consideration you might decide that a less expensive school that has a good reputation and offers a quality education would be a much better option.

Learn the actual cost

If you’ve ever bought a car you know there’s the sticker price and the real cost. The same is true for colleges and universities. The tuition price that you see listed for a school is hardly ever what it actually costs to attend it. In fact, most students at most schools pay a lot less than the “sticker price.” So when you’re checking out a school, don’t look just at the tuition price but also at its average package of financial assistance. You will then have a clearer idea of what it will actually cost your child to attend it. In some cases a school that looks awfully expensive might cost less than a school that appears to be cheap.

money and graduation cap in chainsThink carefully before borrowing money

We know you want to do everything you can for your child so you’re going to want to help with their college education as much as possible. The issue is that you may not be financially able to do this. If you don’t have the cash available to help out with your kid’s education there are loans available such as the federal PLUS loan for parents or a bank loan. However, it’s not a good idea to take out one of these loans. If you don’t have the cash to help your child it might be because you can’t afford to help. If you have to have a loan to finance your child’s schooling this could wreck your budget or even screw up your retirement. Your house could even be at risk.

Know that living at home is best

In 2013-2014 the cost of room and board at a public university averaged $9498 a year and for a private non-profit 4-year school the average was $10,823. Multiply this by four years of school and you’d be looking at around $38,000, which is a lot of money. If you live close to a good college or university you need to seriously consider having your child go there and live at home. If your child really wants to go away to school a good compromise might be for her or him to go to a local community college or university for two years and then go away for the last two.

Be aware that debt could have a considerable impact on your child’s life

As you have read students now graduate from college owing an average of $33,000. Of course, depending on your child’s school it could be much more than this. Studies have shown that a significant amount of debt is keeping many young people from taking critical steps in life such as attending graduate school, getting married, purchasing a home or even having kids. What this means is that it’s best to keep debt at the minimum by selecting a cheaper college and stressing to your child the importance of living frugally and finding part-time work if possible.

Scholarships and grants can make a considerable differenceOne of the most prevalent myths is that only top students get scholarships. Your child should be applying for scholarships even if he or she isn’t in the top 5% of their class. These can be a great source of extra money for your child’s schooling. Be sure to check out sites such as and search through their databases. Your employer, union or fraternal organization might even have scholarships for the children of their members or employees. There is actually a scholarship for golf caddies where we live.

Be sure to teach your child the important skills

You may have spent the last 17 or 18 years doing everything for your kid. In this case it’s time to begin teaching them some life skills. They’ll have a hard time adjusting to life on their own unless you teach them to do laundry, cook, change a flat tire, take a bus, grocery shop or bank for themselves. You also should have the “money talk.” This is where you discuss budgets and frugal living. You need to teach them about credit and debit cards, good money management, debt and why it’s important to have good credit. You might do what some parents have done and give your child a monthly allowance to cover the necessities so they can learn good money management. Almost everyone makes a few financial blunders before learning how to handle money responsibly. It’s much better that your child does this with an allowance than with their student loans that could amount to thousands of dollars.

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