photo credit: kivanc

Recently, we covered step 1 on how to get out of debt - stopping the bleeding, or preventing the accrual of additional new debt. Preventing added debt is essential when trying to break free of debt, however, you’re still going to be in the red unless you find a way that works for you to strategically fill the hole that you’ve already put yourself in. Without having a plan of attack, the length of time it takes you to pay off your debts will be magnified. Let’s discuss some of the current schools of thought out there, so that you can develop the best strategy for you to wipe out your debt. Read the rest of this entry »

photo credit: Amy March

A welcome goes out to all visitors from Jeremy’s genxfinance.com blog. Jeremy’s blog focuses on finances for those in their late 20’s and 30’s. Besides being an all around good guy, he’s a fellow Michigan State Spartan alumni, which makes him an even better guy.

The guest post I wrote is titled “How to Eliminate Mutual Fund Deadbeats from your Portfolio” and was based on one of your emails. It’s a solid read for those looking to take a second look at their mutual fund selections.

If you’re a visitor from GenXfinance who likes the content you see here, you can subscribe to the 20somethingfinance RSS feed here or get email updates here.

photo credit: killrbeez

Rule #1 when trying to save money on auto insurance: Don’t try to take pictures from the driver seat of a passing Toyota Scion that’s styled in memory of the majestic A-Team van while driving on a four lane highway.

Can’t go without it

Auto insurance is one of those things that you hate to have to pay for, but you just need to have. Just about every state requires at least some level of auto insurance coverage. Carinsurance.com and Edmunds both have resources that will give you a rundown on how much coverage you must have for the state that you are licensed in. Most states want you to at least have some legal liability coverage. Smartmoney has an article on what your policy should cover. Additionally, most states have publications on purchasing auto insurance available, which many times will run comparisons on prices over a wide range of insurers. Check out the Michigan 2007 Buyer’s Guide to Auto Insurance. Your state probably has a publication printed, courtesy of your tax dollars as well. Read the rest of this entry »

photo credit: ppdigital

Driven by Emotions

When all it takes to buy something you are interested in is to plug in a number, or swipe with your hand, what’s preventing your emotions from taking over and making rash, irrational decisions? If there was a spectrum for frugality from 1 to 10, with 1 being bankruptcy and 10 being Warren Buffett (richest person in the world, yet still lives in the same house he bought in 1958 for $31,000), I would firmly sit at an 8.

Even at the higher end of the frugality spectrum, at times I have been prone to letting my emotions control my purchasing decisions. One of the areas where I’ve been the most guilty in doing this is in the search for knowledge based information. An example of this would be when I started this blog back in late December. At that time I had a ton of frustration with not knowing how to effectively and efficiently use the Wordpress platform. So, I ran over to the local library to see if they had a copy of Wordpress for Dummies. They did, however, it was currently out, so I placed a hold on it

I felt like I had to have this book right away, despite the fact that all of its contents could probably be found one way or another on the Wordpress site or elsewhere online. But I just couldn’t take it, so I jumped onto Amazon and purchased the book, as well as another I had been interested in at the time. That was back in January. It’s now April and I’ve only gotten halfway through the book (because I had found that my curiosity drove me to already knowing 95% of the material in the book), and I haven’t even touched the other book. Had I been rational, I would have waited for both books to be checked in to the library and not spent a dime. The emergency was all in my head.

So, how do you delay that instant emotional purchase gratification? Read the rest of this entry »

photo credit: millicent bystander

There are many theories on what the best way to pay off your debts is, but before you should even start talking about paying off your debts, you’ll first need to stop the bleeding (accumulating more debts). In order to do that, let’s first discuss good debt, bad debt, secured debt, unsecured debt, and Effective Annual Rates (EAR).

Good debt: This is the stuff that generally results from an investment in yourself (student loans) or something that appreciates in value (house) that will ideally leave you in better economic standing over the long-term. Typically, these debts will carry a lower rate of interest (unless you took out an ARM mortgage).

Bad debt: Any debt that will not benefit you in the least bit, in any way. Most typically, credit card debt, which carries a very high interest rate.  Read the rest of this entry »