Money Beagle

I set some goals in early November.  I figure it’d be a good thing to review the goals and set some new ones for the month of December 2008.  Here are November’s goals in review:

1. Make annual donation to my college alma mater - Done
2. Move donations from the garage - Not yet
3. Change wifes name on mortgage - Done
4. Send out Money Beagle invites - Not really.  I have communicated with a couple of bloggers but still have some work to do.
5. Check out 2009 insurance options - Done
6. Look into HSA / FSA accounts - Done
7. Look at ING Direct CDs - Done, but not signed up yet
8. Check out cat food prices - Done, still getting the best deal.

Not bad.

Here are some goals for December:

1. Review my paycheck after my raise and new health care elections to understand how 2009 will shape up, especially after the baby is born.
2. Review 2008 net worth performance (ugh) and set 2009 goals.
3. Get on those invitations to fellow bloggers for Money Beagle.
4. Decide where to contribute some extra money this holiday season.
5. Begin looking at updating Money Beagle.  I picked a theme that I liked to start but would like to start getting some changes in place that I’ve had in mind.  At the very least, get a list together of things to target in early 2009.

What are some of your to-do’s for the month of December?

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Just like in life, many small things start to pile up when it comes to personal finance.  Here are some of my current to-dos:

1. Make my annual donation to my college alma mater.  The college I graduated is a private school, so I donate a little money each year since they don’t receive state funding.
2. More donations: I have a rather large pile of clothing and household items that need to be taken to Salvation Army.  I know that I’ve had this item on the list for a long time because many of the items are old household items that became unnecessary after we moved and got married, both of which took place in the summer.  Of 2007!  I need to do this before the end of the year for the tax write-off.
3. Change my wife’s name on our mortgage.  We purchased our house before we were married, so the mortgage was taken out in my name and my wife’s maiden name.  Now that we’re sharing the last name, I need to make this change on our records.  It’s a matter of faxing in a copy of our marriage license, so it shouldn’t take much!
4. Send out Money Beagle invitations - I’ve been writing for over two months now, and it’s time to start spreading the word.  I have a list of about 50 blogs that I read, and I’ve been meaning to get around to inviting those bloggers to read my blog and see if they won’t read my articles and maybe throw some ‘link love’ my way!
5. Check out 2009 insurance options.  Our open enrollment for insurance is in a couple of weeks, and I want to sit down with my wife and look at our insurance from scratch.  With ‘Baby Beagle’ on the way next year, I’d like to start from the beginning and look at all insurance options to make sure we’re doing the right things next year.
6. Learn more about HSA / FSA - I’ve never used a health savings account or flexible spending account.  I know my company offers at least one, maybe both.  I’m sure we’ll have out of pocket expenses next year, so I need to do my homework on these.
7. Look at ING Direct CDs - I opened my ING Direct Orange Savings account a couple of months ago and would like to diversify and set up a CD ladder.  At first glance it doesn’t appear that I can do this from within my current account, so I’ve put it off.
8. Check out cat food prices - One of my cats is on prescription food that is very expensive.  I purchase it online as it was about half the price versus buying it from the vet.  Over the past year, I’ve noticed that the price has gone up about 30%.  I understand that the price of just about everything has gone up, but this raised my eyebrows, so I’d like to make sure that the place I’m getting it from is still the best deal.

So, there’s my list.  I’ll check back in a couple of weeks and let you know how I’m doing.

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I’m trying to get in the habit of blogging every day.  I haven’t decided about weekends yet, but I would like to get at least one post every day of the ‘work week’ for sure.  I think that this will lay the foundation for a successful blog, because once it becomes part of my life and daily activities, it will be second nature.  Regular posts will get people in the habit of coming back to read my blog, at least that’s the plan!

I was thinking about this concept, and it led me to think that there are habits in personal finance which can help improve any number of areas, including debt, budgeting, and spending, just to name a few.  Here’s a few ‘habits’ that I came up with that help me keep control of my personal finances.  Let me know if any of these help you too.

• Save money by getting in the habit of checking your account balances every day - If you check your balances regularly, you’ll see if you’re coming close to getting an overdraft fee.  You also might look and realize you’ve been spending a bit too much.  How many times have you gotten a credit card bill or bank statement and not realized how much you spent until you saw the balance?  If you kept track regularly, you can catch this sooner and curb your spending before it hurts you.
• Become a pro at budgeting by creating and sticking to a payment schedule - Create a list  of recurring payments.  Don’t just look at monthly payments, but look for those that might come around once a quarter, annually, etc. Estimate what the payments will be and when they’ll be due.  Organize them in calendar order.  This will ensure that you’ll never forget about them, and will also get you prepared so the payment due doesn’t sneak up on you.
• Use automatic payments - Just about anybody accepts payment online, it seems.  You can even have recurring payments automatically deducted so that you never have to think about it.  This is great! I love the technology that’s gotten us that far.   I would sign up for these as it can simplify your life.  But, there’s a catch.  Don’t forget to…..
• Prevent disasters by verifying automatic payments - Automatic payments are great….until one gets missed.  Whether the bank messes up, the system went down, you didn’t have enough money, it doesn’t matter.  Once that payment is missed, there’s a problem, and a missed auto-pay often takes longer to notice, leading to the possibility of bigger problems.  The sooner you realize it, the sooner that you can correct it and prevent a headache.  Don’t always assume the payment goes through.  Get in the habit of verifying your payments.

Once you do these things regularly, they’ll become habit, and you will find yourself doing them automatically.  These are just a few things that you can do to make sure your finances are in your control!

In an earlier post, I discussed how I was thinking ahead to when I’d be buying our next car, and how I was concerned about having a payment.

That got me thinking about the loan, and a piece of advice popped into my head that I wanted to share that I think is one key to managing your car loan: When buying a car from a dealership, shop your loan around!

Most dealerships will set up financing for you and will be more than happy to do so.  Why are they so happy to provide this service?  Because they make money from it!  I know, a crazy concept, but it’s true!!  They will either get a cut of the loan or mark up the loan to add some profit for themselves.  Hey, you can’t really blame them, but you don’t have to line their pockets either, and all you have to do is shop your loan around yourself.

Make sure to know this when you’re shopping for your loan.  Here’s two situations where I’ve done this in the past:

• When buying a used car, I bought from a dealership and knew I’d have to finance it.  Once I had the estimated the amount I was financing and how long the loan would be for (it helps to have an idea of these things), I contacted my credit union and bank and got their rates.  When I went back to the dealer, I asked what my payment would be, and what the interest rate was.  It was, as I expected, higher than the rate from my credit union.  So, I let them know that I had an opportunity for a better rate, showed them the paperwork, and my salesperson disappeared to the back room.  When he came out, he offered that they would match the rate.  I went with them, at the same rate I found, and drove away in my car that day knowing I’d save some money on my loan.
• A few years later, the same situation repeated when I bought a new car.  This time, however, the dealer emerged from the back room and sadly informed me that they couldn’t match the rate.  So, it took me a couple of days longer to get the financing worked out between the lender and dealership, but I still drove away feeling like I was paying the lowest interest rate I could for my car.

The lesson is to make sure to shop your auto loan around!   You’ll need to provide the bank some information, some of which you may not be exact on, but they should be willing to work with you if they want your business.

I’ve found that you’ll generally get better interest rates with institutions that you do business with than those to which you’re a stranger.  I’ve also found that credit unions often have better interest rates than banks.  But, these things aren’t true 100 percent of the time, so make sure to shop around.  It only takes a couple of hours but can save you hundreds, if not thousands, over the life of your car loan!

There are many other things to know when it comes to shopping for your car, and I’ll get into this deeper with time, but this is a quick bit of advice that I know can be overlooked!

An MSNBC.com article outlined how one Michigan company makes it mandatory for employees to get one-on-one financial planning.

The company mandates up to an hour of money education as a way to help its workers become more knowledgeable about the firm’s 401(k) plan, and also learn about debt management, college savings, and other personal finance topics.

Some might argue that this is ‘none of the employers business’ but I think it’s a great idea.  The paragraph above touches on three points: retirement, debt, and savings.  Let’s briefly look at each of these.

• Retirement - According to a Bankrate survey, only 28 percent of workers feel that they’re prepared for their eventual retirement.  Hmm, so it seems at least 72 percent of workers could instantly benefit from some help.
• Debt - According to another Bankrate fact sheet, over half of Americans don’t pay their credit card balance off monthly.  When you figure that many credit cards charge interest rates of nearly 20% (or more), this is taking a big chunk of money away from people.
• Savings - As a nation, we have been hovering around (or below) a negative savings rate, which means simply that we spend more than we earn.  This can’t go on forever, and it’s a big reason why we are seeing some of the messes in the mortgage and credit industries.

I think that this benefits the employee, and it also benefits the employer.  Think of it this way, if an employee is facing any one of the situations above, chances are they spend time having to deal with it, or there is stress that impacts their job performance.  If an employer sponsored financial adviser can help reduce that burden (and the associated stress), it not only helps the employee gain better control of their finances, it helps the employer gain a more productive worker.  Everyone wins!