Category: Finance

The U.S. retail sector this week released financial results for March that were worse than February’s results. People  aren’t shopping because they feel less wealthy and even if they have a job they also carry around a  palpable fear of losing it.  And probably their minds too. (I said that not “them.”)  I am cramming those feelings into the back of my ample closet. While I don’t recklessly spend I do spend.  I need my retail therapy but I try to be a wise patient by avoiding an overdose.

My least favorite issues are those having to do with finance and money.  However,  since both must be faced I’ve sucked it up and tried to do so by making it as simple for me as possible. Long ago I established my seven simple rules. And I can tell you, this is probably the only part of my life that’s actually…dare I say it… lyrical.

My rules are easy but not perfect or complicated. Even so sometimes I don’t follow them. But for the most part I do.  To be honest,  I can’t resist a good sale at Neiman Marcus and I haven’t been in a T.J. Maxx, Marshalls, Home Goods or Target that I didn’t like. These are my most fav, fav, fav stores.

Nevertheless, everthing in moderation. My rules have been built and occassionally, some of them, broken.  I’m sure you have a few as well – here are mine.

7 Simple Rules for Financial Okayness

1. Pay yourself first.  Sock away a minimum of 10% of your earnings somewhere. If you don’t have an emergency fund start there.  Later, move on to a 401K or an IRA or a Roth IRA or all three.  If you can’t save 10%, save whatever you can on a regular basis and try to build up to 10%.  Once you get to 10% go for a stretch goal of 30%.   These links are to fairly generic sites that can give you more info about these savings tools.   401k     IRA
2. Keep your credit card debt to no more than 15% to 20% of your monthly disposable income.  If you bring home $2,000/mo. your credit card debt should be no more than $300 to $400. The rest pay in cash or save up until you can. Avoid credit card interest charges by paying the balance in full each month.  Avoiding_debt_managing_your_credit_wisely: Personal Finance …     Managing Credit Wisely   Budget calculator
3. Pay your bills on time and keep up with what’s on your credit report and your credit scores. How’s your credit, do you know?  You can get a full review of your credit report once each year for free. Here’s a site you may wish to check out. As far as your credit score is concerned I think from this site you can get a look at your scores for free, too. I actually haven’t figured out the free score piece yet. I pay a subscription service that both monitors my credit for identity theft and provides my credit score. I’m sure there are a lot of them but here’s a site I’ve used where at the very least you can go to look at your credit report from the three major reporting agencies.  Remember, if you haven’t already pulled your free report this year this site will work for you at no cost.  Your Access to Free Credit Reports     How do I get my free credit report and score from each bureau?
4. Keep an emergency credit card for emergency unplanned expense. And forget about it. After all its for an emergency.   Credit Cards | Best Credit Card Offers | Low APR Interest …    Low Rate Credit Cards – AOL Money & Finance
5. Keep car note in the 10% to 15% range and don’t buy more car than you have savings in the bank. If you have $30K in savings then you may consider buying a car priced at half to no more than the amount you have in the bank. If you have no or very little savings buy the cheapest car possible that’s of course reliable, too. And to keep it reliable change the oil and the oil filter regularly. They are the heart of your car.  One more thing: Be careful of dealer financing. Don’t just look at the interest rate, look at the total cost of borrowing over the life of the loan. At the end of the loan how much will that car really cost? Shop around. Credit Unions are often the best places to get the lowest rate on a car loan provided you have good credit.   Free Money Finance: Should I Join a Credit Union?   Why Join A Credit Union? Why I’m No Longer A Traditional Bank …
6. Put six to eight months of emergency savings in the bank.  This should be doable if you’re already doing Steps 1 through 4 but if you have to choose between Step 1 and Step 6, choose Step 6.   Having something socked away should make you less scared of the future. This is your rainy day money so put it somewhere that protects the principle  like a  bank or credit union savings account.  At today’s rates it won’t grow much but the principle will still be there when you need it. If you’re feeling especially randy, tie it up in a 6 or 12 mo. CD.  If you’re buying more than one, stagger the maturity dates.  You might want to check the health of whatever institution you choose.  Bankrate.com Safe& Sound ™: Bankrate free rating system …   National Credit UnionAdministration – About NCUA
7. Buy property. I know the market is down and prices are depressed but provided you have the funds this is a great time to buy something. If you don’t own your home and you have a downpayment of around 10% to 20% + good credit  this is the time. If you do own your own home and want to branch out a bit, you may consider buying investment property. Yes being a landlord takes work but it can pay off handsomely  – both in rent receipts and in tax breaks.  Whether they own or rent; have a job or not, people still need places to live. And many without jobs are able to qualify for government assistance to offset their housing costs. These are good hardworking folks who just need a bit of support just as we all do from time to time.  Anyway, your rents should cover your expense and make a profit. My personal rule of thumb on mortgages for a primary residence is to be no more than 35% of my monthly pre-tax salary.  Homebuyer Basics | Managing Your Money | Using Credit Wisely    RealEstate.com – Buying – Investment Properties