May 2012


Here is May’s review of blog posts. We hope you find something you enjoy!

 

Get Rich SlowlyClassifying Wants and Needs – Sometimes the line between a want and a need isn’t clear.

 

Get Rich SlowlyAsk the Readers: One Expense Leads to Another? – It’s possible for one small expenditure to lead to many more different expenditures without realizing how it happened.

 

Len Penzo dot ComIs it Okay to Eat Foods Past Their Expiration Dates? – Before throwing food away because it’s past it’s expiration date, make sure the food is actually expired! It can save you quite a bit of money.

 

The Simple Dollar Try Using the Snowflake Method – Extend your “debt snowball” by adding some “snowflakes.”

 

Wise Bread 13 Things to Teach Your Kids About Credit Cards – Make sure your to educate your kids about credit cards before they have a chance to get into trouble.

 

Please let us know if you have a favorite financial blog that you think we should be reading.

 

 

  • Disclaimer: The information on this blog is not meant for specific financial advice. The ideas/opinions stated are not suited for everyone, and readers should use their own judgment in applying them in their financial lives.

 

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Next week, I (Dawn) will be on a family vacation to Disney World. Because of this, there will be no post next Friday.

This week, I wanted to share a post from about a year ago that was for a different family vacation to Disney World (yes, I love Disney!).

From 5/2/11:

As you know, we just went on a family vacation to Disney World. We traveled as a group of 8 people, 6 adults and 2 kids. And we thought we’d use our experience to give you some tips on how best to travel as a family.

  • Plan ahead – We know some people are planners while vacationing, and others would rather take it as it comes. It shouldn’t be a surprise that we’re planners. However, even if you aren’t, the more people you are traveling with, the more important planning becomes. Make sure everyone has an input on what they’d like to do and see. This will help eliminate wasted time and money while vacationing because you will already know what everyone wants to do ahead of time.
  • Save ahead – Estimate any potential expense you will have for your family vacation, plus extra, especially if you’re traveling with a larger group. Then, once you decide on your potential budget, save everything up before you go, or even before you book anything if you want to be completely safe. It’s too easy to plan and book a big vacation using credit to cover any short fall. Even if your intention is to pay if off right away, it can be dangerous territory. Also, if you go on the trip knowing that you still owe on it, your vacation won’t be as enjoyable.
  • Pay ahead – If possible, prepay for what you can (transportation, hotels, etc). Prepayment gives your vacation budget a better chance at being followed because it reduces some of the risk of unexpected expenses. Also, since food is such a major expense, if you happen to be going on a vacation to a place that allows you to prepay for food (like Disney or a cruise), look into taking advantage of the option.
  • Be flexible – We know we just told you to plan ahead, but that doesn’t preclude being flexible. When traveling with a group, there will be things that someone else wants to do that you won’t (especially when kids are involved). Just go along with it. You may not want to do it, but your overall vacation will be much more enjoyable because you won’t be at odds with other family members. There is probably something you want to do that the others don’t, so hopefully they will be flexible as well!

If you’re currently planning a family vacation or thinking about it, hopefully these ideas will give you a head start!

 

  • Disclaimer: The information on this blog is not meant for specific financial advice. The ideas/opinions stated are not suited for everyone, and readers should use their own judgment in applying them in their financial lives.

Yesterday, over at Get Rich Slowly, there was a guest post entitled “How I Got Rich Quickly, Then Failed…Miserably.” While the income increase in the post was a little extreme ($33,000/year to $120,000/year in less than 8 years), the points that the author, Belinda James, makes are valid for anyone who experiences an income increase.

 

It’s popular in finances to say that you don’t necessarily need to make more money to be financially successful, and that is completely true. Much of being financial successful is really about how much you spend (and save). However, if you have the opportunity to make more money, it can really help you, but only if you’re smart about what you do with that extra money.

 

We’d like to touch on a few of the points that Belinda discusses:

 

“Find a good accountant” – We’ve ­discussed here before about whether or not to do your own taxes. We definitely believe the more money you make, the more important it is to hire an expert to do your taxes. Tax laws and codes are so extensive that there is no way someone who doesn’t work with them every day can understand it all. If you have a high income and are doing your taxes yourself (and don’t work as an accountant), it’s likely you are missing out on some obscure rule that could be saving you money.

 

“Don’t tie up a large chunk of your money in a car” – Not to say you shouldn’t spend some money on a good quality car, but you don’t need to spend an over abundance of money, even if you’re buying new. If you have the cash to buy a car outright, then it would probably make sense to do so. But in Belinda’s example, spending $43,000 outright on a car is probably not the best use of your increased income.

 

“Nothing lasts forever” – This seems to be where most people get into trouble when their incomes increase. They’re making more money, so they add new expenses. While there is not necessarily anything wrong with that, you have to be very careful. Wait until you’ve received a few paychecks and get a feel for how much extra money you really will have in hand. And when you do decide to add an extra expense, do so sparingly, especially if it’s to be an ongoing expense.

 

You may or may not be lucky enough to stay at your new income level (or higher) for the rest of your working career. You may or may not be lucky enough to always have steady income coming in. But if you add a bunch of extra expenses and do have to take a pay cut or be out of work for a time, what happens to that extra cost then? That bigger house or nicer car suddenly doesn’t seem so important.

 

But as Belinda says, not everything is about “getting rich.” Make sure to enjoy your income while you have it. Just try to decide first what the appropriate amount is to spend on “fun!”

 

 

  • Disclaimer: The information on this blog is not meant for specific financial advice. The ideas/opinions stated are not suited for everyone, and readers should use their own judgment in applying them in their financial lives.