Stop, Think, and Be Thankful

thinking-my-personal-finance-journeyThe following is a post by MPFJ staff writer, Derek Sall. Derek is the owner of the blog, LifeAndMyFinances.com, where he teaches people how to get out of debt, save money, and become wealthy.

Do you ever stop to think about how much you really have? I sure hope so, because if you’re reading this post on your personal laptop or tablet right now, you have tons more than the average person in this world. On this day, I suggest that you stop, think, and be thankful.

We Are Wired to Want

Have you ever wanted something simply because someone else had it? I think we all have! It’s in our nature. Let’s take kids for instance. There might be a group of kids playing, each with their own toy, and then one kid decides to pull a different toy out of the closet, one that everyone knew about and didn’t grab. But, now that this kid has it, the other kids want it. We have all seen this before haven’t we? For whatever reason when someone else has something we are wired to want it.

Unfortunately, many of us do not grow out of this habit of wanting. When our friends and neighbors buy new cars, we suddenly get the itch to buy a new car as well. We know that it’s not a wise purchase (due to our lack of cash and the quick depreciation on the vehicle), but we begin to justify it. We suddenly start noticing that our current car “breaks down all the time” and “gets terrible gas mileage”, when in actuality the car is a perfectly fine automobile and might last another ten years if you just take care of it. The reason for buying the car is simple – we want it so we talk ourselves into buying it.

We Forget What We Have

As human beings, all we really need is a roof over our head, food in our bellies, and clothes on our back. If we shared a house with ten of our closest friends, what would all of that really cost us? Maybe $200 a month? But how much do we actually spend per month? For many of us, the monthly cost of keeping all of our stuff is well over $3,000 a month. Isn’t that just insane?!

And, with all of this spending, we are still left wanting more. Instead of a 2,000 square foot house, we think we need a 3,000 square foot house! Instead of a six-year-old domestic car, we would really like a brand new luxury car. And for what reason? Just because it looks cooler? Or maybe because we want others to envy us?

I don’t think I have ever quoted Oprah Winfrey before, but this saying is absolutely spot on:

“Be thankful for what you have; you’ll end up having more. If you concentrate on what you don’t have, you’ll never, ever have enough.” – Oprah Winfrey

Thankfulness and happiness really go hand in hand. If you are thankful for what you have and are happy with what you own, then you will likely be blessed with even more. But, if you constantly want what other people have, then you will just be wanting for your whole life, because there is no way that you can afford to buy everything. It is best to be thankful.

We Don’t Know What Others Don’t Have

While we are out wanting all day, many of us forget to consider the needs of others. Do you ever stop to think about how good you actually have it? There are millions of people out there that do not have access to clean water, and you can access it from your home by taking about 5 steps to your left and turning the faucet.

There are millions without the luxury of owning a car, but still walk 10 miles or more each day purely for their survival. You have a car that can drive you hundreds of miles, but you just want a shinier model.

The next time you want something, consider the life of the needy. How would they view your desires? Again, be thankful for what you have and you will only grow in your happiness in this life.

How about you all? What have you desired lately that is totally unnecessary? Will you be thankful instead?

Share your experiences by commenting below!

**Photo courtesy http://www.flickr.com/photos/hgaronfolo84/116858703

Increase Your Net Worth with Education

graduate-my-personal-finance-journeyThe following is a post by MPFJ staff writer, Derek Sall. Derek is the owner of the blog, LifeAndMyFinances.com, where he teaches people how to get out of debt, save money, and become wealthy.

Did you know that the more education you have, the higher you pay will likely be? I know it probably doesn’t shock you, but it’s absolutely true!

When I was in college for engineering, I was concerned that I would need to continue my education again and again in order to keep up with the changing dynamic of the engineering world. In fact, it was one of the reasons that I left engineering school.

Looking back, I was an idiot kid that didn’t realize that all occupations require continued learning. It’s expected that you continue to learn, grow, and improve in the working world. In fact, if done properly, it can actually be a great way to advance at your place of employment.

Feed Your Brain

So what is the best way to improve your knowledge and advance your career? As much as I hate to admit it, getting your Bachelor’s degree will probably provide you with the greatest degree of advancement. Just be sure not to spend too much on your degree. It might be easier to find a job coming out of an Ivy League college, but it will definitely cost you more money to receive that luxury (often two or three times more). Instead, look at going to an in-state university. The cost will be much lower, but your employer will likely still be impressed by the name of the school on your resume.

If you have your bachelor’s degree and work in an office setting, the next suitable degree would be a Masters. Again, focus on getting the education from the degree and don’t worry so much about the name of the school you are getting it from. Just having the degree will mean quite a lot to your employer.

Finally, if you are not interested in obtaining degrees then I would suggest being your own teacher. Take a hold of your own education and get yourself over to your local library. What are you interested in learning more about? Company financials? Leadership? Management? The library holds your answer to each of these topics and many more. Find out what you would like to learn, teach yourself through books and online courses, and then be sure to use your new-found knowledge in the workplace.

Prove Your Worth

Getting a degree is admirable, but if you apply none of your learning then you really don’t deserve to advance in the company. No matter where your education came from, if you expect to move up the career ladder to that next job, then you’ll certainly need to apply your learnings in your job.

A few years ago I sought out a mentor. This is the exact message he conveyed to me as well. Sure, a piece of paper from the University is nice, but it doesn’t do anything for the company if the education goes unused. Instead of just displaying my diploma in my cubical, he encouraged me to teach some of my knowledge to the rest of my department.

Within a couple of weeks, I discovered that many of my coworkers did not know how to use Microsoft Excel efficiently. Instead of using a function to transfer information from one file to another, they were copying and pasting information. To help them out (and to prove my worth to the company) I held a class for 14 people. I taught them how to use functions and I was immediately deemed “The Excel Guy”. It increased the company’s awareness of my skills (not just in Excel, but in teaching others) and it showed my increased value to the entire company. This simple action led to a promotion just four months later. If I hadn’t displayed my knowledge, I would likely be working that same menial job today.

Increased Knowledge Equals Increased Income

As you may have gathered, and improvement of knowledge will soon lead to an improvement in your income. As you learn and grow and display your skills to your employer, you will no-doubt be rewarded for the increased value you have brought to the company. Your knowledge will lead you to higher ranking jobs and will also increase your salary with each jump up the ladder. Education is almost certain to increase your salary, and therefore your net worth.

How about you all? Are you working to increase your knowledge? Are you displaying your new skills at work?

Share your experiences by commenting below!

**Photo courtesy http://www.flickr.com/photos/nottinghamtrentuni/14714286904

Can Public Transportation Replace A Car?

Bus-my-personal-finance-journeyThe following post is by MPFJ staff writer Travis.  Travis is a customer blogger for Care One Debt Relief Services, and also appears weekly at Enemy of Debt.  Travis candidly shares his personal journey to pay off $109,000 of credit card debt and the tips he’s learned along the way. As a father and husband he provides a unique perspective on balancing debt, finances, and family.

I stop at the corner at the end of my block to talk to my neighbor almost every day at the conclusion of my morning run. It’s always at roughly the same time because I have to be home in time to make sure my kids get up for school, and my neighbor is waiting for the city bus to pick him up and take him to work.

For as long as I’ve known him, his family has owned a single car and his wife drove it to her job, requiring him to use alternate methods to get to work. I figured that they just prioritized other things financially over owning a second car. When the weather is nice, sometimes he rides his bike, most of the time he takes the city bus.

Recently they purchased a second car, but I still find him standing on the street corner at 6:00am waiting for the bus. I asked him why he still rides the bus, even though they now had two cars. He gave the following answers:

  • Finding parking downtown is difficult and time consuming
  • The cost of parking adds up quickly

Our conversation piqued my interested, and prompted me to do some investigation into using alternate means of transportation as well. My son is turning sixteen soon, and there may be times when he may want or need to drive to school. Neither he or I are in the position to buy another car right now, so we may be left with my wife, my son, and I all needing to drive, and only two cars.

Since my office is less than five miles away from my home I wondered how much it would cost for me to use an alternate method of transportation to get to and from work, and if it would work within my schedule to do so.

Bicycle:

Cost:

I used to have a bike, but it was stolen a decade ago. I’d incur a one time cost of a bike and a bike lock. I could spend $80 on a bike, or I could spend $1000 or more. I’d likely try to find something in the $300 price range.

Convenience:

With a bike, I would be free to come and go as I pleased. However, weather conditions could play a major detracting role in this as well. I would also have to get some kind of rack to transport my lunch and laptop. It would take me about 20 minutes to get to work, which isn’t that much longer than driving myself.

Analysis:

Using a bike to get to work would be much cheaper in the long run than buying another car, but there are times when the weather could be a factor in being able to get to and from work.

Public Transportation:

Cost:

I took a look at my city’s public transportation website and found the following pricing:

  • $2 per ride
  • $26 for a 20 ride ticket
  • $48 for a monthly pass
  • $480 for a yearly pass ($40 a month)

Convenience:

A bus line runs along the street at the end of my cul-de-sac, and as mentioned the bus actually stops at that intersection.   The bus comes every 30 minutes starting at 6am until 8:30am. It goes almost directly to my place of employment, the ride lasting 15 minutes. I can again use it to get home, with the bus picking up at my place of employment every 30 minutes starting at 3:45pm until 6:15pm.

Analysis:

As far as public transportation goes, having a bus stop 100 feet from your front door is about as convenient as it can get. The 15 minute ride is only slightly longer than it would take me to drive there myself.

Riding the bus isn’t as convenient as hopping in my car and leaving at any time I feel like it. But, it does give me some flexibility as to when I want to get to the office and definitely fits my usual workday schedule.

Advantages & Disadvantages:

The pros and cons of using a bicycle and/or public transportation to get to work breaks down like this:

Advantages:

  • Cheaper than owning a third car (Cost of vehicle, gas, maintenance, insurance)
  • Don’t have to worry about my car starting in winter
  • Don’t have to worry about parking

Disadvantages:

  • Inconvenience of waiting in or driving my bike in hot, cold, or rainy weather
  • Takes longer to get to and from work
  • Inconvenience of planning your work day around the bus schedule
  • Lack of privacy when riding the bus

The best solution for me is to purchase a bicycle along with a 20 ride bus ticket. This gives me a bike that I can use not only to go to and from work on days I need an alternate method of transportation, but also for recreational purposes. The 20 ride bus ticket allows me to use the bus on those rare occasional that I need to ride the bus. It doesn’t expire, so I can use it as frequently or infrequently as needed. When it’s used up, I can just buy a new one.

We expect my son to get a part time job, save up his money, and eventually buy his own car. Until then we’ll have to make some sacrifices when it would be more convenient to allow him to drive to school due to after school activities, or if he has to work. The bicycle / city bus combination is the perfect low-cost solution to achieve this.

How about you all? Do you use public transportation? Have you ever investigated the cost and convenience of using public transportation in your area?

 Share your experiences by commenting below!

 **Image courtesy of nitnut at FreeDigitalPhotos.net

Practical Advice For Those Considering Law School

The following is a guest post by Nick from Millennial Finances. Enjoy! 

I graduated law school last May and wanted to pass along some practical advice to anyone considering law school.

Hopefully you read the news and know law school is not a safe route to a high-paying job. You should have significant concerns about about law school, and I’ll try to address them here:

Aren’t law schools producing more graduates than there are legal jobs?

Yes. Only 64.4% of recent law grads had jobs that actually required you to pass a bar exam. Median law graduate salaries (of those who reported their salaries) dropped to around $62,000, down from $72,000 in 2008.

The problem is law schools are cash cows – very inexpensive to run yet you can charge a lot of money thanks the ease of getting federal student loans. For-profit schools are especially predatory in leaving students with high debt, low bar passage rates, and even lower employment rates.

It’s crucial to scrutinize the data of the schools you want to attend. Where do their students end up employed? With how much debt, and at what salary? Many schools fight these important disclosures, or try skewing the numbers. Even prestigious schools magically increase their students existing GPAs to boost their employment numbers. Villanova’s dean resigned after a scandal involving doctored GPAs and LSAT scores.

So don’t just rely on whatever the law school tells you. Spend hours with Law School Transparency school reports. It’s a terrific resource that includes everything you should know your law school destination.

 

Will lawyers be as relevant in the future?

The legal industry is an arcane cartel doing its best to resist disruption. (It is illegal to practice law without being a member of the cartel, i.e. admitted to the bar.) The Supreme Court still refuses to allow its sessions to be videotaped. Laws and regulations are still bureaucratic mazes written by teams of lawyers that require even more lawyers to help others navigate them.

On the other hand, products like LegalZoom and FileRight and more are making inroads into the profession. Discovery work can be done more effectively by combining computers and outsourcing rather than having high-paid associates combing through paperwork.

I have no idea how rapidly things will change, but keep an eye on legal trends so you won’t be blindsided by them.

 

Is law school too expensive?

Absolutely. Paul Campos, a law professor at UC-Boulder, explains the skyrocketing tuition:

“Faculty salaries have doubled in real terms over the past 30 years. Administrative salaries have grown by much more, and the sheer number of administrative positions has exploded. Facilities are much nicer (this is known as the amenities race), and at law schools faculty-to-student ratios are much lower because of the pursuit of rankings. It’s just a crazy business model, all of which is enabled by no underwriting standards for student loans.”

The law school model is flawed, and even President Obama agrees three years is too long: “The third year [law students would] be better off clerking or practicing in a firm, even if they weren’t getting paid that much. [T]hat step alone would reduce the cost for the student.”

What can you do? Consider going only if you get a full or partial scholarship at a good law school. And look into graduating a semester early by taking on a busier course schedule.

I know that sounds extreme, but it’s also quite extreme to be out of the workforce for three years, then saddled with lots of debt, and not have a job. Take the time to read all the criticism of law schools. Everything Paul Campos has written on this issue, always backed up by reams of data, is good to know.

As for me, I went to a pretty good law school and passed my state’s bar exam. I was very fortunate to land a legal job in government as a third year student.

If you’re ready to apply, here is what I think every applicant should know about the admissions process:

Concentrate on your LSAT score and essays. Law schools care about their rankings, and LSATs play a big role. Most admissions committees won’t care if it took you two or three tries to get a high score, so consider sitting for multiple LSATs. 2nd time LSAT test takers score highest on average (mean improvement is 2.8 points). LSAT courses can be a great investment if your higher score gets you an extra $20,000 in scholarship money.

Customizing your essays are also critical to show the admissions committee you care about their law school and are a perfect fit. You can’t change your undergrad GPA, but you can still get a full scholarship with a great LSAT score and essay.

Study LawSchoolNumbers.com methodically. On this site, applicants self-report their data (GPA, LSAT score, demographic info, etc.) and show what schools accepted or rejected them. You get a rough idea of how likely you are to get into different schools, and more importantly, how much scholarship aid you can expect to receive.

Apply as early as possible. As you’ll see on LawSchoolNumbers, much more scholarship money is offered earlier compared to those applying near the deadline. Applying early can be difficult if you’re still waiting for better LSAT results, so try to take your LSAT well in advance of applying to law school.

Read the fine print of any scholarship. The classic scam is the unsavory law schools that gives 50% of the incoming class full rides, but rescind scholarships from those that don’t stay in the top 20% of the class. The ideal scholarship has no strings attached.

A legal career can be very rewarding if are able to avoid the ugliness of high debt and pervasive underemployment. I hope this has been helpful, and I’m happy to answer any questions in the comment section!

***Photo courtesy of http://commons.wikimedia.org/wiki/File:University_of_Notre_Dame_Law_Library.JPG

Important Financial Moves You Can Make in 2015

financial-moves-money-my-personal-finance-journeyThis following is a post by MPFJ staff writer, Jeff. Jeff writes about sustainable living and finances at his website, Sustainable Life Blog. Jeff really enjoys traveling with his wife as much as he can, to wherever he can.

It’s a new year again, and it’s time to prepare yourself financially and get the rest of your life in order. While many have their goals figured out and are midway through the point where they’ll eventually fail, you can make your financial goals different this year.  When you look back on 2015 in December, you can be happy with your progress.

Here are a few things you should do to make the most (financially) out of your 2015:

Increase your retirement contribution by at 10% or more

Last year, I wasn’t sure if I would be able to max out my Roth IRA account, but I knew I wanted to contribute more than I had in 2013. After talking it over with my dad, he suggested increasing my contribution by 10%. The amount doesn’t seem like much, but it made a big difference.  That small monthly increase led to another 10% increase midway through the year, and things just kept rolling.

I was given some money for Christmas, and I used that to max out my Roth for 2014 – the first time in a few years I had been able to do that, since I had been paying off some debt previously.

So, for those of you looking to increase contributions to your retirement accounts (401k, IRAs or 457’s/403b’s) but are not bumping up against the government maximum for the year, consider increasing your contribution by at least 10-15% per paycheck.

Typically, it does not amount to much more than skipping one meal out per week, but the benefits at the end of the year are substantial.

Lower Your Monthly Nut

Lowering your monthly expenses is critical to increasing your cash flow and your savings. I spent most of 2013 working on lowering my monthly nut, and it allowed me to do some things that I probably wouldn’t have been able to do otherwise (like absorb a 1500+/mo cash hit).

In late 2013, I spent a day gathering all of the monthly bills for the family, and then spent the next 3 weeks researching how to lower each and every bill. I started with the big ones like home and car insurance, then moved on to smaller ones, such as cable TV, internet, and cell phones.

Even though you may only be saving $10-$25 per month on some of this stuff, it can really add up over the course of a year. We were able to reduce our monthly expenses from above $2200 to below $1500, just by making a few phone calls.

So in 2015, take a look at your bills and figure out how to lower them – even if it’s just by $10 per month. You’ll save yourself $120/year, and be happy you did.

Pro tip: If you want to lower your phone bill, look into Ting or Republic Wireless. If you want to tackle cable TV or internet, here’s a script to use when you call.

Establish a New Money Routine

This is what I’ll be focusing on primarily in 2015 – changing my money habits.

After looking at the data, it seems as though I can go Monday to Friday without spending a dime, then I’ll spend $100-$200 on the weekends. Of course, some of this is groceries so it’s not all bad, but it seems as though I’ve gone into a pattern where I save all my “pent up” spending for the weekend.

So, in an effort to lower that number, I’m going to do two things:

  1. Set a budget of $500 per month for all non monthly nut related things (for me, that includes gas and groceries), and;
  2. Extend my “no spend weekdays” by 1 day, and make Saturday a day where I don’t spend any money.

I’m hoping this will lower my total spending for the month, and help kick start me to a better habit.

What about you all? What money moves are you planning on making in 2015? Do you have other money-saving tips you found successful and would like to share with us?

Feel free to leave your comments below!

**Photo courtesy http://www.flickr.com/photos/cooperweb/8363160192/