Organize Your Financial Life With This Money Road Map

The following post is by MPFJ staff writer, Melissa Batai. Melissa is a freelance writer who covers topics ranging from personal finance to business to organics to food.  She blogs at Mom’s Plans, where she shares her family’s journey to healthier living and paying down debt.

Are your finances in the shape you’d like them to be?  Or, are they a disaster that you’d like to clean up as soon as possible?

If they’re a disaster, first know that you’re not alone.  Many, many people find themselves in a financial mess at some point in their lives.  There are a number of steps that you can take to strengthen your financial life and make yourself and your family more secure.  Here are the steps that I recommend you take in this order:


Put two to three months’ expenses in an emergency fund

If you’re a fan of Dave Ramsey, you know that he advocates a $1,000 emergency fund and then attacking debt.  My husband and I used to follow this approach, but then we ended up with emergencies bigger than $1,000, and we’d have to go back into debt to pay them.

I’d recommend instead that you first save two to three months’ of expenses, and then start paying down your debt.  That way, if you run into unexpected expenses, you can tackle them without going further into debt and erasing the progress you’ve made on paying down the debt.  (Seriously, nothing is more depressing than working hard for months to pay down your debt just to watch all of your progress disappear with one car repair or home repair.)


Pay down all of your debt except your mortgage

Once you have the two to three-month emergency fund, it’s time to pay down your debt.  I’d recommend paying off credit cards first, then car loans, then student loans.

While Dave Ramsey recommends using the debt snowball and paying off the lowest debt first, others have good luck paying down the highest interest debt first.  Which option is better depends on what motivates you.  Are you motivated by seeing the debts disappear one by one, or are you motivated by knowing that less money is being paid to interest each month?  Ultimately, your motivation will be what helps you through the sometimes long, painful process of paying down debt, so pick the method that works best for you.


If you use your credit card, pay it off each month

Credit cards can be a great tool if you use them responsibly.  If you have a cash back or airline points feature, you can even earn money for using your credit card.  The key is to pay it off each month.  If you can’t do so, it’s time to retrain yourself and start using cash or a debit card.  Once you get better control of your spending, you can start using the credit card again and reaping the rewards.

Credit cards can be a great tool if you use them responsibly.  If you have a cash back or airline points feature, you can even earn money for using your credit card.  The key is to pay it off each month.  If you can’t do so, it’s time to retrain yourself and start using cash or a debit card.  Once you get better control of your spending, you can start using the credit card again and reaping the rewards.


Contribute 10% of your income to your retirement fund

When you’re in the midst of financial difficulties, it’s hard to plan for the future, but if you want to be secure in the future, you must take steps now.  Ideally, you’ll want to save at least 10% of your income in a retirement fund with the eventual goal of getting that number up to 15%.  However, don’t feel intimidated by that amount.  Start slowly if you need to, and contribute just 1% of your income to your retirement fund for six months.  Then, slowly bump it up to 2 or 3% for six months.  Continue adding more every few months.  It takes

When you’re in the midst of financial difficulties, it’s hard to plan for the future, but if you want to be secure in the future, you must take steps now.  Ideally, you’ll want to save at least 10% of your income in a retirement fund with the eventual goal of getting that number up to 15%.  However, don’t feel intimidated by that amount.  Start slowly if you need to, and contribute just 1% of your income to your retirement fund for six months.  Then, slowly bump it up to 2 or 3% for six months.  Continue adding more every few months.  It takes time to get used to making retirement savings a priority.  As you develop the habit, you’ll be able to add more to your retirement savings until you get up to 10%.


Buy term life insurance

(Bump this step up if you have a family before you get to this point in your financial life.)  I was talking to a mom of four young kids recently.  She is a stay-at-home mom, and her husband is older than her; he’s in his fifties.  She was excitedly telling me about their new financial plan.  Each month, they set aside $100 in an emergency fund in case something happens to her husband.  That was their only plan if something happened to the sole breadwinner of the family.

I wanted to cry.  They have four young kids, she doesn’t work, and her husband is in his fifties, yet they have no life insurance!  While the money they’re setting aside is great, if her husband unexpectedly passed away, that money would quickly be consumed.

The family I’m referring to isn’t alone.  According to Fox Business, “Currently, 95 million Americans live without life insurance and only one-third of consumers are covered by individually-owned life policies.”

Term life insurance is relatively inexpensive, especially if you’re young and healthy.  While experts recommend you take out a policy for 10x your income, you can use an online calculator and talk to an expert to help you determine how much you actually need based on your life circumstances.

If you have dependents who rely on your income, you must make buying term life insurance a priority.  I would move this to the first step in this plan, even before creating a two to three-month emergency fund, if you have dependents.  Life insurance and the financial security it can bring your loved ones is that important.


Build an eight-month emergency fund

For ultimate security, you’ll want to bulk up your emergency fund once your debt is paid off, you’re adding to your retirement regularly, and you have term life insurance.   Some experts recommend an eight to twelve-month emergency fund, but start with an eight-month emergency fund first.  This money will be essential if you unexpectedly lose your job or suffer an injury.

Remember, when you’re measuring a month’s worth of expenses, you want to consider the essentials.  If you were suddenly laid off, you’d probably cut non-essentials like eating out and buying new clothes.  Base a month’s worth of savings on how much money you’d need to pay the essentials.  While your current monthly expenses may be $5,000 a month, you may find if you cut non-essential line items, your expenses drop down to $3,800 a month.  The latter amount should be the amount that you consider a month’s worth of expenses.


Pay off your house

When all the steps above have been achieved, it’s time for the biggie—pay off your house.  While some people prefer to pay off their house right on schedule thanks to low mortgage interest rates, why not pay it off if you’re otherwise financially secure?  Think what you could do with that extra money in your budget each month if you didn’t have to pay your mortgage payment?  You could invest it, give to charity, travel the world.  Once the house is paid off and you’ve completed all of the steps above, you’re truly financially free.

The best way to become financially secure is to create a map for yourself with financial goals that you want to achieve.  While the steps above may take as little as 10 years to complete (depending on your current financial situation), or as long as thirty years or more, the point is that you have a plan that you’re following.  It’s imperative that you’re continually making financial progress throughout the years rather than squandering money and going through life without a plan to guide you on your journey.

What do you think?  Do you agree with these financial steps, or would you rearrange them?  If so, what order would you put them in?

***Photo courtesy of

How to Help Your Kids Develop Respect for Money

The following post is by MPFJ staff writer, Laurie Blank.  Laurie is a wife, mother to 4 and homesteader who blogs about personal finance, self-sufficiency and life in general over at The Frugal Farmer. Part witty, part introspective and part silly, her goal in blogging is to help others find their way to financial freedom and to a simpler, more peaceful life.

The debt train is gaining speed in America, as shown by this article on Bloomberg’s website. It seems as if consumers’ love affair with living beyond their means is far from over. Part of the problem – in my humble opinion – is the lack of personal finance education in the lives of children, whether by their parents or their education system. How can we as parents help our kids to understand and value money so that they don’t head the way of so many who are deep in debt?


How to Teach Kids to Value and Respect Money

There are many different facets involved with teaching kids respect for money. Teaching them how to budget is one of them, but that doesn’t begin to touch the tip of the iceberg in today’s instant gratification world. Here are some ways you can help your kids understand and respect the role of money in life.


Teach Them about Emotions and Money

So much of overspending is rooted in the training we receive from media. Commercials show us that if we wear these shoes, drink this beer, drive this car or vacation at this exotic place we’ll be living the good life. They show happy, smiling people with perfect bodies and perfect tans, and seemingly with no troubles in life. The goal they have is to get us to spend money on their products.

We get the same messages in real life. We’re encouraged by our family, our friends, our fellow employees and our community to keep up with the Joneses. People question us when we drive older cars or live in a smaller house.

These messages tempt people to want to spend in order to impress others or make themselves happy, but most people know that the joy that comes with getting new and shiny stuff never lasts for very long. If we can teach our kids this truth, we can help them understand that true happiness comes from the inside out and not from the outside in, and help them avoid using money as a path to acceptance or happiness via ownership of “stuff”.


Teach Them the True Value of Money

The true value of money is rooted in freedom. When your debt load is non-existent – or at least super manageable – and you’ve got money in the bank, you have the freedom to make decisions based on other factors and not on whether or not you can afford it.

This means that you can take the lower paying job that you’ll like better, move to a different state or country, give to those in need when you feel like it or take a sabbatical from work in order to focus on yourself and/or your family.

If we can teach our kids that a healthy bank account balance and a lack of bondage to debtors equals true freedom and happiness, we can help them put potential purchases into perspective.


Teach Them How to Analyze Purchases

This goes along with emotions and money. It helps to teach kids to be able to analyze purchases before they make them. There are two main questions we can teach them to ask themselves before buying:

  1. What value will this purchase add to my life?
  2. Are there other things I want more than this purchase?

If the answer to either of these questions is more important that the purchase itself, that may be a sign that their money is better spent (or saved) somewhere else. Helping kids to work through the “whys” of a potential purchase will help them learn to avoid spontaneous spending that they’ll later regret.


Don’t Hand Them Money “Just Because”

Many parents these days give their kids money whenever they ask or buy them whatever they ask for at the store. When there’s no limit to money in a kid’s world, they’ll have a tough time developing respect for money – or for work.

In our house, the general rule is that we don’t buy them non-necessities unless it’s for birthday or Christmas presents. We also don’t give them money just because they ask or because they want to do something.

Instead, we help them figure out ways to earn money for the things they want. For instance, we have assigned chores that are done by each of our four children just because they’re a part of our family. We also have a separate list of chores they can do to earn money.

Just yesterday our second oldest asked how she could earn money to see a movie with a friend. I offered to pay her $2 for cleaning out the fridge and $5 for organizing my bedroom closet – both are jobs I’m not a big fan of doing. I got some needed tasks off my plate, and she earned $7 toward her movie excursion.

We’ve found that when our kids have to earn the money they get, they tend to be more cautious about how they spend it, and they also value more highly the items and experiences they get when they spend it.


Teach Them the Value of Spending, Saving and Giving

We basically have three choices with our money. We can spend it, save it or give it. All three choices have intrinsic value. Spending money on things that are important to us brings a sense of accomplishment as we fulfill our own needs and wants. Saving money teaches us discipline and helps us prepare a more secure future for ourselves. Giving helps us become detached from money and also helps us to realize the importance of helping others.

If we can teach our kids to balance the three choices they have with their own money, we can help them to develop a healthy respect for money.

Teaching kids to understand how to have a proper respect for money without idolizing it will help them prepare for a secure financial future that isn’t overshadowed by heavy debt payments.

How about you all? How do you teach your kids to respect money?

Share your experiences by commenting below! 

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Securing An Internship (And The Best Companies For Them)

The following is a post by MPFJ staff writer, Toi Williams, who is a professional finance blogger for MarketBeat. She has backgrounds in personal finance, sales, and real estate.

For many students and graduates, the pathway to employment starts with landing the right internship. An internship is program offered by an employer to potential employees that allow interns to work either part time or full time at a company for a certain period of time. The Random House Dictionary defines an internship as:
“Any official or formal program to provide practical experience for beginners in an occupation or profession.”

Internships are an essential pipeline for talent for employers and a great steppingstone for students. Many students try to do a few internships throughout college to get a feel for what career they’d like to pursue. Internships are most popular with undergraduates or graduate students who work between one to four months.

Internships allow you to experiment with a career that interests you. Most American internships are work experience internships. There are also research internships, which are more common in scientific fields. Some internships offer college credit for the successful completion of the program.

Internships can be paid or unpaid. Paid internships for college students are less common than unpaid internships. Unpaid internships are usually subject to stringent labor guidelines. U.S. federal law mandates that unpaid interns must not be used to displace the work done by paid employees or benefit the company economically. Some states have additional laws that govern the activities of unpaid interns.

Just about any internship program would be a good entry on your resume, a great way to gain references, and help you with networking. You’re not bound to work for your employer after the internship is over. However, a survey by the National Association of Colleges and Employers that polled U.S. employers with interns found nearly 7 out of 10 internships result in a full time job offer after successful completion of the program.

If you’re hoping to change geographic location for your internship, there are some things to keep in mind. The first is where you will live during your time with the company. Some internship programs offer housing to students or include a stipend for housing and expenses. Others have developed some financially accessible options so their interns can focus on doing the job rather than worrying about their housing. Make sure you know where you will be living before you make your choice.

Today, employers are being a lot more specific about the skills they need from their interns. These days, interns at some of America’s most popular companies are responsible for a wide range of high level projects. Many companies use their internships as trial runs for potential hires or future promotions. Law firms and investment banks have operated like this decades.

According to a new report by jobs site Glassdoor, the 25 best-paying companies for internships generally pay their interns a median of more than $4,500 a month. Those companies are all generally pay their workforces well above average wages. The intern programs at Facebook, Google, and many of the other Silicon Valley companies on the list are notoriously competitive and challenging, somewhat justifying the higher pay.

Topping Glassdoor’s list is Facebook, with a median pay for interns at $8,000 a month. Microsoft was next, with a median pay of $7,100 a month. The rest of the list is as follows:
• ExxonMobil ($6,507)
• Salesforce ($6,450)
• Amazon ($6,400)
• Apple ($6,400)
• Bloomberg LP ($6,400)
• Yelp ($6,400)
• Yahoo ($6,080)
• VMWare ($6,080)
• Google ($6,000)
• NVIDIA ($5,770)
• Intuit ($5,440)
• Juniper Networks ($5,440)
• Workday ($5,440)
• BlackRock ($5,400)
• Adobe ($5,120)
• MathWorks ($5,120)
• Qualcomm ($5,040)
• Capital One ($5,000)
• Chevron ($5,000)
• Accenture ($4,960)
• Deutsche Bank ($4,640)
• AIG ($4,616)
• Bank Of America ($4,570)

While New York, Chicago, Los Angeles, and San Francisco are the primary metropolitan areas for internships in the U.S., there are plenty of other locations that offer great unpaid and paid internships for college students. There are hundreds of thousands of internship opportunities available with employers across the country. You can focus your internship search by where you live, by your college major, or by specific company.

There are many avenues available for securing an internship. calls itself the largest internship marketplace online, listing “202,897 internship positions from 123,218 companies located in 9,152 cities across all 50 states.” Another resource is, which lets you search for internships in your local area or any other US location you are interested in. WayUp is advertised as “the #1 place for college students & recent grads to get hired and launch their careers,” listing both available jobs and internships for companies across the nation.

Burning Glass Technologies, a research company that collects employer postings for internships, has released a list of the top 20 fields for internships by number of online postings. Those fields are:
1. Business Operations
2. Marketing
3. Engineering
4. Sales and Business Development
5. Media, Communications, and Public Relations
6. Data Analytics
7. Finance
8. IT Development
9. Arts and Design
10. Project and Program Management
11. Human Resources
12. Science and Environment
13. Health Care
14. Educations and Human Services
15. Database Administration
16. IT Support
17. Economics And Policy
18. Legal
19. Retail
20. Event Planning

Securing an internship will provide you with a wide range of benefits. You get a valuable opportunity to talk to real workers in the fields that you are interested in and experience what working for a particular company would be like first hand. Internships also give you a chance to hone your skills and improve your leadership talents. Employers overwhelmingly point to internship experience as the most important factor they consider in hiring new college graduates for full-time positions. Research shows that 85 percent of companies use internships and similar experiential education programs to recruit for their full-time workforces.

How about you all? Did you use an internship to start your career?

Share your experiences by commenting below! 

***Photo courtesy of

The Advantages of Using a Mortgage Broker over a Bank

The following is a guest post. Enjoy! 

Dana at Tundra Mortgage Brokers recently shared her opinion on the benefit of hiring a mortgage broker to help with a home loan, instead of going directly to a bank. Whether you’re a first time buyer, a property developer, or an investor; could you really benefit by turning to a broker when it comes to borrowing money?

In this post, we’ll be diving into the advantages of using a mortgage broker instead of applying to a bank directly – and just how much you could save by doing so.

The Potential to Compare Interest Rates

Have you ever actually sat down and tried to compile a list of the different rates offered by banks? Not only do most of those in Australia (and other parts of the world) propose varying rates depending on the type of loans available; there are also fixed and variable ones to consider, too. As you might imagine this process can be quite time consuming and this is actually something that mortgage brokers typically specialize in.

Most will offer effective interest rate comparison services to those in need – and if you hire a great one, you could be looking at a selection of options in the space of a couple of days (or less!)

Recognizing a Great Deal

What’s the one thing that most borrowers will want to make sure they do when applying for a loan? Keep their costs as low as possible, of course. There aren’t many mortgages that won’t go on for at least a decade (or three) and so finding a great deal can make a lot of difference to your future finances.

A good mortgage broker should be able to compare the varying terms and conditions proposed with specific loan packages and hone in on the best available on behalf of a client.

Taking the Stress Out of Applying

Another frequently overlooked advantage of hiring a broker is the fact that they can actually take care of the technicalities, to minimize the stress that you feel when applying for a home loan. As they’ll be the middle-person when dealing with a bank you will often be able to submit your documentation to them directly, so that it can be forwarded to your chosen bank.

This can make it easy for you to minimize the formal activities associated with applying for a mortgage and allow you to focus on what really matters; getting approval.

You might need to cover a small cost when hiring a brokering agency up front, although some are happy to offer their services free of charge to you for commission from a bank, but just imagine the long term financial savings that you could enjoy. For a relatively small fee at first, you could save yourself thousands of dollars by ensuring that you sign up to a cheaper deal than you would have when applying to a bank directly.

Smart Ideas to Stretch Your Holiday Budget

The following is a guest post by Vera. Vera is a blogger trying to lead a frugal (but not frustrating) lifestyle. For her, frugal living does not mean living a life you dread waking up to, or thinking that money controls you, when in fact, it’s the other way, you control the money. You can find her at Frugal Frogs.

When it comes to the holidays, most people spend more money than they intended to. Of course, that cuts into other bills, savings or something else that you didn’t intend to be affected by your holiday shopping. But you can make your holiday budget work for you with these smart ideas to stretch your budget. You may even have some money left over after the holidays have passed.


Set a Realistic Budget

The first thing that you have to do to make sure that your money stretches far enough to cover your holiday shopping is to set a realistic budget. This is something that many people have trouble with, and it is a common cause of running out of money before the holiday shopping is done.

Make a list of everyone that you have to buy for, and then take a few days to ensure that you have remembered everyone. You will probably have to add a few more names to the list. Once you do that, set a limit on how much you are going to spend for each person.

Some people will have a higher limit than others, and that’s fine, but make sure that you don’t regard the limit as an “about” amount but as an actual limit. Then you’ll know that you won’t go over your budget. If you do find the perfect gift for someone and it is a little over the limit, then make sure that you reduce the limit on someone else on your list to keep your budget the same.


Shop Online More Often

You also want to shop online more often, particularly with the site-to-store feature that many department stores are now offering. You can often find a much lower price this way and always check Amazon before you buy anything because they will often have a lower price and if you are a Prime member ($10 a month), you won’t have to pay for your shipping ever.


Find and Clip Coupons

This doesn’t necessarily mean scouring the local paper and physically clipping coupons. These days, with Groupon and other money-saving websites, coupons are more likely to be found online. There are apps for your phone that give you coupons, even those that check which store you are in and offer you coupons for that store as you shop, as well as member websites that give discounts on most of the well-known chain stores.


Strategize Your Travel

Saving money on travel is just as important as saving money on gift purchases and other holiday expenses. First, if you are traveling somewhere by plane for the holidays, make sure that you get your ticket far, far in advance and at as much of a discount as you can.

Even if you are not traveling any farther than around town to buy gifts, you can still strategize your travel and save money. Figure out which stores you are going to hit and then put them in order by creating a route that will take you to all of them without wasting any gas – which also allows you to spend your time wisely and avoid wasting it running all over town.


Seasonal Jobs

If you want to make your holiday budget stretch a little further a great way to do that is by getting a seasonal job. There are some great part-time gigs out there that last just throughout the holiday season like playing a mall Santa or elf, working at a gift-wrapping counter or hiring on at a store that needs extra help during the holidays. Holiday jobs are easy to find, and the employer usually doesn’t care that you plan to quit after you have earned enough extra money to complete your Christmas shopping.


Use Pre-Owned Gift Cards

Believe it or not, you can get gift cards, with the full balance still on them, for pennies on the dollar. There are a few websites out there like that allow users to buy and sell their gift cards for any price that they want, even some that hook up local buyers and sellers so that you can instantly get the gift card in your hands when you fork over the cash.


Look for Rewards When You Shop

You want to keep an eye out for rewards and always buy with earning some type of reward in mind. You don’t want to go out of your way or spend more money than you would somewhere else, but try to earn credit card rewards, rewards from websites that pay you to shop and rewards from apps that offer everything from prizes to actual cash.


Buy Expensive Gifts Inexpensively

You can visit any of the multitudes of discount websites that offer anywhere from 50% to 90% off the purchase price (and in some cases, have free items that you only have to pay to ship) like These websites sell new items, so you aren’t getting something that is used and the person that you are getting the gift for will never know that you got it at a discount.

***Photo courtesy of