When most of us reach a certain point in our professional and personal finance journey, we start to experience lifestyle creep, the pressure to spend more. The causes could be social, financial or even boredom. After a certain minimum livelihood is met, each raise or goal accomplished allows us to potentially spend or save more. [...]
You know we here at DQYDJ love to try to raise your hackles every once and a while, and there’s no surer way to offend a lot of people than talking about college. The last time we visited the land of student loans, we asked you if Arts and Psychology Majors should pay higher rates [...]
Bells are ringing! I am finally worthless! With my paycheck today my net worth has finally passed the literal and psychological $0 barrier. My financial leverage given a net worth of $1 is about 45,000-to-1. Let this be a lesson to everybody: massively over-leveraged financial positions can only end positively. Look at Long-Term Capital Management, MF Global, Bear Stearns and AIG: their executives still managed to escape with millions of dollars!
Personal finance experts frequently tout the advantages of having a six month emergency fund, if not a more conservative twelve month fund. There are many reasons that a citizen would need to dip into their emergency savings: family illness, death, severe medical expenses, unplanned pregnancy or job loss to name a few. Many reports however, indicate that many (>25% or >50% depending on your definition) Americans still are not prepared for a downturn scenario.
Credit cards get a bad rap – one that is not entirely deserved. I’ve got this working theory that it has to do with their name – the term ‘credit’ may mean ‘ability to obtain resources based on a future payoff’, but the card is named entirely wrong: If the only purpose of your credit cards is to purchase things on credit you are doing things completely wrong. The true beauty of credit cards is that they are a liquidity tool; credit cards allow you constant access to funding… whenever you need it. So, let’s look at the perfect strategy for turning your credit cards into liquidity cards!
Tying to an article earlier that my colleague PKamp3 wrote, personal finance seems to have taken a dive in popularity in more recent years. As a writer for a confessedly self-aware personal finance crowd, this assertion may seem irrelevant, surprising, or, at worst, alarming. As a young college graduate, many of my fellow coworkers (as well as I) have student loans as one of their more significant financial obligations on top of car loans and (soon) mortgages. Some plan on paying down their student loans as fast as possible to deleverage themselves and then start saving for a home. I am of a different and not necessarily correct opinion: to hold onto the student loans for as long as possible due to their incredibly low interest rate and tax-deductibility for incomes up to $60,000 (partial deductions up to $75,000).
There is a mortgage strategy variously described in different corners of the internet where a mortgage is refinanced… and payments stay steady. For this strategy, a borrower is currently paying some monthly payment, and will continue to pay the exact same monthly payment after their mortgage is refinanced. The benefits are usually explained as an acceleration of mortgage payments and a “guaranteed investment return”. You may find yourself in a situation where you are considering this form of accelerated mortgage payments. Is it worth it? Let’s run the numbers and find out!
Conceptually, it’s easy to grasp why and when you should refinance your mortgage. In practice, inertia is the main reason people hold back from refinancing. With that in mind, we present these mortgage calculator which will allow you to see how your current mortgage will compare with the mortgage you are considering. Perhaps if the math is enticing, you’ll shop around? Enjoy!
Here’s an interesting move on the part of Bank of America… account holders who use their debit card at any time during a month will be expected to pony up $5.00 at the end. The fee doesn’t apply if you use your debit card at ATMs, just when you use it to make purchases. It’s just the latest of the big banks to make waves with debit card fees – and, with the fee scheduled to roll out to Bank of America account holders next year, it’s the largest of the debit card fee programs. Wells Fargo and JP Morgan Chase are also toying with the idea to tack on monthly debit card fees.