Six Figures and Broke - Getting Out of Debt » Saving and Investing

Just Contacted One of Dave Ramsey’s Tax ELPs

BigSpender — Tue, 08 Jun 2010 12:00:19 +0000

If you’ve listened to Dave Ramsey’s show for more than a week then you’ve no doubt heard about his ELPs – Endorsed Local Providers. These are specialists in several different financial-related areas including Investing, Real Estate, Insurance, Health Insurance, and Tax Services. Dave Ramsey will endorse a specialist in each of these topics in cities and communities around the United States. Well, I finally decided that I want to get an expert to look at our tax situation. We are flirting with the Alternative Minimum Tax, my husband’s commissions are coming in higher than expected, and I’m self-employed. As much as I enjoy doing our taxes (I know, I’m weird like that), it is time for a professional to take over these duties.

The individual was very nice and we chatted on the phone for several minutes. I’ll be meeting with him next month (due to my tight schedule, not his) and we’ll go over our financials and kind of create a plan for the rest of the year with regards to withholding, etc. Then come 2011, we will hire him to do our taxes. The great thing is that this initial consultation is free! Of course I don’t mind paying for services rendered but it is nice to sit down face-to-face with someone, look over our numbers, and plan ahead without having to pay out anything just yet.

So once we meet I’ll be sure to check back in and share my experiences. I have a question for Dave Ramsey listeners, have you ever used one of his ELPs? If so, how did it go?

Where Should You Put Your Short-Term Savings?

BigSpender — Thu, 03 Jun 2010 12:00:32 +0000

If you have money that needs to be put into a short-term savings venue or an emergency fund, where should you save it? This is a question that I often see on message boards and blogs around the web. The frequency of this question prompted me to write the following post last week: Should You Use Gold and Silver as an Emergency Fund? This week I’m going to share some other places to put your savings.

Since I’m not a personal finance expert, more so an expert in my finances, I looked to the experts for advice. The staff over at the Motley Fool has a set of guidelines that we should ask ourselves when looking for a place to put our short-term savings. Basically, you need to examine the following issues: access, interest, service, and penalties.

The article then goes on to list the pros and cons of several different short-term savings outlets including checking accounts, savings accounts, high-yield bank accounts, money market deposit accounts, money market funds, CDs, and more.

Since this is a personal finance topic, the right answer for you may not be the right answer for your neighbor. I have my emergency fund split between two different savings accounts. One account I can access via my ATM card and the other is an internet-based bank and so it requires a 2-3 day transfer time.

I have chosen this because both are readily liquid however I have immediate access to a portion of this should an emergency occur that requires instant attention. For example, car problems while out of state on vacation. I certainly can’t wait 2-3 days for funds when I’m hundreds of miles from home!

So where do you keep your emergency fund?

Photo: jtyerse/Flickr

6 Personal Finance Apps for the iPad and iPhone

BigSpender — Wed, 02 Jun 2010 12:00:21 +0000

As the nation begins to bounce back from the worst economic recession since the Great Depression, consumers are beginning to focus on personal finance once again. Of course, today’s technology allows consumers to do more with personal finance than those coming out of the Great Depression. To help you get on track, I’m sharing my list of 6 personal finance apps for the iPad and iPhone.

Mint.com – Quicken recently took over Mint and although there isn’t currently an iPad specific app for the site, the iPhone app works perfectly.

Bank of Mom – Keep track of your children’s commission with this app.

Calculator XL – Okay so this isn’t specific to personal finance but the iPad doesn’t have a built-in calculator like the iPhone. I found this calculator to do everything that I need it to do and it was free!

Quicken Online Mobile – This is good for customers of Quicken online. Again it hasn’t been updated for the iPad but the iPhone app works just fine.

Spend Lite – Personal Budgeting – This is another free app that enables you to enter your budget and keep a running track of your spending. However, this tool is perfect for Dave Ramsey envelope system followers. You can use each budget to correspond with an envelope and easily keep track of your cash on your phone or iPad.

Grocery iQ – This is an awesome app but you’ll need an iPhone with a camera to get the most out of it. With this app you can create grocery lists, scan the barcode of items that you use frequently and add them to your own custom lists, add a price list so that you know what you typically pay for an item, and much more. You may be asking how this is related to personal finance, though. Simple – smart grocery shopping is an important part of budgeting and saving money. Instead of creating an old-fashioned print price list, you can keep everything in this handy dandy app!

If you have an iPhone or an iPad, what is your favorite personal finance app?

Photo: Yutaka Tsutano/Flickr

Suze Orman on Personal Finance in 2010 – The Back to Cash Movement

Should You Use Gold and Silver as an Emergency Fund?

BigSpender — Fri, 21 May 2010 12:00:08 +0000

Gold is selling at record highs and I’m seeing the following question asked more frequently: Should you use gold and/or silver as an emergency fund? I’m seeing this question asked on a variety of message boards that I frequent (even those that aren’t focused on personal finance) and of course I hear them on probably a weekly basis on Dave Ramsey’s podcasts.

Dave’s answer to this question is no.

My answer to this question is also no.

Now I’m not an expert, obviously – I’m the one blogging about getting out of a mountain of debt despite having a six figure income – but I don’t think that gold and silver will be worth their weight in the event of an emergency.

There are two types of emergencies that are typically discussed during these forum conversations on the topic. The first is your run of the mill emergency – an unexpected car repair, etc. In that case, hefting your gold bar into the bank and paying a fee to cash it out isn’t convenient nor is it wise. Cash is king in that case.

The other scenario discussed is in the event of a true and complete collapse of our economy. If you’re considering using gold or silver as your emergency fund, ask yourself this question “If the economy has collapsed and stores and businesses are closed, am I willing to give up a loaf of bread for a piece of silver?”

The answer to this question, at least to me, is obvious. Heck no. Why would I want a piece of silver? If I am giving up a loaf of bread I’d better be getting a gallon of clean drinking water or gasoline in return. In the event of an economic collapse (which I’m not worried about) we’ll return to a barter economy – goods and services being traded for goods and services. Not goods and services for a silver coin or a bar of gold.

What do you think? Are you using gold or silver as part of your emergency fund? If so, why? I’m honestly curious and I’d like to get some other opinions on the matter.

Photo: digitalmoneyworld/Flickr

Where Should You Put Your Short-Term Savings?

It’s Never Too Late to Start Saving Money

BigSpender — Wed, 19 May 2010 12:00:55 +0000

One thing that I find inspirational while listening to Dave Ramsey’s podcasts is that he says it is never too late to start saving money. Every now and then he’ll field a call from a married couple in their late 60s that are living on Social Security Income, have credit card debt, rent, and are despondent about their future. Dave is always very optimistic about the situation – sure you have a fixed and very tight income however it is never too late to make a change, pay off your debt, and start saving money.

Recently CNNMoney.com featured an article in their Ask The Expert section that touched on this subject. Sixty year old Tony in Missouri has little in the way of retirement savings and he’s concerned about whether he will be able to actually retire in a few years. He had some savings but it went into his own business which eventually failed. The expert cautioned against the “too many eggs in one basket” syndrome – diversification is indeed key.

Here’s part of Walter Updegrave’s response to Tony:

Clearly, you’re not going to be able to accumulate an entire career’s worth of savings in the number of working years you have left. But even at your age, you can still build a nest egg large enough to make a material difference in your retirement lifestyle.

It is never too late to start saving money.

Read the rest of the answer here: 60 years old and no retirement savings

Spending is Up, Savings are Down, and Salaries are Flat

BigSpender — Wed, 10 Mar 2010 16:12:39 +0000

The Great Recession – it began in December 2007 and we may be officially climbing out of it now. Unfortunately it appears as though our nation is dealing with a jobless recovery. Yesterday, I discussed that fewer Americans are saving for retirement than just a year ago. Today I’m building on that – not only are savings down but spending is up despite the fact that salaries remain relatively flat.

This video from CNN explains it a bit more.

Where Should You Put Your Short-Term Savings?

Fewer Americans Saving for Retirement

BigSpender — Tue, 09 Mar 2010 16:36:26 +0000

While taking the kids to school this morning, I heard a shocking statistic on CNN Headline news. More than one-fourth of American workers have less than $1,000 in their retirement savings account. In its most recent survey, the Employee Benefit Research Institute found that 27% of American workers have less than $1,000 in retirement savings. This is up from 20% just a year ago.

If you expand this to $10,000, 43% of American workers have less than $10,000 in retirement savings today – this is up from 39% in 2009. Obviously, the economic recession and the jobless crisis are contributing to this problem. If you can’t find a job, how can you save for retirement? If you can’t pay your mortgage, how can you save for retirement?

This is creating a new problem – Americans have to work longer in order to have the money they need to retire. This is keeping people in the workforce longer, which makes it more difficult to find a job. It is almost like a vicious cycle that needs to be broken.

So people aren’t saving for retirement but they also aren’t projecting what they’ll need to retire with dignity. Oh, and to make matters worse, some companies have stopped 401k matches due to the financial crisis.

In order to achieve the goal of retiring with dignity, Beth McHugh with Fidelity Investments suggests that Americans need to save approximately 6-10 % of their salary. If you follow Dave Ramsey’s plan, he suggests saving 15% of your salary once you reach Baby Step Four.

So some of these Americans may just be temporarily postponing their retirement savings in order to pay down consumer debt but I’d venture to guess that it is a very small percentage.

Although we’re trying to follow Dave Ramsey’s Baby Steps, we are continuing a smallish contribution to 401k savings plans. We are doing this to attempt to avoid the Alternative Minimum Tax trap for 2010. If I’m going to have to pay out $5k in taxes, I’d rather defer some of my pre-tax income to an investment engine. I don’t know if this plan will work but we can only hope.

I’m curious, are you saving for retirement? If not, why? If you are…how much of your annual salary are you setting aside for retirement?

Photo: Alex E. Proimos

It’s Never Too Late to Start Saving Money

Will the Bank Bailout Fees Affect You?

BigSpender — Mon, 18 Jan 2010 15:00:33 +0000

President Obama is proposing that the largest banks be assessed a bailout fee to help recover some of the TARP funding that these banks received to stay afloat and pretty much avert a total collapse of the American economy. Although he has many supporters, he also has many that oppose this proposed bailout fee, including personal finance guru Suze Orman. What do you think, will the bank bailout fees affect you?

Note to email subscribers, please click through to view the embedded video.

Suze Orman on Personal Finance in 2010 – The Back to Cash Movement

BigSpender — Sun, 10 Jan 2010 12:00:43 +0000

Suze Orman speaks with CNN’s Anderson Cooper about the state of personal finance in 2010. Orman cautions everyone to be careful: get out of debt, have an expansive emergency fund, etc – even if they weren’t affected by the unemployment and financial crises of 2009. Orman calls this the “Back to Cash Movement.” Ramsey fans are already back to cash but now Orman fans will be joining them.

Note to email subscribers, please click through to view these videos.

Who is This Dave Ramsey Guy Anyway?

BigSpender — Wed, 06 Jan 2010 12:00:23 +0000

Although I just relaunched my blog, I’ve already mentioned Dave Ramsey a few times. Instead of trying to tell you who this Dave Ramsey guy is, I’m going to let him explain it to you himself. The following video was filmed during the creation of the Maxed Out documentary (which I highly recommend).

Note to email subscribers, please click through to my blog to view the embedded video.