College Savings or Retirement Savings – Which Should I Save For First?

There is a deep, deep instinct within parents to care for their children. Every parent I’ve ever known wants their children to have it better than they did.

Often this means Mom and Dad sacrifice for their children.  These sacrifices can be small such as not ordering dessert when eating out or driving the old beat up (paid off) car one more year before buying something manufactured in the last 5 years.

Other times the sacrifices made by parents can be financially devastating.

The desire to provide for children is so strong that choices are made that can make things worse than they need to be.

The classic question of saving for your children’s college funds or for your retirement falls right in line with this idea.  Is it a terrible idea to set aside your retirement needs to save some extra dollars for the college fund?  Or can you justify putting off retirement savings to make sure there is enough money to pay the college bills?

Deciding Whether to Save for College or Retirement

Here are 6 factors to consider when making the decision of whether to save for college education costs or your retirement.

1. Why Not Do Both?

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Stocks Drop 2% This Week and Links

The US stock markets dropped about 2% this week.

Is it time to abandon ship on stocks?

Maybe!  Or maybe not.  How can you tell?

It all comes down to your asset allocation and investment plan.  You shouldn’t make significant investing moves just because the stock market goes up or down.  Your shifting of assets should only occur inside your investment plan’s rules rather than because of an emotional decision.

Not sure how to handle your money or investments? Here are some articles to help out:

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Fixed Or Adjustable Rate Mortgage – Does An ARM Ever Make Sense?

Adjustable rate mortgages or ARMs are a different kind of mortgage than the standard 15 year or 30 year loans available at your local credit union.

ARMs have a lot of negative stigmas attached to them, but are there situations where using an adjustable rate mortgage is a wise financial move?

Pros and Cons to Having an Adjustable Rate Mortgage

Before you jump onto the adjustable rate mortgage train, consider the following:

What is an Adjustable Rate Mortgage?

Most of the mortgages now available post-financial crisis are less risky investments for the lenders.

Gone are the days of getting a mortgage without income documentation.  The most common loans are 30-year fixed loans and 15-year fixed loans.  Fixed rate loans give stability to the payment for the borrower.  Your mortgage is $800 today, $800 tomorrow, and $800 10 years from now.  The stability in the payment makes it a lot easier to plan for your financial needs for years to come.
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Balance Transfer Credit Cards – When Does It Make Sense to Use Them?

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Dave Ramsey and other popular financial pundits are fond of saying things like “You can’t borrow your way out of debt!”

The advice is to those that would like to open up a new credit card for a balance transfer, or get a new home equity loan or home equity line of credit in order to pay off their current debts.

And generally speaking, borrowing money to pay off borrowed money is a losing game.

Their advice is for those that can’t handle the financial responsibility of paying off the debt and spending less than they earn at the same time.

If you continually spend more than you earn, no amount of balance transfers or new lines of credit will save you.

Since many people calling into the financial shows can’t handle that responsibility (they are up to their eyeballs in debt currently, right?) the advice points against this strategy.

However, that doesn’t mean transferring a balance from one credit card to a new one is always a bad idea.

If you are smart about how you handle the balance transfer it can actually save you thousands of dollars in interest and result in you being debt-free a lot earlier than you would have been otherwise.

How Does a Balance Transfer Credit Card Work?

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Celebrating Memorial Day 2013 and Links

Memorial Day is a great long weekend for most people in the United States.

But the point isn’t to take a day off just to go to the lake for a cookout.

Memorial Day, originally titled Decoration Day, is to honor and remember the men and women of the United States Armed Forces who died during their service.  Take some time to think about that this weekend as you enjoy your time off.

Having an extra day off is a great time to get your finances straightened out. Here are some good reads for that:

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Happy Mother’s Day 2013 and Links

Today we tip our hats to Moms everywhere.

As Jim Gaffigan says in one of his hilarious standup routines: “Women are amazing. A woman can grow a baby inside their body. Then somehow a woman can deliver the baby through their body. And then by some miracle a woman can feed a baby with their body.”

Your mother did that for you.  And then she kissed your boo boos, got you to school on time, and supported you in every wacky endeavor you took on.

Even better if Mom showed you how to budget for a family, get the best value at the grocery store, and the value of time spent with family.

So thanks, Mom, and all Moms who are involved with their children’s lives.

Here are some great reads this week:

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Gold Price Shakeup and Links

The price of gold took a big hit a few weeks ago.

In the last 30 days the price has dropped from a high of $1,606 to a low of $1,360.  The drop was significant and only over a few day period.  The price has since rebounded a bit to $1,453 but that is still a drop of $153 or 9.5%.

Those that are pro-gold used it as an opportunity to buy even more while detractors pointed out the instability in the price of the commodity.  If you were able to snag more gold at $1,360 you have since earned a return of 6.8%.

No matter how you feel about gold you need free cash available to be able to purchase some. That means taking care of your finances, which these articles will help you do:

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