In January alone, more than 45,000 American families lost their homes to foreclosure. That number sounds high, right? January 2007 saw about 20,000 less foreclosures. The marketing was sliding then, but wasn’t nearly hitting 45,000 families across the country. Is it in the governments duty to help these folks out?

So foreclosures are on the rise, and the housing marketing is certainly in the buyers favor, but it seems like the talk of the town (of towns across the nation) are centered around whether the U.S. government should be held accountable for the foreclosures they’re seeing. Is it government’s responsibility to save people from their own financial missteps?

Obviously I sit in the personal finance realm, and we around here often think that EVERYONE is responsible for their own decisions. This includes the decision to take out a 100% loan at a 9% ARM on your house that just jumped to 13%, etc.

So many families are seeing this and all across the Personal Finance realm people are saying it is their own faults that they’re in this debt mess and that they should dig themselves out without the governments assistance.

Yes, we think like that, and we think that we’re so much better at managing our finances, investing our money, having financial education, and saving for retirement, but if the government DOESN’T help them out, it affects us as well.

• It affects us when our house values go down because we’ve got foreclosures in our neighborhood.
• If affects us when the trees and bushes aren’t maintained, the potholes get bigger, and the public works see less face time.
• It affects us when people get in the mindset that we’re falling too fast into recession and stop spending money at our stores.
• If affects us when our family members are involved in the foreclosure mess. They’re family, but we also want to pull the “I told you so” trigger also.

So yes, it most certainly does affect us and our decision making. I’d say don’t be so quick to judge the government on this one yet. They’re taking in the whole perspective into account. Yes it is lowering the value of the dollar. Yes it is bringing to light the bad mortgage brokers trying to strike while the housing market was hot, but some of these places are being forced to buy back their poor choice loans.

The government can make some bad decisions yes, but playing the devils advocate here, they’re not COMPLETELY worthless. Don’t get me wrong; federally subsidized loans are partly why we have a subprime mortgage crisis in the first place. They have a decent idea in trying to save these foreclosures, in looking at the big picture, they just need to be careful not to slap us folks that have been GOOD with their financials.

Should the “Darwinism” continue and the government stay out of it? Well, it is a bit too late for that now. They in it up to their necks right now, so we need to decide where it is going to go now. Do we slap the mortgage companies and make them take the loans back? Well, in doing that “Robin Hood” approach, you’re now just moving the crisis to the mortgage companies. They have families involved also; sticking it back on them is just going to close shops and put people on the streets there.

Yes, I think it was a bad idea by the individuals that made the decision in the first place, and yes they should have known what they were getting in to, but we’re playing with the cards that have been dealt. We can either piss and moan about it, or look at the entire picture and decide what is best for America as a whole.

I’m not a political blog, but am certainly curious to hear how each of the candidates are proposing to resolve this issue…

Photo by: Mike Licht

Photo credit: Print North East

When you’re about to get married, you and your future spouse have several things to think and talk about with regard to how you are going to manage your financial life together. Your credit scores are one of the many things to consider as you enter into married life.

Many people are surprised to learn that marriage itself doesn’t do anything to your credit scores. They don’t combine when you get married or get averaged out. You keep your pre-marriage credit, as does your spouse. But marriage can affect credit indirectly in several ways.

The main impact of marriage on credit is that the debt you enter into together will appear on both of your credit reports. Of course, this is only true if both of your names are on the debt. Therefore, if you take out a car loan together and both sign the loan documentation, that loan and all of its payments will appear on both of your credit reports. The same is true of credit cards, mortgages, and other types of loans or lines of credit.

Therefore, although your credit scores stay separate, your financial choices as a couple can affect both of your scores. On the flip side, both of your credit scores can affect your financial choices. The biggest area this applies to is your mortgage. If you both earn income that you need to use to qualify for a mortgage, then both of your credit scores will count as well.

A spouse with a low credit score can cause you to have to pay a higher interest rate, which could cost you hundreds of dollars per year, and thousands over the course of your mortgage. Therefore, it’s important to talk about your credit scores before you get married and work together to improve both of your scores.

One great way to improve your scores is to add the spouse with a lower credit score as an authorized user or joint account holder on the credit cards of the spouse with the higher score. This puts all of the credit history on the spouse with the low score’s credit report, ideally raising the score.

Another strategy for improving your credit is to work together to pay down the debt of the spouse with bad credit. Reducing credit card balances and catching up on accounts with late payments are two major ways to boost a bad credit score. Although there’s no way to erase a history of late payments, as you replace the bad habits with good ones, the score will gradually improve to reflect that.

Having good credit scores makes it easier for you as a couple to borrow money at low interest rates. It also can affect your car insurance premiums, ability to find employment, and ability to rent a home or apartment because all of these entities often check your credit. Therefore, talk about your credit scores before tying the knot and make a plan for how to manage credit wisely as a couple.

A major challenge for most income orientated investors is finding a way to increase their overall returns in fixed income areas. This is because interest rates are at the lowest levels in decades (which makes it difficult to see higher levels of income). Once inflation is calculated into these figures the position could be taking a loss. To deal with these challenges most investors will seek out areas that are paying higher amounts of interest. The problem is that this could increase the overall risks to the portfolio exponentially by purchasing bonds with lower credit ratings. To avoid these kinds of issues, most investors need to use certain strategies that will increase the overall return without the risk.

The Use of Laddering

The best way to improve the overall return for the portfolio is through a technique called laddering. This is when investors will take the fixed income securities in the portfolio and will spread them out over the range of maturities. For example, if an investor wanted to see higher rates of interest in CDs. They will concentrate on spreading out this portion of the portfolio over the course of several months to years. This means that they will have a mixture of shorter and long term CDs (ranging from three months to 15 years). The basic idea is that the short term instruments will provide income and will mature at certain points. This allows them to invest in new CD offerings when interest rates are rising. While the long term CDs, will provide the portfolio with higher amounts of interest.

Advantages of Laddering

The biggest advantage of laddering is that the interest rates in the portfolio will continue to remain high. When they are increasing, the shorter maturities that are coming due will provide investors with the chance to capitalize on this opportunity. Over the course of time, this causes the average interest rate to remain consistently high (without increasing the risk).

During times when interest rates are falling, investors can place the amounts that are maturing into medium term instruments. This is designed to prevent the portfolio from being adversely impacted by sharp declines. Once this takes place, is when investors are able to maintain higher yields in comparison with the markets.

A second advantage of this approach is that it always protects against inflation. The main reason is due to the fact that the highest rates are continually being locked in. At the same time, the investments that are maturing can ensure the portfolio takes advantages of potential increases. The combination of these factors will keep the average yield higher.

Clearly, prudent investors will use tactics such as laddering as a way to structure their fixed income securities. This is because it is providing them with a number of advantages that other strategies are unable to achieve (higher interest rates with lower risks). Together, these tools will protect the portfolio against inflation and sharp decreases. This is when there will be more consistent income levels regardless of what is happening.

Photo by: artct45If you’re between 20-40 years old, don’t do anything. Stay where you’re at, markets fluxuate. That is their nature and that should have been something you learned before you got it. If this is your first time hearing about it, don’t worry and more importantly, don’t run. Let the traders panic. That is their job. They’re pounding down 15 cups a coffee per day and enjoy the stress. Let them deal with it. You’re paying a person that the traders are relaying information to in your mutual funds. You’re 3rd tier on that – sit back and enjoy the cheap stocks you’re getting into.If you haven’t sold, you haven’t lost. Stick to your guns and don’t get scared out of the market, recessions happen. But they always come back. As long as you still have a job, you shouldn’t be worrying. If you HAVE lost your job, you should probably not be reading this blog, try this one.

I got to thinking about this today after reading Hot Air’s post about how they had to pull a lottery game in the UK because the goal of the game was in reference to temperature; more specifically, negative numbers.  People were supposed to scratch the ticket and find if they had a lower number than the ticket number.  Once the numbers started getting into the negatives, people got confused:

“The Cool Cash game – launched on Monday – was taken out of shops yesterday after some players failed to grasp whether or not they had won.To qualify for a prize, users had to scratch away a window to reveal a temperature lower than the figure displayed on each card. As the game had a winter theme, the temperature was usually below freezing.

But the concept of comparing negative numbers proved too difficult for some. Camelot received dozens of complaints on the first day from players who could not understand how, for example, -5 is higher than -6.

The story quotes player Tina Farrell, 23:

I phoned Camelot and they fobbed me off with some story that -6 is higher – not lower – than -8 but I’m not having it.I think Camelot are giving people the wrong impression – the card doesn’t say to look for a colder or warmer temperature, it says to look for a higher or lower number. Six is a lower number than 8. Imagine how many people have been misled.

It’s slightly alarming to learn the average person on the street has difficulties with something as simple as negative numbers, though with 15.1m with poor numeracy perhaps Camelot is at fault for making it too complicated.”

Absolutely astonishing, but there is a story to be learned from it – clearly you’re not investing your money when playing the lottery and it’s not as much of a no brainer as you’d think it would be:

“In a 1999 survey by the Consumer Federation of America and financial services firm Primerica, 40% of Americans with incomes between $25,000 and $35,000 — and nearly one-half of respondents with an income of $15,000 to $25,000 — thought winning the lottery would give them their retirement nest egg. Overall, 27% of respondents said that their best chance to gain $500,000 in their lifetime is via a sweepstakes or lottery win, the survey said.”

That’s pretty sad considering that the chance of winning the Powerball is something like 1 in 140,000,000.  That is 0.0000007143% chance of winning, and think of it this way, if you buy 10,000 tickets, what does that improve your chances?  Well, move the decimal 4 places to the left and you’re now a hefty 0.0071428571% chance to strike it rich!  Buy $1,000,000 worth of tickets and you’re ALMOST to a 1% chance of winning (0.71428571%) – but you better make sure the pot is really big because it sure would be a waste of money if you had to dump $1,000,000 in lottery tickets, and it sure would be a shame to have to share that baby!

The DilbertBlog I ran across also made an interesting post about it also:

“I don’t want to accuse the Powerball people of fixing these lotteries. But I notice that the people who win are coincidentally the people who would be best for marketing future Powerball lotteries.”

Isn’t that how it is supposed to be?  It’s just called “marketing”.  What kind of chump is going to play the lottery if the only people that win it are rich people?  They’d accuse them of fixing it the OTHER way then.  Either way, I think it’s a pretty bad investment.  You’d be better off day-trading because then at least you have some chance of learning something.  In the lottery, it is 100% luck that your numbers get picked, and if you’re part of the 78% of the people that play the same family members birthdays each time, your odds of winning it all are dropping at the same rate you’re dropping the $1 per day to win the lottery.

Just as a point, instead of starting gambling at 18, if you want a nest egg, take that $1 per day and invest it instead, get 10% on your return per year, and retire like the long haul trucker at 64 with $262,000 you’ve built by NOT buying a lotto ticket…

Photo credit: osseous

Coupon use has increased dramatically over the last few years, with many families looking for ways to cut costs during the recession. It has also been popularized by television specials on extreme couponing and hundreds of blogs that post guides on how to get started and what deals are going on. But many people looking into the coupon world from outside are left wondering if it’s really worth it. For most, the answer is, “It depends.”

Types of Coupons

If you’re new to coupons, you may be surprised to learn that they’ve come a long way since the basic cents-off coupons you find in the Sunday paper. Although these still exist, and are often some of the best coupons, there are tons of other places to find them these days.

Printable coupons allow you to search by product and print just the ones you need. These can be very helpful when you’re putting together a shopping trip and want to save money on things you were planning to buy anyway.

Digital coupons are also becoming increasingly common. You can load them to your smart phone and have the cashier scan them at the register. Many stores also allow you to load coupons to your loyalty card to get discounts in the store as well. And Upromise, which specializes in building college savings, has coupons that don’t take money off your purchase, but instead put it in your savings account.

Most coupons are manufacturer coupons, which the product’s manufacturer prints in an effort to sell products, especially new ones. The store submits these to the manufacturer and gets reimbursed for them. The other type, store coupons, are printed by the store and do not trigger a reimbursement. Most stores allow you to use both a manufacturer’s coupon and a store coupon on the same product, which can add up to big discounts.

Saving with Coupons

Although buying every product for which you have a coupon will technically save you money off retail price, it probably won’t impact your budget much. That’s because you’re buying products you don’t necessarily need, and at prices that may be above what you’d ordinarily be willing to pay for a similar product.

The big savings come when you match coupons to each other and to sales. If a store has an item marked down and you have a manufacturer’s coupon and a store coupon for it, this can bring the price down to a tiny fraction of retail. Sometimes you can even get the product for free! The people who see big savings are doing this, carefully planning their shopping lists to match coupons with what’s on sale in that week’s circular.

You can sometimes even get paid to buy things if you use coupons on products that have rebates. The drug stores Walgreens, Rite Aid and CVS all have programs that print rebates on your receipt, good for dollars off next time you’re in the store. These can in effect make your products free in some cases.

Is Couponing Right for You?

If you stay organized, use blogs to get lists of products on sale that have matching coupons, and use these to help you strategically buy items you actually need, you can save quite a bit of money. The process does take time though, so plan on spending at least a half hour each week getting ready for your shopping trip and finding the exact products you have coupons for. Many stay-at-home moms who have time on their hands feel that the savings are worth the hassle.

For others, couponing won’t do much. Unless you’re matching coupons with sales, most coupons just bring name-brand products down to the price of store-brand products. Therefore, you could get all the savings without any of the work by just switching to the store brand. Busy people whose time is in high demand may prefer to just buy store brand items and what’s on sale without bothering with the coupons.

Have you tried using coupons? Do you think it’s worth the time and effort?

Plonkee inspired me the other day in writing “would you move for a lower cost of living? to craft up an “other side of the coin” post to ponder – How much would it cost for YOU to move to a war torn area for a year in search of big bucks?

A Tough Decision

My friend was making a decent 60k to do his I.T. job here in the states and was contacted by the Department of Defense to do the exact same job for $290,000, but the caveat was clearly that it was in Iraq.

It is/was an interesting situation to be in for sure.  The lure of 290k certainly has its justification, but at what price I thought.

I know we have soldiers over there doing it for much less in much more dangerous locations; yea, I wondered the same thing, how is there a “safe” spot to be in Iraq I thought.

That’s like saying there are some spots in the ocean that are wetter than the rest.  I’d be un-nerved either way. I have a TON of respect for our troops over there!

But as this relates to a financial situation I had to ask him about what his wife and kids thought of the situation.  I can tell you plain and simple that his wife didn’t like it.  She didn’t like it one bit.

I think that I am good at seeing both sides of the coin though:

Her Point

He has 3 kids and a wife to worry about at home.  I don’t recall if he said she is working now or not, but let us just assume that she isn’t for now.

At 290k she could probably afford to stay home if she wanted to, but clearly that’s not her concern.  He’s got a family to provide for and without him around in a worse case scenario there really isn’t a dollar value you can put on his replacement.

Furthermore, I’ve done the long-distance relationship thing and that doesn’t work. She’s mentioned that also. A year apart from your loved ones can really wear on you and can’t be predetermined what the end result will be.

His Point

He came from a company that recently went bankrupt.  He completely lost his retirement account to which he had 100k+ saved up.  He is 38 years old and has nothing to show for it.

He’s squeaking by on 60k a year in Seattle with a wife that isn’t working and 3 growing kids and doesn’t see a light at the end of any tunnels.  He’s got to start fresh and that’s a lot of bank to come up on.

His kids are starting middle and high school and eventually will have to get into college.  He wants to be able to pay for their college, and with nothing left for him afterwards, he’s looking out for his wife and himself.

One year there and he could be back to what he lost in his retirement account.  He’s pushing 40 now and the idea itself carries some weight, but I’m lost honestly.

I haven’t been put into that position to need to make that type of decision.  Right now, where I’m at currently, I can’t see going, even for that kind of $.  My wife and kids need me and even though I’ve got  a pretty decent insurance policy I just couldn’t do it.

My days would likely be spent 18 hours on the job and back to my re-enforced bunker to hide out until I went back to work.  Wouldn’t I?  Would it be that bad?  I don’t know.

I suppose I’d need some more info on the setup, but from what I’ve seen and heard there isn’t a lot of downtime or sight seeing.

You’d Be Helping Your Country

Yes, I buy that.  I would be and that would make me proud but it comes down to options. I have the option to move or not to move.  I have no clue about anything in regards to firearms or warzone tactics.  Is that risk worth taking?

I’m sure I could be trained and they likely would put me through a civilian “boot camp” of sorts, but still, the guys that are over there now are very well trained, I’d just be mediocrely trained.

Conclusion

It’s high risk for sure – especially not knowing what you’re getting in to, but money can make you do some very risky things, including putting your life on the line. What is your break point?

I can’t see myself bending for much more than $1MIL right now, but hell, even at that price I’d have my doubts.  Until it was actually put in front of me, I couldn’t actually wrap my head around it.

I’ve tried. Believe me, I’ve tried to wrap my head around it and what the pros and cons are, but am still coming up empty.

What are your thoughts?  What would be your tipping point to considering heading to Iraq for a year without your family?

What would be enough to make you comfortable in doing so? Would your significant agree with you?

****Update****

So I’ve gotten a handful of emails and comments in this section asking where to sign up for jobs like this and there are plenty of places to look for a job there – Google turns up a few:
http://www.alliraqjobs.com/
http://iraq.jobs.com/
http://federalgovernmentjobs.us/job-location/iraq.html
http://www.careers.state.gov/iraq-jobs/index.html

Hope that helps those of you interested!

photos by: soldiersmediacenter

The Pacific Northwest has some pretty strange weather patterns. It was 45 degrees yesterday and today it’s almost hitting 90 in the area. It’s a warm one so it is nice to see the weather changing for the better.

MyInvestingBlog fired off some goodies this week dishing out the successful Hanks Holiday Handouts #2, how to reverse engineer the EntreCard system, and some interesting “procedures” in how delivery food is sent to you.

Around the blogosphere we had a lot of new-comers to the list including:

1. Anthroflex gives some do’s and don’ts of financial freedom.

2. WatsonInc provides the 2nd installation of “budgeting, your foundation for wealth” which is a great starting point to wealth management.

3. MySuperChargedLife lays out some good tips on legitimately raising your income. I love raising mine and several of these tips could work for you!

4. A new blog popped up this weekend theKimsta showed how they made 122k and lost 132k in the same timeframe; definitely ping on the assets vs. liabilities bit.

5. FinancialJungle shows the benefits of high yield dividend stocks in todays market.

6. MasterYourCard pops up some good points on watching your Fico score; everything you’d need to know.

7. MoneyAndInvesting knows the ropes of common mistakes in the investing world. There are certainly bumps in the road when this happens.

8. NancyZimmerman discusses how you’re going to get your taxes done by Saturday! Time is up sooner than you think! Keep an eye on the H&R Block site if you want them done free and soon!

9. Is insurance investment for the future? FinancePortal thinks so and brings up some good points in proving it.

10. Credit scores are a hot topic in the PF realm these days; CreditAddict lays out a few good ways to cook it up to the next notch.

This week I had a lot going on, but still managed to check out a few blogs of interest -

Millionaire Mommy gives some good advice on “What would I do in your situation“.
Beacon Financial shows you how to save for college AND retirement – an interesting read.
Essentials of Trading lets people know about NOT letting the markets drop a bomb on you!
Lazy Man let’s people know how to Eliminate debt, the ultimate way.
Green Trader has another green stock riding the wave: NLIA.
Terrible trader let’s people know a good way to drive traffic to your blog via blogrush, I like it, and agree.
Keep more income sings an ode to frugality with a post about finding cheap places to do laundry.
Mojostock lets us know we’re headed down further in the stock market.

Stumbling the blogosphere this week landed me on a lot of new sites. A lot of them themed around travel. I haven’t planned anything for this year yet, but last year landed me in the “land down under.” Where I will land this year is a mystery for now; for me, my wife, and the rest of my family so far. Enough said though, on with my favorites for the week.

1. DailyMoneyTips touched on the biggest benefit of a 401k if your employer uses one!

2. Consumerist interviews a WaMu banker and gets some confessions on how things work.

3. CashMoneyLife gives a few examples of ways to use the Economic Stimulus package that will help you in the long run; NOT the short, which is a better idea, eh?

4. FinancialBlogger gives a few tips to cash in on getting a promotion. I love ideas like this, and I’m certainly going to give them a shot in the next year.

5. SavingFreak saves heat. Harness the suns power? A good idea? SavingFreak gives some stong reasons and examples to do so!

6. ChangeYourTree destructs why thinking you can pay for something isn’t a reason to BUY something. Dig deeper.

7. FrugalDad reviews Dave Ramseys Total Money Makeover. It is still on my list of things to read, but haven’t gotten around to it yet.

8. MortgageGuideUK describes the best way to complain. If you’re going to complain about a product, you should have the right firepower to do it right. Some good examples can be found here.

9. FreeFromBroke wraps up a few quintessential quotes from the past Presidents. I love reading inspiring words. Tossing them around the realm of finance and I like them more!

10. WiseBread shows us how to keep “Budget” in Budget Travel. Many times people traveling on a budget find that budget really getting out of hand. I fell for this on my trip to Australia last year, spending 4k more than I thought I would.