I Googled the price of a new hair dryer on Amazon and the price range was enormous. There were hair dryers for $15, hair dryers for $50, even hair dryers for $200 or more (really? Who needs a $200 hair dryer?). I was so overwhelmed by the number of choices that I basically gave up, deciding my fiancée’s hair would have to fend for itself.

But it did get me thinking – how do you plan for emergencies when it comes to budgeting? Do you factor it into your household budget? Do you set aside money for emergencies – or do you simply pull cash out of your emergency fund when things go awry?

Building Your Emergency Fund

We’re going back to Personal Finance 101 here: the basics of building up your emergency fund. The old rule of thumb said you should have money for three to six months’ worth of expenses in your emergency fund. Since the financial crisis and the sky-high unemployment we’ve seen over the past four years, that advice has changed. Now, financial planners suggest you build up your emergency fund for at least six months’ worth of expenses; some urge you to save up to 12 months’ worth.

Emergency Fund vs. Slush Fund

I have some friends who have, essentially, two emergency funds. The first is the traditional emergency fund I just described – the one you don’t touch except for major emergencies, like a sickness or injury that knocks you out of work for a few months, or a job loss. Their second emergency fund is more of a slush or rainy day fund. They don’t contribute to it religiously; rather, they put in a little bit here, a little bit there, whenever they have the extra cash to do so. Their theory is that this is the account from which they’ll withdraw cash should they need to, say, buy a new hair dryer.

I don’t adhere to the double-emergency fund mindset. It’s one thing to have a year’s worth of expenses locked up in your main emergency fund; setting aside additional money in a secondary emergency fund (slush fund, rainy day fund, whatever) seems pointless. After all, if the money is in a savings account, it’s earning next to nothing in the bank; you could invest it in your 401(k), use it to pay down your debt, make extra mortgage payments with it, etc, where it would actually make money for you.

Budgeting for Small Emergencies

Around here, money for small emergencies – like that hair dryer – come directly out of our monthly budget. After all, replacing something that cost $20 is hardly an emergency – especially if it’s not a necessity. (Note: Please don’t tell my fiancée that I don’t think her broken hair dryer is an emergency. We’re too close to the wedding to call it off.)

When we have one of these minor emergencies around here, we simply dip into our checking account to pay for it. If, for whatever reason, it’s a tight month financially and we don’t really have extra money for emergencies, we’ll trim back in other ways – maybe skipping a dinner out or being more conscious about our energy consumption. We find ways to balance it out, so that by month’s end, we hardly notice the difference.

Budgeting for Big Emergencies

If a broken hair dryer is an emergency, then finding out you need a whole new set of radial tires on the eve of rainy season is a catastrophe of apocalyptic proportions. To me, this is what an emergency fund is truly for. Replacing tires can run close to $1,000, depending on the make and model of your vehicle as well as the type of tires you’re buying. Even if you go with a cheaper tire, you’re still looking at $500 even if you buy and install them through a discount retailer.

In situations like that, I treat my emergency fund like a no-interest credit card. Say I have $10,000 in that fund, and need $1,000 to buy tires, or a new water heater… or a really high-end hair dryer (sense the sarcasm?). Instead of putting the $1,000 on an actual credit card – where I’d have a single month to pay it off in full before incurring interest – I take the money for emergencies out of my emergency fund. Now, I only have to worry about paying myself back. Since I won’t have to deal with interest, I can add a couple hundred bucks to the fund every month until I’ve completely replenished it.

Readers, how do you budget for emergencies? How does your plan differ for big emergencies vs. small ones?

How Do You Budget Money for Emergencies? is a post from Sweating The Big Stuff: Spending Wisely

What got me really excited about combining our finances was that we’d be able to consolidate our accounts. We each have an ING Direct account, and now we’ll combine into just one. Awesome!

The problem is that I have a Bank of America account and she has a Wells Fargo account. Why? It’s an East Coast vs. West Coast thing. When living in Maryland/D.C., Bank of America was my bank of choice. Remember, they have super convenient ATMs. And I’ve been considering closing that account now that ING Direct has remote deposit and they can effectively replace a brick and mortar bank.

However, sometimes checks are larger than $3,000. So we need to have one brick and mortar bank account still open. And since the Wells Fargo ATM is closest to our apartment, she wins.

So why keep open the Bank of America account? For two reasons, one small, one big. The small reason is that I somehow get free cashier’s checks through my account. How? I have no idea. But when I went to get one when I moved into my new apartment in March, and the teller said, “That’s weird, I didn’t even know this was an option, but you have a setting for free cashier’s checks.” I am probably one of just a handful of people who can get free cashier’s checks whenever they want, and I don’t want to give up that title!

The real reason I want to keep that account open is that I have a joint account with my father that allows us to seamlessly pass money back and forth to each other. With most customers (even between Bank of America customers), there are limits to how much you can transfer per day (usually $1,000). But for us, he can place $5,000 in our account and I can transfer it to my account, all in just a few minutes. That’s definitely convenient.

The end result is that we each end up with an extra bank account, but in reality, this will make our lives simpler. I have one bank as my primary (ING Direct), one bank to deposit checks (Wells Fargo, the sweep it to ING Direct), and one bank for transfers to other people and cashiers checks (Bank of America). It may sound complicated, but since each has it’s own purpose, I won’t be going back and forth a lot trying to keep things in place.

Readers, what do you think of my set up? Love it? Hate it? Have suggestions for me?

Combining Finances Means More Accounts, Not Fewer! is a post from Sweating The Big Stuff: Spending Wisely

Too often, we’re given information without knowing what to do with it. Almost all of our news sources are biased in some way, so how are we to know what’s valuable data and which data are being selectively chosen to prove a point? They can’t give us all the information because we’re looking for analysis, but one company came up with an innovative way to present it.

The Financial Times recently displayed the following video in New York’s Grand Central Terminal. It tackles the question of how the United States stacks up in various financial areas as compared to other countries.

It’s not all that surprising that the US ranks first is a few areas, but also ranks lower down the list in a few (sometimes surprising) categories. The often entertaining graphics cover a number of financial issues: total GDP, GDP per capita, economic growth rates, spending on education, cost of living, wages, etc.

Some of the statistics I found most surprising include things like: despite the fact that the US has a higher GDP than Russia, Brazil, China, India, and South Africa combined, China has a higher growth rate than the US. I think everyone knew that, but the surprising part is that Qatar’s economic growth rate doubles China’s.

Another cool fact for impressing your friends is that even though Americans enjoy (on average) the highest wages in the world, our friends in the Netherlands make (on average) more than us per hour, when their comparatively shorter workweeks are taken in to account.

The last tidbit I’ll leave you with is something that will upset even the most cheery of the American workforce. Out of the US, Brazil, Russia, China, and India, Americans are legally entitled to the fewest yearly vacation days, with a whopping zero guaranteed. This is in contrast to Brazil’s 30, Russia’s 28, India’s 12, and China’s 5 days off per year.

So how does America stack up? We have it pretty good here in the land of the free and home of the brave. We have apparently some catching up to do (or slowing down) in terms of working shorter weeks, and getting more days off, but other than that, we make a pretty good living.

Readers, what did you think of the video? Did you like the information displayed in this format?

Sponsored by Financial Times

Sponsored Video: The Financial Times – Stay on Top of the World is a post from Sweating The Big Stuff: Spending Wisely

We are on the same page financially, we have similar goals, and are equally frugal. We buy what we want but also have things we want to save for in the future.

There are couples who keep their finances separate and there are others that combine their finances. It can work either way, so every couple needs to find out what works for them.

Advantages of Keeping Our Finances Separate

Since we have the same goals, why combine finances? Lauren doesn’t need me looking at each of her purchases and questioning the little things. We’re focused on the big picture, so why worry about individual transactions? She should be able to spend money guilt-free without me looking over her shoulder.

As we began to talk through it, we realized one thing: we didn’t want to have an allowance.

Since I am working full time and Lauren is in school full time, keeping our finances separate meant that I would be transferring money from my account to hers. We thought that would have the potential to create a rift where I would want to reduce the amount she gets each month. This was definitely something that wouldn’t work for us.

So, we thought about joining our finances and what that would mean for us.

Advantages of Combining Our Finances

We’re about to get married, and we love thinking about how everything will be shared. “Ours” is our new favorite word. We’ll be able to consolidate accounts, which I like. Lauren won’t feel like I control how much she spends.

Lauren has some student loan debt (and maybe a few instant loans I am unaware of?), and by combining finances, we can pay down the debt together. With separate finances, Lauren would be responsible for her student loan debt. It would cost us a lot of money if we had to wait until she finished school to stay paying off her loans.

However, when we combine our money, she’ll have my help paying down “our” loans. This is especially true since she has some loans at a high interest rate that I would love to pay off in the near future. Now, we’ll be able to tackle them together.

Both emotionally and financially, it makes sense for us to combine our finances.

Readers, do you have separate or joint finances with your spouse? What do you think of our decision?

Our Decision To Join Our Finances is a post from Sweating The Big Stuff: Spending Wisely

Sound familiar?

In this kind of environment, you may think it is wise to develop alternative streams of income, and I couldn’t agree more. The more income streams you create, the more money you are able to generate and the more secure your finances become. If you lose one source of income, there are several other streams of income from which you can draw.

The Internet has made it much easier for people to develop additional income streams. There are so many ideas you could choose from. You could choose to blog, become a freelance writer, be a virtual assistant, or create an online store.

Of those choices, the one that is the most passive is an online store. Decide what you want to sell, find your product, set up the website, chose a secure method to offer for payment (there are many merchant account processing businesses to choose from), and launch your store.

Of course, it is not as easy as that. You will need to market your business and advertise, and you will also need to handle customer orders and complaints as well as keep inventory. However, you can make your online store more passive by selling your own ebooks, for example. Then, you don’t have to worry about keeping up with inventory. Sure, you invest your time in the beginning when you write and produce the ebooks, but once you have marketed them, you can find that you sell copies and make money while you sleep!

The current economy has made it difficult for many people to get ahead. Now is the time to take steps to change that. Decide what is the best way for you to create multiple streams of income. You will feel much more secure knowing that you are not solely relying on your employer and his decision to give you a raise or not; you have also created your own income sources.

Secure Your Future by Developing Multiple Streams of Income is a post from Sweating The Big Stuff: Spending Wisely

With just weeks to go before my wedding, I’ve been asked that simple question more times than I can count. When people pose it, they’re looking for a simple answer. “Please buy me four Egyptian cotton towels in mushroom from Bed, Bath, and Beyond,” they’d like me to tell them. Or, “We really like the copper pots from Williams-Sonoma,” they want me to say.

But I don’t say that.

First of all, if they really wanted to know, they shouldn’t be asking me in the first place. They should ask my fiancée instead. She would have the perfect answer. She’d be able to tell them exactly what we (read: she) wants, exactly where to find it, and exactly how much it costs. I usually reply with a generic, “Oh, I’m sure we’ll love whatever you get! We’re just thrilled you’ll be there to celebrate with us.” Why? Because wedding gift etiquette makes me cringe. The gifts aren’t the reason we’re getting married, so asking what I want makes me uncomfortable.

How Much Should I Spend On A Wedding Gift?

This is my main apprehension to doling out any truly useful wedding gift advice. I don’t know how much my fiancée’s friends from college can afford to spend, and it’s downright tacky to ask. In many cases, our friends are young(ish) professionals, just finding their professional footing. I’d hate to tell them that a $60 waffle iron was what we were eyeing, only to find out later that the money spent on the gift severely stretched their budget. In other cases, I have a general idea of what someone can afford – say, family members like aunts, uncles, or cousins. I know my cousin, a lawyer, is doing well in his career, but that doesn’t mean I should take advantage of it.

The answer to the question, “How much should I spend on a wedding gift?” is inherently personal – and, inherently intangible. A 2009 article from CBS News broke down suggested wedding gift expenses this way:

Co-worker and/or distant family friend or relative: $50-$75 Relative or friend: $75-100 Close relative or close friend: $100-$150

That’s the average, though. According to proper wedding gift etiquette, the scale of the affair is not supposed to factor into the gift-giving decision. That is to say, if one of your co-workers has a five-course, sit-down dinner at a country club while another has a buffet reception at the local VFW hall, but you’re equally close with each, it shouldn’t affect what you buy (ie, you don’t have to “pay for your plate”). However, the cost of living is far higher in Washington, DC, than it is in Roanoke, Virginia – meaning the same $75 gift may look thrifty in the Capitol and simultaneously luxurious three hours to the south.

Buy A Gift

Another question I’m getting a lot these days has to do with exactly what type of gift my fiancée and I want to receive. Namely, do we want a physical gift or just money?

The easiest answer is to simply point guests to the wedding registry. After all, that’s what it’s there for. Months ago, we spent a painful (don’t tell my fiancée I said that) afternoon using one of those barcode-scanner-things to load up our registry. Now, while I can’t say I paid all that much attention to what my fiancée actually scanned, I can tell you – with certainty – that there’s a lot on that registry. Some of the items were cheap; things like placemats and hand towels and napkin rings were less than $5 each. Other items, like our bedding set and cutlery, were far pricier. Some of my friends who have gotten married have even registered for furniture or their honeymoon, allowing guests to donate an amount they’re comfortable with to the newlyweds.

That’s what makes registries so ideal. They’re kind of like a matchmaker, a gift middle-man, ensuring that the bride and groom get exactly what they want while giving the guest the opportunity to select the ultimate price tag without broaching wedding gift etiquette.

Write A Check

The fact is, the decision to buy a gift isn’t for everyone. For one, guests traveling from out of town may be encumbered by a bulky gift. For others, like a cousin with a new baby, it’s just another thing to add to an already busy to-do list. And – don’t tell this to my fiancée – but I realize that other than to me and her, this isn’t the biggest day in world.

That’s where giving money as a gift comes in to play. A friend of mine let it be known through word of mouth that she and her husband-to-be wanted cash for a wedding present. When it was all said and done, their extensive guest list of more than 200 had given them a whopping $15,000 in cold, hard cash (and slightly less-cold, less-hard personal checks). A college buddy and his wife intentionally created a small bridal registry, so their wedding guests would have no alternative but to hand over a check.

Some wedding guests don’t like giving money as a gift because it feels impersonal, sterile, antiseptic. Likewise, many engaged couples don’t like asking for money because it’s perceived as tacky, uncouth, and greedy. The bottom line, however, is that for many couples, cash is king. For a couple starting their lives together heavily in debt, it can be far more freeing than a food processor ever could be. For a couple looking to buy a house, the windfall of several thousand dollars in wedding gifts can mean the difference between a loan approval or denial – unless, of course, banks are now accepting bone china as part of an acceptable down payment.

Readers, what are your rules for giving wedding gifts? Do you follow a specific formula?

Wedding Gift Etiquette – Buy A Gift or Write A Check? is a post from Sweating The Big Stuff: Spending Wisely

But let’s get real here: most people do not drink in moderation and it causes far more problems than it does positives. Alcohol, in fact, is responsible for about 4 percent of worldwide deaths, which is more than AIDs, tuberculosis or violence. In the US, alcohol causes 75,000 deaths every year.

It also costs us considerably in the wallet. Many people who simply can’t afford to blow their money on discretionary spending rack up incredible debts because of the lure of alcohol. It becomes a crutch for many people. They get home from work and in order to release the stress of the day they make themselves a drink or two. If it stopped there, it would probably be okay. Unfortunately, many people don’t stop there. Before you know it, some people are spending hundreds of dollars a month on alcohol, stocking their liquor cabinets, refrigerators, and freezers.

These temporary, bill-like expenses are only the start of the cost of alcohol unfortunately. For many drinkers, the cycle of drinking spirals out of control and they end up in out of control debt because of long-term medical costs and, in some cases, affording the cost of a DUI lawyer, which is all too common. In fact, there are well over a million DUI arrests a year in the US. Injuries, court fees, car damage, and license suspensions that result from a DUI can force people into bankruptcy, foreclosure, and untold financial ruin. And it started with just a couple drinks.

Later in life, the damage can return in the form of liver damage, kidney damage, and overall poor health from years of imbibing. More debt can be accrued from medical treatments, prescription drugs, and even therapy.

Does this mean you have to stop drinking? Well, if you have a problem, yes. Alcoholism can ruin your life and your family’s life and leave you in a terrible financial condition. A drink or two each day will not break the bank and will likely not cause medical problems (provided it does not interact with any prescription medication you take), but it’s always important to remember that alcohol is a depressant and is extremely addictive.

The Real Cost of Alcohol is a post from Sweating The Big Stuff: Spending Wisely

After 8 months, I decided it was time to move out. I am getting married in June and I thought it was time. I was settled, my job was stable, and I wanted to prepare and have everything set up before the wedding day.

So was it worth it? Heck yes. There were very few downsides, but how much did I really save? I’m not going to go into every detail of how much I saved on groceries and laundry costs, instead I’ll stick to the big items (surprised?) and do a lot of estimating.

Rent

This is obviously the big one. Two months ago, I moved into a 2 bedroom, 2 1/2 bathroom apartment for $1,800. It’s far from cheap, but by not paying that each of the last 8 months, you could argue that I saved $14,400 on rent!

However, I probably would have moved into a 1 bedroom apartment (since it would have been just me for nearly a year, part of the reason I got a 2 bedroom now is because we’ll want more space once we get married).

Let’s say I would have moved into a slightly more reasonable 1 bedroom apartment for those 8 months, costing me $1,300/month. That’s $10,400.

Still, I would have been committed to a 12 month lease, so over the course of the first year (July 2011-July 2012) I would have paid $15,600, while under my current arrangement, I will end up paying just $7,200 in rent over the same 12 month time frame.

The final number? About $8,400. Thanks Mark and Rachelle!

Utilities

This one is pretty easy to calculate, our costs for tv, electricity, and gas is about $130, so that’s another $1,040 in savings during those 8 months.

Groceries, Gas, Laundry, etc.

My commute was much shorter, I was buying fewer groceries, and with a laundry machine in the house, I never needed quarters. I’ll guess this came out to $150/month, for an additional $1,200.

There are other costs I saved on, but there were a few other higher costs (I was going out to dinner more often because I had fewer expenses, but I was driving farther on weekends), so I’m assuming they just about cancelled each other out.

In all, it comes out to over $10,500. I have $10,500 more in my bank account that wouldn’t have otherwise been there. That’s awesome! Let’s just pretend I invest that right now and don’t touch it until I’m 65 years old. As a 7% interest rate, that’s about $170,000 that I wouldn’t have otherwise have had. Score!

Readers, did any of you think I was crazy for living with my future in-laws? Now that you read the numbers, do you think it was worth it?

How Much Did I Save Living At My In-Law’s? is a post from Sweating The Big Stuff: Spending Wisely

That being said, I also like to dream what I’d do with more money than I knew what to do with. So I developed a top 5 list of things I’d buy if I had too much money.

1. Home Gym & Personal Trainer – I have no problem going to a gym and working out, but I think it would be really cool to have a gym just a few feet away from where I sleep. It wouldn’t be a big trip, and I’d always get to choose what was playing on the TV.
2. Personal Chef – I make great pasta (from a box) and a mean alphabet soup, but having a personal chef take care of me would be divine. I would love to have someone making me healthy food throughout the week. Plus, I am really slow when it comes to chopping vegetables, so it would be a big time saver if nothing else.
3. Laser Back Hair – While I have a beautiful chest full of hair, I’m not sure what I would do with a back full of it. I’d like to spend a chunk of my change lasering my back. Is anyone attracted to back hair?
4. A fresh pair of socks every day -  I recently heard about this one and absolutely love it. I don’t have a pair of socks newer than 6 months old, but I still remember the feeling of putting on clean, crisp socks. I’d like to pay for enough socks that every day I’d be able to put on a new pair and make my feet feel like a king.
5. A Urinal – I have trouble putting the seat down (I grew up with 2 brothers), so even Lauren’s gentle reminder on the seat (a sign that says “put me down!”, I am sometimes forgetful. Having a urinal would both be easier, and keep me out of trouble. It’s a no-brainer!

Readers, what items would you buy if you had more money than you knew what to do with? I think everything on my list is truly a luxury, but would definitely be nice to have!

Things I’d Buy If I Were Rich is a post from Sweating The Big Stuff: Spending Wisely

Even if you’re not a football fan, there are plenty of reasons to watch the draft. There’s intrigue, love-triangles, and plenty of last-minute back-room dealing – sounds a lot like a daytime soap opera or the latest episode of Mad Men (at least, that’s how you can pitch it to your wife or girlfriend as you steal the remote).

But the NFL Draft is an opportunity to learn about how the business world works – and there are plenty of take-away lessons from the draft that you can apply to your own job hunt.

Employers Take Time To Do The Research

Before the Indianapolis Colts make their choice on Thursday night – in case you’ve been living under a rock for the last four months, they’ve got the number one pick – they’ll have already put thousands of man hours into evaluating their top choices. Andrew Luck is the star Stanford quarterback, with a pedigree so good the Colts let gazillion-time Pro Bowler and Super Bowl MVP Peyton Manning go. Robert Griffin III, called RG3 for short, is the Michael Vick-like Baylor QB who won the Heisman Trophy last season.

The Colts’ executives have studied Luck and RG3 from every angle – they’ve seen them throw the ball at their pro days, they’ve seen their results on the much-maligned Wonderlic test, they’ve gone over (and over, and over, and over…) all the film from the past several years to see how these players react to game situations.

Any employer worth their salt is going to take the time to evaluate you, too. Sure, their research might not include hours of film or a dumbed-down intelligence test; instead, they’ll call your previous employers to see how you’ve performed in past jobs; they’ll go over your resume with a fine-tooth comb to flesh out any inaccuracies; they’ll probably log on to Facebook and Twitter to see if you’ve said anything mind-numbingly dumb enough to make you a liability instead of an asset to their company.

Before they make you that job offer, they’re going to do their research. And you should too.

You Need To Do YOUR Research

Football fans will remember years ago when Eli Manning – Peyton’s little brother and now a two-time Super Bowl champ in his own right – was the top prospect coming out of college. Eli came from a long line of professional level quarterbacks, and knew a good situation when he saw it. He didn’t see it in San Diego, the team with the top pick in that year’s NFL Draft. Eli had done the research, and knew that his playing style wouldn’t fit in with the Chargers’ system. He knew that San Diego wasn’t an environment that would make him happy. He craved the spotlight and the system already in place in New York City, and fought to get the Giants to make a draft day trade to acquire him after being selected by San Diego.

You need to do your research, too. Learn as much you can about any potential employer during your job hunt. What are their strengths? Weaknesses? Place in the industry? Find out as much as you can about your potential supervisor, too. Figure out If you’ll mesh well, and be able to work together as a fluid team. If you don’t do your due diligence, you may find yourself working for a company or a boss who makes you miserable. And, unlike professional sports, you can’t demand a trade to a sunnier market.

Accolades Matter

Each year, NCAA football players are eligible for 21 individual awards. They range from the Heisman, awarded to the best overall player, to the Butkus award, which goes to the nation’s top linebacker, and every position in between.

This year, of the 15 different players who won those awards (Luck, RG3, and Boston College’s Luke Kuechly each won multiple honors), seven of them are projected first round picks. In other words, accolades matter.

Whether you won Salesman of the Year at your old job, or graduated Summa Cum Laude from your university, these types of awards need to occupy a prime spot on your resume. They are more than just bragging rights – they help potential employers focus in on your skill set while showing where you excel compared to your peers.

Test Scores Don’t Matter

I can’t tell you the number of friends who bemoaned their LSAT, MCAT, or GMAT scores, worrying those numbers alone would keep them from reaching the pinnacles of their fields. Likewise, I know plenty of accountants who refused to celebrate over passing their CPA exam, simply because they didn’t score as high as they’d hoped.

But these days, test scores don’t matter. A growing number of top colleges and universities are shrugging off the SAT and ACT, saying they don’t accurately reflect a student’s resume. In the professional realm, when was the last time you put your GPA, or score on the bar exam, or other professional test score on your resume? Chances are, you didn’t – you simply put whether or not you passed or graduated, leaving your potential boss nonethewiser to the fact that you only passed by the skin of your teeth.

Football is the same way. The Wonderlic test, football’s benchmark of baseline intelligence, is a perfect example. Last year, Auburn’s Cam Newton reportedly scored just a 21 on this exam – less than half that of Alabama QB Greg McElroy scored. Yet, Newton was still taken number one overall by the Carolina Panthers and went on to have a record-setting rookie season as the starter.

First Impressions Count

The bottom line? While there’s a lot that doesn’t count – in your job searches as well as in the NFL Draft – there’s one thing that’s absolutely irreplaceable: a good first impression. Whether on the football field or in a corner office, getting off on the right foot is crucial to landing the job. Qualities like professionalism – things like manners, good taste, charisma – can’t be quantified in two lines on your resume or cover letter. They’re intangibles, like audibles called at the line of scrimmage by a fast-thinking quarterback who sees the defense shifting from zone to man-to-man. And they can make the difference between a job offer and an extended job hunt.

What The NFL Draft Can Teach Us About Our Own Job Searches is a post from Sweating The Big Stuff: Spending Wisely

For a few years, I’ve used ING Direct as my primary bank, but I’ve kept my Bank of America account so that I can deposit checks. With ING, the check depositing process was so inconvenient that I never even tried it. It meant sending in checks via mail to get them deposited, which is far less convenient than walking down the block.

Well, now ING Direct makes walking to the bank a thing of the past, and there seems to be little reason not to replace your brick and mortar bank with ING Direct. Between this and giving out paper checks, ING Direct is now a complete bank. Bank of America has caused me a lot of trouble in the past, so it may be time to say goodbye to them.

CheckMate

ING Direct’s newest feature, CheckMate, allows you to deposit checks from anywhere using your mobile device. On the iPhone, all you  need to do is snap a picture of the front and the back of the check, enter the deposit amount and the account you want to deposit to, and hit the send button. The only restriction is that the check must be under $3,000, which isn’t typically an issue. How convenient is that?

ING Direct has updated the entire iPhone app, you can check out all of the new and improved features on their site. The other feature of the app I think is cool is their ATM locator, which previously was part of a separate app. Having it all in one place is definitely a plus.

Check it out and let me know what you think. If you’ve been waiting for this feature, you can sign up now. I can’t wait to get a check and deposit it from the comfort of my own home!

UPDATE: I’ve found out a few more details about CheckMate from ING Direct’s help section. The most relevant things I’ve found:

• There is no fee to use CheckMate. It is absolutely free!
• All U.S. personal, business, and federal checks should be accepted. Foreign checks, money orders, traveler’s checks, and saving bonds will not be accepted
• You money will be available based on the following breakdown::
• Checks deposited for less than $500 – first $200 is available the next business day, the remaining funds are available after 2 business days
• Checks deposited for greater than $500 – first $200 is available the next business day, the remaining funds are available after 5 business days
• Checks deposited after 5 PM ET Monday through Friday, after 2 PM ET on Saturday and anytime on Sundays or federal holidays will be processed the next business day.

ING Direct Checkmate Brings Remote Deposit to Mobile Devices is a post from Sweating The Big Stuff: Spending Wisely

The medical community – and even pop science aficionados – spends a lot of time telling us how our addictions hurt our mental health, or physical health, or our relationships. But have you ever stopped to put a price tag on your addiction?

Technology Addiction

I think we’ve all run across a technology addict at one time or another. Maybe it’s the teenage girl at the restaurant who is talking loudly on her phone through dinner. Perhaps it’s the guy who won’t stop playing Words with Friends on the airplane (yeah, I’m talking to you Alec Baldwin). What people like this cost themselves in wasted time – and in our frustration level – is immense. But that’s not the only problem.

Sure, social networking websites are free to join – despite the urban legends that Facebook or Twitter is going to start charging its members, there’s no truth to these rumors. And while you won’t be charged a dime to use these sites, or others like them – including Pinterest, LinkedIn, and Blogger – too much time online could send you overboard on your bandwidth limits or your cell phone minutes, resulting in huge overages that could otherwise be easily avoided.

And that’s only scratching the surface. Those with serious technology addictions – like one of my good friend’s brother’s-in-law – often find themselves waiting in line overnight to buy the newest iPad or video game, even though they already have the older, slightly outdated model sitting at home. Who needs an iPhone 4S for $199 or more when they have a perfectly good iPhone 4 in their pocket? Not you or I, but to some, it’s an addiction they manage to justify.

Addictions That Make Us Fat

There’s a popular saying that everything is ok – in moderation. You can have a Diet Coke this afternoon for lunch, but you shouldn’t have five; you can have a slice of pizza for dinner, but best not to down the whole pie.

It’s when we take our love of these simple pleasures and go overboard with them that they become an addiction. And the costs of these addictions are hurting your finances on two levels:

1. A 12-pack of Diet Coke at my nearest convenience store usually runs me around $3.99. That means the cost of having one a day is roughly $0.33. I recently watched a Dr. Oz episode (blame the fiancé) featuring a woman who goes through a 12-pack every single day. Over the span of a month, my one-a-day habit is costing me $9.98; her case-a-day habit is costing her $119.70. Extrapolate those numbers out over a full year, and she’ll spend more than $1,400 annually… on soda.

2. The far more dangerous affect of this type of addiction on your bottom line comes from the increased health care costs associated with obesity. According to the Centers for Disease Control and Prevention, just over a third of American adults – 33.9 percent – are considered obese; another 34.4 percent are simply overweight. That means more than two out of every three Americans are in an unhealthy weight category. A 2007 report by the Congressional Budget Office found obese Americans paid 38 percent more per capita on their yearly health care costs than an adult of a healthy weight.

Addictions That Can Kill Us

There are unhealthy addictions – things like overeating – and then there are those addictions that are so unhealthy they can kill us… and potentially those around us. These are addictions like smoking cigarettes or excessive drug or alcohol use. An informal survey of cigarette prices in all 50 states – conducted in 2011 by the website “The Awl” – found the average price of cigarettes to be between $4.74 and $11.90, depending on where you live. The median price was right at $6, so that’s what we’ll base our calculations off here. Say you’re a heavy smoker, going through a pack a day on average – that means you’re spending $42 a week on cigarettes; over the course of a year, you’ll watch as $2,190 goes up in smoke.

Of course, the price of cigarettes or the price of alcohol isn’t the only impact of these addictions on your finances. In 2009, the Huffington Post reported that smoking costs the federal government $96 billion dollars a year in direct health care costs; that means some of your taxpayer dollars are going toward this unhealthy habit. Alcoholism and DUI cases put a crimp on the American justice system as well. Smokers and heavy drinkers pay more in medical costs too and also face higher life and health insurance premiums.

Is Your Addiction Worth It?

It’s tempting to think that your addiction isn’t hurting your financial situation, but if you break it down, just about everything is going to have some sort of trickle down affect. Even someone with a so-called “healthy” addiction like exercising is going to pay the price – new work out clothes, worn out running shoes, a pricey gym membership, maybe even health care costs down the road like osteoporosis from not properly refueling their body.

Readers, what’s your addiction? Can you think of ways it’s costing you?

The Finances of Addiction is a post from Sweating The Big Stuff: Spending Wisely

If you are considering investing in gold, here are some basics you may need to know:

There are two main types of gold investments—bullion and gold stock.

If you invest in gold bullion, you are investing in physical gold. You will buy gold coins or bars. As the market shifts, you may notice that the price of the gold you have may decrease or increase. (You can get daily updates on the price of gold through a site like Lear Capital.) During times of economic turmoil, the price of gold can increase. During economic growth, the price of gold tends to recede. However, while the price of gold may fluctuate in the short term, overall, historically, it increases in value.

If you choose to invest in gold bullion, you will need to think carefully about where you will store it. You may physically have the gold, and while you may want to have it stored somewhere near to you, you probably don’t want to store it in your home, especially if you own quite a bit of physical gold.

If you invest in gold stock, you generally are investing in the mines that produce the gold. This is often considered safer than investing in gold bullion, and it is also used to grow wealth (while investing in gold coins and bars is more often a measure taken to hedge against inflation). While investing in gold stock may be safer, you still have to carefully analyze the companies you invest in.

You may see a rise in gold stock during the fall, which is the wedding season in India. There, gold is used as part of the culture, and the need for gold increases in the fall both for weddings and festivals.

Another advantage of investing in gold stock is that you will not have to find a place to store it, and hold the stock will not make you a target for burglars as holding gold coins and bars in your home may make you.

There are several good reasons to invest in gold, not the least of which is that it can help diversify your portfolio. Once you have made the decision to invest in gold, you will need to decide which form you will choose and how you will store it, if you are investing in gold bullion.

Gold Investing for Beginners is a post from Sweating The Big Stuff: Spending Wisely

1. Start Two New Side Ventures

My scary business venture is still pending (I’ve been really slow with this, but it’s not looking good), while I still have no plans for my second one. Time will tell if I succeed, but I’d have to say I’m not ahead of schedule, if there was one. In this quarter, I’ll find out if my idea will sink or swim. Did I say they had to be successful business ventures?

2. Double My Side Income from 2011

This was a pretty lofty goal, so while I consider 2012 to be going really well so far, that 100% gain seems like it may be a reach. This includes all side income, not just blog related activities, and so far I’m on pace to grow by about 35%. That’s not bad (it’s actually really good!), but far from the ultimate goal. Still, if I compared the first quarter of this year to last, my year over year increase is over 100%, so this one is still TBD. There are too many variables at play and things could change in a hurry.

3. Save 60% of My Post-Tax Income

I figured with having to actually pay rent and furnish an apartment from scratch, this would prove difficult, but for the first three months of the year, I’m actually crushing this goal. So far, I’m at 70%! That’s really crazy, and I take a lot of pride in that. I do have several projected large costs this quarter. I started paying rent in March, and I also have most of an apartment to furnish. Also, did I mention that I’ll be getting married in June? There are some wedding related expenses that are going to be due.

4. Double My Net Worth

I sort of forgot about some money I had in an account not linked in my Mint, so…the bar is set even higher than I expected. Still, I’m up 34% so far. Of course, I’ll be taking a big step backwards (back into negative territory) when I get married as I’ll be including some additional student loan debt. I am also including the $2,500 tax refund I received in February, so that definitely helps.

This one will be a struggle, but it’s definitely encouraging to see my net worth growing based on the things I can control. The things I can’t control will push me back, but I battle on and hopefully my first three goals will contribute to making this last one a success.

How are you doing on your yearly goals? What do you think of mine?

2012 Goals: 1st Quarter Update is a post from Sweating The Big Stuff: Spending Wisely

Now that you know the history of Emancipation Day, you’re probably thinking: what on earth does this regional holiday have to do with my taxes? This year, a whole lot.

Because Emancipation Day – officially April 16th – falls on a Monday this year, pushing back the filing deadline to Tuesday, April 17th. Federal tax law requires that the IRS honor legal holidays in DC, even though the rest of the company doesn’t celebrate it – and, most likely, doesn’t know the background behind it (but thanks to my brief history lesson, you’re no longer a part of that latter segment of the population).

If you’re one of the nearly one in five taxpayers who’s waited until the last minute to file your taxes, you’ve already missed out on many of the perks of filing early, including:

• Getting your refund earlier. The IRS usually gets refunds out within six to eight weeks – and as little as eight days if you e-file – but often experiences a backlog after tax due day, resulting in a delay
• Having a chance to double-check your tax forms. This is especially critical if you do your own taxes and aren’t quite sure of what you’re doing
• Time to pay your tax bill. It’s a misnomer that you can delay paying that bill by filing an extension 4868 form. In fact, that’s totally wrong; filing a 4868 form only delays when you have to file your tax forms, not when you have to pay your bill

Procrastinating leading up to the filing deadline forces you to act quickly and decisively at this point. It’s crucial that you have all your paperwork together – that means all your receipts, W-2 or 1099 forms, your 1040/Schedule A if you’ll be itemizing, your mortgage interest form from your lender, and any other pertinent documents need to be in order. You’ll also need a plan of attack as to who is going to help you file your taxes: will you go to a CPA? A tax service like Jackson Hewitt or H&R Block? Will you do them yourself? If you plan to pay someone, make sure you set up an appointment in advance, so you don’t find yourself left out in the cold. And finally, plot how you’ll get that all important postmark before the clock strikes midnight on the morning of April 18th, lest your tax forms turn into a pumpkin a la Cinderella. The days of your local post office staying open late are long gone, as the USPS has largely eliminated those after-hours collection sites to cut costs.

Readers, when do you file your taxes? Do you wait for the filing deadline, or did you submit your tax forms months ago?

You’re Emancipated From Paying Taxes…At Least For A Few Days is a post from Sweating The Big Stuff: Spending Wisely

For many people, saving money is very difficult to do. Like anything, though, it will get easier if a person decides to make it a habit. The following suggestions are good habits for anyone who needs to save money to get in the habit of. Over time, the money saved by following these tips could help an individual or family accumulate millions of dollars.

Make Saving Automatic

One of the easiest ways to save money is to deduct a set amount from every paycheck and have the money direct deposited into a savings account. Through using direct deposit, a consumer can have money placed into his or her savings account without having to see spendable cash in his or her checking account. By doing this every month for decades, many people have been able to accumulate millions of dollars without ever having to make a sacrifice. The trick is to start the withdrawal as soon as a person starts a new job. By never getting in the habit of seeing and/or spending the money, a person will automatically adjust his or her budget to their “new” income without ever noticing the difference.

People who have already started to work and have a budget based on their entire income usually find this option difficult, however. Fortunately, there are other ways to save. For example, try to save at least half of what people call their “surprise” money. This money includes income from work bonuses, gifts, and tax refunds. Even the money you saved from finding the cheapest auto insurance quote can count toward this. Most companies allow employees to set up special deposit instructions on bonus money. Because this money is rarely a part of a person’s budgeted income, many people are freer to choose whether to spend or save it. Instead of spending all of it, a person can choose to immediately put half of it into his or her savings account. By spending some of the money, a person can still feel like he or she got a reward from the money, and they will still be able to contribute to their retirement savings.

Get In The Habit Of Saving Cash

If a person rarely receives money like this, however, he or she will not be able to save a lot for his or her retirement. A person in this situation could try to deposit his or her entire paycheck into his or her savings account as soon as they receive it. Transfer out the amount that is needed to pay for necessary bills. Typically a person will leave some amount of money in his or her savings account at the end of every pay period. By transferring some or all of this leftover money at the end of the month, a person can build up their retirement savings fairly quickly.

If a person rarely has much left over at the end of a pay period, however, it will be difficult to save a lot of money. In addition to this method, try to redeposit any spare cash. Every time a person spends cash, he or she probably gets some change in return. If a person is on a budget where he or she takes out a pre-set amount of money every week, he or she can save a lot of money by depositing everything that is left over at the end of the week into a savings account.

Easy Ways To Save For Retirement is a post from Sweating The Big Stuff: Spending Wisely

This year will be a little different as I’ll be on the west coast for my first full season, where games starting at 4pm PST interferes with my work schedule. My plan is to sign off of social media between 4pm and 10pm each day so that I can go home and watch the games on my Roku as if they were live. No spoilers please!

Check out these great articles:

Two Takes on the Magic Retirement Number (via Bargaineering)

Responding to When Someone Calls you Cheap (via My Journey To Millions)

Best Cash Back Credit Cards (via Free Money Finance)

Could You Go Without a Car? (via Thousandaire)

I was featured in these carnivals recently:

Totally Money Blog Carnival at Stupid Cents
Carnival of Financial Camaraderie at My University Money
Festival of Frugality at One Smart Dollar
Carnival of Retirement at Passive Income to Retire
Carnival of MoneyPros at Beating Broke
Yakezie Carnival at Watson Inc

Best of the Rest: Baseball Season is Here! is a post from Sweating The Big Stuff: Spending Wisely

Recent Performance

I’ve been doing some complaining about loans that have been paid off early, but this month was a tough one because of a few old loans that haven’t been paid in awhile. Actually, the performance this past month has been pretty good. Another loan of mine came back into good standing, but another was charged off, which is where the drop in interest rate comes from.

I’ve tried to reduce the number of loans that default by using smart criteria, so hopefully I’ve been getting better and I’ve seen fewer loans have skipped payments.

13.71% Interest Rate

I have fewer loans in the grace period, so I think the future looks bright, and I have no new loans that are late.

Take a look at my account snapshot:

There were no new deposits this month (and I’m not planning anything for the next few months, at least). Still, with expected monthly payments of over $150 and, I can’t just sit back and relax. I’ve gotten into a pattern of checking for loans every two weeks, which isn’t too burdensome and doesn’t leave cash sitting idle earning 0% for very long.

Future Lending Club Plans

I won’t be doing much other than simply staying the course by investing in new loans and watching payments come in.

I’ve got my fingers crossed that the worst is behind me, and if a 13.71% return on my investment is the lowest this account gets, I will be pretty happy!

Lending Club Returns at 13.71% in April 2012 is a post from Sweating The Big Stuff: Spending Wisely

Tina had just had her annual review with her supervisors, and, as you’ve probably figured out, it didn’t go well. While Tina had heard some of her co-workers had received modest raises – most of them dubbed “longevity” or “loyalty” raises to thank employees who’d stuck it out with the company during a recession-induced salary freeze – Tiny was bummed she hadn’t received a salary increase as well.

“There’s always next year,” Tina pined, sounded like a Chicago Cubs fan at the end of September.

But really, there isn’t always next year. Here’s why:

What A 3% Raise Is Worth To You Right Now

Say you make an average American salary – that’s around $28,000 according to the U.S. Census Bureau. If you work in a high cost-of-living state, like California or New York, you probably make more than that. If you live in a low cost-of-living state, like Tennessee or Alabama, you likely make less. What does a standard three percent pay raise get you?

$28,000 x 0.03 = $840

An additional $840 a year – which comes out to just over $32 a paycheck (if you get paid every other week), and that’s before taxes – might not seem like much. Depending on where you live, it might not even cover a single month’s rent or pay your yearly car insurance bill. When you do the math, you might find yourself thinking like Tina: wondering why she should even bother to ask for a raise.

What A 3% Raise Is Worth To Your Future Earnings

In Tina’s estimation, it’s ok if she doesn’t get a salary increase this year; she assumes she’ll just have more fodder when she ultimately asks for a raise 12 months down the road. She’s overlooking a critical fact.

Say next year, she does get that three percent pay raise. The year after that, she get a promotion which nets her a ten percent salary increase. After that, she receives a standard cost-of-living raise for four straight years before getting a loyalty raise of five percent the fifth year. Let’s do the math:

Her original salary was $28,000

• Year one: she didn’t not ask for a raise, so her salary remained $28,000
• Year two: she gets a ten percent raise, bringing her annual earnings to $30,800
• Years three thru six: she gets a three percent raise every year, ultimately giving her an annual salary of $34,666 by year six
• Year seven: she gets that five percent loyalty raise, bringing her salary up to $36,399

Now, let’s pretend that she not only asked for but got that three percent raise this year. How does that change things down the road?

• Year one: instead of earning just $28,000 for a second straight year, she instead receives $28,840
• Year two: thanks to the ten percent promotion raise, she is now earning $31,724 – almost $1,000 more than she’d be earning if she hadn’t received the year one raise
• Years three thru six: with her annual three percent salary increase, she’s earning $35,706 by year six
• Year seven: factor in her five percent loyalty raise, and her income is now $37,491

The net difference between a raise this year and waiting until next? During our seven-year example period, Tina would bring home an additional $6,838 simply by fighting for that small raise this year. Under this scenario, her annual salary will be $1,092 higher seven years from now; the gap between what she is earning and what she could have been earning will only continue to grow over the course of her career.

What A 3% Raise Is Worth To Your Portfolio

Seven years from now, let’s pretend Tina took the additional $6,838 she’d earned – just because she didn’t wait until next year to ask for a raise – and put it into an IRA. Let’s give the market the benefit of the doubt and assume she’d see an eight percent return on her investment. At that point she’ll be 32, so let’s look ahead another 28 years – after she’s reached that golden age of 59 ½ and can withdraw from that IRA without penalty – to see how much the $6,838 is worth now:

$58,992

It seems crazy to think that simply by fighting for a measly $840 right now, Tina can add more than $58,000 to her investment portfolio.

And, as astounding as that figure is, it doesn’t even take into effect a 401(k) match from her employer (which would grow right along with her salary) or any additional investments made based on her earnings past the initial seven years. Say she continued to invest an extra $1,000 – which she earned simply because of asking for a raise in year one – every year from age 32 to 60, along with the initial investment of $6,838. How much would her account be worth then?

$161,598

Sure, Tina could wait until next year’s annual review to fight for a pay raise. But she shouldn’t. She can’t afford to.

And neither can you.

Why You Shouldn’t Wait Til Next Year To Ask For A Raise is a post from Sweating The Big Stuff: Spending Wisely

For the record, now is not the time to purchase homes and expect to flip them for an immediate profit. Those days are long gone since the housing market crashed. In fact, it’s considered one of the reasons for the crash as it caused prices to inflate rapidly and artificially.

However, if you’re looking for a long-term investment, consider real estate as a viable option.

Families who wanted to purchase homes before the so-called “housing crisis” found homes to be well outside of their price range. Today, those families can afford to buy their dream homes in the right neighborhood and school district at a small fraction of what it would’ve cost them only 5 years ago.

Additionally, interest rates on mortgages are extremely low. Most real estate professionals would agree that now is the time to buy!

For those who aren’t looking for a home to live in, real estate is still a great investment. Purchasing a home or a piece of property with the intent to rent it out is a great opportunity to make a profit or generate a steady monthly income. With so many people starting over after selling their homes that they could no longer afford or dealing with foreclosure, rentals are
highly sought after. Having prime real estate in a popular location has the potential to bring in a lot of steady income over the long-term.

It’s not just true with homes. Office space is an amazing investment as well. With all of the new start-ups all across the country, small business owners will look to rent office space as their companies expand and they begin hiring more employees. The job market improvement will benefit your bottom line as a real estate investor.

While real estate prices, particularly in the housing market, aren’t expected to rise anytime soon, owning property that you are able to earn a little bit of money on now and then sell later when the market improves is a sound financial strategy. Additionally, making improvements such as solar power installation, will also increase value and make investors independently wealthy and financially stable for a long time to come.

Is it a Good Time to Invest in Real Estate? is a post from Sweating The Big Stuff: Spending Wisely

Those stats got you down? Maybe have you thinking the economic recovery is stalling out?

Not so fast…

There’s a strong silver lining. The MBA’s report also points out that the average loan climbed nearly $9,000 from January to February, up to more than $225,000 – suggesting the housing market is rebounding.

What if you’re in the market for a new home? Before visiting your bank, credit union, or mortgage broker to get a loan approval, you’ve got to do your homework. That means knowing which questions to ask before you ever step foot in your broker’s office. After all, as my ninth grade history teacher liked to say, there are no dumb questions, only dumb borrowers who don’t ask questions in the first place… or something like that.

Question #1: What Documents Do I Need?

There was a time, back during the housing boom of the first half of the first decade of the 21st century, when mortgage brokers, banks, and underwriters alike rarely asked for much in the way of

documentation. I have friends who obtained loan approvals simply by showing their last two pay stubs, or a signed contract from a new job, and nothing else.

These days, things are way different. Your mortgage broker should be asking to see this, that, and the kitchen sink. In order to qualify for a mortgage, you’ll need to show your lender:

• Proof of income: this includes your last two years’ tax returns, as well as recent pay stubs if you have recently had a job change
• Proof of assets: this includes your bank account information, along with any investments or financial gifts you may use for your down payment
• Credit information: while the underwriters will run a check of your credit report, you may need to provide further documentation if, say, you’ve recently paid off a loan and it hasn’t appeared on your credit report yet

If your mortgage broker or lender isn’t asking for these documents, they’re not properly screening you or your finances. While it may make the loan approval process a little easier, this should be a major warning sign. After all, a lender who doesn’t know what you’re capable of handling financially is more likely to approve you for a mortgage you won’t be able to handle – a recipe for disaster.

Question #2: What Are Your DTI Limits?

“DTI” may be the three most important letters in any home loan application. Short for debt-to-income, your DTI ratio is actually comprised of two numbers. Your “front end” DTI ratio is a comparison of your monthly mortgage payments, including escrow, and your gross monthly income. Your “back end” DTI is a ratio of your total recurring debt – things like your mortgage as well as student, home equity, and vehicle loans – and your gross monthly income.

These two numbers play a huge role in determining whether or not a lender is going to give you the home loan – and the interest rate – you want. However, different financial institutions are looking for different numbers. Some want to see a front end DTI ratio as low as 29 percent, while others will go as high as 33 percent and still approve your loan. Back end ratios vary as well, with lenders looking for numbers between 36 and 41 percent.

You may be tempted to work with a lender that has higher DTI ratios. After all, you’ll be able to get a larger loan with a 33 percent front end DTI ratio than with a 29 percent DTI. You need to crunch your numbers before you visit your mortgage broker, however; it’s important for you to know exactly how much you think you can afford, not how much the bank thinks you can.

Question #3: Are Loan Approval Decisions Made In House?

Have you ever been on an all-inclusive vacation? For one flat fee, you get your hotel accommodations, food and beverages, entertainment, travel, and recreation. No more shelling out $10 at the poolside bar for a beer, or $25 to rent a sea kayak for an hour. It’s simple one-stop-shopping.

In-house loan approval decisions work in a similar fashion. Instead of going to a mortgage broker, who works as a go-between for you and the underwriters, an in-house decision ensures your loan application will be more than just a number. Although not a hard and fast rule, in-house decisions – which are more common at credit unions and small, locally-based banks – typically give borrowers more personalized service. During the application review process, you’re more likely to be able to explain any extenuating circumstances to your lender. This process gives you wiggle room, leaving the possibility for several shades of gray in an industry that’s usually black and white.

Three Questions You Need To Ask Your Mortgage Broker is a post from Sweating The Big Stuff: Spending Wisely

I don’t talk too much about my personal life on the blog, but I have shared some of the most important life events that have occurred in recent memory. I proposed to my future wife 11 months ago and will be getting married just 3 months from now.

I also recently moved into a 2-story 2 bedroom, 2 1/2 bathroom apartment in the past month, which is perfect, even though I had a pretty sweet situation at my future in-laws.

If that wasn’t enough, I also have a job with a ton of perks. In addition to half-day Fridays, we go on company sponsored field trips. Not to make you all jealous, but I’m going to the Lakers game on Tuesday.

To top it all off, I’ve also got a successful side business that sort of fell in my lap. I started a blog for fun, but after about 8 months I realized that I could make some money from it. It’s spiraled into something far bigger, enough to make opening an individual 401(k) worth it.

Sure, I didn’t win the $640 jackpot, but I have been blessed with a lot. And I think I’m in a good position to keep building on what I have so that one day I will be wealthy. And maybe since I have to work for it, I’ll use it more wisely than some of instant millionaires who often blow through the money quickly.

Readers, how have you already won the lottery?

Why I Already Won The Lottery is a post from Sweating The Big Stuff: Spending Wisely

Since I have a business (I filed as an LLC a few months ago), I am eligible for an individual 401(k). I looked at a lok options, but ultimately, I went with the individual 401(k) because of the high limits. It allows me to contribute 100% of net adjusted business profits, up to $17,000 in 2012, as a salary deferral contribution, plus an additional 20% of the net adjusted business profits for the company as a profit sharing contribution. The totalI won’t give you specific numbers because that’s not my style, but it gives me the opportunity to contribute more than any other IRA or 401(k) option.

And since I’m young, I opened a Roth Individual 401(k). This lets me contribute after-tax money to the account. The salary deferral portion can be either Roth or Traditional (or a combination), while the profit sharing portion must be made as a traditional (pre-tax) contribution.

Once I knew what I wanted to do, I went onto Vanguard (where I do all my investing), and checked out there paperwork. There was a large packet to fill out, but most of it required basic information about me and my business. I took 30 minutes to fill it out, mailed it off, and a week later I got notification that the account had been set up for me.

I truly thought the process would take a lot longer, there would be more forms to file, and there would be some complications. My only regret is not having done this a year earlier. Instead of a silly $5,000 limit on a Roth IRA, I can contribute way more!

For any of you self-employed individuals, what type of retirement accounts do you have?

Starting an Individual 401(k) is Easy! is a post from Sweating The Big Stuff: Spending Wisely

There are advantages and disadvantages to each payment system, and it definitely takes some getting used to when changing from one system to another.

Here are the pros and cons for the 3 most popular compensation structures:

Hourly

Pros: It’s very easy to see that the more you work, the more you earn. If you are a hard worker, you have the potential to earn even more money for working overtime, which is often at a rate of 1.5 times the usual rate.

Cons: There is very little stability. Also, if you are sick or need a vacation day, you may feel guilty and go to work when you shouldn’t.

Salary

Pros: There is more stability here and it’s easy to know exactly how much you’ll make every pay period. You are likely entitled to benefits, which can help you take off work without having to worry about making less money.

Cons: There is not much ability to increase earnings since performance reviews are often once a year. Also, you may have to work more than 40 hours a week without being compensated for it.

Commission

Pros: The better you are at your job, the more you will get paid. There is no limit to how much you can earn.

Cons: You can never be sure how much money you will make in a given month, which makes planning difficult. Sometimes, factors outside of your control will determine if you have a good or bad month.

Throughout high school, I worked summer jobs, all of which paid me hourly. The more I worked, the more I got paid. So when I wanted to leave my job picking fruits and vegetables on a local farm at noon, it meant that I wouldn’t be making money during the afternoon.

After college, my first job was a set salary for the year. There was definitely a sense of security which I apprecited.

Now, my compensation consists of a base salary in addition to commission based on a percentage of sales. There’s no limit to how much I can make, which I like. I am able to motivate myself because I know that the harder I work, the better I will do, and the more I will earn.

Readers, what payment structure do you have? Do you like it? Which is your favorite?

Salary vs Commission: Which Do You Prefer? is a post from Sweating The Big Stuff: Spending Wisely

Depending on where you live, there are a number of options to choose from when obtaining auto insurance coverage; some mandatory, some elective. One of the most common is no fault insurance; also referred to as PIP insurance.

Personal Injury Protection

PIP insurance, which stands for Personal Injury Protection, is a type of insurance that is designed to allow you to have access of up to $10,000.00 to cover any costs associated with any personal injuries you may sustain if you are involved in an accident that involves an automobile. This coverage pays out regardless of who is at fault in the accident; hence, the other common name for this type of insurance coverage, ‘no-fault insurance’.

In addition to providing coverage for any personal injuries you may sustain, it will also pay out for a certain percentage of lost wages. There are limitations and circumstances that come into play in order for this coverage to pay out up to the full $10,000.00 limit which you should discuss with an insurance agent in the state where you are interested in obtaining PIP insurance.

Liability Auto Insurance

Consumers are known for balking at the cost of liability auto insurance and other types of auto insurance coverage, and many opt for the bare minimum as a way to keep their auto insurance costs low, but this reasoning won’t necessarily prove beneficial should you be involved in an accident, and here’s why.

Let’s say you are the at fault driver in an accident. The other driver’s policy is under no obligation to provide you with any type of financial coverage to help you pay for any injuries you may sustain as a result of the accident. PIP insurance will; even if you’re to blame for the accident.

Let’s say you are not the at-fault driver in the accident. Without PIP insurance, the other driver’s insurance company can drag their feet when it comes to paying out for your injuries. With no-fault insurance you’ll have immediate access to up to $10,000.00 to help you pay for medical bills, and or lost wages.

What if the other driver doesn’t have any insurance at all, and he or she is to blame? At least with PIP insurance coverage, you’ll have access to some monies to help you pay those bills.

At the end of the day there are many scenarios in which no fault insurance proves to be beneficial. Even if you have to sue the other driver in court in order to recoup your total losses, PIP insurance will give you some peace of mind that you’ll have access to some money while you wait for the other driver’s insurance company to pay out.

When trying to figure out what the right auto insurance investments are for you, don’t shy away from PIP insurance coverage simply because of the costs involved with having it. It may prove to be the best auto insurance investment you’ll ever make.

Making The Right Auto Insurance Investments is a post from Sweating The Big Stuff: Spending Wisely