Goodbye to 2009. Earlier, I had been hearing a lot of people grumble about how glad they are that this year will soon be over. It was a pretty tough year for a good lot of people (particularly the first half of the year) so I’m sure most of you are relieved that we’ll now be “starting afresh”.

As for me, I’m starting the year “cautiously hopeful” (or as the oft-heard, well-worn cliche of recent years states: “cautiously optimistic”). For a change, I thought to channel a more rowdy mood for the start of this New Year and present you with a slightly obnoxious 2009 retrospective, a humorous and satirical view of the year that was:

The Digerati Life’s 2009: A Year In Review

Now how about I peel back some of the pages of time and offer you The Digerati Life’s own retrospective and show you a sampling of what we wrote about over the past year? Here are some of the highlights, commentary, opinions and discussions that we had in 2009:

JANUARY: Millionaire Secrets of the Super Rich: The Big Problems They Keep

Pondering some grim realities of the worst economic crisis since the Great Depression: why do some of the super rich find themselves so troubled? What type of problems and terrible millionaire secrets do these people harbor?

FEBRUARY: Obama’s Foreclosure Bailout Plan: Should There Be Help For Homeowners?

What do you think of Obama’s foreclosure bailout plan? It’s a whole separate plan that’s not part of the stimulus package details.

MARCH: 1929 Stock Market Cycle: Are Technical Indicators, Stock Trends Repeating History?

So is the buy and hold strategy dead? I’ve been reading a lot of articles about this lately. But do you believe it?

APRIL: Credit Card Spending Down By 10%, Ours Is Down By 50%

This article describes our own response to this relentless economic downtrend. Let’s cut costs!

MAY: Good Business In A Bad Economy? Grow Your Business In A Recession

I’d like to look at our economic situation as a glass that’s half full, rather than half empty. When tough times call, opportunities are just around the corner.

JUNE: I Need A New Credit Card Fast

Here’s a post that was inspired by the story of how Advanta closed my credit card account, causing me to scramble to try to get a new credit card to replace it. It was a situation repeated many times over around the nation: credit card companies folding under the strain of defaults and a tough business environment.

JULY: Great Stock Market Performance, But Will Dow 9,200 Hold?

The Dow Jones finally breached the 9,000 mark. Here were the thoughts and speculations that swirled around this event.

AUGUST: California Unemployment Rate History: A Visual Guide

Here’s where I cried a little about the state of unemployment in the nation and in my own backyard.

SEPTEMBER: How One Debtor Resolves Her Credit Card Problems

The year wasn’t being too kind to some people. There were those who were at wit’s end about their credit card problems, as they found themselves facing unexpected interest rate hikes.

OCTOBER: Double Dip Recession: Why Dow 10,000 May Not Last

With National Unemployment Statistics showing jobless numbers at record highs and Economic Growth apparently on the upside, we’re seeing mixed signals. Are we vulnerable to a double dip?

NOVEMBER: U.S. Unemployment Rates and the History of Recession: A Visual Guide (Map)

As the year winds down, I had to take a peek at U.S. unemployment rates again.

DECEMBER: Zhu Zhu Pets: Top Toy For Your Christmas Stocking

Eh. Just had to end with the year’s must have toy.

I’ll close by saying that I’m one of the 69% who’s hopeful about this coming year. This CNN poll shows us that while more people are feeling more positive than not about their future, such confidence levels are lower than what they were a decade ago: in 1999, an overwhelming majority of people (85% of poll respondents) were hopeful about their situation for the following year. But these results are far from surprising when you’re coming off a recession vs riding the wave of a huge boom. I don’t find the poll that meaningful (the CNN news title is in fact, misleading) given that it pretty much just states the obvious.

So it’s all up from here right? I’d love to wish everyone here a Happy New Year! I’m 100% certain I’m starting it off right with a game of Catan with a couple of pf bloggers — the bundle of fun known as Cap and Lazy Man .

Happy New Year! Goodbye 2009 and Welcome 2010: It’s All Up From Here

The joys of living in a small home.

For many people I know, a big house to call their own sure sounds like the ultimate dream. Think of all that wonderful space and room and potential to do whatever you want in that space. But there are obvious downsides to having a huge house: number one on the list is the maintenance cost. Granted, you may be able to afford your house and even the ongoing property taxes you need to pay each year — but what a lot of homeowners forget are those pesky maintenance and repair costs that they would be committed to paying, month in and month out. This is what caught a lot of people unawares during the latest real estate downtrend and which may have contributed to many a foreclosure; many homeowners grossly underestimated the expenses involved in maintaining a home.

Sometime ago, I wrote an article asking the question: would you be willing to live in a small house? In this post, I wrote down the benefits of owning a more modest abode. With such a house:

• Your health could improve, possibly because you’d be forced to do more things outside of the house. A small house encourages you to live a less sedentary lifestyle.
• You can live more simply since you’ll have less room for stuff.
• You’ll cut your housing costs significantly!
• You’ll worry less and expend less effort maintaining your home.

Just imagine how much you’d save on your home’s upkeep and insurance requirements once you downsize! You can ask yourself: do you really need all that stuff? If the answer is no — and you promise that you won’t hyperventilate if you let go of your video game collection — then maybe you should check out this alternative way of living. For some, living small is living well. You may want to see for yourself just how well it works for this one guy! I found this video of one happy resident who’s managed to squeeze himself comfortably into 96 square feet of space:

From the video:

“Excess is not necessarily a luxury, it’s really a burden — it’s a liability. People are living in 4,000 and 6,000 square foot debtors’ prisons, and they spend 30 years, sometimes more, paying for more stuff and space than they really need.”

96 square feet may be a little extreme, but it shows us that with a little resourcefulness, even living this way is possible! I also give this story an additional vote because the guy in the video mentioned Imelda Marcos’ shoes.

Personal Finance Articles

As we ring in the New Year, I’m happy to be able to share some words of wisdom from my fellow personal finance bloggers:

• Good Financial Cents: Top 135+ Personal Finance Posts for 2009; Yay! We made the cut!
• Financial Highway: We’re also in Ray’s Best of 2009!
• Money Smart Life: A New Years Resolutions Secret
• OneMint: China ETF List
• Len Penzo: Why Rechargeable Batteries Are Rarely Cost Effective
• Credit Karma: Dear Credit Karma….
• Free Money Finance: Three of the Biggest Estate Planning Mistakes
• Lazy Man and Money: Good Riddance to Unwanted Gifts
• Frugal Dad: Attention Car Owners – Do You Need a Reality Check?
• Brip Blap: You Might Be A Personal Finance Redneck If…

Recent Carnivals

• Carnival of Personal Finance
• Carnival of Money Stories
• Festival of Frugality

Want A Big House? Tour This Small Home, Change Your Mind

Could your Scottrade (or other investment) portfolio use a dose of bonds?

We often cover the world of equity investing here, and we’ve also discussed safer investments like the stable certificate of deposit. This time, we thought to cover some fixed income investing basics. I suppose if we categorized all the investment information out there (and there is a lot), the amount of attention given to bonds would probably be dismally low compared to the attention given stocks. Why? Stock market investing seem more glamorous and exciting. Bonds are boring. It’s no surprise, then, that many people invest much more heavily in equities than in bonds. However, glamor aside, I have found that the average investor really does not truly understand bonds.

Investing In Bonds: Make Money The Boring Way

Bonds are essentially an IOU issued by a given entity where you are really providing a loan in return for the promise to be paid your money back, plus interest over a period of time. Bonds can be issued by the federal or state governments, municipalities, schools, and corporations as a way to raise money. Each issuer, like you and me, has their own credit rating. In return for your loan, you as the investor can hopefully reap the benefits of a return of your initial investment plus a stated interest rate. Because of these factors, bonds are considered to be an income producing investment (from the interest) that’s more conservative than stocks.

These (James) Bonds made money for their investors. Yours can too!

Why Should I Invest In Bonds?

Perhaps you’ve checked the best cd rates available and you’re interested in higher returns, but with less risk than what you’d get with equities. Are bonds the ticket? People tend to think of bonds as the ones they were given at birth (savings bonds worth a whopping $50 at age 35) or something designed for only the older and most conservative investor. However, I would contend that nearly everyone should consider bonds for at least a portion of their portfolio.

There are three main reasons why.

1. First, bonds are a good hedge against stock market fluctuation and tend to perform in an opposite manner. So, if your stock portfolio is not performing well, hopefully your bond portfolio is; hopefully your bonds are at least holding their own. Of course, what your stock to bond ratio should be really depends on a number of factors such as your age, tolerance for risk, and so forth.

2. Second, bonds can provide a fairly consistent stream of income for those who need it. And, those who don’t currently need income to live on can instead use that income to reinvest into other investments.

3. Third, having a balanced portfolio not only reduces overall portfolio volatility, but also stops you from trying to guess when to be in or out of the market. More often than not, it’s best to keep a balance within your investments and “hold the course”.

What’s The Risk?

There are two main risks that are associated with bonds.

1. The first risk has to do with the bond issuer, and how creditworthy they are. This is often referred to as credit or default risk. Generally speaking, who is most likely to pay you back, the old US of A or the struggling corporation with no earnings? You get it…. This risk can best be mitigated when you purchase bonds from high quality issuers that are rated by third party rating agencies like Moody’s and S & P, and when you diversify your bond exposure among several issuers rather than just one.

2. The second main risk is interest rate risk. Bonds are sensitive to changes in interest rates because bond prices move in the opposite direction of interest rates. Here’s a simple example: you buy a bond for $1,000 that pays 4% interest. If, hypothetically, prevailing interest rates are 4% then rise to 5%, then most new bonds issued will pay a higher rate of interest than yours. Therefore, the inherent “value” of your bond goes down. Investors would obviously want to purchase newer bonds with higher rates than yours. So, if you wanted to sell your bond you would have to sell it at a discount. This risk can be reduced by having bonds of different maturities (diversifying with short-term, medium-term, and long-term bonds) or by holding a bond till maturity. Short-term bonds have less interest rate sensitivity than long-term bonds.

How Can I Get Started?

Any online broker, mutual fund company, bank or other financial institution can help you trade bonds. There’s quite a variety of bonds available for purchase — government, corporate, junk, etc. Or you can also buy bond index funds or ETFs. Check out your favorite discount broker, bank or fund company for more information.

A note on pricing: when brokers act as principal on a fixed income transaction, a markup is included in the bond price; but if the broker acts as agent, they charge a commission. The industry average markup or markdown per transaction is 2.5% to 5% built into a bond’s price. Also, if you intend to purchase bond mutual funds or ETFs, then pricing for these types of products applies instead. Here are some places where you can trade bonds:

Misconceptions

Frequently people complain that bonds “pay too low” or contend that it is the wrong time to invest in bonds. The technical side of this is a bit beyond the scope of this post (perhaps another day), but on both of these accounts, investor sentiment ignores the inherent purpose of having bonds in the first place — to counteract and balance our stock portfolio with lower risk investments and/or to provide a source of income. Whether the yield is low or whether we think that the timing is wrong is irrelevant to the overall, long-term health of our portfolio.

Though boring, perhaps it’s time to consider adding bonds to your portfolio if you haven’t already. The extra level of diversification they offer will help create a more balanced portfolio that will take the guess work out of investing and add a bit more stability to your returns.

 
Contributing Writer: Todd Smith, CFP

Investing In Bonds: Make Money The Boring Way

I use a debt consolidation calculator to illustrate how much you can save with the right kind of personal loan.

The other day, I wrote about some ideas on how to become debt free faster. If you’re someone with a strong credit rating but with credit card debt and various loans to your name, you may be able to make bigger dents on your debt reduction efforts by opting for a debt consolidation loan.

Before I familiarized myself with the wonderful world of debt management, I never thought that you could do much once you got yourself stuck with credit card debt, or any loan or mortgage. But there are clever ways to deal with your debt if you’ve got fairly good credit. For instance, if interest rates go down, it’s always worth checking if refinancing your mortgage is worth pursuing. And what about all those personal loans, installment debt, revolving debt and credit card debt that you may be carrying? Well, if you’re money savvy, you can pay much less for your loans over time. While this is not necessarily news for a lot of debtors, it’s surprising that not more people are more strategic about working on a debt reduction plan that can expedite their payoff schedule.

As I mentioned earlier, you can stand to save a substantial amount of money when you have good credit. Having good credit is the basis for cutting down on the costs of borrowing. It’ll be easier for you to qualify for loans with the best terms if you sport a high credit score. And if your loan terms aren’t so good now, you can potentially improve your situation by applying for a debt consolidation loan that could very well be much cheaper than the combined amount you pay for all your disparate loans.

Use A Debt Consolidation Calculator, See How To Erase Debt Faster

So allow me to revisit the Lending Club DebtBuster challenge: if you have a credit score of at least 660, then one way to potentially improve your debt situation is to determine if consolidating your debt will work for you. Check out your current loan rates and how much you’re paying on your existing debt and compare them to personal loan interest rates from Lending Club.

So how much money can you actually save with a better loan? How about I try to illustrate this point with some concrete examples: I went ahead and looked up some numbers, thanks to a debt consolidation calculator from Bankrate and some sample notes I’m currently seeing in Lending Club’s network.

Case #1: Get A Lending Club Loan with A Loan Grade of A1

Suppose you want to finance the purchase of a car at $16,000. Some people will take out some auto financing to cover this purchase. But as an example, let’s say you decide to fund the purchase with the following loans:

• $5,000 advanced from Credit Card #1 at 15.90% APR (monthly payment is $176).
• $2,000 from Credit Card #2 at 19.00% APR (monthly payment is $73).
• $9,000 through an auto loan (monthly payment is $430) with a 24 month term.
• Total payment per month: $679

Now what if you took out a Lending Club loan in place of this existing debt? If you’ve got outstanding credit, you’re a very low credit risk and your loan will be considered high quality with a grade of A1. Here’s what your Lending Club personal loan would look like if you applied and got accepted into this peer to peer lending network:

So if you use this loan to cover your car purchase instead, the debt consolidation calculator shows you these differences:

You’d be paying $494 a month rather than $679 a month. The interest rate at 7.05% assumes that your loan grade (measuring your risk as a borrower) is the best, at A1. In reality, this new loan will save you around $1,480. It’s money you can invest or apply to your loan in order to retire it even more quickly.

Case #2: Lending Club Loan With Loan Grade E2

Now what if you’re a greater credit risk? Supposing you want to borrow money to start a business. You borrow $6,000 from your credit cards (with a monthly payment of $212) and you get $9,000 through a business loan (with a monthly payment of $430). You pay a total of $642 per month on this $15,000 startup loan.

Later on, you decide to consolidate your debt into a Lending Club loan because you qualified as a borrower. However, your loan is deemed a moderate to high risk and is given a loan grade of E2, with a higher interest rate of 16.70%. Again, the term is for 3 years.

So how much do you save? Unfortunately, here’s the rub: because of your higher interest rate of 16.70%, you’ll end up paying an additional $1,213 over the life of the new loan, even as your monthly payment shrinks from $642 to $533.

Depending on your requirements and needs, you’ll have to determine if a debt consolidation loan will work for you. In many cases, it may be the ticket to savings, but as you can see, it’s not always the case. If your payment terms are not great, you could pay more in interest over time. Sure, you’ll pay less on a monthly basis, and this may be what you’re after, but be aware of the overall costs you could end up facing if you go down this route.

Use A Debt Consolidation Calculator, See How To Erase Debt Faster

This is a guest post from Mr Credit Card of www.askmrcreditcard.com. If you are looking for a credit card, please check out his best credit card offers.

Image by Road Trip America.

As we approach the end of the year and probably have emptied our wallets quite a bit, I think it is time to take stock of things that we should be doing to lower our cost of living in the next year. The tips I offer will seem quite generic, but I believe that these tasks should be taken as an annual exercise. So here are 10 things that I think we should do after Christmas.

Personal Financial Planning For The Next Year: 10 Best Money Moves

1. Revisit your cable TV cost — Yes, please revisit it. Cable companies are always offering promotions as often as quarterly. But here is the catch — if you do not ask, they will not tell. If you do not have your cable, TV and internet services bundled up, then consider getting a package deal. This will often save you quite a bit of money. If you have your cable TV and internet services separate, perhaps you should explore services like Netflix as an option.

2. Revisit paid memberships — Are you a gym member? How many times have you been to your gym this year? Is it really worth paying the annual fee? Can you do 50 sit ups at a go or how about 30 proper push ups? How long can you skip on a jump rope? How fast do you run 2 miles? If you cannot accomplish any of these very basic exercises, why join the gym? Might as well do this yourself and once you work up to the required fitness level and you feel you need better equipment, then rejoin your gym.

3. Check magazine subscriptions — How many magazines do you subscribe to and how many of them do you actually read? I bet you have a lot of these magazines lying around unread! You probably say you’ll read them one day, but the truth is, it just never happens. Though magazines do not cost a lot, they do add up. And they do add to the clutter.

4. Enroll in a credit monitoring service — Yep, I suggest that you spend some money on credit report monitoring. Yes, you can get your free annual reports every year. But, (and this is a big but), credit card issuers are monitoring your credit report more closely these days. Many folks who have had great credit have unfortunately gotten their credit lines cut or their rates jacked up. Very often, the problem is due to some errors (negative errors) in their credit report. So in this present credit environment, I think it pays to enroll in a monitoring service (look into something like myFICO Score Watch), especially if you intend to take out a mortgage in a couple of years.

5. Check if you have the right credit card — Is your present credit card the right one for 2010? Maybe, or maybe not. If you carry a balance, you could perhaps get a card with a lower interest rate than your existing one. Perhaps a card with a balance transfer offer makes sense. Regardless, having the right credit card can be a money saver. If you pay in full, make sure you have a credit card that will earn you the most rewards.

6. Revisit your auto and home insurance — When I say revisit your auto and home insurance, I do not simply mean that you should check if you can get both with the same provider and save money. I’m also suggesting that you check the terms of your insurance. What does your policy cover? Very often, with things like auto insurance, the cheaper insurance comes at a cost. If you talk with a number of mechanics, they will tell you that the lowest cost providers often do not want to pay for the proper cost of repairs; you may become shortchanged, and often, you may receive inferior or second-hand parts for replacements. The terms and conditions for your home insurance can get complicated too. It is worth sitting down and getting a second opinion just to make sure you know what is covered.

7. Check for mortgage refinance opportunities — Mortgage rates hit their lows a couple of times this year. If it makes sense for you to refinance, then do it. But you probably have to sit down and work out the calculations. The point is to do it. Mortgage refinancing can save you lots of money if done at the right rate.

8. Do your taxes — Yeah, I know it’s early. But it is better to be early than late. Start doing your taxes now. Do not wait. If you are organized, it should be a breeze. But if you haven’t got a system in place, I would suggest getting a YNAB and Turbotax (if you are a DIY person). And learn them now rather than in March next year!

9. Review your investments and asset allocation — Everyone should do this but I hardly know anyone who does it. Can you answer the question “what was your investment returns net of fees in 2009?”. Well, that is the whole purpose of this exercise. As a reminder, you should plan your asset allocation for 2010. If you work with a financial advisor, then make sure you have a year end meeting. If you manage your finances and investments yourself, then spend some time doing some research and readjusting or rebalancing your asset allocation.

10. Have some idea about next year’s vacation — Do you plan to take a trip next year for your family vacation? Traveling costs are some of our biggest annual expenses. It pays to have an idea where you want to go and it’s a good idea to plan early. If you are the type who likes to earn frequent flier miles, then know that the best time to book is 11 months ahead. Knowing where you want to go also gives you time to search for great travel deals.

Hopefully, this article will give you some food for thought!

Personal Financial Planning For The Next Year: 10 Best Money Moves

The other day, I discussed the SmartyPig free savings account, which allows you to address your specific savings goals by allowing others to help contribute to your SmartyPig account. This time, I’d like to introduce a form of checking account (with debit card) that is non-interest bearing, but promises to be high on rewards. So how about receiving perks by using a debit card?

Let’s take a look at the checking account offered by Perkstreet Financial. It offers a number of perks in lieu of paying out an interest rate. If you’re someone who likes to bank online, who wishes to minimize the fees on your accounts, who uses your debit card often and who appreciates rewards and benefits as a banking customer, then maybe this checking account will fit your needs.

Perkstreet Financial Checking Account Features

Here’s what you’ll get when you open a Perkstreet checking account:

• You’ll receive a Perkstreet Financial Visa Debit Card that will give you 1% cash back, or free music or coffee. There are no limits on the rewards you receive, which you can easily redeem online.
• You’ll receive a $50 cash bonus for opening an account. This is a limited time offer (it will expire by the end of the year).
• You’ll get free checks, 24/7 live customer service, free online banking and bill pay.
• There are no account fees, no ATM fees, no minimum balance required.
• You only need $25 to open an account, which you can deposit via check or electronically.
• You can set up direct deposit and make easy online transfers between your Perkstreet checking account and external accounts.
• Your account has FDIC insurance and fraud protection, as is standard for bank accounts.

Checking Account Fees & Rewards

There are some fees you’ll need to be aware of here, such as a charge for overdraft protection ($30), a bounced check fee, a stop payment fee and a monthly inactivity fee of $4.50 per month. These are standard fees you’ll find assessed for most financial accounts, so watch out for these. On the flipside, there are the perks — if you’re a coffee or music lover, then you can get the equivalent of a cup of coffee (at $2) when you spend $200 on your debit card, or an iTune download ($1) when you spend $100. If you prefer a “cash perk”, you’re actually limited to receiving gift cards from certain merchants such as Amazon, Target and Best Buy.

So is this a good deal? It’s fine if you’re a debit card user. But you can certainly consider other alternatives to getting rewarded for your spending. For instance, I have the habit of accumulating credit card rewards and using cash back credit cards, which may offer better deals than Perkstreet’s debit card rewards. If you’ve got your credit card use under control, then consider those credit cards that offer higher rewards (3% to 5% on certain spending categories and 20% savings through online shopping) for your spending. But if you don’t trust credit cards, then you have the option of getting rewards through debit card spending via Perkstreet.

And as alternatives for your savings funds, you may also want to check into free high yield checking accounts and high interest savings accounts which are interest bearing accounts. You’d have to determine if these types of accounts are where you’d prefer to park your money.

Online Banking With Perkstreet Financial

For those curious as to how Perkstreet Financial Account Screens look like, here’s a quick look at some of them.

#1 Check your balance.

#2 Perform online bill pay.

#3 Review your transactions.

$50 Cash Bonus Details

Some details on the bonus:

1. The offer expires by the close of the year, so you’ll need to act fast.
2. Deposit at least $25 into your new account and keep your account active for 3 months.
3. You’ll receive $50 within 15 business days after the end of the 3rd month of owning your account.
4. The offer is good only for new checking accounts.

$50 Checking Account Bonus With Perkstreet Financial

I’m so glad to be able to wish you all another Christmas for the fourth time! Yes, this is our 4th Christmas online… geez, how time flies. As usual, we had our traditional family Christmas party yesterday with our extended family (this is how we normally celebrate the special annual event commemorating the birth of Christ). While yesterday was about reunion, gift giving and merry making, today is about recovery from all that fun and excitement (especially since I’ve lost my voice to laryngitis and animated talk). And as I am wont to do, I am letting a couple of furry friends pass you our holiday sentiments!

Beautiful cat photo by Tuija2005.

Merry Christmas, Happy Holidays To One and All!

Secretly, have you ever wondered whether your college education was truly worth it? I’m sure it’s something many students and their parents ruminate over. I’ve even written a few articles that cover this subject: Should You Earn A College Degree? and Should You Quit School Because You’re Brilliant? are just a couple of posts I published a while back to address some questions.

College Education Costs: Is College Worth What You Pay For It?

I believe that the value you get out of college is based on what type of classes and courses you decide to take, along with the life lessons and skills you develop while being immersed in a place of learning. Also, there are relationships you build during your stay at school that are unique to the experience — you won’t be meeting the same kind of people in an educational institution as you would elsewhere. There are also a ton of opportunities you get out of your connections and relationships that you forge in college which I find well worth the money you put into this period of your life. One of my close relatives who recently graduated from an Ivy League school actually goes so far as to say (or admit) that what you’re buying from a top notch school is the prestige and the influential friendships and connections you make with others in the same setting.

But by taking a look at this highly interesting infographic, you may find yourself a little more enlightened about the value of a college education in this country. Here are some interesting notes from the graphic:

Remember our post on employment discrimination? Well some of those facts are supported here: 6 out of 10 bachelor’s degrees are earned by a female. But get a load of the median salaries: men with a bachelor’s degree earn $50,916 while women in the same boat earn $41,000.

Here are a few more points:

• More than 2 million high school graduates enroll into college each year.
• 1 out of 3 drop out of college after the first year. This wastes $9 billion each year.
• These days, attending the most expensive college will cost you $54,410 a year or $217,640 for four years.

• Private school tuition, room and board amount to $47,500 (e.g. Yale) a year while public university is $20,000 (e.g. UC Berkeley) a year. Difference between private and public school expenses: $27,500 a year. In 4 years’ time, the discrepancy is: $110,000.
• But is the private school education worth it? If you’re basing it on initial monetary outcomes, then you may think not: the median starting salary for graduates from private colleges is $56,000 a year; while the median annual starting salary for those in public universities is $49,600. The difference here is just $6,400 per year.
• Based on the discrepancies in educational costs and starting salaries, it will take 17 years for someone who attended private school to make up the $110,000 extra that they spent on their education. That gap should close faster if they climb up the career ladder more quickly than their public school counterparts.
• Two thirds of students carry debt when they graduate.
• The average student debt is $23,200 (20% greater than it was 10 years ago).
• Average student credit card debt? $3,173.

Also telling: the graphic I have cited above also points to some cautionary facts — that students spend a lot of time on useless activities, risky behavior, even silly and wasteful endeavors.

Then there is the insinuation here that certain majors won’t do much for you (or may yield a smaller ROI), with graduates holding degrees in the Social Sciences (History or Political Science), Psychology, Communications and English often ending up in popular but lower paying careers like retail store management, customer service and administration. The suggestion here is that by opting for certain majors, you’ll doom yourself into becoming a retail store manager or clerk, customer service rep or administrative assistant. This seems like a common complaint about liberal arts majors, yet surely there are many exceptions. But is this the rule?

So care to sound off? With college costs the way they are today, do you think getting a degree is worth it?

College Education Costs: Is College Worth What You Pay For It?

What will you do for money? How far will you go? This guest post by David Bakke of Your Finances 101 brings up these questions. David also wrote the personal finance book “Don’t Be A Mule”.

Now that I have progressed to the point where I am saving in just about every area of my financial life, from time to time, I hit certain “crossroads” where I am not sure if I am crossing the line into areas that are affecting my self-worth rather than my net worth. In a sense, the question I find myself asking is “How much is too much?”

Some examples:

Surveys – I invest a certain portion of my free time into filling out surveys on the internet for compensation. In the beginning, there were probably five or six sites that I subscribed to. Once I took a hard look at it, I realized that the sites that offered next to nothing in the way of compensation were a waste of my time. Actually, not a waste of my time, but that my time could be better spent elsewhere (i.e. quality time with my wife). I have since dropped this down to two sites, and am considering going down to one site because of the reason I just mentioned.

Coupons – When I was looking for every way possible to cut my spending, I thought that a surefire way to do this would be to clip Sunday paper coupons to save on my weekly grocery bill. I reviewed every ad that came in the mail during the week, and always made a special trip out on Sundays to get the paper. Scouring through that would take an hour in itself. I did save on groceries, don’t get me wrong. However, again, when I looked at how much time I had to invest in this project compared to the amount of money it saved me on a weekly basis, I determined that my time could be better spent elsewhere (outside playing with my son).

Tipping – Since adopting a more frugal approach to life, the number of times that my family has gone out to eat has been reduced considerably. However, when we do, the thought often crosses my mind that I could save myself some money by leaving less of a tip — even if the quality of the food and service is just fine. I think I actually did this once (ie. reduce my tip). At first, I worried that I would look “cheap” in front of my friends/family. However, that was not the issue at all. The fact of the matter is that I left the restaurant that night feeling cheap. I vowed then and there that this would never happen again.

Return Policies – If you try hard enough, you can get around just about any return policy that you want to. Need to use something just a few times and don’t want to pay for it? OK, just keep the packaging in good shape, use the item for what you need it for, pack it back up and return it. Have you broken something that is outside the parameters of the return policy (i.e. past the 30/60/90 days?) No problem. Just buy a replacement, pack the broken item back up in the new item’s packaging and return this. I could go on and on with ways around return policies. The point is that it’s just not worth doing. These practices are what drive up the price of retail items for all of us. Better to gain a good relationship with a local store near you, shop at their stores often, and that way when you do have a problem, you can be honest and straight up with them and they will more than likely make an exception for you.

Net Worth vs. Self Worth: Money Isn’t Everything

I am all about saving as much money as I can, all about spending as less as I can on the things that I do buy, and also generating as much extra income as I can in my daily life. However, not too long into this whole lifestyle change, it became apparent to me that there are limits to everything and there are lines that are not worth crossing. I very quickly learned a couple of lessons:

First, that time is much more of a precious commodity to me than money is. I have a young son at home, who is only going to be two years old once; he’s only going to be three years old once, etc. My “play” time with him is far more rewarding and gratifying than any amount of money that I can save (or generate) during that same period of time.

Second, that there are a ton of things that you can do to impact your personal economy, and you can probably get away with just about all of them, but at the end of the day, the question remains: Are they worth doing? Scamming your way around return policies and all the other situations that probably come to mind that border on being unethical (and sometimes illegal) are simply not worth doing.

In the end, I guess that what I have come to realize over the recent past is that my self-worth means more to me than my net worth.

Author Bio: David Bakke is the guy behind the personal finance blog YourFinances101.com. He is a graduate of the University of South Florida, author of the recently published book “Don’t Be A Mule…”, and currently resides outside Atlanta, GA with his wife and son.

Net Worth vs Self Worth: Money Isn’t Everything

Become debt free by making a commitment. Lending Club’s DebtBuster Challenge encourages you to pay off your debt quickly plus you’ll get free gifts in the process!

In the thick of the holiday season, I am seeing myself part with my cash faster than I normally would during any other month. The festivities have a way of making us feel more generous and lighter in the wallet. I tend to find myself unable to say “no” to those seeking favors, gifts and donations during this time of the year. So who else will admit that this is the month when expenses tend to go a little haywire? It’s therefore a must to develop a holiday budget in advance, just to lessen the blow of the additional expenditures that tend to pile up during the end of the year.

But while there are those of us who have worked out a budget to address the requirements of the holidays, there will be those who will be resorting to advances against their credit lines to fund ongoing festivities. I try to remain pretty conservative about dealing with debt, but there are people who are much more comfortable with it, and may be interested to know that there are ways to borrow money at cheaper rates.

Become Debt Free Faster: Take The Lending Club DebtBuster Challenge

For those of us who have good credit and who are looking for cheaper loan alternatives, there are networks like Lending Club that can offer you better rates. Right now, Lending Club — a peer to peer lending network which we often feature on our site — is offering what is called a “DebtBuster Challenge”: they’d like to get the word out that you can reduce your debt by opting for alternative personal loans that are predictable and have fixed rates. If you’ve got healthy credit (with a credit score of at least 660) and are looking for a better deal on personal loans, then a debt consolidation loan or balance transfer can be something to consider. If you’re interested in taking the DebtBuster Challenge, here’s how to proceed:

1. Commit to paying off your debt in 3 years or less.
2. Check your current balances and interest rates on your personal loans and credit cards.
3. Check out loan alternatives that may provide you with lower rates. Lending Club is one such option: take a look at this loan interest rates page from LC — are these better than the rates you see in step 2? If so, and if you qualify as a borrower, then getting a cheaper loan should help you make a dent on your existing debt.
4. Apply to the Lending Club network through this link.
5. If you qualify for a Lending Club loan, you’ll receive an LC care package with a t-shirt, backpack and pens.

Here’s a look at the free gifts you’ll receive as an added bonus if you take out a Lending Club loan:

You can also get additional information on how to borrow money wisely by checking out our articles on the best debt consolidation loans, on personal loan interest rates at LC, on how to get a personal loan, and our Lending Club review.

While nothing beats reducing your expenses, cutting costs and living frugally, I’ve discovered that there are other debt-beating strategies out there that can also make a big difference. To minimize debt, not only should you cut down on your day to day expenses and manage to make the most out of every dollar you spend, you should also do what it takes to cut down on the costs of supporting any existing debt that you carry. I’m surprised that not more people actually do this.

This Lending Club campaign also includes other debt fighters in the personal finance blogosphere. If you’re looking for more encouragement to get started on Lending Club, you can check out what these other bloggers are saying about this challenge!

• Getoutofdebt Guy
• Consumerism Commentary
• Debt Kid
• Debt Free Adventure

Become Debt Free Faster With The Lending Club DebtBuster Challenge