Free By 50

Starting Salaries Across Several Majors at Different Universities

2012-02-14T08:01:00.000-08:00

There are several studies that show the average starting salary for a given profession or various college majors. There are also some research that shows average wages for alumni of various universities. You can find out the average wage for an engineer or a nurse and you can find out the average income for a Harvard grad or a University of Florida grad.   But I don't see any studies that give you average wages when majors and universities are combined.   I decided I'd try and put together a little bit of data in to show the average starting wages for various majors at several different universities.

There are some significant limitations to the data I have.   This is only a small sample of data. Often the surveys only have 10-20 replies so they are small sample sizes that are subject to some distortions. For example if one student happens to get a very low or very high wage then it will skew the numbers a fair amount.   I don't consider this information to be conclusive or very scientific.   I think its probably 'good enough' sample to get an idea of what the trends are but to have a real solid study you'd have to get a lot more data than I found.

I could only find information self reported by a few universities.    Many of the schools don't have survey data available, or at least not that I could find. The schools I searched for were mostly randomly selected.

I wanted to have some distribution of schools of varying quality.   I decided to try and find schools with high, middle and low rankings as ranked by the U.S. News College rankings report. I started by trying to find a few of the top 10 schools and thats why I have Stanford and University of Pennsylvania. I then randomly found some other universities. I also searched for many other universities by name that I picked randomly but couldn't find information.    I also tried to find schools from different parts of the nation. There are universities from the West coast, Midwest. Northeast and the South.

The universities that I found data for are listed below with links to their salary data:

Stanford	South Carolina
University of Pennsylvania	Kansas State
Carnegie Mellon	Pace University
University of Washington	California Polytechnic, San Luis Obispo
University Texas at Austin - engineering	Western Washington University
U.T. Communications	Wichita State
Purdue	Central Michigan
Virginia Tech

Stanford and U. Pennsylvania are both ranked #5 by U.S. News. They serve as my examples of highly rated, prestigious schools. Carnegie Mellon, University of Washington, U. Texas at Austin, Purdue and Virginia Tech are all in between the #20 and #80 position and the schools I consider to be in the "good" range. South Carolina, Kansas State and Pace University are all below #100 ranking and these schools are the "lower ranked" schools. The "unranked" schools are Wichita and Central Michigan.

Finally I've got Cal Poly and Western Washington university which are 'regional' ranked colleges rather than nationally ranked colleges. I don't know exactly how regional vs national rankings compare.

Chemical engineering, Civil engineering and Computer Science

First I looked at a couple engineering disciplines and computer science. Here's the data:

		Civil engr	Chemical engr	Comp Sci
5	Stanford			$83,294
5	U. Penn			$76,238
23	Carnegie Mellon	$51,000	$66,800	$84,832
43	U. Washington	$51,016	$57,280	$80,318
45	Texas, Austin	$57,454	$72,234
62	Purdue	$52,850	$61,299	$59,090
71	Va Tech	$50,000	$65,000	$62,000
111	S. Carolina	$49,917	$67,350
143	Kansas St	$48,985	$67,344	$60,453
170	Pace
r-7	Cal Poly	$56,000		$69,000
r-22	W. Wash. U			$55,400
n/a	Wichita			$50,133
n/a	C. Michigan

For chemical engineering and civil engineering their appears to be little correlation between the U.S. News rankings and the starting salaries. The lowest and highest civil engineering wages are $48,985 and $57,454 which is about 17% difference. The chemical engineering wages ranged from $57,280 to $72,234 which is 26% difference. Computer science majors see a much wider spread of wages and it appears to be pretty proportional to the U.S. News rankings for the university. The lowest Comp. Sci. average salaries are $50,133 and the highest is $84,832 which is 69% higher than the low. The top 50 schools for comp. sci. all averaged wages in the $76,000 to $84000 range. The lower ranked schools all had average wages of $69,000 or less.

Education, Communications, English and Psychology

Next I picked some humanities and liberal arts fields. I picked elementary education, communications, English and psychology.

		Elementary Ed	Communic	English	Psychology
5	Stanford				$46,271
5	U. Penn	$33,577	$37,021
23	Carnegie Mellon			$34,177	$46,800
43	U. Washington		$38,098	$36,600	$36,100
45	Texas, Austin		$32,500
62	Purdue	$32,775	$33,117	$30,416	$32,004
71	Va Tech		$30,000	$31,000	$32,500
111	S. Carolina	$25,321
143	Kansas St	$34,404	$27,000	$28,710	$24,840
170	Pace	$25,600	$33,000	$48,100
r-7	Cal Poly		$37,000		$27,456
r-22	W. Wash. U	$28,505	$34,110	$27,970	$23,355
n/a	Wichita	$34,164	$23,200	$27,000	$25,753
n/a	C. Michigan	$37,818	$34,930	$35,250	$30,179

Elementary school majors had little difference in wages related to the ranking of the U.S. News rankings. I am assuming that the elementary school major wages are highly dependent on local school district rates and do not relate to university. It should also be noted that some of the teachers wages for just a bachelors are likely underemployed as many states require additional schooling. In other words in some areas a teacher with just a bachelors won't get a full teacher position so wages reported at bachelor level are likely not always for full teacher positions. For English and Communications majors I don't see a significant relationship between the U.S. News rankings of the university and the salaries. Psychology major salaries seemed to correlate some to the U.S. News rankings. The top 75 ranked schools all had wages above $32,000 while the lower ranked schools were all below $31,000.

Accounting and Nursing

		Accounting	Nursing
5	Stanford
5	U. Penn		$56,665
23	Carnegie Mellon
43	U. Washington	$46,410	$58,200
45	Texas, Austin
62	Purdue	$46,522	$46,890
71	Va Tech	$49,000
111	S. Carolina	$51,286	$46,367
143	Kansas St	$44,727
170	Pace	$46,500	$62,000
r-7	Cal Poly	$52,000
r-22	W. Wash. U	$42,254
n/a	Wichita	$38,422	$41,905
n/a	C. Michigan	$45,108

The average starting salaries for accounting and nursing majors have less correlation to the U.S. News reports rankings. For both accounting and nursing the highest wages were seen in middle ranking universities. The low for Accounting was $38,422 and the high was $52,000. Nurses made $41,905 average as a low and $62,000 as the high. The variation between high and low in Accounting was 35% and the spread between nursing was 48%.

Thats a basic run down of the numbers I found. I will talk some more about the data tomorrow and give some of my own conclusions.
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What Does Bus Fare Cost?

2012-02-13T10:19:00.000-08:00

The other day I mentioned that I don't take the bus myself simply because it would take too long to get to work. But for a lot of people taking the bus or other mass transit can be a great way to save money. The cost of mass transit varies from city to city.

I found this document that lists single adult fare rates for a variety transit systems. If you skim through that you can get an idea of how prices vary. I also then looked up the websites for several cities to see how their prices for single fares and monthly passes compared.

Here is a table of some of the larger cities in the USA as well as a handful of other good size cities, the link to the transit website is in the name of the city :

	single	monthly
New York City	$2.25	$104
Los Angeles	$1.50	$75
Chicago	$2.25	$86
Houston	$1.25	n/a
Philadelphia	$2.00	$83
Phoenix	$1.75	$55
San Antonio	$1.10	$30
San Diego	$2.25	$72
Dallas	$1.75	$65
San Jose	$2.00	$70

Arlington TX	$1.50	$50
Wichita	$1.75	$90
Minneapolis	$1.75	$59

Generally the costs fall within a certain range. Typical single basic fare ride tickets are in the $1.10 to $2.25 range. The median is $1.75 and the average is $1.78. The basic fare can be for a shorter ride and mass transit programs often charge a higher fare for longer rides. I did not record the higher fare rates but they typically run closer to $3 per trip. That would be the kind of ride that takes you all the way across town in a larger city.

For a monthly pass the median is $71 and the average is $70. If you take the bus frequently like a daily commute to work then a monthly pass will easily pay for itself.

Bottom Line: The bus typically costs around $1.75 per ride and $70 for a monthly pass, give or take.

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Best of blog posts for week of February 10th

2012-02-10T17:40:00.000-08:00

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week.

Doughroller has a nice series of articles about How to Earn Extra Dough with a Home Based Business and related What a Great Home Based Business Looks Like plus 75 Ways To Make Money On The Side

Bargaineering explains Soft Credit Check vs. Hard Credit Check
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Buy Low, Sell High: The Governing Principle of Smart Real Estate Investing

2012-02-10T08:08:00.000-08:00

This is a guest post from Ryan. Ryan is a guest writer on the topics of real estate investments, homes for sale in Austin TX, and Eanes Central Homes for Sale.
More than a few investors have made money in the stock market during the recession. When stock prices hit all time lows, it’s the perfect time to invest. As soon as things start to rebound, investors make money. It can be downright frightening to invest in something during a period of economic decline. However, if you’re able to stomach taking a very big calculated risk, you can make a lot of cash. The same principles that apply to the stock market also apply to the real estate market. If you buy a house at its all time lowest price in years, you’ll likely be able to make a whole lot of money off of it once real estate prices go back up.

The tricky part about buying real estate is that it doesn’t always pay off right away. You can buy a stock, and the next day you can make a significant amount of cash off of it. It can take years for a house to go up in value enough for you to make a profit off of it. This means that if you buy a house this year, you could be waiting around for several more years, hoping to make some money off of it. This can be nerve-wracking. However, if you can deal with the stress of the unknown, you’ll most likely be setting yourself up for success.

Historically, the best time to buy a house is when house prices are way down. People who invested in houses in the late 80s when prices were at all time lows made quite a bit of money in the late 90s. Unfortunately, many real estate investors had to wait about ten years to see the kind of payback they wanted.

So, now is the time to buy a house, if you’re not risk-averse. Look for foreclosed homes with decent house plans in areas that seem promising. It’s a good idea to buy a house in an area that’s close to the major attractions in a city. Convenience is the wave of the future, as people shift their interest toward urban properties and away from suburban sprawl.

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Five Financial Ratios

2012-02-09T08:13:00.000-08:00

Financial ratios are one way to do a quick assessment of how you're doing.   The 5 ratios below can give you an easy snap shot of how you're doing.   FreeMoneyFinance discussed the five financial ratios below, three of which were from The Dough Roller.

1 ) Emergency Fund Ratio (Liquid Assets/Monthly Expenses) -- The generally accepted rule of thumb is that you need 3 to 6 months of expenses in an emergency fund.

2 ) Doomsday Fund Ratio (Financial Assets/Monthly Expenses) -- How long could you last with no income at all?

3 ) Net Worth Ratio (Net Worth / (yearly income * age / 10)) -- You want this ratio to be 1 or higher.

4) Net Worth / (gross income earned since working )

5) Retirement Fund Ratio (Retirement Savings / Yearly Income) -- The goal is to retire with at least 12 times your annual income.

Here is how I come out on those 5 ratios:

1) Emergency fund = liquid assets / monthly expenses = 30 months
2) Doomsday fund = total assets / monthly expenses = 10.5 years
3) Net worth ratio = net worth / income * age/10 = 1.2
4) net worth / gross total income = 0.55
5) Retirement fund ratio = retirement savings / yearly income = 1.65

I come out pretty well on the first four.   For the first two I used our normal spending. However we could easily cut our spending if we paid off our home mortgage and cut back on some discretionary spending. If we paid off our home mortgage using liquid assets then the doomsday fund would come out to over 12 years.

We look pretty bad in the last ratio because a lot of our assets are not in traditional retirement savings. I only used our 401k & IRA account balances for that.   However I consider our real estate to be retirement investments as well.   We have a much higher % of our assets in real estate investments. If I added those then I'd have a higher ratio there.

Personally I'm mostly focused on the #1 and #2 ratios.   I want a high amount of liquid savings / emergency fund so we can ride out any potential disasters.    I'd also like to have that 'doomsday' fund high enough to last decades. I look at that as another measure of whether or not I'm ready to be truly financially independent.

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Why I Do NOT Ride the Bus to Work

2012-02-08T15:44:00.000-08:00

TheSimpleDollar recently ran an article about the cost savings of using public transit. This is a pretty common money saving tip and it often makes a lot of sense.   A transit pass can usually cost less than the insurance on your car.   If you consider the total cost of car ownership then public transit usually wins hands down. My wife and I spend at least $200 a month on gas and insurance alone and that would buy us monthly all access transit passes. So its an easy financial argument that taking the bus is cheaper.   But I don't ride the bus.

The key reason I don't ride the bus is this :   It takes too long.

Bus ride : It would take me 47 minutes including a 1/4 mile walk to get to work in the morning.

Drive my car : I live 2.5 miles from work and it takes me 6 minutes to drive.

Taking the bus to work would cost me 82 extra minutes per day.

My wife and I have three cars.   We each have cars we drive daily and I own a classic car that sits in the garage most of the time but I drive once in a while for fun.   We could cut back to 2 cars and sell my daily driver.   I could then theoretically take the bus every day to work.   I figure I would save something around $3000 a year if I got rid of the car. That figures the cost of extra gas to drive to work only and the cost of insurance and replacement costs. A bus pass would run me around $100 per month. So In total I'd save just $1800 if I got rid of my car and took the bus.   However I'd spend about 300 hours extra commuting to work.   Thats about a cost of $6 per hour. This isn't great nor awful amount. Its close to minimum wage roughly (after tax).   Financially it makes marginal sense based on the extra time used. If I was broke and needed the $1800 a year a lot more then it would make more sense.   But for me an extra 82 minutes per workday is not worth the cost savings.

This is not meant to be a criticism of the mass transit service around here. We actually have very good transit in our metro area.    I live in the suburbs and our bus service is not bad. It is just that the routes don't happen to coincide with the path between my home and my place of work all that well.    If I happened to work in the center of town then I might take the train to work.   In that situation I'd just take a short 10 minute walk to the train stop from my house and then the train would take me straight into town without any fuss.   The route into town center has really bad traffic during rush hour so the train would likely save me time overall.

I could move closer to work and simply walk to work.   That would however cost a lot of money to sell our home and buy a new home.   It is something I might have considered 14 years ago when I bought my home, but I don't think its a feasible choice right now.   Not to mention I'm pretty sure my wife would veto the idea.

Bottom line : I don't take the bus because it takes too long.
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NFL Ticket Prices

2012-02-07T08:14:00.000-08:00

Before the Super Bowl, Barbara Friedberg posted a topical question : FOOTBALL TICKETS; ARE THEY AFFORDABLE?   She happened to look at NY Giants season tickets.    I thought it would be interesting to look at the cost of tickets across the NFL.

I got data from the following sources and the numbers are a mix of 2010 and 2011 figures.
A USAToday article gave the 2010 ticket prices for each time including the range of retail prices for tickets.
I found average ticket resale prices at SeatGeek
I got the attendance % figures for 2011 season off the ESPN website.

Here is a table of all the teams with the minimum and maximum retail ticket prices and the average resale price on the secondary market. I also list the attendance % for the stadium in question.   100% attendance means the stadium sells out and I'm assuming >100% is due to some sort of flexible seating or something.

NFL Ticket Prices by Team :

	Min	Max	Resale	attendance
Arizona Cardinals	$25	$112.50	$104.80	96.5%
Atlanta Falcons	$55	$125	$115.47	96.8%
Baltimore Ravens	$55	$135	$131.41	100.3%
Buffalo Bills	$40	$80	$50.02	85.8%
Carolina Panthers	$32	$97	$28.20	98.0%
Chicago Bears	$68	$125	$178.51	101.0%
Cincinnati Bengals	$60	$85	$42.31	75.2%
Cleveland Browns	$32	$85	$106.06	90.0%
Dallas Cowboys	$75	$239	$179.49	106.9%
Denver Broncos	$45	$125	$66.18	99.0%
Detroit Lions	$30	$140	$66.05	98.8%
Green Bay Packers	$67	$83	$221.81	96.7%
Houston Texans	$30	$120	$58.29	100.6%
Indianapolis Colts	$38	$126	$162.55	102.9%
Jacksonville Jaguars	$30	$98	$92.74	92.8%
Kansas City Chiefs	$30	$145	$68.14	93.9%
Miami Dolphins	$34	$120	$49.25	81.0%
Minnesota Vikings	$15	$145	$46.38	98.0%
New England Patriots	$65	$169	$160.92	100.0%
New Orleans Saints	$25	$190	$221.13	100.1%
New York Giants	$85	$160	$332.82	96.3%
New York Jets,	$95	$150	$96.93	95.7%
Oakland Raiders	$26	$151	$108.89	94.0%
Philadelphia Eagles	$70	$95	$151.66	102.3%
Pittsburgh Steelers	$64	$98	$143.70	97.0%
San Diego Chargers	$54	$98	$121.02	91.7%
San Francisco 49ers	$29	$149	$27.99	99.3%
Seattle Seahawks	$52	$110	$128.57	99.1%
St. Louis Rams	$25	$140	$151.81	86.3%
Tampa Bay Buccaneers	$25	$115	$80.10	86.2%
Tennessee Titans	$45	$85	$34.78	100.0%
Washington Redskins	$29	$99	$93.60	83.9%

As you can see theres a pretty wide range in prices from team to team.

The cheapest retail tickets are $15 to see the Vikings play. The most expensive retail prices are $239 at Dallas.   On the resale market the cheapest average is just $27.99 for the 49'ers and the most is $332.82 for the Giants.

I'm sure there are tons of reasons that tickets can vary so much from team to team.    The performance of the team matters of course. If a team plays well then more people will want to see the games and prices can be higher.   The fan base size can impact the ticket prices as well.   Its easier to sell tickets and charge more in larger cities with a lot of football fans creating higher demand.   Philosophy of the team ownership can matter as well. I'm assuming some teams are purposefully keeping their 'cheap seats' lower cost so they can ensure that there are tickets available for a reasonable price. The design of the stadium itself would impact all the ticket prices too.   Some stadiums may have minimum prices that are very cheap but maybe those seats are 'obstructed view' that virtually nobody really wants.

Resale prices vary a lot as well.   They aren't directly proportional to the retail prices.   Resale prices can be a lot higher if theres high demand and if tickets sell out easily.   I am also guessing that the state laws regulating resale of sporting tickets could cause the price of tickets for some teams to be restrained. I figure that the attendance % could also impact the ticket prices. If a stadium sells out every game then its probably harder to get tickets and this could increase the average resale prices.   But if the stadium doesn't fill up then you'd assume its easier to get tickets directly and resale values would not get inflated.

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Best of blog posts for week of February 3rd

2012-02-03T17:50:00.000-08:00

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week.

FreeMoneyFinance is doing his annual personal finance blog competition : FMF March Money Madness Brackets Set I have another entry in this year, and hopefully I can get out of the first round for once! ;)

FMF also talks about how you could Earn Extra Money as a Pet Sitter

DoughRoller discusses the question How Much Should You Borrow For College?
a topic that I talked about myself a while ago

fivecentnickel explains Income-Based Repayment Plans for Student Loans
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The cost of uninsured drivers

2012-02-03T08:04:00.000-08:00

This is a guest post written by Rob Powell from Confused.com, the UK’s first car insurance price comparison website.

According to studies done in 2011 a staggering 1 in 7 Americans drive uninsured, and it’s getting worse! According to the National Association of Insurance Commissioners (NAIC) the uncertain economic climate means some aren’t just getting smaller cars and trying to drive less – some are not bothering to buy insurance either in order to save a few more dollars.

Car insurance is one of those few commodities that has to be bought by law (unless you live in New Hampshire) if you own and drive a car as it’s there to help cover the costs of an accident, which can run in to thousands of dollars, if not more!

Uninsured drivers also cost those that buy insurance. The NAIC estimates that uninsured drivers cost $10.8billion dollars, based on 2007 data. You can see how much it costs you in the “uninsured motorist coverage” section of your premium notice. In the UK, another car-loving nation, there is an estimated 38million drivers, 1.4million of whom it’s thought are driving uninsured, adding around £30 to each insurance policy – roughly £500million a year.

A figure of 1 in 7 drivers is the average across all states, so how does that break down? Mississippi is the worst offender with over a quarter of drivers’ uninsured (28%) according to the NAIC, with Maine in a close second place. Other states with a high rate of uninsured drivers are New Mexico with 26%, and Tennessee, Oklahoma and Florida all at 24%.

At the other end of the scale we have Massachusetts with an estimated 4% of drivers being uninsured, roughly the same amount as the UK. Why the discrepancy? One possible difference is that in Massachusetts a driver must show proof of insurance before he is able to register a vehicle. Plenty of other states do not do this, only stating that insurance is required.Maybe requiring proof is the way to go?

The problem of uninsured drivers is further compounded by the fact that plenty of people who decide to not bother with it tend to be high risk drivers who could very well end up being in an accident. People who have had a previous motoring conviction usually have high premiums and often end up in accidents again.
Of course, not all uninsured drivers are purposefully dodging car insurance to try and save money – there are plenty of people who are driving assuming they are covered by an insurance policy but are not due to either inaccurate information being on the paperwork or mistaken assumptions. In the UK, for example, plenty of drivers assume they are allowed to drive other people’s cars with third party, fire and theft cover without being named on any policy except their one for their car. While insurance policies used to have such a clause it has not been standard for many years, and even when it was there were specific criteria that were covered (typically related to moving a vehicle in an emergency).

Many drivers have been caught out this way, and the same could be said for the estimated 14% of American drivers that are lacking insurance: Hopefully many have tried; it’s just that some have failed.

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Don't Let 'Tacky' Run Your Life

2012-02-02T08:29:00.000-08:00

The article Let Go of the Spatula: Reconsidering Wedding Registries on Get Rich Slowly recently discussed wedding registries.   I bring up the article only because there were several comments from readers that used the word 'tacky' to describe what they thought of registries or other ways of wedding gift giving.    These people objected to the registry or other things about weddings and labeled it 'tacky'.

Tacky is basically just a way to say you find someone elses behavior to be objectionable.    If I look up tacky in the dictionary it says it is 'not tasteful or fashionable'.   It also gives alternate definitions using words like : crass; cheaply vulgar; tasteless; crude.    Generally using the word 'tacky' is just a way to say you dislike something based on your opinion on how things should be.

When people are talking about manners and etiquette then 'tacky' gets used to disapprove of what is 'wrong' or 'not acceptable'.   If someone quotes Miss Manners as saying that it is 'tacky' to do something then this is cited as some sort of authoritative and official stamp of disapproval.   Its basically like saying "no that doesn't follow the rules of our society and is not acceptable behavior". We aren't allowed to be 'tacky' when it comes to the rules of etiquette.   You of course don't want your wedding to be 'tacky' right?   That would be abhorrent to modern society.

Why should we let rules of etiquette dictate our behavior to this degree?    Other peoples views about my behavior are really only their opinion.    I'm not hurting them in any way so they shouldn't have a problem with how I conduct my life.

Think of it this way lets compare two scenarios :

1) Lets say that you were organizing your wedding and you decided you would prefer everyone to bring their own food and make it a 'pot luck' instead of hiring catering.   Then disapproving Aunt Betty let it be known through the family gossip grape vine that this clearly 'tacky' thing to do.   Would you go ahead with your pot luck idea or reconsider it?

2) You are sitting in your house watching TV and wearing sweat pants.    Aunt Betty comes to visit and she is wearing a $500 designer outfit.   Betty declares that your sweat pants are 'tacky' and you should dress appropriately like she does.   Would you start wearing $500 designer outfits to lounge around your home and watch TV?

We're probably more likely to put more weight on Aunt Betty's opinions about our own wedding in scenario #1 and feel more embarrassed by our tacky pot luck idea.   But is it really much different than Aunt Betty's opinions about how we should dress when we watch TV in our own home?

In both cases Betty is really just voicing her own opinion about how she thinks things should be done. Betty is not the elected representative of the world view every topic. Its tacky because Betty says she thinks it is tacky.

Now clearly most of the people have strong opinions on the 'right' way that a traditional wedding should be done.   If you did poll everyone then you might find the majority of people do agree that a pot luck wedding is 'tacky'.   People are much more likely to follow the societal norm when talking about a traditional activity. Thats a lot of what tradition is about:   Doing something the same way every time.   You can't have a tradition if everyone does it completely differently every year. This I think adds weight to someone elses use of the word 'tacky' to describe your ideas about a traditional activity.   Hearing its 'tacky' means we're doing it 'wrong' and we don't want to do the tradition 'wrong'.

When you add 'tacky' to 'tradition' it can cause people to do things and act in a way they wouldn't otherwise.   I don't care if Aunt Betty likes how I dress but I may listen to her opinion on how to hold my wedding.   Thats simply because its a tradition.

You don't have to follow tradition unless you want to.   I don't have to put up a Christmas tree and I don't have to buy flowers on St. Valentines day.   Those are traditions but its OK if I don't do those things. If someone else thinks my plastic Christmas tree is 'tacky' or they think my Valentines day balloon bouquet is 'tacky' then that is simply their opinion.   I didn't ask for their opinion and I frankly don't care.    On the other hand of course if you value tradition and want to do things the traditional way then thats perfectly fine too.

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Do You NEED Umbrella Insurance?

2012-02-01T07:34:00.000-08:00

An umbrella insurance policy is a form of insurance that provides general liability insurance coverage. The coverage for umbrella insurance is typically for $1 million or more. Americans seem to be in borderline paranoid fear about lawsuits. I think we watch too many television shows that revolve around lawyers. The reality is that million dollar lawsuits are actually very rare. However a large lawsuit is a risk, albeit a small one, so protecting against such a lawsuit with insurance can be a smart move at least in some circumstances.

What does it cost?

The cost of an umbrella policy can typically run $100-$200 for the first $1 million in coverage.   But keep in mind that this amount is often on top of other forms of insurance.   When my wife got a quote for umbrella insurance they required that we had maximum liability on our home and auto policies first.   If you aren't already covered with maximum liability on your home and / or auto policies then you may need to pay more to get that liability coverage first.

Who should buy it?

My opinion is that umbrella insurance is not necessary unless you have significant assets to protect.   An unfortunate number of Americans have little assets or are technically insolvent.   Those people do not need to bother with umbrella insurance.   If you have nothing to sue for then buying a big fat insurance policy is not really necessary.

On the other hand if you have any significant assets then an umbrella policy can be a very good idea. It doesn't hurt to have umbrella insurance coverage.   The worst thing that can happen is you spend money on a policy you will never need.

People with higher liability have a higher need for umbrella policies.   If you own a business or otherwise expose yourself to higher liability then an umbrella policy can make more sense.   Individuals with lower liability should worry less.

A Lower Priority Insurance
One caveat is that I certainly think that there are other forms of insurance you should obtain first as a higher priority than umbrella coverage.

Higher priority insurance includes :   health insurance, life insurance, short and long term disability insurance, long term care insurance

If you don't have those then you need to get them first. If you have to make a choice between where you spend your money then umbrella insurance should be a lower priority.

I think most people do not "need" umbrella insurance.   However it doesn't hurt to get it.   If you have a large amount of assets or specific liabilities then it can be a smart investment.

I have to admit that I do not have an umbrella policy myself. My wife and I shopped for it and discussed it but we decided that higher liability on our home and auto are sufficient in our opinion.

Image by Molly DG

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Lack of Articles

2012-01-31T11:37:00.000-08:00

I haven't posted anything for a couple days now. Just wanted to explain that I've been a bit busy in my personal and work life so I simply haven't had time to put up anything new. I usually post something on most days excluding Saturday. I'll continue to resume normal posting when I've got some time to write something.

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Best of blog posts for week of January 27th

2012-01-27T17:22:00.000-08:00

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week.

DQYDJ talks about Zodiac Signs and Gambler’s Fallacy

ConsumerismCommentary recommends that you Buy Airfare Six Weeks in Advance

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A 3-Step Plan to Reduce Your Food Budget

2012-01-27T07:55:00.000-08:00

This is a guestpost from Mindy Laughton. Mindy is a journalism student attending Saint Louis University. Upon graduation she hopes to travel the world while producing great content for a variety of publications.

When it comes to clothing, travel, or entertainment, my tastes range from being moderately cheap to extremely frugal. I simply don’t like spending money on things that aren’t hugely important to me, and I’ve never ascribed much significance to material items.

Food, however, is a completely different matter altogether. While I many hesitate to whip out my credit card for even the most necessary of other purchases, I probably wouldn’t blink before taking out cash advances or online loans in anticipation of an extremely lavish, overpriced, and thoroughly unnecessary dinner. Simply put, I like good, high-quality food. It is probably not surprising that my tastes run far on the expensive side.
While this taste translates into countless delicious meals, it has also taken a substantial and not-unexpected bite out of my monthly budget. The United States Department of Agriculture estimates that a moderate food budget for someone in my age group should run around $290 per month. Needless to say, I far exceed that number. And I want to change that.

Here is my 3-step plan for reducing my food costs:

1. Limit my restaurant visits. If you spend on food the same way I do, the goal of completely eliminating restaurant meals is one that would almost surely never be realized. Consequently, I am setting a more realistic goal: I can only eat out on one predetermined day per week. Furthermore, I can only spend a certain amount on such meals per month.

2. Start buying cheaper products. At this step, I will change my grocery shopping experience by replacing name brand items with generic store labels. I’ll purchase my non-perishable items less often and in bulk quantities, thereby reducing my per-units costs. I’ll also stop buying more extravagant products (smoked salmon, bottled water, expensive cheese, etc) in favor of products that have a high nutritional value relative to price (beans, rice, lentils, etc).

3. Plan my meals. Once I’ve kicked the bucket on frequent restaurant trips and started to spend less at the store, my final step involves planning out all my meals for several weeks at a time, before I even go shopping. This will insure the continuation of steps 1 and 2. Also, by insuring that I buy only what I know I will need for an upcoming meal, this plan will maximize my grocery efficiencies and eliminate all unneeded purchases.
Hopefully, I can succeed in following this plan faithfully and reducing my food costs. The ultimate goal is to decrease my monthly expenses by at least $50, thereby making my food budget more akin to a low-cost plan in the Department of Agriculture guidelines. Hopefully, with a little commitment and hard work, I will make it to that point.

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