Archive for August 2014

Are You Prepared for a Financial Disaster?

August 27, 2014 Asset Protection, Lifestyle 16 comments
Financial Disaster

Financial DisasterThe following post is a contribution from my blogging friend over Financial Debauchery, a money blog that focuses on comprehensive financial planning and strategies for a brighter future. If you would like to contribute to Wise Dollar, please contact us.

You wouldn?t jump out of an airplane without a parachute. You probably also wouldn?t drive down the expressway without your seat belt.

Yet, every day, millions of people do exactly the opposite when it comes to how they handle their money. They go about their day completely wide open to any financial disaster that could overtake them at any given time.

Some claim they don?t have the time to worry about it. Some just simply don?t care. Others just don?t know where to look or how to get started.

In this post we?re going to highlight some of the larger areas of financial protection you should definitely cover so that you?re prepared for the worst of disasters.

Income for the Family After You?re Gone

What if the worst happened? What if there was suddenly no one around to help support or take care of the family?

One thing that many people are completely unprepared for (or even unaware of) is the protection of having life insurance. If you were to die tomorrow, your loved ones would be faced with a major financial burden. They?d first have to figure out how to pay for all your funeral expenses. Then they?d have to cope with the loss of your income. And believe me ? Social Security and your employer?s life insurance policy are not going to cut it.

One of the cheapest and best things you can do is to get a term life insurance policy that is 10-12 times your annual income. If you have any questions about whether or not you?d qualify for one, don?t worry. Some providers even offer guaranteed term life insurance policies that will protect you no matter what. By getting yourself some kind of policy, you will be ensuring your loved ones that if a tragedy should happen you?ll be all set for at least a decade or better.

What If You Could No Longer Work?

Death isn?t the only thing that can become a huge financial disaster. There are many people who get hurt and become temporarily disabled for some period of time. When that happens, usually you can?t work anymore. And that means no income.

To protect your family from this, check into a good disability insurance policy. Though they are generally more costly than what you would expect from a life insurance policy, you can shop around to find some decent prices. Plus they can be well worth the money should you ever need to redeem one.

What About a Financial Disaster Now?

There are a lot of things that may not be tragedies but they can certainly drain your finances faster than you can blink. In 2013 I had more than $6,000 in random car repairs to pay for. That?s outrageous!

Unfortunately it doesn?t end there. Basements flood, roofs need repairs, medical emergencies pop up, and we occasionally lose our jobs!

To protect ourselves and keep your finances from going into high-interest debt, it?s recommended that you have at least 3-6 months of your normal income set aside in emergency funds. That will give you the money you need to take care of whatever you have to for at least a few months until you can find a new job and temporarily relieve the pain until we can get back on our feet.

Planning Ahead for the Future

Though most of us know that you should be saving for retirement, not many people really understand that this is a form of financial protection as just as important as any of the other points above.

Saving for retirement protects us by providing income at an age when we are no longer able to earn it ourselves. During your working years you save a little bit every month by putting it into an investment account where it grows tax-deferred. That?s a huge advantage over stuffing the money under your mattress because it allows your nest egg to grow faster than inflation and much, much larger since you?re not paying taxes until you need the money for retirement.

The good news: Saving doesn?t have to be complicated. In fact even following the simplest recommended retirement directions from personal finance advisors could still lead you to savings up and over one million dollars.

A good rule of thumb for saving for retirement is to build up your nest egg approximately 20-25 times bigger than your current income. That will ensure that you can withdraw around 4% from the fund every year for the next 30 years with an extremely low likelihood that you will run out of money.

It All Starts With You

Remember that no one is looking out for your family except you. Not the government, not your work, not your friends. It?s all up to you. Make it a priority to take as much time as you need to look into each of these areas and do what you need to make sure you are protected against the next financial disaster.

 

What are you doing to prepare for a possible financial disaster? What is one thing you think we too commonly overlook when it comes to being financially prepared?

 

 

Photo courtesy of:?JSellger2

 

 

 

How to Freeze Garden Vegetables

August 25, 2014 Lifestyle 7 comments
freeze garden vegetables

4663933277_84c3f2b545_zWhen we first started gardening years ago, I was terrified of learning how to freeze garden vegetables. I can’t tell you exactly why, but once I learned, I realized that freezing garden vegetables is really quite simple. Harvest time is here in many parts of the country, so I figure now’s the perfect time to talk about the ease of learning to freeze garden vegetables.

How to Freeze Garden Vegetables

1. Determine what you will freeze.? Some vegetables are great for freezing, some aren’t.? We’ve successfully frozen carrots, green peppers, onions, green beans and peas. Tomatoes can also be frozen, and zucchini freezes well if you shred it first and skip the blanching process, using them for soups or zucchini breads.? Potatoes reportedly freeze well, but I’ve not tried this personally.

2.? Learn what’s involved with the blanching process.? Just the words “blanch your vegetables” used to send panic through my bones, but really, it’s quite simple. [easyazon_link asin=”0470906022″ locale=”US” new_window=”default” nofollow=”default” tag=”wisedollar-20″ add_to_cart=”yes” cloaking=”default” localization=”default” popups=”yes”]Any quality basic cookbook[/easyazon_link]?will have instructions on freezing vegetables, and along with freezing most vegetables comings blanching them. Blanching vegetables is a simple process of placing your raw veggies in boiling water for a few minutes, followed by placing them in ice water for the same amount of time. With green beans, for instance, you’ll place them in boiling water for three minutes, then transfer them to ice water for three more minutes. A pot with an immersible metal basket works best for this process, but we simply drain the pot with the vegetable after the three minutes and dump them into the ice water.? No need to get fancy if you don’t want to.

3.? Determine how you will store your vegetables.? We have a [easyazon_link asin=”B0044XDA3S” locale=”US” new_window=”default” nofollow=”default” tag=”wisedollar-20″ add_to_cart=”yes” cloaking=”default” localization=”default” popups=”yes”]Food Saver Vacuum System[/easyazon_link].? The heavy duty freezer bags are vacuum-packed and then sealed by our Food Saver, making the process simple for us and extending storage time in our deep freezer. A deep freezer or zero-degree freezer is best for long-term storage of frozen vegetables, helping them last up to a year. It was July when we finished our last package of frozen green beans from last gardening season and they still tasted fresh and delicious.

4.? Wash Your Veggies Thoroughly.? No need to use a vegetable soap if you haven’t added pesticides to your garden – just give them a good, hard rinse.

5.? Trim ends and chop where needed.? Determine what uses you’ll use your vegetables for and chop to the appropriate size. For instance, we chopped our carrots into thin slices so they’d be ready to use for soups and stews.

6.? Blanch as instructed.? Your basic cookbook should have blanching times and freezing instructions for vegetables.? If not, get another cookbook.

7.? Pat the veggies dry.? Using a clean kitchen towel, get as much moisture out of the vegetables as possible by patting them dry. They’ll seal better this way and you also reduce your chances of freezer burn.

8.? Place them in a freezer bag, remove as much air as possible, then seal tightly.? This is where an item like a Food Saver Vacuum System comes in really handy. It does the grunt work of eliminating air from the freezer bag and sealing the bag shut for you. If you don’t have some type of vacuum system, place your veggies in a freezer bag that is appropriate in size for the amount of veggies you’re freezing (leave as little extra space as possible) and seal tight.

9.? Place sealed bag in your freezer as soon as possible.?Pretty self-explanatory I think. 🙂

10.? Enjoy at your leisure! ?

If you’re willing to learn how to freeze your garden vegetables, you can get the most out of your home garden and save tons of money in the process. What’s more, you can’t beat the taste of home grown vegetables.

 

Have you ever frozen your garden vegetables before? What questions do you have about freezing garden vegetables?

 

 

Photo courtesy of:?Coanri/Rita

Is It Too Early to Start Christmas Shopping?

August 20, 2014 Shopping 21 comments
Christmas shopping

Christmas shoppingWhether we like it or not, Christmas will be here all too soon. Christmas is one of the most enjoyable times of the year, but it can also be one of the most expensive. If you?re like us, you have a large extended family and the costs can easily add up. We have found a number of ways to try and whittle down our costs ? like not exchanging with all of the kids. However, there is often other cost cutting measures we like to take in order to save money on Christmas shopping.

With that in mind, there is the usual question of whether it?s better to buy most of your gifts in advance to get the best deals and spread out the cost? Or should you just save money throughout the year and wait until the last minute to buy presents? While there may be no one right answer, there are arguments to be made on both sides of the issue.

The Case for Doing Your Christmas Shopping Early

One of the major benefits to doing your Christmas shopping well in advance of the holiday is that it can be a good way to spread out the expense. If you pick up one or two a month as the year goes along, you won?t be overwhelmed by it when December rolls around. If you live your life on a specific budget that accounts for where all of your income goes, spending smaller amounts a little bit at a time may be more feasible than laying out all the money at once. That said, how we handle this expense is by putting aside money throughout the year so if we feel the need to spend money early in the year we have it there to access.

The other major benefit to starting your Christmas shopping early is that you will have more time to shop for good deals. If you put shopping off to the last minute, you might just settle for buying the items wherever you can find them and not paying attention to what they cost.

When time is on your side, you can shop around and make sure you aren?t paying too much for a gift. This can also make the whole experience less stressful, which is a huge win in my book as I hate shopping. By taking the rush out of Christmas you can relax and enjoy the holidays without being stressed over finding all of your gifts in time.

The Case for Waiting

Generally speaking, I don?t like to spend money when I don?t have to. If you?re like me at all, then it pains you to spend when there is no huge and pressing need. I?d much rather hold on to that money in the event something else came up. That?s also not to mention the fact that when the holiday is so far away it can be difficult to rationalize buying something so far off.

There is another element to waiting to do Christmas shopping that can be wise as well as many stores have sales in the days leading up to holiday to try and attract your business. It is not as competitive in the summer months, for some businesses, so you might not find great sales that you can take advantage of. When you shop in the last two weeks before Christmas, you might be able to track down stores that are offering nice discounts, allowing you to get the gifts you have your eye on for less than expected. With that being said though, I?m more prone to getting our Christmas shopping done as early as possible so I don?t have to deal with the crowds come Black Friday or later.

Ultimately, I believe it?s a personal decision as to when you start Christmas shopping. You need to think about what works best for you, your schedule and budget and plan accordingly. As for my family and I though, we?ll be enjoying the days leading up to the holiday at home away from the crowds.

 

When do you typically start Christmas shopping? Is your holiday shopping done yet? Do you hate dealing with the crowds during the holiday season as much as I do?

 

 

Photo courtesy of: Roberto Verzo

How Long Would Your Ideal Work Week Be?

August 18, 2014 Lifestyle 17 comments
Ideal work week

Ideal work weekWe all have different ideas of what the ideal work week looks like. For some it means clocking in for a couple of days per week while playing the rest of the time. For others, it?s a more traditional 9-5, 40 hour work week. A big part of that is going to depend on what our particular needs may be from a financial standpoint. You may want to only work four days per week, but your budget may dictate otherwise.

Anyway, Carlos Slim (the Mexican telecommunications magnet who is also the second wealthiest person in the world) made headlines a few weeks ago when he called for a move to a three day work week. From what I could tell, he didn?t have set hours but simply advocated moving to a three day work week. His argument for the change is to give people more time to themselves while also working longer. He argues that it would improve our livelihood and wouldn?t mind not retiring until 73 or 75. His statements have caused quite a conversation as to what the ideal work week should be so I thought I?d add my $.02. 🙂

We Live in A Changing Culture

I know this isn?t really a shocker to many, but we?re in a changing culture. No longer are many working 30+ years for one company and retiring with a fat and healthy pension. I don?t know if that?s good or not, but it is changing. A number of things have come about over the past few years as a result, such as:

  • More people are working for themselves
  • More are working multiple jobs in order to make ends meet
  • Fewer people are working the standard 9-5 schedule

I?m sure there may be other changes at play, but these are the main ones I can think of. In light of that, I believe that Slim could be on to something with his argument for change. While I may not like the idea of not retiring until 75, I also don?t want to work myself into the ground so I can retire a few years earlier. I?d much rather have a more enjoyable life and leave open the possibility of working later in life if I choose to.

He Could Have An Underlying Motive

Some have argued that Slim?s suggestion of moving to this more laid back work week is selfish at best. For those who don?t know, Slim owns the largest telecommunications company (Telmex) in Mexico. He would stand to benefit from individuals having more free time as they would be more likely to use the services his company offers. He even said that it would give people more time to entertain themselves.

I understand why opponents would think that he?s not being completely altruistic in his suggestion, but I don?t believe that should negate it. According to the Huffington Post article I cited above, Slim regularly allows employees to retire prior to 50 if they wish and also allows for older individuals to worker considerably shorter weeks if they wish. While he would likely benefit from shorter work weeks I believe his train of thought is one that we should look at.

We Work Ourselves Too Hard

I believe the reason why so many, especially here in the States, have issue with Slim?s suggestion is we seem to get some sort of perverse pride in working ourselves to death. I would consider myself a hard worker and will go above and beyond in order to get a job done, but at what point should we stop and ask ourselves if we?re working ourselves too hard? This tendency to overwork ourselves is the underlying problem in my opinion.

Consider this. As I was doing research for this article I read that, according to the Center for Economic and Policy Research (CEPR), the U.S. is the only industrialized nation in the world that does not offer at least one legally required paid vacation day or holiday.

How does that fare in relation to other countries? Quite pitiful to be honest as most countries in the European Union require at least four weeks of paid vacation. That?s just nuts in my opinion. While many workers in Europe are averaging around 35 or so paid days off each year, their counterparts here in the States are averaging 16 paid days off for private sector employees. The bad news doesn?t stop there as 25% of American workers don?t even have one paid day off each year. That is sad, putting it lightly.

I believe it?s somewhat obvious that we have much to learn from Slim. Maybe it doesn?t mean moving to something like a three day work week but we do need to see change. Personally speaking, I know that?s a big part of why I left the corporate world to run my own business. I want to have more control over my time. I want to be able to take time off without having to clear it with various people first. I don?t want to have to watch over my few paid days off with fear that my family and I won?t be able to enjoy doing things together. While I love working more to make more money, it?s not worth sacrificing time with my family.

 

What do you think about Carlos Slim?s suggestion to move to a three day work week? What does your ideal work week look like? Why do you think we overwork ourselves here in the States?

 

 

Photo courtesy of: kroszk

How to Build Credit From Nothing

August 13, 2014 Credit 18 comments
Build credit from nothing

Build credit from nothingAre you currently trying to build credit from nothing, but don?t know how? I have had a number of friends that thought they were doing the wise thing because they never fell into the temptation of getting a credit card and therefore never got into any debt. However, when the time came for them to buy a house, they ran into major issues because they didn?t have any credit history.

I urge you not to be like my friends. While it may be difficult to build credit from nothing, it most certainly is possible to do. After all, it?s something we all have to do at some point in our lives as so many institutions care about our credit scores.

Start Building Credit With a Credit Card

I know it might seem counterintuitive to many, but building credit from scratch generally requires getting a credit card. When you choose to get the card will depend entirely on your given situation and circumstances. You can start as simple as getting a student credit card where your parent is also on the account or getting your own card while in college. Again this is going to depend on what your given situation is.

Thankfully credit card companies aren?t allowed to target college students illicitly any longer, but college or very soon after is likely when you would generally start thinking of building your credit – if you’ve not done so already. Generally speaking, you?d want to make sure you have a job and use the card sparingly while paying it off each month. By following this pattern, you?ll show the card companies that you?re somewhat trustworthy and allow you to start to build credit.

What if You Can?t Get a Credit Card?

For whatever reason, some people just can?t get approved for a credit card. If this is your struggle, then the last resort option is a secured credit card. There is usually some sort of fee for this sort of card, but if you are having trouble building your credit, then this could be your only option and the fee is likely worth the cost in the long run.

Simply search for a secured MasterCard or Visa through their sites and pick the one that suits you best. You can then preload money onto this card and use it as you would a regular credit card. The limit on a secured credit card is usually the amount that you preload onto the card, though it can vary on occasion. Start with a manageable amount and use the credit card wisely while also handling it responsibly. After some time this should be able to allow you to start building credit at which point you can get an unsecured credit card and stop using the secured one.

Pay Your Bills

Some people have trouble building credit from nothing because they were not responsible for any bills while they were living at home. Either that, or you just reimbursed your mom and dad for bills that were yours, but came in under their name. One of the classic examples of this is your cell phone?bill.

If you are interested in building credit, then it is in your best interest to get that bill put into your name. By paying this bill on time each month, you will be boosting your credit score and establishing a reputable credit history

Pay Your Bills On Time!

Your credit score is made up of a number of factors, but the key factor is your payment history. In fact, it makes up 35% of your credit score and thus very important if you?re looking to build credit from scratch. The last thing you want to do is have a bill and forget to pay it. That missed payment will be reported to the credit reporting agencies and thus negatively impact your score.

If making timely payments on your bills is a challenge, then do what you can to remind yourself. You can go as simple as marking your calendar to setting a reminder on your phone. Heck, many service providers even provide free text alerts to let you know when a bill is due.

 

What do you think is the biggest challenge in trying to build credit from nothing? What did you do when first establishing yourself to build up credit?

 

 

Photo courtesy of: sovietmole

 

 

*This post was featured on 2 Copper Coins

« Older Entries