Can you believe it? Today was my 100th segment on NBC’s Today Show! If you missed me this morning on Money 911 make sure to check it out now! We answered questions about investing, emergncy funds, credit scores and using your 401k plan for home improvements.
Plus dont’ miss the special video I did below, where I share how YOU can earn 3% on your money in 2012!
Question: I have good credit and have opened another credit card recently to get the travel rewards. I now have 5 credit cards open, but all with zero balances. How manycards is too many? And will my credit score be impacted if I close one or two of them?
My Advice: - Five credit cards is too many
- Closing credit cards may impact your credit score
- Keep the credit cards open
- Continue paying them off on time
- If you choose to close one of the cards, close the one with the smallest credit limit
New Year’s Eve has always been a time to reflect on the past and more importantly, set goals for the upcoming year. There is nothing that I want more this year, than for you to take action to live and finish rich in 2012. That’s why I am giving you an easy to use financial action plan for the New Year—so let’s get started!
1) PAY YOURSELF FIRST
According to a new Fidelity Research Report, the number one goal of American’s is to double their savings in 2012. What I want you to do is take out your 401k statement and either increase the dollar amount or increase the percentage of your contribution. If you just change it by 1% this year, you will make a positive impact on your financial life and savings. Making this increase to your savings is the single easiest thing you can do right off the bat for 2012.
2) MAKE YOUR FINANCES “AUTOMATIC”
2012 is the time to use technology to your advantage when it comes to your finances. The best part about automating your financial life is that it can be done in less than an hour and it will save you time and money for years to come! You need to start by making sure your paycheck is directly deposited into your checking account. Then by using online banking and bill pay you will distribute your money automatically into the following key accounts:
1) Retirement Savings
2) Emergency Savings
3) College Savings
4) Dream Account (i.e. vacations, holidays savings)
5) Mortgage Payment
6) Credit Card Bills (minimum payment, so you will never miss a payment again)
7) Recurring bills (utilities, phone, cable, etc.)
3) GET A WILL It’s reported that over 50% of American’s do not have a will. The reality is, everyone needs a will, even if you are not married or don’t have kids. Think of your family and friends that you would want to receive your life’s work. Many people do not realize that making a will can actually be quick and relatively cheap. You can create a will yourself for as less $50, using a program such as Quicken Will Maker or you can hire an attorney to help you.
Critical things that you will need in your will are:
- Health care directive
- Financial power of attorney
- Executor documents
- Final arrangements
4) TRACK WHERE THE MONEY GOES “AKA FIND YOUR LATTE FACTOR®” The best way to improve your financial life that I know of, other paying yourself first, is to track where your money is actually going. I would use a site like Mint.com, orYodlee Money Center. They have the best programs online to track your expenses and they use the same encryption system the banks do, so your information will be safe. If you don’t want your expenses tracked online then you can go get an old school “budget tracker” workbook and keep track of where your money goes each month. Then review your finances to see what you are wasting money on or spending too much on and then stop that specific spending!
5) CLEAN IT OUT AND SELL IT January is a great time of the year to clean out everything in your house that you don’t need and then sell it or give it away—especially if you have a storage facility. If you are paying to store things you don’t really use and realistically will probably never use now is the time to get rid of everything! Doing this one act could save you over $1,000 a year. What you can do to help yourself, is to look up companies in your area that will come photograph and sell your unwanted items for you, saving you time and making you money.
I would like to say, that this is my personal, number one, New Year’s resolution to help me save in 2012. In fact, you can mark my words that I will get rid of my storage facility this year!
6) GIVE SOMETHING UP One of the fastest ways to cut your expenses in 2012 is to pick ONE thing and give it up. We all hate to do it at first, but once we make the change, we usually find out it’s not the end of the world and can be completely worth the savings. For example, you can give up a car. For many families this can cut expenses by $5,000 to $10,000 a year! If you don’t think you can give up your car, really think about it, what can give you up? What are you paying for each year that you truly could try and live without? Is it your storage facility? Is it premium cable? Is it a cell phone? Is it a second home? A vacation you ALWAYS take? Sometimes just deciding to give up “one thing” can completely change your financial life. Then these savings could be used to pay down your debt, OR save for retirement, emergency purposes, college OR all of the above!
What I want you to remember is that you don’t need to have a doctorate in math to get these things done; you just need the motivation to make a positive financial change in your life. Trust me—it will be worth it! To connect with like-minded people and get support on your journey to live and finish rich join my community on Facebook or follow me onTwitter.
Finally, for all of you that voted for me as your favorite expert of 2011, THANK YOU! Your votes have pushed me to 2nd place in the poll and now I need your help getting me to 1st. To vote now, click HERE.
If you missed my segment on NBC’s Today show – entitled “Put Your Best Financial Foot Forward in 2012” make sure to check it out! If you take just one of these tips and implement it in 2012, you can get yourself a brand new financial life, if you do more than one—EVEN BETTER! Watch and let me know which tip you’ll be using this year!
Question:
I already have $30,000 worth of loans from my first degree. Should I keep working minimum wage dead end jobs to pay off this debt or work on getting into a field that will provide financial stability?
My advice:
- Continue working your current job and look for a new opportunity.
- Save money for the next 6 months to a year.
- Go back to school to launch a new career.
Check out the recent segment I did for with Bloomberg On Demand about Women and Retirement. Learn what you need to know and do to avoid costly mistakes while planning for retirement and what it takes to be financially secure in your senior years. Make sure to let me know what you think about the segment!
Question: I just started my job about a month ago and we have the option of a traditional 401(K) and a ROTH 401(K). I am 22 years old, have a long career ahead of me and don’t have huge amount of expenses. Which would you suggest?
My Advice: - Your goal is to max out the retirement account
- You can use a traditional 401(k) and get a tax deduction
- Or have no tax deduction upfront with ROTH 401(k) Plan – (but remember you will have to pay taxes when you take the money out later.)
- I suggest, put half into each of the plans
The holidays are HERE, and many of us will get caught up in the excitement of the season and be sent into a last minute spending frenzy. In fact, The National Retail Federation reports that holiday shoppers are expected to spend an average of $704.18 on holiday gifts and seasonal merchandise this year.
If you find that the only holiday tradition you have is to overspend, take heart in the old saying that ‘traditions were made to be broken.’ This year, I challenge you not to overspend! If you follow these tips and use a little creativity and commitment, you’ll be kicking off a new year this January without the burden of holiday debt – which is the best gift that you can give yourself!
So to help you this year, I’m giving you my 9 LAST MINUTE Holiday Tips to save you money:
1. If you haven’t started yet, make a detailed list. Write out who you’re buying for and how much you can afford to spend for each gift. When you add it all up, you’ll know if you need to cut back the list or perhaps decrease your spending limit per person. Impulse purchases will quickly get you off track, so bring the list with you when you shop — and resolve to stick to it.
When making your list think about chipping in with a family member or friend. Or getting for something less costly but more meaningful — a carefully chosen book, a favorite photo in a frame, even a homemade treat made with love.
2. Use cash. If, like the average shopper I mentioned above, you spend $700 on gifts and then charge it all on your credit cards. Then you only make the minimum payment each month, at a rate of 18 percent you’ll end up paying another $700 in interest and it will take you 131 months to pay it all off!
Paying with cash makes your spending more real and will cut down on your urge to splurge. If you can’t afford to pay for a gift with cash, then more than likely you can’t afford it.
3. Shop online. A recent study by management consulting firm Accenture says that 59% of shoppers expect to buy more than half of their gifts online. When it comes to online shopping, remember – online prices often beat out in-store prices, but will require you to use your credit card. Shop with the card that has the lowest interest rate and keep track of what you’re charging. If you don’t pay your balance off in full, you’ll more than wipe out the saving benefits of buying online.
According to The National Retail Federation’s Shop.org division a record 92.5% of online retailers will offer free shipping at some point this holiday. If you meet the minimum purchase requirement, you’ll want to take advantage of free shipping offers for gifts you plan to ship long-distance. You’ll save yourself a bundle, not to mention long lines at the post office.
4. Compare prices. Another advantage to shopping online is the myriad of comparison tools available on the Internet to help you find the best deal. Check out sites like Shopping.com, ShopZilla.com and PriceGrabber.com.
Most sites will even offer a bottom-line comparison, which shows you the best deal with tax and shipping included. For big-ticket items, comparing prices before you buy will pay off big-time.
5. Use coupon codes. This is one of my favorite ways to get some good deals while shopping online. Don’t leave that “coupon code” field blank when you’re ready to check out. Take a moment to visit sites that offer discount codes for hundreds of stores — from Amazon to Zappos. Check out: RetailMeNot , CouponCabin, Buxr, BradsDeals, and Coupon Sherpa.
6. Draw names from a hat. With a large family or group of friends, it’s just not feasible to buy a gift for everyone with out spending a fortune. Instead, pre-select names from a hat so that each member of the family or group only buys a gift for the name that they’ve chosen. Set a spending limit and have some fun with it. Visit SecretSanta.com for entertaining variations on this idea.
7. Donate to a charity. For the person who has everything, consider making a donation in their honor to a charity that holds special meaning for them. At JustGive.org you can buy a donation certificate to give as a gift. Your recipients can then choose a charity to donate to and as a bonus, you’ll get a nice tax deduction.
Be sure to save your receipt, and make sure the charity you ultimately choose is legitimate. Check them out first at GuideStar.com or Give.org.
8. Host a potluck dinner. You can do a great job of keeping your gift list in check and then blow your whole budget on an overly expensive dinner for your guests. Steer clear of splurging on lobster tail and filet mignon when you’re on a tuna fish budget. If it’s your turn to host family and friends this year, take some of the burden off by asking your guests to each bring a favorite dish or dessert.
9. Wrap with recyclables. Sometimes we end up spending more on wrapping paper than we do for actual gifts. When I was a kid and we ran out of wrapping paper, my creative mom used the comics from the Sunday paper to finish the job. It looked cool and didn’t cost a dime.
Super Bowl is THIS weekend! Here's some tips to throw a party for $100 or less. What's everyone doing for the big game? http://t.co/2iCnC6JA4 hours ago
