tag:blogger.com,1999:blog-8747190646346266172024-03-14T03:50:14.030-04:00Keith Reed's Money CornerI'm Keith Reed, a business reporter, national economics commentator and blogger and this site is part of my personal mission to help more people -- particularly young people -- better understand the economy and manage their own financesKeith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.comBlogger206125tag:blogger.com,1999:blog-874719064634626617.post-2075486400309975752011-02-14T13:52:00.000-05:002011-02-14T13:52:34.243-05:00The Absolute, Positive Best Valentine's Day ideas under $50, anywhere!If you're doing the Valentine's Day thing, you've got just one weekend left to find an appropriate gift. Of course, the thought that counts, not the money you spend, and with finances still tight for a lot of people, I asked my blog readers and Twitter followers to shoot me their best Valentines Day gift ideas for under $50. <br />
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Lemme tell you: the answers were, uh, creative. (As an aside, I heard from a lot of you about the farce and commercialism of Valentine's Day. I can't say I necessarily disagree that the biggest Vday winners are retailers and there's certainly nothing wrong with finding your own ways and days to celebrate your love. But, uh, that ain't what this post was about. Besides, if it meant a lot to your S/O, would you really risk pissing him or her off for lack of a few roses and a card?)<br />
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Now, for the answers and the winner of the $55 gift code generously provided by <a href="http://www.csnstores.com/">CSNStores</a>. I could put the answers into three categories: the quaint, the explicit and the heartfelt.<br />
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Quaint:<br />
One woman suggested a "Recession V-day" with "dollar store wine glasses, candles, rose petals and a card"). Another suggested " a love letter. Seriously, a letter with real effort and thought is the best gift."<br />
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Explicit:<br />
Might wanna cover the kids' eyes for this one: someone literally emailed me this as a suggestion: the <a href="http://www.adameve.com/sexy-extras/sex-furniture-props/sp-sex-sling-6353.aspx">'sex sling'. </a>Wow.$29.95...click the link or use your imagination.<br />
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But the winner was <a href="http://www.twitter.com/">@evolve_u</a>, who tweeted the following heartfelt suggestions and gets the $55 from CSN:<br />
<blockquote>"Buy 3 pks of V-Day cards from $1 store. In ea card, write 1 thing you luv about ur love (i.e. "You make me blush when..." "I love how you..." "Our first kiss felt like..."; plant the cards in places s/he will find them... (e.g. in the car, under a pillow, in a lunchbox, under the remote, in the fridge, etc.) everyday leading to V-Day. On the 14th, over homemade candlelit dinner (wearing his/her favorite lingerie/silk pjs), tell him/her in person how much s/he means to you. Total cost $25: cards $3; candles: $2; food: $20; time: priceless; reward: ;-)"</blockquote>However you plan to celebrate, have fun, and make sure not to breatk the bank. Happy Vday.Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com14tag:blogger.com,1999:blog-874719064634626617.post-47373850886371625432011-02-10T10:59:00.000-05:002011-02-10T10:59:58.221-05:00$55 prize for your best under $50 Valentine's Day gift ideasFour days until Valentine's Day, so help me help out the people with bigger hearts than wallets. Today and tomorrow send me your best suggestions for Valentine's Day gifts under $50. Get creative. No flowers, candy or blanket-on-the-floor matinee here. Get your imaginations working; you've only got a week to make him or her feel like a million bucks on a shoestring budget.<br />
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As a bonus, I'm giving away a promo code worth $55, courtesy of my partner <a href="http://www.csnstores.com/">CSN Stores</a>. Best answer gets the prize, which you can use toward anything at CSN, which has more than 200 online shops where you can find everything from stylish handbags, <a href="http://www.csnofficefurniture.com/L-Shaped-Desks-C78802.html">a L shaped desk</a>, or great cookware!<br />
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Best idea gets the prize, so be creative. I'm taking as many ideas as you want to send me either here or on <a href="http://www.twitter.com/k_dot_re">Twitter</a>, so send a bunch. It is Valentine's Day, and grown folk do like to get all happy time with theirs. If your idea's all hot & steamy, that's fine by me, but let's not get too explicit. Suggestive's cool, x-rated ain't.Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com5tag:blogger.com,1999:blog-874719064634626617.post-4302079600293982852011-01-31T08:34:00.000-05:002011-01-31T08:34:54.882-05:00Monday Q&A: Is there a quick fix for low FICO scores?This question came from one of my <a href="http://www.formspring.me/kdotre">formspring</a> followers:<br />
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<b>Q:</b><i><b> Is there any way you can improve your credit score in a short time? </b></i><br />
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A: I'd generally say no, but really the answer depends on how much you want to improve your credit score and what you consider a short period of time.<br />
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Ruining a credit score usually happens over time, as either bad financial decisions or tough times erode your record of on-time payments and throws your debt-to-available-credit ratio out of whack. If it took you two years for your FICO score to drop below, say 600, don't expect it to be 800 in a year or less. <br />
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The things that help you improve your credit score the most are making payments on your debts on time and paying down the balances on any outstanding accounts you have, especially unsecured accounts like credit cards. The faster you can pay off any overdue or outstanding balances, the better chance you have of raising your score. But any blotches on your credit report, like delinquencies, bankruptcies or accounts in collection, can remain a drag to your FICO score for as long as seven years. <br />
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Do what you can to be responsible with your credit from here on out, but don't expect things to turn around overnight.Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com1tag:blogger.com,1999:blog-874719064634626617.post-90884371951391007092011-01-26T16:30:00.000-05:002011-01-26T16:30:25.104-05:00State of the Union: the President should be unemployed<object height="390" width="540"><param name="movie" value="http://www.youtube.com/v/kl2g40GoRxg&rel=0&hl=en_US&feature=player_embedded&version=3"></param><param name="allowFullScreen" value="true"></param><param name="allowScriptAccess" value="always"></param><embed src="http://www.youtube.com/v/kl2g40GoRxg&rel=0&hl=en_US&feature=player_embedded&version=3" type="application/x-shockwave-flash" allowfullscreen="true" allowScriptAccess="always" width="540" height="390"></embed></object> <br />
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Jobs were the top issue in President Obama's State of the Union speech, and they should have been. But does anyone in Washington actually understand how unemployment affects a real person's life?<br />
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Congressional Democrats and Republicans have used unemployment as a political football for two years, even allowing unemployment benefits to expire for those who needed them while they argued over the terms of an extension. In the meantime people who receive unemployment were dealing with the reality that they weren't getting out of the system nearly what they put in, and very likely weren't getting enough to keep themselves afloat. I'll use myself as an example to explain:<br />
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The first thing you need to know about unemployment benefits is they aren't guaranteed to everyone. You only collect unemployment if you were previously employed full time; part-timers and those who were self-employed or had contract work usually don't qualify. Unemployment benefits are funded by money your former employer pays into a kind of insurance fund which pays off if you lose your gig. But that's the problem. Most people buy enough insurance to cover all their losses from an accident, flood or whatever else you're insuring against. You wouldn't insure a $45,000 car with a policy that'd only give you $20,000 in coverage.<br />
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With unemployment, typically the best you'll do is about a third of what had been your weekly pay. Raise your hand if you could pay all your bills with that.<br />
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This is how that worked out in my case: Until Dec. 31, my gross income was about $2700 each pay period. Here's what that state of Ohio approved under unemployment claims:<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/_3bfbg6ZpKFo/TUCH2ZIwkBI/AAAAAAAAALw/bApxQxILQ60/s1600/Moneycorner+Jan+26.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="72" src="http://2.bp.blogspot.com/_3bfbg6ZpKFo/TUCH2ZIwkBI/AAAAAAAAALw/bApxQxILQ60/s320/Moneycorner+Jan+26.JPG" width="320" /></a></div><br />
The top number, $470, represents what I'm eligible to receive each week (provided every week I go online and fill out a form that certifies I could work, I looked for work and didn't turn down any work that was offered to me). Do the math and you'll see that the weekly amount is about 14.7 percent of my previous salary. And I've got children. Luckily, I also have savings.<br />
<br />
The bottom two numbers are the total unemployment benefit I'm eligible for and how much of that is remaining. That's right: the state is granting me a whopping 12 grand and change in unemployment benefits, of which I've got just about $11,000 left.<br />
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Oh, and one last thing: there's a "waiting week", akin to the NFL's bye weeks, where you're approved for benefits but don't get a payment at all. I found that out after calling the state unemployment office and holding for more than a half-hour to ask why I got money for the past two weeks but not the first week of the year.<br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://2.bp.blogspot.com/_3bfbg6ZpKFo/TUCMlhGW6KI/AAAAAAAAAL0/AStfy5bsZNk/s1600/Moneycorner+Jan+26-2.JPG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="198" src="http://2.bp.blogspot.com/_3bfbg6ZpKFo/TUCMlhGW6KI/AAAAAAAAAL0/AStfy5bsZNk/s320/Moneycorner+Jan+26-2.JPG" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">(<i>Notice the $470 becomes $423 after taxes. Yes, they take taxes out of unemployment payments.</i>)</td></tr>
</tbody></table>The woman on the phone explained to me that everyone has a 'waiting week' under Ohio law; I explained that someone should tell our legislators that people's bills don't take a week off.<br />
<br />
Which brings me back to the State of the Union speech. I don't believe President Obama has done a bad job on the economy and I'm not cynical enough to blame him for all the country's job losses or the fact those jobs haven't returned yet. The Reagan, Bush 41, Clinton and Bush 43 presidencies passed while the economy was being wrecked; it won't be fixed in two years.<br />
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Still, I think we need a New Rule here: No politician can give a speech about jobs until they've experienced the unemployment bureaucracy for at least one month.Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com2tag:blogger.com,1999:blog-874719064634626617.post-52312059279706839792011-01-25T11:39:00.000-05:002011-01-25T11:39:54.700-05:00Should you hire a tax preparer or DIY?Here's a question from a Twitter follower who's striking out on his own:<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/_3bfbg6ZpKFo/TT74EVs0PqI/AAAAAAAAALs/brnmeQloNVA/s1600/moneycorner+jan+25.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="50" src="http://3.bp.blogspot.com/_3bfbg6ZpKFo/TT74EVs0PqI/AAAAAAAAALs/brnmeQloNVA/s400/moneycorner+jan+25.JPG" width="400" /></a></div><br />
I usually avoid tax questions, and for good reason: I'm not a CPA or tax preparer, so anything dealing with the specifics of a return, etc. is more than I'm qualified to answer. This, though, is a general question and important to answer since so many people are going through career transitions and need to make similar decisions.<br />
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Your employment status shouldn't necessarily dictate whether you do your taxes on your own or hire someone. You need to consider the complexity of your return and how confident you are that you can do it without errors that might hold up a potential refund or trigger an audit.<br />
<br />
Even though I held only one full time job in most years, for example, I still used a CPA to file my taxes. It cost more than just using Turbo Tax, but I've never been comfortable enough with the dizzying tax forms to want to do even a basic return myself. <br />
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If you're uncomfortable with filing taxes on your own, hire a qualified CPA or tax preparer. It will save you headaches, and possibly money down the road. Thanks for the question.Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com1tag:blogger.com,1999:blog-874719064634626617.post-63696122698221116642011-01-24T09:00:00.002-05:002011-01-24T09:00:01.121-05:00Best money bets for college studentsA question I get asked often is for advice for college students. One of my Twitter followers, @BeForREAAL, brought the topic up last week:<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/_3bfbg6ZpKFo/TTuRSzI3eTI/AAAAAAAAALg/U5N7ubYdrUs/s1600/Moneycorner+Jan+24.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://1.bp.blogspot.com/_3bfbg6ZpKFo/TTuRSzI3eTI/AAAAAAAAALg/U5N7ubYdrUs/s1600/Moneycorner+Jan+24.PNG" /></a></div><br />
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My thoughts on that question never waiver: the best financial decision college students can make is to avoid graduating with unnecessary debt. The two most important ways to do so is avoid over-borrowing for school (i.e., borrowing for more than tuition, fees and books instead of working to pay for incidentals), and using credit cards for non-essential purchases. <a href="http://online.wsj.com/article/SB10001424052970204731804574388682129316614.html">The average college student in the 2008-2009 school year had borrowed more than $23,000</a>. That's a lot to have to pay back -- with interest -- in a tough economy where it's hard to find a job. <br />
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I opened the question up for my timeline and got some other answers:<br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/_3bfbg6ZpKFo/TTuXM6gSyUI/AAAAAAAAALk/ErW2vmCrrHc/s1600/Moneycorner+Jan+24-2.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://4.bp.blogspot.com/_3bfbg6ZpKFo/TTuXM6gSyUI/AAAAAAAAALk/ErW2vmCrrHc/s1600/Moneycorner+Jan+24-2.JPG" /></a></div><br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/_3bfbg6ZpKFo/TTuXSOvRWjI/AAAAAAAAALo/sS3drMtAhzY/s1600/Moneycorner+Jan+24-3.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://4.bp.blogspot.com/_3bfbg6ZpKFo/TTuXSOvRWjI/AAAAAAAAALo/sS3drMtAhzY/s1600/Moneycorner+Jan+24-3.JPG" /></a></div><br />
Pretty sound, common sense advice. What else would you suggest?Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com0tag:blogger.com,1999:blog-874719064634626617.post-9958752441640026822011-01-23T15:11:00.001-05:002011-01-23T15:11:35.899-05:00formspring.meGot questions you want answered on my blog (or just anything you wanna know in general?) ://formspring.me/KdotREKeith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com2tag:blogger.com,1999:blog-874719064634626617.post-60130066791839217252011-01-21T16:08:00.000-05:002011-01-21T16:08:49.806-05:00Learning big lessons from losing a big job<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="http://3.bp.blogspot.com/_3bfbg6ZpKFo/TTnzAS72zRI/AAAAAAAAALc/N-7twb9nxCQ/s1600/IMG00081.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="240" src="http://3.bp.blogspot.com/_3bfbg6ZpKFo/TTnzAS72zRI/AAAAAAAAALc/N-7twb9nxCQ/s320/IMG00081.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">View of Cleveland & Lake Erie from my former corner office</td></tr>
</tbody></table>Yesterday's post was about how unsettling and eye-opening it's been to lose my job. Today I'm talking about how I got here.<br />
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What's interesting about being in my position is that it didn't come about in a 'conventional' way -- if there is a such thing. What I mean is that even though I work in a shrinking industry (journalism) during a massive recession, neither of those things were responsible for my job loss. In fact, my own ambition and desire to climb may have as much to do with it as anything. Let me explain.<br />
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Two years ago I worked for the Cincinnati Enquirer as a business reporter covering Procter & Gamble, the biggest company in a town with several Fortune 500 headquarters. In my early 30s, I'd say I had done well building my career; decent enough that my blog had a nice following, I was freelancing cover stories for major magazines and national TV and radio outlets regularly called me for commentary.<br />
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Still, journalists were getting fired left and right, I'd recently had a setback at work and a bunch of people at my company were being laid off. On top of that, my goal was never to write for anyone else forever: I wanted to be a magazine editor, to have a gig that came with a bigger following and management experience I could apply when I struck out on my own as an entrepreneur.<br />
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Then the call came: a magazine in Cleveland needed a new top editor and their headhunter got my name from an editor I'd worked with in NYC. Was I interested? Unsure at first, I got advice from family, mentors and my then significant other, then packed up and moved to Cleveland. A nonprofit operation whose funders were losing faith, my job was to use what I'd learned about management to turn the place around. And boy did I try.<br />
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In the ensuing two years we got some of the highest praise for our editorial content we'd ever gotten. Our audience loved what we were doing. We even took home some major journalism awards; one of my commentaries narrowly lost one contest to Earl G. Graves, founder of the much larger Black Enterprise, one of my role models in this business. I took the nomination as a victory.<br />
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The business side was a different story. I had a staff of four valiantly doing the work of at least twice as many people. My title was editor, by my responsibilities were more like editor/publisher/development officer/marketing and circulation guru. Our funders said how much they loved our work, but the love didn't come with a commitment to extend our funding. I closed our office in favor of telecommuting last August to save money, and we shut down for good Dec. 31. As trying as it's been for me, my biggest lament was for my three colleagues who lost their jobs.<br />
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So why post about this on a blog where I usually answer questions about personal finance and the economy? Well, because some of the lessons I learned have universal application for anyone climbing a career ladder, or stumbling down a couple rungs. When I was in Cincinnati, the paper's executive editor told me he had to take detours to smaller markets and off the beaten path in order to land in the big chair. I didn't forget that when Cleveland called, and neither should you when you get a similar call. To paraphrase another mentor: companies, no matter how small, don't call you looking for chief executives every day.<br />
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On the other hand, I learned how important it is to do due diligence on new employers, especially when stepping into an executive role. Had my mouth not watered so much at landing that beautiful corner office with a spectacular view, I might have discovered how dire the management and financial situations were at the magazine (although, honestly, I still would have taken the job).<br />
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There were plenty of other lessons, but the last one I'll share comes out of losing the job: It's not the end. As many daily postmortems as I subject myself to about what I could've done to save the place, ultimately none of them matter. Nor does my frustration and anxiety over what's next. What matters is I gained, in two years, a ton of experience that many other people my age don't have. No one can take from me that at 31, I sat in the big chair, even if it was in a small shop. By 33, I'd grown totally into that chair and with my 34th birthday just days behind me, the challenge now is to figure out how to parlay all those lessons into the next big opportunity.<br />
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And the thing to remember, if you've lost your gig like I have, is that that opportunity is coming. The only question is whether you'll be ready to recognize it when it does.Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com5tag:blogger.com,1999:blog-874719064634626617.post-68267204456765675312011-01-20T18:20:00.000-05:002011-01-20T18:20:45.202-05:00I'm Jobless<span style="font-size: small;">For a few years, I've been blogging about personal finance, sharing all I learned as a business journalist in plan English with my readers here. When the economy turned, I turned with it: readers started asking a lot more about how to be safe in this economy, how to save cash, live on a budget and preserve their jobs. Unfortunately some of my friends and readers of this blog lost their jobs to the Great Recession.</span><br />
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<span style="font-size: small;">I never imagined I'd be one of them, but I am. It's taken a while to decide I should blog about this; the psychological effects of losing a gig are as great as the financial ones. You start thinking things like "Who cares what an unemployed journalist has to say?"</span><br />
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<span style="font-size: small;">Then you get over it (or at least I did). Truth is I'm one of millions of people who are still without jobs, even as other pundits talk about a recovery. And I've got it good: I have savings and I'm connected enough in my industry to have decent leads on contract and freelance work. In a way, this is a blessing: I'm free to work on projects that have been dormant for months or years. Some of them, like a radio pilot I recorded last year, have gotten more traction since Jan. 1 than they did in the months before I lost my gig.</span><br />
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<span style="font-size: small;">Revitalizing this blog fits in that category. Being newly unemployed is giving me a first-hand look at what so many others have gone through, from the frustration of job hunting when you're limited by geography, to the maddening bureaucracy of filing for unemployment benefits, to the absurdity of what the state hands you in exchange for all that red tape.</span><br />
<span style="font-size: small;"><br />
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<span style="font-size: small;">It'll be an adventure I share, along with my reflections on career, next moves and the normal personal finance observations I've always posted here. Hope you ride with me.</span><br />
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<span style="font-size: small;">*<i>Tomorrow: How I got here and why it's a blessing*</i> </span><br />
<span style="font-size: small;"><br />
</span>Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com2tag:blogger.com,1999:blog-874719064634626617.post-78576353118530835332010-11-07T01:49:00.001-04:002010-11-07T01:49:36.323-04:00Hey Keith. Great to see you prospering and good to see you're still giving out advice. My question is a pretty simple one, but one that everyone seems to ask. What's the best way to start saving and building financial wealth? The smallest tips will help.<p class="formspringmeAnswer">So many people ask that question because there's no one answer. There are underlying habits that anyone needs to have to increase their chances at financial stability, such as living within a budget and not using credit cards outside of emergencies. But other than that, there's no one size fits all for wealth building. Whether you start that process with saving up an emergency fund, investing in stocks, starting a business or paying off debt all depends on your situation. Start with an evaluation of where you are and what your goals are, and that will point you in the right direction.</p><p class="formspringmeFooter"> <a href="http://formspring.me/KdotRE?utm_medium=social&utm_source=blogger&utm_campaign=shareanswer">Ask me anything</a></p>Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com1tag:blogger.com,1999:blog-874719064634626617.post-41225626769604721082010-10-22T12:18:00.002-04:002010-10-22T19:47:21.775-04:00Grading CNN's Black In America: Almighty Debt<object classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" height="374" id="ep" width="416"><param name="allowfullscreen" value="true" /><param name="allowscriptaccess" value="always" /><param name="wmode" value="transparent" /><param name="movie" value="http://i.cdn.turner.com/cnn/.element/apps/cvp/3.0/swf/cnn_416x234_embed.swf?context=embed&videoId=us/2010/10/15/inam.jeffries.cnn" /><param name="bgcolor" value="#000000" /><embed src="http://i.cdn.turner.com/cnn/.element/apps/cvp/3.0/swf/cnn_416x234_embed.swf?context=embed&videoId=us/2010/10/15/inam.jeffries.cnn" type="application/x-shockwave-flash" bgcolor="#000000" allowfullscreen="true" allowscriptaccess="always" width="416" wmode="transparent" height="374"></embed></object><br />
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I caught CNN's Black In America special, "Almighty Debt" last night. Bottom line: I think CNN deserves kudos for putting up the time, money and Soledad O'Brien to report on black debt, but the presentation left me wanting. I was hoping that at some point the church angle would go beyond anecdotes about how some churches are helping their members financially. Helping congregants isn't specific to black churches and it left a lot of material unexplored. For example, where does "prosperity gospel" as preached by megachurch leaders like Bishop Eddie Long, fit in a community plagued by debt and institutional economic bias? What role, if any, do black churches still have as economic engines in downtrodden communities?<br />
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<br />
And I really would have loved to see a more explicit discussion of the difference between debt as a function of the legacy of institutional racism and debt as a result of really, really bad choices. For an example of the latter, see this keeping-up-with-the-Joneses couple, who sold luxury cars and houses for a living and have a daughter with a $400 a month credit card habit but landed in foreclosure on their house:<br />
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<object classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" height="374" id="ep" width="416"><param name="allowfullscreen" value="true" /><param name="allowscriptaccess" value="always" /><param name="wmode" value="transparent" /><param name="movie" value="http://i.cdn.turner.com/cnn/.element/apps/cvp/3.0/swf/cnn_416x234_embed.swf?context=embed&videoId=us/2010/10/15/inam.jeffries.cnn" /><param name="bgcolor" value="#000000" /><embed src="http://i.cdn.turner.com/cnn/.element/apps/cvp/3.0/swf/cnn_416x234_embed.swf?context=embed&videoId=us/2010/10/15/inam.jeffries.cnn" type="application/x-shockwave-flash" bgcolor="#000000" allowfullscreen="true" allowscriptaccess="always" width="416" wmode="transparent" height="374"></embed></object><br />
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I want to know heard more about this couple's mindstate before landing in foreclosure. What the hell were you thinking?<br />
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In any event, if you didn't watch it, you should check out the re-airings over the weekend or more clips from the show here http://www.cnn.com/SPECIALS/in.america/black.in.america/Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com0tag:blogger.com,1999:blog-874719064634626617.post-37488248357185211282010-10-21T10:57:00.000-04:002010-10-21T10:57:28.085-04:00Should your bosses get to look at your credit score?Employers have been using credit reports as one way to evaluate potential employees for years. But the recession-that-won't-end is effing up thousands of people's scores, so now some states and Congress are thinking about banning the practice, according to<a href="http://online.wsj.com/article/SB10001424052702304741404575564502442371086.html?mod=WSJ_Careers_CareerJournal_4#articleTabs%3Darticle"> this Wall Street Journal piece</a>. <br />
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I think banning the use of credit reports in most (but not all) hiring is a good thing: anyone can be a good employee and have financial trouble along the way. For most of us, it'd only take one emergency or a couple months of unemployment to ruin a good credit report. Companies argue that the credit score is a good predictor of potential problem behavior with employees but I don't see how that argument carries weight in an era where all manner of personal information is available with a quick Google search, and criminal background checks are cheap and easy to conduct.<br />
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But I'm cynical: what took legislators so long to wake up to the fact that this is a problem? It seems to me that the only reason they're taking on this issue now is that it's affecting people more in the economic "mainstream" (read: middle class whites) who have been hurt by the recession. Poor people and minorities, especially blacks and Hispanics, have had their economic prospects hurt for years by this and other practices which unfairly and disproportionately impact their job prospects (see: using credit scores to determine insurance rates). It makes no sense to use credit reports to bar people from getting jobs when getting a good job in the first place can help improve the score.<br />
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It's amazing how something that's been harmful to a great number of people for a long time is ignored by politicians and regulators until it starts hitting their poll numbers. Then what's been a bona fide crisis for years becomes an official one and finally there's debate, if not action. Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com2tag:blogger.com,1999:blog-874719064634626617.post-83259158571690434012010-06-05T09:13:00.001-04:002010-06-05T09:13:51.920-04:00I have about 4K in credit card debt (12% interest, I think) and about 17K in savings in an acct that makes about 1.5% interest. Should I just pay off the credit card debt with the cash I have or try to pay it off slowly? Thanks!<p class="formspringmeAnswer">Normally I'd tell you to calculate the difference between what you're earning in interest and what you're paying on the card, and factor in how many months' worth of living expenses you have saved. But in this case it's an obvious no-brainer: pay off the debt!<br /><br />You've got four times as much in savings than you owe, so you won't miss that $4,000, and since you've already got $17,000 saved I'm assuming you're a disciplined saver and will replace that money relatively quickly. Besides, there's a 10.5 percentage point difference between what you're paying in interest and what you're earning, so at this point, paying off the debt is a better investment from a return perspective. Pay off the card and get free.</p><p class="formspringmeFooter"> <a href="http://formspring.me/KdotRE?utm_medium=social&utm_source=blogger&utm_campaign=shareanswer">Ask me anything</a></p>Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com4tag:blogger.com,1999:blog-874719064634626617.post-68262168649577964402010-06-03T23:33:00.001-04:002010-06-03T23:33:42.489-04:00No question, just a comment. Good stuff! This is a ministry! You are really helping people out! -Pauli<p class="formspringmeAnswer">Thanks! I really appreciate that.</p><p class="formspringmeFooter"> <a href="http://formspring.me/KdotRE?utm_medium=social&utm_source=blogger&utm_campaign=shareanswer">Ask me anything</a></p>Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com0tag:blogger.com,1999:blog-874719064634626617.post-50279473842101067942010-06-03T23:32:00.001-04:002010-06-03T23:32:42.222-04:00Just found out mom, who died in 2005, had insurance policy. $300k spilit between me & bro. What the hell do I do? I only have car payment, little savings. Taxes?<p class="formspringmeAnswer">First, I'm sorry for your loss.<br /><br />As far as the insurance settlement, my best advice is to start with a tax adviser, preferably a CPA. You'll need someone familiar with tax law to determine how much of your half of the insurance policy will actually come to you and how much will go to Uncle Sam,who gets his cut first. My guess is that if the money is to be split down the middle, $150k apiece, you're looking at 40 percent or better of that money going to the government in estate and or income taxes. (Of course I'm not a tax accountant so don't quote me on that).<br /><br />After you've worked out the tax implications, you'll want to make sure you do some planning for what you'll do with that money. It's great that all you've got in debt is a car payment, so I'd start by paying that off. After that, beef up whatever savings you've got to the extent that you have at least six months worth of expenses in a liquid (cash) account. <br /><br />With the rest, take a tiny, tiny, tiny fraction for a splurge, and put the rest toward some long-term investment (home downpayment, retirement, etc.).<br /><br />Good luck.</p><p class="formspringmeFooter"> <a href="http://formspring.me/KdotRE?utm_medium=social&utm_source=blogger&utm_campaign=shareanswer">Ask me anything</a></p>Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com0tag:blogger.com,1999:blog-874719064634626617.post-84587099983782382012010-06-03T14:27:00.001-04:002010-06-03T14:27:17.893-04:00Thanks for that great answer. I do not have a credit card now, although I do have a Walmart money card. Is that enough for now or do I really need to have an actual credit card?<p class="formspringmeAnswer">You're welcome. As for your Wal-Mart Money Card, it won't help in rebuilding your credit. It's not a credit card; it's a prepaid debit card and as such there are no bills associated with it. You can only spend what you put on the card and after that it's empty and useless until you decide to refill it.<br /><br />The key difference between that and a secured credit card is that the collateral you use to obtain the secured card won't be used to pay off the bill unless you fail to pay when your statement comes. You'll still get a bill each month and be responsible for paying that bill in full (or at least the minimum amount), and your payment history will be recorded and submitted to the major credit reporting firms. Since there's no bill with a prepaid debit card, there's no reporting and thus it can't help you rebuild your credit.</p><p class="formspringmeFooter"> <a href="http://formspring.me/KdotRE?utm_medium=social&utm_source=blogger&utm_campaign=shareanswer">Ask me anything</a></p>Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com2tag:blogger.com,1999:blog-874719064634626617.post-85158525586460617372010-06-03T11:03:00.001-04:002010-06-03T11:03:18.785-04:00I had past issues, but am now debt free. I got 1 of those Bank of America prescreened credit card offers and applied. I was turned down, but they offered me a secured card & want me to send them at least $300. They say it will help my credit scores and I<p class="formspringmeAnswer">Looks like your question got cut off but I'm assuming you wanted to ask whether the Bank of America card was a good idea. I can't give you a yes or no answer but I can give you some common sense advice on how to think about whether or not you need that card.<br /><br />First, how severely did your "past issues" damage your FICO score? If it pushed your score into the 500s or lower, a secured credit card might be a good way for you to rebuild your credit. Your payment history is among the top factors in determining your credit score, which in turn helps determine whether or not you qualify for loans and on what terms. If your score is so bad that most lenders won't touch you (and being in the 500s is pretty close to that), one way to rebuild credit history is with a secured card, which is basically a credit card that is "secured" with collateral -- in this case, a $300 deposit, in many others, a linked checking or savings account.<br /><br />That said, you may not need that secured card at all. If you've already got a credit card or cards in your name, you don't need to get a new one and in fact applying for additional credit after you've already had issues could further hurt your score. If you already have a credit card in your name, one way to rebuild your credit is to use that card for small purchases and to pay the balance in full monthly. For example, if you've budgeted $200 for groceries every month, you could use your existing card to pay for them, then immediately pay off that bill out of the cash you would've used normally. That will show up on your credit report as you paying your card balances in full every month and help your score. Just remember that this strategy relies on you paying the full balance every month and never carry a balance of more than 30 percent of your available limit.<br /><br />One last thought: Personally, I've never been a fan of prescreened credit offers. As a consumer, I know when I have a need for new credit or to change lenders. I don't need credit card marketers to tell me that. Credit card issuers send those letters out for their benefit, not yours, and in my house they always end up in the shredder. Besides, the offer you got feels a lot like a bait and switch: if you were "prescreened", then the company should already know that you don't qualify for anything but a secured card, so why send you an application for something different? <br /><br />Think about it.</p><p class="formspringmeFooter"> <a href="http://formspring.me/KdotRE?utm_medium=social&utm_source=blogger&utm_campaign=shareanswer">Ask me anything</a></p>Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com0tag:blogger.com,1999:blog-874719064634626617.post-73903219138992673432010-05-20T16:05:00.000-04:002010-05-20T16:05:30.865-04:00On ascots, oil spills and wealth disparities<span style="font-size: large;"><span style="color: black;">Today I taped an interview with Georgetown professor Dr. Michel Eric Dyson for </span><a href="http://www.dysonshow.org/" style="color: black;">his newly-relaunched radio show</a><span style="color: black;">. It'll air Tuesday but here's a preview:</span></span><div style="color: black;"><span style="font-size: large;"><br />
</span></div><div style="color: black;"><span style="font-size: large;">Dyson asked me about the long-term economic impact of the <span class="goog-spellcheck-word" style="background: none repeat scroll 0% 0% yellow;">BP</span> oil spill in the Gulf of Mexico and I said I thought we're already seeing it in the form of higher gas prices and that it would continue. A few weeks ago I was buying gas for $2.50 or less and a few days ago i filled up at $2.81 a gallon for regular. I also said I was skeptical of <a href="http://abcnews.go.com/Business/oil-spill-hurt-national-economy-report/story?id=10693638&page=1">a report from Moody's Economy.com</a> that said that the spill won't have a long-term impact on the US economy because the Gulf states only account for 1 percent of GDP.</span></div><div style="color: black;"><span style="font-size: large;"><br />
</span></div><div style="color: black;"><span style="font-size: large;">We also talked wealth disparities in the wake of a new report that shows that <a href="http://www.latimes.com/news/nationworld/nation/wire/sc-dc-wealth-race-20100519,0,153009.story">the black-white wealth gap in the US has actually quadrupled since 1984</a>. It's vexing because this is actually the period over which many thought that the black middle class was permanently expanding as the result of economic and employment gains in the decades following the civil rights movement. I've actually pitched a commentary to <span class="goog-spellcheck-word" style="background: none repeat scroll 0% 0% yellow;">TheRoot</span>.com about my take on those numbers so you'll read about that over there soon if they accept it. If not, I'll write it here no later than Monday.</span></div><div style="color: black;"><span style="font-size: large;"><br />
</span></div><div style="color: black;"><span style="font-size: large;">And speaking of <span class="goog-spellcheck-word" style="background: none repeat scroll 0% 0% yellow;">TheRoot</span>, today they ran a colorful piece by yours truly called "<a href="http://www.theroot.com/views/we-got-our-ascots-handed-us">We Had our Ascots Handed to Us</a>." Its my take on black men's style cues and what we lost when <a href="http://www.thedailyshow.com/">Daily Show</a> host Jon Stewart discovered that Roland Martin has interesting taste. Check it out and let me know what you think.</span></div><div style="color: black;"><span style="font-size: large;"><br />
</span></div>Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com0tag:blogger.com,1999:blog-874719064634626617.post-30800200898629705382010-05-18T10:05:00.000-04:002010-05-18T10:05:43.658-04:00Can I save for a home and pay off my debt at the same time?<span style="color: black; font-size: large;"></span><div style="color: black;"><span style="font-size: large;">Sorry for being gone for so long; the month of April was ridiculously busy at the 9 to 5. But I'm back strong and with a good question that came from formspring:</span></div><blockquote style="color: black;"><span style="font-size: large;"><i><b>I'm almost debt free and I want to start saving for a down payment. How can I aggressively tackle the last credit card...and save at the same time? </b></i></span></blockquote><div style="color: black;"><span style="font-size: large;">My advice: Don't spread yourself too thin. You have a finite income and that money only stretches so far. If you're almost debt free, you should devote as much of your income as you can to paying off the debt until it's gone. That will help you as much as saving for a down payment (on a home, I'm assuming) because lowering your debt will help improve your credit score. When the debt's gone, take the money you were putting toward that and apply it to a down payment. Take your time and remember you can't do it all at once.</span></div><div style="color: black;"><br />
</div><div style="color: black;"><span style="font-size: large;">Also, how much money do you have in an emergency fund? If it's less than six months worth of your living expenses, that should be your priority over both a down payment and paying off debt. What you don't want to do is be in a situation where you've got to run up credit cards or beg, borrow and steal if you should lose your job.</span></div><div style="color: black;"> <span style="font-size: large;"><br />
</span></div><div style="color: black;"><span style="font-size: large;">Good luck.</span></div><div style="color: black;"><span style="font-size: large;"><br />
</span></div>Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com0tag:blogger.com,1999:blog-874719064634626617.post-20344053094150047072010-04-09T10:50:00.000-04:002010-04-09T10:50:34.765-04:00Why you're probably paying too much in property taxes<span style="color: black; font-size: large;"></span><div style="color: black;"><span style="font-size: large;">When did you buy your house? If it was in the last five years, chances are you're paying too much for property taxes and it might be tough for you to appeal to have them lowered.</span></div><div style="color: black;"><br />
</div><div style="color: black;"><span style="font-size: large;">(I have to credit CNN for inspiring this post, since they did a report on the issue this morning). The problem is that most municipalities only schedule property tax reassessments every three to five years. What was happening five years ago? You guessed it: we were in the middle of the housing boom. So if you own, your crib is almost certainly worth less than you bought it for, provided you bought in 2007 or before. And if your property hasn't been reassessed by local authorities since you bought it, you're paying taxes on the over-inflated value of the house, not what it's currently worth.</span></div><div style="color: black;"><br />
</div><div style="color: black;"><span style="font-size: large;">Don't own? Don't think this doesn't affect you. The rent you pay is directly tied to your landlord's cost of ownership, which includes the mortgage and property taxes. That's going to be especially true if you're renting from a private owner and not a large management company.</span></div><div style="color: black;"><span style="font-size: large;"><br />
</span></div><div style="color: black;"><span style="font-size: large;">So what can you do? In most places, there's a formal appeals process you can go through to get your property reassessed. Check with your local authorities for the procedures. They'll have to follow whatever those steps are to re-evaluate how much you pay. But don't expect that to happen quickly, or for your local government to be eager to lower your taxes.</span></div><div style="color: black;"><span style="font-size: large;"><br />
</span></div><div style="color: black;"><span style="font-size: large;">The recession has hit local governments hard, and nearly half their revenues come from property taxes. I live in Shaker Heights, which has Ohio's highest property tax rate and where the city is now asking voters to approve a hike in that tax to support the schools. In short, your appeal could starve them of money right when they need it most. That means make sure you have your ducks in a row before you shoot for that appeal.</span></div><div style="color: black;"><span style="font-size: large;"><br />
</span></div><div style="color: black;"><span style="font-size: large;">Good luck and have a great weekend.</span></div>Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com1tag:blogger.com,1999:blog-874719064634626617.post-44901563368688829822010-04-07T10:53:00.000-04:002010-04-07T10:53:59.705-04:00Financial Literacy Month<span style="font-size: large;"></span><div style="color: black;"><span style="font-size: large;">February was Black History Month; March, women's history month? Anyone have a clue what April is? Hint: It's the title of this blog post!</span></div><div style="color: black;"><br />
</div><div style="color: black;"><span style="font-size: large;">I view the idea of Financial Literacy Month the same way I view the other "months" celebrating ethnic heritage, gender solidarity or any other cause or purpose. It's nice to take 30 days to emphasize the need for a basic level of financial smarts in this country. You need only look at our abysmal personal savings rate, how many adults live on credit and how many of our young people lack basic consumer skills like how to create and live by a budget to know that there's a serious need for financial education in this country. But having a "month" is only a start. What happens when April is over and all the marketing campaigns go away?</span></div><div style="color: black;"><br />
</div><div style="color: black;"><span style="font-size: large;">I'm a big advocate of making financial literacy a mandatory and integral part of the school curriculum from the earliest levels. No one should be able to graduate from high school without demonstrating that they can manage the wages they'll earn on a job. But more on that in a later post.</span></div><div style="color: black;"><br />
</div><div style="color: black;"><span style="font-size: large;">Here, I just want to create a list of links to Financial Literacy Month sites and other programs that are focused on personal finance education. It'll start short, and grow as people point me in the direction of more links, so be sure to <a href="http://www.twitter.com/k_dot_re">tweet me</a> any you have. </span></div><div style="color: black;"><span style="font-size: large;"><br />
</span></div><div style="color: black;"><span style="font-size: large;"><a href="http://www.financiallitnow.org/">Financial Literacy Now</a>: A campaign for financial literacy sponsored by </span><span style="font-family: Arial; font-size: large;"><span style="font-family: Arial;">The McGraw-Hill Companies, The New York Public Library, Working in Support of Education (W!SE), Literacy Partners, and Talking FinLit</span></span></div><div style="color: black;"><br />
</div><div style="color: black;"><span style="font-family: Arial; font-size: large;"><span style="font-family: Arial;">FinancialLiteracyMonth.com: A site promoting the month, it's purpose and events from the nonprofit Money Management International</span></span></div><div style="color: black;"><span style="font-size: large;"><a href="http://draft.blogger.com/goog_83879880"><span style="font-family: Arial;"><span style="font-family: Arial;"> </span></span></a></span></div><div style="color: black;"><span style="font-family: Arial; font-size: large;"><span style="font-family: Arial;"><a href="http://www.americasaves.org/">America Saves</a>: "</span></span><span style="font-size: large;"><span class="size12"><span class="size12"><span class="size12"><span class="size12"><span class="size14">A nationwide campaign in which a broad coalition of nonprofit, corporate, and government groups helps individuals and families save and build wealth" -- from the site's "About Us" page. </span></span></span></span></span></span></div><div style="color: black;"><br />
</div><div style="color: black;"><span style="font-size: large;"><span class="size12"><span class="size12"><span class="size12"><span class="size12"><span class="size14">More to come... </span></span></span></span></span></span></div>Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com1tag:blogger.com,1999:blog-874719064634626617.post-42475656347972219172010-04-06T10:04:00.000-04:002010-04-06T10:04:50.591-04:00Saving for retirement vs. your child's college education<span style="font-size: large;"></span><h1 style="color: black; font-weight: normal;"><span style="font-size: large;">A question from <span class="goog-spellcheck-word" style="background: none repeat scroll 0% 0% yellow;">formspring</span>:<i> </i></span></h1><blockquote><h1 style="color: black;"><span style="font-size: large;"><i>What is more important-saving for my retirement or saving for the kid's college education? </i></span></h1></blockquote><div style="color: black;"><span style="font-size: large;"><b>A: </b>That all depends on your financial situation but if you're like most people the answer is your retirement.<br />
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The reason is simple: your child can borrow for education but you can't for retirement. And depending on your age, the years between new and your children's college graduation could be critical for you in terms of building a nest egg and adding to it with the appreciation you earn on your retirement investments. For example, if you weren't investing in stocks or mutual funds at all from late last year through the first quarter of 2010, you likely missed out on huge gains that could have offset any losses you took in the 2008 market crash. </span> <span style="font-size: large;"><br />
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Every parent wants to see their child do well but you have to remember that life will go on after your child has finished school and started a career. Not having retirement savings could not only harm you, but harm the start you're trying to give your children in life -- imagine how hard it would be for them trying to take care of you in your later years absent the retirement savings you could have socked away?</span> </div>Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com0tag:blogger.com,1999:blog-874719064634626617.post-72277514148498951722010-03-31T09:30:00.001-04:002010-03-31T09:30:02.316-04:00Keep the used car or get a new one?<span style="color: rgb(0, 0, 0);font-size:130%;" >Two interesting questions from one person I got on <a href="http://www.formspring.me/kdotre">my <span class="blsp-spelling-error" id="SPELLING_ERROR_0">formspring</span></a>:</span><span style="font-weight: bold; font-style: italic; color: rgb(0, 0, 0);font-size:130%;" > <blockquote>My 2003 Lexus runs reasonably well, has 83k miles. I think it will need about $2k in repairs & it will be fine. I do mostly city driving. I owe about $8k on it. I could pay it off, sell it, get newer used car & still have nice bit of cash left. Thoughts?</blockquote> </span> <p style="color: rgb(0, 0, 0);"><span style="font-size:130%;">If your car is still running well and you only owe $8k , I'm baffled at why you want to get another one. Unless the plan is to sell the car for enough to buy a newer car in cash, then this plan doesn't make sense.<br /><br />But to do that, you'd have to sell your car for $8,000 plus the price of the newer car. I know </span> <span style="font-size:130%;"><span class="blsp-spelling-error" id="SPELLING_ERROR_1">Lexuses</span> have decent resale values, but I have a hard time imagining you selling a 7-year-old car with almost 100,000 miles on it and which needs $2,000 in repairs for enough to be able to pay off an $8,000 note AND still buy another car. Either you need to go into used car sales or that plan is seriously flawed. </span></p><blockquote style="color: rgb(0, 0, 0);"><span style="font-size:130%;"><span style="font-weight: bold; font-style: italic;"><span class="blsp-spelling-error" id="SPELLING_ERROR_2">Ok</span>, you sold me. Keep car, pay it off, get it fixed. Done. So what do I do with the rest of the cash, around 40k? Can I have just 1 splurge? Please? </span></span></blockquote><span style="color: rgb(0, 0, 0);font-size:130%;" ><span style="font-weight: bold; font-style: italic;"></span></span> <p style="color: rgb(0, 0, 0);"><span style="font-size:130%;">If you've got $40 grand in cash laying around, that's great and it's perfectly fine for you to buy yourself something. People get it twisted by thinking that folks who advocate frugality don't want you to spend ANYTHING. That's not the case; it's just that most people spend more than they take in, and don't save much at all.<br /><br />Feel free to do something nice for yourself WITHIN REASON. Don't blow $25k of it in a weekend. Give yourself a (small) budget and have some fun.</span> <span style="font-size:130%;"><br /><br />After that, though, you need to consider what in the world you're doing with all that cash laying around? How much of an emergency fund do you have? If the answer's none, you need to stash enough of that money away in a savings or money market account to cover your expenses for several months in the event of a layoff or emergencies. </span> <span style="font-size:130%;"><br /><br />Already got an emergency fund? What about retirement? If you're not investing in a 401(k) and don't have an IRA, you need to start putting money away for your retirement.</span> <span style="font-size:130%;"><br /><br />If you've done both of those things, you're in good shape, but you can always afford to be in better shape by stashing most of that money away either for a rainy day or toward a home or some other goal you have.</span> </p>Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com2tag:blogger.com,1999:blog-874719064634626617.post-74646983430012593982010-03-30T09:30:00.002-04:002010-03-30T09:30:00.878-04:00Single mom wonders about tax withholding<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://4.bp.blogspot.com/_3bfbg6ZpKFo/S7DEEa3UYbI/AAAAAAAAAKo/Lu70tXcJyTc/s1600/Photoxpress_5889326.jpg"><img style="display: block; margin: 0px auto 10px; text-align: center; cursor: pointer; width: 320px; height: 240px;" src="http://4.bp.blogspot.com/_3bfbg6ZpKFo/S7DEEa3UYbI/AAAAAAAAAKo/Lu70tXcJyTc/s320/Photoxpress_5889326.jpg" alt="" id="BLOGGER_PHOTO_ID_5454074728955535794" border="0" /></a><br /><span style="color: rgb(0, 0, 0);font-size:130%;" >With April 15 around the corner, most of us are focused on getting our returns in on time or on getting whatever refund we're owed. But right <span class="blsp-spelling-error" id="SPELLING_ERROR_0">now's</span> also a good time to think about preparing for next year's tax season by adjusting your withholding for the current year. That's what one friend asked me about recently: </span><blockquote style="color: rgb(0, 0, 0);"><span style="font-size:130%;"><span style="font-weight: bold; font-style: italic;">I'm never quite sure how to fill out my W2 forms. I'm not sure what number I should put down for withholding, although I was told not to put down more than 2 to avoid owing the government. Also, for the state, I don't know whether it is better to claim an exemption for my dependent or myself.</span></span></blockquote><span style="color: rgb(0, 0, 0);font-size:130%;" >My first piece of advice here is that whenever you're unsure about a tax issue, it's always best to consult with an accountant. That doesn't mean you have to go out and hire one, but most people either know someone personally or know someone who knows someone who prepares taxes for a living and asking that person for five minutes of their time costs nothing.<br /><br />Now, here's my totally (non-legal, non-<span class="blsp-spelling-error" id="SPELLING_ERROR_1">cpa</span>) opinion: instead of just punching in a 0, 1 or 2 on your W-4 (that's the withholding form; the W-2 is the tax statement your employer sends you at the end of every year), read the actual instructions and follow them. the W-4 is more than a form, it's a worksheet designed to help you estimate in advance which deductions you're eligible for and to structure your withholding around those. In short, it's a way to make sure that you're keeping all the money you should keep all year long, instead of giving it to the government, which is what happens when you get a big tax refund every year.<br /><br />As a single mother, it's entirely possible that you may be eligible for more than two deductions as you might qualify, for example, as head-of-household or for a child tax credit or earned income tax credit. You might also be eligible for a deduction for qualifying childcare expenses. Going through the worksheet and talking with an accountant or tax preparer might reveal that you should actually put a 3 or 4, instead of a 1 or 2.<br /><br />Being concerned about owing the government is legitimate; in that case you could still do the worksheet and then subtract one or two from the number it suggests just to stay on the safe side.<br /><br />Good luck.<br /><br /><span style="font-style: italic; color: rgb(153, 153, 153);font-size:78%;" >image courtesy <a href="http://www.photoxpress.com"><span class="blsp-spelling-error" id="SPELLING_ERROR_2">photoxpress</span></a></span><br /></span>Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com0tag:blogger.com,1999:blog-874719064634626617.post-38164242909180511122010-03-29T10:41:00.001-04:002010-03-29T10:44:36.241-04:00Are you getting a good deal on your credit card? Take our survey<div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/_3bfbg6ZpKFo/Swayxo2yEmI/AAAAAAAAAGg/OBKkhMnAGGo/s1600-h/credit%20cards.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="213" src="http://2.bp.blogspot.com/_3bfbg6ZpKFo/Swayxo2yEmI/AAAAAAAAAGg/OBKkhMnAGGo/s320/credit%20cards.jpg" width="320" /></a></div><span style="font-size: large;">Credit card reform went into effect earlier this year with a number of significant restrictions on fees and practices that should benefit consumers. That was the good news; the bad was that before reform took effect, many consumers saw interest rates skyrocket on their cards, often with no explanation from the card issuer. </span><br />
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<span style="font-size: large;">Were you one of the lucky ones whose rate stayed the same or were you whacked with a big interest rate increase? <a href="http://www.surveymonkey.com/s/ZD2VRTV">Take my survey</a> on credit card rates and help me with later posts looking at how readers like you have been affected by the changes. </span><br />
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<span style="font-size: large;">All responses are totally anonymous; I'm not collecting any personally identifiable information -- no names, no addresses, no email <span class="goog-spellcheck-word" style="background: none repeat scroll 0% 0% yellow;">addys</span>. Thanks.</span>Keith T. Reedhttp://www.blogger.com/profile/11096646974898360459noreply@blogger.com0