How to Save Money: Even Your Milk Money Counts

Do you find yourself saying that you don't have enough money? Is it hard to find the pennies necessary to pay the bills? Saving money can be difficult at times for a lot of reasons. Whether it is because you are stuck in contract to lease a car or can't stop yourself from buying the latest, greatest item, it can be hard to save money. The simple fact is that it is hard to postpone gratification when you get a 'high' right now.

It isn't always the consumerism or the impulse purchases that keeps people from saving money. In fact, it was just recently that a reader commented that it's hard to save money when they barely make enough money to pay the bills. Do you have to make a ton of money to be able to save any significant amount? While it may be easier to save money when you have more of it, having a low salary does not discount you from saving money. The important principle in understanding how to save money is that every little bit helps' even your milk money.

 

How I Learned to Save Money

When I think back to my childhood, it makes sense why I am already saving for my retirement in my mid 20's. When I was in elementary school, my older brothers were middle school and even high school. Like any youngest child, I wanted to be just like them. One brother had a real job and another a few baby sitting gigs. I was too young to have a job, but old enough to know that I wanted to buy things. With no allowance, I was left with one option: milk money.

Everyday I was given $.40 for a carton of milk. Over a standard week, that equated to $2. While that may not sound like a lot to you (or me now), to a 10 year old child, that's a lot of money, especially for something that I didn't need. While I still love chocolate milk to this day, I made a decision that saving the money and buying something bigger was more valuable to me than drinking milk every day. I never did tell my parents this because I was afraid they would stop giving me milk money. Slowly, but surely, my piggy bank filled up and I could buy my own toys. I know what you are thinking''Didn't your parents buy you toys?' Sure, my parents would buy us things, but they also wouldn't spoil us. Certain things we were required to buy.

Excuses Why People Can't Save Money

There are many excuses that people give when they say they can't save money. Here are the top 10 excuses that I have heard, in no particular order:

1. I don't make enough money
2. I have to pay off debt
3. I have too many expenses
4. I really needed this or that
5. We live on one income
6. I pay too much in taxes
7. I'm in college (which is kind of a combination of #1 and #3)
8. I have kids (the implication is similar to #3)
9. I'll earn more in the future and be able to save more
10. I didn't start saving early enough

I could continue on, with numerous variations of several of these excuses. Many of these I have heard over and over again. In some sense, I understand people's situation. My wife and I both work and don't have any kids, so it is easier to save money than others. Or, at least that's what I am told to believe. My wife and I also have our own obstacles to save money. I don't make very much money and we live in one of the most expensive areas in the country. A great example of the higher cost of living is this: I pay more than twice the amount in rent (for my 1 bedroom apartment) that my in-laws pay for their mortgage payment on their 3 bedroom home.

Everyone has obstacles to save money. While I recognize that there are legitimate reasons to prevent people from saving money, there are also many decisions that you can make to save money. If you find yourself saying to yourself that you can't afford to save money right now, you are lying to yourself. Most of our obstacles to save money are not forced upon us, but are based on decisions that we have made ' whether those are decisions we made yesterday or years ago. I think when we are honest with ourselves, we will realize that we can choose to save more money. It's just that we don't value saving as much as whatever else we would have to give up.

• If you are the one that can't save money because you have too many expenses, get rid of your expenses. Whether that means moving to a cheaper apartment or home, using one car instead of two, eating out less frequently, etc. We all have places where we can save more.
• If you are in college, consider getting another job in college to help pay your way through college. Or, consider lowering your expenses. Live with a couple roommates, eat cheap food, etc.
• If you find yourself saying that you really needed a new computer, smart phone, or an I-Pad, think again. These are luxury items. You can get by without them. It just means that having the best technology means more to you than saving for our future.
• If you have kids and can't find a way to save any money, you might be spoiling your kids. Spending all of your extra money on your kids is not only bad use of your finances, but teaches them a horrible lesson.
• Choosing to have one adult stay home, whether it is to take care of children or another reason, is a just that: a choice. Many families still prioritize saving even though they have one income. It's just a matter of increasing your income and lowering your expenses.

The 'Secret' to Saving Money (or Saving MORE Money)

While I could go on and on, about different situations of saving money, the 'secret' to save money is to make it a priority. I've already discussed what it means to establish financial priorities, but it really does start with that. Anyone who wants to start saving money needs to begin with understanding the value of saving money. The old phrase of 'delayed gratification' is true in this instance.

Benefits of Saving Money

The value of saving money comes in what is offered ' or the benefits. While you could summarize it to be 'financial security', that is pretty vague and doesn't fully illustrate the true benefits of saving money. Here are some of the popular ones:

• Protection from expensive emergencies
• Early retirement
• Other flexibility in your career (the option not to choose the highest paying job)
• Less stressful upbringing for your children (i.e. paying for their college, etc.)
• Peace of mind
• Ability to stay at home with children

How Value Saving Money

It may be as 'simple' as placing more value on the future benefits of saving money, sometimes life gets busy and it's hard to focus on the benefits of saving money. It's hard to convince yourself that it's better to save the money for the future than enjoy a new car. Here are some tips to keep you on track in the busyness of life:

• Set Financial Goals ' This is a great way to keep you working towards something tangible. You can review my financial goals if you need inspiration.
• Reward Yourself for Saving ' A small treat can be a great way to motivate yourself to save money
• Review Your Budget Monthly ' Keeping up with your monthly budget, including tracking your expenses can help keep you accountable. Before you know it, you may enjoy evaluating your success each month. I know that I do!
• Track Your Net Worth ' While a lot of people place a lot more value on this than I do, it is a great indicator of whether you are saving or not. It can also be fun to track your progress.
• Visualize Retirement ' Another great way to motivate yourself is to visualize your retirement or future financial security. Post a picture  that captures your ideal retirement, like a picture of the beach or a golf course. This will help you focus and maintain that priority.
• Don't keep a wish list ' I've said this before, but the worst thing you can do in regards to saving money is to think about things you are going to buy someday soon. If you are looking at the items, you may convince yourself in a time of weakness that you 'need' it now.

Learning how to save money is just one of the many life lessons that responsible adults need to embrace. It will not only offer you the much needed financial security later in life, but will ultimately mean distancing yourself from the consumerism that drives our society. No matter how much you buy, it won't satisfy you. The earlier you learn this and the earlier you start saving, the better off you will be.

Financial Carnival for Young Adults ' 23rd Edition

Welcome to the twenty-third edition of the Financial Carnival for Young Adults. My purpose with this carnival is to create an easy-to-find place for information about finances for young adults. The carnival is hosted here at 20's Finances almost week and features the most recent articles from around the web. While last week we talked about investing, this week the topics include Real Estate, Frugality, and Self-Employment.

Real Estate:

I love talking and planning for my entry into real estate. I am starting to think about investing in a different market than my own in order to expedite my investments. Here are some other people writing about real estate.

Shawanda @ You Have More Than You Think writes The Rent vs. Buy Debate: Why Renting Makes Sense - Is it better to buy vs rent? Buying your home may give you the warm and fuzzies. But before you take on the expensive cost of home ownership, run the numbers.

Earth and Money @ Earth and Money writes Seven Reasons for Renting over Buying - There's a lot of reasons to buy property, but sometimes its better to rent. Here's seven reasons why renting is better than buying.

PPlaner @ Provident Plan writes Shop Around for Your Property, Not Your Bank - Looking for a home? If so, then you know shopping around for both your mortgage and your new home can save you thousands of dollars.

Corey @ Steadfast Finances writes Should You Build Your Own Home? - Owning a home is the dream of most middle-class families. Not only does it offer the ability to be in control of your own housing environment (as opposed to renting), but it offers long term financial security. Yet, it's not always attainable. As we have mentioned before, buying a house can be difficult with the recent economy.

MR @ Money Reasons writes Earning 25 Percent On My Previous Mortgage Payment - Earning 25 Percent On My Previous Mortgage Payment by overlapping some awesome money instruments.

Jen @ Master the Art of Saving writes We're Buying Our First House! - Around a month ago, my husband came to me and said that we really need to buy a house right away. Scary! I'm the one who handles the budget and all the money'

Jason @ Work Save Live writes Saving a Down Payment For a House - Our Journey June 2012 ' Saving a Down Payment for a House The end of May and throughout the month of June presented a lot of great changes for us.

Frugality:

Because my wife and I are preparing to pay for her semester of Grad School, we have been really tight with big expenses. Sure, we will spend a few dollars here and there in order to enjoy the summer, but we haven't used any significant amount this month. This makes me feel better about forking over a ton of money on her education.

David Carlson @ Young Adult Money writes How I Saved over $700 on a CT Scan ' I explain how I saved over $700 on a CT scan that originally was going to cost over $1,000.

Crystal @ Budgeting in the Fun Stuff writes Life is Too Short to Spend Time Ironing Sheets - Here is the list of things that I refuse to waste time on since they do not give me enough satisfaction to justify the time spent. Life is too short.

A Blinkin @ Funancials writes Your Obsession With FREE - Are you drawn to things that are BOGO (buy one get one free)? I'm guessing you are. We all are. The sound of FREE is music to our ears. Why? Because it's not only free, it's RISK FREE. The majority of us are such sissies that we would rather 'not lose' than 'win.&

Miss T. @ Prairie Eco Thrifter writes Maybe I Should Save Money and Blog Less - While I'm rationalizing an opportunity cost to settle my conscience about hiring a mechanic, what I'm really justifying is spending $60 for two hours of leisure time.

Self-Employment:

Miss T. is asking the popular question of whether it is better to spend less with a DIY project, or invest more time in your business. Being self-employed can be quite a challenge and involves a lot of time investment. Here are some great posts that discuss self-employment.

PITR @ Passive Income To Retire writes Why Blogging is a Respectable Business ' Find out why blogging is a respectable business model and why it aligns with the future of online usage.

John @ Married (with Debt) writes Does America Need Small Businesses to Fail? - Does the American economy need small businesses to fail? And from this question: does the economy depend on having both losers and winners?

Invest It Wisely @ Invest It Wisely writes How Hard is It to Become a Freelancer? - Do you find that the world is becoming a little bit more entrepreneurial, these days? Read my experiences and see if you agree!

Little House @ Little House in the Valley writes Is Self-Employment the Answer in a Troubled Economy? ' In cities where employment has stagnated, is there a chance where a significant percentage of the population who has struggled with unemployment could turn their finances around by becoming self-employed? Or, maybe it's really 'freelance' that I'm thinking?

What to Bring to College? 5 Things Every College Student Needs

July is almost gone and that means summer is almost over. It's not just the end of summer, but the beginning of another school year. Teachers and students alike are getting ready for another year of education. For those who just graduated high school, it means the first year away from home at college.

Moving away to college can be a stressful time, filled with doubts and uncertainty. You may be asking yourself how you are going to survive or who you are going to room with. Yet, it's not just fear. College comes with a lot of excitement. Time to get away from the parents (Don't burn any bridges because you may need to move back in with your parents after graduation) and live your own life.

One of the most critical questions that you may be asking is what to bring to college? Every soon-to-be college student and their parents asks this question. Here are a list of must have's for all the soon to be Freshmen out there.

Things to Bring to College

1. XL Twin Sheets

This is an absolute must. College campuses feature extra long twin beds for Freshman and a normal set of twin sheets just won't cut it. Don't assume that college is a hotel or bed in breakfast where these things are provided. The prepared college student will arrive with at least one set of sheets, a comforter, and pillows. There's no reason to forget your linens.

2. Clothing

Don't be fooled by the hot temperatures at check in. While you may think that you never need any warm clothes, the fall season can come quickly and leave you a little chilly if you don't come prepared for cooler temperatures. Make sure to pack clothes for all types of weather. Just try to imagine what you wore in the past year and pack that. You may tell yourself that you have time to get these items at Fall break, but what's to say you won't take a trip with your new friends.

3. Mini-Fridge

If you know who your roommate is before hand (which you should), be sure to connect with them to see who is bringing the mini-fridge. This not only allows you more flexibility with the Campus Meal Plan (thereby saving you more money), but it is also a great way to keep your drinks cool. There's nothing that helps you stay up all night studying for that exam like a lot of caffeine. The best dorm room pairs a mini-fridge with a microwave. Nothing says college like Ramen and noodles, right?

4. School Supplies

While college may seem like the perfect escape from all responsibility, don't forget that college is about learning in the classroom as well. A prepared college student will come with some of the basics of school supplies. Paper, pencils, pens, organizers, etc. You've been in school for many years now ' you should have this under control. This may also be the perfect time to convince mom and dad to help you with the new computer that you 'need' for school. All the cool kids have them.

5. Toiletries

Last, but certainly not least, are the toiletries that you need to bring. Of all the things that your roommate will most appreciate, deodorant is on the top of the list. Maintaining proper hygiene may not seem like a necessity at certain times in college (who didn't go to their first class in pajamas), it is important to have the necessities: shampoo, soap, toothpaste, deodorant, makeup etc. This may be the time in your life where you meet your future spouse, so come prepared.

While it may seem overwhelming or something that you don't need to worry about now, getting your stuff together now can decrease stress and lessen the financial burden of preparing for college. You never know when Mom and Dad are going to stop helping you pay for things, so you might as well take advantage while you still can. This may be your ticket to paying for college without going into debt. (It is possible to graduate without student loans, you know')

What else is on your list to bring to college?

Readers who have graduated from college, what's the most important thing for Freshmen to bring?

Why Investment Fees Matter

Corey previously wrote about how time is your new best friend. This is all because of compound interest. The more time you have to let your investments grow, the more your money can compound upon itself and grow faster. It almost sounds too good to be true, and unfortunately it is when you look at it in terms of investment fees.

The effect of compounding can be sizable. Looking at the example from the post from above, investing $10,000 for 40 years while earning 8% annually grows to over $200,000. But what happens to your money when fees are included? Let's look at an example.

You invest in Fund A with $10,000 for 40 years that earns 8% annually. The fund charges 1.50%, which is roughly the average that you will find today for an equity mutual fund. After those 40 years, you will have paid a little more than $27,500 in fees. Had you invested in Fund B that charges 0.50% annually, you will have paid roughly $12,000 in fees.

Some of you may be thinking that $15,000 isn't that big of a deal. But let's go back to the whole concept of compound interest. When you invest an amount of money, say $1,000, and it grows to $1,080 after one year, the next year, you earn interest on the entire $1,080. If you are paying more in investment fees in one fund versus another, you are not only being charged the fee, but you are costing yourself additional compounding of your money. The $15,000 that you didn't pay by investing in Fund B allows your investment to grow more. Put another way, $15,000 stays in your portfolio to compound over time.

As you can see from the chart below, after 40 years, your investment in Fund A grew to just under $119,000 while your investment in Fund B grew to a little more than $177,000. Remember that you invest the same $10,000 to start and both funds earned 8% annually for 40 years.

The $15,000 in fees that you paid cost you roughly $58,000. In the chart below, I break out the actual fee you pay for each fund as well as the 'lost opportunity' that the fee cost you in terms of additional compounding.

You need to pay attention to fees. They are one of the most important things you can control when investing. There is no point in paying a higher fee for an actively managed mutual fund in hopes that the fund manager will earn you a higher return. In most cases, he will not. 80% of active funds fail to beat their benchmark every year. Find lower cost alternatives, like Vanguard. I urge you to review your investments and to look at the fees you are paying. It is easy to pay a high fee because you never get a bill for it. The money comes out of your investment, but it doesn't show in your statement, just in your performance number.

For example, Fund A, after taking into account the 1.50% fee it charges, returned 6.38%. Fund B returned 7.46%. When looking at just the performance, which is typically the only thing you see on your quarterly and annual statements, both funds performed decently. You would never know by looking at this number, how much money you are costing yourself. Pay attention to fees!

Five Ways Anyone Can Make Extra Money

Ever since I started making a little extra money from my hobby (and realizing the difference that it makes on your monthly budget), I have been a little obsessed with different ways to make money. There is so much more that you can do with extra money. The idea of it being extra money can be dangerous though because it can encourage more splurging. I know that many of my friends would love to have a little extra cash to play with.

Extra money doesn't just have to be splurging money though. It can fund a lot of responsible things. It can help you save for retirement, pay for trips to attend friends' weddings, or even save up an emergency fund if you don't have one. I am convinced that everyone can earn a little extra money if they put their mind to it. If you count up how many hours you spend watching TV, you will realize that you have a little extra time on your hands than you think. With that time, you can do one of these five things to earn a little extra money.

1. Yard Work: One of my first jobs was to mow my neighbor's yard for $20 every other week. There was no age requirement as long as I could get the job done and it was good money. I was a thirteen year old making $20 per hour. What's not to like. Regardless of how old you are, if you can push (or drive) a lawn mower, you have access to a part-time job. I am sure there are several neighbors that would prefer to pay you to mow it than some company.

2. Wash Cars: When I was growing up, my brothers and a friend washed our neighbors cars so we could afford some new Nintendo games. We were motivated entrepreneurs and we knew how to get some extra cash. It's not a mystery why a car wash is one of most popular forms of fundraising out there. It's easy to do (it's not rocket science and people always want to have a clean car).

3. Tutor: You may be thinking that you weren't good in math or English, but before you put yourself down, ask yourself what you are good at. My wife is basically fluent with Spanish and has turned down multiple opportunities to tutor children in our neighborhood despite having no experience. If you a skill/talent, I am sure you can find a subject matter to tutor in. People desperately want their children to succeed in school and will pay to make it happen. Why not take advantage of the situation and help a student at the same time?

4. Earn it Online: There many ways to earn money online, whether it is starting a blog or doing online surveys. Believe it or not, you can make extra money by doing online surveys. I generally avoid online surveys, but that is just because I prefer to blog. You won't become the next millionaire this way, but a little extra money helps provide that financial cushion.

5. Give Blood / Plasma: There were many people in my Freshmen dorm in college who followed this route. They would give their blood or plasma in exchange for $40. I am sure it depends on what and where you are donating, but it can be a nice way to earn a little extra money. I tend to stay away from unnecessary needles, so it's not my ideal way to earn a little extra money. You should know that there are also limits on how frequently you can do this. There's no reason to sacrifice your health for a few extra bucks, so be cautious.

Making a little extra money will take a little extra time, but it's not overly complicated. If you are short on cash or just want a little extra money to play with invest in your retirement, you might want to consider some of these options.

Keeping Track of Your Expenses and Why It's Important

Managing your finances often starts at college. Regardless of whether it is when you enroll for classes in your freshman semester or when you graduate, you are forced to take on the challenge of your finances as an adult. It's often the balancing act of knowing how much you are earning in comparison to how much you are spending. Knowing how much you earn is often the easiest part. Keeping track of expenses is the hard part.

Whether you want to admit it or not, you purchase a lot of things over the course of the month. Whether it's a pack of gum at the convenience store, ice cream on a hot summer evening, or your groceries. My wife and I average about 40-50 transactions each month on our credit cards. Most of our friends average more than that. Spending money is an everyday part of life and you need to learn how to keep track of it.

How to Keep Track of Expenses

There are many ways that you can use to keep track of your expenses. Many of the most popular ways have even more forms as everyone seems to personalize their own form of tracking the outward flow of money. This only makes sense. People have different personalities and different spending habits, so why abide by the same system to track it? Here are the three basic ways of monitoring your spending:

The Diligent Paper Trail:

One of the most basic ways to keep track of what you spend each month is to write down each and every transaction while it happens. This has a lot of advantages. It ensures that you do not miss a single transaction, allows you to confirm that the credit card statement matches your records, and allows you to easily total how much you have spent in that month at any given point. If you are ever wondering how much money you have left in a given month, there's no need to guess. If you want to do the work, you have the tools at your finger tips. This type of monitoring gives you peace of mind knowing that you did not miss anything.

The problem with this method is the time investment necessary. We are all busy creatures and if I had to guess, the people who do not keep track of their expenses fail to do so because it takes time. If you are seriously considering this option, you need to ask yourself if you are going to be diligent enough to write down every transaction. If you are going out on a date, are you going to interrupt the flow of the evening to write down how much you are spending? If not, will you remember to do it that same night before you forget the total?

The Technology ' Using Credit Card Statements

Another way to keep track of your expenses is to use your credit card statements to track your spending. Unlike the old-fashioned option mentioned, this utilizes some of the technological resources available to you. At the end of each month, you can use your statements to add up how much you spent for each category (i.e. housing, transportation, etc.). In case it isn't obvious, this method requires you to use your credit or debit cards. Otherwise, there would be no trace of your spending.

This method excels where the previous one fails. It allows you to enjoy each and every occasion without having to obsess about writing down each expense. This is a huge benefit. Yet, it isn't without it's own faults. While it may allow you to easily keep track of your credit card spending, it still requires some additional work to keep track of cash purchases. Can you handle juggling this balance? The other downside is that it generally requires a couple hours of work each month. Will you have the patience to add up each category each month? Or will you give up?

The Easiest, Fastest Option ' Mint.com

The third alternative, which utilizes technology to its fullest is a free online service. Mint.com is one of many online services that helps you keep track of your expenses. While there are others out there, it is probably the most well known and popular. Instead of having to write down each transaction or add it up at the end of the month, why not have a computer software do it for you?

There are many reasons why I think mint.com is a great option to monitor your spending:

1. It requires very little time for you to keep an eye on your spending. This means more free time for you and a greater chance that you will stick with budgeting. Budgeting doesn't have to be time-consuming to be effective.
2. You can connect multiple accounts to it, so there is no need to login to multiple accounts. It's all in one place.
3. Easy-to-use analytic software, including the ability to create graphs and charts. If looking at numbers doesn't give you a whole picture of where your money is going, why not use Mint.com to create fancy charts to better understand your expenses.
4. It's secure ' while some people may be worried about connecting multiple accounts to one place, it offers the same level of protection as online banks. How's that for secure!
5. Did I mention that it's FREE? While other services make money off of membership fees, mint.com makes its money on promotions. That means its free to use for those who just want a tool to track your spending.

Why You Should Track Your Spending

Understanding why you should track your spending is different than actually doing it. Some young adults start monitoring their expenses in order to please their parents or because they think it is what you are supposed to do. It is not uncommon for people to do this without understanding why it is important. I generally think that understanding why it's important is crucial. If you aren't sure why you are doing something, you will often stop.

It's YOUR Money:

The first major reason why I think everyone should track your spending is because it is your money. It isn't someone else's that you can just throw away without any consequences. It is your money that you earned through hard work and determination. Just like anything else in life, keeping a close eye on the things that matter in your life is essential. If you are growing a garden, you realize that it takes a little time and focus to grow it. It's not going to happen without the attention necessary. In the same way, paying attention to where you spend YOUR money is a natural part of being responsible with your finances.

Not only is it natural to pay close attention to where you money goes, you need to make sure that no one is stealing from you. While you may think that no one would cheat you (because you wouldn't cheat anyone else), this is far from the truth. It was just a couple of months ago that I discovered a $100 charge on my credit card bill for a rental that the repair shop was supposed to pay for. If I hadn't been paying attention, I would have paid it and no one would have blinked an eye. People's credit cards are compromised everyday, so you never know when a fraudulent charge will come up. If you're not paying attention to the bill, you'll never even know that someone is cheating you.

If You Want to Do Something Differently With it, It STARTS with KNOWING Where It's Going

If you have recently found out that you are throwing your money away AND want to change, it first has to start with where you are spending your money. Did you know that a lot of people can not answer how much of their budget they are spending on food or transportation? The easiest way to go into debt is to stop paying attention to where you are spending your money. The alternative is also true: a great way to save money (whether it be for vacation, retirement, or a new car) is to start tracking your spending. Once you do this, you will be able to limit yourself next month.

If you want to start taking charge of your finances, start paying attention to where you are spending your money. Technology has made it significantly easier to track your expenses then ever before, so there's no excuse. You have the power to change your financial situation today.

Do you keep track of your expenses on a regular basis? If so, how do you do it?

 

Financial Carnival for Young Adults ' 22nd Edition

Welcome to the twenty-second edition of the Financial Carnival for Young Adults. My purpose with this carnival is to create an easy-to-find place for information about finances for young adults. The carnival is hosted here at 20's Finances almost week and features the most recent articles from around the web. This week it includes the topic of investing.

Investing:

Investing is always a difficult thing. People spend their careers trying to figure out the best way to use the stock market to build up their nest egg. It can be a scary thing, but is also necessary. Here are some posts about the approach to investing:

Ashley @ Money Talks Coaching writes The Power of Dollar Cost Averaging - Dollar cost averaging is when you decide how much money you are going to invest each month and then chunk it into the market each and every month no matter

Kanwal @ Simply Investing writes When is the best time to buy stocks? - When is the best time to buy stocks? Should you try and time the market? No, market timing doesn't work. It is always a good time to buy quality dividend paying stocks when they are undervalued. No one can predict the future. Analysts, financial experts are no good at predicting the future than you and I.

Earth and Money @ Earth and Money writes Community Bonds ' A Primer - Community bonds are just what they sound like ' bonds issued by local, community organizations (either a non-profit or a co-operative) to local, community investors. The investment funds provide the organization with either money to pay down existing loans that they may have, or to provide start-up capital for a potential project, in exchange for a fixed rate of return.

MMD @ My Money Design writes How to Read and Evaluate Basic Stock Metrics - Have you ever looked at a stock online and wondered what all the metrics represent? Which ones are good and what is their significance? This exercise walks through a stock page on CNN Money and explains the importance of each of the metrics to you.

Luke @ Learn Bonds writes The Total Return Approach - Are you investing in individual bonds, bond mutual funds or bond ETFs to stabilize your portfolio throughout retirement? You are not alone.

Tushar @ Start Investing Money writes Do You Know Enough to Be a Successful Stock Market Investor? - For many people the obvious route to take when thinking about investing is to head for the stock market. But is this really the wisest route for everyone? There is certainly a lot of money to be made with stocks and shares.

I never want to find myself asking if I started too late. This is what Ted Jenkin @ Your Smart Money Moves writes about when he asks, Is It Too Late To Begin Saving For Retirement? - You are 45 years old and it dawns on you that your college days are looking further and further in your review view mirror and you can see the exit sign.

Investing can also become obsessive. Before you know it, your investments can consume your every thought. You need to be careful and that is why it's important to listen to Daniel @ Sweating the Big Stuff, when he writes How Often Should You Check Your Investment Accounts? - We like to be in control of our day-to-day finances and we want to keep tabs on our investments as well. But is checking constantly healthy?

 

Business Start-up Considerations

Setting up a new business can be a very daunting prospect, but it can also be lucrative. If you can find a niche in a current market and exploit it to your advantage you could become very successful. If you've been thinking about it you may have been seeking advice on anything from company structure to releasing funds with factoring once you get started.

Advice is key, but only if it's good. With that in mind, take a look at our considerations to take into account when starting up your own business.

Reasons why you're setting up

Setting up on your own is a massive deal. In order to be successful you'll need to put in a lot of work, commitment and patience. You'll immediately need to be able to structure your time and keep on track of the day to day operations.

Now's not the time to hide anything from yourself. It's time to really start to gauge an understanding of you as a person and whether or not you have the capabilities and the capacity to succeed. If you know you have what it takes to go it alone, go for it.

Deciding on company structure

Once of the first things you need to do is decide on the business structure you wish to trade under. It could be sole trader, partnership, limited liability company or LLP. The tax and legal obligations varies between structure so it's vital you get professional advice on which one best suits your requirements.

Funding

In the end it often comes down to money, with one of the biggest reasons companies fail being due to lack of capital. It's time to be realistic and conservative when it comes to working out how much funding your new business will require. Once you're up and running you also need to keep on top of your cashflow management. There are specific options available to you to assist with this, such as factoring.

Research the marketplace

It's imperative that you research the marketplace thoroughly for your product or service. In order for your venture to survive there needs to be a market. Don't go in blind; you must cover all your bases before starting on any new venture.

Put in place a business plan

Many people don't believe in business plans. However, even if you don't refer to it again once you're up and running the process of actually writing one can be very helpful for getting your thoughts in order and structure. It's also essential if you need any third party funding.

Money in Your 20s ' What to Do with it

People in their 20's are famous for throwing away money once they get it. Remember why it's hard for people in their 20s to save money? I'm convinced that one of the biggest challenges that young adults face is to manage their newly acquired money. Going from college student income to someone rolling in the dough overnight is not easy. It may not sound like a challenge to many' I mean, why is having more money ever a problem?

But, it is a problem. This is a critical point in your life and learning what to do with money while you're still in your 20s will have rippling effects on your finances for decades to come. If you are in your 20s and you are left wondering what to do with the money that you do have, here are some great options (in no particular order):

1. Invest in Your Retirement

You can start saving for retirement in a variety of ways, but the important thing is to start now! Compound interest is more powerful than a large salary and if you start investing as much as you can in either your 401(k) or your Roth IRA, you will be glad that you started.

2. Save up an Emergency Fund

An emergency fund is the key to protecting yourself from going into debt in the future. Too many people are forced to pay for unforeseen expenses with a credit card or by borrowing money from mom and dad. It's bad enough that some young adults still live with their parents, let alone borrow money because of bad decisions. By saving up for an emergency fund, you can give yourself a lot of piece of mind.

3. Travel

Traveling should be something that all young people prioritize. It seems like my entire facebook news feed is full of friends having kids without ever taking the time to travel to places on their list. Before you settle down with a family, why not invest some of your extra cash in some great life experiences. Hopefully you will use it to learn about other cultures and not just brag to your friends where you have been. My wife and I currently take a yearly vacation to celebrate our anniversary.

4. Pay Off Your Debt

While you may think it's okay to live with some debt, there are many great reasons to pay off your debt as quickly as possible. Whether it's a car loan or student loans (I hope you didn't forget my rant about why you should never take a loan out for a car), debt is debt. It costs you money to owe people and if you have extra money to throw at your debt, why not become debt free. In case you missed it, here's some advice on how to get pay off your student loans quickly. Why pay interest on something when it can be avoided?

5. Save Up a Down Payment for a House

Home ownership is a dream of mine. Not because of some status, but because of the connection to building up wealth and equity. Instead of always paying rent for the rest of my life, I would much rather pay a mortgage for 30 years (or less if I pay it off quicker than that) and live with very little housing costs for the rest of it. But, this will never happen if I can't save up the necessary money for a down payment. Making this a priority is a great option for anyone in their 20's. While it may be hard to keep setting money aside without seeing any concrete results, it will pay off in the long run. The earlier you get into a house, the earlier you are building equity and the earlier you are living mortgage-free.

6. Buy a Life Insurance Plan

While some may not prioritize this option, I think this is a great way to use your money. If you have a spouse or children, this should be even more important. I would hate to leave my wife in a poor financial position and I am sure many of you think the same way about your loved ones. While it may seem like you are young and healthy, and therefore do not need a life insurance plan, this is actually why it is a great time to get one. I elected to get a whole life insurance plan and did so at an early age because I knew locking the premium in now while I was young would be a smart decision. Can you imaging having to get life insurance after being diagnosed with a serious health condition?

7. Invest in a Business Idea

While many people think that focusing on their career is the best path for them, I am convinced that having diverse income streams provides the best security. The best way to diversify your income is to invest in a business idea. Whether it is starting your own business or simply being a financial backer in a new company, the options are endless. While there is a possibility of you losing your investment (so you should be careful), I think you will be surprised about how much this opens your eyes to the possibilities of generating a side income. The old adage, 'You never know until you try' rings true in this situation. In your 20's, you are likely to have more energy and passion than later in life. Might as well do it while you can.

Having money when you are young does not mean that you need to throw it away on temporary thrills. If you are smart and plan for your future, you could not only speed up your retirement, but enjoy a greater peace of mind knowing that you don't have to worry about having enough to pay the bills.

What do you do with extra money? If you could do it over again, what would you do with the extra money that you had in your 20s?

Homeowners and Renters (Infographic)

The past few months, I have found myself obsessing over buying a home. Part of it is due to the fact that we don't have any debt and it's one of my long-term financial goals. I also hate renting (and feeling like I am throwing money down the toilet instead of building up equity). I am sure there are many other factors that come into play (like how my parents always owned their own home instead of renting when we were growing up), but suffice it to say that it is on my mind. I am still a couple years away from being prepared to buy a home, but it won't stop me from thinking about it.

Home ownership is never something you should jump into without examining the true costs. I remember hearing experiences of people close to me buying a house before they were ready. They had a 'stable' job and wanted to buy their own home, so they took the leap. They didn't have a lot saved up, but had enough cushion in their monthly income that they weren't worried. The past few years, with the housing market practically collapsing, have forced people to become more cautious when buying a home. While most of those closest to me have been lucky to keep their homes, they do have a greater appreciation for financial security, especially in respect to managing their debt. This is why I elected to share this infographic. It does a great job at illustrating the different trends, in respect to debt, that homeowners and renters face, which helps illustrate some of the other expenses that you don't normally associate with home ownership. Enjoy!

Chaikin Portfolio Health Check Service Review

Investing can be a difficult thing for young adults. It's hard to know what to invest in, where to start investing, and how to know when something is a good investment. These challenges often keep young adults from investing (and consequently investing in their future). Unfortunately this not only means that they are missing out on an opportunity for exponential growth, but also delaying the inevitable: learning how to invest.

Part of the problem that I think young people face is not having anyone or anything to help them. It seems like everyone has a different opinion on investments, so the uncertainty continues. Sometimes it is helpful just to find a second opinion without having to pay a lot of money and sacrifice a part of the returns on your investment. An affordable alternative to the professionals who charge a lot of money for their advice seems necessary. This is what I found when I was asked to look at Chaikin's Portfolio Health Check Service.

What is the Chaikin Portfolio Health Check Service? How Can You Use It?

Chaikin provides a service to help you evaluate the strength of your portfolio. On a weekly basis, it provides you with the information to help predict the movement of your stocks. It is based on a 20-factor model of analysis, which is also known as the Chaikin Power Gauge Rating. In essence, this rating system uses 20 points of information about a stock and produces the ranking in a red-to-green display (Green meaning bullish and red meaning bearish). This analysis, which is updated weekly, helps you predict where your stocks are going to be in the next three to six months.

While it won't tell you what you need to do exactly or where you should invest your money, it will give you recommendations. In fact, the best use of the service seems to be in assisting the investor to perform regular portfolio adjustments based on this information. In fact, the CEO of Chaikin Stock Research describes its use more fully in a video on Fox Business. As he describes it, this service helps you perform stock swapping. For those who are buying individual stocks, it could help you avoid any unnecessary losses. In other words, if you currently own a stock that is predicted to plummet, why not switch it out for a stock that should go up in price?

If you are wanting to get started as an active investor, this service might provide the additional peace of mind that you need to get started. I know that I have not made the leap to becoming active trader because of the fear of losing my precious, hard-earned money. With my luck, I would invest in a stock and it would plummet. Yet, it is this philosophy that creates a need for such a service. The review of the Chaikin Portfolio Health Check service in Barrons quotes the CEO of Chaikin as saying:

'Instead of buy-and-hold, we believe in buy and prune,' says Chaikin. 'Buy good stocks, but also get the weeds out of your garden before they take over.'

In other words, it gives the investor another layer of information in order to avoid any possible bad investments. While I think it is a great service, it should not discourage investors from doing their own research on companies and stocks before making investment decisions. As I see it, it provides an easy-to-access source of information about the climate of the stock market so that investors can make informed decisions.

To get your first Portfolio Health Check free visit: http://www.portfoliohealthcheck.com

Don't Focus on Your Return But Your Goals

I enjoy writing about investing. Over the years, I have found that most people are focused on returns. The higher the better, and if your return wasn't as high as mine, you didn't invest as well as you could have or should have. But there is a flaw in this type of thinking. A bigger return isn't always better for everyone.

Let's look at an example. We have Kevin, a 30 year old saving for retirement. He invests in an 80% stock / 20% bond portfolio, which has earned him 9% annually. We also have Mike, a 27 year old saving for a new car in three years. He is invested in a CD ladder (multiple bank CD's with varying maturities and interest rates), that has earned him 3.5% annually.

Without knowing the details of their goals, if I were to tell you that Kevin earned 9% on his money and Mike earned 3.5% on his money, you would think that Kevin is the winner. He is earning much more than Mike. But really, they are both winners. Kevin is earning a good return of 9% for his goal of retirement in 30-plus years. Since his goal is long term, he is able to afford more risk, thus earning him a higher return.

Mike is also earning a good return. Since his goal is short term, he is taking much less risk and as a result, earns a lower return. But just because his return is lower doesn't mean it's bad.

Instead of focusing on returns, focus on your goal and whether or not the return you earn on the risk you are taking with your money is enough. Just because you 'only' earned 5% doesn't mean that you did great or poorly in an overall sense. How you did depends solely on what you goal is. Focus first on what your goal is, then focus on what kind of return you can expect for the time-frame you have of achieving your goal. Once you have a baseline on what you can expect to return, you can then determine if your return really was bad or good.

Some typical guidelines for your returns are as follows:

• Long Term Investing (10 years or longer): 8% or more
• Intermediate Term Investing (6 to 9 years): 5%
• Short Term Investing (1 to 5 years): 3%

How to invest for those time frames:

• For long term investing, you should focus on stocks with an increasing mix of bonds as you approach your goal.
• For intermediate term investing, you should be mainly in short term bonds and bank CD's, with a small amount of stocks sprinkled in. Ideally, you would keep the stock portion to 20% or less. You may want to look into peer-to-peer lending as well when investing for the intermediate term.
• For short term savings, you are looking at high yield savings accounts, bank CD's and short term bonds. You would want to avoid stocks in this situation as the risk of losing your money is too great.

Always keep returns in perspective and focus more on achieving your goals. This way you will increase your probability of attaining them, whereas if you get caught up in returns, you may never realize your goals.

How to Get a Promotion

Managing your career in this economy can be a difficult thing. With companies going out of business and people being laid off left and right (or so it seems), thinking about advancing within your organization may seem like a stretch. I know what you're thinking: It's one thing to keep your job and quite another to get a promotion.

Even though this poor economy in the past few years has affected our outlook on employment opportunities, it isn't as grim as people would like to make it sound. Companies are still hiring and even opening up new positions ' you just have to know where to look and how to perform. After you have a job, the best thing you can do for your career is look to get a promotion. It not only looks good for your resume (which will help your next interview go well), but it keeps you performing at a high level. It keeps you from getting bored as you are motivated to take the next step. Here are several things you can do to improve your chances of moving up the corporate ladder and get a promotion.

Be Willing to Try New Things ' One of the best indicators that an employee should be considered for an open position is a work history that shows ambition and the ability to adapt. If you were the hiring manager, would you rather hire someone that has done the same thing over and over or would you look for someone who has proven that they would be able to take on a new challenge. Taking on new responsibilities is a great way to demonstrate your skills and abilities to people higher on the 'food chain.' Trying new things also applies to transitioning to a new department. Sometimes if your focus is too narrow, it can be decades before a higher position opens up. If you are willing to transition to a different apartment, you can move sooner rather than later.

Excel at What You Currently Do ' Taking on new responsibilities won't help you if you can't perform your current responsibilities well. Even though I think our work force is a little backward in promoting people who are really good at their jobs (who said that if a person can do X really well, they can also be a manager ' these are two different things), this is how it works. Achieving success in your current position is an essential part of moving up in your company. This also includes being punctual and taking as few sick days as possible. If you are out of the office or coming in late, people will notice and that reputation will stick with you forever.

Connect with Your Supervisor ' Even though it is cliche, It's not what you know, but who you know. The importance of connecting with your supervisor can not be emphasized enough. If you are looking to move up, you will undoubtedly need a great reference from your immediate supervisor. While this alone will not be enough to earn a promotion, it will go a long ways to increase your chances. The more people rooting for you to get the job the better.

While it may seem daunting, getting a promotion is easier than it sounds. I have followed these basic steps at both employers since college and have been promoted to better positions. Employers prefer to hire internal candidates and if you put in the hard work from day one, you will move up in no time.

What have you done to improve your chances of getting a promotion?

Financial Carnival for Young Adults ' 21st Edition

Welcome to the twenty-first edition of the Financial Carnival for Young Adults. My purpose with this carnival is to create an easy-to-find place for information about finances for young adults. The carnival is hosted here at 20's Finances almost week and features the most recent articles from around the web. This week it includes topics of budgets, student loans, and cheap summer activities.

Budgeting

I absolutely love budgeting. My wife tells me it's because I just want to be a grown up, but there is something about evaluating my progress each month (and setting limits for next month) that excites me. It helps me feel intentional and keeps my priorities straight.

Lance @ Money Life & More writes Break It Down ' Daily Income and Expenses ' I always see people talking about how much things cost in total, by month or by paycheck. There is another dimension that you can consider and it is mostly a mental exercise. Break your income and expenses down to dollars per day.

JP @ My Family Finances writes How Does the Average Family Budget Compare to Yours? - We are obsessed with being more than average. So, if you want to avoid the average family budget, it helps to know what it is.

Tushar @ Start Investing Money writes Are Your Parents Jeopardizing Your Savings Plans? - Are Your Parents Jeopardizing Your Savings Plans without even knowing it? After all, we are a product of our childhood and the way that we were raised'

L Bee @ L Bee and the Money Tree writes How I cut my spending 38 Percent by simply by writing it down. - You may have heard me gushing on my blog/twitter about this FREE debt worksheet I've been working off starting last month. A fellow pf blogger, John at Married with Debt is kind enough to send over the excel spreadsheet he and his wife use to track their finances FOR FREE to anyone who wants it.

Student Loans

Student loans or college debt is never a fun topic. I was able to graduate debt free, but I know that I was lucky. There were times when I didn't think I was going to make it without getting a loan, but I did. Here are some great articles on student loans.

Glen Craig @ Free From Broke writes Have a Student Going Off to College? Teach Your Child about Student Loan Debt - If your child is accepted to number of great colleges that's awesome. But she should understand the costs and how student loan debt will affect them later on.

Jessica @ Budget for Health writes Do you use your college degree? ' It's sad that 1/3 of college graduates get jobs that don't even require a college degree. I'm thankful Dave & I both got jobs related to our degrees!

Jon the Saver @ Free Money Wisdom writes Paying off Debt? Follow your Own Rules ' When it comes to paying off debt, I've realized two things: it's a long process, and you have to make your own rules. Depending on how much debt you have to begin with, it can take years to get yourself out of the red.

Daniel @ Sweating the Big Stuff writes Do You Pay Student Loans Bills With a Credit Card? ' I love using my credit card for gas (3 percent cash back) when I can, but there are certain situations where you simply can't use a credit card to pay your bills. I would love to get 1 percent cash back on my rent'

Crystal @ Budgeting in the Fun Stuff writes Is the 'College Experience' Worth Student Loan Debt? - My husband and I have disagreed about the point of an undergraduate degree. I think college is for growing and he thinks college is for getting a job.

Wayne @ Young Family Finance writes Why Being Debt Free is Great for Your Family ' Find out why being debt free is important for your family.

Bridget @ Money After Graduation writes Avoiding Debt After Graduation - As college leavers know, taking another course is a great way to delay the start of paying off your student debts. Unfortunately, once you've passed the post and enjoyed graduation you quickly head towards the time you need to start making those repayments.

Summer Savings

Last, but certainly not least. I love summer! I have written before that it is one area where it puts my budget to the test because there are so many more temptations than ever before. Hot weather and outdoor activities along with weddings, vacations, etc. What's not to love. Well, make sure to consider your budget when you make your summer plans. To help you with that choice, here are some helpful posts:

Erika @ From Shopping to Saving writes How to Save Money at the Fair or Amusement Park ' Tips to save money at the fair or amusement park this summer.

Little House @ Little House in the Valley writes Saving Money on Wedding Photography ' As most newly married couples and brides know, hiring a photographer isn't cheap. If you're lucky enough to have a friend who dabbles in photography or is a professional photographer, you might be in luck. But for most everyone else, skimping on photography is a painful choice.

Ashley @ Money Talks Coaching writes Have Fun on a Budget This Summer? ' We look forward to the summer months all year long. Summer for many of us means vacations, road trips, concerts, and backyard barbeques.

Miss T. @ Prairie Eco Thrifter writes How to Save Money Visiting Yellowstone National Park ' It isn't cheap to visit a national park, if you stay in the park lodging and eat at restaurants ' which we did (because I am NOT a camper!), but there are some things you can do to trim expenses. Here are some of the things we did to curb our spending:

Do You Accept Bad Customer Service?

For those who know me well, know that I like to avoid conflict. I am still trying to figure out why I am that way or whether I had a bad experience with it, but I tend to shy away from conflict. Whether it is a falling out with friends or poor customer service, I usually just let it go. I generally do whatever it takes to not cause a scene. Whether it is the universe trying to teach me a new lesson or just plain bad luck, I have experienced a number of things that I just couldn't give up.

Possible Reason Why I Avoid Conflict

Growing up as a child, I have a few distinct memories of my family experiencing poor customer service. Yet, it wasn't the service that I remember. In fact, it was my father 'raising a stink.' It seemed like no matter what happened, if we somehow got cheated, even if it was small, my dad was asking to speak to the manager or on the phone giving his two cents. That's right ' my dad always had to get fair treatment. He never wanted to be mistreated and if he was, he was going to make sure it was corrected.

While it may not have been this bad, I distinctly remember thinking, 'Oh no' here we go,' knowing full well that my dad was about to raise his voice or tell them how it was bad service. I don't mean to say that my father was picky, hard to please, or even that he lost his temper easily. None of these things are true. BUT' if he didn't receive what he was promised, he was active in finding a way to receive it.

You see' I told myself that I would never be this way. Sure, if there was something significant, I would make sure that I got a quality service or product. But, if it was something small, I would just let it go. That's what I told myself, at least.

Two Experiences of Poor Service

A few weeks ago, I was gearing up for the best birthday ever. Okay, maybe a slight exaggeration, but I knew that the big celebration was going to be going out to eat. I wanted to make the most of it and so I did research. I even asked all of my readers which restaurant to choose. Thanks to you who gave me ideas. I ended up going to the Cheesecake factory because I like their cheesecake and could get a free scoop of ice cream. Or so they said. They ended up not offering me any free food and instead I ate my cheesecake (that I paid for) without any ice cream. What to do? Accept that I got stiffed and learn my lesson? Or do something about it?

To make a long story short, I decided to start a twitter campaign against the Cheesecake factory so that people would know not to expect any free ice cream. While I am not sure if people who go there for their birthday will now receive free ice cream, I did get a personal letter from the manager of the local restaurant, accompanied by a $10 giftcard. Cha-ching!

In addition to this, I was recently reviewing my credit card statement (like I always do in order to track my spending and find any possible mistakes) when I realized there was a fee on my credit card statement. This never happens. And when I say never, I mean that I have never paid a fee for any credit card'ever! I always pay my card off each month and never pay interest. Well, my credit card company *cough* Chase *cough* decided to charge me interest because I supposedly didn't pay my bill in full. When I first called and found out the reason, I was surprised and didn't know what to say. I said thanks and that I was surprised.

I looked at my statement again and did some research. I always pay my bill the exact same way and always use the check box (radial button, if you know what that is) that indicates the amount of the statement balance. I did issue a payment for that month, it just wasn't the full amount. I knew something wasn't up. I did enough research to gather that there was a computer glitch and the online system issued the same amount from my previous statement, thereby leaving me a couple hundred dollars short. I was then charged interest on the balance because I didn't pay it off. When I called again (I just couldn't let this one go), I explained the situation and pushed my reasoning on the woman who answered. She agreed to remove the fee this once and I gained another $25.

Should You Make a Scene?

While I was reluctant to be like my dad, I am learning that you have to speak up for yourself. Customer service agents will try to give the typical response, but if you plead your case (assuming you have one to begin with), my experience tells me that you have a good chance of getting what you deserved. But don't take it too far. If you decide to speak up for yourself, you have to learn the skills of negotiation.

How to Get What You Want

In case you are wondering how you might handle these sorts of situations in the future, here are some general tips to get what you deserve:

• No matter how small, ask someone to do something about it.
• If the first person tells you 'No,' ask to speak to their manager
• ALWAYS be polite. Yelling may tell them this is serious, but it is much easier to get your way when you are kind.
• Explain yourself fully, explaining why you are right.
• Get others to support you in your campaign

Do you speak up for yourself when you experience poor customer experience? Or do you just accept it?

4 Tips When Starting Your Own Business

If you are like me, you are entrepreneurial at heart. I love to come up with ideas and see if they have what it takes to be a viable business. Some of my ideas have worked while many have failed. Even more though never even made it to reality. I realized early on that it just wouldn't work.

If you have a drive to start your own business but don't know where to start, you've come to the right place. I'll present to you the four steps I take when coming up with an idea to making it a reality.

Do Something You Love (To Do For A Living)

We've all heard this line before. If you find something you love, it won't feel like work. This is very true. But more importantly, you have to love something enough as a job. Here is an example: I love to detail my car. But there is no way I could detail cars for hours a day, every day. So, car detailing is better suited as a hobby for me.

The way I approach this quote is to write down on a piece of paper everything I love to do. Then I think about why I love to do it and whether or not I could do it for hours a day, every week. In many cases, I couldn't and that is OK. The goal here is to weed out as much as you can.

Fill an Unmet Need

Once you have the things you would love to do as your job, your next step is to determine if there is an unmet need related to it. In many cases there is. The problem is that sometimes the need isn't big enough to warrant a business. You need to find something that not only fills an unmet need, but has a large enough pool of consumers that are willing to buy the good or service you are offering.

Look For A Low Cost Niche

You may find that the market isn't big enough for your idea. No worries. You can continue to focus on the idea, you just have to tweak your approach. By looking at your market more closely, you may find a niche that you can help with your product. Of course, the niche needs to have a low entry cost so that you can afford to create the product and still earn a profit. You would be surprised at how many niches you can find in certain markets.

Prepare for Setbacks

It's a fact: most small businesses fail. If it was easy to be a success, more people would start their own businesses. But it's hard work. The odds are that you will face setbacks. You need to know this going in. I strongly suggest determining when to pull the plug before going into business as well. It's one thing to create a product, find out there isn't much interest in it and remodel it looking for better results. But once you remodel it a few times and there still is no interest, then you need to cut the cord and let the idea go. By knowing when enough is enough before going into business, it will save you time and money.

Again, this isn't saying that if you fail from the start to simply give up. I'm saying that prepare to encounter setbacks but know when enough setbacks are a sign that the idea just isn't the solution you think it is.

Does the Cash Method Really Work?

One of the many ways that people try to curb their spending habits is to go to an all-cash budget. The reason for making the adjustment is that it helps you weigh the actual cost of each expense because it is actual bills leaving your pocket. In other words, the idea is that if you leave the all too convenient plastic cards at home, and using cash budgeting, you will reduce your spending.

Yet, as you know, my wife and I live by our credit cards. We strategically use our credit cards in order to get cash back rewards. Without doing any additional spending, my wife and I earn about $500 a year in cash back rewards. So, if there is anyone to critically evaluate the cash method (a.k.a the envelope budgeting method), I would be the guy.

When the Cash Method is Helpful

Despite the reluctance to give up using my credit cards, I do understand that some people struggle with controlling their spending. My wife and I recently created a fun budget, allowing us to spend a few hundred dollars each month without having to feel guilty. Yet, as you all probably know, starting to spend money on things you WANT (not need) is like pulling the plug on a bath tub full of water. Once you pull the plug, it is hard to stop the water from draining all the way. Side note: Sometimes I think it is easier to control your spending by not allowing yourself to do it at all. Once we started our fun budget, and living a little, I started to want a new TV. We currently have a small 19in flat screen that is just a little bit bigger than our computer screen. From a distance, it actually appears smaller than setting our computer on our coffee table. So, you can understand why it would make sense to buy a bigger TV. In truth, however, we don't need it and we could easily spend the money on something more valuable to our social life.

To put it simply, I have realized how letting go of the tight spending limits has increased my consumerism. Imagine how tempted other people might feel who aren't used to controlling their spending. The cash method may be their only way of escaping perpetual debt. For people who have trouble visualizing the impact of numbers on a computer screen, the cash method makes sense. It is a strict way of budgeting because once you run out of cash, you can't spend any more money.

The cash method also has many benefits. If you separate your cash at the beginning of the month, you will even be forced to prioritize your spending ' similar to setting up a budget, only a little more tangible. Obviously, you would set aside money for the necessities: housing, payments, insurance, etc. Then, everything else you are forced to weigh its importance.

Do I really need this? 

What's more important to me: this or that?

Can I really give this up?

These type of questions are important for anyone to ask. It forces you to recognize the limited nature of your finances and not be tricked into believing debt is a viable option to pay for your consumerism. This is why I think the cash method could be a viable option. For those struggling with their finances, it can be a shocking reality to only spend what you have.

Why I Won't Be Going to a Cash Method Anytime Soon

While it can be beneficial, it's not to say that it is helpful or necessary for everyone. My wife and I are still prioritizing our finances as any young family should: emphasizing savings for retirement, maintaining an emergency fund, paying our bills on time, and then enjoying a little of what's left over. Since we are in control, we are reaping the benefits of credit rewards. (Get the Discover® More Card today if you want to start earning 5% back on rotating categories).

The method of budgeting is all about being honest with yourself and realizing what is necessary to get the job done. If you are struggling to spend less than you make, why not try the cash method. If that helps, see if you can slowly incorporate credit cards responsibly to reap the benefits of cash back rewards.

Have you ever used the cash method for budgeting? What has worked for you?

What's the Best Job in College?

Summer is here and that means that many young adults are preparing for their first year of college (or even another year of college). College years are an important part of any young adult's life. Not only is this the most popular phase in one's life to establish a career track, it also is the place where young adults are faced to take on many of life's financial challenges.

Unfortunately, too many young adults do not take college seriously. They enjoy the parties, late-nights, and other events that will always remain unspoken. College is similar to a prison to many. You put in your time in order to get one piece of paper, which will ultimately grant you freedom ' or so it seems. Getting a college degree does not give you a free pass to landing a high-paying job. In fact, many people graduate college without a job and are therefore forced to live with their parents after graduating just to survive.I don't know about you, but I would rather set myself up for success than failure.

Your chances at success immediately following college will be greatly increased with not only getting a job in college, but finding the best job while in school. While compensation may be an important immediate need, there are other things to consider when getting a job in college. While it may not seem like it, there are many options for employment in college.

Pizza Delivery ' Pizza delivery is one of those cliche jobs to have while in college. Yet, it isn't without a reason. Between the almost-guaranteed free pizza at the end of the night and potential tips, it can be a smart job to have in order to pay your way through school. Yet, it might not give you the experience necessary for landing that salary job right out of school.

Office Job ' Getting an office position, whether it's on campus or not, will provide you with the experience that you are lacking as a pizza delivery person. Most office-jobs want relevant experience and this would give you that, without a doubt. Yet, don't expect to be earning a lot of money for the menial tasks that you are most likely to be assigned. Filing, answering phones, responding to emails are not the most challenging tasks and will be compensated appropriately.

Residential Life - Working in 'Res Life' can be a great opportunity for most students. The nature of the job will force you develop both administrative and inter-personal skills. The tasks associated with being a live-in supervisor of some sort (whether it's a resident assistant managing the floor or resident director supervising the residence hall), can provide necessary experience that can transfer to a variety of career opportunities. While the on-call hours of an RA or RD may not seem appealing to everyone, the flexibility can allow you to prioritize your studies and even allow a motivated person to seek additional employment.

While there are certainly more options available than the ones mentioned above, this should give you an idea of the important things to consider when finding employment while in school. If it's not that obvious, here is a list of things to consider when looking for the best job in college (in no particular order):

• Immediate Compensation ' How much will you get paid? Will you get paid for time off? Will this be enough to pay your bills in college?
• Tasks Required ' Will you enjoy working in this position? Will you dread going to work? Are you able to perform at a high level or are the necessary tasks beyond your abilities?
• Schedule ' Will the employer be willing and able to work around your class schedule OR will you be forced to take certain courses in order to prioritize work? Can you get time off in a moment's notice? Will you be forced to work nights and weekends, thereby hindering your social life?
• Experience ' Will this job give you the experience necessary to succeed after college? Is this position in a similar field to your major? Will this experience translate well into your desired career track?

Selecting the best job means more than finding the highest paying job (another reason why the highest paying job is not the best one). I believe that the best job in college is one that will give you experience in your desired field (thereby increasing your chance of landing your dream job), while at the same time also giving you other options. I found this to be true in my life as I went the Residential Life route. I not only developed a lot of professional skills, but I succeeded and was even offered a professional position as a Residence Hall Director my senior year in college. This as a result, set me in a great financial position at graduation from college, allowing me to establish an emergency fund without having to make any hard sacrifices. Perhaps more importantly, it provided me with excellent work experience (with references) that allowed me to get a job after graduation.

What do you think is the best job for college students? If you already graduated college, how did your job affect your career path?

 

Financial Carnival for Young Adults ' 20th Edition

Welcome to the twentieth edition of the Financial Carnival for Young Adults. My purpose with this carnival is to create an easy-to-find place for information about finances for young adults. The carnival is hosted here at 20's Finances almost week and features the most recent articles from around the web.

I enjoy doing the new form of this carnival because it lets me relate more of a personal connection with each of the articles that I select. The first few articles that I want to feature focus on home ownership. One of my goals in the next few years is to buy my own home. It's hard right now because we don't make that much money and housing prices in the Greater NYC area are one of the highest in the country. Talk about a poor combination. I guess it will have to wait a little while.

SB @ One Cent at a Time writes How to Shop for a Mortgage Loan ' If you are shopping for a home loan, it is only natural that you want to find a low interest rate mortgage loan. The surest ways to find the best deal are to Be a prepared borrower and to Shop around. Read more to explore.

YFS @ Your Finances Simplified, who is slowly becoming a real estate guru, writes Home Buying Tips That People Never Tell You! - I would like to talk about home ownership, in particular, mortgages. Now everyone tells you that home ownership is better than renting. Some people would say renting is better than home ownership. I don't really care what you do-I just want you to do what's best for you and your finances.

Crystal @ Budgeting in the Fun Stuff, who is going about getting a home a different way, writes Build a Home Series: Frame, Plumbing, and the First Inspection'Supposedly - The frame for our slab is finally down, the plumbing has been added, and we just had our first inspection. Our house is finally starting to be built!

I would probably give up my goal of owning a home anytime soon if it were not of a little extra money that I am earning with my online efforts. Earning extra money is a great way to build up your savings faster. Here are some articles to help you get started:

Matt @ Living in Financial Excellence writes Best Side Gigs to Earn Quick Cash ' I was asked today what the best side job is to earn some quick cash. Sometimes this is necessary to pay off debts, to keep current on your bills, or just for some extra spending money. I have done a few things on the side like donating plasma, creating websites, and financial coaching (when I was working full time somewhere else).

PPlan @ Provident Plan writes 3 Basic Steps for a Small Business - Starting a small business may sound like a great idea.

Invest It Wisely @ Invest It Wisely writes Freelancing Revenue Report: My First Three Months in the Trenches - I'm now in my fifth month of entrepreneurship, and things are going well so far. I'm really happy with some areas, and not too happy with some other areas.

But, working for yourself isn't for everyone and sometimes a regular 9-to-5 day job is the best option. Focusing on your Career as a young adult can do wonders for your financial security.

Penny Thots @ Penny Thots writes Five Steps to Making a Great Impression in the Office ' When somebody first judges you, they hypothetically place you on this ranking scale. This is the first impression. While your ranking can slide up and down the scale, it takes time ' first impressions are hard to change. The point of this article is to ensure that you are doing the right things so that the ranking scale of impression is moving in the right direction for you ' UP!

Jon the Saver @ Free Money Wisdom writes How to Survive a Layoff - Surviving a layoff is no small feat. It takes patience and a long term goal horizon. One needs to always be checking for new jobs and opportunities.

Daniel @ Sweating the Big Stuff writes The First Three Things You Need To Do If You Lose Your Job ' Millions of Americans are out of work. Take these tips to find out what you should do if you suddenly lose your job.

Financial Goals ' Motivation for Success

It was in the fall that my wife and I set financial goals for ourselves for the next few years. Every couple of months, I like to write an update on our progress. I wrote my recent progress on our financial goals a couple months ago, which was actually the second update in this series. For those who weren't reading my blog when I set my goals in the fall, here are the goals that I set out to accomplish in the next 2-3 years. It's already been about 8 months since I have set my goals. While I am happy with my progress so far, I have a lot to do.

1. Open and maximize yearly contributions to Roth IRA for both of us
2. Start contributing to 403(b) for both of us (I'm eligible to participate starting in the Spring)
3. Get Life Insurance
4. Increase net worth by 50% (this is easy to do when your networth is low )
5. Finish Graduate School Debt Free (next December!!)
6. Pay for Mrs. 20's Graduate Degree in cash (She applied to start in January, more details to come)
7. Build enough passive income to retire ' Yes, I want to 'retire' in 2-3 years. This is part of my early retirement plan.

Already Completed:

As I mentioned last time, I already checked off numbers 1, 2, and 3. We are strong believers in saving for retirement with a Roth IRA, especially for people who are still in their 20's. I have enough money in my savings to dump into our Roth IRA's for the 2012 calendar year, but I am waiting for the right moment. So, technically, I haven't maxed out our yearly contributions for 2012 yet ' but I will soon.

I just recently qualified for my employer's 403(b) plan and have been putting money there in addition to our Roth IRAs. Money has been going in there for almost 5 months now, and I am happy to see that money build up.

Lastly, as I already wrote about separately, I got whole life insurance. You can read the article if you want to know more about why I chose this form of insurance over term life. I think it's important to consider because most financial advisors and bloggers suggest term life over whole life. The alternative exists for a reason and you should at least consider if it is right for you. It is really affordable for the coverage that I have and I don't need to make another payment until this fall. (October, I believe).

Financial Goals Still In Progress

My wife and I have been great at saving money each and every month. With the new addition of my 403(b) account and additional savings, our net worth has been slowly increasing. If I had to guess, I think we might be able to reach our goal of +50% by the end of the year.

I am now working on my Thesis, the last requirement for my graduate school. Technically, I am not writing it yet, but I will be soon. I hope to get it done sooner rather than later so that I don't have to stress about it, but we'll see how that plays out. I have become quite good at writing over the past 9 months (thanks to blogging) and I don't expect a problem getting the content out on paper once I have done the research and have my outline in place.

My wife and I have been talking about moving at some point in the future. One of the reasons why we have decided to stick around for the next couple of years is because she will be finishing up with her graduate school. In order to finish her degree in two years (as opposed to three), she will now be taking 2 classes per semester instead of one. This not only means that she will be busy, but also will cost us more money each year. Nearly double the cost. This means we won't be able to save as much money, but I still plan to pay for it in cash as we go along. You can read about how we pay for both of our graduate degrees in cash instead of loans.

Lastly, I am still building up my side income, but it will be a while before I can determine if I will be able to quit my day job any time soon. I haven't been focusing on this goal as much because we have been quite busy. I hope to work on a few new business ideas that I have been thinking about and implement them in the next year or so. One of them has the potential to make a lot of money if I can market it correctly. Stay tuned for more updates about these.

Overview

Similar to my last update, I have realized how hard it is to stay motivated with the same goals. Having financial goals definitely motivates me and keeps me on track to prioritize my spending. I enjoy looking at a long-term goal and finding out what I need to do to reach that goal. I got a little sidetracked for a month or so, but with my wife taking more classes now (and costing us more money each semester), I am motivated again to see what expenses we can cut out to reach our goals. I can't wait to check off a couple more of our goals in the coming months. Stay tuned for more updates!