Why Young Adults Fear Active Trading: How to Overcome Investing Doubts

In the past few months, I have started to think more seriously about my investment strategy. Most of my retirement plan right now has been 1-dimensional: INVEST A LOT! For many reasons, this is important. For those who know very little about investing, investing a lot early is the key to cushioning that retirement nest egg. Yet, I have come to realize that this is not enough.

Here's a little bit more about my retirement strategy. I am currently using two different retirement vehicles (your employer's 401k or 403b AND Roth Ira) to save for retirement. While it takes sacrifice to invest in both on a salary of someone just entering the work force, I have come to realize that it's insufficient. I want to do everything I can to boost my investments while I'm young.

Through this new dedication to set up financial security, I have come to an important realization: I don't know anything about active investing. That's right ' I'll admit it. I know some stuff, but not hardly enough to feel comfortable picking individual stocks. All of my current investments are automatically diversified based on my age. For someone who enjoys directing his money and putting it to good use, I am delinquent in this area. I need to improve! I have done a lot of research on investments in the past couple of weeks and will be continue to do so. That's when it hit me. I bet I'm not alone. Many young adults also struggle with knowing how, when, and where to invest their money. For this reason, I plan to write more on the in's and out's of investing. Not just basic stuff like INVEST A LOT NOW. This is important, but not everything.

One of the first things that I had to overcome when I decided to invest more money was my fear of losing my money. Many young adults also face similar fears. After working at their job (or jobs), it's hard to risk losing that hard-earned money. While some doubt or fear may be healthy, fear can be debilitating. It can, and often does, prevent young adults from starting to invest. The only way to overcome these fears and actually start investing is to identify what's holding you back. For this reason, I thought I would cover the common fears that young adults face when it comes to investing.

Reasons Young Adults Fear Investing (or active trading)

Unfamiliarity

One of the major reasons that young adults are afraid of investing is that it is unfamiliar. They have never done it before. You're always afraid of that which you aren't familiar. Investing is no exception. While some young adults have taken advantage of their employer's 403b or 401k, that doesn't mean that they have spent time researching the stock market. In fact, most people start with mutual funds or other diversified funds that have someone else managing them. While this may be great for people without any experience, it also means that young adults don't have to learn. It's hard to know where to start and there is always the growing fear that you will jump in too soon without knowing enough.

Poor Recent Performance of the Stock Market

Over the past decade, there have been two sizable drops (if not more). For young adults who have just graduated from college, this means that they have grown up being aware of the volatility of the market. Take it from someone who knows first hand. My wife got advice when she was a child to invest some of her savings in order to put her ahead of her middle-school peers. Unfortunately, this was just before the time that the stock market crashed. Yep, she lost most of her investment. Talk about demoralizing, right. It happened again in 09. While she is coming around to investing again and knows it's a long-term tool to build wealth, it hasn't been easy. Many young adults also face this same hesitancy.

Don't Make Enough Money

Many young adults start out with low paying jobs. It's often an unfortunate result of getting a job without adequate experience. The truth is that many young adults struggle when they are first starting out. Some move back in with their parents while paying off student loans and others continue their college diet of ramen noodles. When you are barely making ends meet, even the slightest chance of losing any extra money is enough to give you a heart-attack. Most people start investing when they have a surplus in their monthly cash flow, so it only makes sense that young adults would shy away for not making enough money.

Not Enough Time

Being a successful trader, selling and buying individual stocks, takes a lot of work. Many young adults are quite busy. Whether it's because they are continuing their volunteer work from college, or working two jobs to get by. Many young investors don't have enough time to closely monitor their portfolios. Can you imagine missing the latest news about a corporation going under and being late to the party? Take it from someone who knows what it means to stay busy. I am currently working full-time, going to grad school, and blogging at night. I know that I don't stay up-to-date with the latest news and I would hate to miss some important news that would negatively affect my portfolio.

Overcoming Fears of Investing

Are you guilty of letting one of the above reasons from starting to invest? While it may seems like the cards are stacked against you as a young adult, it shouldn't keep you from investing. In fact, there are many advantages that young adults have when it comes to investing, but one that is perhaps most important. The thing that should convince young adults to start investing today is TIME.

Time is important to consider for many reasons. It not only gives you the duration to grow your portfolio, (Remember the importance of compound interest and why time is an investor's best friend?) but it also gives you a little bit of cushion. In other words, if the stock market drops in the next few years, you have enough time to recover your loss ' and the stock market has always came back. People who are nearing their retirement age do not have this same luxury. That is why most people become more conservative as they approach retirement age. There is less time for them to recover any drastic loss.

If you are letting one of these reasons keeping you from investing while you are young, you are making a big mistake. Take time to evaluate how much you can invest and start doing research.

Did you let the risk of investing keep you from investing when you were young? 

Four Tips For College

College campuses will be filling up in the next few weeks as classes soon begin. Regardless of what year you are, below are four tips to help navigate you through your college career. While they may not seem very important at the time, they have a profound effect on your future.

Stay Out of Credit Card Debt

This one should be a no brainer to everyone. Just because the credit card companies start sending you applications or are on your campus talking to you, it doesn't mean that you have to open a card. Sure they may give you a credit line of $5,000, but that is only because they want you to charge $5,000 because they know you will most likely be paying it pay slowly over time since you don't have a job. That small monthly payment means a lot of interest to them. I may be dating myself, but remember back to watching cartoons as a kid and when the main character would be hungry, they would see a cow and it would turn into a steak? When credit card companies see college students (including you) they see dollar signs.

Note that I have no issue with you opening up a credit card to start building up a credit history, but just use it wisely. You don't want to have to work two summer jobs just to pay off your credit card debt or graduate and have your paycheck going to the credit card companies as you dig yourself out of debt.

Limit Student Loans as Much as Possible

Same as above with avoiding credit card debt, you should avoid student loans as much as possible. This means foregoing the work study job on campus and getting a better job off-campus. If you really like your work study job, find other ways to earn some money. Use that money either to pay for classes and avoid student loans, or put the money in a separate savings account and build it up. When you graduate and you have to start paying back your loans, use this money to make a dent in the debt. This should only be done if you have a government loan that does not accrue interest while in school. Otherwise, it makes sense to pay the debt as you go.

Having trouble thinking of ways to earn extra income? Corey posted five ideas for extra money here, and I posted five more ideas here. And if you are planning on going to grad school, you can pay for it in cash.

Skip the Party and Study'.

Sometimes in life, you just have to do things you don't want to do. This includes studying. There were times when the last thing I wanted to do was study. It was hard to motivate myself to do so. I would open a book and my mind would wander. Eventually, I found my focus. You can too. I know it's hard to think about life 10 or 20 years into the future, but in this scenario, you have to. You need to study to get good grades. Your higher GPA may be the difference between you getting a job and it being offered to someone else. It could also be the difference in getting a job that has a starting salary of $30,000 versus $35,000. Don't think that is a big difference? Think again. Assuming a 3% annual raise, in 10 years with the $30,000 job you will be earning $40,300 versus $47,000 from the other job.

'.But Don't Skip Every Party

You learn in college both in and out of the classroom. My college experience was awesome. I wouldn't trade it in for anything. I learned so much that prepared me for my career and I learned a lot about myself too. Make sure you take advantage of college and everything it has to offer. Don't spend every waking moment in the library studying. Let loose once in a while and have some fun! Take it from me: once you graduate and start working 40+ hours a week, every week, you'll wish you could go to college for your entire life. But you can't. So make the most of it while you can.

Motif Investing Review

Anyone looking to invest in the stock market is faced with many challenges. While I am in no way an experienced trader or even close to being what people often label a day trader, I do know a thing or two about the challenges of investing. I have many of the basic principles of investing under my belt.

To be honest, I don't stay up to date on the recent trends or news on individual companies, so it is difficult to follow for me to follow individual stocks. While buying individual stocks may provide investors the ability to beat the indexes, it also comes with more risk. One of the many challenges that I face is diversifying my portfolio with buying individual stocks. I simply don't keep up with the recent news, nor do I have enough money to properly diversify by investing in individual stocks. This is why mutual funds and ETF's make up most of my retirement funds.

Motif Investing ' What is it and How Does it Help Investors?

That is why I was really interested to learn about Motif Investing. It is a company that allows investors to compile a portfolio of different stocks focused around one investing idea. For example, I have often thought that great businesses are those who prey on consumers who don't care about how much they are investing. The type of businesses that I have in mind include those within the tourist industry, pet accessories, etc. These industries offer, in my opinion, offer a lot of potential. Yet, it can be quite risky to invest in individual stocks in these markets.

That's where Motif Investing comes in. A motif that is featured in their catalog is the Pet Passion Motif. This fits my category of a popular industry that takes advantage of consumers who are willing to pay a fortune. This motif allows investors to buy into these industries or ideas in a similar way to ETF's. As the review written at Forbes put it, it offers 'wide-ranging ' and thus, low risk ' investments.' While I may like the idea of investing in a company within this area, before Motif Investing, I wouldn't see myself actually doing it. I see this field as a little more volatile than others. Investing in these ideas or industries, instead of individual stocks, has become that much safer and easier with motif investing.

If you don't want to invest your money in an industry that is as volatile as the pet passion motif, you can also invest in something like the Utility Bills Motif. This may offer the security and long-term outlook that many investors are looking for. As I have already hinted at, what I like best about motif is the inherent diversification. It allows investors who may not have a lot of money (like me or other young adults) the ability to spread out their money among several similar stocks.

To put it simply, Motif Investing seems to offer another unique vehicle with which to invest. In my opinion, the more tools and entry points into the market that provides more security for investors, the better. While it may not be the answer for everyone, I have been pleasantly surprised by looking at the Motif investing strategy that I will consider this going forward. It certainly offers investors a simple way to diversify within emerging industries or ideas, which is important for the young adult generation.

This article was sponsored by Motif investing, an innovative new online investing platform that empowers individuals to easily invest in ideas they see every day. A motif is a carefully researched and balanced grouping of up to 30 stocks that combine to give investors diverse exposure to a single big idea.

Do You Remember Your First Time?

I remember my first time. There was nothing else that I wanted except to be an adult. To be independent and responsible for my own life. Crossing this threshold is often a sign of stumbling into adulthood. I gave it some serious thought before I decided to take the leap. It wasn't a decision that I wanted to take lightly. I thought about the many ways this could ruin my life for years to come. Whether I would make a mistake or whether my instincts would kick in and help my overcome my nerves.

Do you remember your first time? How did you feel? If it's anything like my first time, I imagine there were some feelings of nervousness, anxiety, excitement, anticipation. Most people wait for their first time until they are adults, while some other jump the gun and get ahead. Did that one confuse you?

Still don't know what I'm talking about? Well, applying for your first credit card, of course. What did you think I was talking about.

Why Getting a Credit Card Matters ' The Benefits of Using a Credit Card

Applying for a credit card is an important first step in adulthood. While some people will tell you to stay away from them, I am a firm believer that they are essential. You'll recall that my friend got denied for financing despite her solid employment and savings because her credit history was poor. Using credit cards is in no way evil or detrimental to your finances. It may be a means or avenue for YOU to ruin your own financial position, but it's not the credit card's fault. In fact, using a credit card wisely has many benefits.

1. Boosts Your Credit Score/History - If you think you will ever want to buy a home or get financing for a car, you will need a good credit history and credit score. Basically, lenders want to see that you are reliable and responsible with the credit given to you. There's fewer ways that are better to prove this to them than using a credit card and paying it off each month.
2. Teaches You Responsibility - Learning how to control the urge to splurge (did you like that rhyme?) early on can be extremely beneficial for your finances. Knowing when to say no to unnecessary expenses is an important lesson to learn in adulthood. There's no better way to discipline yourself than to start early on.
3. Learn How to Pay Bills Early - One of the challenges (yes, it is a challenge for many young adults, don't laugh) for young adults, when venturing off onto their own, is learning to pay bills. This is a challenging time for people and the most skills that you have mastered going into this transition phase, the better.
4. Cash Back Rewards - The people who live their life with an all cash budget are missing out on cash back rewards. Credit card companies, in attempt to lure you into using their credit cards, offer cash back rewards. This means that for all of the money that you spend using your credit card, you get a certain percentage back. This is money back on expenses that you would normally spend. The earlier you sign up for a credit card, the earlier you will save more money. (One of the first credit cards to offer 5% cash back on rotating categories, and one of the best still, is the Discover® More Card.)

My First Credit Card

As I have mentioned before, I understood the benefits of getting a credit card at an early age. This is one of the reason why I have a high credit score, even at an early age. I was quite ambitious growing up. I applied for my first credit card when I was 18. Because some credit cards are hard to qualify for without any previous credit history (which is kind of ironic ' if you need credit history to build up credit, then how do you get qualify in the first place), I applied for a credit card through my bank. Because I had been a long-time customer, I thought that might help my chances. I was right. I got approved for my first credit card with $1000 limit.

This wasn't enough for me though. I wanted a second card to start building up my good credit history at an early age. I had heard that using two credit cards regularly and paying them off was even better than using one. So, what's an ambitious 18 year old, making very little money to do? I applied for an American Express Credit card and was denied! That's right ' my first rejection. For a while I took it personally until I heard that American Express is more difficult to qualify for.

I didn't let this get me down and I later applied for the Discover® More Card. I was approved and I had secured my goal of getting a second card. To my surprise, I found out the benefits of cash back rewards. As I used my credit cards to pay for everyday expenses (even paying for my tuition balances in college), I saved hundreds of dollars a year while also boosting my credit score and history. What's not to like about that?

How to Get Your First Credit Card to Build Up Credit History

Getting your first credit card without any credit history can be a challenge. If you are wondering how to get your first credit card, I highly recommend one of the following things:

1. Applying through your local bank, hoping that this may increase your chances of getting approved
2. Being added to your parents credit card as an authorized user to give you some positive history
3. Apply for a student credit card (like the Discover® Student More Card)

 

 

Financial Carnival for Young Adults ' 27th Edition

Welcome to the twenty-seventh 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 couple/family finances, poverty, and buying a home, this weeks topics include retirement and budgeting. If you want to learn more about these topics from some of the best personal finance bloggers, continue on.

Retirement:

If you this is not your first time to 20's Finances, you will probably remember that I wrote Young Adult Retirement Planning ' Benefits of Saving a Lot Early. As it turns out, this is quite the popular posts. Lots of people have read it, maybe because it's important. (smile) In light of that, I thought I would feature other retirement posts this week.

Invest It Wisely @ Invest It Wisely writes I Don't Need to Worry about Retirement Yet, Do I? ' When is it time to worry about your retirement savings? Read my article to learn when'

TRL @ The Retired Landlord writes Real Estate Leverage ' Using it to Your Advantage ' Are you wondering what real estate leverage is? Find out the answer and how to leverage your money to build wealth faster without the risk.

IMB @ Investing Money writes Investing Money is Important ' Find out why investing money is important. You could be missing out on a lot of money.

John Border @ The University of Money writes Why It's Better to Start Investing Early - Start early and get the benefit of compounding. This is the best way to save and build a huge retirement corpus.

Paul Vachon @ The Frugal Toad writes Decidiing When to Retire - Deciding when to retire can be a difficult decision to make. Will I have enough income from my retirement accounts, pension, and social security to live comfortably in retirement?

J.P. @ Novel Investor writes What Are Target Date Funds? - Target date funds were created as an easy way to invest for retirement. It's probably one of many options in your retirement account. But is it for you?

Budgeting:

Budgeting is also an important step to being successful with your finances. Here are several great posts about budgeting, in case you want to learn more about it.

A Blinkin @ Funancials writes The Ideal Budget for a Single Guy (Age 24) - The transition from college student to young professional can be one of the most fun times in your life, but it can also be a time of stress. The increasing inflow can be extremely exciting, but only if it exceeds the increasing outflow. The bills that mom and dad used to cover (without your knowing) are now directed to your mailbox. This article will tell a 24 year old single guy how to budget.

SBB @ Simple Budget Blog writes Is Budgeting Worth Your Time? - Find out how you can keep budgeting simple and avoid the time consuming tasks that are often associated with managing your finances.

Miss T. @ Prairie Eco Thrifter writes 10 Nifty Ways to Eat Organic on a Budget ' Finding ways to fit organic foods into your budget is really not much different than any other endeavor of frugality. So even if you're on a tight budget, you can still manage to go organic if you follow just a few of these tips.

Don @ MoneySmartGuides writes Living Paycheck to Paycheck - In my recent wanderings on the world wide web, I came across an article on CBS MoneyWatch that said 38% of Americans are living paycheck to paycheck. This is up from 31% back in 1997.

Amanda L Grossman @ Frugal Confessions writes My Advice to a Person Budgeting for the First Time - Someone asked for my help this past week in creating a budget for their household.

Michelle @ Making Sense of Cents. writes Reader Question: College Budget - I recently received a question that I thought could be applied all around, whether you're in college or just trying to save money and spend wisely, and I thought it would be a great fit for a blog post.

Aloysa @ My Broken Coin writes How Much Money Are We Supposed to Spend on Friends? - Friends. My biggest monetary pet peeve lately. Nowadays it is not easy to be a good friend. Nor it is cheap anymore.

My Vegetable Garden ' Enjoying The Harvests

It has been a while since I have updated my readers on my vegetable garden progress. You can catch up on this series if you weren't around when I started planning my vegetable garden. I started out with great aspirations and had made some improvements from last year with an extra garden box that we used for beans. We got ahead of ourselves in the transplanting stage and were forced to start over. The few weeks of growing the seedlings were flushed down the toilet (figuratively, not literally) because we didn't wait for the weather.

In my last update, I shared our alterations and improvements. We had a furry neighbor eating out plants that we had to put a stop to as well as some other important updates. It has been several weeks (if not a couple months) since that update, so I figured it was time to tell you all how it's going.

What's Growing Well

In the past two months, we have mostly positive moments. We enjoyed the first harvest, which consisted of a couple green beans (from the only plant that survived our earlier planting) and it has picked up since then. While many people who rent don't take advantage of having a vegetable garden, we have enjoyed every minute. If you remember, we planted green beans, green peppers, tomatoes (2 plants), and cucumbers. Here's a detailed look at our progress:

Green Peppers:

One of the vegetables that is doing well is our green pepper plant. We have already enjoyed two green peppers and there are at least 3 other peppers growing on the plant. A friend of mine grew green peppers last year, but only had 1 pepper for the entire season. So, I feel like this is a huge success. More importantly, I absolutely love green peppers, so it's even more of a success in my book.

Tomatoes and Cucumbers

We have also had pretty decent success with our tomatoes and cucumbers. We have two tomato plants, one cherry and the other one being 'regular' sized tomatoes. We've had at least 20 cherry tomatoes already and 3 regular sized tomatoes. While we often eat the cherry tomatoes before getting inside (they're a great snack), the large ones make a great components to one of our various salads. yummm!

Our cucumbers are doing okay. We've had 4 or 5 of them already with one more growing. I'm afraid that the plant is going to stop producing soon since I don't see any other cucumbers growing at the moment. This is about what we got last year, but I still have my fingers crossed.

A picture of our cherry tomatoes ripening. The cucumber plant is behind it.

 What's Been Struggling

In case you haven't guessed it already, the one downside to our vegetable garden has been our green beans. While our one plant was the first one to produce anything out of our garden, the other plants that were part of our second planting of beans, have been slow to produce. When I say slow, I mean, they are just now flowering. *sigh*

For the longest time, I thought we didn't have green beans. The reason being is that all of the second phase plants trellised up the fencing and poles. The first plant (again, that survived the first planting and was weeks ahead) did no such thing, so you can imagine my surprise when I saw this happen.

Can you see how far they are from the ground?

Anyways, because we have only had one plant to produce anything, we only got a couple of green bean pods at a time. Which, is basically nothing. In hindsight, this was poor planning on my part because you can't just eat raw green beans. I mean, maybe you can, but I'm not going to. While I am looking forward to seeing how the rest of the plants produce, I'm not holding my breath. In fact, I am already planning on excluding green beans from our garden next year ' that's how much I am disappointed.

Reflections

I have thoroughly enjoyed growing our garden this year. It is always nice and relaxing to water the plants after a long day at work. I know I have already said this in one of the earlier updates, but it's definitely true: gardening is a cheap hobby. While there have been frustrating or disappointing moments and I have already made plans to improve our garden for next year, it is nice to enjoy the benefits of your hard work. This is true with all aspects of life, isn't it?

Are you growing a garden? How's your garden going?

 

Why do People Get in Debt? How to Get Out of it

Young adults have their entire future ahead of them. Unfortunately, this means that many of them take advantage of the time instead of doing everything they can to get ahead. Many of my friends talk about debt as if it were just another fact of life. I can't help but wonder if we are desensitizing ourselves to the negative aspects of it.

This may seem like an obvious question, but if the answer is so clear, why are so many people still struggling with their finances? Through the recent financial hardships of the global financial crisis, many people have become aware now, more than ever, of the importance of understanding your personal finances. While some people still live from paycheck to paycheck, it has never been so clear that everyone should be implementing a budget or savings plan, to counteract any unforseen expenses. Being prepared is the best thing that you can do, in order to avoid debt. Understanding why people get in debt can help us to avoid the same mistakes, often assisting us to create a healthier financial future.

The Obvious

The most obvious, yet also the most common, reason why people get in debt is simply because they are spending more than they are earning. Most workers receive a regular income from employment, whether it is paid weekly, fortnightly or monthly. Receiving a regular salary should enable people to create a budget, including all incoming and outgoing transactions. The fact of the matter is, however, that some people simply do not abide by their budgeting plan, often outlaying more money than what they are receiving. Overspending leads to unnecessary debt, commonly in the form of credit cards or personal loans. To continue accumulating debt is to ultimately dig a financial grave for yourself.

Unforeseen Expenses

On the other end of the spectrum, there are those people who consistently abide by their budgeting plan, always allocating money towards their savings, who are suddenly struck with an unforseen expense. Unexpected payments are a part of life, but they can really throw a spanner into the works of your financial situation. We've all been in a situation, where unforeseen costs arise, such as a car breakdown, an unexpected trip or hefty medical bills. Although these occurrences are unpredictable, we can always prepare for the unexpected, by sticking to a budgeting or savings plan. While the total of your savings may not cover the entire cost, it will greatly reduce it, allowing you to rest at ease knowing that your financial future is not ruined.

What now?

If you have found yourself in the unfortunate place of being in debt, there are always ways to begin your journey back to financial freedom. Learning about debt consolidation is a great start to better managing and understanding your finances. Debt consolidation involves combining all outstanding personal loans, credit card balances and store cards into one more manageable loan. Whether you have accumulated a great amount of debt or are worried about your financial future, talking to a debt solutions specialist can assist you in better understanding your options.

While it's not always going to be the best option available to young adults, it is something to seriously consider. It may be that which helps you gain your footing so you can start attacking it more aggressively.

Have you ever considered debt consolidation?

Do I Need MORE Life Insurance?

It was just a few weeks ago that a good friend of mine, Jeff, asked me to take part in the Life Insurance Movement. He's another personal finance blogger like me  and actually cares about informing people on everyday topics. As I informed him, I have already written about my choice to get whole life insurance. But, I figured it's a topic that can't be over-emphasized.

One of the many financial challenges that young adults face is learning to allocate money to specific aspects of their budget. How much should one spend on this or that. Housing. Food. Retirement. Life insurance. These are all competing factors in our budgets and young adults generally have less money to work with. This inevitably means that some of the most important aspects of someone's budget are left out of the equation. Without any doubt, it's obvious that life insurance is one of the first things to go. It's seen as an elective. In the terms of sports, it's 3rd string. Rarely used and a waste of money. That is, until it really becomes necessary.

As many of my faithful readers already know, I didn't want to make this mistake. That's why I decided to get whole life insurance. It was one of the financial goals that I set for myself last fall and I wanted to get ahead of the game. I also made a purposeful decision to avoid term life insurance because I wanted to diversify my investments at the same time. Yet, Jeff's initiative has invited my to revisit this decision. Now that we are doing okay for ourselves, it might be time to consider whether I need more life insurance. Maybe many of you are in the same boat.

Reasons to Get More Life Insurance

Generally speaking, there are many reasons why someone might be interested in getting more life insurance. Here are some of the top reasons:

1. New Addition to the Family - Whether it is getting married or having children, another member (or members) of the family often means that there are more expenses on a regular basis. If someone is the primary bread winner for the family, this makes necessary coverage that much higher.
2. More Liability ' Another possible life change that could require more life insurance would be taking on more debt. Whether it is to buy a home for your family or as an investment, more liability means more money that you need to cover. An unexpected death after a recent home purchase could be a major challenge financially for the remaining family members if you aren't fully covered.
3. Lifestyle Inflation ' Another general reason to get more lifestyle inflation is because you have slowly increased the standard of living for your family. If your averages expenses increased $10,000-20,000 per year, you need to include this in your necessary expenses.
4. Pay Increase ' Maybe you already have life insurance, but made a necessary choice to limit how much coverage to buy because you couldn't afford to be fully covered. With a recent pay increase, you are now considering getting more life insurance coverage.
5. Bigger Peace of Mind ' Regardless of the primary reasons, sometimes you just feel like being extra cautious. Whether it is a result of seeing someone close to you pass away or something else, you may just feel the need to be better covered. Getting more life insurance can help you sleep at night, knowing those you love about are covered.

To put it simply, most people get more life insurance because their life situation has changed enough to justify spending more money now for a future security. Getting more life insurance is often motivated by coming to realize that the current coverage is insufficient.

For me personally, very few of these reasons actually apply directly to my situation. We have seen modest pay increases, but have no more debt and don't plan on expanding our family anytime soon. (Except for a cute puppy that I want to get). We may be buying a home in a few years, but that's still a few years away. However, it's no reason to exclude the option of getting more life insurance.

As it currently stands, my wife and I both have decent life insurance plans. My death benefit on my plan is $80,000 and considering that my wife earns more than I do, I am not worried about her ability to make ends meet without me. She also has a decent life insurance plan, so I'm not worried either. Yet, that doesn't mean that we couldn't use more for peace of mind. In order to judge whether it is absolutely necessary, I figured I would get some more specifics.

What Would it Cost Me to Get More Insurance

In order to determine whether it was worth it for me to get more life insurance, I decided to get a couple of estimates. I asked my good friend Jeff to give me a couple quotes, just for informational purposes and he was more than happy to oblige. Here's the estimates that I received for a term life insurance plan for 20 and 30 year terms. I should point out that these are personalized quotes and if you are looking for how much it would cost you personally, know that a lot of variables go into this.

20 Year Quotes:

30 Year Quotes:

So, what does this mean? For me, it means that I could get an extra $250,000 death benefit for the next 20 or 30 years for $150-250 (approximately) per year. Yet, that figure does very little to help me. Let's imagine that I elect for the 20 year term and spend $150 per year for this benefit, only to find out that I survived. While I will rejoice to reach my mid 40's no matter what, this would mean that I am spending only $3,000 for a huge benefit. Not bad at all, right. For the 30 year option, let's say I make it to my mid 50's. I would have spent $6,150 on the cheapest premium option. Not bad for an extra 10 years of coverage. This may seem like a 'no-brainer' until you consider my personal situation.

I currently don't have any debt, am happily married where both of us work jobs that we could be self-sufficient if absolutely necessary, and we don't plan on having kids anytime soon. While we may buy a home in the coming years, it will only be when we can absolutely afford it. Thus, for right now, I am choosing to pass up this opportunity for additional insurance. While I am sure my role as a personal finance blogger should be to plead with you to get all the coverage you can, I don't see it this way. My role is to help you make wise decisions and sometimes that means not getting extra life insurance.

Getting more life insurance is a decision that you make carefully and don't let anyone persuade you that it's the best decision if you deem it unnecessary. Consider your liabilities and your responsibility and weigh that against the financial hardship that those closest to you would face without it. Because I know that my wife can get by with the life insurance that we currently have, I am not electing for extra life insurance right now.

A New Preference for Cars? Why the SUV is on it's Way Out

Over the past few months, I have been brainstorming how to write this post. And that's when it happened. I was inspired last week sitting in the movie theater. My wife and I went to see the movie titled, 'The Bourne Legacy' and when we were watching the previews, we saw the most unusual advertisement for cars. I forget the brand of the cars, but the commercial featured this overseas cars driving into the ocean and miraculously driving all the way (under the ocean water) until the came to the U.S. While somewhat ridiculous, the message was clear. These, compact (and what I assume to be fuel efficient cars) are now available in the U.S.

This commercial stood out to me because it fit with my perception of the recent trends in the U.S. It doesn't take a rocket scientist to see that car manufacturers are making automobiles increasingly fuel efficient. Part of this is due to consumer demand. With the increase in gas prices, more and more people are thinking about how much it costs to fill up the tank. What better marketing ploy than to build a car around this feature, right? This has many great benefits ' the consumers get what they want and buy the cars, car manufacturers sell cars, and the environment is just a little cleaner (in theory). Yet, if this is the case, it also means the end of a trend ' the popularity of the SUV.

While I don't think that the SUV's popularity will die out overnight, I think there will be a slow decrease in sales. If not, there should be. The SUV is an unnecessary feature of the American dream to have the fastest, biggest, and most versatile. While there are features that attract me, when I sit down an analyze the practical use of SUV's, I can't help but shake my head.

Reasons Why SUV's Are Unnecessary

People often trick themselves into buying something they don't need based on subliminal messages in advertising. There are many different myths that convince people that they need a Sports Utility Vehicle, when in reality they could get away with a small car (like the Honda Jazz Si). Below, I reveal reasons why most people should not be convinced to buy a SUV.

1. Cargo Space - Many people buy a car that is at least $10,000 more expensive (brand new) than the car equivalents because of the cargo capacity. They  believe that they 'need' this space, but in reality, they could probably get by with a car or even wagon, which are more affordable and whose fuel efficiency is much higher. In fact, the wagon that my wife and I own has more cargo space than most small SUV's. We often brag that we were able to fit our small couches in the back of our wagon. How's that for space?
2. AWD/4WD Capabilities - Another feature that people are convinced to pay more money for is AWD/4WD. It's like marketers have swooped in and told everyone that if they have 4WD, they will become that much more popular because of the ability to go 'off-roading'. In all seriousness, my parents had 4WD vehicles when we were growing up and rarely used this feature. Whatever you do, don't buy a car for a feature that you will use once a year or less.
3. Towing Capabilities - Another case in point. People think that they need a large SUV (or truck) so that they can tow whatever accessory they also have. The problem is that these trailers or boats are only used a handful of times. While a little less convenient, it would be more affordable to rent a vehicle for the few days that it is necessary to tow something. The truth is that people are getting these larger vehicles not because they are more practical, but because of the image associated with them.

While not a myth about SUV's, the price of a SUV is significantly higher than the more affordable, more practical car alternatives. When you combine this with everything else, why would anyone want to buy a SUV? There are much more affordable and practical alternatives to the iconic SUV. Whether that is a minivan, sedan, wagon, hatchback, etc. Buying a minivan in today's world seems just as impractical as buying a sports car (like the Honda NSX).

Many of you will remember that my first car was a Ford Mustang. I am guilty as anyone of getting an impractical car, but I have turned from my impracticality. After getting married, my wife and I ignored the stereotypes and got a wagon. While some people still laugh at the model, it has been a great car and is great for both gas mileage and cargo space. I can easily put the seats down to put my bike in the back of the car. Talk about versatility! If you are considering buying or leasing a new car, go the practical route and avoid the SUV.

 

3 Ways to Continue Your Education for Free (or Close to It)

Just because you've earned your college degree doesn't meant the learning needs to end. All that needs to end is taking out student loans for more learning. There are many ways you can continue your education for little or no cost. While non of these will earn you a degree, they will allow you to learn new skills and/or hobbies. Below I point out three such options.

Community College

Your local community college offers many non-credit courses that are either free or cost very little. Every semester in the mail where I live, I get a booklet from the local community college that lists all of the courses they are offering. While many are for traditional students trying to obtain their Associates Degree or preparing for a traditional four-year college, there is a nice sized list of courses for everyone else. They range from computer programming to photography, with everything else in between. It's a great option to look into to learn a new skill or find out if a new hobby is for you.

I personally have used my local community college for the advancement of my career. At one of my past jobs, we were looking to create macro's through MS Excel. No one had a good grasp on how to do this. I ended up taking a class for free at my local community college and was able to lead the project at work. The initiative I took made me stand out to my employer and got me a nice sized raise.

YMCA

Along the lines of the community college route is your local YMCA. While being a paid member of the YMCA will allow you to take many of the courses for free, non-members can also sit in on classes and only pay a small fee, usually less than $100. The courses offered at the YMCA are geared more towards hobbyists, with courses in painting, drawing, basket-weaving, photography, etc. However, depending on you skill set, they too offer classes in MS Word and Excel, among other programs. I get this booklet mailed to me all of the time as well. If you don't, you can either visit your local YMCA or their website to get an idea of the courses that are offered.

Non-Credit College Courses

Many colleges and universities offer non-credit courses for little or no cost as well. The best part is that you don't have to re-take your SAT's and write an essay to get in!

Many colleges offer free courses, including MIT, Harvard and Stanford. A quick look at some available courses includes Shakespeare, China, World War II, Probability, and more. All of the courses offered are online, so it doesn't matter if the college is local to you or not. You can even find free courses on iTunes too.

These are just a few examples of ways of continuing your education for free or low cost. They are great options to look into if you want to explore a new hobby, brush up on an old skill, or learn something simply for the sake of learning.

Readers, have you ever taken advantage of a free course at any of the above? Can you think of other ways to continue your education for free or low cost?

Financial Carnival for Young Adults ' 26th Edition

Welcome to the twenty-sixth 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 productivity and financing, this week's topics include couple/family finances, poverty, and buying a home . If you want to learn more about these topics from some of the best personal finance bloggers, continue on.

Couple/Family Finances:

It should be no secret to my readers that I am happily married. My wife and I created a joint account before we were even married (technically only a month or two before the wedding, but still). We think it's the easiest to just assume all of the money that we each earn is OURS. But, I know others disagree' Regardless of your position, talk about what works for you. Managing finances as a couple or family is much more complicated than that. This week there were several posts that I wanted to feature.

TTMK @ Tie the Money Knot writes Being Genuine With Money When Dating ' Most people try to put their best foot forward when dating, even if that means spending more than they would like to. Who wants to be seen as cheap? However, is that really a wise approach long-term?

A Blinkin @ Funancials writes How Should Couples Merge Their Accounts? ' Money is a touchy subject. A lot of people prefer not to talk about it. Why? Because most people don't have as much of it as they lead on. If they are open about their finances then they will incidentally reveal their mistakes.

Jester @ The Ultimate Juggle writes How I Spend Money #1 ' Lunch At Panera With The Family - The first in the series How I spend money. This is about how I spent my time and money with my family at Panera.

Steven @ Grocery Alerts writes Family of 5 with a $200-300/month grocery budget. How can it be done? - Here is how we managed having a grocery budget of $300/month or less each month for a family of 5. I wanted to share 10 ways how we did this and sharing how you can to!

JP @ My Family Finances writes Why Stores May Be Charging You a Fee to Use Your Credit Card and What It Could Mean for Your Family - Why stores are charging credit card fees and what it means for you and your families finances.

Poverty:

Poverty is never a fun topic, but should be addressed. No one wants to be poor, but due to society's structure, it happens. Here's some articles to help give voice to that which is rarely discussed.

Ashley @ Money Talks Coaching writes Poor People Don't Retire - A few years ago I had a lightbulb moment when I realized something about aging.

MMD @ My Money Design writes Why Do Poor People Have Two or More Flat Screen TV's? - Poor people in the U.S. own just as many flat screen TV's as the middle and wealthy classes. This begs the question of whether social inequality is really as bad as it seems.

Debt Guru @ Debt Free Blog writes Three Basic Rules of Paying Off Debt ' Follow these three basic rules to help yourself get out of debt and live a better life.

Buying a Home:

It seems like everyone is buying a home these days except me. Those of you who know me well, know that I love the idea of home ownership. It's one of my goals. Yet, because of where we live and how much we make, there's no way we can buy one now. I hope to make the leap in a couple of years. In the meantime, for those wanting to learn more about buying a home, here are some great posts that you can learn a thing or two from.

Jen @ Master the Art of Saving writes Buying Our First House-Price & Other Costs ' It's time to dish about the financial side of buying our first house: asking price, offered price earnest money, home inspection, appraisal, flood plain survey.

Little House @ Little House in the Valley writes New Motivation for a House: I Want a Dog ' I haven't lost focus of what I want: a house. Now I seem to have even more motivation to reach that goal sooner than later; I want a dog!

PITR @ Passive Income To Retire writes One Step Closer to Real Estate Investing ' I have always wanted to get started in the real estate business. Okay ' when I say always, I really mean for years. I have long understood it as a great long-term investment. Unfortunately for me, I live in an area where it is very difficult to make a profit anytime soon.

Echo @ Boomer & Echo writes How Much House Can I Afford? ' There's an important difference between how much house can I get approved for, and how much house can I afford? Here's why:

Steve @ Canadian Personal Finance writes 40 question checklist you need to ask before you buy a house ' Here is a checklist of questions to ask your realtor before making an offer to buy a house.

Young Adult Retirement Planning ' Benefits of Saving a Lot Early

Retirement planning isn't just for old people ' or even middle aged people. People in their 20s and more generally, young adults, can start saving for retirement too. In fact, young adults can make a larger impact on their retirement income than anyone else can ' and that's because they have one major advantage that older people don't have: time. By having more time for your investments to increase and earn more interest, young adults can either make or break their retirement plans based on whether they save or don't save.

My Retirement Blunder ' How I Didn't Start Saving Early Enough

Most young adults are happy to start saving for their retirement by their late 20s, early 30s. Not me. In fact, one of my biggest mistakes when it comes to personal finances is not taking advantage of retirement savings early enough. In fact, I remember talking to my in-laws during this time and telling them that I didn't need to start saving for retirement yet. Oh, how I was wrong.

My first professional job was working for my university while I was still finishing my undergraduate degree. I was only 21 and had the best job in my life up until that point.

The job came with many perks, which I took advantage of, but I declined the retirement benefits. I was only going to be working there for a short period of time and at the time I thought I would prefer the extra cash in my savings account. What I failed to consider was that my employer offered matching funds up to a certain amount. This was my mistake. Not only did I pass up a large chunk of money in matching funds, but I lost several years of earning interest.

'When Do I Need to Start Saving for Retirement?' ' The 1st Wrong Question to Ask

Most young adults ask the same question when they finally get serious about their financial future: When Do I Need to Start Saving for Retirement? This reminds me a lot of my initial approach to retirement. Here's what my logic was:

How long can I continue to live on all of my income before having to save for retirement? I have a lot of things that I would like to buy now that I am earning some decent money at a real job, so why not put off saving for retirement a couple more years. It's not that important since I am young, right?

While none of us want to admit to operating on this same logic, it's what goes on in most of our brains. This question suggests that we would much rather delay saving for retirement than be pro-active and make it easier on ourselves later.

This line of reasoning (to delay saving for retirement) is also based on the faulty logic that it is easier to save later in life. Reality check: It's NOT easier to save later in life. While you might think it is easier to save when your salary is at its peak later in life, in all actuality, one of the easiest times to save money is when you are just starting out. Here are several reasons why saving money is easiest when you are just starting your career:

1. You are used to living on significantly less income
2. With the exception of possible student loans, you have very few mandatory expenses as you will later in life.
3. Lifestyle flexibility to keep your housing expenses to a minimum by having roommates. This becomes increasingly more difficult with a spouse and children later in life.

Instead of asking yourself when do I need to start saving for retirement, perhaps ask yourself how early can I start saving for retirement AND how much easier will it be to fund my retirement because I started so early?

'How Much Do I Need to Save for Retirement?' ' The 2nd Wrong Question to Ask

The other difficult questions that young adults must answer, without adequate experience is to determine how much they need to save. Along the same lines, most young adults want to save the bare minimum. Instead of asking what is the bare minimum that you can save, try asking yourself: what's the maximum I can save in order to make it easier for myself later in life?

By saving early in life and saving MORE, you can drastically increase the figures that are eligible for the benefits of compound interest. The more money you have in your retirement funds, the more options you have. One option would be to decrease your savings later in life when you need to pay for your children's college education. Another option would be to retire early. While I could continue on and on, the important thing to consider is the freedom available to you later in life for making retirement a financial priority now.

Readers, when did you start prioritizing saving for retirement? Do you regret not starting earlier?

Emergency Expenses ' How Young Adults Can Expect the Unexpected

Today, it seems like everywhere you turn financial advisers and mentors are instructing people to have an emergency fund. While young adults may struggle with saving money, I believe that my generation is going to succeed in this area because of certain advantages that they have. Despite my (perhaps illogical) confidence in people just starting out, it still is something important to cover.

The simple fact is that emergencies do happen. If you are younger, you may think you are invincible or have a lot of time to think about certain things, but nothing is guaranteed. Ever heard the saying, 'The best defence is the best offense'? Well, the same is true in finances. The best way to avoid financial disaster is to plan ahead and take action now. Taking the time to establish financial priorities can mean the difference between being prepared for emergencies and being forced to do something you regret.

What Classifies as an Emergency ' Definitions

Before we get into how to prepare for the supposedly unexpected, I'd like to clarify what we're talking about. What is considered an emergency? It is easy to identify the things that don't qualify (such as: a craving for ice cream, desire to watch movies on a bigger T.V., etc.)

To put it simply, emergencies are difficult situations to deal with that come about unexpectedly. A monthly mortgage payment or rent is easy to predict, but it's the things you don't normally pay for that can both surprise and hinder your ability to conquer. We all know that a financial cushion protects you against emergencies, but not everyone has one. Loans online are options that some people look to when they are thinking about how to pay for the emergency that came up unexpectedly.

An emergency can be anything that requires immediate cash that you have not planned for. Some ideas of emergencies include:

• Sickness of a relative or close friend: When someone you love becomes ill, it can be emotionally and financially taxing. Having cash on hand can help you figure out how much you need to pay to help someone who is ill.
• Personal health problems: As the saying goes, health is wealth and this is why you need to have emergency money set aside for your health to cover the amount not covered by your insurance. People may think that they are fully covered, but serious health problems come with rippling effects.
• Death of a relative: Funeral costs are just some of the many costs associated with helping out when a relative passes away.
• Sudden job loss: Perhaps most common is the loss of employment. If you lose your job, you instantly lose an income stream that you normally depend on. Emergency cash will tide you over until you find a new job.

Why Young Adults May Have an Easier Time Creating an Emergency Fund

As I stated earlier, young adults may have an advantage over everyone else that is often overlooked. The main reason that I think excel is because of their fear of investing. The last decade has been hit with several unexpected downturns in the stock market. It has happened more frequently in one period of 10 years than any other in the past 60-70 years. It only makes sense that young adults are gun-shy, so to speak.

Now, investing is something that I don't know enough about (not for long though), but I do know that it is essential for any long term financial plan. It is simply too hard to save up enough money to live off of if it isn't earning interest and competing with inflation. Despite its importance, it is also that which competes with saving money for an emergency fund. Between spending too much and not having enough liquid assets, investing too aggressively is one of the main causes.  Being afraid of the stock market has more young people saving money in a high interest savings account instead of investing it. I should know ' until recently, I was one of those people (to a certain degree).

That's not young adults' only advantage in saving an emergency fund. They also have more lifestyle flexibility than older, more stuck-in-their-ways adults. In other words, the youth allows many people the financial luxury of minimizing expenses. Whether that means moving in with parents or having roommates, they can afford to take these cuts.

How can I plan for an emergency?

Young adults need to take advantage of these advantages while they still have them. Putting money aside is one of the best ways to plan for an emergency. We all know this ' it's just that we don't always make it happen. Like almost everything else in life, it's easy to talk about it and much more difficult to actually do it.

The first thing you can do is to have cash ready. Start saving a little bit now if that's what it takes. It may be hard at times, but it is much better than the alternative of being in debt for something that you could have prepared for. Payday loans are one way that people have cash for emergencies, but I would rather avoid this option.

After saving some cash, make sure that you are fully covered. List what types of emergencies could happen to you:  You should look at your lifestyle and consider the types of emergencies that are more likely to happen to you. It's okay to talk worst case scenario in your planning. Again, it's better to be prepared than not. By listing out the emergencies that you can face, the likelihood of them happening, you will be able to judge whether or not you will be able to handle them with what you have saved. If you can't, make an effort to save more so that you don't have to lose sleep.

Preparing for emergencies is never a fun topic. It means sacrificing your immediate desires for future stability, no matter what. Young adults may feel invincible, but it's important to take advantage of your unique situation and prepare for the future.

Investing is Like Baseball

I've been watching my Phillies this season and so far, it has been a season to forget. While many have deemed this season to be lost and no longer watch the games, I find myself continuing to watch. Granted my mind wanders as I watch now, but I still watch. While watching a recent game, I was thinking how baseball is a lot like investing. You have to have a long term approach to building a successful team, much like you need a long term approach to be successful when investing.

Most successful baseball teams are built strong 'up the middle'. This means that they have a strong defense from the catcher, up to the second baseman and shortstop, and out to center field. With investing, you start off strong up the middle by investing in a solid passive fund that tracks the S&P 500. This type of fund is built with strong blue chip companies that have stood the test of time.

From there, a baseball team works on adding good defensive players at the other positions, while also making sure these players can provide offense. This is why teams tend to go after first basemen that can play decently in the field but can also drive in runs. You need to have an offense as well. A balanced team that can hit and play defense is like a well diversified portfolio. Your other position players should include small cap mutual funds and large and small cap international funds too. You should also mix in value and growth funds too.

From there, a team is looking to build a strong pitching staff, which includes both starters and relievers. Good pitchers can get themselves out of trouble on a regular basis. When it comes to investing, bond funds are your pitchers. Bonds are good at protecting you when the market is in trouble.

A successful team will also have bench players. These bench players are great for specific situations. You have the speedster that can be inserted in the late innings to try and score. You have the switch hitter that can knock it out of the park if need be. Your bench players are real estate and commodities. These two investments can help you further diversify your portfolio and help with your returns.

Of course, building a great team has to be done on a budget (forget about the Yankees for a minute). While it is great to go after the guy who hits a home run every at bat, he costs money. Lots of money. Building a full team of this type of player is going to get costly. Too much for the average team. Likewise for the average investor. That is why you need to stick to low cost passive investments. Keeping costs low earns you a higher return in the long run.

When it comes to investing, you cannot always hit the home run. Sure you may have gotten lucky with Apple or Google, but for the most part, investing is 'won' by adopting a long term approach that keeps costs low through passive investing. Baseball is the same way. You always won't hit a home run. In fact, the odds are against you. So focus less on the glamorous aspect of investing and focus more on building a team that is poised for long term success.

Furnish Your Apartment ' Expensive or Cheap?

A few weeks back I was at my friend's wedding in Ohio. I was part of the wedding and got to spend a lot of time with one of my closest friends. There are very few things that are better in life than spending quality time with those closest to you. When we were talking about the upcoming changes for the married couple, I heard that they were investing in a nice bedroom set. They were well connected in the furniture business and were able to get a family discount on wholesale prices for a really nice set of matching dressers, but they still spent a good chunk of change.

Thinking about how much they were spending on two dressers, I couldn't help but think of all of the other things I could buy. I can't help it ' it's part of who I am. If you remember, the topic is close to my heart because I was able to furnish our first apartment for $600. Then, my friend said something very interesting ' they were looking at is an investment. They'd rather get a nice set of furniture now than go the cheap route and have to replace it multiple times over the next few decades. So, which route is better? Furnishing your apartment with quality, expensive furniture or going as cheap as possible via craigslist.

Two Approaches to Furnishing Your Apartment

While I imagine that there is a spectrum of different approaches to furnishing an apartment (in between these two options), it's an interesting discussion to have. Is it better to invest in quality or go as cheap as possible and use the money elsewhere. While there may not be one right answer, I thought it would be an interesting conversation. Let's start by examining the pros and cons of buying the high end furniture.

Pros of Buying Expensive, Quality Furniture

• Less chance of having to replace nice furniture
• You get nice furniture
• You don't spend lots of money on different pieces of furniture, upgrading slowly
• You can take pride in having nice items
• A better looking (and maybe more hospitable) home
• Spend less time shopping for furniture over lifetime

Cons of Buying Expensive, Quality Furniture

• Spending a lot of money per item
• A chance of your furniture eventually becoming outdated
• If something were to happen to them (either in a emergency or moving), the loss would be more devastating
• If you refuse to buy cheap furniture, it might take a while to furnish your apartment completely

It's hard to say whether buying expensive furniture has more pros or cons. On the one hand, it would be nice to have, but on the other hand, I can't help but think of the functionality as the priority. In other words, if a drawer opens and holds clothes (and doesn't look too ugly), isn't that all that's important? Let's consider the pros and cons of buying cheaper furniture.

Pros of Buying Cheap Furniture

• Spending a lot less per item
• Much more options for furniture and easier to have matching furniture
• Doesn't matter as much if it breaks or is destroyed

Cons of Buying Cheap Furniture

• Increased chance of furniture breaking or falling apart
• May go through several sets of furniture
• Spend more time shopping for furniture

Again, it seems to be difficult to choose without knowing the person that the furniture is for. If you are going to respect and take care of the furniture, it may be wise to invest in something nice that you don't have to replace. But, if you are known for breaking things, it may be a smart move to go cheap, knowing that you will have to replace the furniture either way. If you are looking for answers to what I am finding to be an incredibly hard debate, consider these questions to help you decide:

• Am I going to get sick of one set of furniture?
• Do I want to buy new furniture every few years?
• Will this quality furniture be outdated in 30 years?
• Is it better for me to spend this money on more important things now (like debt, investing, car, etc.)?
• Can I afford nice furniture?
• Will I regret not getting quality furnishings?
• Will it make my apartment more hospitable? Will anyone even care that I have nice furniture?
• Will it be hard to re-sell if I get this or that?

While the questions could go on and on, the important thing to do is to consider all of your options. The way that you furnish your apartment could influence how you approach all of your financial decisions. If you overlook the importance of weighing all of your options, it could set you on course for ruining your finances. Be sure to consider all of the factors before jumping into something that could affect your finances for decades.

 

Financial Carnival for Young Adults ' 25th Edition

Welcome to the twenty-fifth 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 side-jobs and credit, this week's topics include productivity and financing. If you want to learn more about these topics from some of the best personal finance bloggers, continue on.

Productivity:

I have long been known as staying productive. It's part of who I am. I can't take too much time to relax and enjoy myself. It's certainly something that I need to improve, but I love the idea of setting myself up for a better future. In case you are looking for ways to be more productive, SB @ One Cent at a Time writes 101 Ways to be More Productive ' 101 ways to be productive, better and successful at your work, Learn to excel in whatever job you do. these tips are essential for any job. tips to get you ahead in your career.

One of the things that has been floating in the back of my mind is if I would be more productive if I had a smartphone. Lance @ Money Life & More writes Should I Get a Smartphone Update! ' Am I Glad I Got a Smartphone? After about a month and a half of owning my smartphone I am extremely happy I got it! My biggest concern was the smartphone data bill, a whole $30 a month. Thing is, I rarely buy things for myself and am definitely not a big spender'

Daniel @ Sweating the Big Stuff clearly doesn't have the same addiction to being productive (either that or he has a better grasp on how to work hard, play hard so to speak) as he writes Why $200 Lost Gambling Was Better Spent Than $200 Cirque Du Soleil Tickets - In all, we spent about the same amount on the Cirque Du Soleil tickets as we lost playing Craps over the weekend. Where did we have more fun?

Financing:

Financing is a tricky thing. Most of you know my stance on financing as it means putting yourself in a bad situation going forward. With that said, I do agree that it's almost impossible to buy a home in cash ' and I'm not even sure that it makes sense because paying for one in cash means leaving your money just sitting in a savings account. That doesn't keep Deacon Hayes @ Well Kept Wallet from exploring this possibility. He writes about How to Buy a Home WITHOUT a Mortgage - About 6 years ago, I didn't even think this was possible. I thought the only way I will ever own home is to borrow money. Man, was I mistaken. Looking back at all of the interest I have paid to banks makes me sick. I knew there had to be another way and there is.

If buying a home isn't the option, maybe you want to explore financing a home and making sure it is a good option. Eddie @ Finance Fox writes Many Are House Poor and How You Can Avoid The Same Mistakes ' One of the biggest mistakes I've seen friends (and acquaintances) make is to buy a home that's simply too expensive for them. House poor'

While Eddie's post is helpful to explore the idea of specifically focusing on a mortgage, PPlaner @ Provident Plan gives us a philosophical and religious take on debt. He writes Should You Avoid Debt? ' Too often people in both niches of finances and religion identify a situation as black and white when it is actually gray.

Bridget @ Money After Graduation seems to share my same distaste for debt as she writes make pre-payments on your student loan debt to make progress - On Monday I blogged about how much I've overpaid my student loans. Well, I keep a running tally of a number of my student loan metrics, including how much of my payments go towards the principal balance and how much just pays off interest: Note where it says the net paid off is about $5,100.

To complicate the issue even further (which is great in mind, because hardly anything is black and white anymore):  Jon the Saver @ Free Money Wisdom writes Three Reasons You May Not Want to Make Extra Mortgage Principal Payments - These three reasons are great advice for why one should not make extra mortgage payments. While some may disagree, these are great reasons.

Advantages of Being Young in the Work Place: Utilize Your Strengths to Succeed

Over the past few months, my wife and I have been addicted to the TV Show, 'The Office'. I know we are late to the party, but it is a hilarious show. I had never watched more than a couple episodes of the show and didn't understand how entertaining it can be. Despite my love for the character Michael and pure enjoyment in learning of Jim's pranks on Dwight, there is one character that stands out: Ryan. For those who don't watch the show, Ryan is one of the youngest characters on the show and is often referred to as 'the temp'. As a recent business school graduate, Ryan has many aspirations and even delivers on some of his potential when he lands a management position over his superiors.

While I could go on and on about this show, the thing that interests me the most is how his youth is woven into the plot of the show. In many episodes it typifies popular stereotypes in the American work force, and other ways (like getting a promotion), it defies it. Traditional American culture often looks down upon young adults for their lack of work experience. Youth, in many ways, is often associated with a weakness. Despite anti-discriminatory laws, young adults are often excluded from management positions.

However, that's not the end of the story. Young adults have many over-looked skills and advantages that they can utilize. Not only is it possible to get jobs without experience, it is possible to use your youth to your advantage. The secret to succeeding in the work force, at any age, is playing to your strengths while downplaying your weaknesses. Being a young adult is not exception to this rule.

My Work Experience as being the Youngest in My Departments

It should come to no surprise to my readers that as an author of a site titled, '20's Finances', I am in my twenties. Yet, what may surprise them is the past three positions that I have held, I have always been the youngest employee in my department and that hasn't held me back. It first started when I was a senior in college. During my last year, there was a vacancy on campus and I received a personal phone call from the Director of the department immediately after she knew of the opening. I had worked in the department before as a student worker, but she wanted to consider me for a professional position. Every other similar position was filled my someone either pursuing a master's degree or held this position as their career. I was just a lowly 21 year old senior in college and was been asked to apply.

Fast forward a year or two later to my second position. I was hired on at a different university where I was starting my graduate studies. It was a part-time position and I soon started working with people ranging from 5 years older to me to someone who was months away from retirement. I also learned that many people who were working here were stuck in a dead end job and I refused for this to happen to me. To work with people without any motivation to move on is disheartening and draining. It wasn't too long of working hard to complete all of my tasks in record time, assisting others with their work, that I was noticed for my hard work and was promoted. A few months after that, I accepted another position in another department that was better pay and a better work environment (which brings my to my current position).

What are the Advantages of Being Young?

Many people under-estimate young employees. Whether that be as part of an unofficial hazing policy or just plain disrespect for people younger than them. I have worked for a supervisor who was quite full of himself and would make every effort to bring up how long he has been in management. The employees that I worked with often used the phrase, 'since God was a boy/girl' whenever he brought this up in order to undermine what he was doing and expose his ridiculous behavior. I believe the truth is that people under-estimate young adults until they need them to solve a problem that they are incapable of handling. Here are some of the strengths of being young.

1. More Energy ' It's no secret that you are in your prime health of your life somewhere in your 20's (maybe even early 30's). While it may take me only 6-7 weeks to get in shape for a 5 or 10k race, it would take someone much older a few more months to do something comparative. Being young and having more energy is one of the many reasons that people have children at a young age. They would rather do it while they can physically handle it. Having more energy than the older employees gives you an advantage. Whether that is increased efficiency or the ability to work longer hours without complaining, it gives you an edge.
2. More Flexibility ' Many young people, at least where I live now, are not in long-term relationships. People in the NE part of the country often marry much older than the places where my wife and I grew up. Not being in a long-term relationship also gives you some advantages in the work place. It allows you to pack your bags and move for a better position much easier as well as work evenings and weekends if that's what is needed to succeed. Use this flexibility to your advantage while you still can. While I am in a committed relationship (and wouldn't change it for the world), it comes with it's limitations. I know that if one of us gets an opportunity elsewhere, it would take a lot more knowing that there is two of us moving. With that said, we still have more flexibility than those with kids.
3. Familiarity with Technology ' Because my generation grew up with technology essentially in our cribs, it is easy to understand and navigate some of the more complex programs even without official training. While I only took one computer course in middle school, I have learned my way around a computer. I regularly help my department with what I would deem 'basic' excel functions. Not only am I known as the guy who can figure out a way to do things, but am also being asked to do some basic graphic design for publications, despite any official training. With the increasing use of technology, this advantage will only become more obvious.
4. Commitment to Efficiency ' Another unique attribute that young people hold is their distaste for inefficiency. Because young adults are increasingly busy, whether it be school work, working multiple jobs, or socializing, they know how to prioritize and make things more efficient. Their lust for multitasking gives them the drive to find the most efficient ways to do things. Instead of being stuck in their ways, young people are more likely to accept streamlined processes. Who would you rather have on your team? Someone who is going to do things without asking why or someone who is going to work to make things faster, more efficient?

How to Play to Your Strengths

Having these strengths without successfully displaying them means absolutely nothing. In order to be successful in your career and in the work place, you have to learn to display these in the best way. Coming across too strong can lead people to look to your poor relationship skills and ignore everything else, while not taking any initiative can leave you in a cubicle for the rest of your life.

1. Produce Quality Work Consistently ' When tasks are assigned to you, be intentional about producing top-quality work. Never turn in something that you are ashamed of because the quality will be associated with your name. Reputations go a long ways when it comes time to future job opportunities.
2. Be Willing to Take on New Tasks ' Every supervisor wants to have team players working for them. When new projects come up that you can handle, don't hesitate to volunteer to be part of it. If it seems like it would be too much to handle in addition to your current responsibilities, consider having an honest conversation with your supervisor about giving up some of your other responsibilities in order to focus on the new project.
3. Be Social ' One of the most important things is to be social. It shouldn't take away from your work, but make sure that your co-workers and supervisors get to know you. Don't pretend to be someone else for the sole purpose of impressing others. Simply be yourself and be kind to those who work with you. The saying, 'It's not WHAT you know, but WHO you know' is true these days and this is a great way to get ahead.
4. Stay Focused on the Long Term Goal ' It can be easy enough to feel comfortable in a position, so be intentional about always doing your best. Thinking of a long term goal is a great way to keep your focus and prevent yourself from settling for being average.

While people may look down on you for being young, the times are changing and the opportunities are available to people who show the initiative and skills to succeed. Don't let the culture of disrespect for young adults hold you back. Instead, use it as motivation to succeed.

Are there any other advantages that young people have?

How have you used your strengths to succeed in the work place?

 

Save The Earth and Your Money: Swapping

It's amazing how the internet connects us all. Before the internet, if you needed something, you could either buy it, or find a friend that had it and let you borrow it. If you didn't know someone with the item, you had to buy it. No more. With the internet, you are connected to many more people, which allows you to not have to buy just about anything. Welcome to swapping, internet style.

There are many things you can swap online. One such example is DVD's. There are only a few movies that you buy ' those that you know you will watch over and over again. Everything else, there is no point in buying. Sure you can rent them, but that costs money. If you want to do it for free, check out SwapADVD. This site lets you earn credits for lending your movies and shipping them out. You can use those credits to borrow other members movies.

Let's say movies aren't your thing. Or maybe you are doing a house project and need a special tool. Jump online to NeighBorrow or SnapGoods. Both sites will connect you locals in your area to borrow the items.

If you have children, you know how quickly they grow out of clothes. It's almost pointless to buy them new clothes. Many parents hit up yard sales to find gently used clothes for deep discounts. One new option is ThredUp which allows you to get rid of your kids clothes and get some that fit. It recently changed up its business model, moving away from a pure clothes swapping site to a discounter. You can fill a bag full of clothes and mail it in for free. ThredUp will pay you 20-30% of the value of the clothes. You can choose cash or use it to buy clothes on their site. New clothes start at $2.49 on the site.

If you have paperback books, then PaperBack Swap is the place for you. Simply list the books you will swap and when other members borrow your book, simply mail it out and choose a book you want to borrow.

Finally, there is Swap, which lets you trade just about anything. When I say anything, I mean it: you can trade books, tools, jewelry, even kids! (OK, not kids). The site boasts over 500,000 members with over 1.5 million items to swap. With those numbers, I'm sure you'll find what you are looking for.

These are just a few ways to trade and borrow items from others. I'm sure with a little digging around, you can find other sites that will allow you to trade items that the above may not. If you do know of any, be sure to add them in your comments below so we can compile one incredible list!

1 Year Giveaway

I can't believe it's already been 1 year since I started blogging. This time last year I was still learning the ropes. I am happy to say that I have made it longer than most. Despite some difficulties and fear that nobody would care what I write, I have stuck with it. To celebrate, I am hosting a giveaway with Making Sense of Cents. I noticed that she was celebrating her 1 year of blogging this month and so we teamed up to make it that much more worthwhile for our readers.

 

The Giveaway is really easy to enter and has 11 different prizes. It will run from Today, August 7th until August 31st at Midnight. All winners will be announced on Monday, September 3, 2012.

Now on to the good stuff'

Prizes:

1. Amazon Kindle Fire
2. $130 Cash (via paypal)
3. $100 Cash (via paypal)
4. $50 Amazon Gift Card
5. I-Pod Shuffle
6. $50 Panera Bread Gift Card
7. Free Copy of 'How I Make Money Blogging' by Crystal from Budgeting In the Fun Stuff
8. Personal Finance Book
9. Personal Finance Book
10. $25 to Anthropologie
11. $20 Amazon Gift Card

Below you can use the Rafflecopter widget to enter. There are two mandatory entries and lots of options for additional entries. There is even an option to get more points each and every day by tweeting about this giveaway.

a Rafflecopter giveaway

A Special Thanks to All of Our Wonderful Sponsors:

My Personal Finance Journey
Budgeting in the Fun Stuff
Modest Money
Budget and the Beach
Frugal Portland
Debt and the Girl
The Egg
From Shopping to Saving 
My Journey to Millions
One Cent at a Time
Prairie Eco-Thrifter
My Broken Coin
SpringCoin
Money Reasons