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Posted
Aug 04 2008, 06:06 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from J.D. Roth at partner blog Get Rich Slowly. When I was a sophomore in college, I got my first credit card. I thought it was awesome -- it was like free money. Soon I got another credit card, and before long I'd maxed them both out. I entered the workforce with a handicap. I had the start of a nasty credit habit. My parents had never been good with money, and as a result I had no notion of proper financial skills. I made some bad decisions, which were in turn compounded by some rotten luck. Just five years after graduation, I had about $20,000 in credit card debt. For the next decade I tried to kick the habit. Sometimes I'd make progress, but then I'd find other ways to fall behind. Here are some of the mistakes I made along the way and the steps I took to correct them.
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Posted
Jul 07 2008, 04:49 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from J.D. Roth at partner blog Get Rich Slowly. While sorting through reader e-mail recently, I began to detect a subtle recurring theme. People were writing to me because they had a goal in mind, but their present circumstances seemed to be far from their intended destination. These two points were so far apart, in fact, that my correspondents were afraid to begin moving. Because the distance seemed overwhelming, they were paralyzed. The importance of action I used to feel this way, too.
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Posted
Jun 02 2008, 05:37 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from J.D. Roth at partner blog Get Rich Slowly. I pulled out my camera gear last night. It's been two years since I used it regularly. Before I started Get Rich Slowly, I seriously considered trying to become a professional photographer. But for a long time now, my camera stuff has been gathering dust in the corner of my office. I can't even remember the last time I used it. It's fun to look at all my equipment again. It's fun to handle it, to imagine the possibilities. I'm eager to get outside and make some images. As I sorted through my bodies and lenses, though, I had to shake my head.
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Posted
May 18 2008, 08:45 PM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from J.D. Roth at partner blog Get Rich Slowly. Recent research at the Stanford Graduate School of Business suggests that shopping can lead to more shopping. When such savvy marketing researchers as Uzma Khan of Stanford, Ravi Dhar of Yale, and Joel Huber of Duke noticed that shopping sometimes proceeded unchecked even in their own private domains, they decided to get to the bottom of things. Setting up a series of tests of purchasing behavior, they found that for most people buying that fateful first -- and often innocent -- item seems to open the purchasing floodgates. This realization, they say, has important implications for how stores are laid out as well as for understanding individual behavior. These researchers indicate that shopping is a two-stage process.
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Posted
Apr 21 2008, 06:36 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from J.D. Roth at partner blog Get Rich Slowly. Stories about national economic woe abound. I've had conversations with a few of my friends about the mortgage mess, about recession and a possible bear market, and about the nature of poverty. The economy is sour in the United States (and elsewhere in the world), and this frightens many people.
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Posted
Apr 14 2008, 05:51 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from J.D. Roth at partner blog Get Rich Slowly. There's an old man who lives down the street. I don't know his name, but every day I see him walking up and down the road with his cane. He moves slowly. He always wears the same thing: faded denim pants, a lightweight tan jacket and a bright orange cap. For one hour every day -- rain or shine -- he walks up and down the street. Every day. We live on a steep hill, but he only walks on the flattest part. He's been doing this for months. We've exchanged greetings before, but I've never asked him about his routine. Does he do this for exercise? Is he recovering from surgery? All I know is he's out there every day, making small steps, walking for an hour. I don't know where he's going, but he does. The dangers of going cold turkey When a person decides to make a lifestyle change, whether financial or otherwise, there's a temptation to go all out. With the zeal of a new convert, she leaps headlong into the life of the frugal, for example, giving up everything she held important before. There's a problem with this method. Most people who leap from a lifestyle of deficit spending to one of extreme frugality find the waters very, very cold. It's a shock to the system. It feels oppressive. They struggle to tread water, but before long decide they're going to sink rather than swim, so return to the warmer, familiar waters, the waters of debt.
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Posted
Mar 31 2008, 05:57 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from J.D. Roth at partner blog Get Rich Slowly. When I lived paycheck to paycheck, there never seemed to be enough money to go around. I was perpetually $50 or $100 short of what I needed. Because I was spending more than I earned, I fell further behind every month. I had a negative cash flow, which led to more debt, which put me deeper in the hole. It is mathematically impossible to get ahead with a negative cash flow. In order to save money, in order to pay off debt, you must earn more than you spend. Though I understood this intellectually, it was only when I actually saw the concept applied to my own life that I appreciated the power of positive cash flow. Cash flow basics To gain wealth, you must spend less than you earn. This is the fundamental law of money. Framed in terms of a mathematical equation: [WEALTH] = [WHAT YOU EARN] - [WHAT YOU SPEND] This formula tells us two things:
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Posted
Mar 17 2008, 06:50 AM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
This post comes from J.D. Roth at partner blog Get Rich Slowly. "To develop a better understanding of the wise use of credit, let's spend a few minutes with a certain individual we'll call 'Mr. Money,'" suggests the narrator in "The Wise Use of Credit," a short video created in 1960 by Sutherland Educational Films. In this film, produced with help from the National Consumer Finance Association (which is now the American Financial Services Association), Mr. Money teaches John and Judy the ins and outs of credit. His advice is familiar to most of us:
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Posted
Mar 10 2008, 05:46 AM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
This post comes from J.D. Roth at partner blog Get Rich Slowly. I met with one of my readers at the local coffeehouse the other day. Like many of us, Aaron got into money trouble when he was young -- he made some dumb mistakes. He fell for a get-rich-quick scheme that left him deep in debt. For a long time, he floundered, struggling to find motivation, but ultimately he found purpose in religion. Aaron's faith helped him to turn his life around, to begin making smart financial decisions. He still has a long way to go, but he feels like the worst is behind him. "I've had many good opportunities to change things along the way, and that's what I've done," Aaron told me. "My life used to be about me, me, me and take, take, take, but now I've changed." "What about you?" Aaron asked, sipping his coffee. "What motivated you to take control of your finances?" I started to answer but, as conversations will, our discussion lost its focus. I never gave a complete response. I thought about the question for the rest of the day, though, and concluded that for me, money represents freedom.
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Posted
Feb 04 2008, 05:32 AM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
This post comes from J.D. Roth at partner blog Get Rich Slowly. I've been thinking lately about the value of a college education. I ear ned a B.A. in psychology from Willamette University in 1991 (with a minor in English literature, and almost another minor in speech communications). What have I done with this degree? Almost nothing. Yet I do not regret the money and years I spent working to earn it. Does earning a college degree make a difference in your future? Absolutely. The facts are striking. On average, those who have a college degree earn almost twice as much as those who do not. According to the U.S. Census Bureau: Adults with advanced degrees earn four times more than those with less than a high school diploma. Workers 18 and older with a master's, professional or doctoral degree earned an average of $82,320 in 2006, while those with less than a high school diploma earned $20,873.
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