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Posted
Sep 24 2007, 11:01 AM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
The Fed's decision to lower short-term interest rates last week stimulated fear among some money managers that prices for consumer items could rise. Investors are watching carefully as the Fed tries to steer a course between inflation and recession.
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Posted
Sep 26 2007, 01:50 PM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
Which makes more financial sense: applying extra cash to low-interest debt (we're assuming you're not carrying a credit card balance) or investing it? Investing will likely get you a better return, but freedom from debt is a powerful draw. The bottom line is it's a very personal decision.
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Posted
Oct 04 2007, 10:20 AM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
This post comes from partner blo g Blueprint for Financial Prosperity . The “ latte factor ” was a term coined by David Bach to represent the idea that the key to financial prosperity is to cut out the little things in life you're paying other people for, and spend that money on yourself and your future. Mathematically, it involves taking a $5 cup of coffee each day, or other discretionary spending you'd like to substitute in its place, and calculating how much that $5 would be worth in 40 years if you had invested it. It's not a particularly novel idea because everyone can appreciate that saving $5 each day and then compounding that at 11 percent each year for 40 years will result in a huge number. But its value is that it challenges you to examine the motivations behind your spending and how you could change those for the better. It all adds up When you make a large capital purchase, like a house, a car, or even a plasma television, you spend quite a bit of time researching in order to
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Posted
Oct 08 2007, 11:33 AM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
Higher gas prices are just one of the difficulties frugal folks will encounter as the dollar loses value. Wise Bread offers insights on what's to come: Importers will feel increasing need to raise consumer prices, a pressure most have so far resisted. At MSN Money , "What the falling dollar means for you" explains the pitfalls (higher prices, interest rates and cost of travel abroad), and the upside (more export opportunities and foreign tourists) of a sinking dollar.
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Posted
Oct 09 2007, 06:27 AM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
This post comes from partner blog Blueprint for Financial Prosperity . In layman's terms, the interest rate dictated by the Fed impacts the stock market because it affects the rate on loans businesses can get. When the interest rate goes up, loan rates go up and businesses have to pay more on their loans and have less to put back into the business. The interest rate also affects consumers because the rates on their loans are going to go up and thus their ability to spend money is going to go down. If consumers are spending less, businesses are making less -- yet another hit to future growth potential. Since the stock market is supposed to track the business, rate hikes affect growth projections and thus the price of stock. The price of a stock is based on those projections, so increased costs means potentially decreased future growth, and so the price goes down. A rate hike means stocks weaken; rate drop means stocks strengthen. That's the layman's version and that's basically like explaining
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Posted
Oct 10 2007, 07:59 PM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
Gary Foreman started The Dollar Stretcher in 1996 when the company he worked for started laying people off. Twenty months later, he too lost his job but his groundbreaking Web site dedicated to frugality was already well off the ground. In an interview at Wise Bread , Foreman shares his favorite tips to save money (use a grocery price book ), make money (let compound interest work for you), as well as the times his efforts at extreme frugality didn't work out the way he'd planned.
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Posted
Oct 12 2007, 02:09 PM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
Think you've got it made when you get your credit card company to reduce your interest rate? It ain't necessarily so , writes Mrs. Micah . That lower interest rate will apply only to new purchases and, she says, if you're carrying a balance, "the credit card company will pay off your lowest interest balance first with the money you send in ." She recommends a course of action. (Our advice? Never carry a balance .)
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Posted
Oct 17 2007, 07:22 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from partner blog Five Cent Nickel . On the heels of my confession that we take our own treats to the movie theater instead of buying them at the snack bar, I thought I’d throw out another one: I cut my own hair. I’ve been doing it for at least 10 years. I don't have special skills in this area. I simply give myself periodic "buzz cuts" with inexpensive clippers. My current weapon of choice is a Remington Precision haircut kit I picked up at Wal-Mart for less than $20 a couple years ago. I buy new clippers every three or four years, so it costs me a grand total of about $7 a year. In return for this minor investment, I save myself the expense of 12 to 15 haircuts per year. Splitting the difference, and assuming $12 a haircut, including tax and tip, that works out to $162 per year, or $155 after factoring in the cost of the clippers. Extrapolating over a decade, this turns into a nice little chunk of change. On top of this, we buzz our kids’ hair in the summer. With four
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Posted
Oct 23 2007, 06:53 AM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
This post comes from partner blog Blueprint for Financial Prosperity . You want to make a big-ticket purchase, you've just been offered 12-month, same-as-cash financing, and you're not sure if you should accept it. Take a breather and analyze the offer. How good a deal this is depends on what your plans are for the next 18 months. Do you plan to buy a home in the next 18 months? If the answer is no, take the offer. If the answer is yes, here's some downstream-effect math for you: What you save/earn. By taking the offer, you can potentially earn a little under 5% on the value of the purchase by putting the purchase price into a savings account. Let's say you're buying a $2,000 television. By putting the money into a high-yield online savings account, you will get about $100 in interest before taxes. (The $2,000 will slowly diminish as you make minimum payments, so $100 is the maximum.) A $10,000 home-renovation job with 0% financing is an interest win of $375. You also have to consider the
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Posted
Dec 11 2007, 09:50 AM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
This post comes from partner blog Blueprint for Financial Prosperity. What is the most important goal for an emergency fund? Capital preservation. Your emergency fund is the foundation on which the rest of your personal-finance house is built. You should pour it and let it sit. Hopefully, you'll never have to touch it. However, if you find yourself in a situation when you’ll need it, you want it to be available. That being said, a friend recently asked me whether a money market account or a high-yield savings account is better for an emergency fund.
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