• How much are you gonna save up for a down payment and closing costs?
• How do you know how high a mortgage you will qualify for?
• How much can you really afford based on your lifestyle?
• How much will you really save in taxes?

The key point here is home ownership is not for everyone and there is nothing wrong with that. If your lifestyle requires you to change jobs often and move or get transferred every year or so then it makes perfect sense not to buy. Typically, it takes 4-6 years to recoup the money you pay in up-front costs and the cost and fees.

You may also be happier renting if you’re not comfortable with performing your own repairs and maintenance and you can’t afford to hire someone else to do it for you. There are plenty of people who enjoys the benefits from living in apartments, benefits such as like swimming pools, recreational features and the flexibility of being able to move without too much trouble. You want to think about whats important to you, there is nothing wrong with renting if it suits your lifestyle.

For those who do want to own a home, you want to make sure to avoid being house poor. You don’t want to put your self in a situation where you have such high house payments that your a prisoner to your own house and cant afford much of anything else. You may think at first that buying your dream house is worth the sacrifice but years of doing without the enjoyment of vacations, new furniture, new cars, eating out and just other simple life pleasures can make your dream house into your worst nightmare. Becoming house poor can also affect your relationship with your spouse or partner.

The general rule of thumb you want to stick to is to buy a house that costs less than two and a half times your income. For example, if you and your spouse make $100,000 together, then you want to try to keep your home price under $250,000.

Front page stories (Editors Picks)

Brip Blap presents Best Financial Move in College

I applied to Harvard on a whim, … I started the application, handwritten, in black ink and when that pen died I finished in blue ink. I did it because one of my friends told me there was no way I could get in, and I took the bet.

Living the Cheap Life presents When Bank Account Bonuses Come Back to Bite You

The thing is, sometimes the banks get really tricky with the requirements. Sometimes there are obscure terms and conditions in tiny print …the banks play dirty.

Frugal Dad presents A Personal Finance Wakeup Call

So there I was at the McDonald’s drive-thru with a dead check card, an over-the-limit credit card, an empty wallet and exactly fifteen cents in the change holder in my truck.

Dont Feed the Alligators presents An Ounce of Prevention Saves Tons of Burning Car

“HEY!!! Your car is on fire!” He turned and smiled and kept walking. “HEY!!!” I yelled again, “YOUR CAR IS ON FIRE!”

Money & Fitness Blog presents My Mom Continues to Help Me Financially and She Shouldn’t Be

I have told my mother time and time again that all I want is a card but she continues to send money

Other Fantastic stories:

My Money Adventures presents Y’s Story: Part 2

My ex is a sleazebag. He grew up in a middle-class home with a middle-class mom and a middle-class dad…

The Q Family Adventure presents Handyman in a Making…

This week project is the flower pencil holder…

Finance Gets Personal presents I’ve Never Been So Happy About Not Taking a Week’s Vacation

…we’re taking a vacation in our own city, and our house will be the hotel

Fire Finance presents Beware - Citi Cash Returns Card Charges Hefty Over the Credit Limit Fees

…keep a tab of our credit card’s transactions via any system that works

Money Blue Book presents “Parking Wars” Reinforces Why I Dislike Tow Truck Drivers

The livelihood of tow truck drivers is based on their ability to successfully hide in the bushes with their getaway vehicles and lie in wait for hapless drivers to make a parking mistake or slip up

I’ve Paid for this Twice Already… presents One Person’s Coupon Trash Ends Up My Treasure

Not being one to turn down a coupon, I sorted through them, and found that most of them were for things we don’t buy or use.

The Financial Blogger presents My Smith Manoeuvre - April Update

In fact, it is more like gambling than investing!

My Daily Dollar presents Why Goals are Awesome

The great thing about the blog is that it’s so public. At first, it’s scary to put yourself out there, but then you realize that you have all these wonderful readers helping you along

Lazy Man and Money presents The Power of the Dream

I haven’t felt like this since college. A good friend and I would stay up all night dreaming about business plans

Dough Roller presents How to Turn Mistakes into Opportunities

The fact is that some of our best successes are born out of mistakes. I’ve made many mistakes with The Dough Roller, and most of them have allowed me greater success down the road

Just Shoot Me Now presents How I saved $10 in Gas

“Honey, do you really want me to come be with you?… I’d rather not waste the gas.”

Thats it for this weeks edition of the Carnival of Money Stories. You can submit your money stories using this form here. If you are interested in hosting a future edition of the Carnival of Money Stories please go to the carnival home page under hosting.

A budget is really nothing but a spending plan.

You may find yourself struggling with an unrealistic plan to save tons of money when what you really need to do is spend more wisely. If you think that you can meet your financial goals without some sort of a spending plan, you will find yourself very disappointed. Regardless of whether you make a hundred dollars a week or a million, the key ingredient to successfully making your money work for you is to create your spending plan.

The problem is that many people spend more money than they make and they don’t realize they’re spending too much until its too late and they’re deeply in debt. What you want to do is to decide in advance how to put your money to use instead of letting it happen accidentally. When you spend without some sort of a spending plan, you are not in total control of your money. In other words, your money is in control of you.

The driving force to keeping a spending plan, or budgeting, is all in the attitude. You want to think of budgeting as eating right rather than being on a diet. You eat what you want in moderate amounts, you don’t binge, you don’t deprive yourself, and yet you end up better off. The word budget, for some, creates images of sacrifice, penny pinching, and doing without the extra. I want to say that 90% of budgeting is mental, so if you find yourself overwhelmed when you hear the word budgeting, then you want to replace the negative image with a positive one.

Remember, the key ingredient to successful budgeting is a positive attitude.

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Merry Christmas and Happy New Years!

Welcome to the 40th edition of the Carnival of Money Stories, the one year anniversary edition. To be exact, our first edition was last year on Christmas day, so the carnival is exactly one year and one week old.

I am really glad that it has made it this far, many great thanks to all the hosts and submitters for all their hard work and efforts. I want to take the time to recognize all the hosts that has contributed this past year including with all the posts and submissions from each carnival. Here is a recap of all the carnivals from the previous year, December 2006 - December 2007.

1. Moneywalks on 12/25/06
2. Moneywalks on 01/08/07
3. Save Money on 01/22/07
4. BinaryDollar on 02/05/07
5. DigeratiLife on 02/19/07
6. Money,Matter and Musing on 03/05/07
7. WiseBread on 03/19/07
8. MoneySmartLife on 04/02/07
9. FireFinance on 04/16/07
10. Young and Broke on 04/30/07
11. Sun’s Financial Diary on 05/14/07
12. Getting Green on 06/04/07
13. Money Walks on 06/11/07
14. The Frugal Law Student on 06/18/07
15. Retire Young and Wealthy on 06/25/07
16. My New Choice on 07/02/07
17. A Penny Saved on 07/10/07
18. Sushi Money on 07/16/07
19. Dough Roller on 07/31/07
20. Bryan C. Fleming on 08/07/07
21. Ask Mr. Credit Card on 08/14/07
22. Carnival of Money Stories on 08/21/07
23. Fire Finance on 08/28/07
24. Enough Wealth on 09/04/07
25. Tight Fisted Miser on 09/11/07
26. Paid Twice on 09/18/07
27. Money For Military on 09/25/07
28. Building An Empire on 10/02/07
29. Money Monk on 10/09/07
30. Free Money Finance on 10/16/07
31. Stop the Ride! on 10/23/07
32. Bag Lady on 10/30/07
33. Moolanomy on 11/06/07
34. Being Frugal on 11/13/07
35. Living off Dividends on 11/20/07
36. The Dividend Guy on 11/27/07
37. Loonies and Sense on 12/04/07
38. Cash Money Life on 12/11/07
39. Time to Budget on 12/18/07
40. Here on …today!

…and finally on to our 40th edition of The Carnival of Money Stories. Great selection of stories here so please take your time to look over these articles. Theses are in order from the time it was submitted. Enjoy!

1. My Dollar Plan
2. Millionaire Neumes
3. Credit Withdrawl
4. Me Vs. Debt
5. Gather Little by Little
6. The Investors Journal
7. Free Money Finance
8. The Financial Blogger
9. Chief Family Officer
10. Free From Broke
11. Early Retirement Extreme
12. Money Blue Book
13. Singly Guy Money
14. Money Clipped
15. Paid Twice
16. Credit Cards that Pay
17. Ask Mr. Credit Card
18. Money Changes Things

So that was it, I really enjoyed reading through all these stories. If you have time, please highlight your favorite story or even your favorite carnival edition from the past since its posted all here. Thanks for taking the time to look over this edition and big thanks to all submitters and also once again to all the previous hosts. Lets hope we can have another successful year of Money Stories.

If you are interested in hosting a future edition of the Carnival of Money Stories you can either send an email to carnivalofmoneystories(at)gmail(dot)com or just leave a simple comment here to this post. To submit your stories to the next edition, you can use this form here. Have a great week everyone and Happy New Years! Cheers!

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Merry Christmas!

It’s that time again for another year of gift opening, eggnog drinking and spending time with your loved ones. This day a year ago was the first edition of the carnival of money stories and I am very glad that it has made it this far. I want to thank all the hosts and story submitters for their hard work and efforts.

As for todays edition, I will be extending the deadline for another week so that we can get more stories. We had plenty of awesome entries, but most of them were not stories dealing with money or experiences so I could not include them. Please remember that this carnival is specifically just for stories and experiences. So it will be hosted here on January 2nd here at Money Walks. You can use this submission form to submit your stories.

Have a safe and a joyful break!

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When you get your first job offer, how will you know if the salary is reasonable? The first thing you need to do before you enter the job market, whether it’s your first job fresh out of college or a new step into a career path, you need to research what the going rate or salary is in your area that also matches your education and skills.

When it comes to negotiating salary and benefits, most of it just boils down to knowing how much you’re worth in the marketplace. You need to identify which benefits are important to you and associate these benefits with a price tag offered by the employer so that you can evaluate the real value of the offer. The total compensation encompasses much more than just a salary, but also benefits and bonuses such as relocation package and signing bonuses.

When negotiating with your prospective employers, you need to find out what benefits and bonuses the company offers to employees in the position that you’re applying for, what the average pay increase is, and what benefits might be added later.

As far as when to discuss salary negotiations, you should delay any questions or requests until you’re well into the interviewing process and you also want to avoid telling your interviewers how much you currently make. You shouldn’t be thrown into a salary range that’s lower than your current going rates just because you were underpaid at your previous job, and discussing your salary too early in the game can take you out of the running if your current salary is too high. The main goal here is to have enough time interacting with the managers and interviewers to have a chance to “sell yourself” and to convince them why you’re the right person for the job before going into discussion about salary.

Keep in mind, the objective of them asking your current salary or the salary you’re looking for is generally to pay you as little as possible. Employers, for the most part, will always offer less than what they can afford. So the general rule of thumb is this, whatever the offer, always ask for 12%-15% more than what they give you. The reason for this is because when they put together your initial offer, they compose the letter assuming that you will ask for an increase. The employer usually allocates 15% higher than the initial offer for their budget on you, so if you don’t ask for the increase, then the company is more than happy to give you your base pay since they were able to reel you in with their minimum offer. When asking for the 12-15% increase, you might not always get the exact 12-15% but any increase is better than nothing. In the worse case scenario, they say no and that’s it. They’re not going to retract their offer because you asked for an increase, it can’t hurt to ask.

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Hello and welcome to the Carnival of the Capitalists. I hope everyone had a great thanksgiving weekend and a smooth black Friday. I want to start off by thanking Jay of Bizosphere for giving me the opportunity to host this great carnival. If this is your first time hearing about the carnival you can read the details from their main site and submit to their next edition, if you have an awesome article you would like to share, using this blog carnival form.

I had a great time reading through all the entries, 21 articles made it to this edition. Following the guidelines of the carnival theme, as long as the article was not older than 3 weeks and it was quality work it was included here in this edition. Okay, without further delay I present you the Carnival of the Capitalists.

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Capitalism
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Banks + Debt = Evil

http://www.pqinternet.com/94.htm

Buffet on Diversifacation

Most people end up di-worse-si-fying their portfolios by adding stocks in unfamiliar sectors for the sake of diversification

What Is A Cap Rate

The lower the cap rate, the more the market values the future appreciation of the area.

Estate Tax or Death tax?

Paying taxes is like pouring water down a drain. Yeah, some good happens (the drain gets cleaned and is kept functioning), but so much is wasted

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Personal Finance
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Will A Bank Sleep With You? Understand Credit As A Relationship

Do not try to lie to a women, they have a sixth sense for this kind of stuff. So do banks

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Business
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Business Investment Strategies That Work Every Time

The secret to investment success is the consistent application of time-proven strategies, not the use of complex, hard-to-understand investment vehicles created by investment bankers out to take your money

Five Powerful Techniques to Help Your Business Stand Out

It is impossible to know how to brand your company if you don’t have a clear vision of what you offer, why it is different from others who may offer similar concepts or products, and how to convey all of this to your customer

Business Cards:A Valuable Investment or a Waste of Paper?

Business cards don’t work in all cases though. They will only work as well as you do

Interviewing Employees: Avoiding Problem Workers

Beware of any job applicant who badmouths their previous employer. All they are saying to you is that you will be the next evil one on their list

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Management
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The illusions of superior professional mutual fund manager performance

If investment mutual fund managers were truly skilled at beating the market, then you would expect mutual fund manager performance prowess to persist over time

The Startup Team or the Startup Idea:What’s More Important?

If you surround yourself with great people, the great ideas will flow like good wine.

Please, Lord, Not Another Trademark Leadership Concept

We don’t need more “creative” ways to write about leadership. We need more good leaders we can use as role models, examples and mentors

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Marketing
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Get Demographic Market Research For Free

Don’t rely on visual cues such as “oh I saw at least 10 old people in the pharmacy.” Be scientific and be cost effective.

The Psychological Effect of 99 cents

Manipulating the price to make it look like a bargain is a powerful psychological strategy used in marketing for the best ROI

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Economy
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The Most Anticipated Recession Ever

households in the lowest third of the income distribution have experienced a ‘devastating impact’ from high fuel and food prices, with 60% reporting a worsening financial situation.

Ron Paul Wants to Abolish the Federal Reserve

abolish the Federal Reserve and replace it with a computer

So Now you know

The Fed’s 3-year-ahead inflation forecast also surprises me a little, in that the highest inflation rate that any member anticipates for 2010 is only 2.0%

Good News on the Declining Dollar, Savings & More

Many people who denounce our national savings rate do not realize that the savings rate statistic does not include most investments nor does it include assets in retirement plans or even home equity

Informations and the Commons

Today in Professor Rustici’s class, we discussed the tragedy of the commons…

What is the Bank of England Base Rate and Why is it Important?

The Bank of England interest rate is the rate at which the Bank lends money to high street banks

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Sales
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Don’t Let your Car’s value Go Down “Like a Rock”. Buy the Vehicle that Keeps it’s value the Best.

Its 2008 Best Resale Value Awards found that Volkswagen produced vehicles will keep their value the longest.

So that concludes this edition of the Carnival of the Capitalists. If you are interested in submitting or hosting in the near future you can stop by the carnival home site and learn more on how you can contribute. Thanks for stopping by and have a great day.

There was an article that made it to the front page of yahoo that linked to an article on The Wall Street Journal about a homeless man, John Wesley Jermyn, who is often seen either on roller skates or dancing, inspired a new brand name of clothing line called “The Crazy Robertson”. If you have 98 dollars to dash out, you could have one of his graphic hoodies.

What caught my eye was that he now also have an agent and a manager, to manage his profits of his clothing line. At this point I’m thinking wow, a manager and an agent, I guess he suddenly made it pretty big and has a pretty nice stack of money in some bank account somewhere but thats far from the truth. Although its not much money, Mr. Jermyn has specific ways he wants to be paid. Interestingly, he doesn’t want any cash or anything that is of any value, at least our definition of value. All he wants is food, liquor and some paper for his art projects.

“But so far he has refused to accept much cash, preferring to be paid in food, liquor and paper for his art projects, according to Teddy Hirsh, one of the label’s founders.”

In order words, he only wants what of any value to his life, which happens to be food, liquor and art projects. Not a new Ipod, or a computer, or some expensive unnecessary gadget from Best Buy. He basically lives his life according to his own lifestyle that he is used to and doesn’t like to involve any money in his daily life and therefore does not depend on society for anything. I like this article because I like that he values his life style and won’t change even if he had money. It is evidence that show it is possible to live without all the extra stuff we have and long for.

Mr Jerymn and I live on the same planet but apparently two completely different lives. So much of our daily lives involves monetary issues and we strive to perfect our social order, but sometimes I wish I was in an environment somewhat similar to Mr. Jerymn’s shoes, or roller skates rather and skate along freely. When we see Mr. Jerymn, we see him as being trapped and being extremely limited. But in a way, it’s quite the opposite, we’re the only ones who deal with all these problems we deal with money. It’s a interesting concept but really, money is the only thing that limits us and clearly, because Mr. Jerymn does not reply on money, he is free and unlimited.

Keep on dancing Mr. Jerymn, you rock!

It looks like my money market account’s interest is finally stabilizating at 4.50%, which is .4% lower than the last time I had mentioned my money market account which is over at gmacbank. Which is okay with me, not like I’m happy that it went down but the amount of money in my account right now doesn’t make any significance difference losing that .4%. Losing the interest rates is all handy and dandy but today I encounter something that was more of a worry than just losing some interest rates.

For the most part, I try to stay away from checking my investment accounts as much as possible because then I would not be inclined to touch or do anything with the account but yesterday I checked my account and I’m glad that I did. As I was going over my account summary, I realized that there has not been to much activity going on in the account. Thats mainly because I haven’t been putting any thing into my account, so the only thing in my statement was my interest rates that were credit into my account for the past 4 months. While looking over the statement, it made me realize that I was actually making some decent money and I thought to myself, “wow, I’m glad that I had started this account a while back. Look at all this interest it’s making and how much I would have been missing out on”. But thats when I realized and said, “wait a minute, these numbers don’t seem to be adding up right”. Then after careful review of the account summary, I was right, they weren’t adding up right. Each month was credited some money from the interest rate but was not the full amount that month had earned.

Now what I am to think. There has got to be an explanation right? I mean, gmac bank is a pretty big online banking firm and I doubt that they’re trying to cheat me out of my money so I decided to give them a friendly call to see what the problem was. Maybe it was some kind of a monthly fee I didn’t know about?

So I called them up and this woman answers. The conversation was pretty quick, after giving her all my account info and my security questions, the conversation went something like this:

Me:” So I was looking over my account summary for my money market account and noticed that my interest rates weren’t adding up, whats the issue here”?

Gmac representative: “Okay, let me take a look at it.”

(Silence and some keyboard tapping noises…)

Gmac representative:”Hmmm…this is pretty interesting. I’m not exactly sure what’s going on here. Let me take out a calculator to verify that they’re not adding up.”

now I’m thinking…wow. Its an obvious miscalculation, I mean you can look at the credited number and see that it doesn’t add up ( kinda like you know 1+1 is not going to be a two digit number)

me:” …ok”.

(more silence and some calculator tapping noises…)

Gmac representative:”wow, you’re right. It doesn’t add up. I’m really not sure what’s going on here.”

Me:”So it’s not any kind of fees that maybe you’re deducting each month?”

Gmac representative:”No, when we deduct fees, we list them as such. What we’ll have to do is put in an investigation ticket in and someone from the department will contact you within 2-3 business days”.

Me:”…oh…ok”.

Gmac representative:” Is there anything else I can help you with”?

Me:” No”

…

So that was pretty surprising. I mean, even if the interest rates don’t add up to that much, its the trust thats the issue here. Whether it’s two dollars or two hundred dollars, money is money. I’m not sure what would have happened if I didn’t call them about this issue. How long would it have taken until it was fixed or would it ever have gotten fixed? I’m not so sure.

I’m curious, has anyone else experience anything like this before? Maybe you might want to check your investment accounts and see if your interests are adding up.

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On my last post, I talked about the importance of setting your goals and as with any road maps, before you can determine how to get from here to there you need to know where “here” is. In other words, where do you stand financially? This is where the net worth statement concept comes into play.

The net worth statement is a very simple concept, it is a snapshot of your financial health. To break it down, your net worth is the difference between all the things that you own of value and all the debts you owe. In other words, it is your total assets minus your total liabilities.

So why do we need a net worth statement?

Net worth statement gives us a snapshot of your current financial condition, basically, tells us how we are doing financially at this moment in time. This is important and you need this information in order to effectively set the financial goals that you want to work towards, determine your progress along your way, and make adjustments, also why it’s important to update your net worth on a regular basis. Your net worth will also come in handy when you decide to apply for a mortgage, credit cards or any types of loans.

How to prepare your Net Worth Statement.

Not having a strong grip on your financial situation can really hurt you in times of need, like a job loss or health emergency. It’s really hard, if not impossible, to plan for your future if you don’t know where you are today. So lets start making you your Net Worth statement today.

You can begin by taking out a piece of paper and start listing all the things of value that you own. Include everything, even those you still owe money on like your house or your car, etc. You want to use their full values as of today. Don’t worry about the balance of the loans related to these assets, they will be included in the liabilities section so your equity in the assets you list will not be over looked. However, for your bonds, stock options, and retirement accounts, use your current value and not the value at maturity or the value on the date you’re fully vested. For this portion, you should talk to your broker/employer and ask for statements showing the current value of these accounts.

For life insurance policies, you should only list those that have a cash value. Majority of life insurance policies are provided through the employers and are terms policies good only for the time that you are working for that company, so these are not considered assets.

For cars and all other vehicles, use the Kelley Blue Book value, which is the estimated price of the vehicle if the car were to be sold to another consumer or a car dealer. For every other assets, use your best estimate of the fair market value.

So here is a general list of some common assets sorted by category:

Cash Equivalents: Banks and money market accounts, CDs, and Cash on hand.

Investments: Stocks, Bonds, Mutual funds, Index funds, Savings Bonds, and Stock Options.

Retirement Funds: 401(k)/Pension funds and IRAs.

Real estate: House, Land and Rental Property.

Personal Property: Vehicles, Campers and RVs, and Boats.

Household Goods: Furniture, Jewelry and Electronic Equipment.

Money Owed to you: Rents due to you, Rental Deposits, Utility Deposits.

Other Assets: Life Insurance, Privately owned business.

So now that you’ve listed everything you own that has a monetary value, in order to get a true representation of your financial net worth, we’re also going to have to list money you may owe banks or other finance companies, also known as liabilities.

Some examples of Liabilities include the following:

Loans: Mortgages, Home Equity Loans, Vehicle Loans 401(k) Loans, Student Loans.

Credit Cards: Visa/Master Card, American Express, Discover, Department Store Credit, Gas Credit Cards.

Taxes Owed: Real Estate Taxes, Unpaid income taxes, Quarterly Estimated Taxes.

Other Debts: Unpaid Bills, Alimony, Child Support, Miscellaneous.

After you have listed everything you can think of, then you have to total up all your assets and liabilities. Now subtract your liabilities from your assets and that is your Net Worth. If your number comes out to be positive(assets are greater than your liabilities) then congratulations, you have a positive net worth. If your number is negative (liabilities are greater than your assets) then you have a negative net worth. If you have negative net worth, don’t let this discourage you. At least now you know exactly where you stand and can finally map out your route to a positive net worth. Now that you have your Net Worth, our next post will concentrate on deciding what your goals are and how to get started.

(This is the second article of the three part series)

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