How to use the 'small wins' strategy to accomplish big goals.
I'm not going to lie: I'm not a huge Dave Ramsey fan.
There have been several times he's spoken on radio or I've seen things he's written in print when I thought he was flat-out wrong or misleading on a point. One of my recurring favorites is how he encourages people to take what they save and put it into a "good growth stock mutual fund that earns 12% on average." Man, if only it were that easy.
Another one of his nonsensical strategies is also one central to the Ramsey philosophy. The "debt snowball" debt payment plan is completely contrary to basic rules of arithmetic. You see, Ramsey says that if you have a bunch of credit card debts, you should line them all up by the size of each debt, and pay the smallest-balance ones off first, regardless of their interest rates.
The rational person in us should cringe at this.
'You can't take it with you' also applies to credit card bills. But what kind of a retirement strategy is this?
We've all heard the expression "You can't take it with you."
Usually the maxim applies to assets. These days, an increasing number of retirees are applying that philosophy to debt, racking up thousands of dollars in credit card bills they have no intention of ever repaying, a survey says.
- Calculator:Plan for your retirement
Some seniors are using the money to pay for "toys" and vacations. Others are going into debt for medical care and basic living expenses.
Thanks to the CARD Act, gift cards have fewer fees and less fine print.
Gift cards are making a comeback after three years of sluggish sales -- and the federal government might be the reason.
A new survey from research firm TowerGroup predicts that spending on gift cards for the 2010 holiday shopping season will increase for the first time since 2007, reaching $91 billion in sales. And in two years, that should reach an amazing $100 billion.
Why the jump when we're still in the grip of a struggling economy?
While it's technically illegal to inflate the original price, state laws allow for lots of wiggle room.
Ads that tout deep discounts -- 50%, 60%, even 70% off -- have become the norm these days. But some of the companies behind those bold promotions may be doing more than luring bargain hunters: They might be breaking the law.
Several California district attorneys filed a civil lawsuit against Overstock.com last month, claiming that the site deliberately misleads customers about the depth of its discounts. In particular, the lawsuit alleges that the company inflates its reference prices -- the "compare at" or list price that's supposed to tell a shopper how much he or she is saving. The result, they claim, is that consumers may not check for lower prices elsewhere.
Among their examples: a patio set with an alleged reference price of $999, sold for $450, and arrived with a $247 Wal-Mart price tag.
Take a look at spending habits before crying 'poor me.'
When I read Laura Rowley's excellent column, "Why the rich don't feel rich" -- in which she wrote about a University of Chicago law professor's struggle to survive on a combined family income of more than $250,000 -- I thought the column was a stark contrast to something that happened while I was in New Jersey to visit a terminally ill relative.
- Calculator: Are you saving enough for retirement?
I frequently stopped by to see another relative, my Aunt Dot, who's 87 and very frail due to several medical issues. She and her son live on Social Security and disability plus her small pension. One evening I discovered that they had exactly one dollar in the house. Her check was due the next day and she planned to walk to the bank to cash it.
The bank is at least a mile from where Dot lives. And did I mention that she's on oxygen?
Wine brings people together. And it does that just as well at $8 a bottle as at $80 a bottle.
The holiday season is upon us, the time of year for family, friends, food -- and wine. Yes, it's true. I associate the holidays with alcohol. It never used to be this way (probably because I didn't drink), but for the past five years, I've spent late November stocking our wine rack.
There are several reasons for this:
BBC video shows how a fake Wi-Fi network can intercept your smart phone's data and expose you to identity theft.
As if you didn't have enough to worry about, two British chaps have demonstrated how a phony Wi-Fi hotspot can intercept data from your smart phone. It's the strangest thing we've seen since Firesheep was declared the "threat of the month."
In a BBC video, Tom Beale of security firm Vigilante Bespoke gathered sensitive information from the iPhone 4 of BBC tech writer Rory Cellan-Jones as the smart phone accessed the Web via a fake Wi-Fi network Vigilante had set up. Then Cellan-Jones logged on to Facebook and it went downhill from there.
Smart people of modest means understand that saving money takes time -- sometimes lots of it.
If you'll indulge me today for just a second, I'm going to offer up a little debt management counseling. Although I haven't conducted a scientific study, I suspect that most people of modest means who are most successful in managing their personal finances understand the importance of being patient.
I've said it before and I'll say it again: People who are debt-free didn't get there because they are impulsive shoppers or always looking for instant gratification. If the money for something isn't in the budget, then they save their money and wait.
- Saving for a new home? Compare mortgage rates
When I look back at my own personal situation, patience has played a ginormous role in allowing me to build a healthy nest egg while keeping my debt limited to nothing more than a very manageable $600 monthly mortgage payment.
An unexpected milestone
I was reminded of this again last week after the Honeybee and I bought beautiful new end and coffee tables to cap off our recent remodeling project.
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