Friday, January 21, 2011
Saturday, January 15, 2011
Snowball Method of Debt Repayment
I have mentioned the Snowball method of debt repayment a few times before; I have been meaning to go a little deeper in explaining the process. Well, now seems like a good time.
The Snowball method (as part of the “Baby Steps” to getting out of debt) has been made famous by Dave Ramsey in his book The Total Money Makeover The method involves listing your debts from lowest to highest (the most psychologically pleasing) or highest to lowest to determine which debt will get paid off first, then snowballing the payment money to the next debt.
Let’s look at this further:
• First build up your EF to $1,000 while paying the minimums on debt.
• Once you are ready to tackle you debt make a list and order them from smallest to largest.
• Start at the top and work your way to the bottom. Remember to pay the minimum on the rest of the debts while paying more than the minimum on the debt at the top of the list. Pay whatever extra that YOU are comfortable with.
• When you pay off one debt, snowball that money that was going towards the debt you were just focusing on to the next debt. Pay the minimum on the rest.
• Continue down your list until you are finished. It will take some time but you will be done before you know it.
Here’s how this would look (hope it’s not too confusing):
• Total Debt = $1,500
• CC#1 - $100 amount of debt - $5 minimum payment – [$5+$10 (extra monthly payment)] = $15 monthly payment
CC#2 - $200 - $10 = $10
CC#3 - $300 - $15 = $15
Loan #1 - $400 - $20 = $20
Loan #2 - $500 - $25 = $25
• CC#2 - $200 - $10 – [$10+$15 from previous month] = $25
CC#3 - $300 - $15 = $15
Loan #1 - $400 - $20 = $20
Loan #2 - $500 - $25 = $25
• CC#3 - $300 - $15 – [$15+25] = $40
Loan #1 - $400 - $20 = $20
Loan #2 - $500 - $25 = $25
• Loan #1 - $400 - $20 – [$20+$40] = $60
Loan #2 - $500 - $25 = $25
• Loan #2 - $500 - $25 = [$25+$40] = $85
You are already use to spending the repayment money each month so you won’t miss it as you move onto the next debt. As you are working your way through your list, this is where the EF comes in handy, while paying off your debts the EF allows you to not go further in debt. Be prepared because this can be a long journey but I have read about people paying off thousands in the span of a couple years, so it can be done!
The Snowball method (as part of the “Baby Steps” to getting out of debt) has been made famous by Dave Ramsey in his book The Total Money Makeover The method involves listing your debts from lowest to highest (the most psychologically pleasing) or highest to lowest to determine which debt will get paid off first, then snowballing the payment money to the next debt.
Let’s look at this further:
• First build up your EF to $1,000 while paying the minimums on debt.
• Once you are ready to tackle you debt make a list and order them from smallest to largest.
• Start at the top and work your way to the bottom. Remember to pay the minimum on the rest of the debts while paying more than the minimum on the debt at the top of the list. Pay whatever extra that YOU are comfortable with.
• When you pay off one debt, snowball that money that was going towards the debt you were just focusing on to the next debt. Pay the minimum on the rest.
• Continue down your list until you are finished. It will take some time but you will be done before you know it.
Here’s how this would look (hope it’s not too confusing):
• Total Debt = $1,500
• CC#1 - $100 amount of debt - $5 minimum payment – [$5+$10 (extra monthly payment)] = $15 monthly payment
CC#2 - $200 - $10 = $10
CC#3 - $300 - $15 = $15
Loan #1 - $400 - $20 = $20
Loan #2 - $500 - $25 = $25
• CC#2 - $200 - $10 – [$10+$15 from previous month] = $25
CC#3 - $300 - $15 = $15
Loan #1 - $400 - $20 = $20
Loan #2 - $500 - $25 = $25
• CC#3 - $300 - $15 – [$15+25] = $40
Loan #1 - $400 - $20 = $20
Loan #2 - $500 - $25 = $25
• Loan #1 - $400 - $20 – [$20+$40] = $60
Loan #2 - $500 - $25 = $25
• Loan #2 - $500 - $25 = [$25+$40] = $85
You are already use to spending the repayment money each month so you won’t miss it as you move onto the next debt. As you are working your way through your list, this is where the EF comes in handy, while paying off your debts the EF allows you to not go further in debt. Be prepared because this can be a long journey but I have read about people paying off thousands in the span of a couple years, so it can be done!
Friday, January 14, 2011
Ponder This...
"Time is more valuable than money. You can get more money, but you cannot get more time." - Jim Rohn
Wednesday, January 12, 2011
Nursing Student Woos Crowds in NYP Jam! Grand Finals
An unexpected victory for one singer, who beat a hot favorite to clinch top prize. A band member who rushed from the airport to made it in the nick of time for his performance. These are just some of the highlights of the NYP Jam! Grand Finals held on 7 January 2011.
Diploma in Nursing student Khairul Azree joined NYP Jam! as a part of a duo with a good friend. However, the judges who were more impressed with Khairul’s voice, asked him to audition as a solo singer instead. He eventually made into the finals.
That evening, Khairul serenaded the crowds as well as the judges with his own acoustic rendition of ‘Grenade’ by Bruno Mars. He won first prize. Hot on his heels was a crowd favorite Andrew Kim, a School of Business Management exchange student from Seoul Korea. Andrew had to content with the second place while Yellow Black Haze band came in third.
“This is truly unexpected as Andrew was a crowd favourite. I thank the judges and my friends who came out to support me,” said Khairul.
The 4 Avenues band, which competed in the Secondary School Students’ category, have every reason to cheer. One of their guitarists had cut short his holiday in Canada to perform at the finals. He only landed at Changi Airport at 7pm and made it at the nick of time just as the band was about to start their performance. His return lifted their spirits and the band went on to win the first prize.
“We are very happy that he made it just in time and performed with us. We are also thankful to NYP who made changes to the line-up and allowed us to sing last,” said lead singer Natalie Wong of Whitley Secondary School.
Chyee Gin from Orchid Park Secondary Schoo,l who performed his own song composition, came in second while Jurong West Secondary School student Siti Nurindah Musali took third place.
This year’s NYP Jam! and NYPTV on Air LIVE show – both signature events at NYP Night Open house were bigger and better with special the performances by local celebrities Jack & Rai, Tay Kewei and Malaysian recording artiste Farah Asyikin.
My Favorite Financial Things: Mint.com
My newest money obsession is Mint. Mint is great! It’s a financial tool that allows you to upload your financial information (bank accounts, savings accounts, credit cards, loans, and liabilities) to help you track your spending, debt, and goals. Mint even helps you budget.
Mint is a great tool for someone, like me, who doesn’t do the best job of budgeting or checking accounts often (other than paying the bill every month). With Mint it’s all in one place, organized, and evaluated. Just sign into your Mint account and its all there. Even if you don’t sign into Mint, you can set up alerts to be sent to your email or cell phone…and they even have apps for your cell phone.
Using Mint has been an eye opening experience. I thought I was being more financially responsible, until Mint so kindly showed that my spending on food and miscellaneous spending is still way too high. Some months my GF and I spent more than $800 on groceries and eating out…for 2 people. No bueno. Each month our food spending is going down as we find ways that work for us like eating out once a week and depending on the restaurant we share a meal, cooking during the week so we have dinner and lunch for the next day, and making a meal list for the week before we go to the grocery store – and sticking to it.
For a long time I was very reluctant to upload my information to Mint, which is why I am just getting around to writing about it. I was unsure about having all my information out there but Mint is very secure. I read a lot about Mint before trusting the website for myself and since using it I have quickly grown to love Mint. If you are unsure of Mint.com, like I was, check out their Terms of Use.
What does Mint do?
Mint allows you to upload your financial information and places everything into categories. There is a section for you accounts that is broken down into Cash – bank accounts and savings accounts, Credit Cards, Loans, Investments, and Property. Using these categories, Mint shows your Net Worth also. Your Net Worth is your assets and your debts added together; basically how much you are worth financially. Each category can be expanded to show your individual accounts.
Budgeting is pretty easy with Mint, after you enter all your information there is a preset budget. You can adjust the budget to meet your needs and see places you need to spend less since you can now see where you are actually spending your money. Mint uses green, yellow, and red to let you know how on track you are with your budget. Besides food, I usually go over on alcohol spending each month.
Using the Transactions section gives you a day-to-day look at your spending. You can put things into categories, which you can look at in the Trends section. All your spending from each account (checking, savings, credit card) you have registered with Mint shows up in the Transaction section.
The Trends section shows you how much each category of your spending is taking up. National Averages say Housing 24%, Utilities 8%, Food 14%, Clothing 4%, Medical/Healthcare 6%, Donations 4%, Savings and Insurance 9%, Entertainment 5%, Transportation 14%, Personal/Debt 12%. I have a ways to go before my spending meets the National Averages. But the Trends sections lets you see how close or far you are.
One of the things I love most about Mint is the Goals section. You can select from preset goals or create your own. Input how much money you need to complete your goal and Mint tells you how you are doing. If you are behind, on target, or ahead; Mint will tell you.
As you can see, I behind on everything so far. The dot is where I am supposed to be to meet my goals by the time I set. Being able to see my goals and my progress helps me to know where I need to be or even that I may need to readjust my goals to fit my financial situation.
Mint even tells you when you are paying more than the National average for things like health and auto insurance and credit cards and where you might be able to get a better deal on checking and savings accounts. Mint does most of the work for you; fill in some information and Mint gives you some options to switch things around to save you the most money possible. Of course you should do some research for yourself, but Mint gives you a place to start.
Mint is the perfect tool for anyone looking to gain financial independence because everything is laid out in front of you with little effort on your part.
Mint is a great tool for someone, like me, who doesn’t do the best job of budgeting or checking accounts often (other than paying the bill every month). With Mint it’s all in one place, organized, and evaluated. Just sign into your Mint account and its all there. Even if you don’t sign into Mint, you can set up alerts to be sent to your email or cell phone…and they even have apps for your cell phone.
Using Mint has been an eye opening experience. I thought I was being more financially responsible, until Mint so kindly showed that my spending on food and miscellaneous spending is still way too high. Some months my GF and I spent more than $800 on groceries and eating out…for 2 people. No bueno. Each month our food spending is going down as we find ways that work for us like eating out once a week and depending on the restaurant we share a meal, cooking during the week so we have dinner and lunch for the next day, and making a meal list for the week before we go to the grocery store – and sticking to it.
For a long time I was very reluctant to upload my information to Mint, which is why I am just getting around to writing about it. I was unsure about having all my information out there but Mint is very secure. I read a lot about Mint before trusting the website for myself and since using it I have quickly grown to love Mint. If you are unsure of Mint.com, like I was, check out their Terms of Use.
What does Mint do?
Mint allows you to upload your financial information and places everything into categories. There is a section for you accounts that is broken down into Cash – bank accounts and savings accounts, Credit Cards, Loans, Investments, and Property. Using these categories, Mint shows your Net Worth also. Your Net Worth is your assets and your debts added together; basically how much you are worth financially. Each category can be expanded to show your individual accounts.
Budgeting is pretty easy with Mint, after you enter all your information there is a preset budget. You can adjust the budget to meet your needs and see places you need to spend less since you can now see where you are actually spending your money. Mint uses green, yellow, and red to let you know how on track you are with your budget. Besides food, I usually go over on alcohol spending each month.
Using the Transactions section gives you a day-to-day look at your spending. You can put things into categories, which you can look at in the Trends section. All your spending from each account (checking, savings, credit card) you have registered with Mint shows up in the Transaction section.
The Trends section shows you how much each category of your spending is taking up. National Averages say Housing 24%, Utilities 8%, Food 14%, Clothing 4%, Medical/Healthcare 6%, Donations 4%, Savings and Insurance 9%, Entertainment 5%, Transportation 14%, Personal/Debt 12%. I have a ways to go before my spending meets the National Averages. But the Trends sections lets you see how close or far you are.
One of the things I love most about Mint is the Goals section. You can select from preset goals or create your own. Input how much money you need to complete your goal and Mint tells you how you are doing. If you are behind, on target, or ahead; Mint will tell you.
As you can see, I behind on everything so far. The dot is where I am supposed to be to meet my goals by the time I set. Being able to see my goals and my progress helps me to know where I need to be or even that I may need to readjust my goals to fit my financial situation.
Mint even tells you when you are paying more than the National average for things like health and auto insurance and credit cards and where you might be able to get a better deal on checking and savings accounts. Mint does most of the work for you; fill in some information and Mint gives you some options to switch things around to save you the most money possible. Of course you should do some research for yourself, but Mint gives you a place to start.
Mint is the perfect tool for anyone looking to gain financial independence because everything is laid out in front of you with little effort on your part.
Saturday, January 8, 2011
Emergency Funds
One of the most important aspects of becoming financially independent is having an Emergency Fund (EF). An EF helps to keep you out of debt when the unexpected happens and the unexpected always happens.
The standard suggestion for building an EF is to set a goal of $1,000, preferably before starting to focus on debt repayment. This is your goal, so if you want to set it higher or lower just make sure you are committed and comfortable. $1,000 sets a foundation for your EF and teaches you discipline when reaching your goals.
How does one build their very own EF?
It’s relatively easy actually, just requires some stick-to-itness…
1. Find a bank (online or brick and mortar) that you feel comfortable with. You can open a savings account with the bank you are currently with but online banks usually offer higher interest rates. Online banks like ING offer another advantage besides higher interest rates; it is usually more difficult to actually touch your money. ING usually takes 3 days for money to transfer back and forth – so keep that in mind. I think this is good because if I have immediate access I am more likely to spend it. Here is a nice list of online banks to help you get started.
2. Once you have a place to store your money, start saving. Set up automatic deposits from your checking account to the savings account. Start with $20 or $50, whatever is comfortable for you, and make sure to set the deposit date for the day you get paid. You will get use to “not” having this money and won’t miss it after awhile.
3. Don’t touch it! Unless it’s an emergency, of course.
4. You will hit your goal before you know it, but don’t stop saving. Now, you can begin to focus on debt repayment.
5. After you have the first goal met, the next goal is to save 3-6 months worth of living expenses. Some personal finance experts say that in today’s economy a good EF consists of 12 months of living expenses, but that’s a huge number and very intimidating. Just keep focusing on saving after you reach your first goal and you should be good.
My EF is with ING, but I also have savings accounts set up for a house, new vehicle, vacation and wedding. The way ING is set up, you can monitor each account on one page. It’s pretty user friendly, which is why I haven’t taken my money someplace else when the interest rates dropped (as they did everywhere). I am back to the $1,000 goal before I focus on building up the rest.
After my financial meltdown of the last year, I finally understand the importance of having an EF. I’m pretty mad at myself for going through this, when things weren’t exactly on emergency status. But all I can do is learn from my mistake and move on.
I can see my financial independence from under all this mess, I hope you can too. Don’t forget, we are in this journey together…
The standard suggestion for building an EF is to set a goal of $1,000, preferably before starting to focus on debt repayment. This is your goal, so if you want to set it higher or lower just make sure you are committed and comfortable. $1,000 sets a foundation for your EF and teaches you discipline when reaching your goals.
How does one build their very own EF?
It’s relatively easy actually, just requires some stick-to-itness…
1. Find a bank (online or brick and mortar) that you feel comfortable with. You can open a savings account with the bank you are currently with but online banks usually offer higher interest rates. Online banks like ING offer another advantage besides higher interest rates; it is usually more difficult to actually touch your money. ING usually takes 3 days for money to transfer back and forth – so keep that in mind. I think this is good because if I have immediate access I am more likely to spend it. Here is a nice list of online banks to help you get started.
2. Once you have a place to store your money, start saving. Set up automatic deposits from your checking account to the savings account. Start with $20 or $50, whatever is comfortable for you, and make sure to set the deposit date for the day you get paid. You will get use to “not” having this money and won’t miss it after awhile.
3. Don’t touch it! Unless it’s an emergency, of course.
4. You will hit your goal before you know it, but don’t stop saving. Now, you can begin to focus on debt repayment.
5. After you have the first goal met, the next goal is to save 3-6 months worth of living expenses. Some personal finance experts say that in today’s economy a good EF consists of 12 months of living expenses, but that’s a huge number and very intimidating. Just keep focusing on saving after you reach your first goal and you should be good.
My EF is with ING, but I also have savings accounts set up for a house, new vehicle, vacation and wedding. The way ING is set up, you can monitor each account on one page. It’s pretty user friendly, which is why I haven’t taken my money someplace else when the interest rates dropped (as they did everywhere). I am back to the $1,000 goal before I focus on building up the rest.
After my financial meltdown of the last year, I finally understand the importance of having an EF. I’m pretty mad at myself for going through this, when things weren’t exactly on emergency status. But all I can do is learn from my mistake and move on.
I can see my financial independence from under all this mess, I hope you can too. Don’t forget, we are in this journey together…
Friday, January 7, 2011
Wednesday, January 5, 2011
NYP Open House 2011
Nanyang Polytechic Open House starts today.
Come down to NYP and find out about our 49 diploma courses, all under one roof. Check out our new Diploma Plus Programme, new diplomas in Food & Beverage Business and Medicinal Chemistry, and new curricula for the diplomas in Mass Media Management and Electrical Engineering with Eco-Design.
You can also join campus tours led by our student guides and see first-hand our state-of-the-art facilities, innovative projects and inspiring learning environment.
We work hard and play hard too! We're a fun bunch of people and you can get a taste of the lively diversity of CCAs at NYP. Enjoy the wide range of performances put together by our campus talents - from hip hop dancing and martial arts, to orchestral and vocal performances. This CCA showcase will definitely thrill and entertain you!
For more information check out our Open House 2011 website at : http://www.nyp.edu.sg/OH2011/main_hgts.htm
Tuesday, January 4, 2011
Do you lead a Double Life?
Yahoo Finance Recently posted an article on the Double Life of the American Worker and featured 6 people, who for various reasons are working second jobs. There were Marketing Specialists, administrators, and even CEO’s on the list. The second jobs ranged from Ice Hockey Referee to Obituary writer to barista.
Each of the people featured in the article had a financial situation that seems to be pretty common these days. They were experiencing lay-offs and downsizing at their full-time employment, just graduating from college with high student loan debt, being unable to find full-time work comparable to previous employment, and so on.
I have been contemplating taking on a second job to help with debt and savings, but I have been unable to commit myself to the idea of giving up my free time. I guess I am not ready yet to make that step – even though I know it would help me get out of debt quicker. One problem I keep running into is the hours most of the part-time jobs want you to work. I don’t get off from my full-time job until 5pm and most of the office type part-time positions require working during the day. I have been thinking of tutoring, but after school programs are usually over by 5 or 6 pm. There are private tutoring services that would be more willing to work with my schedule and maybe even off weekend hours. I have a paralegal certification so I am also looking for contract work as a paralegal that would fit my schedule. This would allow me to gain experience in a field that I am interested in and earn extra money. Retail isn’t an option for me, right now, because I am unwilling to give up my entire weekends and evenings to work a position that doesn’t pay well.
I may be naive about this whole part-time job situation, but the job has to be something that I am comfortable working. I am getting closer and closer to the realization that to do the things I have planned or even the things I need to do, I need a part-time job. But the right kind of part-time job…at least until I am forced to do otherwise.
Do you have a Double Life? What types of positions or money making ways have you committed yourself to?
Each of the people featured in the article had a financial situation that seems to be pretty common these days. They were experiencing lay-offs and downsizing at their full-time employment, just graduating from college with high student loan debt, being unable to find full-time work comparable to previous employment, and so on.
I have been contemplating taking on a second job to help with debt and savings, but I have been unable to commit myself to the idea of giving up my free time. I guess I am not ready yet to make that step – even though I know it would help me get out of debt quicker. One problem I keep running into is the hours most of the part-time jobs want you to work. I don’t get off from my full-time job until 5pm and most of the office type part-time positions require working during the day. I have been thinking of tutoring, but after school programs are usually over by 5 or 6 pm. There are private tutoring services that would be more willing to work with my schedule and maybe even off weekend hours. I have a paralegal certification so I am also looking for contract work as a paralegal that would fit my schedule. This would allow me to gain experience in a field that I am interested in and earn extra money. Retail isn’t an option for me, right now, because I am unwilling to give up my entire weekends and evenings to work a position that doesn’t pay well.
I may be naive about this whole part-time job situation, but the job has to be something that I am comfortable working. I am getting closer and closer to the realization that to do the things I have planned or even the things I need to do, I need a part-time job. But the right kind of part-time job…at least until I am forced to do otherwise.
Do you have a Double Life? What types of positions or money making ways have you committed yourself to?
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