In honor of Father’s Day on Sunday June 17, I thought it would be fun to post blogs this week about the lessons and adventures I’ve had with my dad. You didn’t forget about Father’s Day did you? Well if you did, consider this your notice, make sure to show your appreciation for your dad. This post is going to discuss what my father taught me about personal finances.
Growing up my parents were anything but wealthy. I learned really quickly what it meant to be frugal. My parents drove cars till they died, lived in modest homes and going out to dinner was considered a treat. I remember begging and pleading to get my first pair of Nike shoes at the age of 13 because it was the “cool” thing to have. When I got a bit older we moved into a home with a pool, my siblings and I thought we had died and gone to heaven. Even though we lived in a nicer home, my father’s frugality never changed. My father always made sure that lights were turned off, windows were opened instead of using the air conditioner and showers were timed. Have you ever heard the saying “If it’s yellow let it mellow, if it’s brown flush it down” when referring to the toilet? That actually happened in our house to save water.
As a kid I always complained about the cost saving restrictions we had. I am now grateful for the lessons in frugality that my father taught me. I now use those same cost saving measures in my house; minus the toilet thing. That grosses me out. Now that I am a father I plan to pass these lessons on to my children. Is 4 months old too young to start teaching?
What are the financial lessons your father taught you? Do you still use those lessons today?
“He didn’t tell me how to live; he lived, and let me watch him do it.” ~ Clarence Budington Kelland
One of the most complex things in relationships are how to deal with finances. As many of us have heard, 50% of marriages end in divorce and one of the main reasons for that is financial issues. Many couples have issues figuring out how to deal with finances and who should have the responsibility of taking care of them. This blog discusses how to handle finances in the family and it also gives five reasons why sharing financial responsibilities are important.
When I first got married I thought, due to being a financial person, that I needed to be in charge of our family finances. After a couple of years my wife became frustrated with me because she wanted to be included in our finances. When I finally gave in, it really helped strengthen our relationship because we communicated better. As we all know communication is one of the most important things in a relationship, this should also include finances. Communicating about finances will help make sure you and your spouse have the same financial goals and your budget stays on track. Check out the video blog and I hope it helps give you some insight on how to deal with finances in a relationship.
Are there any tips you would add? Do you think share financial responsibilities are important? Let me know with a comment below.
Additionally, if you have any critiques of my first video blog post I would love to hear those as well. Thanks.
Interest rates are low and it is a great time to refinance your home, but due to many homes being underwater it has been very difficult to refinance. I have been trying to refinance my home for the last two years. I have basically been told by my lender, Bank of America, on many occasions that due to the fact my payments are on time they won’t help me. I began to wonder if I was ever going to refinance. I started debating on stopping making my payments just so I could get help. There were many programs out there to help homeowners that were facing hardship stay in there homes, but there were no programs for people that made their payments on time. Finally on March 17, 2012, a program called HARP 2.0 was setup to allow underwater homeowners to refinance their homes. While this program was approved in March, the lenders have finally received many of the regulations and guidelines within the last few weeks. As we all know government works slow.
I purchased my home in November 2006, which was near the height of the market. Lucky for me I was able to get a great deal from the developer and paid far less then many of my neighbors. For example, I purchased my home for $329,000. The home across the street from me is the same model with a few extra upgrades and it sold for $458,000 a month earlier then mine. When I purchased this home I took out an interest only adjustable rate mortgage because I was single and this made it affordable. Now that I am married and have dual incomes I have wanted to refinance into a 30 year fixed mortgage for the past few years. Last week I received a call from another lender I have been working with saying that I was eligible to refinance my home under HARP 2.0. This call was a major sigh of relief for me. Last week we signed the application to get the process started.
If you are wondering whether you qualify for the HARP 2.0 program, here are the eligibility requirements:
- Your mortgage must have been sold to Fannie Mae or Freddie Mac before June 1, 2009.
- You must be current on the mortgage and have no late payments in the last six months. A late payment is defined as one that’s more than 30 days overdue.
- You must not have more than one late payment in the past 12 months.
- This must be your first refinance through HARP. If you have refinanced under an earlier version of HARP, then you do not qualify.
Here are the websites to check if your loan is owned by Fannie Mae or Freddie Mac. Here is another link from the The Mortgage Reports. This guy does a great job of providing up to date information.
I have no problem helping people that are having hardships, but I don’t understand why it took so long for the government to help people that are paying there mortgages on time. I guess it is better late then never. I will keep you updated through the process.
Have you had issues refinancing? Are you taking advantage of the HARP 2.0 program? Would love to hear your thought on it.
Van 2. A great group of people. From left to right, Karrie Craig, Nicole Beatie, Lauren Basic, Scott Oxarart, Meredith Bennett and Matthew Doyle
How do you challenge yourself? What do you do to take yourself to the next level? This past weekend I completed one of the hardest, but most enjoyable events I have ever participated in. It is called the Reno Tahoe Odyssey, everyone around here calls it the RTO for short. It is a 178 mile 12 person relay race that starts in Reno, NV and travels through Truckee, CA then up to Lake Tahoe. After the teams run around the lake they drop into Carson City, NV and then up to Virginia City, NV then back through Reno to finish. Here is a link to the map. Each team member runs three separate legs of the run. The legs range from 8 miles to 3.1 miles, but there is a lot of elevation change.
At the start of the race each team is split up into two vans. I was put in a van where I knew only one person, but I ended the adventure with many new friends. You basically go for almost 30 hours with little or no sleep because you are supporting your teammates. I know you are asking yourself, how does this sound fun? Well you have to experience it to understand. I am extremely proud of my all my teammates. They all fought through some sort of illness or extreme heat to complete their legs. There was no complaining because no one wanted to let down the team. Well maybe there was a little complaining when the sprinklers came on us three times while we were trying to sleep in the grass of the Raley’s parking lot in South Lake Tahoe. Other then that, great job Silver State Streakers.
I know this is a financial blog and you came here to read about finances, so here it is. When you spend money you are expecting something in return. This is often called return on investment. I am asked all the time why I spend money to run in races and beat up my body. I do it because the enjoyment I receive from competing far exceeds the investment I made to enter the race. I love to challenge myself to see how I compete against others. As the old saying goes, “you must pay to play”. Life is always about improving, so go out and challenge yourself. Get out of your comfort zone.
Thanks again Silver State Streakers for working so hard. You are all awesome. I am already looking forward to next year!!
Silver State Streakers 2012!!
Have you ever given somebody advice and then did the exact opposite of that advice? Well I feel sheepish. I gave you advice to periodically review your financials in my Spring Cleaning post, but I ignored that advice. Over the past year my wife and I have fallen into a comfort zone with our finances. I had not reevaluated our budget for a while and if it wasn’t for my wife’s persistence I probably would have ignored it longer. What can I say, life gets in the way.
My wife recently came to me and asked if we could go over our finances to see if we can afford to have her work part time during the last year of her Masters program. I told her I would do it, but I kept putting it off. She eventually got tired of waiting for me and decided to put a budget together her self. When she showed it to me I was pleasantly surprised at how good of a job she had done, but on the other hand I was concerned that we were starting to out spend our income. It is a good thing that she took the initiative because now we have enough time to cut back on our expenses to make sure we can afford to have her go part time in August.
We are very fortunate that our spending didn’t spiral out of control and caught it just in time. We were spending far too much on shopping sprees, going out to dinner and buying unnecessary things online. It is really easy to get comfortable in your financial situation and lose sight of your goals. The lesson learned here is to practice what you preach and pay attention to your finances.
Have you ever given someone advice and then caught your self ignoring that advice?
“There are two things which a man should scrupulously avoid: giving advice that he would not follow, and asking advice when he is determined to pursue his own opinion.”
It seems like my skepticism of Facebook’s initial public offering (IPO) was warranted. Facebook’s (IPO) was offered on May 18, 2012 with an opening price of $38 per share. It jumped to a high price of $45 before closing just above the initial offering price at $38.23. This means that many people who purchased Facebook shares sold it within a few hours of the initial offering. The priced closed on Friday at $31.91 . Overall this stock has greatly underperformed the initial estimations.
I am not a hater of Facebook and I never want to see a company fail, unless it needs to of course. The Facebook IPO reminds me of that movie that all your friends told you it was the funniest movie ever and when you saw it you didn’t find it funny. The media loves to hype things up, if you haven’t noticed, and this can lead to irrational decisions by investors. I hope Facebook succeeds, but there is a lesson to be learned.
Just because the media jumps off the bridge doesn’t mean you should follow.. Prior to making any kind of investment decision make sure to do your own research. A quick Google search showed me that Facebook’s revenue was primarily from advertising; 85% to be exact. This tells me that Facebook has too narrow of a business focus and needs to diversify in order to succeed over the long term. You don’t have to be a rocket scientist to find this information. Just like Facebook has done, use the internet to your advantage. Now on to the next Dot Com IPO that becomes a media darling.
Did you buy Facebook shares? What do you think the share price will be after the first 6 months? ( I think it will hover around $30, but I think it’s true value is around $20)
Are you an impulse buyer? Have you ever walked in to an electronics store to look around and walked out with a big screen tv or other large item? I will admit that this has happened to me. The bright picture was too awesome and the sales person told me it was the best deal around. I have learned that a little patience can go a long way with saving money on those types of items. The only problem is that I drive my wife nuts sometimes because I have too much patience and I am always waiting for the best deal.
Now when I go into a store and think that I want to buy something, I will write down all the information for that item. I will go home and research it online. I like to read the reviews from other users and research other prices. This is the great thing about the Internet, your most trusted critics are other consumers. Additionally, I will often find that item cheaper online or I will wait until it goes on sale. I am a proponent for buying through local stores and I will often buy items from them even if they are a little more expensive. I will still do research to make sure I am not getting ripped off.
Here are a few sites that I use to search for good deals and price comparisons:
There are many other sites out there, but these are just a few that I constantly monitor to make sure I don’t pay too much for a big item.
Have you ever impulse bought something and then realized you could have gotten it cheaper if you would have waited a few days?