Improving Personal Finance Management

Over at No Credit Needed, NCN has posted questions for the Personal Finance Community to answer. If you could improve one area of your personal finance management, what would it be?Personally, my biggest challenge is to keep to my budget. I tend to get a bit overeager to pay off debt and don't always budget enough for daily expenses. When this happens I find that my snowflakes make their way to supplement my budget instead of going towards debt. It’s not a good cycle.

To help counter this problem, I save one dollar bills and change from purchases. The dollar bills get stashed in an envelope for the last few days before the next paycheck. The change gets saved in a glass jar. When I reach a certain level in the jar, I take it to the bank, cash it in, and put it towards credit card debt.

Happy Valentines Day To Both Couples And The Singles Crowd

I realize Valentines Day is a day to celebrate love and remind that significant other how you feel about them. Unfortunately, those of us that are presently single often get left out of the equation. Personally, I think that we singles need to take this day and treat ourselves too.
In need of some ideas?
- Make yourself a great meal. This is the time of year when luxury foods go on sale like steak, lobster, seafood, champagne, etc. You don't have to go whole hog. Just spend a bit more time and enjoy the experience of cooking and savor the flavor.
- Go to the gym and do something good for yourself. Drop in on a class you haven't tried before.
- Throw in a movie, make a bowl of popcorn, and relax.
- Turn off the T.V., unplug the phone, and read a good book.
- Go grocery shopping. Research shows that's where the new pick up scene is.

Reduce A Bill Challenge

We are almost halfway through the month of February and I'm having a hard look at my efforts in Working For Financial Freedom's "Reduce A Bill Challenge." For those who are not familiar, the "Reduce A Bill Challenge" is for anyone who would like to participate. Simply choose a bill that you would like to reduce, set an attainable goal, post your commitment on Working For Financial Freedom's website, and focus on your goal.

My goal this month was to take my lunch at least three days per week to work and to earn an additional $100 per month. I'm happy to say that I've succeeded with the extra $100. That was done in one day with $25 for a taste test and $75 for a market research study. The other part has been a bit hit or miss. Last week, a friend at work kept asking me to join her for lunch because the person she normally eats lunch with was out of town. I think I brought my lunch (and ate my lunch) only once. This week I'm 1 to 1 and in a better place. I can say that I've only spent $1 at the corner store for an afternoon snack. I've kept a healthier supply in my desk drawer.

Just in case you're curious, I keep my snack drawer stocked with:

• A can of soup - for when I forget my lunch or don't have a chance to pick something up
• A box of crackers - I also keep a small chuck of cheese in the fridge at work
• A jar of peanut butter - to prevent morning trips to Starbuck's if my tummy is gnawing
• Granola bars - to stave of afternoon munchies
• Two Hershey's kisses - one must be prepared for that evil need for chocolate
• A can of Tuna fish - another lunch safety net

Weekly Review

Wise Bread - Feeling Stuck? 100 Ways To Change Your Live by Nora Dunn - Nora Dunn writes an excellent post describing an excercise to help get out of a rut and discover what is most important.

Wise Bread - The Pros and Cons of Dollar Cost Averaging by Kate Luther - I know its a bit unusual to have two posts from the same blog, but I'm pleading indulgence since it is from two different authors. Great post on investing basics.

Being Frugal - 7 Things Women Wished Men KnewAbout Money - A must read for men, especially with the upcoming Valentine holiday.

The SimpleDollar - Little Steps - 100 Great Tips For Saving Money For Those Just Getting Started - An amazing list for everyone, but especially for those just getting started.

Dual Income No Kids - Budgeting For Vacation - I'm on a travel theme, but with the struggling dollar we may need a bit more advice on keeping the cost of vacation down.

Debt to Income Ratio - A Calculation Important in Debt Reduction

Ever wonder how much debt is considered by banks and financial institutions to be too much debt? If you don't know where you stand, its time to take a moment and figure out your debt to income ratio.

First, take a moment to figure out your bad debts. This includes credit card balances, store charge cards, car loans, and any debt that is depreciating in value. Don't worry about including good debt like student loans, mortgages, investements, etc. Now you need to figure out your after-tax annual income. Finally, divide your after tax income by the total bad debt (after tax income / total bad debt = debt to income ratio.)

Obviously, the personal finance and frugal communities don't believe in carrying any bad debt, but if you do carry debt you shouldn't carry more than 15%. If you meet a company who is trying to convince you otherwise, RUN! They obviously are only concerned about their bottom line.

Today Was A Very Good Day

I was lucky enough to have two opportunities to earn a bit of extra money. The first was a taste test. The subject was apples and I have to admit it made me think. As most tests are set up, I was asked a number of questions about taste, texture, color, etc., but I found myself falling into the consumerism mindset that makes marketing companies the big bucks. It was the search for the perfect green apple.

I like to think of myself as a bit of a foodie preferring organic, fresh food. I believe I can taste the difference and that the organic will be obvious because it will have flavor. Today I was humbled. I realized I was drawn to the crisp green apple that didn't brown after it was cut. It wasn't until the very end of the test that I realized no natural apple does that. This apple was manipulated through genetic breeding, radiation treatment, injected with toxins or some other torture device designed to make a super apple.

I had ask what is my tolerance for flaws? The apple that browned was just as good as the bright green one. In fact, I think the green one was slightly more tart. How many other things do I look over because it doesn't fit the picture of perfect freshness? How much food goes to waste because others share my ingrained preference for appearance? Don't get me wrong, I'm not typically worried about trends. I try not to judge a person by its cover. I usually value the unique and different. So why is this green apple different?

The second opportunity was much easier. It was a market research panel for a local restaurant. It was really fun. I may have to add these types of panels to my entertainment list. Wow, how sad is that!?!

At the end of the day, I have $67 for debt reduction, $25 for groceries, $3 lunch splurge, and a $50 gift certificate to a fantastic restaurant. Yeah! Now if I could just work more days like this.

Fair Isaac Is At It Again! Are you Ready?

Liz Pulliam Weston at Money Central has written a new post and its a must read! Fair Isaac has revamped their FICO score for 2008. Check out "Build A Killer Credit Score In 2008." There are changes and if you aren't privy to those changes you could be hurting your score without even knowing it. According to the article, some changes include:

• "Applying for new credit accounts may hurt your score less.
• Having high balances on your credit cards could hurt more.
• Actively using the credit accounts you have may be more important.
• Having both revolving and installment accounts on your report could help you more, as the new formula is more sensitive to your ability to handle different types of credit."

Throughout the article, Liz Pulliam Weston stresses the importance of keeping credit balances well below the limit suggesting not to exceed 30%. This is because FICO uses this percentage as the largest factor in your score. Unsure of your FICO? While you can get a free annual report yearly at AnnualCreditReport.com, it's not as easy to find out your FICO score without applying for a loan. Having said that, they will for a price, include your FICO score with your credit report. Each of the three reporting companies will have a different score. To play it safe, use the lowest score.