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Retirement saving in the UK

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This post is sponsored.

April is Financial Literacy Month in the U.S., designed to drawn attention to the need on financial education. And one of the biggest messages in financial planning and literacy is the need to save for retirement.

I’ve been hearing experts talk about most Americans’ dismal state of retirement planning, but it turns out that our friends from across the Atlantic aren’t faring much better. A March 2013 Telegraph article reports that “Brits are worst in world at saving for retirement. A study shows that the average length of retirement is 19 years, but many Brits are only prepared for 7! True, there are government programs to ensure that the elderly won’t fall into penury (and I’d venture to guess that the programs in the UK are more generous than the ones in the U.S.), but it’d still be a sparse lifestyle.

Nowadays, it seems that we can get loans for everything. We can take on debt to finance the purchase of a home, a car, a college education, etc. But no one is loaning money for retirement. That’s why it’s important to NOT be underprepared or unprepared for retirement. There are many sources out there, such as Guardian Wealth Management Retirement Planning. The important thing is to be educated about retirement savings, plan ahead, and save, save, save so that those “golden years” will truly be golden.

Leggings vs. Pants

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pants or leggings Leggings vs. Pants

There is a leggings vs. pants battle brewing out there.

Heated words have been exchanged, emotions are running high, and women have been forced to take sides…? BuzzFeed recently detailed 23 reasons why leggings are the worst, calling leggings a “confusing and confused item of clothing.” Two days later, Slate came around with a retort: “leggings aren’t pants – they are superior.”

Where do I stand in this debate? I say, why don’t we all compromise on thick ponte skinny pants!? This dark green pair from Loft seems especially promising – I got it for a mere $19 during a 30% off sale a week ago. Besides, what is the difference between thick leggings and stretchy skinny pants, anyway? All I know is they are an essential part of my wardrobe.  Outside of dressing up in business formal for interviews and business casual for networking hours, I wear skinny jeans or thick leggings + riding boots + sweater. I looked at some pictures of myself over the past 6 months, and realized that I had on the same outfit in almost every, single, picture.

When I find a good pair of leggings, I typically pick up multiples because I know I will wear them so often and they are very affordable (my normal price range for leggings is between $20-$30). When I don’t buy multiples, I regret it – many times the original item I liked has sold out or has been discontinued and it’s a hassle trying to find something just as good. In fact, my best pair of black leggings is on its last legs (har har har!), and I am on a (so far) fruitless search for a worthy replacements. My eyes keep wandering to these Splendid leggings on ShopBop, but at $70 a piece, I can’t quite hit the “buy” button.

What are your favorite pairs of leggings/skinny pants, and what’s the most you’d spend?

How do you decide where to live?

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For most of us, where we lived during our childhood was not our decision. We lived where our parents (or other primary caretakers) lived, and that’s that. For some of us, college is the first time when we might have a little bit more choice of where to settle, and once we are financially independent adults, our choices are wider, yet again. Where we live impacts almost every aspect of our lives – how often we can see friends or family, how much we are able to save, what kind of job opportunities we have, how often we have to travel, what kind of entertainment is available, etc.

where to live How do you decide where to live?

Can you guess which 3 cities are these?

I am in a decision analysis class at school right now, and loving learning about all the different ways to make decisions, evaluate risk, and calculate utility. So that got me thinking… how do people make a decision on where to live? How do we decide which factor is the most important in where we live? I brainstormed up a list of broad categories (in no particular order) on which people might make their location decision:

  1. Family/children – Proximity to family and children (especially in case of divorced parents with joint custody) may is a powerful anchor. It’s easier to live near family who can help out with kids or stay close to elderly parents who need more attention. On the other hand, I’ve known friends who have moved away from areas BECAUSE they didn’t want to be too close to family! icon wink How do you decide where to live?
  2. Friends – Friends are the family you choose, and living near friends and having a strong social network have been shown to significantly increase a person’s happiness. 
  3. Romantic relationship – Long-distance is no fun. Sometimes, we move so that we can actually live in the same zip code as the one we love, even though it is not a place we would have chosen otherwise. 
  4. Weather – Many people have pursued their own Californian Dream because of 300+ days of sunshine. Many seniors have second homes in Arizona or Florida because of that same reason. If you can’t stand the rain, you shouldn’t live in Seattle. And if you can’t stand the cold, you should take a pass on Minneapolis. 
  5. Career opportunities – You can’t live somewhere where you can’t make money. Even though online/virtual job opportunities are becoming more common than in years past, many careers still have “hubs” where more opportunities abound. 
  6. Social/cultural amenities – Where we live determines what kind of social and cultural opportunities are available to us (and how long/far we have to go to access them!). Need to have great public transportation? Don’t move to Los Angeles. Need to be close to the best museums, most diverse food choices, and most 24-hour dry-cleaners? New York is calling your name. 
  7. Cost of living – We all pay a price for living where we live. Personal finance blogs talk about this issue a lot, but where to live is never (nor should it be) a purely number-based decision. But finances, of course, do matter. A couple making $100K a year can easily afford a house in Charlotte, NC, but will be struggling mightily in Southern California.
  8. Nature – Beaches or mountains? Or both? 

Decisions, decisions

    • For example, I have grown up in Southern California and have stayed there after college mainly because of my then-boyfriend / now-husband was there (#3), I could find a good job (#5), and I loved the warm, temperate climate (#4).
    • I had a good friend of mine move to New York City because her career is centered in Manhattan (#5) and she loved NYC and just wanted to be a part of the fastest-paced city in the country (#6). She certainly didn’t move to NYC for the “astronomical” cost of living – her words! – or the mind-numbing winter cold.
    • Another friend moved from LA to Denver, Colorado because he loved being outdoors (#8) and the slower pace of life and lower cost of living (#6 and #7). His girlfriend later moved to Denver as well because she also found a great job, but her impetus for job-hunting was mainly #3 – because he was there.
    • I’ve read many articles that talk about Portland in particular – a wonderful place that draws many well-educated young people with its affordability and quality of life, but that have been described as “the place young people go to retire” due to its underemployment and stagnant job market. I imagine that most of the folks who move there are not moving for career opportunities. More likely, they are moving because they can be closer to family or friends or because the culture just resonates with them. I also know several of my friends who would LOVE to move to Austin for the vibrant social scene, but the MBA jobs just aren’t there.

I wasn’t very thoughtful about where I wanted to be after college – I kind of just let the decisions fall where they may. But MBA recruiting opened up the country to me in a way that I haven’t experienced before. Recruiters came from New York and Boston and San Francisco, from Chicago and Houston and Atlanta. I took a very rational approach when evaluating my post-MBA geographical preferences. First and foremost, I focused on career opportunities: at which company and which geography will I get to work with the people I want, have the chance to do the type of work I want, and have the best opportunities for upward progression? For my husband, his 2 biggest focus is (1) me and (2) career prospects, when he evaluates the next step in his life. Ultimately, my husband and I need to live in a big-enough city that can support two careers. For the short-term, though, we have discussed the possibility of continuing our long-distance marriage if he finds a compelling enough opportunity not in my city.

But professional considerations are not the only issue for me when it comes to location. I also value proximity to my parents (within a 3-hour flight so I can visit them monthly if necessary), a relatively cost of living (I want to save money! And buy a house and travel and have nicer things while being able to save money), and warm weather (below 60 is cold in my book).

How did you decide on where to live? Which of factor(s) did you consider most strongly in your decision? 

Fitness in your financial budget

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fitness goals Fitness in your financial budget

Trying out fitness for free (or cheaper)

A few years ago I was spending quite a bit on fitness (those Zumba and Bar Method classes add up quickly!). Now that I am a graduate student without a car, those expenses not only seem extravagant, it is also impractical to drive the 20 minutes to find those classes. A friend recently told me that the university gym classes are free for students, and forward me a schedule. Guess what classes are offered? Yoga and mat pilates! This is a very exciting development. On a less frugal note, I am also exploring some private pilates reformer classes to build up my core muscles, as well as a physical therapy/myofascial release budget to deal with a nagging ankle injury. The subsidized private reformer classes cost $55/hour. I am planning to start out with a class once every two weeks.

What other bloggers say about their fitness spending

  • Lacy at Earn Verse (also a grad student) recently discussed her attempts to find an economical fitness option. She mentioned an upscale chain called Equinox that cost $150 a month, but ultimately decided to stick to cheaper options. I actually considered Equinox a few years back, (and yes, they are absolutely gorgeous). Fortunately for my wallet, I moved to an area without any of Equinox locations and so passed on the membership.
  • Elle Sees, a New Yorker, has switched to the YMCA gym to save $60 a month. She had been wary of the transition, but found the adjustment much easier than anticipated.
  • JW at Umbrella Treasury, another great new blog I’ve recently stumbled upon, has a $400 fitness budget for her and her husband. That number might seem hefty to some, but she does have access to unlimited Bar Method classes – which are awesome! – so it’s very understandable why such a membership costs $$$.
  • Joe at Retire By 40 also does the bar method – except in his case it’s the monkey bars! Joe has designed a playground workout routine for his fitness goals, and get to spend time with his son in the process..

Given that most people don’t get enough exercise, I am a big proponent of doing whatever you need to do to stay healthy and motivated for fitness. That might mean splurging on a nicer gym near work, buying a expensive, comfortable pair of running shoes, or hiring a private trainer. That might mean paying higher rent if you can live within a walking distance to work or getting regular, stress-reducing massages. Of course, none of our choices exist in a vacuum, so spending $500 a month on fitness means that money doesn’t go to other financial goals – such maxing out savings or topping off vacation funds, or saving for a child’s education.

Where do you strike the balance between fitness and other financial goals? How much do you spend on fitness every month?

How to find the right home loan

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Offset Accounts and Redraw Facilities:  Mortgage Features

The number of different mortgage products and features available today is dizzying, and trying to compare all your options can be a difficult task.  Among the most poorly understood features are offset accounts and redraw facilities.  For some borrowers, the best home loan is one with one or both of these benefits.

Offset Accounts Explained

A 100% offset account is a savings account that is tied to your mortgage.  The money in this savings account offsets the amount of principal in the loan, thereby reducing the amount of interest owed.  For example, if you have a $200,000 loan with an attached offset account containing $20,000, mortgage interest is calculated only on $180,000—the loan principal less the offset account balance.  This kind of an arrangement can significantly reduce the amount of interest paid over the course of a mortgage’s term.  As a result, more of the borrower’s loan repayments are going toward paying down the principle, meaning that the mortgage can be paid off more quickly.  What’s more, the funds in the offset account earn interest, just as any savings account would, and since that interest is realised as a discount on mortgage interest, interest earned on the offset account is not taxed.

The benefits of an offset account are clear, though to really take advantage of them you must be in a position to leave substantial liquid assets in the offset account.

Redraw Facility

A redraw facility is a provision written into a mortgage agreement that allows the borrower to access any payments above the minimum repayment schedule to offset the loan.  Knowledge on the part of the borrower that these assets can be accessed if necessary makes it easier to make the extra repayments in the first place.

Not all mortgages have a redraw facility provision and even those that do vary widely in their terms.  There are different rules covering a variety of issues such as:

  • Fees for including a redraw facility in the loan agreement.
  • Fees for the redraws themselves.  Some lenders charge nothing while others affix a variety of different fees.  Some agreements allow a certain number of redraws in a given time period and then assess a fee.
  • Annual limits on the number of redraws allowed.
  • Minimum and maximum amounts for each redraw.
  • Mortgages differ from country to country and can be confusing, especially for first time home owners. Australian readers might want to check out a mortgage broker such as Smartline.

Mortgages with redraw capabilities can be a tremendous savings vehicle since interest rates on the extra funds are equivalent to the loan interest rate, which is virtually always more than a normal savings account can earn.  And, again—the interest on such accounts is not subject to tax.

We are not going to Paris

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Our Paris planning euphoria last barely a month. CB and I were all set to go to Paris in May, but… after talking it through some more, we have decided to shelf that plan. Thank you to all the dear readers who have commented and emailed me with suggestions and encouragement. I feel like the “girl who cried Paris” one too many times – and I almost feel as if I am letting you all down by not going.

dc vs paris vacation We are not going to Paris

In the end, though, the prudence (or risk aversion) won over the wanderlust in me. I still want to go on a little vacation together, so instead, we are going to take a few days and head to Washington D.C.

Why we aren’t going to Paris:

  1. Paris is expensive. Flights alone would cost $1,250 a person. So we’d be out $2,500 before we even set foot on French soil. Adding up the costs of a week’s worth of accommodation, food, entertainment, etc, the whole trip will cost at least $5,000.
  2. Paris is not our DREAM vacation. It would be lovely to visit the City of Light, but we want to go to Galapagos more. So we are going to continue to focus on that number one travel priority and divert the money we would have spent on Paris to our Galapagos fund.
  3. We want to relax. As beautiful and enriching a trip to Paris would be, I foresee it as a little bit of a stressful excursion. I know I will feel the pressure to SEE ALL THE SIGHTS! and neither of us know the language. If we delay this trip to later, we’ll be in a better financial position and can at least learn a smattering of French before we go.

Our trip to Washington, D.C. fulfills a lot of what we wanted to get out of our vacation – we’ll still get to indulge in a rich museum culture (most of which is free, thank you Smithsonian and Taxpayers of America!), stay in a nice apartment and enjoy meals at new restaurants. On the plus side, the D.C. trip will only cost us ~$1,500, and the rest of the money we can direct towards our other financial goals.

Would you have gone to Paris instead?  

 

 

Underwater basketweaving – it’s a real class

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“Underwater basketweaving” is probably the most maligned imaginary degree out there – a catchphrase for all sorts of classes and degrees that are deemed useless and unmarketable. (As a liberal arts graduate, I have heard of my degree derided a few times as such).

But does any school actually teach underwater basketweaving?

I would have thought no, but I would be wrong. Underwater basketweaving may have started out as a joke, but several schools now offer classes in the craft. Weaving baskets may be easy to do badly, but constructing a good basket takes skill, patience, the ability to follow directions, the willingness to try something new, and creativity. Oh wait, don’t those sound like skills that a good employee would have?!

underwater basketweaving Underwater basketweaving its a real class

University of California at San Diego offers a recreation class in Underwater Basketweaving. Apparently, the class first started in 1984 and has been going strong since. I found a class that takes place on in May 2013 – it only takes a few hours on the weekend and costs a pittance of $10 (the cheapest class at UCSD). Unfortunately, enrollment is full. Perhaps next year! Students who completed the class get a “diploma” in underwater basketweaving – I’d love one so I can frame it and hang it in our apartment. Reed College also offers an underwater basketweaving class, but I couldn’t find a live registration link.

If you are a diver, US Scuba offers you the chance to weave baskets… truly under water. The class description beckons students to “be one of the few divers in the world with this unique Specialty…and take home a memorable souvenir.” (I assume this souvenir is your very own basket).

Would you ever take an underwater basketweaving class?

Mega commutes: painful but (somewhat) avoidable?

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megacommute Mega commutes: painful but (somewhat) avoidable?

Studies have long shown that a long commute is one of the most stressful experiences in a workers’ day. The unpredictability, the lack of control over the situation…it all contributes to deep unhappiness and/or severe road-rage that extreme commuters have all faced at one time or another. Slate just came out with an interactive graph that calculates average commute times by zip-code.

My most recent location is a mere 18 minutes in average commute time. My previous locations all clocked 20-30 minutes in average commute time, but I know from experience that I was – unfortunately – definitely above average in this aspect.

My longest commute was at my last job, where I drove 65 miles (more than 30 miles each way) to work every day. It was one of the most painful aspects of my job, as the commute would stretch from 40 minutes on a “good” traffic day to a mind-numbing hour-plus on a day with a few accidents or weather issues. Eventually I started working from home on Fridays, but the Monday to Thursday commute still took 7-8 hours of my life. (I couldn’t move closer to the office, because CB’s work was all the way at the other end of the county, and he had a 70 mile round-trip commute.)

Some commute, sometimes, is unavoidable, but I am hoping that I can structure my life to avoid the mega-commutes. At my next job, I hope to be able to live within a 15-20 minute drive of the office, maybe even closer. I do not know what kind of opportunity could make me a “megacommuter,” or someone who drives 90 minutes to work on a regular basis, but even if it’s an opportunity I can’t turn down, I would rather move than make a drive like that. A long commute is not just about the money you’d spend on transportation/increased housing prices, it’s about your quality of life.

What is the average commute time in your zip code? Is your own commute longer or shorter than that?

Judge a home by its pictures

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beautiful homes Judge a home by its picturesvia Flickr

The author of a design blog I love – Small Chic Home – is selling her condo in Charlottesville, VA. She has posted some pictures of her beautifully-staged home and wondered whether the quality and quantity of pictures on MLS listings affect number of potential buyers who then visit the house in person.

As a big fan of HGTV, a search-the-real-estate-listings-for-fun looker, and a frequent apartment switcher, I’ve seen my fair share of badly-staged homes and ugly pictures. I know pictures aren’t everything and I will still go see a poorly-photographed unit that fits most of my other criteria. But it’s so much easier to decide to go see a bright, beautifully-photographed place. My last apartment in California had horrible Craigslist pictures – the only reason CB and I went to see it was because it offered two parking spaces for a one-bedroom, a relatively rare occurrence in our neighborhood. The reason we were one of the few applicants, I believe, was because the dark and dingy pictures scared other folks away.

As a potential buyer/renter, here is what I like when I look at pictures on a listing or in person:

  • No clutter – I want to see the house, not a collection of tchotchkes
  • Neutral paint colors
  • Bright light (ideally photos are taken in natural light)
  • A floor plan

When you were looking at apartments or houses, did the MLS or Craigslist pictures affect which places you decided to visit?

Big tax refunds: love ‘em or hate ‘em?

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keep calm and enjoy tax refund1 Big tax refunds: love ‘em or hate ‘em?

I have to say that this year, I am loving big tax refunds. We will be receiving over $5,000 back in state and federal income tax refunds. Even though this means that we gave the government a $5,000+ interest-free loan, I’m so happy we’ll now have $5,000 in one lump sum. In the words of the great British intelligence officer, Austin Powers, yeaaaah baby!

This is the biggest tax refund we/I have gotten since, well, ever. I doubt we will see a similar-sized refund anytime soon. This year is an anomaly because I only worked for 1/2 of a year, and I went back to school and so qualified for the Lifetime Learning Credit. A alum told me that our tax refund would be especially high this year, and I’m glad that turned out to be the case. The money, especially in its lump sum form, will be much appreciated.

Even though many personal finance experts argue against a large tax refund and counsel folks to adjust their deductions so they have more money with each paycheck, I think that big tax refunds, when used appropriately, can be an effective personal finance tool.

Why big tax refunds deserve some love:

  1. It forces you to save for a big-ticket item such as a down payment on a car or a summer vacation, or even topping off your Roth IRA contributions.
  2. By being conservative on your deductions, it minimizes the risk of having to make up taxes at filing time.

So big tax refunds, do you love ‘em or hate ‘em? And what is the biggest tax refund you have gotten?

Egg-freezing to extend fertility

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egg freezing Egg freezing to extend fertility

Over breakfast, as we chatted about my career goals and caught up on each others’ lives, a mentor of mine recommended I consider freezing my eggs. (I was really happy that I did not order scrambled eggs for my entree). “We’ve had trouble conceiving,” my 40-something mentor told me, “in hindsight, we should have frozen some eggs so that we don’t have to go through more invasive procedures now.” I have never thought about egg freezing before, but a quick search of “egg freezing” resulted in many articles about women in their 30s who have undergone or are considering egg-freezing in order to extend their fertility.

More women interested in egg-freezing

And it’s not just the women themselves who are interested in this technology. Parents who are eager for grandchildren are also getting in the act – by offering to pay their daughters’ egg-freezing procedures. Talk about thoughtful and slightly awkward all in the same breath. That is one conversation I hope to never have with my mom! (A friend of mine – also in her late 20s – told me that HER mom has indeed broached the subject of freezing eggs. It’s real!)

A 2011 Vogue article profiles several other women who are undergoing egg-freezing, and provides some useful background information. The article seems to indicate that the vitrification, the flash-freezing process that allows eggs to be preserved, started in 2006. So egg-freezing is still quite new. In late 2012, however, the American Society for Reproductive Medicine declared that egg-freezing technology is no longer “experimental.” The Society is not giving its blessings to egg-freezing for all women. Even though scientists think there have been 2,000 babies born from frozen eggs, the technology is still in its early days.

A little more googling turned up the story of a couple who decided to freeze their embryos (essentially, undergoing IVF but saving the embryos for their future selves) so that they can delay parenthood until they are ready, but heavily mitigate the risks of decrease fertility. For couples in committed relationships, freezing embryos may be a better way to extend fertility because frozen embryos have a longer history of success and a better track record than the much newer egg freezing process.

Then there’s the money issue…

Aside from the potential health risks of hormone injection or the uncertainty of successful pregnancies from these technologies, these reproductive procedures aren’t exactly cheap. Egg-freezing costs ~$10,000-$20,000 per cycle, and I imagine IVF cost similar amounts. Then there is money you’d need to spend to house the frozen eggs or frozen embryos can cost $500-$1,500+ per year. Then, if everything works out, you are on the hook for the costs of actually raising a baby! icon wink Egg freezing to extend fertility

As a woman in her late 20s, I don’t know any of my friends who are talking about preserving their eggs (only one of my college friends has a baby) or preservation IVF. But I do wonder whether this option is something my husband and I should think more seriously about. We are definitely not ready for kids right now, but maybe I will change my mind when I am 35. Wouldn’t I want the possibility to have a baby if I decide later on that that is what we want?

That’s the question I imagine many young professional women / families are asking. This is a brave new world of reproductive technology, and for some of us, maybe egg-freezing or preservation IVF is an answer, or at least has the potential to be an answer.

Would you consider or have you undergone egg-freezing or preservation IVF to extend your fertility?

How to Save on Home Technology

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As well as being beautifully furnished and stylishly decorated, it’s likely your dream home will also include the very latest in technology. From alarm clocks to televisions, it’s difficult to pin-point a room which wouldn’t be enhanced by a gadget or two. But of course, staying on top of the latest releases and still sticking to a modest budget is not always feasible.

With this in mind, we’ve compiled a list of how you could implement some new technology into the home without breaking the bank!

For the kitchen…

With smart fridge-freezers and slick touch-sensitive hobs, technology in the kitchen is becoming increasingly sophisticated. It can be easy to get carried away; however, you don’t need to overhaul the entire room to enjoy a bit of cooking gadgetry. Instead of investing in big appliances, look for smaller, less expensive items. From potato peelers to toastie-makers, there are endless inventions which could keep you entertained (and well fed) in the heart of the home; and by shopping online with vouchers, you could come across some great money saving deals.

For the living room…

Who said the fireplace has to be the focal point of the living room? With most people’s sofa’s being pointed at the TV, there are now even more excuses for spending money on state-of-the-art entertainment. But as a lot of people will attest, the fast turnover in technology often leads to spontaneous and foolhardy purchases. So instead of investing in an expensive sound system or the latest games console, i.e. something you might quickly lose interest in, invest in one item you’re guaranteed to use. Case in point: the laptop. From online shopping to music downloads, it’s an item which will always be switched on. By getting discounts on Dell products or other big name computer brands, you could still end up saving.

For the bedroom…

Although it might be tempting to put another TV in the bedroom, a lot of studies have shown that the use of digital devices can contribute to poor standards of sleep. So, forgo the late night shows for a bit of real relaxation! Lots of sleep-related technology has been cropping up of late, but instead of splashing out on fancy mattresses which might not even work, try out cheaper ways of improving your shut-eye. Apps like Sleep Cycle are great; they monitor levels of sleep and wake you at the correct moment to ensure you feel refreshed and regenerated.

Be savvy

You don’t have to splash out on the most expensive items to enjoy technology. By being a little smarter with your money, you could end up with your dream home and financial security. And you really can’t put a price on that!

Are You Managing Your Debt Effectively?

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This is a sponsored guest post

The problem of debt continues to be arguably the most important subject currently facing most developed economies. But while national debt may be what hits the headlines and engages politicians, for most of the population, it is household debt that is the most pressing problem. If you’re struggling financially and are worried about debts building up, there are a number of things you can do to improve your situation and get back on track…

Prioritise your bills

Of course all bills are important, but there are some that are more important than others due to the repercussions of falling behind. Examples of these include your mortgage and hire purchase loans that have been secured against something you own. If there has been a reduction in your income, through redundancy, maternity or a cut in working hours, it is always a good idea to approach your provider, as they can often suggest some alternative payment patterns. Some mortgage providers offer a payment holidays, which could really help you if you’re low on cash. Whatever your situation, if you’re struggling to keep up with repayments on your bills or debts, you should contact your providers to tell them about your situation and see if they can help you in the short term until you’re back on your feet again.

Avoid quick fixes

When it comes to dealing with debt or tight financial situations, there is no such thing as a quick fix. Some people feel like a payday loan could help them out, however, if you can’t afford to repay the balance in the agreed time frame, you could end up in a spiral of debt that’s hard to break.

In some cases, payday loan companies can charge as much as 4,000% APR, so debt due to interest and charges can quickly build up.
Consolidation loans can be a good idea as repayments will be over a realistic time frame, rather than on your next pay day.
One of the most effective ways to manage your finances is to use an income and expenditure form to find where you’re spending money and see if there are any areas where you can cut back. You may even be surprised that you’re still paying direct debits or standing orders for products or services that you no longer use.

Switch to a better credit card

There are many deals from credit card providers offering zero, or single figure interest deals on balance transfers. These require you to transfer any debit balances from existing cards and, for a specified period, you will not pay any interest on the outstanding debt. Usually, the interest-free period ranges from six to 24 months and can save considerable amounts. However, the best deals are only available to those with the best credit records and, it is absolutely vital to pay off, or transfer, any debt before the specified period ends; otherwise you will end up with interest charges back dated to the entire period.

Seek expert advice:

Don’t wait until it is too late and your debt gets out of hand before you seek advice. Experts can help you by suggesting various ways of managing debt and can also approach lenders on your behalf.

Consider a Debt Management Plan

If you want some help with your finances and feel like you would benefit from the experience of a professional debt management company, then you may feel that a Debt Management Plan would be a suitable solution for you. Debts will be consolidated into one easier to manage monthly repayment, so they’re easier to manage.

Re-assess your financial behaviour

Often falling into debt happens because of unforeseen circumstances like illness, unemployment or family bereavement. However, financial mismanagement and lack of spending control are equally culpable in many cases.

Scrutinise your finances, separate essential from all non-essential spending and cut out all non-essentials until you have cleared your debts. You can also save substantial amounts by switching current accounts and ensuring you take advantage of all suitable deals on utilities, like gas, electricity and broadband. More effective financial behaviour can be by far the most effective way to manage debt in the long term.

Win $200 Cash!

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tomorrow finance house1 Win $200 Cash!You read that right… the first giveaway of 2013 is a good one: $200 of cold, hard (PayPal) cash. What would you do with $200 cold hard cash? If you win, you’ll have to decide very soon!

Well Heeled Blog has teamed up with Tomorrow Finance to offer everyone a chance to win $200 cash, to spend on whatever you wish. The personal finance blogger in me must plug that you have until April 15th to max out your Roth IRA, so hint hint! icon wink Win $200 Cash!

What’s cool about blogging is the chance to work with folks from all over the world. When a Tomorrow Finance representative approached me about sponsoring a cash giveaway, I was really excited. Then I found out that Tomorrow Finance is an Australian home loan comparison website who could help you money on your home loan. As an independent company, Tomorrow Finance regularly have specials which are better than what the banks advertise and managers from the major banks to help you through the process.

a Rafflecopter giveaway

I am not from Australia, but I do want to purchase a home in the not-too-distant future, so I went on the website and played around with the loan comparison tools and read on their money saving tips and loan advice. Some of them are obviously specific to Aussies, but there is a lot of good information that is helpful to anyone who wants to buy a home. So check them out!

What did you do with your wedding pictures?

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wedding pictures What did you do with your wedding pictures?

It has been 9 months since CB and I officially tied the knot. Our wedding pictures are still sitting in the CD the photographer sent us. I’ve uploaded some to Facebook and my computer, and occasionally I’ll look at a few, but we still haven’t gone to Costco to make physical prints of our pictures, and I haven’t made any progress on the wedding album I was going to put together.

I wonder if I should just ask our photographer to make our wedding album for us. An album would be a ~$600 luxury, but then, we’ll have an album, and it will be beautiful. On the one hand, how often will we really look through the wedding album? On the other hand, isn’t it nice to have an album just for the sake of having an album? Recently I stumbled upon Living Debt Free Rocks and her beautiful album on her blog, and now the “wanting” of a professional album has just gotten stronger. Michelle’s Finance Journal also have posted some beautiful wedding photos. My cousin had a traditional Chinese wedding and has loads of pictures from several photo shots - I would love to look through her album the next time I see her!

Alternatively, perhaps I will go the less expensive route and just get a few larger prints of our favorite shots, and frame them.

What did you do with your wedding pictures? How often do you look at them?

Marathon interview sessions: surviving the longest wait

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marathon interviews Marathon interview sessions: surviving the longest wait

The job search process can be trying, especially if the job interview you prepared so hard for doesn’t work out. But maybe getting a definitive “no” is better than waiting and interviewing for the 7th, 8th, or 9th time for the same position, and then getting the “no” months later. Unfortunately, because of a still stagnant labor market, employers’ uncertainty, and so many folks out of work and eager to find jobs, the interview process has been stretched longer and longer – the New York Times called them “marathon interview sessions.” According to the article  “With Positions to Fill, Employers Wait for Perfection”:

“There’s a fear that the economy is going to go down again, so the message you get from C.F.O.’s is to be careful about hiring someone,” said John Sullivan, a management professor at San Francisco State University who runs a human resources consulting business. “There’s this great fear of making a mistake, of wasting money in a tight economy.”

As a result, employers are bringing in large numbers of candidates for interview after interview after interview. Data from Glassdoor.com, a site that collects information on hiring at different companies, shows that the average duration of the interview process at major companies like Starbucks, General Mills and Southwest Airlines has roughly doubled since 2010.

I have recruited through a school twice: once in college, and once in business school. One of the best perks about interview through such a structured process is that students know they will get an answer – either good or bad – within a reasonable amount of time, sometimes as short as a few hours, but definitely within a couple of weeks. The hardest part about the job process is the wait, and I am so grateful when the wait is minimized to the extend it could be.

In college, a few positions I applied to took only one day of interview, but what a day that was: the interviews started at 8am or 9am and lasted 4-5 hours with 10-minute breaks in between.

During the MBA summer internship recruiting, my interview with a firm that shall go nameless lasted the longest in term of sheer hours: 2 hours for a first round interview, and then 4 hours for a final round interview. Fortunately, the turnaround time for most positions occurred very quickly – I had my final round of interviews with the company I will intern at during an afternoon and got a phone call with the good news just a couple of hours later.

The longest successful interview process I’ve had consisted of 4 rounds over a month: (phone screen with hiring manager, in-person round 1: interview with HR manager, hiring manager, and associate, in-person round 2: interview with director, in-person round 3: interview with CEO). It was a grueling process, but what made it easier was that the manager was actively trying to fill the role and gave – and followed through – on definite timelines when I would hear the results. I really appreciated the way the process was conducted, and thought it reflected well on the company that it treated candidates’ time with respect.

What was the longest interview process you had? Have you been through a marathon interview session with more than 6 or 7 separate interview rounds?

One extra hour a day – name your price!

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extra hour time One extra hour a day name your price!

Yesterday was the day when we all set our clocks one hour ahead for Daylight Savings Time – effectively losing the one hour that we will then gain back in November (“spring forward, fall back”).

Because school has calmed down significantly since recruiting ended and I didn’t have any big assignments due today, this “loss” of that one hour doesn’t seem as painful as it normally would be. But it’s better to gain time than lose time, right? That is why I am always happier when “fall back” comes around.

So here’s what I’m wondering. What if you could gain an extra hour a day, every day? A sort of magic time of an hour that is yours, alone, to do with whatever you wish. How much is that extra hour worth to you?

You can use this magic hour to sleep in, cook and eat a leisurely meal, watch two more episodes of Suburbatory, spend extra time at a game, finish up a good book, etc. This hour can’t be accumulated, though, so just like a normal 24-hour day, once the day is over, you will never get that time back. On the other hand, this magic hour is also invisible to everyone else so you are free from their expectations of what to do with this time. Your employer wouldn’t know or experience this extra hour, so you would not be expected to work it. Your family wouldn’t expect you to pay more attention to them. That extra hour is yours to use and enjoy however you wish.

How much would you pay for this extra hour? And what would you do with it?

Veterinarians facing a beast of student loans

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student debt beast Veterinarians facing a beast of student loans

We hear a lot about the plight of student from law schools, med schools, and other graduate programs who are burdened by drastic amounts of debt (you might remember the studentloanasaurus drawing from that earlier post). Apparently, veterinarians are not exempt from the problem. A New York Times article, “High Debt, Falling Demand Trap New Vets” shed some light on this growing problem: veterinarians’ inflation-adjusted pay has been decreasing, but their student loans are increasing at an alarming rate.

The article profiles a young doctor, Haley Schafer, who has dreamed of becoming a veterinarian since she was 5 years old. She has fulfilled that dream and has a job that has meaning and a steady pay of $60,000. Unfortunately, as a cost of pursuing that dream Dr. Schafer has also racked up a lot of debt.

She also has $312,000 in student loans, courtesy of Ross University School of Veterinary Medicine, on the Caribbean island of St. Kitts. Or rather, $312,000 was what she owed the last time she could bring herself to log into the Sallie Mae account that tracks the ever-growing balance.

“It makes me sick, watching it increase,” she says. “There’s also the stress of how am I going to save for retirement when I have this bear to pay off.”

The average pay for vets is around $45,000-$50,000, which means, if you are to stick to the 2x your starting salary guideline, veterinary student debt shouldn’t exceed $100,000. That is going to be all but impossible, unless a student has family support or financial aid. At the same time, the cost to attend veterinary school, like most other professional programs, has increased.

And the cost of vet school has far outpaced the rate of inflation. It has risen to a median of $63,000 a year for out-of-state tuition, fees and living expenses, according to the Association of American Veterinary Medical Colleges, up 35 percent in the last decade.

But at least Dr. Schafer has gotten her DVM (doctor of veterinary medicine) degree. Another lady profiled in the article was ejected from veterinary school before she could graduate, and left with $160,000 in debt and no degree. Now she works at a veterinary technician for $18 per hour.

Dr. Schafer seems very happy to do what she does (how many of us get to live out our childhood dreams?), but $300,000 debt on a $60,000 salary? That kind of debt is mind-boggling, and maybe even feels a little hopeless. Given the financial circumstances that many new veterinarians face, I hope that veterinary schools and pre-vet programs at colleges incorporate more financial literacy education into their curriculum. This way, folks who care so much about helping and healing animals can also take good care of their own financial future.

Would you follow your dream career if it required you to take on enormous debt for decent-but-not-spectacular pay? Have you heard your vet talk about this issue?