The Amateur Financier

It’s January, and that means that all around you, people are trying to improve their lives. More than any other time of the year, January is when everyone attempts to fix past problems and make their lives better. I’m certainly including myself in that group; it’s only six days into 2012, and two of my posts so far have involved my goals for the coming year.

Given that so many people are taking the time to focus on their resolutions and trying to improve their lives, I figured that it would probably make for a good blog entry (or four) to look at some of the more common personal financial resolutions and provide on how to accomplish them. So, for the next four Fridays, I’m going to providing advice on achieving Resolution Success, starting with

Paying Down Debt

This is a perennial favorite resolution: most of us have some debt, and it’s a rare person who doesn’t want to be debt free. Heck, I’ve covered this exact resolution before. (Although, looking back on it, I realize that I wasn’t as clear on how to actually pay down debt as I should have been; ah, the things you can learn by being a blogger.)

It's almost as good as book learnin'

But it’s obviously a tough one to actually achieve, otherwise there wouldn’t be so many people who make the resolution year after year. Since I find myself in the same boat as many people, facing quite a bit of debt and wanting to pay it down, it’s an area I definitely want to focus on this year. With that said, here are some tips to help you (and me) pay down debt this year:

-Figure Out a Plan of Attack, and STICK TO IT: As you might guess, the topic of paying down debt is a popular one, which I am hardly the first person to tackle. There are more than a few gurus with their own personal favorite ways to tackle debt, from Dave Ramsey’s Debt Snowball to Flexo’s Debt Avalanche, and pros and cons of each. Hashing out the best method is not what this article is about (and the best method for YOU is something I can’t tell you, anyway), but the important thing is that once you have a plan you feel will work for you, you need to stick with it. Going from one plan to another to another (or worse, dropping your plan altogether) will be worse than sticking with a single plan, even if that single plan is less than ideal.

-Pay More Than the Minimum: The centerpiece to every debt elimination plan is to pay more than the minimum on one particular debt. (Which one is a major source of debate, of course.) Trying to pay off your debt while paying only the minimum is a surefire method to remain in debt for years, if not decades, longer than you need to be. While some debts, like student loans, are designed to be paid off in a specific number of years (ten for most student loans), others can take decades to pay off at the minimum payments (and may not necessarily ever be paid off at those rates). If you aren’t putting more than the minimum into one of your debts, you’ll need to do so if you hope to ever declare yourself debt-free.

-Negotiate Better Rates, if Possible: It’s a situation of ‘ask, and ye shall receive’, at least sometimes. The simplest way to lower your credit card or other debt interest rates? Ask for lower rates. It really can be that simple. The worst that happens is your creditor says no, and the best is that you find yourself charged hundreds or even thousands less as you work to pay off your debt.  While I can’t say for certain whether your lenders will be willing to cut your rates, asking is the only way to know for certain.  Better yet: find out the rates you could get by transferring your debt to another creditor, and use those rates to negotiate better rates.  Worst case scenario, you know where to get to get lower rates if your current creditors won’t play ball.

-Put as Much Money as Possible Towards Debt Elimination…: Regardless of what particular repayment tact you choose, you’ll be most successful by putting the maximum amount of money possible towards debt repayment. You might say that you don’t have any money available; if you did, why would you be in debt? But there’s usually money to be found, if you put your mind to it. There are probably services you use, from cable TV to subscription websites, that you can cut, at least until your debt is gone. There are likely items in your house you could sell to bring in some extra money. And speaking of extra money, have you heard that some people even make a few bucks online doing something called ‘blogging’? If you put some time and effort to it, you can potentially derive quite a bit of additional to help your debt repayment.

-…But Make Sure to Have a Reserve: It’s tempting to go whole hog when you are paying down debt; after all, every dollar of credit card debt you eliminate is one less dollar you owe, and thus one less dollar accruing interest. But you need to have some money set aside in an emergency fund; otherwise, the moment you run into financial trouble, you’ll find yourself in even deeper debt. How much of an emergency fund to have is another of those issues you’ll hear numerous opinions on, but you should have enough that any foreseeable problems can be handled without having to add further debt.

-Be Careful About Adding New Debt: I’m going to take a different tact here than the average debt elimination adviser. Most sources you’ll read say to not add any more debt as you pay down what you owe; things like cutting up your credit cards and canceling them as soon as you eliminate what you owe. This is not bad advice, particularly if you find yourself spending money you don’t have anytime there is plastic in your wallet. But, I understand that there are times when you find yourself all but unable to avoid adding further debt. Particularly if you are a student and making little, if any, income, you’ll likely have to go into debt simply to keep a roof over your head and food in your belly. The trick is to be careful and only add more debt when it is absolutely necessary. So, food, gasoline (assuming you are going to and from classes or work, not joyriding across the country), and rent: yes; expensive parties, fancy clubs, and high-class booze: no. A good rule of thumb: Try not to add any debt that doesn’t directly help you to earn more in the future.

There are a few tips to help you take that debt off (and keep it off). Does anyone have further suggestions they’d care to share? Or perhaps horror stories of finding themselves in too much debt thanks to doing things wrong? Inquiring minds would like to know!

The new year is well and truly upon us now. The resolutions have been made, the plans to achieve them have been drawn up, and we’re all ready to meet our goals in the coming twelve months. Everything is set, right?

Well, maybe. Chances are, you made some resolutions for last year, too, and probably didn’t get everything you wanted accomplished. After all, it’s sometimes tough to lose fifty pounds, pay down your credit card debt, and dominate the world, all at once. (Although, that last one might just be me.)

As you've probably heard more than once, you can't win the race if you don't run

While it’s tempting to push all those missed resolutions to the back of your mind and never think about them again, there’s much that you can potentially learn by looking back and reviewing your failed resolutions, seeing where you ran into trouble last year could help you see how to do better this year. I tried to do so myself in my latest resolution review, and it did help me to determine how to approach my goals this year.

Here are a few Dos and Don’ts to keep in mind as you look back at the year that was, and consider how to do well in the upcoming year:

DON’T Be Too Hard on Yourself: There are any number of reasons why you might not have gotten everything done that you wanted to do in the past year, many of which were likely outside of your control. Beating yourself up over not getting everything done that you wanted doesn’t do anything to help you improve in the new year, nor does it make the past year any more productive. What it does do is make you feel bad, and put you in a poor state of mind for getting your new goals done.

DO Think About What Went Wrong: This is not to say that you shouldn’t review what happened with your goals in the last year, and try to figure out why you weren’t able to achieve what you hoped to achieve. Looking back on your goals can give you some excellent insights into how to go about improving in the new year. Some possible reasons you ran into trouble could include trying to do too many things at once, making resolutions that were too ambitious (losing two hundred pounds of weight or building up your net worth by $100,000 would both be stretches for the average person), and not creating a reasonable plan for meeting your goal.

DON’T Forget to Learn From Your Mistakes: It’s not enough to know what went wrong if you set yourself up to make the same mistakes again in the coming year. If you discovered that your resolutions were too ambitious, for example, don’t allow your new resolutions for this year to be equally ambitious. Instead, review your resolutions for this coming year in light of what you learned about the past year, and adapt your new resolutions accordingly.

DO Share Your Resolutions: One of the best ways to motivate yourself to get your resolutions accomplished is to share them. Not only can your friends, family, or blog readers (for those of us write blogs, at least) help you to meet your goals through advice or other help, but the simple act of making your goals public can help to make it more likely that you will put in the time and effort needed to accomplish them.

DON’T Get Discouraged: Finally, it’s easy to discouraged when you look back at things you wanted to get done and ended up failing to do. The last thing you want as we start a new year is let past difficulties cause you not to try your hardest. Remember that your success this year is determined only by how hard you try.

That’s some good advice on how to be successful in this new year, if I do say so myself.  Here’s hoping you have plenty of luck accomplishing all your goals for 2012 and beyond!

Alright, it’s a brand new year, and for most of us, that means one thing above all others: resolution time! Yes, as the calendar rolls over, we try to improve ourselves, by focusing on the aspects of our lives we’d like to to improve. There’s plenty in most of our lives that we would like improve, and it tends to be easier when so many other people are also trying to make their lives better.

You might recall that last year, I made a number of resolutions (ten in fact), which I’ve been trying to achieve over the past year. I’ve done a somewhat decent job on achieving them all, but trying to do ten different (if generally inter-connected) things proved to be a bit too much for me to achieve.

Yup, I felt a bit like this at times during the past year

Rather than spread my focus in so many different directions, this year I’m going to make a smaller number of more focused resolutions. Hopefully, if my goals are more focused, I can have more success in achieving them during the next year. So, rather than creating ten different resolutions and dividing them into three categories, I thought that this year, I’d only create three goals to keep my attention more focused. So, with no further ado, here are my resolutions for 2012:

For my Blog, get my Alexa Ranking Under 100,000: I had hoped to reach this point by now, anyway, but things just haven’t quite worked out like that yet. So, rather than five different goals that should get my ranking to this point, I figured I would focus on the hopeful end goal instead. (I have mentioned, when going over my resolutions from last year, that I’m a bit leery about making goals that are dependent on other people’s responses, but I feel in this case that it should be more than possible if I focus on my blogging more.)

For my Finances, Eliminate $5000 in Credit Card Debt: Rather than the rather vague ‘Pay Down My Credit Card Balances’ goal I had last year, this year I’m giving a specific dollar goal and going to try my best to achieve it. It won’t be easy, but by focusing on doing so a little at a time, I should be able to get this accomplished. (As a side note: I will be taking out more money in student loans later this month; any portion of that money which goes to paying down my credit card balances won’t count. The last thing I want to do is simply trade one debt for another while calling it ‘paid down’.)

For my Personal Life, Finish Graduate School and Get a Job: This is another of those that depend on people other than me, that is true, but finishing grad school is certainly within my control, and if I start working diligently on job hunting now, it shouldn’t be too much of a problem to find myself some gainful employment. It’ll take some effort, but more than anything else I can do in the coming year, this will help me get my life off to a better start.

There you have it, three new goals for the new year. What do you hope to accomplish in 2012?

Ah, it’s amazing how time flies, isn’t it?  It seems almost yesterday I was sharing some of my goals and resolutions for the new year of 2011, and here it is, the end of 2011 and time to think up new goals for the coming year.  Of course, before I go and start sharing a whole new set of goals for 2012, it’s probably good to sit down and see how well I did on my resolutions.  (The same way I did at the end of the first quarter, second quarter, and yes, the third quarter of this year.)

Hopefully, seeing my overall progress on these resolutions will help me to do better in the future.  To aid in that regard, I’m going to add a review of the resolutions themselves, to share some thoughts on attempting to achieve such a resolution in a single year and how well (or not so well) it worked out for me.  Given that I should come up with some new resolutions in the next few days, thinking back on the pros and cons of these resolutions should be good to help me learn from my mistakes.

Roger’s Resolution Rundown

Resolution #1: Write At Least One Post Per Day
Comments: Well, as I look back at nearly a year worth of writing, I see that I’ve written 199 posts in 2011 (including this one).  That’s 166 short of my goal, and a bit more than half, when all is said and done.  Not exactly what I had hoped to get accomplished.
Grade: C-: Well, I did manage a pretty healthy output of blog entries, even if I fell a bit (or more than a bit) short of my initial goal.  All the more reason to try harder next year, I suppose.
Resolution Review: While not a bad goal, it’s a bit tough to achieve a post a day under the best of circumstances.  While there are clearly bloggers who manage to put up a fresh, new post each day (and sometimes more than one), they tend to be full-time bloggers who can put in eight or more hours a day doing this, not people trying to fit in time to write a blog post between preparing bacteria for research and studying for a test (that is, people like me).  Maybe a more modest goal, three to five posts per week or so, would be more suitable.

Whoo-Hoo! Fireworks to ring in the New Year!

Resolution #2: Write At Least One Guest Post Per Week
Comments: Yeah, if there’s one goal I really, really, REALLY have not done well with, it’s this one.  Still haven’t been able to write any more guest posts; one of my biggest regrets this past year is not doing more in this respect.
Grade: F: Yup, as you might guess, still no improved grade here.  I’ll have to try harder in the coming year.
Resolution Review: It’s a pretty solid resolution, and something I do hope to achieve.  Although, as with the first resolution, it might have been a bit too ambitious; particularly as I work through grad school, it’s tough to even keep up with my blog, let alone write posts for my fellow bloggers.  I’ll need to try better to find the time, though.

Resolution #3: Promote My Blog In More Places
Comments: Not too much good to report here; I’ve been trying to do more promotional efforts, but as you might guess, it can be a bit tricky (to say nothing of time consuming).
Grade: D : Quite a bit more effort to be made here, as there’s definitely quite a bit of room for improvement.
Resolution Review: Not a bad goal to have, although as with so many resolutions, it suffers from a decided level of vagueness; I could say that simply by participating in the few carnivals I did this year, that I DID promote my blog in more places.  I’ll need to be more specific in the future, I suppose.

Resolutions #4 & #5: Read At Least 50 Blog Posts Per Day & Comment On 10 of Them
Comments: If you re-read those linked resolution reviews from previous quarters, you probably know what to expect here: I have been doing some more reading and commenting, but nowhere near the level I hoped to achieve
Grade: F: Yup, you guessed it, another F for this resolution.
Resolution Review: While reading and commenting on fellow bloggers a good goal to have for an up and coming blogger like myself, I was definitely far too ambitious about what I could achieve.  Reading 50 posts a day, for example, would take 2.5 hours at the relatively swift reading speed of three minutes per post.  Add another five to ten minutes per comment, if not more (I tend to be a wordy commentator), and I’d be putting in nearly four hours a day for something that, while enjoyable, doesn’t directly improve my own blog.  (Yes, it helps get the Amateur Financier name out there, and promotes my blog indirectly, but doesn’t do much good if it leaves me with no time for writing my own posts.)  I’ll have to be much, much more conservative if I opt for a resolution like this again, to say nothing of actually getting around to reading more posts…

Resolution #6: Pay Down My Credit Card Balances
Comments: As you might guess, between the holiday season and the normal troubles of being a poor student, I haven’t made much progress here.  A nice goal, but one I couldn’t really achieve.
Grade: D- : Not surprisingly, this is still an area where I need to make more progress.  The goal is tackle this with renewed furor in the new year.
Resolution Review: It’s definitely a good goal to have (although, again, it’s a bit vague).  If I decide to tackle this again as a resolution in the new year, I’ll try to set a more solid goal level, rather than the vague ‘pay them down’.

Resolution #7: Create at Least Three More Sources of Income
Comments: Well, at the end of 2011, I still have only as many income sources as I did at the start of 2011.  So, pretty poor showing here, all in all.
Grade: C : I would put a D or even F here, but I have managed to build my blog into a pretty decent alternative income source, so I’ll call this one a draw.
Resolution Review: Probably my least well thought out resolution; in hindsight, I should have been much more concerned about how much alternate income I generate, rather than the number of places I derive said income from.  (Especially trying to be a Jack of All Trades would likely leave me as the Master of None.)  Of course, that’s not to say I didn’t put some thoughts into my level of alternate income…

Resolution #8: Generate At Least $1000 Per Month in Alternate Income
Comments: Here’s a surprise: I actually earned over $1000 in alternate income in December.  Granted, some of that was once a year offers or others that won’t enable me to earn more in the same place come January, but still, RESOLUTION = MET.
Grade: A+ : Yup, I’m giving myself an A+ on this one; it might have taken me until the end of the year, and I might not expect the same income next month, but hey, I did get this one done.
Resolution Review: I’m a little bit leery about a resolution like this which depends, in whole or in part, on other people (like, say, earning $1000 per month on a blog), but this worked out pretty well.  I’ll definitely have to consider ramping this up next year.

Resolution #9: Go to the Gym At Least Twice a Week
Comments: I’ll be honest: I’ve been slacking in this area lately.  Between the holiday season, studying for finals that came before that, and doing research that frequently kept me in the lab until eight or nine at night, my ability to get to the gym lately has all but disappeared.  It’s been a few weeks since I’ve been at all, and probably since the last resolution update that I’ve been there on even a semi-regular basis.
Grade: C- : Not too good, I’m afraid.  Definitely something I need to do better on in the near future.
Resolution Review: It’s a classic, going to the gym as a New Year’s resolution.  I managed to do better than many (perhaps most) people, but in the end, the same thing that gets to most people when it comes to fitness resolutions, a lack of time in a busy schedule, got to me, too.

Resolution #10: Reconnect with My Old High School and College Friends
Comments: Well, unfortunately, the closest thing to a 10th anniversary my high school had was an informal meeting in a bar near the school in the middle of the week (which ass a six hour drive from where I currently live, during a week when I had tests to study for), but I am connecting more with my old friends and classmates online, so I’ll consider this accomplished (kind of).
Grade: A- :  Still pretty good; not perfect, but given that I’m over three hundred miles away from most of my former classmates, I’m doing alright.
Resolution Review: Not quite the way I had hoped to reconnect, but given the power of modern technology, it’s hard to argue that I couldn’t reconnect with at least some people I used to know.

Extra Special Resolution: Being a Great and Supportive Fiancee
Comments: My fiancee Sondra was reading over my shoulder as I wrote this (and managed to catch a grammar error, so perhaps I should ask her to do so more often), and upon seeing the poor grades I was giving myself for most of my blogging and financial goals, insisted that I include this resolution and give myself an A++ grade for being so helpful and wonderful to her.  Hence, the added resolution at the last minute.
Grade: A++: Who am I to argue with my fiancee on this particular point?
Resolution Review: While definitely an important goal to have, it’s something I’ve managed to do pretty well without needing additional motivation. I’ll just have to be my sweet, wonderful self through the coming year(s), and I should continue to get high marks in this area.

Overall: C- Not too shabby (although, my fiancee’s grade definitely helped shift my score higher), although far from the A I was hoping to have.  I’ll need to try better next year, and try to come up with some better resolutions to try my hand at achieving.