One in four (25 percent) say they would like to be less reliant on credit and debt in the future, 21 percent plan to keep a lid on spending on non-essentials, and 18 percent think they will save and invest more. Fifteen percent say they will now develop and stick to a financial plans.

This is an interesting development. If the recession really does result in a change to overall financial habits, then that could be seen as a definite silver lining. Now is a good time to take a look at your own financial habits and see what can be done about paying down debt, and reducing credit card use. And, of course, it always helps to make a financial plan. It would be even more encouraging to see more people decide to make use of financial planning.

Image source: JudeanPeoplesFront via Flickr

Post from: EveryJoe

Do You Plan to Change Financial Habits?

At any rate, here are some great personal finance posts from other bloggers. Enjoy your weekend!

• Roth IRA Conversion from Consumerism Commentary
• Americans To Spend Less This Holiday Season from Free From Broke
• The Personal Finance Toolbox from The Simple Dollar
• Tax Efficiency of Index Funds and ETFs from The Oblivious Investor
• Fifteen 5-Minute Tasks to Improve Your Finances from Fiscal Fizzle
• 15 Reasons Why You Should Ignore Your FICO Score from Money Ning
• 5 Tips to Avoid Overdraft Fees from My Dollar Plan
• 10 Questions To Test Your Credit Savvy from Moolanomy
• Diversify DRIP Cash Flow By Withdrawing Shares from Money Energy
• How to Save Money on Travel from Million Dollar Journey
• What IS Frugality? from Funny about Money
• How To Survive a Stock Market Crash from Good Financial Cents
• Rent vs Mortgage: Calculating Tangible and Intangible Costs from Frugal Dad
• Daily money Saving Tips That Really Add Up from My Two Dollars
• Achieve More By Having Smart Goals from Green Panda Treehouse
• Five Things That Don’t Affect Your Credit Score from Bible Money Matters
• Unemployed? Any Job is Better Than No Job from Cash Money Life

Image source: dichohecho via Flickr

Post from: EveryJoe

Saturday Staples: Personal Finance Reading

“Having a good wealth manager that understands your goals and dreams can help you build a plan around what you want,” Campbell said. He pointed out that many brokers just execute trades. They receive commissions and provide tips — on products that may be better for their pocketbooks than your long-term wealth.

“A fee-based financial planner, though, makes money based on how well you do financially,” Campbell said. “If your account value doubles, so does the financial planner’s pay. If your account value dips, so does the planner’s pay. An independent, fee-based financial planner has an interest in helping you reach your wealth potential.”

Fire Your Broker makes the same argument. The book is well organized, providing a clear case for choosing a financial planner, and the reasons for getting help with your financial management. He also makes a clear case against short-term stock picking in the book, and why it is important to think long-term in your planning and investing. One of the more interesting chapters in Fire Your Broker deals with account minimums.

Many fee-based financial planners have account minimums. Campbell argues that you should choose a planner with account minimums that reflect your account size. If you have a $500,000 account size, don’t go with a manager whose account minimum is $100,000. Choose an advisor with a higher account minimum — in the $300,000 to $500,000 range.

The book ends with a chapter on some of the dirty secrets of the financial industry, as well as a call to action for change in your financial life. It is an interesting and straightforward book, and one that can help you identify a good financial advisor. I found it an interesting read. While I’m not quite ready to go out and get a financial planner, I did find the book helpful.

At the close of our interview, Campbell offered these tips for choosing a financial planner or advisor:

• Choose a big picture person. “You want someone who looks at the whole picture, who goes beyond a broker giving soft tips and trading for you,” Campbell said.
• Consider someone who knows the basics of all aspects of financial planning. “If you get a CFP, you know you are getting someone who has had training in retirement, estate planning and college planning,” Campbell pointed out.
• Look at someone who understands diversity. “You have to realize that you can benefit from asset classes across the globe. … You’d think it silly to put 100% of your money in Japanese investments. But to the Japanese, it makes sense. Just as to us it makes sense to put everything in domestic investments. You have to think globally,” Cambell said.
• Find someone who is indepenedent. “You want a planner or a firm that does not represent any kind of investment or insurance company. You want someone with no personal stake in or bias toward certain products,” Campbell concluded.

Campbell recommends that you visit CFP.org or FINRA.org to research financial planners in your area, and to check for any violations or sanctions against planners. “Interestingly, before the whole thing blew up,” Campbell said, “there were red flags against Bernie Madoff. You really need to do your homework before you entrust your money with anyone.”

Post from: EveryJoe

Book Review: Fire Your Broker

August 7, 2009 –       Money 101: Knowing the Basics

September 4, 2009 – Kids & Money

October 2, 2009 –      What is Financial Planning?

November 6, 2009 –   Protecting What You Have

December 4, 2009 –    Investments: The Basics

January 8, 2010 –        Investments: Advanced Concepts

February 5, 2010 –       Managing Your 401(k)

March 5, 2010 –            Leaving a Legacy

April 2, 2010 –               Women and Money

May 6, 2010 –                Financial Planning and Small Business Owners

June 4, 2010 –               Your Retirement

July 1, 2010 –                 Financial Windfalls

Post from: EveryJoe

Personal Finance Series from NAPFA

Happily, there are a number of online financial planning tools that can help you figure out what you need to do to move forward on the path to financial freedom. Here are some of my favorite places to go when I need help making a personal finance plan:

• Bankrate.com calculators: If you are looking for calculators, this is the place to go. You can find out whether it is worth it to refinance, how long it will take to pay down debt and figure out how you can save more money.
• DebtGoal personalized debt reduction: I really like how this site helps you figure out a way to pay down debt. Create a personalized debt reduction plan, and see how quickly you can pay off debt in different scenarios.
• Instant Budget Make at CNN Money: This is a great way to figure out how you stack up with others in similar categories, and help you analyze your spending. I also really like the budget planning tools available at Mint.com.
• Vanguard financial planning tools: If you want help with creating an investing plan, or if you are trying to create a retirement plan or prepare for college, there are some great tools at Vanguard. I also really like this handy investment risk tolerance quiz that you can take at Rutgers. A must if you are planning to put together an investment portfolio that works for you.
• Life Happens insurance calculator: Figure out how much life insurance you are likely to need with this handy calculator. It comes from a non-profit together by a number of life insurance organizations.
• CreditKarma.com: Keep track of your credit score for free with help from Credit Karma. Also includes a neat Credit Card Simulator that can help you determine how certain financial decisions can affect your credit score.

Do you have any favorite online financial planning tools?

Post from: EveryJoe

Online Financial Planning Tools

At any rate, this is just more proof, I hope, that Americans are starting to look at their spending and saving habits and make some changes for the better. If anything good comes of the current financial crisis and recession, it will be that some Americans will do some introspection and change the way they think about money.

Do you think that this recession is causing people to re-evaluate their personal finances?

Post from: EveryJoe

State Lotteries Dropping in Popularity

Former President Ronald Reagan:

“Recession is when a neighbour loses his job. Depression is when you lose yours.”

Post from: EveryJoe

Ronald Reagan Offers Some Economic Definitions

I’ve heard a lot lately about the advisability of investing in index funds. What is an index fund?

If you’ve been reading advice about investing lately, you might have the same question. After all, many financial planning experts and investing analysts recommend index funds for long-term investing, as well as a good choice when it comes to riding out a down stock market.

An index fund is a mutual fund that follows a specific index. The S&P 500 Index is one of the more popular for this purpose. You basically invest in every company listed on an index. Other stock indexes that have funds include DJ Wilshire 5000 (the whole stock market), Russell 2000 (which consists of small companies) and the MSCI EAFE (European and Asian stocks).

These are considered low-maintenance  ways to invest. Index funds usually perform well, and often beat managed funds. Look for a low-cost index fund. Realize that while the returns won’t be anything really sexy, they will usually provide stable, reasonable returns that beat inflation.

If you want to ask a question, email the Piggy Bank.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. 

Post from: EveryJoe

Ask the Piggy Bank: What is An Index Fund?

Meanwhile, the homeowners can avoid the risk of more negative equity and eliminate the cost of owning and maintaining their home from their household budget. And since the property now belongs to an institution rather than another family, why not strip the fixtures and sell them for cash on your way out of town?

The home is now no more than another consumer item. Or perhaps an investment like those on the stock market. Cut your losses and leave. It seems like a rather irresponsible mode of financial planning, much like the craze to get rid of debt a few years ago by filing for bankruptcy.

Do you think foreclosure is a viable financial planning move?

Post from: EveryJoe

Financial Planning: Foreclosure?

Yet still, despite falling house prices, soaring energy prices, a credit crisis hitting the financial sector, and increasing concern about more violence in the Middle East, the amazingly resilient American consumer continues to pack malls, restaurants, highways, popular air routes, concerts, and sporting events, as if the bill for all these hijinks will never come due.

More, now than ever, is the time to start paying for what we want with the money that we have.

Post from: EveryJoe

What Are American Consumers THINKING?