I want to make you aware of a few deals that I’ve been made aware of. It’s always nice to save a couple bucks here and there, so why not try it with some of these.

Restaurant.comAs you probably know by now, I’m a big fan of this site where you buy gift certificates for a reduced price ($25 for $10 and $10 for $3). Well, now you can get an extra 50% off the already cheap price. That means a $25 gift certificate for only $5 or a $10 gift certificate for just $1.50. All you have to do is enter the discount code SUMMER and hit recalculated total. If you haven’t yet tried this site out, now is the perfect time. But, you’ve got to act pretty quick. The extra 50% off is only good through Sunday, June 24th. You only have to purchase it by the 24th though, you can use it whenever.

GoDaddy.com This site is one of the largest and most recognized sites for purchasing domain names. It’s also where I just recently picked up my domain name. Well, now they’re having a sale where you can register a domain name for just $6.95 instead of the usual $8.95. If you’ve been putting it off, now is the time to get that personal domain name. Just click the link here, and you’re on your way. Also, if you’re still using the (dot) blogspot extension, all you have to do is get the domain name and blogger will still host it for you for free.

ING Direct - High Yield Savings with 4.50% annual percentage yield!I would also urge you (if you haven’t already) to set up a high yield savings account where you can hold your emergency fund. Unlike a normal money market fund, this account is FDIC insured up to $100,000 so you’re assured of having your money when and if you need it. Also, if you’re willing and able to start your account with at least $250, send me an email with your name and email address. I can then send you a link through which you’ll receive $25 just for opening the account (Full Disclosure: I will also get $10 for the referral).

These are a few really great offers. If one or all of them are right for you, then go ahead and take advantage of them. I will also say that the provided links are affiliate links which help to keep this site up and running. Thanks for reading and thanks for your support.

There are so many different financial products out there to choose from these days. There are brick and mortar banks, internet banks, national banks, local banks, standard brokerage firms, online brokerage firms, investment banks, credit card companies, and the list goes on. With all these options to choose from, you could spend a lot of time just trying to decide what products are right for you.

I’m a big believer in knowing what you’re getting yourself into and reading the fine print. I do, however, think that there is a limit to this. You can’t spend all your time researching to the point that you never actually reach a decision and move forward.

Let’s take a basic money market account for example. You can get an account at your local bank, brokerage firm, financial planner, or from an internet bank such as ING (see link to the right). The interest rates will vary from provider to provider and they are also continually changing. Some people have looked at all these accounts many times but are still unsure which one’s the best. In the meantime, their money is sitting in a standard savings account earning next to nothing.

I know I make this point a lot, but doing something is usually better than nothing. Pick an account that meets your needs and don’t worry if there might be something better out there. If you happen to stumble across another option that would be better for you, there’s nothing saying that you can’t switch to it.

The same thing goes for credit cards. There are so many options in this arena and yes, some may be marginally better than the next, but you may as well make a choice that will meet your needs and move on with life.

You also have to realize that a lot of the options that are available today might not even be around in the next 10 years or so. No decision is really final when it comes to your finances. Balances can be moved, rolled over, transferred, or what have you depending on what your then current situation requires.

Don’t misunderstand me, though; it’s important to understand what you’re getting yourself into, but don’t fall into the trap of “analysis paralysis”. Eventually, you need to make a decision and sooner can be better than later.

We all know that credit card debt is some of the worst kind. So many people either have struggled or are struggling with it. In either case, credit cards use is widespread and is in some cases almost a necessity. If you’re going to use credit cards, you need to realize that you don’t always have to just accept the terms that the issuer provides. A credit card is a financial product and you can negotiate the terms.

Whether you carry a balance on your cards or not, you can call the company and ask for certain terms to be changed. You’ll want to request that your interest rate be lowered. When you ask this, make sure that you ask for a specific rate that you would like to have it lowered to, like 6%. They may not immediately give you this rate, but you’ll never know until you ask. Remember, you have the final trump card in your hand because you can cancel the card at anytime (this may not be an option for you if you have a balance, but you could transfer it to a lower rate card).

You can also call to have your credit limit raised or lowered. Some people want to have higher limits because it gives them easy access to funds in case of an emergency. Others would like to maintain a lower limit because of the temptation that a large limit provides. Whatever you’d prefer, all you need to do is call the company and request it. Again you’ll never know until you ask.

What’s most important, though, is to realize that you’re dealing with YOUR finances and you shouldn’t let a credit card company take charge of them. If there’s something you’d rather have or like to change, take a moments and ask for it.

If you work for a company, no matter what size, it’s worth finding out whether or not the company offers a 401k plan. Most larger corporations will offer one of these plans and many smaller companies are also beginning to offer them. In order to find out, all you need to do is contact your companies Human Resources department. If your company has a benefits website, you’ll also be able to find more information there. If you don’t like either of these options, just try asking a co-worker. Some how you’ll be able to find out not only whether a 401k is available to you but how it works and what the specific terms are.

Once you find out that you have the option available, there are a few key things you’ll want to know about it. First of all, does your employer match any portion of your contributions? When you elect to contribute to a 401k, you decide what percentage of your salary you will contribute. The company will, at its discretion, match your contributions up to a certain percentage. They might not match you dollar for dollar; sometimes the match is something like 50 cents for every dollar. Whatever the match is, it’s a guaranteed instantaneous return on your money. This is why you’ll always here financial gurus recommending that you always contribute at least the amount that it takes to get the full company match.

You’ll also want to know what investment options are available to you in the plan. Most commonly, you’ll have the choice between a select number of mutual funds and your own companies’ stock. If it seems too complicated or a little intimidating, you shouldn’t let this part deter you from enrolling in the plan to begin with. There is usually a simple money market fund or other stable investment option that you can put your money until you decide how you’d ultimately like to invest your funds.

The most important thing here is to actually make the move and begin your 401k. You don’t have to begin by contributing a lot at first, but start contributing something, especially if your employer is willing to match any portion of your funds. Don’t worry if you don’t think you’ll be with your employer for much longer. You can take the funds with you when you leave. Whatever the hold up is, there’s no better time than now to research and start your 401k plan.

Conventional wisdom tells us to save for a down payment when purchasing a home. Twenty percent happens to be the magic number. In today’s world, however, this just isn’t the norm. Between the over-inflated housing prices and America’s scanty savings rates, many are finding that they have to explore other options.

If you’re going to buy a house without putting any money down (or less than 20%), there are two main options. You can get a single loan of up to 100% percent of the purchase price of the home, in which case you’ll be forced to pay Private Mortgage Insurance, or PMI. You could also get a loan for 80% of the purchase price and another piggy back loan for the other 20%.

So which choice is the better choice? Or is one better than the other?

With the first option, you’ve got one loan that’s typically at a competitive interest rate that keeps the payment low. The downside to this option is that the lender will make you pay an insurance premium called Private Mortgage Insurance. The policy insures the lender against a default because they’re lending more than 80% of the value of the home. It has no benefit to you, and is the reason your payment will be higher.

If you choose the second option, you won’t have to pay for PMI. What you’re essentially doing is getting a loan for your 20% down payment and financing the other 80% separately. This would seem like the better option except that the smaller loan, or piggy back loan, is financed at a higher interest rate. This will also serve to raise the payment amount.

As far as your monthly payment is concerned there is no clear winner between these two options. It’s usually a good idea to get a quote for both of these options.

It used to be that only the mortgage interest was tax deductible and you couldn’t deduct your PMI payment. This has changed, however, as of 2007. Now you can also deduct your Private Mortgage Insurance payments. So, it would seem that both are viable options.

I, however, still prefer to go with the 80/20 loan split as long as the monthly payments are comparable. With this option you’re able to lower your monthly payment once you pay off the smaller of the two loans.

If you’ve got a loan with PMI, it’s a more involved process in order to remove it and lower your payment. You’re able to remove your PMI payments once you’ve payed the loan down to 80%, but it doesn’t just automatically get removed usually until the loan is down to 78%. If you believe that you’ve already got 20% equity in your home at some point then you’ll have to go through the process of ordering an appraisal and proving to the lender that you indeed have 20% equity.

While these two options are different in how they work, they provide very similar outcomes. The choice between them is then left up to your personal choice and what will work best for your particular situation. As I stated before, it’s best to get a quote for both scenarios. You can then compare the two options and make an informed decision.

What are your thoughts?

The insurance industry is enormous and can be quite intimidating. Insurance is being sold for almost anything and everything you can imagine. Determining what’s right for you can be a very daunting task. Hopefully I’ll be able to shed some light on the subject.

First of all, insurance is a product. There are companies that sell it and consumers that buy it. Don’t falsely believe that insurance companies are doing some sort of charity work by offering a huge payout in exchange for small monthly payments. Insurance companies are in the business of making money and they do it very well.

This doesn’t mean that you shouldn’t ever buy insurance. You just need to determine what’s right for you, and this isn’t necessarily what a company may say is right for you. We need to understand what the purpose of insurance is.

Insurance should be bought to protect you against a calamity that would otherwise be financially devastating.

Let’s take a few examples and hold them up against this criteria.

One type of insurance I see advertised is a life insurance policy for children and even babies. The attempt here is to play on your emotions because you love your children right? If (heaven forbid) you were to lose a child, it would be devastating emotionally, but is a cool half million going make it better? A family (usually) doesn’t rely on a child’s income to maintain their standard of living, so why would you need to insure them?

Now let’s examine auto insurance. A certain level of coverage is required by law, but this is mainly to cover the other party in case of an accident being your fault. The other options are exactly that, options. If having your car totaled in an accident would devastate you financially, there’s a case for more insurance. If you would be unable to come up with $100 to repair your car, you’d probably want a really low deductible, but you’d be paying higher premiums. Once you have an emergency fund, you should be able to handle a much higher deductible such as $1,000 or even $2500. This can significantly lower your premiums.

This same line of reasoning can apply to adult life insurance. Say you currently have a 20 year term policy. After actively saving and investing, when the term is up, you don’t necessarily need another insurance policy. If you’ve already got a couple hundred thousand to a million stashed away, would your loved ones be financially strapped if you were to pass away unexpectedly?

I realize that every situation is unique, but some thought should be put into what amount and type of insurance you need, if any at all. Also, realize that situations change over time and what was once right, may not be anymore. Take a look at your current policies and see if you could save some money by raising the deductibles. Maybe there are policies that you no longer need at all. It can’t hurt to review them from time to time.

I’d like to respond to a reader question that I received as an anonymous comment to a previous post entitled Starting my Roth IRA. Here’s the question:

“Any advice for newbies on how to pick what you’ll invest in with the IRA, especially for those not savvy with stocks, etc.?”

First of all I think the reader mentions a very important aspect of an IRA. A Roth IRA (or a Traditional IRA) is not an investment in and of itself. You may hear someone say that you should open up a Roth IRA because they have great returns. You have to remember that the IRA doesn’t produce returns; the investments IN the IRA produce these returns. An IRA is like a basket which holds these investments.

Now, on to what investments to pick for your IRA.

Realize up front that your IRA may not be your only investment account. Even though you may want a well diversified portfolio, your IRA doesn’t have to be. You may have a 401k or a 403b at work. You may also have a money market account that you use as an emergency fund.

You aren’t more diversified if you hold the same mutual funds in your IRA as you do in your 401k. The same applies to holding cash in your IRA if you already have a cash reserve elsewhere. These aren’t the only scenarios, but I’m illustrating a point. You may want to figure out what you’re ideal portfolio would consist of, see what you already have, and begin to fill in the blanks.

I would make sure that I had a sizeable amount of cash in an emergency fund. I would hold this cash in a money market account outside of an IRA, but read my post, Best of the Roth IRA, and you may decide to hold it inside.

Mutual funds are a great way to provide instant diversification because you’re immediately invested in a wide array of stocks or bonds. ETFs or Exchange Traded Funds are very similar but don’t have some of the fees that mutual funds will usually have. You may choose index funds because you want to match the returns of the general market as a whole. I choose to hold these types of investments in a 401k because my only options are a handful of funds.

After mutual funds and ETFs, you can move on to individual stocks and bonds. I would start with solid blue chip companies that pay a dividend. Start by looking at the 30 companies that make up the Dow Jones. As you begin accumulating more and more stocks, you’ll be able to build off of this solid foundation. Essentially you’re creating your own personal “fund” at this point.

I choose to buy individual stocks in my Roth IRA because I already have cash in a money market and mutual funds in a 401k.

It may seem very daunting at first as you decide what to specifically put in your Roth IRA, but as you look into some of the different options, you’ll be amazed at how much you’ll learn so quickly. Also, once you set up your account, say, with an online brokerage such as Scottrade, you’ll have access to a lot of information that can help you decide what to choose.

I hope all this helps. There’s no one right answer, and everyone’s situation is different. If you still have questions, feel free to email me with more information about your specific situation and I’ll help out as best I can.