Money minded

Why is that everything I think about has a money value?  I grew up in a house were we always had food and clothes.  I was the type of person growing up where I would spend money as soon as I got it.  It was not until my high school senior year when I needed to have an elective class that it changed.

I chose a personal finance class. In all my classes in high school it was the best class I had ever taken.  The class taught us about debit cards, loans, savings accounts, insurance, taxes, and so much more.  It was a breath of fresh air from writing english papers, or doing science labs.  It was something I felt I had been jipped in education system for not spending more time with me on educating me about money and finances.  So after that class I finally realized how important it was to handle money in the correct manner. 

I think high schools and colleges should make it be mandatory to teach people about personal finance.  These classes will affect people for the rest of their lives. Either way it was the best class I took in high school and read the book Rich Dad, Poor Dad and it really opened my eyes about money.

$4 Gallon Gas

I really did not want to have to write another story on gas but I thought since gas is now $4 a gallon it must be talked about.  This is a historic event in America right now.

So the cost is extremely expensive and is causing consumers to shift their spending from other things to keep gas in the tank.  Here is the break down on all the hidden fees from a gallon of gas.

The estimate of $4 per Gallon breakdown:

Gas Stations. They only take about .8-.13 cents per gallon and that is not even profit. 
Taxes. The government takes roughly .40-.52 cents per gallon of gas and half of that goes to the Fed.
Transportation. Moving the gas from the refineries to the gas stations cost about .25-.35 per gallon.
Refining. Exxon, Valero, Chevron take about .30-.37 per gallon to turn the crude oil into gas.
Crude Oil.  This is the most expensive part of the process and cost on average $2.50-2.70 per gallon currently.

I think the part that bugs me the most is the government and their tax cut they get from it.  They tax my paycheck, my property, food, and everything I buy.  And for some reason they always need more money.  We need someone who can balance the books in this country. 

Things to ponder when buying a house

Something I have been watching recently has been the housing market. 
Here is my criteria when it comes to a purchasing a house:

The house must be affordable.  You can’t have the plan of getting rid of the house in 2-5 years.  The market may drop again and you need to make sure that you can afford the mortgage no matter how long you will be in it for.  If you have stretch to buy the house or are relying on two incomes to buy it then I would pass on it.

The Rate must be locked. Get a 15 year fixed or 30 year loan for the house.  Sometimes people do the interest only because they think they will get rid of it fast.  Before they know it they were in the house for 10-15 years just paying interest on the loan.  If it was fixed the house would have had some principal paid off on it.

Put 20% Down.  Investment or not you must put this amount down into your house.  This will allow you to avoid mortgage insurance and get you the best rates available from lenders.  I am sure people out there disagree with this but this is my opinion.

Location. Is this where you want to live?  Are you okay with the commute to work and other places?

A mortgage is not your only bill. Not only will a mortgage be your biggest bill but many people have to remember they have car payments, insurance, HOA fees, electric, cell phone, cable, food, and many more. So after you have all those bills can you still afford it?

Last minute double check.  Once you think you have found a place you want to buy do a final market analysis with your agent to see what else is out there in the same area for the price you are willing to pay.  You might find a better bang for the buck.

There are many more things to consider but these are a good start in the process of getting a new home.

Building a nest egg

Can you just save $5 a day?  It adds up and here is how.  For easy math let’s say there are 30 days average a month.  That would $150 for month in savings.  So if you do that for 12 months you will have $1800 for the year.  Let’s take it a step further and say you do it for 5 years you will have a total of $9,000. 10 years and you will have $18,000.  That is a easy way to put a few dollars in your savings and those numbers do not even include the interest you will be earning.  I can already see your nest egg beginning to grow. 

What if you do not have $5 a day to put away? Then start with $1 dollar.  Also if you are that tight on money you need to look at all your spending and see if you can cut out anywhere on the Starbucks runs, eating out, cable, and other luxerious items. 

Try it and see how it works for one month - Turn saving a little money into a habit!

Memorial Day

Today is not just a day that I have off of work.  It is a day to be thankful for all the soldiers in the United States who gave their life for our freedom.  Thank You to all the troops who have made sacrifices to serve and to all the troops who are currently serving in our country.