Money on the mind
One of the first topics Gov. Rod Blagojevich tackled in his State of the State address today was the economy.
"Today, as we focus on what I believe we must do to strengthen the economy, we must never lose sight of the fact that it is all about families and our ability to help them build a better, more secure life," Blagojevich said.
While things have gotten pretty messy lately in the state government, I think the governor nailed this one. Money is an emotional issue - for families, for singles, for almost every adult I know. And with the threat of a recession hanging over our heads, it's an issue people seem to be talking and writing about a lot lately.
And while family finance is important for many, I went hunting for resources for people like me - young, single people who are more worried about paying off their own degrees than how to save for an eventual child's college.
I found some pretty good advice along the way. Here's some:
"Newly-minted adults tend to overestimate how far their paychecks will go and blow too much on apartments, cars, wardrobes, eating out and all the other trappings of grown-up life," wrote Liz Pulliam Weston over at MSN Money. "A smarter approach: keep living like a broke college student for a few more years. You'll get a better handle on what you can really afford and be able to free up more money for real adult goals, like retirement and health insurance."
That's not what many young people want to hear, but maybe that's necessary when it comes to money. Weston also gave some scary statistics in her story, including the fact that one out of four families headed by people between ages 20 to 29 owe more money than the value of the things they own, and their median net worth is $7,901. That doesn't speak well for my generation.
But G.E. Miller of 20somethingfinance.com believes that there's no uniform way to ensure 20-somethings get their financial stuff together.
"What I have learned is that there is no glass slipper for everyone when it comes to financial planning. Circumstances change, people change," G.E. Miller, who's devoted an entire blog to compiling information for 20-somethings hoping to get a rein on personal finance. He suggests readers think carefully about how changing careers, marriage, divorce, children and even medical emergencies will affect their finance.
Luckily, he has a few simple solutions for making it through these events.
"Real Simple" magazine has some tools to help anyone - not just young people - figure out how to get his or her finances together. The March 2008 issue had an extensive section about money and the worries associated with it. The magazine's Web site has plenty of interactive tools to help readers out, including tips for finding free stuff (who doesn't love that?) and worksheets for recording your spending.
When you figure out where your money is going, financial journalist Barbara Whelehan suggests you re-route some of that into your retirement fund. For young people, time is on our side, she says.
"Believe it or not, if you're lucky, one day you'll find you are older, so it's best to be prepared. Setting up automatic contributions to either one of these retirement vehicles at a young age will help you build wealth painlessly," Whelehan suggested in one of many financial tips.
And continuing in the trend of giving straight-talk to young people struggling with finance, The New York Times' Damon Darlin has written a couple of columns touting advice he claims college graduates don't want to hear. His second edition included some valuable information and calculations about spending.
He came up with a list of pretty good suggestions for young people. I'll leave you with his thoughts:
- Never pay a real estate agent a 6 percent commission.
- Buy used things, except maybe used tires.
- Get on the do-not-call list and other do-not-solicit lists so you can't be tempted.
- Watch infomercials for their entertainment value only.
- Know what your credit reports say, but don't pay for that knowledge: go to www.annualcreditreport.com to get them.
- Consolidate your cable, phone and Internet service to get the best deal.
- Resist the lunacy of buying premium products like $2,000-a-pound chocolates.
- Lose weight. Carrying extra pounds costs tens of thousands of dollars over a lifetime.
- Do not use your home as a piggy bank if home prices are flat or going down or if interest rates are rising.
- Enroll in a 401(k) at work immediately.
- Postpone buying high-tech products like PCs, digital cameras and high-definition TVs for as long as possible. And then buy after the selling season or buy older technology just as a new technology comes along.
- And, I'm sorry, I'm really serious about this last one: make your own coffee.