Photo Credit: Gone But Not Forgotten Groceries

Jeff at Deliver Away Debt talked about Emergency Credit Cards, asking Is a credit card necessary for emergency purposes? For those in the debt payoff mode, Jeff’s answer was a strong “no.” And I agree. Jeff has done a remarkable job paying off his own debt and documented much of his progress at his blog. An inspiring story.

Boomer wrote How To Pay Off Your Mortgage Faster. If that’s your desire, go for it, but for reasons I put in my comments at Boomer and Echo, I’d avoid the Bi-Weekly mortgage.

From the department of really stupid tax mistakes, Joe Kristan posted Million dollar mortgages: when division = subtraction. A great warning about how choosing the wrong filing (joint vs marries filing separately) status can cost you dearly.

Generation X Finance article How Bartering and Trading Helps You Make Money and Help the Environment really intrigued me. There was no talk of tax consequences. As I understand it, the trades mentioned, even trading clothes for other clothes, is considered a taxable barter transaction. Hmm, I wonder if anyone will add a comment or question about that at Gen X.

And to wrap up this week, Hank Coleman wrote Being Too Frugal Can End Up Costing You Money. He offers instances of taking frugality too far, which really bring the point home. Good examples of when you don’t want to be that guy.

The current crop of graduates are in for a double whammy, a low employment rate for new grads, and the debt load accumulated during their schooling. I envy their youth, but the the job market they are entering.

Frugal Zeitgeist posted that the Top 1% Keep Getting Richer. I don’t doubt that. Under median income (about $50K for a family) saving is very difficult, and income is all from wages. Someone already worth tens of millions of dollars isn’t likely to be a W2 employee. They are making money from their wealth. “The rich get richer” is hardly a new phrase, it’s been true for a long time now.

Jeremy Vohwinkle at Generation X Finance answers the question My Employer Stopped Matching My 401k – Should I Still Contribute? An excellent analysis of this issue, and with so many companies reducing or eliminating the 401(k) match, it’s something many need to think about.

Getting back to basics, Green Panda asked Do You Balance Your Checkbook? It seems that many of his friends who don’t are paying overdraft fees that are adding up. Jane and I are paid every two weeks, and we don’t balance to a mailed statement, we balance with every check. The deposit goes in, and we quickly look at the balance the bank says we have, subtract the checks that haven’t cleared, and the numbers match. Right then, we look to see what bill will auto-pay before the next paycheck and make sure they’re covered. It’s actually faster and easier than it sounds.

And to wrap the week up, 6 Ways College Grads Can Save On Their First Apartment, a guest post at Planting Money Seeds. I’ll admit, I’m a sucker for a good list, and if you’re a recent grad or about to be, this is a list worth reading.

In the United States we celebrate Mother’s Day tomorrow. In Mexico, it was celebrated yesterday, pretty cool to have it fall during the week, I’d day. There was a time that the true test of the local phone companies was whether they could handle the traffic on Mother’s Day, as this is the highest phone use day of the year. Happy Mother’s Day to all the mom’s who are reading.

The larger issue for the poorest of this world is the lack of clean drinking water. Authors Peter Diamandis and Steven Kotler describe the large number of person-hours spent each day simply fetching water which isn’t always of good drinking quality. Dean Kamen, inventor of the Segway is currently working on a water purification device which can be powered from virtually any source of power and will produce 250 gallons of water per day, enough for 100 people. His target cost for this machine is sub $2000.  Even if you focus on the fact that the target market for these machines are making less than $10 per week, this one time expense of $20 per person will free up many hours of family time from the whole water fetching process. Add more of these systems and the issue of clean water for one’s crops start to be a non-issue.

The other technology that holds great promise continues to be solar power. For the parts of the world where there is no “grid,” it’s possible there may never be one. Just as there are parts of the world that skipped right over providing phone lines all over the place, instead just putting up cell towers, solar may be the next step in bringing electricity to the world. Where burning kerosene lamps is expensive, dangerous, and unhealthy, solar power can charge storage cells to extend the daylight into early evening, provide power for computers, and bring up the education level of the world’s poor. There is a direct correlation between improvements in education and health and the reduction in overpopulation. This book makes a great case for the potential to wipe out the pervasive global poverty within the next two generations.

Abundance runs 240 pages, and then another 100 of notes and references. It does an interesting job of projecting based on current science and the rate of progress we are experiencing. It borrows from, and complements my recolewction of Ray Kurzwell’s The Singularity is Near, another good read.

Car insurance isn’t just something that’s nice to have; it’s required by each of the 50 states if you want to operate a motor vehicle. For some, car insurance is a necessary evil; it’s an added expense on top of already-tight budgets. Other people recognize the value and protection that it provides, and don’t mind paying for it.
To make things even more complicated, insurance rates can vary greatly from one state to the next. Here’s a list of some of the most expensive states to insure your car:

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1. Louisiana. Year after year, Louisiana tends to be either #1 or #2 in terms of the most expensive states for car insurance. There are a couple of reasons why premiums are so high in the land of Jazz and Cajun food. First of all, jury trials in Louisiana are only available on claims of above $50,000. That means many insurers settle out of court, usually at $49,999. Add to the fact that Louisiana’s road infrastructure is one of the worst in the country, and you can begin to see why they’ve got insurance problems.
2. Michigan. Vying for the top spot is Michigan. The birthplace of the automobile is also one of the most expensive states to insure that automobile. Michigan has a mandatory requirement that auto insurance provide lifelong medical care for the injured parties in an accident, regardless of their own policy limits. This “Personal Injury Protection” requirement pushes prices into the stratosphere. Add in the high unemployment rate (Michigan has never fully recovered from the post-9/11 recession, and was even further devastated after the housing crisis) with so many uninsured motorists, and prices have remained high.
3. Oklahoma. Liability is a required coverage in the Panhandle State. The high liability minimums are required to cover bodily injury as well as property damage. In addition, the state’s insurers levy heavy penalties against those who allow their coverage to lapse, as well as severe penalties for driving without having a proof of insurance. These factors have pushed rates up steadily in the state for years.
4. Montana. This western state is pretty uptight about insurance overall. If you’re caught driving without insurance, you can get a three-month jail sentence. Do it several times and you can lose your license for good. In addition, Montana considers all new drivers as “high risk” – not just those who have multiple accidents in their history. New drivers can provide proof of having completed a driver’s education course to get a bit of a discount, but rates are still higher than in most other states.
5. California. The nationwide average for accidents that are caused by uninsured drivers is 14%. In California, a full third of accidents are caused by uninsured drivers. What that means is that drivers carry uninsured coverage, so that their insurance is going to make the payments regardless of who is at fault. This means that the rates in California continue to rise, at almost the rate that the number of residents does. It’s that growing population – one in eight Americans lives in California – and you wind up with millions of accidents and insurance claims in that state each year.
6. South Dakota. Like some of the other top states, South Dakota has some of the highest coverage minimums. Their bodily injury, accident liability, and property damage minimums are higher than all but two other states. This has shown a steady rise in premiums over the past several years.
7. New Mexico. New Mexico’s minimum coverages are fairly high, near those of South Dakota. Only their property damage minimum is less than South Dakotas. New Mexico is also one of the states that allows insurers to base your auto insurance premiums, in part, on your credit history. During tough economic times, credit histories get worse and insurance costs therefore increase – which is what’s happened in the past few years in New Mexico.

If you live in one of these states, it’s important that you do your research when you’re getting ready to buy a car. Find out which cars will cost you the most, and which ones will get you an insurance break.
You also need to talk to your insurer to find out what kinds of discounts are available. Often, you can realize substantial savings on your car insurance if you have multiple vehicles, multiple drivers on the policy, or if you bundle your auto insurance with other insurance policies.

Nick Simpson is Social Media Coordinator at Fred Loya Insurance. Fred Loya provides general car insurance as well as unique services catered specifically to customers in multiple states. Car insurance in Colorado and auto insurance in California are two areas where they have excelled in recent years.

At Savings Advice.com, Why You’re Likely To Be In A Higher Tax Bracket When You Retire. I humbly disagree. I like her writing. I like that she warns about the phantom rates retirees will see as a result of their social security benefits becoming taxable. I just don’t see a savings level high enough to support the notion that the average taxpayer is actually saving their way to a higher bracket. This prediction isn’t unique, in fact, it seems pretty widespread. Time to start gathering up the data and write an article of my own to support my position, that this will be the exception and not the rule.

Time is not money, and the Mighty Bargain Hunter shares his reasons why.  Along with a story of how a man with precious few months left seems to wasting that time.

Monevator explains The cyclically-adjusted P/E ratio (PE10 or Shiller PE). This ratio has such a successful predictive value of future market returns that many believe that PE10 makes a strong case for not buying and holding.

At My Retirement Blog Andy discussed Early Retirement and Social Security. I know, for most of you retirement is decades away, but for those starting to count the years to retirement, understanding social security is a must to have on your to-do list.

Len Penzo offers up another 100 word post, this time it’s 100 Words On: The Dumbest Place Where People Use Credit Cards. Len, I have to admit, when I saw the title, I thought “hookers,” and even though Len might agree that one shouldn’t pay for their prostitutes on credit, his article was a bit more mainstream. You might even have done it yourself.

Let’s wrap us this week’s reading with One Frugal Girl’s One Penny at a Time. She’s been selling on eBay for a time and wrote a bit about how much she’s accumulated.

I hope your Cinco de Mayo was all you hoped for.

I was reminded of when Jane was pregnant, and I told my father-in-law that I was thinking of getting her a present “Joe knocked me up and all I got was this lousy t-shirt” but she wouldn’t find that funny. He did, and we had a chuckle. The economy? I think it will take more than 4 years of Obama to fix the 8 years of Bush.

Where one strong mind by itself can work wonders, two, working in tandem, can work miracles. If the relationship is done right, joint partnerships have the potential to take your business over the top and deep into the black. But joint partnerships can be tricky if they aren’t handled right. Here are ten tips to help you create the magic of a joint partnership that truly flourishes.

1. Skills That Complement Each Other: Try to find a partner with skills that don’t overlap your own but instead complement them. If you prefer organization and accounting, look for a partner who will love meeting clients and being the face of the business. The most successful joint partnerships feature multiple individuals with unique sets of skills that complement each other and fit well together to create a complete whole. If you like being in control, bringing on board another person who likes being in control will only create conflict. Instead, find someone who is comfortable with allowing you to be in control.
2. Relatively Secure Financial Background: It is usually unwise to pair up with a partner who has a shaky financial background. Doing the bulk of the heavy financial lifting while your partner only seems to tag along for the ride can get old fast. Make sure your partner is able to contribute his share of the finances to help start up your joint enterprise and that he doesn’t have any glaring financial monsters in his past that may come to stand in the way of your business’ future success.
3. Equal Motivation: If you are a driven person, try to find a partner who is equally driven. Although there are exceptions, motivation is usually a quality that is hard to drum up if absent. If you find that you always have to drag a partner around by their hair or if you are always getting dragged around by a business partner who is more motivated than you are, your relationship and partnership will wear thin fast. Partner up with someone who has a similar amount of drive and enthusiasm as you, and you will both be happier.
4. Similar Goals: In much the same vein, the goals of your partner and yourself must be somewhere in the same universe in order to create a successful joint partnership. There are many different kinds of goals, but at least when it comes to business goals, it’s best to find a partner with whom you are able to find some common ground. As long as you both are on the same page as far as the direction in which you would like your business to go, varying individual goals can more easily be tolerated.
5. Shared Business Vision: Once you find a partner who has similar goals to yours, you must then make sure that they wish to go about accomplishing those goals in a similar manner. Two partners with similar goals and a similar vision for accomplishing those goals are practically unstoppable. Obviously you will both want your business to prosper, but if one of you wants to franchise and the other wants to sell the company to Microsoft, you may not be the best match for each other.
6. Mutual Trust: Trust is supremely important in any successful joint partnership. You can’t work with someone who you don’t feel you can trust. A lack of trust will only create fires in the workplace and roadblocks to the success of your company. The importance of the trust factor is why so many successful partnerships are made up of brothers and sisters or husbands and wives. People who trust each other implicitly make much better matches, work much better together, and have much more success as a partnership.
7. Job Roles: It’s important to define clear job roles for each member of the partnership so that nothing gets overlooked. It’s even a good idea to write down the roles that each partner will be expected to fulfil in order to maintain the highest degree of clarity. When you write down the responsibilities that each of you will be expected to perform, it helps to avoid frustration, disappointment, and the tragedy of crucial tasks falling through the cracks. Don’t operate under false assumptions about your partner or your business. Even if your partner is the primary salesperson, he may still expect you to bring in at least some business. When the job roles are clearly defined, each partner will then be accountable to each other and to themselves.
8. Strategy for Handling Disagreements: Even the most successful joint partnerships will eventually and occasionally have disagreements. Make sure that these don’t turn into arguments or grudges by setting in place from the beginning a strategy for handling disagreements. The best partnerships are those that handle frustrations and disagreements effectively, wisely, and without any feelings getting hurt. Tailor your strategy to your strengths and the strengths of your partner so that both of you can come out of disagreements having made the right choices and feeling closer to and more trusting of each other.
9. Communication: Often the only way to avoid bad feelings and disenchantment with your business partner is to have plenty of regular communication. If one or both of you is not the communicative type, it may be best to schedule regular times for communication so that the lines are forced to stay open. Having a communication session once a week or even once a month will allow you to bring up to your partner anything that may be on your heart about him. It will also allow him to address any issues he may have with you that he may be shy about bringing up on a regular business day. Don’t let your joint partnership deteriorate to the point that it becomes difficult to communicate with your partner, but schedule regular communication sessions right from the beginning.
10. Break-up Plan: Even if your business ends up lasting your entire lifetime, it’s still wise to draw up a separation plan right from the beginning just in case. A break-up plan for a business partnership is much like a prenuptial agreement for a marriage. It will help you to both be on the same page about what will happen in the event that one or both of you wishes to terminate his involvement in the joint partnership. A break-up plan can help to give both of you peace of mind about the business even when it is going through a rough spot, as you will have a firm exit and asset-division strategy in place.

Andy writes about managing the relationship with money for Finance Choices, a UK based website where users can save money with a cheap balance transfer deal or interest-free credit card.

From the very frugal Debt Sucks Cheap Scooter Repair With Plasti Dip. I’ve seen that stuff, but never bought a can. It may be time for me to give it a shot, I have a bunch of stuff I’d like plastic-coated.

Paula at Afford Anything asks How Much Money Is “A Lot”? I suppose it’s all relative, but it’s more than we start out thinking.

At Master Your Card, Using Credit Cards to Pay Insurance Premiums: Pros and Cons. Interesting article, but it all comes down to whether you are in the group that pays in full or allows charges to carry month to month and cost you interest. My simple rule? If you don’t have the money to pay in full, don’t buy the item. Insurance should be budgeted and made a top priority.

And to wrap up another great week of reading, at Graduated Learning, Stephanie wrote about Walk for Hunger: My first fitness+fundraising adventure. It was slow going at first, but after a few tweets and my pledging to match donations the first week, Stephanie has passed the $500 pledge level, let’s see  if we can help her hit $1000 by the day of the walk (Sunday May 6th). Good luck, Stephanie!