At Suburban Dollar, Kyle reminds us that Base Salary Isn’t Everything. Between, 401(k) match, pension (perhaps), and a  nice list of other benefits, we can see that salary is just one component of our compensation.

Debt Hawk takes another crack at the Flat Tax. I’m always interested in reading about this when the topic is raised, unfortunately, I think it’s very unlikely for it to ever pass. No flat tax in my future.

On My Super-Charged Life I read A Debt Free Manifesto – 10 Common Sense Reasons To Live Debt Free. Just when I think I’ve heard every spin on why one should avoid debt, another post comes along with a new twist. Good reading.

I saw an article at Bankrate asking Could you be saving too much? It quotes Harvard University economist David Laibson as saying, “About 10 percent of the population is accumulating too much retirement savings in the sense that they could have saved significantly less and still retired with enough resources to continue in the lifestyle they enjoyed during their working life.” I tried to find other citations from Prof Laibson, with no success. I find such unsubstantiated generalities with no link to any data to be curious. I’d bet that in any given group 3/4 believe themselves to be above average. Are this many people really over-saving? I doubt it.

In a view that’s the exact opposite of the above, Free Money Finance is convinced that Americans [are] Not Ready for Retirement. I agree that most of us are not going to be ready, the risk of over-saving is one that few need to worry about.

Adam Baker now staff writing at Get Rich Slowly, wrote about The Curse of a Big-Win Mentality. As I’ve come to appreciate, Adam once again offers an interesting spin on the the idea that one needs to take advantage of small wins as well as the big. He suggests that balance is key, not ignoring one for other.

And last, for today, 7 Tips to Achieve Retirement Success from Redeeming Riches. The post starts by reminding us that retirement is a marathon race, not a sprint, and the post continues with advice to help keep you on a path toward long term success.

Have a great week ahead.
Joe

• PF Bloggers' Weekly Roundup
• This week's Best PF Blog reading
• More Roth Lovin'
• This past week's blog reading
• Good Reading This Week

• Debt success stories
• Where to go to Learn How to Blog
• Corporate Barbarian Links: Backbreaking Work Edition
• Blogging Away Debt has posted Carnival #116
• Bragging and Blogging

Enjoy the weekend!
Joe

• More on the Recession
• Time to Hit the Beach
• I did not forget to post today.
• Another Look at Variable Annuities
• Some Delicious Links

The Black Friday Edition

Is it that time already? Only three weeks and it’s Black Friday, the day after Thanksgiving and the official beginning of the holiday shopping season. The name of this day has changed over time, but it seems to have settled on “Being in the Black” as in “profitable.” For the consumer, it’s come to mean a day of shopping madness, getting up before the sun rises, and heading to the store with mobs looking to grab a bargain.

I have mixed thoughts regarding this day. A bargain for something you don’t need and won’t use or give as a present is hardly a bargain. Do you really need a new _____ ? (fill in the blank for yourself.) On the other hand, if you’ve held off on replacing a really broken electronic device, or know now what gifts you’re planning to search for for the holidays, you may find some savings to be had. I found a few years back that some stores will refund the price difference if you buy an item the week prior to Black Friday and go in on that day presenting your receipt. This at least saves you the risk of running into a sold out item.

If the whole idea of chasing down a bargain on this day appeals to you, try to plan ahead, there are a number of web sites that manage to get the BF ads in advance so you can figure out your best strategy.

• Retail Me Not
• Black Friday.com
• The Black Friday.com (not to be confused with….)
• Black Friday.net
• Black Friday at Gotta Deal
  
• Black Friday.FM
• Black Friday Ads
• Black Friday.info

I wish you well on your Black Friday adventures, let me know what bargain (if any) you bought.

Joe

• Time to Hit the Beach
• A CyberMonday Deal
• This past week's blog reading
• Reading other PF bloggers
• A Brilliant Cartoon Saturday

• It's About Time - The 2006 Target Black Friday Ad
• The 8 Minutes in the Morning Diet
• Lowe’s (NYSE: LOW) and Sears (NASDAQ:SHLD) Black Friday Ads Released
• Black Friday Ads - Where is Target and ToysRUs?
• Second Black Friday: Will (or Did) You Shop?

What do you do? Save money for an emergency, when rates on savings are now well below 1%, or pay off the debt, especially credit card debt which can be at or above 30% per year?

Two schools of thought, one vocal one suggesting it’s irresponsible to forgo an emergency fund, the other, telling us to kill that debt ASAP. One well known advocate in the “emergency fund camp” is Dave Ramsey. He advocates saving a $1000 emergency fund and not rely on your credit cards for an emergency. This may sound nice, but I’ll suggest you look at this a different way. When you owe money, the next dollar you’d put to another use is costing you the highest rate you pay. So if your credit cards range from 12% to 24%, and your payoff plan has 4 years to go, that $1,000 sitting in the emergency fund earning you nothing is really costing you nearly $2000 by the time the last $1000 is paid off. A cumulative 100% interest. (Get a calculator and multiply 1.18*1.18*1.18*1.18 for four years’ interest.) During this time of going after your debt with a vengeance,  you should carefully monitor your available credit, and make sure you have enough credit to get you through a potential emergency. Every individual has a unique situation, so the exact cost or savings will be different for you. The goal is the same, to stop paying interest and start earning it.

• Money Merge Account Analysis Pt 10
• A VA to consider
• Credit Card due date redux
• Debt Snowballs
• Money Merge Account Analysis Pt 8

• We Don't Need No Stinking Bailout Plan
• Seven pairs of easily confused money terms
• Investing the Easy Way
• MonaVie vs. an Apple
• Mrs. Micah’s Financial Overview of August

I’ve written about Evernote, the software that you run on your computers, phone, etc to keep track of your stuff. Whatever documents you want to be able to access from anywhere with search capability. One feature I struggled with was the ability to scan right into the application. I had seen ads for ScanSnap by Fujitsu that lets you do this, but as I already have an HP Officejet, I was hoping that I could set it up to scan into Evernote without having to copy, paste, or import. Now, success. For those who aren’t aware, I am on a late model Macintosh, an MDD Dual core G4 PowerMac to be more specific. The HP is an Officejet J6480, a model recently discontinued, but I’m sure the process would be similar on current models.

First, open HP device manager (search for it if it’s not within the HP folder among your applications), and go to the information and settings icon and choose Scan Preferences.

Next, enter Evernote into the destination name, browse to find the Evernote application, and choose JPEG as document format. Hit Finish, and you should be all set.

Now, when you press “Scan To” (toward the left on my printer, not shown here), the menu with offer you Evernote as a choice of destinations. You can now scan a document directly to Evernote without any additional steps.

• Credit Card deals a Ripoff?
• Free; The Future of a Radical Price
• A VA to consider
• Mortgage Rates Bottoming?
• Mortgage 101

• Top 10 Selection Criteria for Outsourced Electronic Medical Billing Software as a Service (SaaS)
• Building Security Into Your Organization's Web Applications To Begin With
• Tips For Advertising on the Google Local Business Center
• Ultimate Twitter Resource Site
• Canonical Domain: SEO Advice From Internet Marketing Indonesia Blog

This week, I challenged myself to read PF blogs I hadn’t posted about before, finding some new (to me) talent.

Go To Retirement wrote Calculating a Retirement Income Replacement Ratio in which My GoTo makes a great case that the 70-80% rule of thumb is not accurate, and needs serious rethinking. He describes why the rate is higher for lower income people but drops below that 70% at higher incomes.

Ron at the Wisdom Journal asks if there’s No Such Thing As Good Debt? Given the current state of the economy and insecurity regarding jobs, I understand and respect the anti-debt movement. This post offered another analysis leading to that conclusion.

Richer by the Day offers a book review of one my favorite personal finance authors, Dr Thomas Stanley. His latest installment in his Millionaire series is titled Stop Acting Rich … And Start Living Like a Real Millionaire. Mike’s summary is enough to make anyone want to read the book in full, and understand its lesson, that the habits associated with being rich are the same habits most rich people avoid. The fancy cars, premium brands etc, all are habits that keep us from accumulating real wealth.

Another candidate for my List of Lists is 23 Things Beginners Absolutely Must Know About Saving for Retirement. David at Money Under 30 goes through the Topics of Retirement Saving Basics, Matching and Vesting, Rollovers and Withdrawals, and Choosing Your Investments with 23 tidbits of advice in all. An excellent post to bookmark for a repeat visit.

No Credit Needed posts How A Silly Little Experiment Helped Me Get Out Of Debt, offering his story of how a daily extra $5 paid to his credit card got him moving to eliminate his debt. Whatever works for you is what you should do. Over the years I’ve become more open to any ‘out of the box’ ideas that help people get ahead on their debt repayment or savings goals.

Last, a frugal post from Steadfast Finance, Restaurant Meals You Can Make at Home For Half the Price, recipes include Chicken Parmesan, Sweet Potato Salad, Roast Pork Tenderloin, and Southern Louisiana style Jambalaya. Nothing like eating well at home and saving some bucks.

Have a great week.

Joe

• Another Fellow Blogger Roundup
• Another good week of PF blog reading
• Good Financial Reading This Week
• 401(k) Loan bad for your (financial) health?
• Another Great Week Reading My Fellow PF Bloggers

• PF Blog Spotlight - The Simple Dollar
• FICO Scores Can Hurt Your Job Search
• Ways to Improve Blog Traffic
• Which Personal Finance Guru Would I Recommend?
• Automatic Finances has posted the Carnival

Sad to say, our collective memory appears to be getting shorter, back to the same bad habits.

Joe

• Top Ten Signs You Have a Bad Bank
• Innumerate? Bring me a beer!
• Changes to the Blog
• A DVY update
• Upcoming Feature Articles

• Getting My Ex Back - 5 Techniques That Work!
• How to Go Into Debt to Get Out of Debt
• New Search Engine With Human Guides
• Rootsweb Gets A New Address
• Learning to Play the Clarinet

Waste. It really is an ugly word. We waste food, money, time, electricity, gas, and countless other things every day of our lives.

Over the next week, why not pay a bit of extra attention to how you can avoid waste and save some money along the way:

• Food – when eating out, don’t be embarrassed to ask for a ‘doggie bag’ and have the leftovers for another meal
• Food – at home, serve smaller portions, so no extra on the plate goes into the trash, if you’re still hungry have seconds.
• Electricity – in my house this is a sore subject, I constantly go upstairs to find the lights all on, but my wife and daughter still on the first floor. One bulb seems like nothing, but do the math and it really adds up.
• Gas – How often are you waiting for a spouse or child to come out of school, a store, a friend’s house, and for whatever reason, the engine is still running? Break this habit now. You can stop the engine and keep the radio on if you wish without killing the battery.
• Time – I’ve seen advice suggesting that when going grocery shopping, making and sticking to a list will save you money. Planning further so you stop at the grocery store to or from work will save time and gas. For me, the ride to the supermarket is 10 minutes each way, but I pass it on the way home so stopping while out is 20 minutes I gain.
• Water – No, I won’t suggest to stop flushing. But, when brushing your teeth or washing dishes, that water running is costing you. Letting water run down the drain to warm it up or get cold water is wasteful.
• Space – look around your house. Are there areas of clutter? The fact that it’s occupying space that you can use for something better means it’s costing you. Maybe not dollars and cents, but in its alternate, more enjoyable use.
• Anger – A bit of a stretch, perhaps, but anger often wastes. It wastes your attention, distracting you from things you can do to move forward in your life. Unfortunately, we often can’t just step back and change the direction our mind is going. Too bad.

Where else can you start to eliminate waste from your life?
Joe

• Swapping Mutual Funds For ETFs
• Moral Hazard
• The Alternative Energy Bandwagon
• My Weekly PF Blogger Roundup
• My Blog Reading This Week

• 9 Weekend Home Projects That Will Save You Money
• 16 ways your iPhone can save you money
• Simple Energy Solutions That Save Big Money
• Solar Lights: The Latest Technology That Saves You Money
• How to Save Money on Food Expenses Even if You Can’t Cook

When it comes to finance there are few issues that are black and white, right or wrong. This makes it tough for anyone answering a question but unable to draw out the further details needed to give the topic an in depth review. Often it comes down to numbers vs feelings. It gets even tougher when a reader writes “but the numbers show that those who feel good about their results…..”

That said, today I’d like to offer my take on the “pay off debt or invest” debate. When the choice is between paying off high interest debt or saving, even in an IRA, I agree, pay the debt. As we slide toward paying off that 6% student loan or 5% mortgage, the discussion gets more gray. Not to make this a Dave (Ramsey) post, but I’ve heard him as well as many financial bloggers suggest to pass on even a matched 401(k) until the debt is paid off. Not so fast, let’s do some math, I promise to keep it pretty short and simple. You work for an employer who matches the first 5% you put in, dollar for dollar. You are in the 25% bracket. To put $2000 in the 401(k) costs you $1500. Your employer matches it, and you have $4000 in the account. In 12 months, the $1500 you didn’t pay off is now up to $1800. You now borrow out half that $4000 at 6% interest pay off the $1800 and an extra $200. I understand the warnings against borrowing 401(k) money, and for the most part, agree. In this case however, if you lose your job, you have $2700 (after 25% tax and 10% penalty). Sure, you owe the 401(k) loan $2000, but you still pocket an extra $700 and knocked off $1700 in credit card debt. Grabbing that money is a low risk proposition.

We are told by the motivational guys to plan for success, not failure, right? You are going to stay employed. Your employer keeps matching your deposits. After 5 years, you have $20,000 deposited (I’ll ignore growth for now) which only cost you $7500 out of pocket, and you have $10,000 in a low interest 401(k) loan instead of high interest credit card debt. A 15% difference in interest is enough to keep funding the account and help you continue hacking away at the debt. I’m sure it’s a great feeling to pay off that last credit card bill, no doubt. Imagine how much better you’d feel also having a nice balance growing in your retirement account, funded with a combination of the employer’s money and the interest you saved by shifting from the cards to the lower interest 401(k) loan.  It may take some month longer, depending on the amounts owed, their rates, and what you are able to pay toward the debt, but keep your eye on the big picture, the sum of the 401(k) balance minus the debt owed. This method will see your net balance rise fastest.

Of course, this takes discipline. You first need to get your spending under control and be committed to putting as much toward your debt as possible. Don’t confuse this idea with the suggestion that you take a loan from your 401(k) separate from the deposit and match. The steps I describe are the way to avoid missing the match which is free money, and at no point do you owe more than the match you are grabbing.

Disclaimer – If you really believe you’ll feel better paying off three 6-8% credit cards with $1,000 balances instead of applying that $3,000 to the 24% card with a $10,000 balance, then this advice may not be for you. And that’s ok, I hope my other posts give you ideas you can better apply to your finances.

Joe

• Zero Interest Faux Pas
• Money Merge Account Analysis Pt 14
• Money Merge Account Analysis Pt 20
• This past week's blog reading
• Another Fellow Blogger Roundup

• Reduce your debt with person to person loans?
• Is It Ok to Consolidate Your Debt Before Paying It Off?
• Card Issuers Cut Limits, Lowering FICO Scores
• Ben Bernanke Wants Personal Finance Blogs Out Of Business!
• Pay your bills using Electric Orange Bill Pay and you could win $1,000

In May, I wrote about CARD, the  Credit Card Accountability, Responsibility, and Disclosure Act of 2009. In that post I wrote about the potential unintended consequences of such legislation. Only five months later and we have it already. Latest bank fee is for paying off credit card on time every month, was just published by USA today, and confirms my cynical nature isn’t without reason.
It seems that to counter lost revenue elsewhere, card issuers are starting to add annual fees ranging from $29 to $99 for Bank of America customers as an example. The article goes on to share Citigroup’s plan to add fees to customers who don’t charge more than $2,400 per year.
This wasn’t unexpected, but it’s also avoidable. If you have a good credit rating and are hit with such a fee, call the card issuer and tell them you’ll cancel their card rather than pay the fee. If they refuse, tell them you plan to pay it off under the old terms, and won’t charge any more on it. It’s still easy enough to find cards that charge no fee, although it may get tougher over time. Remember, the issuers make money by merchant fees as well as the interest they change customers for carrying a balance month to month. So, if they alienate those who generate the merchant fees month after month they’ll only be spiting themselves.

Whatever the bank that issued your credit card, now is a good time to have a “plan B” whether that be a card by another issuer, the use of a debit card, or to take the Man vs Debt approach and tell the banks where to stick it.

Joe

• Unintended Consequences
• A Bad Zero Percent Card Offer
• Credit Card Big Brother
• How Dumb are our Congressmen?
• Chasing Customers to Bankruptcy

• My experience with LendingTree, and free gift cards
• Avoiding Late Fees
• The Weakonomist Gets His First (And Last) Returned Check Fee
• Editorial: Overdraft Fees - Will We All Have to Pay for the Irresponsible Few?
• Five Key Steps to Managing College Loan Debt