student loan
Boycott BP by Adjusting Your Spending Habits
Jul 30th
The following is a guest post by Kevin of CreditShout, a personal finance blog dedicated to educating people about how to beat the card companies at their own game and save money with credit cards.
Coined as one of the largest oil spills in the history of the continental United States, the BP oil spill is one travesty that seems to worsen more and more every single day.
Eleven workers perished on that rig situated in the middle of the gulf peninsula, and yet BP still manages to sell gas to the everyday Joe at outrageous prices. The oil is currently impacting one of the most prominent ecosystems in the northern hemisphere and yet Americans feel as if their hands are tied when it comes to taking cognitive action.
This is that moment in history where carpe diem reigns supreme, and the power is in the hands of the consumer. Like the popular 80s rock song says “we own the night!”
so take advantage of it! There are many things that you can do to let the big shots BP know that you are serious about change and proactive about making it happen.
Some of you have probably already considered boycotting BP. We decided to explore a few ways that allow you to make an impact on the company financially, as a consumer.
Use a Different Gas Company
Who says that you have to pledge your allegiance to a company that cares less about the environment or worker safety? One of the main things that you could do is seek
gas from other providers. There are so many gas companies that would be glad to have your business – from Shell to Texaco and everything in between, you can seek out new ground in gas. If it is performance that you are worried about then put your concerns to rest, because BP gas was not the supreme gas for cars on the go anyways.
Switch Your Credit Card
By switching your credit card, there is no way that BP can profit off of you or this travesty. You can switch from BP to Exxon or even eradicate the gas card altogether and opt for a regular credit card. If one person represents 10,000 people, can you imagine the strength in numbers and what would inevitably happen if people by the thousands began switching their gas cards from BP to somewhere else?
There is a catch however, in the end you are really forced to make a choice between the lesser of two evils and one of the oil companies is still going to be getting a kickback from your hard earned money.
Use Cash
With all the public and political rage over the oil spill forcing BP’s Tony Hayward to step down, the sky is the limit as to what your voice can do in times like this. It was the public outcry over the spill that inspired Hayward to step down. This is probably a better option than switching to another station specific credit card. By using cash to make your transaction at other gas companies you can rest assured in the fact that the big oil companies will not get a percentage of your transaction as a kickback.
Spread the word
History can only be history when knowledge is passed from one person to the next. It preserves the legacy of integrity of those individuals who made a difference. Not since the Exxon-Valdez oil spill has an event caused this much of an uproar. People are taking a stand and they are determined to make the big oil company pay for the damage that was caused by the spill. By telling people what you know about the oil spill and what they can do to be proactive to change, you are inevitably making a difference.
Choosing a New Card Wisely
If you decide to boycott BP with your credit card, you might consider choosing a gas card that will give you cash back as well as rewards at the pump and isn’t affiliated with a specific oil company. The Discover Open Road card gives you double cash back bonuses with no annual fee. So you can win at the pump by getting double cash back while boycotting an oil company that has caused
a lot of turmoil in a short period of time.
How To Save During Back To School Shopping Season
Jul 29th
One of the things that is often neglected in the family budget is back to school shopping. These kinds of neglected costs often wind up costing more than we anticipate because we did not plan for them. When you go shopping without a plan and a budget you are more likely to buy on impulse, buy things that are too expensive, and buy things that you really do not need. This can all be avoided with a bit of planning and research on the part of you and your children. Before you buy even one pencil or go to one single store follow these simple steps and the experience will be easier on both your nerves and your wallet.
Back To School Shopping Tips:
Gather the troops - Back to school shopping is not something you can do by yourself. Your children will want to have input because they want specific items either because they really need them or because the wan to have the coolest backpack. It is important for children to have a say in the items you buy for that first day of school, but more important is for them to have an understanding of the costs of these items and the sacrifices that they might need to make. For example, you and the children can sit down and discuss which things they needed last year that you did not have or which things your purchased that they wound up not using. Then you can all discuss which items are really important to them to be both fashionable and functional.
Budget, budget, budget – Your budget should be iron clad, with no exceptions. As soon as you start spending a little extra on one thing it will lead to spending a lot extra on everything. Instead, set a realistic budget that takes into account those items you will spend extra on to get higher quality and those items that you can spend less on to be more budget friendly. Remember to leave a little money in reserve for ongoing expenses like replenishing lost or used up items. If you have a child who is absent-minded and tends to lose things have him make a list of everything and the cost of each item. In the event he or she loses something require them to pay all or a portion of the cost to replace it.
Set your list in stone – As you are discussing the back to school shopping with the kids come up with an absolute list. This will have to include all of the items that are required by the teacher and those that your child wants personally. The kids school list should be easy enough to find online, but do some research to make sure it is correct. Sometimes these lists are just passed on from year to year so double check with the teacher or some other parents to make sure that you really need everything that is on the list. You might be surprised how much is on the list that the teacher does not actually require students to purchase or at least purchase right away.
Shop at home - No, not on the Internet, first shop in your own closets and drawers. You, like most of us, probably have piles of pens, paper, folders, and pencils scattered around the house from the previous school year. Gather up all of these items and cross check them with your list. You might have plenty of pencils and pens so you can check them off your shopping list before you step foot into any store.
Buy used items - This is especially important for those students who have to purchase books. Look at online auction sites or on display boards for them slightly used. They are always loads cheaper and tend to have the added benefit of notes written in the margins. If you wear uniforms in class or in physical education class look for them gently used too, you’ll save yourself a bundle and no one will know the difference. You can also make a bit of money toward your school shopping by selling your used items. Keep that in the minds of your children and remind them that the better they take care of their things the more money you will be able to sell them for later.
Look for sales and discounts - Every big retailer knows that the school supply buying frenzy is a chance to make big profits. Because of that they will put certain items on sale for rock bottom prices to lure customers into their stores. You have to be careful though, because for every cheap item there is another item that you need that is not on sale. Look for coupons and sales on the items you need from each store. It will be worth shopping around to get the best deal, even if you have to take a day or two and hop from store to store to get the best deal. Be sure to take advantage of mail-in-rebates too, you would be shocked at how many of those go unclaimed. If you live in an area that has interest free days for back to school shopping, plan to do the bulk of your shopping then to get the most savings.
Keep shopping - If you always have the school supply list handy you can easily pick up the things you need whenever you come across deals. You do not want to overbuy, but keep in mind that you will need items through the year and in the following years. Once the school year has started the retailers will drop prices to clear out inventories, it is a perfect time to stock up on the cheap.
Everyone can stand to save money on back to school shopping. All you have to do is know exactly what you need to purchase and what you and your kids can live without. Once you make your decisions be vigilant about sticking to both the list and the budget. If you can do that and follow some of the tips listed here your back to school shopping will be a minor blip on your budget instead of a major budget bust.
This article was written by Timothy Ng who is a regular personal finance writer and part of the team at Credit Card Finder, a 100% free Australian credit card comparison and application service. Visit the Credit Card Finder website for more information on credit cards.
More College Dorm Essentials
Jul 27th
I covered college freshmen essentials last year. It became one of my most popular posts for the whole summer as new college students were looking for guidance in this area. This year the list has of course expanded. Let’s take a look at more college freshmen essentials for your dorm room/pad:
Leave your wardrobe behind. Don’t bring every single piece of clothing that you own. This will only take up space in your room– oh and it will bother your roommate who’ll be stuck with zero closet space.
Vacuum cleaner. Cleaning may not be your thing right now, but when a few months of pizzas and cookies catch up with you, you’ll be dying for that vacuum cleaner. You likely won’t have to bring your own vacuum cleaner, but it would be helpful if you could have one ready to borrow.
Cleaning supplies. To go along with the previous point, as much as you’re going to hate the thought of cleaning up, you’ll realize how important it is when your place begins to stink and nobody even wants to come in. You can’t have a college dorm essentials checklist without some paper towels and disinfectant spray. This may seem ridiculous at this very moment, but trust me you’re going to want to keep your place clean and fresh.
A stack of DVDs. I mentioned a DVD player as a college dorm room essential last year, but I never mentioned the stack of DVDs. It’s super helpful to have movies ready for every kind of situation. Nothing beats Super Bad on a Friday night, just like nothing beats a scary movie on a date night.
Headphones. Your roommates won’t be too happy with you blasting music in the middle of the night. A solid pair of headphones will come in handy when you feel like blasting some music in the middle of the night to pump you up for that assignment that’s due in a few hours.
Earplugs. There will be times where all you want to do is sleep. Having a roommate and a million other distractions, might make falling asleep next to impossible. The best way to combat this is through getting yourself a nice pair of earplugs (just don’t let this be an excuse for missing your alarm wake up in the morning!).
There goes another list of college dorm room essentials. What did I miss this time around? What could you not live without?
How to Write a Business Plan in Five Easy Steps
Jul 26th
A business plan can be used to attract business partners or secure loans and investment capital. A comprehensive plan is especially important if you have a new business because it shows that you have worked out any potential problems and developed a strategic plan of operation. Established companies can also benefit from a business plan. Putting intentions and goals down on paper can be helpful when it comes time to track progress, establish alternatives, and show clients or employees where the business is going.
Developing a business plan takes both time and careful thought, but it is not nearly as difficult as most people think it is. In only five easy steps, you could have a business plan that is respectable enough to present to potential business partners, investors, clients, and employees.
Step One: Create a Cover Sheet and Statement of Purpose
The cover sheet, or title page as it is also known, should be simple and to the point. It should include the name of your business as well as the words “Business Plan”. The statement of purpose should be written on one sheet and immediately follow the cover sheet. Your statement of purpose should also be kept short–about half a page will do. This statement should sound professional and include a short description of your business (what you do, sell, or market), your current business position (age of your company, phase of operation, etc.), a short blurb about principal owners and key employees, and major achievements (patents, prototypes, awards, crucial contracts, focus group results, etc.). If you are applying for a loan or trying to secure capital or a business partner, you should also include a short line describing what you need. For example. The XYZ Company is seeking a short-term loan for $100,000 to purchase inventory, secure premises, and provide adequate working capital.
Step Two: Describe Your Business
The first actual “section” of your business plan should include a more comprehensive description of your business. You can offer a brief account of how your business got started and present an outline of your goals and business strategy. You can also use this section to explain what sort of need your business fills and describe the way it differs from similar businesses. Other information that should be included: biographies of the management team and key personnel, market potential for your product or service, advertising and marketing strategies, and basic operating procedures.
Step Three: Prepare Financial Information
This section is one of the most tedious to prepare, but it is also one of the most important aspects of a good business plan. It should begin with a summary of your financial standing, a three to five year financial forecast, and an estimate of your financial needs. Do not hesitate to go into detail here. This section will help others determine whether or not you have a viable and profitable business idea. You should also provide an income statement that includes revenues, expenses, and profits for a specific time period (usually six months to one year for a new business, broken down by month), a cash flow projection statement that estimates how much money will be coming and going from your business on a monthly basis, and a balance sheet that summarizes business assets, liabilities, and equity.
Step Four: Collect and Organize Supporting Documents
Supporting documents are a must if you are trying to secure a loan or investment capital. Basic documents include tax returns, personal financial statements, business licenses, franchise agreements (if applicable), and necessary purchase agreements. You may also need to submit a loan application, letters of intent from suppliers, and other legal documents supporting statements you have made in the business plan.
Step Five: Proofread and Write the Table of Contents for Your Plan
The final step involves proofreading your work–you don’t want your business plan to be riddled with typos or grammar errors–and creating a table of contents. These tasks can be performed simultaneously. The table of contents should be broken down by section (statement of purpose, business description, financial data, and supporting documents) and include identifying page numbers for important information in each section.
Additional Help
If you need more help getting your business plan together, you can check out one of the many free online courses and workshops designed to guide you through the process. The Massachusetts Institute of Technology offers a 31-page Business Plan Tutorial as well as Seminar in the Nuts and Bolts of Business Plans. The U.S. Small Business Administration also offers a self-paced online training course titled How to Write a Business Plan. Finally, it may be a good idea to explore a few sample business plans on the web. Seeing what others have done may give you the ideas and motivation you need to begin writing your own comprehensive business plan.
Guest post from education writer Karen Schweitzer. Karen is the About.com Guide to Business School. She also writes about pharmacy technician training for PharmacyTechnicianCertification.com.
Managing Money When You Have An Irregular Income
Jul 24th
It’s time for another reader Q&A ssession. Today we’re going to discuss the ever popular topic of managing money when you’re a student/freelancer/entrepreneur with an irregular income. Your fellow Studenomics’ cartel member, Jessica, emailed me with the following question:
I would love to see more posts on how to invest/save with the irregular income that comes from being a university student. For example, I have two years left in a five year degree and at this point I know that (barring something catastrophic like not having a job for the next two years) I will be graduating with no debt and some money left over. However, the money that I make is… unpredictable. One semester I have a TA job, the next I tutor. Week to week, month to month, and year to year my income is constantly changing. Right now my financial “plan” is a hodge podge. I’m sure there are other students in a similar situation and I would love to hear some ideas on how to deal with the unevenness when it comes to saving or investing.
Good question. This irregular income may not end after college. You could pursue a living as a freelancer or you could work on starting up your own business. Either way, this is an issue that’s also been affecting me lately. My income is some what predictable, but it varies from month to month. Let’s look at some super-tactical ways to deal with an irregular income:
The first step is to figure out how much money you need every single month just to survive. I don’t believe in arbitrary percentage figures, so I won’t throw any out here today. You need to figure out all of your fixed and variable costs. You need to calculate how much money you’ll roughly need every month for the following expenses:
- Food.
- Utilities.
- Rent.
- Entertainment.
- Subscriptions- cell phone, gym, online stuff, etc.
- Other.
It’s important that you include everything in this number. You don’t want to budget for $700 and then get slammed with a $100 phone bill that you don’t have the money for. This could lead to credit card debt or a minor destruction to you financial system.
Setup an emergency fund/money-to-survive fund. Once you’ve figured this number out you should strive to try to save up 3 months worth of these expenses. I know that some of you feel that the emergency fund topic is rather overrated or a bit boring. Let’s just call it your survival fund for today’s post. This is the money that you’ll need to survive when your income is next to zero and you’re trying to figure out what you’ll eat for lunch.
Invest/put aside the excess. If you realize that your consistently earning/saving plenty more than you need to survive, you could put this money aside or invest it (online savings account or securities if you can handle the risk).
Don’t spoil yourself until you have money saved up. The biggest issue here is that it’s tempting to go all out those months where the money is coming in. It’s really tempting to buy a new outfit, get bottle service at the club, or go away for Spring Break. Why does this happen? For two reasons:
- We view our money on a weekly basis. Instead of looking at the bigger picture/annual figure, we’re looking at the week-to-week. It’s difficult to fathom that you may be broke a few months down the road when you have a few thousand dollars in your bank account at this very moment.
- The lean months feel like torture. Those weeks or months where money is really tight feel like they’re never going to end. Then finally we see our bank account pile up cash. The euphoria kicks in and we feel like we deserve to spend this excess cash because we went through so many poor periods. This is why many of us have difficulties with managing an irregular income at first.
When you start to apply the tactics for this article, you’ll view your overall financial system from the “bigger picture” mindset, as opposed to the “right now” mindset. This is when you’ll get to the point where you’ll no longer have issues with managing your irregular income.
Was this article helpful? How do you guys manage your money with an irregular income? Any more tips out there?
Credit: Pg. 139-41 of I Will Teach You To Be Rich for a lot of the help here (hey, I said I would do research to help you guys!).
I would love to see more posts on how to invest/save with the irregular income that comes from being a university student. For example, I have two years left in a five year degree and at this point I know that (barring something catastrophic like not having a job for the next two years) I will be graduating with no debt and some money left over. However, the money that I make is... unpredictable. One semester I have a TA job, the next I tutor. Week to week, month to month, and year to year my income is constantly changing. Right now my financial "plan" is a hodge podge. I stuck an entire scholarship into a TFSA and invested it. I also have $50 a month that automatically goes into a mutual fund. It's not much, but with inconsistent income, it's hard to set up automatically to do more. I'm sure there are other students in a similar situation and I would love to hear some ideas on how to deal with the unevenness when it comes to saving or I would love to see more posts on how to invest/save with the irregular income that comes from being a university student. For example, I have two years left in a five year degree and at this point I know that (barring something catastrophic like not having a job for the next two years) I will be graduating with no debt and some money left over. However, the money that I make is... unpredictable. One semester I have a TA job, the next I tutor. Week to week, month to month, and year to year my income is constantly changing. Right now my financial "plan" is a hodge podge. I stuck an entire scholarship into a TFSA and invested it. I also have $50 a month that automatically goes into a mutual fund. It's not much, but with inconsistent income, it's hard to set up automatically to do more. I'm sure there are other students in a similar situation and I would love to hear some ideas on how to deal with the unevenness when it comes to saving or investing. investing.
Student’s First Car Buyer Guide– What You Need To Know
Jul 22nd
I remember when I became a student (many years ago). Instead of worrying about what study equipment I need, and how much time I’d spend studying at weekends, the first thing I was interested in was when was I going to get my first car.
I had it in my head that being able to turn up to university in a shiny car would somehow enhance my learning experience. I suspect things are fairly similar with today’s youth, although there are of course some very practical reasons to owning a car whilst studying.
Getting to and from your place of study is perhaps the most urgent reason, but also it makes it easier to carry things around, and travel to and from home if your are studying a little way from your family home.
Buying a new car can be a daunting experience however many cars you have driven in the past, but when you are buying your first ever it can be a very worrying task indeed. So what advice would we give to a student looking for their first car? We have put together what we think are some of the most important things to know.
What Exactly Do You Need?
The first thing you need to get clear in your mind is what sort of vehicle you need. Note the word “need” as opposed to want. When you are a student and on a lower budget you have to be realistic in your choice of vehicle.
You are looking for something sturdy, safe, and affordable. With your first car looks really should be way down on your list of priorities. As much as we would all love to be driving that racy red sports car, your dream car will have to wait.
How Are You Going To Finance The Car?
The chance that financing your first car is going to be the biggest stumbling block is one you will need to overcome. As a youngster obtaining a car loan is going to be very difficult. Most car loan companies will only lend to people who are employed in full time work, and earning above a certain amount of money each year.
One of the main reasons loan companies will not give car loans to students is for their lack of credit history. Whenever you apply for any form of credit, the potential lender will run a credit check on you to check your suitability as a borrower.
As a student you may not have had any credit before, and this will mean very little for lenders to make a judgement on. One good tip for students in this situation is to build up some sort of credit history by taking on a pre-paid student credit card.
These give you the opportunity to build up a financial reputation whilst not risking getting into any debt. This process does take some time, and will not help you finance a car in the short term.
If you do happen to obtain credit, you need to ensure that you are in a position to pay the debt off. If you default on your payments not only will you damage your credit rating but you will also lose your vehicle.
Buy With Cash
If at all possible it is your best option to pay for your first car with cash. That way you are debt free, and if something does happen to go wrong with your car you are not going to be stuck paying off a car loan for a vehicle you no longer have.
Insurance is Expensive
Motor insurance is notoriously expensive for younger drivers. Younger males are most likely to pay the most for their insurance, and it is not unusual for a student’s average yearly premium to run into the thousands of dollars.
The age, engine size, and model of your car will also affect how much you pay for insurance. The bigger and more powerful your car is the more you are going to have to pay to insure it. This is another reason why it is sensible to stick to a modest car when you are starting out.
Consider the Cost of Maintenance
Another issue that students often overlook when buying a vehicle is the cost of maintenance.
There are many relative costs involved with maintaining a car. Not only is there the fuel (which is very costly nowadays), but then you also have to think of replacement tyres, oil, and yearly testing.
There is also the cost of repairs that you might need if something goes mechanically wrong with your car.
When you are budgeting for your first car it is good to try and factor in some sort of monthly maintenance costs to your equations. Have a look at how much different car parts would cost.
Some cars are more expensive to maintain, so doing your research will help to ensure you buy a vehicle that you can afford to look after.
Be Careful Where You Buy
There is no real blueprint for buying a car safely without being ripped off. Some people would argue that you are as likely to get a bad deal from a car dealership as you are if buying a car privately.
You should always try to buy your vehicle from a recognised seller, or somebody whose contact details you can get access to. It is not advisable to buy a car from somebody you just met in a bar!
If you can get some sort of guarantee with the vehicle then you will have a little peace of mind that the car is in fairly sound condition. If you know somebody with experience with cars, or maybe even works in the automotive trade then it is a good idea to take them with you to view the vehicle. They may spot something you would not have looked for.
One of the most important pieces of advice for students buying their first car is to buy with your head and not your heart. It is very easy to fall in love with a car that is way over budget, expensive to insure, and hard to maintain. Buy sensibly and you will save a lot of money, and heartache.
This article was written by Timothy Ng who is a regular personal finance writer and part of the team at CreditCardComparison.com.au a 100% free Australian credit card comparison and application service. Visit the Credit Card Comparison website for more information and resources.
Barriers to Earning More Money
Jul 21st
I recently presented you guys with 3 reasons why your new business won’t succeed. Then a few days after that I was perusing through my favorite personal finance/entrepreneurship blog- IWTYTBR, when a post really struck a cord with me. I really enjoyed the post on 5 surprising insights on earning more money. At the end of the article, Ramit asked the readers for any barriers they had about earning more money.
After siphoning through the comments and through my own thoughts, I wanted to list some of the barriers to earning more money/jumping into entrepreneurship that many of us share:
Waiting around.
Whether it be waiting around for the “million dollar idea” or trying to decide on a company name, we spend too much time waiting to get things into motion. I’m 100% guilty of this myself. I’ve been planning on getting my own newsletter off the ground for the longest time now. I keep on talking about with people and getting tips. In essence all I’m doing is waiting around. When I reached out for help yesterday one of my peers gave me the simplest advice, he told me just to start the newsletter and worry about the minor details later. This makes perfect sense. Every day that we spend waiting around is another day we don’t earn more money.
Saving money mentality.
We’re so accustomed to being told to save money that it really comes out of left field when someone suggests that we spend a little bit of money. The reality is that if you want to increase your income, you might have to invest in yourself initially. Don’t get me wrong here– I’m not suggesting that you go to a Venture Capitalist to help you raise a million dollars so that you can buy a McDonald’s franchise. I’m just suggesting that it doesn’t hurt to invest some money to improve your skillset.
For example, when I first started college I wanted to earn some more money so I took a course where I got my license to work as a Personal Trainer. I spent a couple of hundred bucks on the course (textbooks, equipment, and other administrative stuff) and in the end I had a license to earn more money, and more importantly I learned a valuable skill.
Lack of immediate income.
This ties into the point above. When you have a steady paycheck it’s extremely difficult to steer off into the unknown. When you try to earn more money on the side, or try to become an entrepreneur, your income situation becomes pretty damn random. You no longer have guaranteed income, nor do you have steady income. The fear here in my opinion lies in figuring out how to deal with the very lean times, without going into panic mode and selling your car! It can easily become nerve-wrecking when you no longer get paid X amount every other Thursday. Subsequently, this becomes another barrier for many of us that are concerned about becoming entrepreneurs/becoming 100% responsible for our income.
Effort.
Once you have everything else taken care of, you must be willing to put the work in. The biggest problem with making more money is time (I didn’t mention it as a separate point because it’s too easy). I’m not referring to some sort of time famine, where you have absolutely no time. I’m talking about wanting to go home early so that you can start working on your freelance projects. I’m talking about actually looking forward to parts of the job. There’s no point in trying to earn more money on your own, if the work feels more mundane than your day job.
Effort is a major barrier to earning more money because there’s simply a plethora of options when it comes to distributing our effort. We could go to the gym, go for drinks, go to the coffee shop, watch a Saved By The Bell marathon, and plenty more. How does one find the effort to do more work after a long day of work? This is where the major challenge comes into play of setting aside enough time to get things done.
Motivation.
If you live at home and your parents don’t force you to pay rent, you simply won’t care about earning more because you’re content with your current situation. You can also run into the problem where all of your friends are professionals, that happen to work in the financial district. Do you want to become the one person that’s not at lunch every day? Do you want to put up with those around you hassling you about your completely absurd schedule (working at weird hours of the night while everyone sleeps)? The answer is usually no. As a result, the motivation to earn more money/start your own side business slowly fades away and we go back to our old ways.
Fear.
What if I fail? What if I spend money and end up not earning any extra cash? What if my friends and family will laugh at me?
I’m in no position to talk about this, so I left it to a few much bigger fish. Jonathan Fields addressed this issue of the fear of failure:
You wanna be afraid, really afraid, take a look at what your life’ll look like not if you try and fail…but if you keep on keeping on for decades. That’s the real nightmare scenario for most people.
Also allow me to quote Aristotle on this topic:
To avoid criticism say nothing, do nothing, be nothing.
Is that how you want to live? Don’t take it from me. Take it from those that have been there.
Now I turn it over to the readers of Studenomics: what are your barriers to earning more money? What’s holding you back right now?
