Tag Archives: tips

Do You Prefer Advice From An Expert Or Someone Who Has Had Experience?

While nobody is perfect, I pride myself on making as few financial mistakes as possible. That’s not to say every investment I’ve made has gone well, but for the most part I don’t waste money and have made pretty good decisions regarding my personal finances. I take advantage of my credit cards by paying them off in full each month and taking the 1-3% in cashback rewards.

Some bloggers who started their blogs to dispense their financial advice and personal finance thoughts include Financial Samurai, Len Penzo, and Wealth Pilgrim, among many others. Who better to take financial advice from than experts who have experience making great financial decisions?

Other bloggers have made a name for themselves based on their stories of making terrible financial mistakes such as getting into tens of thousands of dollars of credit card debt and then working their way out of it. A few bloggers who fit this mold are Trent at The Simple Dollar, Baker at Man vs. Debt. There are many others who are still working their way out of debt and their blogs are used partially to keep them accountable.

I can definitely see why people like taking advice from people who have made mistakes and are working their way back into the black. They have had the experience and can mentor people to avoid make the mistakes they did. They know where the traps are, so they can guide readers around them.

People also like to take advice from people who are similar to them. Those who have never made a financial mistake don’t know what it’s like to have debt issues and they don’t identify with the same issues.

Personally, I like reading bloggers who’ve had success that I can attempt to replicate. Why? Let me put it this way: Would you like to take investing advice from a trader who used to get negative returns but is now working to break even? Or would you rather get your investing advice from Warren Buffett? I think I could learn a lot from Mr. Buffett.

Readers, where do you enjoy getting your financial advice from? Someone who has always done things the right way or someone who is working his way back from being in severe debt?

Top Five Stress-Free Vacation Tips

Imagine this: you’re on a secluded beach sipping the beverage of your choice – doesn’t matter if it’s a pina colada or a plain old South style sweet tea; you’re listening to the waves rolling in, and wondering whether you’ll order the fresh lobster or the more exotic conch for dinner. That decision – what’s on your dinner plate – is your biggest worry. There’s nothing else bothering you, no financial troubles hidden in the depths of your mind, zilch, zip, nada. You’re feeling completely, 100 percent stress free.

You’re probably saying, “Yeah right, Daniel. On what planet do you live?” Fair enough. But the truth is, I live on a planet where vacations can be stress free… as long as you take your time planning and financing them.

Stress Free Vacation Tip #1: Don’t Follow The Crowds

Remember back when you were a teenager, and you wanted a tongue piercing because everyone else was doing it? Your mom said no, using the age-old adage, “If everyone else were jumping off a bridge, would you?” to dissuade you. Well, the same theory holds true when it comes to vacation planning.

There’s a reason why a five-star hotel on a popular Florida beach goes for $400 a night – because the property’s managers know they can command that price tag. They know that their rooms are filled on a regular basis, and can charge a premium for that very reason. Hotels – and, more generally speaking, resort towns – that are off the beaten track are more likely to be the ones offering you room discounts, free meals, and other perks to entice you to bring your business to them. Same goes for traveling in the off-season; if everyone is traveling to the Bahamas in the late winter – the region’s peak season – that shouldn’t be reason enough for you to follow them. Instead, find out when your destination’s slow season falls, and book your vacation accordingly to get the lowest prices.

Stress Free Vacation Tip #2: Set A Budget And Stick To It

This sounds like a no brainer, right? Say you plan to spend $2,500 on your family vacation, setting aside
the following amounts:

  • $800 for travel costs
  • $1,000 for hotel rooms
  • $500 for food
  • $200 for entertainment

But once you arrive at your destination, you’re bombarded by incidentals you didn’t plan on. Maybe it’s a $12 photo of you and your spouse about to board a Royal Caribbean cruise ship; or maybe it’s a $15 boogie board at a surf shop. Whatever it is, if you’re not setting aside a little extra cash for expenses that creep up along the way, you’re not accurately budgeting your trip. My standard rule of thumb is to set aside an additional 10% of your budgeted vacation expenses for incidentals.

But this vacation tip goes both ways; just as you shouldn’t overspend on your vacation, you shouldn’t underspend either. I have a friend who recently scored a great deal on a beach condo – I’m talking a deal of a lifetime here: she saved hundreds of dollars, slashing her estimated hotel budget by more than half. Instead of stashing that money back in her bank account, she plans to use it to indulge herself and her family on their vacation. After all, they’ve worked hard for it, and using those funds to pay for a few extra dinners out will definitely make for a more stress free trip than if she was slaving away in the condo’s kitchen every night.

Stress Free Vacation Tip #3: Save, Save, Save

There’s nothing worse than going on a vacation, only to find yourself wondering halfway through the trip, “How am I going to afford all this?” If you’ve ever traveled with this type of vacationer, who charges everything that comes their way without having the necessary funds already in their checking account, you know how miserable they can be. They’re constantly obsessing over every little expenditure, from the hotel bill to gas prices to tipping a waitress.

Instead of stressing over expenses, set the money aside before you leave – long before you leave. Say you’re planning a family vacation to Universal Studios six months from now. Take your budget (don’t forget that extra 10% for incidentals!), divide it by six, and make it your goal to set that amount aside every month until you leave. If you do, you’ll be able to pay for your entire vacation in cash – or, if you use a credit card simply for rewards, you could go that route – without worrying about whether you’ll have enough.

Stress Free Vacation Tip #4: Use A Travel Rewards Card (If Applicable)

I know this is a risky piece of travel advice to give on a personal finance blog, but I’m going to dole it out anyway. Using a travel rewards card can really pay off for certain destinations. For example, Disney offers a Visa card from Chase that includes a $50 gift card to Disney the very first time you use the card. If you’re planning a family vacation to visit Mickey, Minnie, and the gang, that $50 gift card can help defray the cost of your park tickets or room fees. On top of that, you can also earn 1% in rewards dollars, which can also go toward your Disney vacation. Sure, this option doesn’t work for every destination, but there are plenty of hotel chains and airlines that offer credit card and loyalty programs that can help reduce your costs if you know you’ll be using the company’s services.

Stress Free Vacation Tip #5: Leave Your Home In Good Hands

This isn’t technically personal finance advice, but that’s why it’s so important. So many travelers head out the door for their vacation without a second thought to what’s going on at home, only to come back to discover they’ve been the victims of vandals or, worse, thieves; this happened to a good friend of mine when he and his fiancé went out of town over July 4th. Here are three ways to avoid problems:

  1. Let people know you’ll be out of town. I’m talking about your neighbors, family, and – most importantly – the police. Many municipalities will do an extra drive-by of your home if they know you’ll be out of town.
  2. Don’t let the world know you’re going away. This means Facebook – do not, I repeat, do NOT leave a message on your profile stating that you’re going out of town. Even if you think you have your profile information set to private, there’s still no guarantee.
  3. Make it look like you’re still home. You should stop the mail, set light timers, and ask a neighbor to pick up your newspaper (if you’re one of the 1 in 100 Americans who still gets home delivery) so robbers won’t get the idea that you’re out of town.

Following these simple tips can make sure your vacation goes off without a hitch.

Readers, what are your vacation tips for a stress free trip?

Used Car Buying Tips

I am so glad that my used car buying process is over. While necessary, it was time-consuming and exhausting, so I hope I don’t have to go through it again for a long time. I went in to the market looking for a car as a relative newbie, so I had little guidance as to what to expect. My brother had a better idea, but in the past 3 years, the used car market has charged significantly, so we pretty much had to start again from scratch.

Now that I’m a seasoned pro, take these used car buying tips the next time you’re searching for a new vehicle:

Not All Dealers Are The Same

I visited several dealers, all with similar cars, but their prices and customer service all varied. Some were more forceful, some would do anything to get me to test drive, while the ones I liked were the ones who showed me lots of different options that fit my needs and told me to look online at their full inventory. Both the dealers I was most interested in let me leave without forcing anything on me, gave me a business card, and said be in touch.

The ones who had me sit on a room for even a minute and made me uncomfortable in the negotiating process never heard from me again, even though the prices weren’t out of my range. What was worse was the dealer who told me to come down to look at several cars only to tell me when I got there that they weren’t available and that we should look at a car I had already seen and turned down.

Set Limits Before You Hit The Lot

I went with some vague idea of what I wanted. Basically if it drove, I was interested. What I should have done is limit my options earlier by setting limits on the number of miles already driven by a car and my absolutely maximum price, including all fees, of which there were many. I wasted a lot of time setting soft limits. I ended up test driving a few cars that I wasn’t really interested in. While it gave me a taste of what to expect from dealers and what the process was like, it wasted time that I could have spent in better ways.

Be Aware Of Fees

The price on the sticker is far from the price you’ll ultimately pay. Fees, taxes, and licensing can throw your whole equation off. In California, the fees totaled around 11% of the price, so a $10,000 car quickly became an $11,000 car, which was well above my budget. Knowing what the fees would be can help you revise your budget or aim for a lower car to start with the even with fees, you won’t have to dig into your savings (or spend an extra several months making payments).

Know Your Financing Options In Advance

I opted to pay for my car in cash, and boy am I glad I did. Each dealer came back with a whole complicated math problem for me to solve. With an $X down payment, I could pay just $Y per month, and it made it very difficult to compare. By knowing your financing option in advance, you can avoid the tricky math and focus on the total price. That way, you don’t have to worry about the details and can focus on the big picture when buying a car. All I cared about was the final price (what do I care which portion of the price goes to the dealer and which portion goes to fees?) so I tried to make the process as straightforward as possible.

Car buying isn’t always a ton of fun. However, it’s not unbearable if you have the right tools and know what to expect. Use these tips and you’ll be about two weeks ahead of where I was when I started.

Readers, what other tips do you have for when buying a used car?