Well, the week has gone by pretty quickly here at Spending It — with “SaveIt” on his way to France and me, “SpendIt”, getting ready for a road trip.  Still, since our last Personal Finance Week in Review, I think we’ve gotten out some thought-provoking articles, such as:

When we next hear from “SaveIt”, he should be blogging from France, and putting his Currency Exchange For Travel information to good use.  Until then, we’ve rounded up some personal finance advice from around the blogosphere for your reading pleasure:

And there you have it, some great personal finance blog articles to get you through the weekend!

A lot of personal finance articles these days can be summed up as follows: cut out everything nice or fun in your life to save money.  Here at Spending It we have a slightly different view.  Sure, if you have a $4 a weekday premium coffee habit, you can save hundreds of dollars by brewing your own coffee at home.  That kind of personal finance advice to save small amounts here and there seems to be everywhere these days, yet many people seem to overlook opportunities to save much more money than that.

The three biggest opportunities that the average consumer has to save a substantial amount of money are when (1) buying a house, (2) selling a house,  (3) buying a car.

When buying a house many people make the mistake of not truly understanding the market.  This could cause them to pay too much or it could cause them to pass up a good deal because they don’t realize how good of a deal it is.  If you are buying a house, be sure to stay on top of the market by looking at multiple sites on the internet to see what prices houses are being listed for in your area.  Also, be sure to ask your realtor (if you have one) for a good list of comparable house sales in the area, and you can research sale prices for yourself using sites like Zillow.com or the web site of local government office responsible for filing deeds and other information about home sales.  But don’t just rely on the internet — scan the local newspaper or housing booklets for open houses and go see the full picture of what your money is really buying (they never show the worst bathroom or the industrial park next door on internet listings).

When selling a house many people get in too big of a rush to sell their house and end up losing money because of that.  While there are plenty of good realtors out there, there are also many realtors who really push homeowners to take the first offer that comes up.  After all, a quick sale is quick money for a realtor, while taking longer to sell requires more work showing the house and perhaps investment of money to advertise the property.  Research shows that when realtors are selling their own houses, they leave them on the market longer and get better deals.

The third opportunity to save a lot of money is when buying a car.  People simply get lazy and/or get worn down by the car dealers and make bad deals.  You can save a lot of money by remembering that cars are a commodity (there are lots of the same type of car at many dealerships), doing research on proper prices on the internet, and using email to negotiate with several car dealers at a time.  You can find more a more detailed car negotiation strategy in this article: Negotiating Car Purchases.

So, be sure to take the time to prepare yourself for these big opportunities that you have to save a lot of money.  Then, you can go ahead and treat yourself to that delicious premium coffee every now and then.

11 May, 2009  |  Written by  |  under Personal Finance Articles

Did you ever think that you might die before you retire?  I don’t want to be morbid, but I think that it is something that I must at least acknowledge.  There is a chance that I might die before I retire.

The reason why I bring this up is that I think that it has a profound impact on my financial planning.  But, very few people ever really talk about it.

Many personal finance gurus talk ad nauseam about planning for retirement, saving for retirement, working for retirement, etc.  But, what if I never retire?  I could kick the bucket the week before my retirement party.  Now that would suck!!

Thousands of Americans die at work every year.  Sure, we hope that they have financially prepared for their death by buying life insurance.  Most personal finance articles would hammer this point home.  But that is not the purpose of this post.

I want to think about whether my financial planning for retirement should change with the knowledge that I might die before I get there.  I want to think about the stuff I deferred doing until I retire.  I want to think about my unfulfilled goals and dreams?

I like to talk about conscious living where I live every day knowing what I want out of life and work every day to accomplish those life dreams.  Because I know that I could die prematurely, I want to make the most of each day here.  And, my financial planning for retirement must take into account the possibility that I will not die of old age.

Financial planning must help people balance the conflicting interests of spending money now versus spending money later.  Without balance, I might spend too much money now and not have enough for retirement.  But, the opposite is also possibility.

I don’t want to live like a pauper now so that I can live like a king when I retire.  I want to find the right balance between saving enough, but not depriving me things which make me happy today. That is not good.  Instead, there needs to be a way to maximize your finances so that the present is just as good as the future.

This is my goal for my own financial plan.  I want to find balance between living for today and living for tomorrow.  Don’t get me wrong, I don’t think that people should not save for retirement.  But, some people go overboard and put off things now with the idea that they will do them when they retire.

If I die before I retire, this balance is even more important.  I don’t want to put off life’s greatest joys so that I might experience them later.  Later may never come.  Therefore, I want to experience them when I can, but, without mortgaging my future.  I must keep balance in my life so that my retirement is just as rewarding as the present.

This financial balance is holy grail that I am seeking.  I hope that my writing here at Spending It will help me and you find this financial balance.

Now a few questions for you.  I really would like this blog to be a two way conversation and that can only happen if you leave comments.  So, here are some questions to get you commenting.  Have you thought about dying before retirement?  If so, how has this affected your financial planning?  What impact does this have on you financial planning for retirement?

I recently saw some debate on another personal finance blog about an issue that has crossed my mind several times over the years.  The issue is:  is there such a thing as being too young for investing in bonds?

I’m totally on board with the idea of diversifying your holdings, but come on, bonds seem like an investment your grandmother would make!  To be fair, I’m still about 30 years away from retirement, so it seems like I should be risk-seeking at this point to a large extent.  But, by one “rule of thumb” that I’ve heard about (your age as the percentage of bonds) I should have over a third of my holdings in bonds already!  Really? I just can’t see that with so much time left until retirement.

I am specifically thinking about my 401(k) — and there is a difference between owning bonds and owning shares of bond mutual funds.  When it comes to bond funds, they have not been immune to the economic times we are in either (See Older Investors Should Examine the Risks in Bonds).  So, it seems to me that younger investors might just as well go ahead and have the potential upside of a higher risk investment, rather than limit their return to bonds and still have some downside when the economy goes down.

Now, I could see maybe a third of my portfolio in index funds — maybe.  Assuming that the current economic recession lasts less than ten years, and we go back to the historic trend of “ever upward”, investing in index funds seems like a decent strategy for part of my portfolio.

In any event, it seems to me that I could still be in higher-risk funds now and start re-balancing my investments ten years or so before retirement and still be o.k.  However, I’d love to hear some of our readers’ thoughts on this issue.

The first week since launching Spending It is already over.  Boy the weeks fly by!!  Every Friday, SpendIt and I will provide a Personal Finance Week in Review.  We will cover the highlights in personal finance news, including a recap of what we covered on Spending It and highlights from the personal finance blog community.

This week SpendIt and I tried to build the foundation of Spending It .  We wrote several posts about our philosophy on saving money, including a great article all about SpendIt.  If you missed these articles, check them out now.

With less than a week left before my wife and I travel to France I wrote a Currency Exchange For Travel Guide.  I have been reading a lot about how to save money traveling to Europe.  I will be writing more article about my trip to France.

Well, enough about us.  The other personal finance bloggers wrote lots of great articles this week.  Here are some articles that you should read.

Have a great weekend!!

7 May, 2009  |  Written by  |  under Travel

In less than eight days, my wife and I are going to travel to France. I can’t tell you how excited I am for this trip.

With about a week left, I have begun to look for the best way to exchange money in Europe. Since I did all of this research, I thought that I would share it with you in this currency exchange for travel guide.

Budget travel in France is not easy.  The value of the U.S. Dollar vs. the Euro is down, and Paris is an expensive city.  So, the last thing that I want to do is waste my money paying currency exchange fees or getting a bad exchange rate.

Here are 5 tips for travel currency exchange:

  1. Don’t exchange your currency before you leave home.  I know, you are scared that you won’t have time to get it once you are there.  But, this is a costly mistake.  You will pay a lot more money to convert dollars to Euros in the United States.  I almost made this mistake.
  2. Know the current foreign currency exchange rate.  Knowledge will always save you money.  You have to know the current foreign exchange rate.  If you don’t you will never know if you are getting a good deal.
  3. Exchange money using the ATM machine.  We love to complain about ATM machines, but they sure are wonderful machines.  Not only are they convenient, but they also provide the best place to exchange money for travel.  Most ATM machines will not charge you a fee for the currency exchange.  Sure, you will have to pay an ATM usage fee, but not a fee to exchange money.  Wow, it is amazing that the most convenient way to exchange currency is also the most cost effective.  How often does that happen?
  4. Use the ATM machine only once.  Don’t keep going back to the ATM machine over and over.  This will cost you a lot of money in ATM fees.  Instead, just take out the amount of cash you think you need the first time.
  5. Use your credit card.  While this isn’t a way to exchange money, using a credit card for travel is a great way to buy things.  Not only do you not have to carry around a lot of money, but credit card purchases provide extra benefits like extended warranties.

Wow, I am getting excited for my trip to France.  I will be posting pictures of Paris, Versailles and Normandy during my trip.

Do you have any good tips for traveling to France?  I would love to hear them.

My pen name is “SpendIt”, and I’m a personal finance blogger. As we mentioned in our first blog post, one thing that makes SpendingIt.com different is that we have dueling bloggers — “SpendIt” and “SaveIt” — to discuss both sides of the issues.  So, what is my story and why am I “SpendIt”?

I am a professional (with a business degree) employed by a large corporation.  I am also a husband and father of two children.  I am “SpendIt” not because I believe in wreckless spending, but rather because I have for years believed that the common personal finance advice to “save everything so that you can retire wealthy” is flawed.  I believe you should make conscious decisions to spend a portion of your money on certain things that will enrich your life, even though they will leave your wallet a bit lighter.

One example: my wife and I made a conscious decision early in our relationship to prioritize international travel over other items that we might want/need.  Travel is a shared interest that we are both passionate about, so we decided to indefinitely put off getting a house (or even a full room) full of new furniture to instead focus on this mutual interest.  My wife and I both had family members who with age had developed health issues that limited their ability to travel, so putting off travel until retirement did not seem like a good idea — we might not be able to travel then.

The result: we prioritized travel and have some great memories and experiences from some many trips in the United States, two trips to the Caribbean, several trips to Europe, and two trips to Asia.  While furniture eventually breaks or goes out of style, those trips are great shared experiences that have really broadened our horizons and the memories will continue to give us much more joy than even a house full of new furniture ever would have.  We were very budget-conscious in planning those trips, but made conscious decisions to spend money on those things that would give us a good Quality Of Life Return On Investment.

When I started talking with fellow blogger “SaveIt” about the idea for a personal finance blog, it was important to me that we try to help people remember not only to save money with the best financial return possible, but that we also help people use their money for what we call Conscious Living — spending it wisely to both enjoy your life now and to still save for the future.

So, in addition to more routine personal finance articles that provide commentary on current personal finance news, I really hope that our focus on Conscious Living can help you find ways of spending it to achieve a great Quality Of Life Return On Investment.  Please visit our site often and/or consider subscribing to our RSS feed.

Today, I found a pretty cool personal finance calculator on CNN.  This personal finance calculator is designed to allow users to check their individual financial health.

Here is a video from CNN’s Your Money regarding this tool.

When I took the financial stress test, my overall debt load was ok, as well as the amount of debt tied up in my home mortgage.  However, I still need to work on my emergency savings fund, retirement savings.  Here is a picture of my test results.

My Financial Health

My Financial Health

Hopefully, next year at this time, if I run this personal finance calculator again, I will be on my way to getting an A.

Please leave a comment below with you own test results.  I would love to hear how you did.

4 May, 2009  |  Written by  |  under Personal Finance Articles

We believe that personal finance knowledge and money are merely tools to help you live a more fulfilling life.  Too many personal finance blogs turn money into a religion or an obsession.  Our mission is to figure out how to save money and spend money to optimize our life goals and fun.

We want to help people embrace money management so that they can make the most of their money.  But, because this is a blog, we feel that the best way for us to do this is by sharing our personal finance tips and knowledge as we learn it.

Spending It will help you discover:

  • Personal finance tips that will help you make more money.
  • Shopping tips that will help you to spend your money on the best products at the best prices.
  • Career advice designed to help you to accomplish your career goals.
  • Life hacks to increase your productivity, enjoyment and effectiveness.

To summarize the above, Spending It is about Conscious Living.  Through developing a conscious spending plan and conscious savings plan, you can have the life that you desire.

We hope that our journey here on Spending It will help you to understand your goals and how to best save and spend your money to accomplish them.  This is the core of our conscious living mission.

Please follow us on our journey by subscribing to our RSS feed.  Subscribing to our RSS feed is the best way to ensure that you don’t miss any of our posts.

Welcome to Spending It, a personal finance blog with a different approach from the other personal finance blogs out there.  Sure, in the months and years to come you find lots of personal finance articles and coverage of the latest personal finance news.  However, we tend to view personal finance — and life — a bit differently from your average personal finance blogger.

In fact, you won’t find us giving out personal finance advice that tells you to live like a pauper for the next 30 or more years just so you can retire rich.  To us, that is about like telling you to drive no faster than 25 miles per hour on the interstate — it’s overly cautious advice, and overlooks the fact that life is just as much about enjoying the journey as it is reaching the destination.  Let’s be reasonable and save for retirement without forfeiting the first 65 years of our lives!

So, while you will still see some articles here about finding the best savings accounts and the best mortgages, we will also help you find ways to enjoy spending your money wisely — such as travel on a budget and how to negotiate new car prices.  In short, we will help you find both the best ways to save your money wisely and spend your money wisely, because what is the point of money if you can never enjoy it?

We should mention that another way that we will be different from other personal finance blogs is that there are two of us blogging here — under the pen names SaveIt and SpendIt.  We will provide point and counter-point on different topics, often playing devil’s advocate to more thoroughly discuss the ideas here and not leave any idea unchallenged.  Of course, we welcome your comments and ideas also, so please take a moment and give us your thoughts in the comment form below!