RefBan

Referral Banners

Thursday, September 22, 2011

BREAKING NEWS: Fox News-Google Debate at 9 p.m. ET

Watch the Fox News-Google GOP presidential debate live from Florida on Fox News and FoxNews.com starting at 9 p.m. ET

More headlines from FoxNews.com:
http://email.foxnews.com/t?ctl=1437D:D11652E6566F72D588047FA28450685D&

Watch Fox News Channel for complete coverage of this story and all breaking news.

------------------------------------------------------------

To learn more about all of our newsletters and alerts visit: http://email.foxnews.com/t?ctl=1437E:D11652E6566F72D588047FA28450685D&

Fox News never sends unsolicited email. You received this mail because you requested a subscription to Breaking Alerts from FoxNews.com.

To unsubscribe from this email notification, click here:

http://email.foxnews.com/u?id=D11652E6566F72D588047FA28450685D

To unsubscribe from ALL email notifications, click here:

http://email.foxnews.com/u?id=D11652E6566F72D588047FA28450685D&global=1


Copyright 2011 FOX News Network, LLC
1211 Avenue of the Americas
New York, NY 10036

All Rights Reserved

A Cautionary Tale for College Students: The Five Dumbest Money Mistakes I Ever Made

By Melanie Pinola

A Cautionary Tale for College Students: The Five Dumbest Money Mistakes I Ever Made

A Cautionary Tale for College Students: The Five Dumbest Money Mistakes I Ever MadeWhen you're just starting out managing your own finances, little things like paying your own bills, going to the bank, and even grocery shopping "like an adult" can feel empowering. But if you're reckless and don't pay attention to money management basics—or just don't know any better—this is also when you can make the biggest money mistakes of your life. Take it from me, little grasshopper: One of the reasons I have such an interest in personal finance now is that I've broken just about every personal finance rule there is—not purposefully or knowingly, but just in the course of being young, foolish, and learning to manage money on my own. If you're reading this now, you're probably wiser than I was at the time, but hopefully you can still profit from my experience.

Here are five of the dumbest money mistakes you should avoid (I didn't), followed by what you can do to recover if you've already made these common mistakes.

Mistake #1: Not Listening to People Who Know Better

I had the good fortune of being born to very financially astute and responsible parents who tried to teach me about smart money management (my dad subscribed me to Kiplinger's, Money, SmartMoney, and just about every other personal finance publication while I was in college, in addition to sending photocopied articles—paragraphs generously highlighted—in the mail regularly.).

Not everyone can say that, and financial literacy is still unfortunately not something that's taught in our school system.

Because I was trying to achieve my independence (financially and otherwise), it was all "in one ear, out the other," however. My parents had sound advice about money—like put some aside in a savings account—and I ignored it for the sake of "being my own person." Absurd, right? Youth is definitely wasted on the young.

Getting Back on Track: Start Listening and Educate Yourself

Your parents, magazines, websites, and everyone else can point the way, but the truth is, if you don't start listening or pay attention to the wisdom of others, it doesn't make a bit of difference.

Being independent, I learned, doesn't have to mean disagreeing or going the opposite way on every matter. For subjective things like music and fashion I could take my own approach, but with money, there really are some fundamental rules (that sometimes need adjusting now and then). The biggest thing I learned was to put my ego (and a desire to be impervious to advice) aside.

Mistake #2: Using Credit Cards Like an Idiot

There's a good way to use credit cards and then there's the typical first-timer way.

I remember walking on campus and the rows of tables with credit card companies offering enticing products—frisbees and water bottles!—for a quick credit card sign-up. I think in one day I got four credit cards; it was so stupidly easy to do on campus.

There's nothing wrong with having a credit card. Used wisely, a credit card is just another way to pay for stuff you would pay for anyway using a different method—often you can get cash back or other rewards just by using specific types of rewards credit cards.

Credit card companies, however, target college students because most don't know a heck of a lot about handling credit. It's easy to charge for things you can't afford and blindly pay loads in interest and fees for the convenience.

I suspected it was dumb to go up to (and even above) my $5,000 credit line to buy dorm accessories and only pay off the minimum amounts each month. The minimum payment was only $15 or so a month, I rationalized, which didn't seem like a lot—in the short term. I didn't really know enough about how much I was really spending or how it was all snowballing.

Paying only the minimum on credit card balances, racking up credit card debt, buying things on credit when I didn't have money to pay for them—these are classic DO NOT DO things—dumb money mistakes—you learn in Money 101. (But that's just a figure of speech, because there're really no Money 101 class. You have to go and learn these money management basics for yourself.)

Getting Back on Track: Getting Credit Card Debt Under Control

Your credit card usage and limits become a problem most apparently when you need more credit or your credit is checked, such as when you go to rent a new apartment or apply for a loan to buy a car. Suddenly your credit and debt habits become glaringly apparent.

Get your free credit report and credit score estimate and work on getting paying down your debt, highest interest debt first. The previously mentioned debt snowball calculator can help you find out the order to pay your debts, based on their APRs.

Quite honestly, I think there's a "Eureka!" moment too, a defining line between poor financial habits and good ones, when you finally get your act together and realize using a credit card isn't like playing with pretend Monopoly money or pay-it-someday-money but actual cold hard cash that you work hard for and comes out of your bank account. To get to that point where you realize this, you'll probably have to come to some major crossroad—buying a new car, renting an apartment, or being turned down for something based on your credit history. It's an important turning point though.

Mistake #3: Taking Out Cash Advances on Credit Cards

If you own a credit card, you probably get credit card advance checks by the boatload. Using credit card advance checks or your credit card at the ATM machine to take cash out could easily fall under the mistake section above, but I think credit card cash advances are their own special kind of evil. For one thing, they seem innocuous: Here are some checks with 0% rates that you should cash right now. In the fine print is a hefty 3%-5% transaction fee, interest rates that apply as soon as the cash is taken out (or balances are transferred from other cards), and other limitations or gotchas.

For check and cash advances, the highest credit card rates apply. These are just atrocious, especially for new credit users. In an emergency—an uncovered hospital visit, for example, or some other unexpected extraordinary expense—borrowing money from a credit card is one of the easiest and least risky places to borrow money in a pinch, but otherwise, taking money out of the credit card in this way is a dumb mistake.

Getting Back on Track: Understanding Credit Cards

Really the best recourse is to use credit wisely, as above. Many people don't know that there's a difference between credit charges and cash advances, but when you take money out of your credit card via ATM or the convenient checks, you're charged more and interest accumulates faster. Take the time to read the fine print with all the balance transfer offers—or other credit card offers—you receive.

Mistake #4: Taking Money Out of an IRA to Pay Off Credit Card Debt

With all that mounting (seemingly insurmountable) credit card debt, I looked for an easy way out. And here's the dumbest, worst financial mistake I ever made (and, hopefully, will ever make): taking money out of an IRA to get rid of credit card debt.

Your biggest advantage when you're young is your youth, and all the time you've got to live (you've probably been told that ad nauseum). It's especially true when it comes to money because of all the compounding going on.

Trading long-term financial growth to solve a relatively small problem like credit card debt definitely falls into the dumb money mistake heading. In addition to losing valuable investment growth over those years, I got hit with a pretty hefty 10% early tax withdrawal penalty. Taking money out of your IRA (if you're going to be hit with that penalty) is really a last resort. Don't sacrifice powerful investment gains.

Getting Back on Track: Automating and Catching Up on Retirement Savings

It's hard to make up for lost time, but to compensate for the retirement savings losses, I simply increased my retirement contributions, which are automatically funneled into my now sacred IRAs.

Mistake #5: Not Having a Plan and Assuming It'll All Work Out

You don't have to have your entire financial life set in stone—where you'll be at each point in time—but mapping out what you want can help you prioritize your spending, your saving, and what you're working towards and for. What is this all for anyway?

A plan helps ensure it's all going to work out or understand if it won't so you can adjust accordingly.

I started out many years ago loosely committed to a career that doesn't really interest me right now, but when my career plans changed, I made the mistake of not updating my financial plans, the classes I needed to re-take, and the many other adjustments needed.

Getting Back on Track: Defining Your Financial Goals

Since then, I've learned that one of the most powerful ways to achieve what you want in life is to actually define (and write down and review) what you want—imagine that!

This applies for financial goals too, things like buying a house, planning for a family, having $5 million in your account by the time you're 55, living large on a boat somewhere on the Pacific, or retirement plan basics. Seriously, not planning for dreams like these would be dumb.

How About You?

Those are just my top 5 mistakes (there have been others). Care to share some of your own?


You can follow or contact Melanie Pinola, the author of this post, on Twitter or Google+. Number of comments
  • Share this:

Dear Prudence: Once a Cheater

Slate Magazine
Now playing: Slate V, a video-only site from the world's leading online magazine. Visit Slate V at www.slatev.com.
dear prudence
Once a Cheater
My husband says he had a one-night stand with a co-worker--but she called it a torrid affair. Who can I believe?
By Emily Yoffe
Posted Thursday, Sept. 22, 2011, at 7:03 AM ET

Get Dear Prudence delivered to your inbox each week; click here to sign up. Please send your questions for publication to prudence@slate.com. (Questions may be edited.)

Got a burning question for Prudie? She'll be online at Washingtonpost.com to chat with readers each Monday at 1 p.m. Submit your questions and comments here before or during the live discussion.

To continue reading, click here.

Emily Yoffe is the author of What the Dog Did: Tales From a Formerly Reluctant Dog Owner. You can send your Dear Prudence questions for publication to prudence@slate.com. (Questions may be edited.)

Join the Fray: our reader discussion forum
What did you think of this article?
POST A MESSAGE | READ MESSAGES

Also In Slate

Sorry, Republicans, but the Law Says the Federal Reserve Can Do Whatever It Wants


How the Moneyball Movie Perpetuates the Myth That Oakland Reinvented Itself With Stats Alone


The Billion Bunny March, the Snack Glory Hole, and Other Really Weird Stuff at Burning Man

Advertisement


Manage your newsletters subscription: Unsubscribe | Forward to a Friend | Advertising Information


Ideas on how to make something better? Send an e-mail to slatenewsletter@nl.slate.com.

Copyright 2011 The Slate Group | Privacy Policy
The Slate Group | c/o E-mail Customer Care | 1350 Connecticut Ave NW Suite 410 | Washington, D.C. 20036


Today in Slate: Can Rick Perry Ride the Cowboy Myth to the White House? Plus, A New Prudie

Slate
 
Briefing News & Politics Arts Life Business & Tech Science Podcasts & Video Blogs
 
 

Today: September 22, 2011

The Slow Death of Certainty

The Slow Death of Certainty

Will the Troy Davis case be the one that finally turns America against the death penalty?

By Dahlia Lithwick

READ FULL STORY | More News and Politics

R.E.M.'s Revolution

R.E.M.'s Revolution

How a post-punk band from Georgia changed rock 'n' roll forever.

By Bill Wyman

READ FULL STORY | More Arts

Revenge of the Texans

Revenge of the Texans

Can Rick Perry ride the cowboy myth to the White House?

By Bryan Curtis

READ FULL STORY | More News and Politics

Sorry, Republicans, but the Law Says the Federal Reserve Can Do Whatever It Wants

Sorry, Republicans, but the Law Says the Federal Reserve Can Do Whatever It Wants

How the Moneyball Movie Perpetuates the Myth That Oakland Reinvented Itself With Stats Alone

How the Moneyball Movie Perpetuates the Myth That Oakland Reinvented Itself With Stats Alone

My Friend Broke Our Pact. Should I Make Her Shave Her Head?

My Friend Broke Our Pact. Should I Make Her Shave Her Head?

Men Are Finished: The Fairer Sex Won at  Our Intelligence Squared Debate

Men Are Finished: The Fairer Sex Won at Our Intelligence Squared Debate

Advertisement

Briefing

News & Politics

Life

Business & Tech

Science

Manage your newsletters on Slate Unsubscribe | Forward to a Friend | Advertising Information

Please do not reply to this message since this is an unmonitored e-mail address.

Ideas on how to make something better? Send an e-mail to slatenewsletter@nl.slate.com.

Copyright 2011 The Slate Group | Privacy Policy
The Slate Group | c/o E-mail Customer Care | 1350 Connecticut Avenue NW Suite 410 | Washington, D.C. 20036

Sports Nut: More Moneyball, Same Problems

Slate Magazine
Now playing: Slate V, a video-only site from the world's leading online magazine. Visit Slate V at www.slatev.com.
sports nut
More Moneyball, Same Problems
The numbers are good, but the story is still bunk.
By David Haglund
Posted Wednesday, Sept. 21, 2011, at 1:01 PM ET

Still from Moneyball. Click image to expand.A few months back, when I read that the movie version of Michael Lewis' Moneyball had finally been completed, I checked the film's IMDB page. I was looking for three names in the cast of characters, and I didn't really expect to find them. Tim Hudson, Mark Mulder, and Barry Zito were the "big three" starting pitchers who, in 2002, the season covered by Lewis in Moneyball, each pitched more than 200 innings for the Oakland A's, allowing fewer than 3.5 runs for every 9 of those innings--considerably fewer in the cases of Hudson and Zito. None of the three featured prominently in the book, even though two of them (Hudson and Zito again) were probably the team's best players, and the third, Mulder, was easily in the top five.

Statistically savvy baseball fans who are familiar with the debates that have taken place in the wake of Moneyball may think they know where I'm going with this. I'm about to say: "The real reason Oakland won all those games from 2001-03 was because they had these three great pitchers, whom everyone knew were going to be good--not just the A's front office that, thanks to general manager Billy Beane, preferred computers and number-crunchers to professional scouts. Beane isn't so great," I'll conclude, "and statistics don't tell you much. Just look at the A's record lately."

To continue reading, click here.

David Haglund is the managing editor of PEN America. Follow him on Twitter.

Join the Fray: our reader discussion forum
What did you think of this article?
POST A MESSAGE | READ MESSAGES

Also In Slate

Sorry, Republicans, but the Law Says the Federal Reserve Can Do Whatever It Wants


How the Moneyball Movie Perpetuates the Myth That Oakland Reinvented Itself With Stats Alone


The Billion Bunny March, the Snack Glory Hole, and Other Really Weird Stuff at Burning Man

Advertisement


Manage your newsletters subscription: Unsubscribe | Forward to a Friend | Advertising Information


Ideas on how to make something better? Send an e-mail to slatenewsletter@nl.slate.com.

Copyright 2011 The Slate Group | Privacy Policy
The Slate Group | c/o E-mail Customer Care | 1350 Connecticut Ave NW Suite 410 | Washington, D.C. 20036


On Those Massive Funding Needs Of European Banks


View this email online | Add newsletter@businessinsider.com to your address book
Money Game Share this Email
Tech Entertainment Wall Street Markets Strategy Sports Lifestyle Politics Europe Video Latest

Thursday, September 22, 2011
Find Us on Facebook Follow US on Twitter


On Those Massive Funding Needs Of European Banks

From Morgan Stanley, the ultimate guide to European banks funding needs. Read »


Also On Money Game Today:
Advertisement

chart of the day, existing home sales, september 2011

CHART OF THE DAY: The Best News On Housing
chart of the day, single family housing starts and the unemployment rate, sep 2011

CHART OF THE DAY: Why The Jobs Recovery is Different This Time
chart of the day, pe ratio and m/o ration (middle-aged  (40-49 year old) cohort vs. the old-age (60-69) cohort), september 2011

CHART OF THE DAY: A Simple Demographic Chart That Says Market Valuations Are Going Down
Share this: Facebook Facebook Twitter Twitter Digg Digg Reddit Reddit StumbleUpon StumbleUpon LinkedIn LinkedIn
Follow us on Facebook Follow us on Twitter
The email address for your subscription is: dwyld.kwu.wyldside@blogger.com

Change Your Email Address | Unsubscribe | Subscribe | Subscribe to the Money Game RSS Feed

Business Insider. 257 Park Avenue South, New York, NY 10010

Terms of Service | Privacy Policy


If you believe this has been sent to you in error, please safely unsubscribe.