Looking for some free financial calculators?

I found a post over at the The Digerati Life this morning. You might be interested in some of the calculators mentioned there. I'll bet the Life Expectancy calculator is getting a lot of use!

Have a great weekend!

Here's the link to The Digerati Life and the Free Calculators!

Free Today, January 15th Jump-Start Day at Kiplinger

What a great opportunity to talk with a professional financial planner about your personal finance questions! Members of the National Association of Personal Financial Advisors (NAPFA) will be standing by to talk with you about your financial concerns and answer your questions. On January 15th and Friday, January 25th from 9 a.m. to 6 p.m. Eastern Time, these planners who are well versed in investments, taxes, insurance, estate planning, and saving for college and retirement, who normally charge clients $100 to $300 an, will be providing their expertise for free!

Just call toll-free 888-919-2345 or log on for online discussion with a knowledgeable and professional adviser!


The National Association of Personal Financial Advisors

NAPFA Code of Ethics

Objectivity: NAPFA members strive to be as unbiased as possible in providing advice to clients and NAPFA members practice on a fee-only basis.

Confidentiality: NAPFA members shall keep all client data private unless authorization is received from the client to share it. NAPFA members shall treat all documents with care and take care when disposing of them. Relations with clients shall be kept private.

Competence: NAPFA members shall strive to maintain a high level of knowledge and ability. Members shall attain continuing education at least at the minimum level required by NAPFA. Members shall not provide advice in areas where they are not capable.

Fairness & Suitability: Dealings and recommendation with clients will always be in the client’s best interests. NAPFA members put their clients first.

Integrity & Honesty: NAPFA members will endeavor to always take the high road and to be ever mindful of the potential for misunderstanding that can accrue in normal human interactions. NAPFA members will be diligent to keep actions and reactions so far above board that a thinking client, or other professional, would not doubt intentions. In all actions, NAPFA members should be mindful that in addition to serving our clients, we are about the business of building a profession and our actions should reflect this.

Regulatory Compliance: NAPFA members will strive to maintain conformity with legal regulations.

Full Disclosure: NAPFA members shall fully describe method of compensation and potential conflicts of interest to clients and also specify the total cost of investments.

Professionalism: NAPFA members shall conduct themselves in a way that would be a credit to NAPFA at all times. NAPFA membership involves integrity, honest treatment of clients, and treating people with respect.

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Removing the Burden of Debt

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If you face some crushing debt burdens, from credit cards or payday loans, you may wonder if you'll ever get out of the cycle of debt. A short-term loan like a cash advance is one way to avoid recurring debt, if used wisely. Used improperly, it can end up costing you much more than what you originally understood. This happens mostly when paycheck loans are used without understanding that they work best as short-term loans. You can decide to refinance the loan, but this will usually outweigh the benefits of taking it out in the first place and convert it from a short-term solution to a lengthier debt burden.

While debt is a fact of life in modern America, recurring debt doesn't have to be. There are times when you want to be able to get loans to finance emergencies like a broken down car or an unexpected medical bill. But, once the emergency is over the bill should be paid in full as quickly as possible. The problems can increase when a bill is not paid when it is due, and instead it is rolled over into a new loan. At that time penalties and fees may be levied for missing the original due date or the interest rate increases. This can make you end up paying two or three times the actual cost of your emergency.

If you find yourself in debt, seek to settle your accounts as quickly as possible, negotiating with your lender for a payment plan you can meet. You can reduce your risk of not meeting the due date by limiting the amount of money you withdraw. Then, if you do need more, that will be available after you pay off the first loan. In the meantime, try to put aside any small amount to start building an emergency fund. It doesn't have to be large; it can be $10/week. If at the end of two months you haven't used the money, you will have $80 in an emergency fund. This isn't much, but the psychological lift of seeing some savings is better than having no savings and feeling burdened by debt too.

Transfer Fees and Minimum Payments

You just received a fantastic balance transfer offer in the mail and you have a couple of credit card balances that you have been thinking about consolidating. Maybe this is the time! Should you transfer those balances using this offer? Let's take a look to find out how much it might cost.

So the offer says that you can transfer your balances at a low 3.9% fixed rate for 12 months. Sounds reasonable, after all, you are paying 16% on the accounts that you want to consolidate, so at least for the first year (if you carry a balance this long) you will have paid less in interest. So far so good.

The transfer fee (see the small print on the offer that you received) will increase the balance that you are transferring, and you will pay interest on this transfer fee. In our example, let's use a nice round number, say $6000, as the amount that we are thinking about transferring.

What would it cost if you did nothing and decided not to consolidate and transfer the balances? According to Bankrate's credit card payment calculator, it would take TWENTY FOUR YEARS and cost of over $6,500 in interest to repay this debt if you paid just the minimum monthly payment. If you were to instead make a dedicated payment of $200 per month (instead of whatever the minimum payment is) you would retire the obligation in just 39 months, and pay only $1,714 in interest. Now, if the minimum payment was 2.5% of the outstanding balance, then it would be $50 more each month to save almost $5000 in interest and shave a couple of decades off of the time it would take to pay it back!

Do we agree that if at all possible, you should pay a regular fixed amount each month rather than making just the minimum payment?

Alright, now back to the balance transfer. Assuming that the balance transfer fee is 3% of the balance transferred, the 'new' balance on the card that you are transferring to would be $6,180.00. How does this compare to just leaving it on the other card and making fixed monthly payments? Let's take a look.

Because the interest rate on the transferred to account is fixed for only 12 months, we need to take an additional step to calculate the total costs. During the first 12 months, you will have paid $220.00 in interest, paying the principal down to $4,751. If instead you made a fixed monthly payment of $200 per month, your interest expense would be $207, and your outstanding balance would be $3,987. Now we have to make some assumptions as to what your adjusted interest might once this introductory rate of 3.9% expires at the end of 12 months.

Most all credit cards use the Prime Rate as an index. To this they add a margin for risk. Let's base our scenario on today's current Prime Rate of 7.25% with a margin of 8.75 added for risk, making your adjusted rate 16.00% (note that this new rate is the same as what the old credit card rate is at today..). Note that these rates are subject to change anytime that the Prime Rate changes. For our purposes, we will assume that the Prime Rate stays until the balance has been paid in full.

If you had paid only the minimum monthly payment for the first 12 months, and assuming the adjusted rate thereafter is 16%, it will take you 20 years to payoff the remaining balance, and the interest expense would be $3,949. If you dedicated $200 per month for this debt, it would be paid in 28 months at a cost of $845.00.

Now, let's see how the transfer option works out...

Option 1- Do Nothing
It will take 288 Months to repay, and cost you $6500

Option 2- No Transfer, Dedicated $200 Monthly Payment
This option reduces the time to pay to just 39 months, and costs $1714

Option 3- Transfer, pay minimum
This option shaves 7 months from the term, and saves quite a bit, costs $5548

Option 4- Transfer, Dedicated $200 Montly Payment
Here you have the best of both. Retires debt in 29 payments and costs $1400

As you can see, doing something is a whole lot better than doing nothing! If you were to transfer the balance and make only the minimum payment, you would payoff the debt 7 months sooner, moreover you would save almost $1000 in finance charges. No, over 20 years, that is not a whole lot of money but it is money that you did not give to the credit card company.

Quite obviously, based upon our assumptions that the adjusted interest rate will not change (unless you have a fixed rate card, it will!), the apparent best choice would be to take the balance transfer option and dedicate a higher monthly payment. Doing so will cost you significantly less AND get payoff the obligation much faster.

New Year Resolutions - 2008

A little off topic, but here are my resolutions for the year:

• Drop Sixteen Pounds by April 1- just before hunting season '07, I weighed in at 166#. This morning I'm 180#. I have this really cool Navy Seals exercise and diet plan that worked very well for me a few years ago. I'll begin that plan again to help reach this goal.
• Payoff the MBNA Visa Card- I have a few more months at the intro rate of 1.49%, then it will adjust to prime +. The balance is right around $7k (I intentionally charged some big ticket expenses and purchases instead of taking the money out of a high yielding money market account, of which I will do when the rate on the credit card adjusts.)
• Sell the boat- not the little fishing boat, but the run about. On top of being expensive to insure and maintain, the price of gasoline is becoming quite prohibitive. The only problem with selling it now is I'll be taking a bath in losses because I'll need to price it low enough to attract a buyer. The boat, although in extremely good condition, is 20 years old this year. This 23' Regal Valenti runs like a top, powered by a 7.4 liter Mercruiser. I've owned it now for 4 years and loved almost every minute with it! In case you or somebody you know wants to buy it, I'll email you pictures! It has a brand new 2006 Venture Trailer that can go with it, if the price is right!
• Read a book a week- right now I'm finishing up Rudy Giuliani's biography (not that I'm a fan or anything, just reading the book). Next in line will be Tim Ferriss' 4 Hour Work Week or Lee Iaccoca's latest.
• Work 4 hours per week!
• Stay within the budget!
• Continue to grow my business- will be adding a few new services to include tax prep and plastic card POS processing.
• Visit Graceland

DANGER: Miscellaneous Catagory

If you're like me, you have a category in your financial software labeled 'miscellaneous'. I've found this to be a very dangerous and expensive category. If you're not careful, you can mask dangerous spending habits that could be costing you a lot of money.

Consider this article by M. P. Dunleavey appearing in today's New York Times. She talks about how quickly $27 per day on miscellaneous things can add up.

What are some things that you can do to curb miscellaneous spending?

1. Don't take plastic cards with you: they encourage miscellaneous spending

2. Give yourself a daily cash allowance and only carry this much with you

3. Purchase only items that you need

4. Keep records of every dollar that you spend from your daily allowance

In 2008, I vow to remove the miscellaneous category from my expense list and to take a very critical look at where this money really goes.

Free Advice from NAFPA August 17 and August 30

You might want to know about Kiplinger's Jump-Start Your Retirement Plan Days, two days of free financial advice by phone or e-mail on Friday, August 17, and Thursday, August 30 (9 a.m. to 6 p.m. eastern time on both days) from planners who are members of the National Association of Personal Financial Advisors (NAPFA).

Normally, these fee-only planners, who are well versed in investments, taxes, insurance, estate planning and saving for college and retirement, charge clients $100 to $250 an hour. But on Jump-Start Days, you don't pay a cent -- not even for the phone call. Just dial 888-919-2345 and a NAPFA adviser will respond to your question. Or, if you prefer, you can e-mail your question in advance starting August 1 to jumpstart@kiplinger.com and a NAPFA adviser will reply on one of the Jump-Start dates.