When you’re in school the thought of having money – any money – is usually a laughable novelty. What money you do have is usually spent on late night pizzas and scraping up rent. Then when you get out of school and you get your first “real job” where you actually are bringing in a decent paycheck that money goes towards acquiring all the things you couldn’t buy in college. Suddenly you can afford things – you don’t have to shop the clearance rack or order off the dollar menu. Rarely do young, aspiring professionals think about planning their finances because the thought of investing money or saving a portion each month doesn’t seem as important as buying your first brand new car, or closing on your first house. However when you’re young is the perfect time to get familiar with financial planning, and can be done rather easily and in ways you may not have thought of before.

1. Don’t get caught up in what you’ve been denied

When you’re in school and you’re living on Ramen noodles made from a coffee pot (you didn’t do that? Then you were better off than me…) and meager wages from a part-time job, it’s easy to get caught up in the mindset of “I deserve this!” once you start making money. This leads to fancy new cars, swanky living situations, and other luxuries that you weren’t previously able to afford. However before you start throwing money at expensive items you couldn’t buy before, take a step back and realize that the key to a sound financial future is being smart now. Focus on saving money and scaling back on debt before you rush out to buy that expensive new car.

2. Repaying debt from school

The sheer magnitude of the debt acquired to go through school can be overwhelming and it seems like the smart thing to do would be to pay it off as quickly as possible. However before you jump into paying off debt you need to take a look at the interest rates on your debt – if you have a low interest rate then you can pay back the debt over a longer period of time and focus on investing elsewhere, whereas if the interest rate is on the high end it would make more sense to focus on paying off the debt before worrying about other investments.

3. Break it down into 1/3’s

When you do start making a more substantial income try to break those paychecks down into 1/3’s… Save 1/3 of it, spend 1/3 of it, and use 1/3 of it to pay off debt. This way you’re covering several bases at once. It can be hard to put money into a savings account each month, so one thing that helped me was adopting the mindset that depositing money into savings was just another bill I had to pay. By thinking of it that way I’ve gotten into the habit of transferring money over to savings each month without even thinking about it.

4. Plan ahead

You need a clear idea of how you want to allocate your finances so that you can best decide how to save and invest. Do you want to have enough money saved to pay for your kids’ colleges up front? Do you want to retire at a certain age? Do you want to achieve a certain amount of money in savings? Specifically defining your goals will help you figure out the best way to work towards them.

5. Give yourself a limit

Each month allocate certain amounts of money towards different categories. By giving yourself limits on what you can spend you’re less likely to go overboard. Designate a certain amount for groceries, gas, bills, savings, and fun so that you cover all the inevitable costs but you also are able to spend money on yourself. This way you won’t feel deprived and end up going on a spending spree. Taking the time to identify your financial goals is important for everyone – whether you’re bringing in a substantial income or not. Starting out with your financial goals when your career is also starting out will help you gain financial independence and security much quicker than waiting until you’re already bringing in a steady income.

This is a guest post from Laura Backes, she enjoys writing about all kinds of subjects and also topics related to internet service in my area. You can reach her at: laurabackes8 @ gmail.com.

This is the sixth article of the A-B-C's of credit and debt. Today is F for Free advice.

If you can get something for free, you should do it, right?

Well that all depends. Free beer - that sounds great! But a free puppy - well, that could be lots of fun. And it could be LOTS of work and cost you lots of money! It all depends on which one you end up with more of - fun or work. So, free isn't always great. And free isn't always free.

When it comes to financial advice, there's free ADVICE. And then there's FREE advice. Big difference!

There's been a lot of talk recently about the pre-paid debit card from financial celebrity Suze Orman. That's what got me thinking about this entire free advice thing. Let me say for the record that I'm not opposed to any of these financial "experts" you see on TV. They all have their areas of expertise. And I'm sure most of what they say is good, honest advice.

But I'm just a bit skeptical when they try to be everything to everybody. If I have car trouble, I bring it to my mechanic. But if I get into an accident, I bring it to the body shop. They both know about cars. So why doesn't my mechanic do body work? And why doesn't the body shop do brakes and oil changes?

Because they each provide service on the type of work they do best.

Again, free financial advice can be great - but only if it is good advice for you and your situation. Uncle Joe might be a great guy. And he might know a lot about making money or saving money. But just because something worked for him doesn't mean it will work for you!

When is free financial advice good financial advice?

Let me give you a few examples to make my point a little more clear:

Suze Orman and the other TV "experts"

• Suze Orman is a financial planner by trade. She helps people who already have money to find ways to make more money. Great profession. And she is probably very good at what she does. So if you have money you need to invest, or learn about estate planning, tax shelters, and things like that, talk with a financial planner.
  
• But helping rich people get richer is a lot different than helping people struggling to get out of debt. Both rich people and struggling people need help with money. But these are 2 entirely different situations. With 2 entirely different solutions. Just because someone is trained on building wealth, investing with mutual funds, and protecting your wealth from Uncle Sam does NOT mean they know about the best ways to pay off debt, avoid bankruptcy, and fix your credit problems. Her advice is free. But is it the best advice for someone with debt and credit problems? Not always.

Finance writers

• Writers are typically good at taking a bunch of facts, quotes, and news items and making them into a good story. Their talent is to make the story interesting enough for the average person to read and enjoy.
  
• But writers are typically not experts in the field they write about. They may shave some experience. Or they may just be interested in the topic. Or it might just be their job. Or they might be like the TV experts from the point above. So, just like cooking isn't simply about taking a list of ingredients and throwing them together, neither is taking a bunch of facts and quotes and making them into expert advice. Not that the writers are useless. But their writing can't always be taken literally as "advice" especially when it comes to finance.

Message boards

• Online message boards are a great way to get information on a particular strategy or company, from someone who used that strategy or company. If you want to know about Company X, reading what other people have to say about them can be helpful.
  
• Just keep in mind that one person's experience does not always translate into every person's experience. So while Susan from Dallas might have had a bad experience, realize you are not necessarily getting the entire story. Her goals, her situation, and her understanding of the company or service might be quite different from yours. Ands her expectations might be entirely different, too (with debt relief, expectations are often quite different!) So there is nothing wrong with gathering information, but don't make your decision based on one bad comment.

Ads

• Ads are a great way to learn about different products, services, and companies that can potentially help us solve a financial problem. You've probably seen many different types of debt problems - personal debt, business debt, tax debt - and many different types of solutions - debt consolidation, debt settlement, bankruptcy. So advertising can be informative.
  
• But ads can also be misleading. Even if a company is completely "above board" the ad probably won't give you all the details. And can leave you thinking "hey this is right for me" even if it is not. Sure, you can call the company. But unless they somehow can't make money from you, they're going to do what they can to sign you up.

So where do you find the right financial advice - for free?

Before you fall for the next "get out of debt in 6 months and save $50,000" type of scam, do your research. For example, if you're looking for information on how debt settlement really works, go to Google and type in "how does debt settlement work". Pick out 5-10 articles and learn as much as you can. Then go back to Google and type in "best debt forums" or "debt message boards" and check out people's experience. If you find a company you like, check the Better Business Bureau website and read the review. Then type the company name into Google and see what you find. Each step of the way, ask questions. The more you can learn the better. Whether you do it yourself. Or get professional help.

And that's how you get free advice that can really help you!

Where else do you find free financial advice?

This is the fifth article of the A-B-C's of credit and debt. Today is E for Empower.

So what is the reason for your money problems? So many people these days find it easy to blame something or someone other than themselves. "It's not my fault" they'll say. It's just so much easier to...

Blame your boss.
It's not your fault you didn't get that raise. Or work crappy hours. It's your boss's fault. They hold you back. They treat you poorly. Someone else gets the good hours, the promotions, the nice office. You, well you get the leftovers.

Blame the government.
Taxes are way too high. The Democrats don't know what they are doing. The leaders in your town and state stink too, right? If only they knew what it was like to be the little guy, the person who works hard and never gets ahead.

Blame your parents.
They should have taught you better how to manage your money. Or they should have given you more to help you get started in life. You deserved so much more from them. They made so many mistakes raising you that if only they had raised you properly, you would be so much better off financially.

Blame bad luck.
You're cursed. It's always someone else who gets lucky, and wins the lottery, or marries into money, or gets that good job you wanted. If it wasn't for bad luck, you wouldn't have any luck at all.

Blame lack of education.
Those smart college kids have it all. Bigger houses, better jobs, better benefits. They don't have any money problems like the rest of us. If you just had the money and the motivation to go to college when you were younger, everything would be so much different.

Baaaaaloney!

None of those things above are the reason for your struggles in life. Whether you're talking about money or anything else. Sure, some people get lucky and win the lottery. But only a small handful out of the millions and millions who play it. And no, it isn't fair that greedy bankers and lawyers and politicians make more than hardworking factory workers, or underpaid teachers who work with our kids, or any other average person who works hard for a living.

But stop blaming others. And heck, stop blaming yourself.

Even if you take complete responsibility for your current situation, there's no sense torturing yourself over past decisions, bad mistakes, or steps you never took. Instead, empower yourself to become the person you want to be. Act like the person you want to be. "Be" the person you want to be, even if you aren't quite that person right now.

Here are several ways to empower yourself right now:

Take a class.
It can be a college class if you want to earn your degree. Or a free online class. Or a class with your local adult education program. Or a class about anything that interests you. Challenge your mind to learn something new, have fun, or start learning skills for a new career.

Start a business.
If you've always wanted your own business, start one. You don't have to quit your regular job. Think of something you can do part-time, and either just make some extra spending money, or build towards something full time.

Start saving.
Go to your local bank, set up a savings or money market account, and start saving. If you can do an automatic payroll deduction or automatic withdrawal from your regular bank account, do it. No matter how big or small, just do it.

Go job hunting.
If you're not happy in your current job, check out what's out there. Even if you don't find a job right away, you will feel empowered. And you might figure out some new skill or qualification you need and can start working towards while you keep looking.

Find new friends.
Join a club in your town. Join a chamber of commerce or local group in your industry. Join an online message board with other people who have similar interests. Nothing makes you feel more alive than a new friend!

Start exercising.
Nope, it won't help your finances. But do it anyway. If you have the money you can think about joining a health club, but there are lots of ways to exercise for free - Go for a walk. Start running. Do pushups and situps (here's a great 100 pushup challenge). A stronger body definitely leads to a stronger mind.

So now you have several simple ways to empower yourself. So stop blaming. And put yourself in charge of your own life!

By Kris Bickell

This is the fourth article of the A-B-C's of credit and debt. Today is D for Don't.

Who do you turn to for money advice?

• A friend in the financial industry?
  
• Late night TV shows on money?
  
• Newspapers (online or print) like the Wall Street Journal or New York Times?
  
• Websites like MSM Money?
  
• Financial bloggers who have some real-world experience?
  
• Nobody - you learn for yourself?

When it comes to debt, it seems like EVERYONE has an opinion! Well, you know the old saying about opinions, right?

"Opinions are like a#$%^@#$, everyone has one..."

The problem is that most opinions probably have some basis in truth. Yet none of those opinions contain the EXACT advice you need to fix your particular money problems, or manage your money properly. Sure, some of them may be correct. But some may be lies. And some may contain "partial" truths just to get you to buy something. Others are the blabber from an expert who needs to say something, but comes without any real experience or knowledge.

So when you hear advice about getting out of debt and fixing your credit problems, BE CAREFUL! Don't believe everything you hear.

Here are some guidelines when getting advice on fixing your debt and credit problems:

DON'T believe everything you hear from "the experts".

Most of the financial experts you see on TV or read online are true financial experts - but usually in some type of financial field other than debt and credit. Sure, they know about some of the rules the debt relief companies must follow. And they know about general financial principles. But most of them have never been in debt. Or had credit problems. And there are lots of little tips that you just can't know about unless you've been through it. Here's an example - most of them will tell you that all credit problems will remain on your credit report for 7 years. Technically, this is true. But there are legitimate ways to get the bad credit fixed faster.

DON'T believe all the ads from the debt relief & credit repair companies.

Many debt relief companies advertise that they'll help you reduce your debt by 40-60%. But what they don't tell you is that it involves using debt settlement. Now, I used debt settlement so it is a legitimate option. But, it's not right for everyone. First, you need to be behind in your payments - or stop paying. Second, you need to have a lump sum to pay off your bill when the settlement is reached. In some cases, this works out for the better. But if you think that they can reduce EVERY debt by more than 40%, well, that's just wrong. And then there's the catchy tunes from the FreeCreditReport.com ads - which isn't really free, by the way. Here's my take on FreeCreditReport.com.

DON'T believe your cousin Joe or neighbor Susan.

I'm sure they are nice people. And they might have some good ideas. But first of all, they don't need to know anything about your finances. And second, chances are that they have enough of their own problems. And even of they did have some good advice, who knows if it would even fit YOUR needs or solve YOUR problems. Let them brag, let them complain, let them think they have all the answers. And then walk away and find your own solutions.

DON'T give out your personal info unless you check it out very carefully.

This one should be obvious. But sometimes it is tempting to just believe what people tell you. Sadly, this can get you into big trouble. Before you sign up with any financial company (and this goes for debt relief, credit repair, mortgage, investment, or anything that deals with your money, social security #, or your personal data) do some research first. Check their Better Business Bureau rating. Type their name into Google and see what other people are saying. Read the paperwork before signing it. Use your common sense...

Finally, DON'T forget that if it sounds too good to be true then it probably is!

There are no easy ways to being rich. There are no quick ways to making lots of money online. There are no shortcuts to getting out of debt. There are no secrets to fixing years worth of credit problems in 30 days. However, there are legitimate ways to achieving each of these - but most take a good amount of effort. So the next time you read or hear about something that sounds so much easier/faster/cheaper than you ever believed possible ... be careful!

Overcoming financial problems is not easy. But it is possible. If you use some common sense, if you are prepared to do some work, and if you come up with a plan and stick with it.

Thanks to Tom at Canadian Finance Carnival for including us in the latest blog carnival.

Recently, renowned NYU professor and activist Andrew Ross encouraged students to sign a petition promising to default on their student loans in solidarity against rising student debt. Associated in part with Occupy Wall Street, Ross claimed that if enough students defaulted together, it could meet the protestors’ ostensible demands of across-the-board student debt relief, free education, and other such cosmic improbabilities. If Ross understood for just a second what would actually occur if any graduate forewent their legal contract to repay their loans, maybe he would think twice about encouraging others to destroy their financial futures. For those not in the know, there are quite a few consequences when you default on your student loans. You essentially run the risk of:

1. Losing your federal benefits

Although it is illegal for the government to take away your Supplemental Security Income, once you default on your student loans, it’s possible for Uncle Sam to take away a portion, up to 15% of your social security retirement and disability.

2. Losing your tax refund.

If you default on your student loans, you can kiss your tax refund check goodbye. After six months of non-repayment, which is the standard for considering your loans to be under default, the government can put a hold on your tax refund check until your loans are paid back in full or until you agree on a repayment plan.

3. Taking a cut from your paycheck.

Yes, the government can even start taking money out of your regular paycheck. Called “garnishing,” the Department of Education and the loan guarantee can take a certain amount of your paycheck, which can be up to a little over $200 dollars out of your weekly wages.

4. Having any professional licenses revoked.

If you are in a profession which requires a license, such as any of the various medical or legal professions, you could stand to have your license revoked. This may entail being fired from your job and not being able to practice your profession elsewhere.

5. Trashing your credit score.

This, of course, goes without saying. Although having a poor credit score is not the end of the world, and you can certainly work to raise it again, the going will be very tough. Having a poor credit score can destroy your chances of ever buying a house, securing more funds for education, or making other important purchases later down the line.

6. Being sued by the Department of Education.

You read that right. If you default on your loans, the government will go as far as to sue you to get their money back. The Department of Education can extract funds from back accounts, property, and other assets.

Of course, it’s unlikely that you’ll cavalierly join Ross’s call to default on your student loans. If you are defaulting out of necessity, however, there are different options that you should look into. Communication with your lenders is key, as they can adjust repayment plans to accommodate you. Whatever you do, don’t simply stop repaying without letting anyone know! It will come back to haunt you.

This is a guest post by Mariana Ashley, a freelance writer who particularly enjoys writing about online colleges. She loves receiving reader feedback, which can be directed to mariana.ashley031@gmail.com.

What would winning the all expenses paid trip to Affiliate Summit West mean to me?

First of all, I've been doing affiliate marketing for nearly 10 years...and I've yet to "hit the big time" and be able to run my business full time. Sure, I've had some decent years. And I've had some bad ones (this one is closer to bad than decent). So hopefully this would give me that little extra push to get over the top.

Second, I'm not just some marketer pushing a bunch of junk. The sites I build are based on lessons I've learned, mostly the hard way. So I share those lessons, and the resources I've used, and in the process build a business around them. I'd love to be able to reach more people and help them get out of debt, buy their first house, or fix their back problems.

Third, I'm an eager student. For many years I sat alone and tried to build my business. Now, I'm focusing on building partnerships and learning from those who know what they are talking about (constantly buying the newest "get rich quick" program is definitely NOT the way to do this). So I would truly appreciate the opportunity to schmooze with the best affiliate marketers, and maybe even share a tip or two I've learned through the years.

Thanks for the opportunity, and good luck to whoever wins!