Archive for December 30th, 2010

After a few brutal years, promises of easy wealth ring hollow. That won’t stop some people from trying to guarantee an easy path to riches, but I’ll let you in on a secret:

“Slow and steady wins the race” has never been truer than it is today.

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The “New Rules of Personal Finance” start with the foundation of eliminating debt and saving money.

It may not sound new or glamorous, but getting this first piece of your financial life right will help make everything else fall into place. And though slashing debt and saving money sounds familiar, a huge number of people have aggressively ignored this wisdom. Much financial ruin over the past 20 years stems from people borrowing heavily against their future, rather than saving for it.

Many people have rediscovered the power of thrift. Some people eat out less, while others put off buying new clothes and many are focused on rebuilding their savings. In sum, thrift is the new black.

[See Give Yourself a Financial Check-Up]

Here are five things you can do to establish your own thrifty bona fides.

1. Get on a Budget

For the personal-finance writer, this is a bit like recommending that people floss more. Fact is, everyone hears about budgeting, but very few people actually do it.

The key here is to start simple and keep it simple. Don’t let minutia deter you from getting the budget down in rough terms. You have your income (salary or other income, after taxes), and you have your expenses (housing, food, transportation, etc.).

Ideally, the difference between those two is positive. If it’s not, then you know you’re losing money on basic expenses, and we haven’t even gotten to fun things like movies, trips or new clothes!

A number of websites, such as Quicken.com, provide budgeting help. SmartMoney.com (part of The Wall Street Journal family) also has a number of budget-related worksheets that can help get you started on the numbers-crunching game.

2. Eliminate Credit-Card Debt

Once you get on a budget, the first thing you should do is eliminate your credit-card debt. Why? Because it’s almost certainly the most costly debt that you have.

I know this is challenging for many of us, but before you can start thinking about cashing in on great investment opportunities, you have to get rid of expensive debt.

This advice might sound like common sense, but a surprising number of people try to build a savings account or investment account while maintaining relatively high balances on their credit cards.

This, of course, doesn’t make much sense. Credit-card interest rates can easily run in the mid teens. Savings rates are nearly 0% in many cases, and investment accounts on average return 6% to 9% over time — though not lately!

In other words, you’d be much better off paying down the expensive credit-card debt and then moving on to investment and savings.

3. Reduce the Cost of a Common Thing

Once you’ve got a budget, look for a common thing (meaning something you do often) that could be done more cheaply.

For instance, I plan to start riding my bike to work as it gets warmer. A friend of mine says she is opting to walk to the coffee shop rather than drive. These small actions save money on subway fares or gas. It may not sound like much, but it adds up.

The key is to find something already built into your lifestyle and do it in a cheaper way, creating a recurring savings.

[See Products and Services You Can Get for Free]

Energy costs are another way to build in savings. For instance, energy costs can fluctuate. Up north, winter is usually costlier. In the south, the summer, especially if you have air conditioning, can be more expensive.

Take the peak months and maintain a budget that handles those peak months. As the costs come down in nonpeak months, move that extra money into savings instead of blowing it on something frivolous.

4. Delay Gratification

It’s good to treat yourself to a nice meal or a trip somewhere. But you can’t do it every day. As my grandfather said, “First we work, then we eat.”

By delaying gratification, we build discipline, we establish control of our financial lives.

For instance, say you want to get a flat-screen television. There are several ways to do this. Pop out to Best Buy (NYSE: BBY – News) and put it on your Visa — and sort things out later. That would be a carefree approach more common in the pre-crisis era.

Second, you could time the purchase to come after a key income moment, such as a raise or an expected bonus. At least in this way, you are directing a reward toward the acquisition. A bit more disciplined.

[See 15 Things You Should Not Be Paying For]

Third, you could set a savings goal and build in a “matching” notion that would go into the flat-screen TV fund.

In other words, you decide that you want to add $5,000 to your savings account in the next 12 months. For each dollar you put into the savings account, you put 20 cents into your flat-screen TV account. Once you get to the goal, you will have a contingent “reward” account from which you can buy the flat-screen TV.

5. Develop an Accountability Strategy

When you commit to something — exercising more, eating better, saving money — it is challenging to stick with it. Whole forests have been felled in the name of books meant to help us stick to self-improvement promises.

A powerful tactic is to share your goals with someone you trust so that this person can hold you accountable. It’s easy to tell ourselves that we’ll “get to it tomorrow.” It’s tougher to confess letting things slide to someone who is holding you accountable.

Who is the ideal accountability partner? Ideally, someone you trust enough to be straight with, especially when you’re not meeting your goals. Spouses can keep each other accountable, and that’s how my wife and I have it arranged. Other options are good friends, but make sure you’re ready to give it to them straight. If you prefer someone more removed from your personal life, a financial adviser or even someone in the clergy might play a deeper role in helping you meet your goals.

Share your budgeting and money-saving strategy with your accountability partner and then schedule check-ins on a weekly or monthly basis. Ideally, your accountability partner will help you get back on track when you fall behind.





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Picture of the Day:

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Katy Perry Has a Controversial Playdate with Elmo.

Pop star Katy Perry made countless headlines in 2010 — not just for the success of her album, “Teenage Dream,” but for the rumors surrounding her wedding to actor-comedian Russell Brand. (No, she did not end up wearing a latex “gown.”) But nothing she did this year generated a frenzy of attention to match that which greeted her “Sesame Street” segment with Elmo. Originally slated to appear in this fall’s season premiere, after an outcry from concerned parents regarding her revealing costume, the number was shelved…though Perry laughed it off later that week, with a winky sketch on “Saturday Night Live.”:

My Fave 🙂 Come on now how fucking cute was this man.


TV’s Best Viral Videos of 2010


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Iconic face of Rosie the Riveter poster dies


CHICAGO (AFP) – A Michigan factory worker used as the unwitting model for the wartime Rosie the Riveter poster whose inspirational “We Can Do It!” message became an icon of the feminist movement has died.

Geraldine Doyle died Sunday, a spokesman for the Hospice House of Mid Michigan told AFP. She was 86.


Doyle didn’t realize she had a famous face until she was flipping through a magazine in 1982 and spotted a reproduction of the poster, her daughter told The New York Times.

But while Doyle recognized her face under the red and white polka dot bandana, the strong arm held up in a fist wasn’t hers.

“She didn’t have big, muscular arms,” Mrs. Gregg said. “She was 5-foot-10 and very slender. She was a glamour girl. The arched eyebrows, the beautiful lips, the shape of the face — that’s her.”

Doyle was just 17 when she took at job at a metal pressing plant near Ann Arbor, Michigan in 1942.

She quit about two weeks later after learning that another woman had badly injured her hand on the job — she was worried she’d lose the ability to play the cello, her daughter said.

She was there, however, when a United Press International photographer came to the factory while documenting the contribution of women to the war effort.

A picture of Doyle was later used by J. Howard Miller, a graphic artist at Westinghouse, for the poster which was aimed at deterring strikes and absenteeism.

The poster was not widely seen until the 1980’s when it was embraced by the feminist movement as a potent symbol of women’s empowerment.

The iconic image now graces a US postage stamp and has been used to sell lunch boxes, aprons, mugs, t-shirts and figurines.

The term “Rosie the Riveter” stems from a 1942 song honoring the women who took over critical factory jobs when men went off to war.


Another Michigan woman, Rose Will Monroe, was the best-known “Rosie” after being featured in a wartime promotional film about female factory workers.

Doyle was quick to correct people who thought she was the original Rosie the Riveter, Gregg told the Lansing State Journal.

“She would say that she was the ‘We Can Do It!” girl,” Gregg said. “She never wanted to take anything away from the other Rosies.”

A funeral service is set for Tuesday. Gregg did not immediate return a request for comment.




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