On My Own Two Feet

On My Own Two Feet, by Manisha Takhor and Sharon Kedar, markets itself as the "modern girl's guide to personal finance," but in all honesty this book is for everyone. While Price Charming Isn't Coming was is about the relationship women have with money, On My Own Two Feet is a simple, well-thought out to-do list. Thakhor and Kedar teach you the basics of personal finance without using complex terms or convoluted language and leave you with concrete steps to start getting your financial house in order.

The book is broken into three parts. The first reviews the tools for financial empowerment and goes over the basics. This includes savings, credit cards, credit scores, insurance and budgeting.

My biggest critique of the book is the second part. This is where the authors get into the basics of investing. They do an excellent job in explaining stocks, bonds, mutual funds and index funds and they not only cover how to invest, but also why. There advice - stick to index funds. What I don't like about this section is that they never go into asset allocation or diversification. In fact I could easily see how someone could finish reading this and decide the smartest thing to do for retirement is to put all there money in one index fund.

My favorite part of the book was the third section. I felt that they did a good job discussing sometimes difficult decisions. The chapter on buying or renting explicit tells readers that buying isn't always the smart move. While the recession has taught us this, the book was published in 2007. I was also impressed after I read through the chapter on taxes and was never once confused. Now that is a difficult thing to do. Finally they get into the hard topic of money and love.

As someone who is pretty well versed in personal finance I can't say I learned much, but I did enjoy the book. I especially enjoy the tables that compared your salary to what they believed you could afford. While not everyone's situation is actually that cookie-cutter, they were nonetheless interesting.

I suggest recommending this book to anyone you know who needs a primer in personal finance and is looking for a quick read.

Fighting the Urge to Spend

I don't know if it is because the weather is getting warmer or if it is because I haven't bought new clothes or shoes in a while, but I've been getting huge urges to spend money.

I want some new summer dresses and new shoes. It feels like such a long time since I bought new shoes. The last time I bought a bathing suit? Maybe 3 years. I've thought about cleaning through my clothes so I have an excuse to go shopping again and just "window shopping" at Loehmanns.

The truth is I have bought clothes recently. According to my budget I spent $30.44 in January, $84.91 in February, and $55.89 in March on clothes. I may not have spent anything in April, but I have shopped. It is times like these where I am so grateful for my budget. It would have been so easy to rationalize spending more money on clothes, but the facts speak for themselves.

Maybe in the beginning of June I'll treat myself to a new summer dress or pair of sandals, but in the meantime I'm going to go through what I already have and think about how to make them feel new.

Tuesday Fun

I Made A Top 100 List!

The Online MBA Guide recently published a list of 100 Best Financial Planning Blogs. And guess what!? Yours truly made the list! If you scroll down I'm under Living Smart (think the 60s) you'll find me.

If you get a chance take a look because this is a really solid list of good pf blogs. A lot of blogs I know and love are here, and there are some I'm just discovering and loving already.

Step Back, Take a Breather

My post about Friends and Money yesterday got me thinking about balance again. I feel like I'm constantly struggling to find the right balance between spending and saving. Going out and enjoying the city with my friends or staying in an saving money by watching a movie. As the weather gets warmer I want to be outside and find myself spending more money, and then berating myself for spending that money.

"I don't have a fully-funded emergency account yet! Did I really need that dinner?"

"That food went bad in my fridge, what a waste! I could have used that money to put towards my Roth IRA."

"That candy bar from the vending machine was delicious, but did I really need it?"

"Why do I drink? I spend money and feel gross the next day. But I did have a great night with some friends."

This internal struggle can be exhausting. I need to find a way to remind myself to step back and take a breather. If I saved every penny I would be a miserable person. I need fun in my life and fun often costs money. I have to learn how to forgive myself to spending money. I not only have to find the balance between spending and saving, but I need to find the balance between spending and getting frustrated and spending and enjoying the experience spending gave me. Wouldn't it be great if I could just snap my fingers and find that balance?

Friends and Money

I have awesome friends. At this point in my life I've weeded out all of the crazies, drama queens/kings, and frenemies. Those that are left are amazing, caring, and wonderful people and I consider myself lucky to be able to call them my friends.

When I was in college, all my friends were in the same financial place. We were broke. I remember being upset if I spent $20 in one night.

Right after college my friends and I were sort of all on the same level. Some were paid more than others, but overall we were all struggling on entry level salaries. This was the first time the dynamic around money and friends changed for me. I developed the "keeping up with the Jones' syndrome". Even though I couldn't afford it I would shop for clothes, blow $80 going out, and live paycheck to paycheck without even thinking about saving. Since we weren't open about salaries I didn't know if my friends were also relying on their credit cards or if they had more expendable cash than I did.

On May 12 it will be seven years since my college graduation. At this point in my life my friends and I are all at completely different stages. We work in different fields and I'm sure we make very different salaries. I wouldn't be surprised to hear that some of my friends make twice as much as I do. Surprisingly, while I'm always a little jealous about higher salaries, I wouldn't trade places with them. I'm sure they wouldn't change places with me. We've picked different paths and so comparisons and "keeping up with the Jones'" is not longer important to me.

However, my issues with friends and money has not disapeared now that I no longer care about keeping up with them. What we consider a normal amount of money to spend going out is different and constantly changing. It all depends on what else is going on in our lives. There are houses and weddings to save for and their are bonuses and higher salaries to spend. I find this can sometimes make it hard to stick to my budget. With some friends I rarely spend anything, meeting for avrun and some gaterade. Others I can drop $100 or more a night.

When I spend a lot of money (like I did this weekend) I never feel upset with the friends I've gone out with, but rather frustrated at myself. Why didn't I budget better? Shouldn't I have planned for this expense? Isn't my blog title "Always the Planner"!

I've realized that sometimes plans fail and you definitely can't plan for everything. I'm over budget this month and still have another dinner planned. Is it worth it to cancel this dinner because I'm overbudget? This isn't dinner with someone I see everyday, so no.

As I said when I started this post, my friends are awesome. I've decided that going over budget every once in a while is worth it to be able to spend time with them. As long as I'm balancing this extra spending with working towards my financial goals and comfortably saving, it is okay. Espeically since a new month is around the corner and I get to start fresh again.

I Want!

I want these!

Or maybe these!

They are not cheap. But for every pair you buy they donate a pair to a child in need. So maybe it's okay then? Oh, wait I'm already over budget this month. So sad...

What Can You Live Without

MainStreet.com has an article about five everyday items you don't need.

1. Bottled Beverages
I completely agree. Especially when it comes to water. Tap water in New York City is actually really clean. When it comes to other beverages the article suggests cutting what you drink in half and substituting it for water.

2. Food
I am guilty of this, food always ends up going bad in my fridge and I have to throw things out. I don't know how to solve this. Perhaps it will get better when I'm no longer living by myself.

3. Diet Products
I don't buy diet products, I think they are most likely just as bad for you as the regular stuff.

4. Vitamins
I disagree on this one. I take fish oil, a multi-vitamin, folic acid and vitamin D-3. I know I pee most of it out, but some of it also sticks with me. If I had a better diet then maybe I wouldn't take them, but in all honesty I don't.

5. Cosmetics & Toiletries
The article says

expensive hair products are no more effective than cheap ones. Usually they're made with the same main ingredients or produced by the same company. Try store-brand or less expensive products the next time you're stocking up

I don't buy store brand but I do buy drugstore.

What do you use everyday that you could live without? One thing I recently got rid of was caffeine. I rarely drink it anymore and find that I actually don't need it. What I do need is something hot in the morning, so now I'm on decaff. I could also probably get rid of aluminum foil and pack my sandwiches in tupperware instead.

To Bring Or Not To Bring

Broke Grad Student wrote a post yesterday on why he never brings his lunch to work. When it comes to the issue of bringing work to lunch I think it is a personal choice. I decide to bring my lunch so I can use my money for treating myself to dinner out on the weekends. I believe frugality is all about the choices we make. It is not about saving every penny, it is about deciding what we are going to spend our money on and what we are going to give up. Buying lunch is an easy thing for me to give up.

Broke Grad Student gives three reasons for why he never brings his lunch to work. The first is nobody else brings their lunch. At my work place it is mixed, but even those that don't bring their lunch usually just pick up something and bring it back to their desk. So it is natural for me to bring my lunch - no peer pressure for me.

His second reason is that it saves him time. I bring a kindergartners lunch to work. This usually means a pb&j sandwich and a few snacks. How long does it take me in the morning? Maybe 3 minutes max. So saving time isn't an issue.

Finally he said bringing your lunch isolates you. As I mentioned above most of my coworkers don't socialize during lunch anyway. When do we socialize? Throughout the day. We seem to take mini-breaks to socialize around the water cooler. I don't feel isolated by bringing my lunch, but I also make a point of going out to eat every once in a while. I also socialize with my coworkers in other ways. I am a part of a knitting lunch with includes people from the mailroom to the VP level. We don't actually eat during this lunch, just knit.

I completely understand why Broke Grad Student buys his lunch everyday, but I am going to continue to bring mine.

Prince Charming Isn't Coming

Today's book review is on Prince Charming Isn't Coming: How Women Get Smart About Money by Barbara Stanny. I first read this book a couple years ago after hearing a friend rave about it. As part of my book review series I decided to read it again.

This isn't a book that is going to teach you how much to save or how to begin investing. Instead it focuses on our (as in women) relationship to money. Stanny sums it up best in her introduction:

This book is written with one purpose in mind-to urge you to accept financial responsibility as simply another part of life; to renounce the Prince and become personally accountable. Indeed, something wonderful happens when we stop searching for Prince Charming and start relying on ourselves.

Your Prince Charming doesn't have to be a man (though often it is), it can be a bonus, a certain job, or a salary goal. The theme of this book is that financial independence and learning starts now.

She begins the book by telling her own story of avoidance and finally financial awakening and it is nice to see that the author struggled with her relationship to money as well.

The book is conveniently laid out into three parts. The first focuses on what Stanny sees as the Problem, the second is the learning Process, and finally the Power. At the end of each chapter Stanny includes a recap and a to do list which helps to focus the reader on her main points.

If you are a woman and you are struggling to learn and take control of your finances I highly recommend this book. In fact I highly recommend it to all women. Even though I've read it before it gave me the push I needed to continue learning about personal finance and in particular investments.

Carnival Time

Here is this week's carnival round-up

The Carnival of Twenty Something Finances is live at The Stretchy Dollar.
My favorite reads include 25 Debt Reduction Tips For Your Immediate Action Plan, Worried about retirement? I’m not, and Ahhhhhh!! We Can’t Refinance Our 1st Mortgage.

The Carnival of Personal Finance is up at Mighty Bargain Hunter.
I really liked mad at Suze Orman!, automation and subaccount magic you can do, Bank On Yourself strategy is for real (I wrote about this as well).

The Carnival of Pecuniary Delights is live at Miss Thrifty.
My favorites from the carnival of pecuniary delights include KISS - Keep It Simple, Small, How To Save Money Buying Wine, and Organizing Your Personal Finance-Financial Planning Basics.

My Financial Health

Money magazine has a pretty cool tool that measures how financially fit you are. Of course a tool like this could never know the whole story, but nevertheless it's fun.

I got a B+. According to the tool I need more life insurance and I pay too much for housing. It is definitely not a surprising conclusion.

Rebalancing Your Retirement Accounts

Money and Such has a great post on rebalancing his 401k. This is a timely post for me since I've been thinking that it is time to take another look and what has happened in my 403b.

Here is a preview:

Re-balancing is a pretty simple process in which you bring your investments back into your desired asset allocation. Say you would like to have your assets invested 50% in stocks and 50% in bonds, but with stocks taking a major hit over the past couple of years your stock values fell by a half, while your bonds remain unchanged. While your overall portfolio has lost 25% of its value, stocks now account for only 25% of the remaining funds. When re-balancing you would sell some bonds and buy some stocks such that the new asset allocation matched your original investment targets of 50% in each asset class.

I highly suggest you visit his site and read his full post.

Wasting Time on Friday

This one is for those of you that are as unhappy as I am about the subway fair hikes. A little music and a little fun. =)

Bonds, Stocks, and You

A 31 year old doctor asked Money Magazine if he should be investing 100% in equity right now. The answer - yes, up to a point.

With the Dow hovering somewhere around 8,000 or so, equities are certainly a lot more attractively priced than they were back in October 2007 when the Dow closed at nearly 14,300.

And since your retirement savings will likely remain invested for 30 or more years, you can afford to ride the ups and downs of the stock market to reap the capital growth equities have historically provided over the long term.

What I found most interesting is the idea he brings up next. That you are either a bond or a stock.

Let me explain. Although most of us think of our wealth in terms of the financial assets or real estate we own, the truth is that much of our wealth is also tied up in our human capital, or our earning power.

You can think of that human capital as having the characteristics mostly of a stock or a bond. If you work in an industry or profession that provides lots of job security, then you can count on steady income throughout your career, much like the interest payments on a bond.

If, on the other hand, you work in an area where job security is low, then your earnings are likely to be erratic. Which would make you more like a stock.

My profession, while isn't the highest paying, does offer quite a bit of job security. Nothing is perfect, but losing my job is nothing something I've had to worry about in this recession. Would you consider yourself a stock or a bond?

How Much Do You Save?

Broke Grad Student recently wrote a post asking his readers what percentage of their salary they save. This got me thinking and rather than write a comment I decided to answer him in a post.

The first thing I thought about was the act of saving itself. What does it mean to save? My side bars show an important part of my savings. They are my goals and I put money into them the beginning of every month, just like they were a bill. How much am I saving towards my sidebar goals? 10% of my take-home pay. If you take away the money I'm saving to spend later I'm left with only 6%. Ouch.

Unfortunately my expenses right now don't allow me to save much more. I know it is depressing.

But I'm not only saving in my savings account. I'm also putting away money pretax in my 403b. Right now I'm putting 15% of my gross salary. Even though I seem to have less money in my account then I've put in, I'm still happy. I prefer to think about the deal I'm getting, rather than the current value.

I know it is not popular to think this way anymore, but I also consider the equity I'm building as savings. I'm planning on waiting out this market, so I'm focusing on a longer term view of the value of my apartment.

According to conventional wisdom I'm not doing that bad. What bothers me is that I still feel like I'm not saving enough. I'm obsessed with fully funding my emergency savings, and sometimes it feels like I'll never get there. Slow and steady can sometimes feel like you are moving at a snails pace.

The Apartment Hunt

Bf and I found a place! This is a good time to rent in New york City because demand is down, which means prices are down. We are very excited to live together and to have found a place already (we are not moving until next month).

This is the first time I've ever moved in with a boyfriend and I've found that the experience is very different than looking for a place with a roommate.

The Budget
With a roommate I've either split all the costs or one person would pay more for a larger bedroom, so the budget was simple. The bf is moving an hour away from where he works to a more expensive city and therefore taking on number of extra costs. He is sacrificing for me because I'm going to be in school and so splitting the costs down the middle wouldn't be fair. We worked together to create a proportional budget that would leave us both satisfied. Since I won't be getting a raise and he will, we will reexamine our budget when that happens.

The Search Begins
We actually started looking a few months ago by going to some open houses and just trying to get a feel for what is out there. In the past when I've searched with a roommate, all I cared about were the shared areas and my room. Searching with the bf I wanted to make sure the entire apartment was nice.

So two weekends ago we went to go look at a bunch of apartments owned by the same people. We saw a two bedroom that we loved, but it was more than our budget allowed. We decided to try and negotiate and got the monthly rent down $100. Which was still $75 more than our budget.

The Next Weekend
Since we hadn't seen too many apartments we weren't completely sure if that price was a good deal. So I took last Friday off and we made some appointments. We saw a ton of places on Friday, basically walking around from 11:30-6pm. There were some nice apartments, but many of them were sh*tholes and there were no real two bedrooms. At the end of the day we were feeling really good about the 2 bedroom, but wanted to see it one more time. We spent that night reworking our budget to see if we could afford it. We could.

The Conclusion
We saw it one more time, loved it, submitted our application and was approved! We are going on Thursday to sign our lease. Right now I'm just hoping the money for the deposit transfers in time.

The Deal
Just a quick warning, if you do not live or have not lived in New York City and the surrounding areas you probably won't think this is a good deal, but trust me it is. We were able to obtain a 2 bedroom apartment in a sought after neighborhood in Manhattan for $1950! Yes it is a walk-up & there is no laundry in the building, but it is only two flights up and there is a laundromat across the street.

Even better is the fact that we have two bedrooms. I honestly didn't think we would be able to find something bigger than a 1 bedroom for our price range in the area we wanted to live. We have a good size bedroom, tons of storage and closet space, and another room to use as a home office/guest bedroom. The living room is also big enough to fit both of bf's couches. To give you another idea of how great this deal is, according to streeteasy.com, last year at this time they were renting for $2,250 - $2,400 a month.

Life is good. =)

What Financial Security Means to Me

Dog over at Dog Ate My Finances was recently laid off. Well technically her employer fired her (and others) so not to have to pay severance. Talk about unethical, but that is a whole other post. My heart goes out to Dog, but she was smart enough to create a plan before she was laid off and she has savings to fall back on so even though it is tough for her right now I know she'll be okay.

Her situation got me thinking about why personal finance is so important to me. I budget and save so I can get to a point where I finally feel financially secure. For me financial security = freedom. It means that if I hate my job I can quit. It means I never have to stay in a bad relationship because I can't afford to leave (even though I would probably leave anyway). It means I can take care of myself and others if they need me too. Basically having this freedom means independence.

So financial security means freedom, but when will I feel financially secure? This is a tough one. When you are a saver it is very easy to feel like you always need to save more. And honestly, there is always something to save for. I think for some people getting rid of all their debt will help them feel financially secure. Others may want a certain amount in the bank or in their retirement savings.

I am actually okay with my debt (mortgage and student loans), it is low interest and it has put me in a better place. Yes, I would like to be putting more away for retirement, but I'm already putting away the suggested 15%. I think I will feel better about where I am financially when my emergency savings is fully funded and a mini-emergency savings is funded as well.

And even though personal finance is important to me because I'm working towards financial security, it doesn't mean that once I've reached financial security I no longer have to plan. While I hope to have a little bit more money to have fun with, successful personal finance is something you work on your entire life. And isn't that what this blog is for? Helping me learn and make smart financial decisions for the rest of my life.

Small Splurges in a Recession

Mainstreet.com recently published an article about the simple pleasures that thrive during a recession. When it comes to publicly-traded companies, if they deal with the following they are actually growing: chocolate, caffeine, alcohol, fast food, romance novels and video games.

Sometimes it seems like I crave chocolate at least once a week. It doesn't have to be expensive chocolate, in fact my favorite craving fixer is a couple hershey kisses (okay maybe more than a couple).

The other day I was actually wondering if lattes have actually become a splurge. No, not starbucks lattes, dunkin donuts 99 cents lattes. It looks like I'm right. While starbucks may be selling less, dunkin donuts is doing very well for itself. Bf and I drove past one last weekend that was packed!

Alcohol isn't surprise, when things are bad people drink. When things are good people drink.

Fast food isn't a surprise either. It's cheap, fast and addictive. 

While I'm not so into romance novels I am a big reader and right now I can't put down the twilight series. I get the books from the library though so I'm waiting as patiently as possible for Eclipse. I can see why romance novels are up, they are cheap and they have happy endings (don't they?). In a recession distractions that end well are always welcome.

I find it funny video games are on the list because they tend to be more expensive. But, I guess if they keep you from going out and spending money then technically they can be considered a simple pleasure. 

What are your simple pleasures right now? One I would add to the list are sunday mornings, drinking tea and watching CBS Sunday Morning. 

Genetics & Investing

Are we predestined to make certain mistakes? Can we actually be hardwired to make certain decisions about money? Jason Zweig of the Wall Street Journal recently had his brain tested to find out how much of his genetic code influenced his investing habits.

After I spit into a cup, Dr. Hariri had my DNA analyzed to find out which form I have of five genes that influence the brain circuits that generate decisions about risk and reward over time. His findings: In all five genes, I have a variant, or allele, that is sometimes associated with bad investing decisions.

They also tested how he reacts to real-world financial decisions:

Given the choice, would I rather have a small profit sooner or a larger profit later? Many people hate to wait, choosing as little as $50 today rather than wait a year to get $100. I, meanwhile, was willing to wait a year for $100 rather than take anything less than $90 today. When he saw my results, Dr. Hariri joked that I exhibited "Zen-like patience."

Interestingly this is not unusual. In fact only 20% of your investing habit (or rather risk taking) is genetically determined. So why was focused on long term investing rather than the short term? His assumption is his education and training.

I found this to be article to be very comforting. It means we can change and control how we view investing and our money. Just because I used to overspend doesn't mean I do anymore and even better just because someone overspends now doesn't mean they have to keep doing so.

It is nice to know that the time we spend learning about personal finance and training ourselves to stop spending and start saving and is not all in vain.

Pay Yourself First

I found myself checking my bank accounts this weekend to make sure all my transfers went through. Some of these transfer include my debt payments for student loans and my mortgage, but the majority of them were for savings.

I get paid once a month. A few days later my checking automatically transfers various amounts of money into various savings account. And so - I end up paying myself first, by treating my savings as another bill. The payments into my savings are automatic and happen at the beginning of each month. I find that if I try to wait and see how much I've saved by the end of the month I spend a great deal more money and save a lot less.

I'm a big believer in paying yourself first. Once you start to view your savings as a bill it becomes a habit. And even though every once in a while I have to dip into that savings to get through a particularly tight month, I still end up saving more than if I wait until the end of the month.

How do you go about saving?

Oh, and I'm happy to say all my transfers went through as planned. =)

Financial Commandments - 30s

Yesterday I looked at Kiplinger's Financial Commandments for those in their 20s. Today I'm looking at the version for your 30s. Since I'm not in my 30s yet (though I'm getting close) I'm taking a slightly different view when reviewing these than I did yesterday.

1. Pay off Your Non-Mortgage Debt
Agreed! If all goes well in my 30s I'll be paying off my student loan and the only debt I'll have to worry about is my mortgage. Hmm...maybe I should start saving for a car now so when the time comes I'll have the money.

2. Kick the Debt Cycle Altogether
Here they suggest to take that money you used to use to pay off debt and put it in a savings account. I agree this is a great way to save money, but the thought of not being able to enjoy any of that money is depressing. Of course I'm thinking about it in terms of the money I make now, hopefully I'll be making more money in my 30s!

3. Get Serious About Retirement
The article suggests using your 30s to plan your goals for retirement. I have to say I disagree, I think this should start in your 20s.

4. Diversify Your Investments
I have the same comment as before, this should start the same time you start investing, which is hopefully in your 20s. Make use of the resources that can teach you how to diversity. There are probably resources you have at work, through friends and even your parents. Not to mention their are tons of great books and websites that talk about diversifying.

5. Continue to Learn
I completely agree! Learning doesn't stop when school stops. If you want to get ahead in life you should be taking advantage of opportunities to learn new skills and follow up on your interests. What a great reminder for our 30s.

6. Protect Your Assets
This comes down to the emergency fund and insurance. Again, why wait until you are in your 30s for this?

7. Live Simply
We don't need to keep up with the Jones. I agree, in our 30s we should enjoy what we have, but also remember our bigger goals.

8. Make your Will Known
A great idea and something I have definitely not done. The article suggests having a will no matter how young, single or broke you are. This is probably something I should look a little bit more into.

9. Get a Life...Insurance Policy
If you have kids, parents, siblings or anyone who relies on you getting a life insurance policy is a must. Right now I have one through work, but that's about it.

10. Be Charitable
Why wait until your 30s? Maybe you don't have the money in your 20s, but there is also volunteering. Charity doesn't always equal money. It is important to give back, especially to our communities. If you don't have the time, but you do have an extra $10 a month I suggest you start researching some charities and considering giving that $10. A little can go a long way.

Overall I wasn't as impressed with these as the financial commandments for your 20s. Then again I'm not yet 30. I was surprised this list didn't mention anything about kids after the list for your 20s talked about marriage. I also though a lot of this should be started in your 20s. What do you think? Do you agree?

Financial Commandments - 20s

In January Kiplinger magazine came out with 10 Financial Commandments for Your 20s. I thought they were interesting and so I'm re-posting them with my own comments.

1. Plan AheadI completely agree (as should be expected given the name of my blog). Financial planning is something I think we often fail to do in our 20s because we are too busy trying to figure out our life. Between roommates, jobs, living on our own for the first time, and trying to figure out how we fit in post-college we are swamped. We live paycheck to paycheck and we live day to day. If I had started planning right out of college I would be in a better place today.

2. Live Within Your Means
Just like the SNL sketch Brunette on a Budget posted says "Don't buy stuff you cannot afford." Staying away from credit card debt is one of the best things you can do for yourself in your 20s.

3. Make Savings a Habit
Think of savings as a bill and make it automatic! The less you have to think about it the more of a habit it will be.

4. Pay Off Your Credit Cards
I would like to take it one step further and say stay out of credit card debt, but if you are in it (and aren't we all at some point) make it a priority and pay it off. This is also part of planning as in our 20s we should also be thinking about our credit scores.

5. Start Investing
As soon as you have a job which has a retirement benefit take advantage of it. There is also always the Roth IRA. I'm copying straight from the article on this one:

Let's say a man starts socking away $200 a month at age 25 in an account earning an average annual return of 8%. By the time he turns 65, he'll have $703,000. But if he waits until he turns 30 to start saving, he'll end up with only $462,000.

6. Establish Credit
Having a good credit history will benefit those in their 20s down the road as they apply for auto, home and other loans.

7. Have a Marketable Skill
This is not one I would have added to my own list, but it makes sense. This one is all about your education and your job skills which equals your earning power. If you want to go back to school, make sure you know what you want to do and what that degree will help you get. I'm a big believer that undergraduate education should be steeped in liberal arts and graduate education should be about preparing you for a certain sector/job.

8. Cut the Financial Umbilical Cord
Kiplinger talks about this in term of your finances. Your parents should no longer be preparing your taxes or managing your investments. I have my own two sense to add to this one. In some parts of the country to buy an apartment/house you need help from someone. NYC real estate is incredibly expensive and there is no way I could have bought something without help from my parents. My apartment is an investment we all own and share. All decisions about it are made as a family. Manhattan real estate is also its own beast. Case in point I bought my apartment in January of 2007 and even with the downturn it is still worth 25K more than I paid for it. So I haven't cut the financial umbilical cord, but I don't think it is a bad thing.

9. Marry Wisely
It is important that you have similar values with the person you decide to spend the rest of your life with. It is also important that you share the same financial values. I'm not sure how many couples actually spend the time to make sure page when it comes to your financial goals. I also think this should be a goal in your 30s as well. Not everyone gets married in their 20s!

10. Have Some Fun
Ah the most important is always saved for last. Don't let money management take over your life. Enjoy your 20s, even if that means splurging here and there. Just remember that you can't get this time back.

Since I'm creeping up on 30, tomorrow I'm going to review the 10 commandments for your 30s.

My March Update

Sorry for the lite posting this week folks, life has been a bit busy and I need to get back in organization mode.

In other news it is my favorite time of the month again! That's right, it's updating time:

• My net worth increased 10% this month! This is a great feeling after so many months of decreasing. Most of this is due to my tax return and the fact the markets are slowly starting to inch back up. Could we be moving out of this recession? It's probably to early to know.
• My emergency fun is now at $8,833! This is up from $5,636 and has everything to do with my tax return. I'm excited to be so close to $10,000, but a little bit depressed to be so far from $16,000 (which would be 6 months of living expenses).
• The slush fund went from $17 to $683, thanks again to my tax return. Boy do I love this time of year!
• The travel fund is slowly moving up and is now at $358. Small I know, but after last summer I won't be traveling anywhere this year so I have time to build this back up.
• My BT fund is also slowly increasing and is now at $240, I won't need this money for a few years so I'm not rushing to fund this.
• I also started a new sidebar called School Fees. This is to pay for the student and technology fees that my place of work won't cover and for books.
  

Overall I've had a very good month. When it comes to my debt I'm slowly hacking away. I'm still paying more interest then principal on my mortgage, but at least I got back a nice and fat tax return because of it. And, while I would like to have my student loans paid off my emergency fund is my priority right now.

In yet other news this week I participated in the Carnival of Personal Finance at Wide Open Wallet and the Money Hacks Carnival at Ask Mr. Credit Card.