Here are some articles that caught my eye this week…
One of the four basic rules of the You Need A Budget method of budgeting is working your way up to the point where you have enough saved so that you are paying this month’s bills using money you earned last month. Personally, I think this is a great goal. What would it mean to your peace of mind if you knew you already had money in the bank to pay all of your bills this month?
While certainly there are exceptions, I still believe that folks that have become wealthy often do so because of the way they have approached life. And the poor often fail to ever make any progress because the decisions they make keep them in a state of poverty.
One of Dave Ramsey’s most famous sayings is, “Live like no one else, so that later you get to live like no one else.” One of the keys to financial success is being willing to have the discipline to sacrifice in the short-term so that you can have what you really want in the long run.
I love the Roth IRA especially for young people. While you give up the tax deduction today, the tax benefits you get in the long-term can be enormous. They provide you a great deal of flexibility in managing your taxes in your retirement years. While I don’t recommend pulling money out of retirement accounts to pay for today’s bills, the Roth does provide you with the ability to pull out money you have contributed without penalty. This could provide a critical safety net in the event you were faced with a really serious emergency.
If you are planning to live in your home for many years to come, then I don’t think it matters much whether you can recoup the cost of home improvements. If you have some changes you want to make that will make your home more comfortable for you and you have the money to pay for them, then do it. If however, you plan to sell your home in the next few years it is important to understand whether that home improvement you are planning will really translate to a higher price when it comes time to sell. You don’t want to pay $20,000 for an upgrade that someone else will enjoy.
This is something to keep an eye on. I hate the fact that credit scores are really just about how good you are at borrowing money and yet they get used for things that have nothing to do with debt. If, however, the scoring methods are changed to include non-debt payments, it would start to go a long ways toward making the credit score a more useful number.