I spent last week in Phoenix, Arizona on a business trip. Whenever I fly for business I have a note saved in my Evernote account with a full packing list. (I tend to forget things these days… I’m told having a baby in the house will do that to you.) 

On that list is everything I need to put in my toiletries bag: allergy medicine, vitamins, shaving cream, and a razor.

I went through my packing list item by item, yet still somehow showed up to Arizona without my razor in my bag.

I discovered the omission around 10:30pm Sunday night. The local pharmacy stores would likely be closed by the time I got there, and I didn’t want to try and find a Wal-Mart.

The hotel was nice enough to bring me a free “razor”… but I’m not even sure you can call it that. It was a piece of plastic with two metal blades that felt like it had been recycled from a lumberjack’s shaving routine.

In other words it was extremely dull and didn’t really do the job. 

I needed to buy a razor despite having a cabinet of them back at the house — frustrating. Nonetheless I looked around online and found a really cool thing that Target does these days: mobile coupons.

Target has two mobile coupon options, and you can use both: 

  • Their new Cartwheel app
  • Text Messages with links to unique website coupons

My deal was on the text messaging side, and this is how it works.

First, you sign up online to allow Target to send you coupons via text: http://www.target.com/spot/mobile/landing

Then you get a text message and are asked to confirm that you actually wanted to sign up.

Next they send you a coupon of what they send everyone.

But if you just stop there you are missing out on some savings. Target releases several different coupons throughout the months and year with a phrase you can text back to them. In return you get another unique set of coupons. 

I was able to text “BAREURHAIR” and got 5 haircare product coupons back. The first one was $2 off a Gillette razor.

I scooted down to the giant red-dotted store and picked up a razor. The checkout experience was very easy. I clicked on the URL that Target had texted back to me, my set of coupons loaded with a giant barcode at the top, and the cashier scanned my phone for instant savings.

It was really slick. 

The Cartwheel app is a little different. It’s like having a coupon wallet on your phone. Except the coupons are from Target, and you can only hold 10 at a time. (There are over 500 available discounts available on the app as of this writing.) I’ve yet to find a discount in the Cartwheel app that I could use, but if you do a majority of your shopping at Target I’m sure you could find something to fit what you need.

In the end I saved a measly $2. But for the effort I put into it, especially for something I was definitely going to buy anyways, $2 is still $2. (And it bought me shaving cream to go with the razor, too.)

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Your Cinderella Finance Story

by Kevin on March 28, 2014

The Dayton Flyers have pulled it off. They entered the NCAA tournament as an 11 seed and facing large statistical odds to advance.

They beat the team that refuses to play them — #6 Ohio State. For that win they were given the privilege of playing  #3 seed Syracuse. The same team that earlier in the year were 25 and 0, not having lost a single game. But Dayton beat them, too.

The Cinderella title was firmly in place. They were overcoming odds, continuing down the tournament, and now faced #10 seed Stanford. From a pure seeding perspective it wasn’t so much an upset as just a quality game.

Dayton is now in the Elite Eight for the first time since 1984. Thirty years have gone by.

Are You Cinderella?

What’s your financial story?

Are you the top seed coming into the tournament? Doing everything right, saving for retirement, and sitting on a massive emergency fund?

Or are you struggling to get by, making mistakes, and looking to turn things around?

Here’s the good news: you can choose to be the Cinderella finance story. Today. Now. 

You don’t need to wait for a tournament to come out. There’s no bracket, no seeding required.

You have the capability to say enough is enough, I’m ready to defy the odds and turn this “team” around.

How to Become a Financial Cinderella

Alright coach, how do we defy the odds like Dayton? Start here:

Realize Your Situation

Being aware of your financial situation is the first step in making changes. If you are driving blind you won’t have much success. 

Basketball teams track stats and work to improve them. But they can’t improve what isn’t tracked, so your starting point is gathering all of your financial information to figure out what is going on first.

Grab the Coach’s Whiteboard

Then you grab the coach’s whiteboard and sketch out a plan. 

Cut spending here. Work a little more over there. Get creative with meals here.

Whatever it takes, whatever play we need to come up with in order to win the game.

Successful planning in this stage is based on the data we have. You know your opponent likes to drive to the left to the basket so you set your defender up to block his path and force him to go right. 

You know what your gaps are and you plan to close those gaps.

Execute on the Play

The play is drawn up. The referee signals it is time to break the huddle.

It’s time to execute on the play.

The thing is… not every play works. Turnovers happen. Shots go up and badly miss. 

That doesn’t stop the players from coming back down the court to execute on the next possession. It doesn’t stop them from playing tough defense when the opponent has the ball.

It shouldn’t stop you either.

You’re going to make mistakes along the way with your finances. Get back up, dust yourself off, and execute on the play you have drawn up. Continually call timeout to assess the situation, grab the whiteboard again, and draw up a new play if needed.

This is the path to financial success. You could be Cinderella this year. Don’t wait, the big dance is waiting for you.

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March Madness is in full swing. A 16 seed still hasn’t topped a 1 seed, but the rest of the bracket is in chaos. We’ve got 14 seed Mercer knocking off perennial favorite and 3 seed Duke, a 10 seed Stanford knocking off 2 seed Kansas, and everything in between.

In the spirit of March Madness I thought we should look at what I’ll call the “Best Personal Finance Concepts Bracket.” Just like you would expect a #1 seed to make it far in the tournament, these are the tactics and strategies that when performed successfully are most likely to lead to financial success. That’s not to say a lower seeded tactic won’t help you, but these are the most likely to lead to winning.

The Top Four Seeds of the Bracket

Overall #1 Seed: Spending Less than You Earn

I’ve written about spending less than you earn a ton over the years and for good reason. This is the favorite to win our theoretical tournament due to the strong foundation it creates for everything else you do in life.

You can’t perform many other positive financial tasks if you are consistently spending more money than you are bringing in. It doesn’t matter if you’re a millionaire or just starting your career at the bottom of the totem pole if you spend more than you make. Both parties are broke!

Overall #2 Seed: Having an Emergency Fund

This is a strong contender for the title because it can save your bacon in so many different ways. Living on the edge of financial bankruptcy is not a place of comfort. If you never build up a rainy day fund you are walking that fine line even if you don’t realize it. A small hiccup without an emergency fund can wipe you out while a huge financial problem with a strong emergency fund can save you from ruin.

Overall #3 Seed: Investing for Retirement Early

I’d like my road to retirement to smooth and paved with gold bars. If you’re like me you need to get started today.

When it comes to retirement nothing will do you as much good as starting as soon as possible with socking money away for when you clock in for the last time.

There are three variables to investing for retirement: how much time you have money invested, how much money you invest, and the rate of return that invested money earns.

Starting today means you have to rely on the other variables less. That means not having to save as much money and not having to take as much risk to generate a significant return.

Overall #4 Seed:  Responsible Credit Use

Credit cards aren’t evil. Home mortgages aren’t evil. A company giving you the ability to borrow money at a cost isn’t evil.

These things are tools that must be used responsibly. Successfully using them in the right manner can actually net you tens of thousands of dollars over your lifetime. 

The largest example is that of a home mortgage. If you use credit well and have a solid credit score you will qualify for the lowest mortgage rates around. Irresponsible credit use would land you in higher interest land. The difference is staggering. A $160,000 mortgage with a 30 year term at 4.25% would require you to pay $123,357.38 in interest. That same mortgage at 5.5% would require $167,046.46 in interest.

The difference? $43,689.08. 

Off of one home purchase.

Use credit wisely and all of your credit costs go down permanently. It’s a strong contender in this bracket.

What other “seeds” should get strong consideration from the selection committee?

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Life insurance is a financial instrument we don’t like to think about. We know we need it, but invoking thoughts of our own death and what happens to our families afterwards is uncomfortable to say the least.

We put it off for months, years, and decades. Meanwhile our family’s financial risk is high and the cost of finally taking action rises as we get older.

Maybe you’ve decided its time to get life insurance. You see the value. You see the need.

But there’s always an excuse or two in our heads to hold us back from making this decision. A common excuse: we’re not healthy enough.

What Does Health Have to Do with Life Insurance?

If you’ve never applied for life insurance you might not understand why your health plays a huge part into life insurance.

When you apply for a life insurance quote online the insurer wants to know just about everything about you:

  • your height and weight
  • your family medical history
  • your vitals and blood work

They send a nurse out to your home to draw blood which is sent to a lab for testing. They want to know your good and bad cholesterol levels, your red and white blood cell count, and numerous other items.

Your health determines where in the life insurance rate spectrum you land. These are typically Preferred Plus, Preferred, Select, and Standard. (Your specific life insurer might call each category something slightly different. The front end of the list is the best health and lowest rate, and rates go up the further you go down the list.)

If there are red flags in your health screening you won’t get the least expensive life insurance rate.

This makes your health important not only for your longevity, but for your out-of-pocket life insurance cost.

Never Wait to Buy Life Insurance

Perhaps you just had your annual physical and they did a blood work on you. The results come back with mostly average results, but a few spots of concern.

Should you wait to apply for life insurance?

You might be able to improve those numbers in 6 or 12 months through diet and exercise. A healthier you would land a lower risk score and thus a lower term life insurance rate.

However, waiting to buy life insurance is a horrible decision on for several reasons:

  • You could die between now and when you decide you are healthy enough to get life insurance leaving your family in financial straits.
  • You could still qualify for the cheapest life insurance rate with your current health.

But there’s one basic reason waiting is a bad idea…

The Beauty of Term Life Insurance

Term life insurance is a form of insurance that insures your life for a specific term.

That might sound redundant, but when you compare it to the significantly more expensive whole life insurance full of investment options, the simplicity of term life becomes obvious.

Term life insurance is just like car insurance. You pay your premium on time and the insurer agrees to insure your life for the stated amount. And just like car insurance if you don’t pay your premium on time the insurer cancels your policy. Or you could cancel your policy and go with a competing firm.

Term life insurance works just like that. You can buy a policy today, get your health screening, and pay whatever premium. If you land in a risk bucket above where you want to be, you still buy the policy. Then you get to work on becoming the healthy you. One year later you buy a new life insurance policy, wait for your health screening to confirm your lower rate, complete the purchase of the insurance, and cancel your old policy.

This isn’t possible with whole, variable, or universal life insurance because there are surrender charges and all sorts of fine print. Term life insurance is pretty simple, so don’t delay in buying a policy today. You can always cancel it in the future when you get a less expensive rate.

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