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It’s another Saturday night, and those free weekend wireless minutes are coming in handy as you make plans with your friends. The only problem: your lawyer and trust-fund friends want to follow up a four-star meal with a night of skipping velvet ropes (and outrageous covers). What do you do when your friends’ idea of a night out will cost your whole entertainment budget for the month? [...]

How does your banker get paid? By waiting for you to make a mistake, of course. According to the Federal Deposit Insurance Corporation, in 2004 banks and credit unions collected a record $37.8 billion in service charges–more than double the amount collected ten years ago. With cigar-smokin’ fat-cat bankers drooling and just waiting for you to overdraw your account, you had better know how to escape their bank fee traps.

Overdraft Fee (Non-sufficient Funds) – The most common bank fee, typically between $25-$50, occurs when you write a check (or make a debit purchase) for more money than you have in your account. Overdrafts occur when your check or electronic charge is proccessed and the bank has to front the cash to cover the difference betweent the payment and your account. “Ding!” Hello, fee. And we’re not just talking about bouncing your rent check — you bank will slam you if you overcharge by just a penny. Budgeting and balancing your checkbook are the easiest ways to avoid overdrafts, but you can also ask your bank for overdraft protection. If offered your bank can link your checking account with another account or credit card and charge any overages to that account, saving you the fee. Have an emergency? Try explaining extenuating circumstances to your bank. With a good enough sob story they may refund certain overdraft fees.

Withdrawal Fee – Certain savings accounts impose fees when you make more than a couple of withdrawals per month. Be sure to read the fine print before depositing to any savings account and only put money away that you know you won’t touch until reaching a goal.

ATM Fees – Automated Teller Machines may dispense money, but they’re good at taking it too! Unless your bank belongs to a free ATM network like SUM, chances are you will incur fees of $1.00-$3.00 at other banks’ ATMs just to take money out. And if you have a large bank with lots of ATMs of its own, watch out: your own bank may ding you with another fee of its own! Plan your cash needs ahead of time with cash envelopes to avoid using ATMs. Or, pay for groceries and other supplies with your debit card and use the cash-back feature. A note: fewer and fewer merchants require minimum credit card transactions, making credit card micropayments possible. To avoid ATM fees use plastic at McDonland’s, chain convenience stores, and more.

Things have a way of happening to my cell phone. It gets dropped, it gets hurled, it gets sat upon, it gets lost between the car seats, it breaks. Most recently, it was submerged in water. So it’s off to the Verizon store for (yet another) new one.

The first time my phone met with unfortunate events, an opportunitistic VZY sales weasel sold me on “phone insurance”. For $3.99 a month you could get a new phone for a $50 deductable if anything happened to your phone (even if it was your fault, as most of mine admitedly were). Then, about a year and a few months into another phone, a part on it wore out so that it could no longer be charged. I thought, well, let’s make this thing work for me and use the phone insurance…and the rip-off is revealed.

Paying the $50 deductable entitles you to a new phone of the exact make and model. As you know, cell phone models have a life of about 15 days before carriers are urging you to trade-up to the latest and greatest model. So the phone will invariably be out of stock and require a few weeks to order. My cell phone is my only phone. Can I be without it for two weeks? Not likely. But wait, it gets worse…in this case, the phone wasn’t even made anymore, so Verizon said, in some polite round-about way, you’re S-O-L. They offered to get me a new phone for free or cheap if I renewed my contract. Thanks, guys, you do that anyway, everday.
So if you’re even thinking about getting some kind of “insurance” for your cell phone, think again. As I have learned you can almost always get a new phone for next-to-nothing if you suck it up and renew your contract. Not fun, but in the end a better deal. As crappy as they are to deal with, in the Boston area Verizon seems to have the best repuation for coverage, and I have too many friends with Verizon not to take advantage of the free in-network calls etc. etc. I guess I just have to bend over and take it, once again, as I go to get yet another new phone.

A 401(k) vesting schedule is a common way for employers to provide an incentive for employees to stay on-board for more than a year or two. For the uninitiated, 401(k) vesting is when an employer makes a contribution on your behalf into a tax-deferred retirement account on a regular basis, but does not give you complete ownership of the money until you have meet certain requirements. While the money subject to 401(k) vesting earns interest the minute it is deposited, you may not be able to take all of that money with you if you quit before your employer’s allotted period of time. [...]

In the movie Boiler Room, Ben Affleck’s character spouts out that “Whoever said money doesn’t buy happiness doesn’t [expletive] have any.” Maybe, maybe not. But more than we often admit, money and psychology are inseparably fused.

For most, the act of spending money brings temporary gratification. The key to responsible spending is to avoid becoming “addicted” to this feeling. I’m not suggested everybody with a bit of credit card debt is a compulsive shopper, but I think we have all caved in a little to this universal human weakness.

In theory, the act of buying something should be a balance between the pleasure we get from owning something new and the “pain” we feel from parting with our money. But in the electronic age, the feeling of parting with money is no longer immediate. When you pay with a credit, or even a debit, card, the realization of spent money doesn’t come until the end of the month.

That’s why it’s a good idea to record every transaction, even when paying with plastic. Keeping a running total of your purchases will remind you of how much you’re spending, and create mental obstacles for your impulses that may want to spend more than you should. Why?

Throughout college my motto was “financial ignorance is bliss.” I charged and charged and just ignored my credit card balances each month – as long as I had enough to make the minimum, I didn’t care. But as soon as I began to look at the mounting debts on those statements, it became harder to spend. When I was thinking about my debt, I could be cheap. The only problem was I could easily put it all out of my mind days later.

As I now work to permanently change my habits, I still find it hard to read every statement carefully – after all, it’s not a pretty picture. But the more keenly aware I am of my monthly budget and my long-term goals – every day – the easier it gets to spend less.

On the flip side, I have known people so frugal that every penny they spent hurt. I am pretty sure I will never get to that point, nor do I want to get there. After all, if you can not enjoy something, why buy it at all?

Nobody can get out of debt without the right debt management plan. Pick a plan that is too aggressive and you may not be able to keep up; go with a “too affordable” plan and you won’t get out of debt as fast as you should. One the flip side, if you are too aggressive with your debt management plan and put too much money to debt each month you may not have enough left over for necessities or emergency expenses. That can lead to new charges on your credit cards, negating your hard work. [...]

The surest way to sound personal finance in your twenties is to learn how to manage your money before you need to. And if you’re a parent, you can help your children become wealthy even if you’re not.

Although this site is mostly dedicated to readers in their twenties looking to better manage their finances, I believe it is never to early to begin a child’s financial education, and it’s a topic I want to touch on as often as possible. The following are some points that can go a long way in helping your kids get off on the right foot financially.

Allowances Aren’t Enough – Whatever age you decide to start giving your child an allowance, be sure that it comes with your two cents on smart spending. If junior is blowing the allowance on candy each week, insist that a portion of the money goes directly into savings. Kids aren’t inclined to think about the long-term, so don’t feel bad about helping yours along!

Lead By Example – You won’t get very far saying “spend as I say, not as I do.” If you’re preaching frugality and savings but racking up new purchases on a credit card, chances are your advice is going to be wasted. Actions speak louder. Kids should give you yet another reason to be financially responsible. If you are, let your child see you in the act of saving money, paying bills on time, and foregoing purchases that you may want but not need.

Watch Where the First Paycheck Goes – When your child, perhaps as a teenager, lands his or her first steady job, be involved in how they use their first paycheck. Of course some of it will go for movies and eating out with friends, but what about the rest? Are they saving for a car or going to the mall on a shopping spree? Sadly I had already spent my first paycheck, by checking off things I wanted in catalogs, long before I had earned it – a telling sign of my credit card woes to come. On the flip side, one of my best friends had over $1,500 saved in an IRA before he started college.

Teach Credit Slowly – Credit cards are a necessary evil. Giving a teenager a credit card is risky, but it is also the best way to begin developing a credit history early on. Two alternatives to giving your child his or her own credit card? Create a duplicate card tied to your account. Allow your child to make purchases on it as long as the balance is paid to you in full each month. If your child overcharges, take the card away until the balance is paid off. You could also use a pre-paid card like Visa Buxx. When it is time for your child’s first credit card, explain the dangers of consumer debt carefully, and check in with them to make sure they aren’t racking up a balance.

Helping your child become financially responsible can be a tricky balance between parental guidance and independence and privacy. At least until your child is 18, it is fair to ask to be involved in all of your child’s financial decisions. Doing so may be one of the most valuable things you can do to secure your child’s future.

The second step in my Debt Free in Seven Steps system involves composing a clear picture of the debts you want to get rid of, any assets you are willing to liquidate to make debt payments, and your monthly cash flow. You will want to have copies of your most recent credit card and loan statements, bank or investment statements, and a pay stub. A calculator and pen and paper will also be helpful. Ready? [...]

All my life I have lived among the American upper-middle class, but I never had the money to actually count myself in this group. But of course I tried. It was a classic case of keeping up with the Jones’, and unfortunately, the more I tried to keep up, the poorer I became. Don’t get me wrong; living among rich people isn’t so bad. It beats living the ghetto – but the more people around you have – the easier it is to think you need more. Which is exactly what happened to me.

Born one of the nation’s wealthiest regions, west of Boston, I attended an expensive private college with the help of loans and financial aid. When I arrived I found that many of my classmates not only didn’t have to worry about paying tuition, they were living like royalty on trust funds. With all that free money, it amazes me they bothered to study! And of course I wanted to live their life, too.

With the help of new credit cards pouring into my campus mailbox by the truckload, I started furnishing my dorm room, buying new clothes, and taking my girlfriend to expensive dinners and to hotels. I picked up bar tabs for my friends. I even dropped $4,000 on flying lessons. After all, it was 1999-2000, and even English majors were getting $75,000 dot.com jobs after graduation. Even if I racked up debt, I thought, I could pay it off after a few months of work.

Boy was I stupid. Today my college credit card debt is an enormous hindrance to my financial future, but one good thing may have come out of it. I have learned to love living with less.

Basically, I can list here what I own: My car, a computer, a camera, an iPod, two guitars, a sofabed, a desk, and my clothes. Really, that’s it. I rent my room and use everything else that my roommates own, and I’m thinking about ditching one guitar and the camera (the iPod was a gift, so I will keep it). And if I didn’t work in the boondocks, you can bet I’d lose the car.

A friend with a lot of stuff told me the other day that I live like a monk. Maybe it’s true, but there is probably a reason monks get rid of possessions along the road to enlightenment. With less things to care for and worry about loosing there is more time (and more money) to enjoy life. Of course, unless you want to be homeless, nomadic, or a monk, we might not be able to get by with nothing. But here are a few pointers for unloading possessions without turning your life upside-down.

Possession Triage: Take a day to go through your belongings one by one and determine the last time you used each one. If it was less than 6 months – get rid of it! If you are hanging onto large items for sentimental reasons but don’t use them, consider selling them anyway. You will always have the memory, and chances are somebody else can use the item more than you can. Another rule: If you have to pay to store something, you don’t need it. Clean out that storage space and save your money. Remember that you can rent or borrow almost anything, anytime!

Organize: Get everything you do own into easily accessible places. If you can access it easily, what are the chances you will actually use it?

Sell, Donate, or Trash: You can purge anything you own in these three ways. Hold a yard sale for smaller items, or sell bigger ticket items on eBay or a community marketplace like Craigslist. Donate clothes to charities. Some will even take furniture in good condition. Toss anything else!!

Improvise: Use plastic storage containers instead of dressers. Hang wall shelving yourself instead of bookcases. Speaking of books, go to the library and rent videos instead of buying! Many items have multiple uses. A sofa can be your bed. An eating table can be your desk. A storage chest can be a coffee table. But then again, what do you have to store?

Take Care: Make the things you do own last and last by taking care of them. Remember, the less you buy, the higher quality things you can buy.