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Gifts That Avoid Both Extra “Stuff” And Clichés

This article was written by Smithee in Consumer. 2 comments.

There comes in a time in a person’s life when they have everything they need. While not necessarily rich, the house is well-furnished and they’re not hurting for clothes. Maybe this someone has even come out and said, “I don’t know what I want, I just know I don’t need any more stuff.” What do you get a person like that?

The old standby is a gift card to a favorite store, or maybe a gift card for something perfectly intangible like some MP3 downloads. But you’d rather try to be more creative, and look at that, time is running out. I heard a few neat ideas from a co-worker yesterday and thought I’d share them with you.

Charity donations

You probably know enough about your friend to make an educated guess about the things they really care about. Consider making a donation to a cause they identify with, be it the ASPCA, the Red Cross, Heifer International, the Electronic Frontier Foundation… the list is nearly endless.

Memberships that show you really care

My clever co-worker from earlier renewed her brother’s NRA membership for Christmas. Maybe guns aren’t her thing, maybe they are, but that doesn’t matter. It was important to her brother, so that’s what he got. What better time than Christmas to practice tolerance?

What could you gift as a membership that you wouldn’t normally get for yourself? NPR or the ACLU, maybe? How about one of your friend’s favorite podcasts that relies on donations to keep alive?

Kiva gift certificate

We’ve talked a bit about Kiva on here before: the service that makes it easy to donate start-up money to developing countries. They’ve got a program for you to give a gift certificate, too, and I imagine it’d be heartwarming and fun to spend an hour or so one of these upcoming mornings for you and your friend to find the right recipient.

Here’s to avoiding stuff and clichés! Good luck, everyone.

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Ten Things to Do With $1,000 Right Now

This article was written by Flexo in Saving. 17 comments.

Mention to your friend that you suddenly received an unexpected $1,000 and I would be willing to bet he could come up with several suggestions for you. Most of those suggestions will likely involve handing the money over to him. My first suggestion is to refrain from telling your friend when you have $1,000 more than you know what to do with. Once that is achieved, it is best to have some ideas in mind just in case this situation presents itself.

Money Magazine has eleven suggestions for people who find they have $1,000 sitting around without a planned destiny.

Top off your emergency fund. If you don’t have an emergency fund, $1,000 is a great starting point. It is quite easy to open a high-yield online savings account so you can keep your emergency fund close while letting it earn as much as possible.
Spend five hours with a financial planner. Here Money Magazine assumes you will go to a financial planner who charges $200 per hour. Unless your finances are unusually complicated, skip this suggestion.
Buy a top-notch stock fund. Here Money Magazine suggest putting your money in actively managed mutual funds. I suggest sticking with low-cost non-managed index mutual funds. Vanguard requires $3,000 to start investing, but the low-cost Schwab Total Stock Market Index Fund (SWTSX) requires only a $100 minimum deposit.
Upgrade your home appliances. I can see this being a legitimate option if you have problems with your appliances or need to switch to more energy-efficient models.
Help on a large scale You can use the $1,000 for others’ good. Money Magazine suggestions buying sheep for farmers, offering small business loans through Kiva, and planting trees. Any charitable option is a good choice for an unexpected $1,000.
Join a gym. If you know you can make your gym membership last, this could be a suggestion that saves money through your improved health. Otherwise, a gym membership could do nothing more than suck your money away.
Beef up your IRA (if you’re 50 or older). Anyone age 50 or older with the appropriate level of income can invest an additional $1,000 above the standard maximum in a Traditional or Roth IRA.
Pay down credit card debt. This should probably be towards the top of the list. Paying off expensive credit card debt saves you money in interest fees down the road. $1,000 can go a long way to getting out of debt.
Update your estate documents. Money Magazine assumes you had your estate documents in order at one point. $1,000 should cover updates to your will, health-care proxy, and power of attorney.
Start a young investor off right. Money Magazine suggests setting up a diversified portfolio for a child using a combination of Schwab’s low-minimum and low-cost index funds.
Become a star at work. This is the most unlikely suggestion for spending your own $1,000. Money Magazine suggests taking a class, much like the improv class Smithee is taking, or any other course that might provide you with a competitive edge. Self-development is a good idea for your own money, but I wouldn’t spend $1,000 on an activity that does nothing more than increase my value to a corporation.

What would you do with an unexpected $1,000 right now?

What to do with $1,000 now, Money Magazine, October 12, 2009

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Podcast 24: Unconventional Path to Becoming a Millionaire

This article was written by Flexo in Podcast. 2 comments.

Our guest on today’s podcast is Jen Smith, the “Millionaire Mommy Next Door.” By age 40, Jen had become a self-made millionaire and she and her husband are now financially independent, stay-at-home parents. In our interview, Jen describes her path from minimum-wage jobs to financial freedom.

Jen has appeared on The Montel Show and shares with Consumerism Commentary and is scheduled to appear in an upcoming film, Secrets of Money: The Documentary Movie. She writes regularly on her blog, Millionaire Mommy Next Door.

To listen, use the player above (Adobe Flash required), download the podcast here, subscribe to the podcast RSS feed, or use the iTunes link. Note: open links in a new window (Ctrl-click or Command-click) to avoid interrupting the podcast.

[00:00] Introduction from Tom Dziubek
[00:44] Interview with Jen Smith, Millionaire Mommy Next Door
– [01:02] Why and how Jen set out to be a millionaire
– [04:22] How Jen has lived differently since achieving millionaire status
– [07:55] Jen’s unconventional path to becoming a millionaire
– [10:34] Apprenticeship as an alternative
– [17:38] Why Jen started the Millionaire Mommy Next Door website
– [19:28] Jen’s donations to micro-lending website Kiva.org
[21:06] End

We always welcome feedback from listeners. If you have any comments for this episode or for any other, or if you have suggestions for future episodes, please leave us comments here or email us at podcast at this domain name.

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Predatory Bank Fees Could Lead to the End of Banks

This article was written by Flexo in Banking. 5 comments.

About the author: Karney Hatch is a filmmaker whose new documentary, Overdrawn!, explores the predatory lending practices of major national banks with Ralph Nader, Joel Bakan, a loan shark, and many others.

In all the number crunching and legalese surrounding predatory fees of various sorts, it’s easy to forget the visceral reaction that they cause in people. Ask any “telephone banker” who works a call center for any of the big banks, and they’ll tell you the first reaction that these fees cause in customers: rage.

Or, sometimes, shame. Which is the way the banks want it. For the most part, only people with low balances in their accounts get overdrawn, and so one of the most common emotional reactions when the fees hit is shame, and people who are ashamed don’t tell their friends they got overdrawn, they don’t call their member of Congress and tell them something needs to be done, they don’t switch to a smaller local bank or a credit union -– they just pay the fees and go back to their lives. Until the next time they get overdrawn, and then the process repeats.

I have two things that I want to encourage people to do.

Don’t feel ashamed. Shame just makes us feel isolated and powerless. Rage is healthier and leads to actions, like those mentioned above.

I’d like to encourage people to consider an option that hasn’t quite hit the mainstream yet, at least here in the US: microlending. A relative of credit unions, sites like Lending Club and Kiva work by facilitating loans between individuals, but without any kind of bureaucracy that can lead even a well-meaning credit union in the wrong direction. No middle man, no managers, no shareholders watching the bottom line. Just people lending to people.

For now the micro- prefix fits, but there’s no reason that this framework can’t expand into home mortgages, business loans, and so on; in short, every form of lending that banks currently dominate and exploit. As Jessica Anderson, a banking consultant with over three decades in the industry, says in Overdrawn!, “Once that model gets the bugs worked out, then why do we need banks?” And how would that make me feel? Pretty damn good, I have to say.

If you enjoyed this article, please take a look at Overdrawn! The Documentary by Karney Hatch.

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Support Entrepreneurs in Developing Countries With Kiva

by Flexo

Kiva is an international non-profit organization that facilitates “microlending” for the purpose of its mission, alleviating poverty across the world. The organization allows those who wish to contribute to lend money in small amounts to entrepreneurs in the developing world. Kiva’s website lets you browse entrepreneurs’ profiles to select the recipient of your micro-loan and ... Continue reading this article…

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My Picks From the Top 100 Undiscovered Websites

by Flexo

PC Magazine recently published a list of their editors’ picks for the top 100 “undiscovered” websites. The list spans a variety of categories from reference to music to health. Consumerism Commentary readers are probably familiar with a few of these sites, particularly those in the “money” category. Here are some of the highlights throughout. Hard ... Continue reading this article…

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