Tips from Real Life 101

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Tipping Etiquette 101

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One of my favorite restaurants suggests in bold letters at the bottom of their menu “18% gratuity is appropriate and recommended.” With restaurants suggesting how much to tip before you even place an order, appropriate tipping etiquette may be confusing. When do you leave a generous tip? Is it ever acceptable to leave no tip at all? We’ve created a little cheat sheet of the modern guidelines when it comes to gratuities and tipping etiquette.
Restaurant Dining: Tipping used to show an individual’s appreciation for exceptional service. Restaurants now factor in tips as a way to lower wages, and therefore it is customary to leave:

  • 15% gratuity for average service.
  • 20% is recommended for exceptional service. 
  • 10% gratuity is appropriate for less-than-mediocre service. 

It is never appropriate to leave a nickel or dime out of spite, and the manager should be confronted privately if the service does not deserve even 10% gratuity.
Tip Jars: Many small establishments, such as coffee bars and ice cream shops, have a tip jar next to the register. Because these tips are shared between all employees, it is not necessary or expected to leave a tip.

  • Frequent patrons should drop in a few bucks from time to time. 
  •  This guideline can be applied to bar service as well. 

Private Parties: It is not recommended to tip servers or bartenders at private parties, unless the server has provided extraordinary service.

  • Etiquette experts suggest a small tip of appreciation in special circumstances, such as help when you spill on your shirtfront.

There are a few other situations when it is customary to leave a small tip:

  • Valet parker: $2-$5
  • Doorman: $5 for hailing a cab (more generous tips are recommended around the holidays for doormen you encounter regularly)
  • Coat check clerk: $1-$2
  • Hairdressers, barbers, manicurists, etc.: 10% of total bill (more is recommended during the holiday season)
  • Taxi driver: 15% of total bill
  • Skycaps at airport: $1-$2 per bag
  • Grocery loaders: $1-$3 depending on the number of grocery bags

Sources: How to be a Gentleman, John Bridges
Essential Manners, Peter Post

Five Things Credit Card Companies Don’t Want You to Know

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Five Things Credit Card Companies Don’t Want You to Know

You don’t have to look too far to read about someone getting into big trouble with credit cards.  In fact, you may just need to look at your latest statement to see someone who needs help getting out of credit card debt.  We’ve prepared some tips to help you, or someone you know, start climbing out of the hole they’ve dug.

1.  Little dollars make a big difference. Credit card companies earn money from consumers through interest charges and fees.  The higher the balance you have, the more you will pay in interest.  If you go over your limit, make late payments, or skip payments, there will be fees charged to your account.  This lets the credit card company double-dip; unpaid fees add to your balance, which increases the amount of interest you pay each month.

Most people only make the minimum payment each month.  While this protects their credit rating by keeping them in good standing with the credit card company, it does very little to reduce their debt.  Paying any extra amount toward your balance will drastically reduce the time and costs of paying down your debts.  If you have a $10,000 balance on a credit card at an 18% APR, paying only the minimum payment every month will take 26 years and $24,234 to pay off.  Adding $10 extra to each payment will save you nearly 9 years of payments and almost $3,000 in total interest.  If you up your payment by $25 each month, you will pay off your balance in a little less than 13 years and save nearly $6,000 in total interest compared to the minimum payment.

2.  You don’t have to wait for your bill to arrive before you make a payment. Credit card companies calculate the interest you owe based on your average daily balance.  By paying ahead on your balance, you reduce your balance and therefore the amount of interest you owe each month.  If you make a major purchase, and you plan on making a larger credit card payment which won’t pay off the balance, don’t wait until your bill arrives.  Use your credit card company’s online payment service to make your bigger payment early in the month.  This way you pay down more principal and pay less in interest charges.

3.  Everything is negotiable. Your interest rate, minimum payment, payment due date, fee and just about everything else can be subject to negotiation with the credit card company.  You won’t always get your way, and you’ll need to have a good reason for what you are asking for, but you will be surprised at how flexible they can be.  This is particularly true if you are a good customer: someone who makes their payments on time and uses their card regularly.  As the saying goes, it never hurts to ask.

4.  There are other options besides paying off your balance in full. We all know it is always best to pay off your credit card balance in full every month.   However, if you are in big trouble with credit card debt, and you don’t feel you can repay what is owed, you do have options besides defaulting on all that debt.  You can ask to settle the debt with the credit card company for some amount less than the total of what is owed.  This satisfies your obligation to them, and eliminates a costly burden on your end.  However, this is not without its downside.  Settling your debt is like a “mini-default”; it’s not as bad as not paying anything, but it’s not the same as paying everything either.  You will still take a negative hit on your credit report, and your ability to be approved for future credit cards or higher credit limits may be limited.

 5.  The consumer credit industry is extremely competitive, and that can be used to your advantage. There are tens of thousands of credit card options on the market today for most consumers with different rates and benefits.  Credit card companies only make money if they are the ones collecting interest and fees.  If you take your business elsewhere, that costs them money.  This is why companies are willing to negotiate, but if you still aren’t happy with your arrangement, go somewhere else.  Many companies offer low introductory rates on balance transfers, so your monthly payments can pay off your debt faster with the new card.  You have the most options, and are the most attractive customer, if you make regular payments and have a good credit score.  Always keep an eye out for better offers; if your current company can’t match the deal, you can always make the switch. 

3 Reasons NOT to Pay Off Your Mortgage Early

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With the current housing crisis, many homeowners are considering paying extra each month on their mortgage to pay their loans off early.  People work hard every month to come up with extra dollars looking for big savings in the future.  But is it really worth it?

Let’s look at the facts:

The case for:

(The numbers in the following example were created using a mortgage amortization worksheet template which may be found online or in the spreadsheet software that came with your computer.)

The case for paying off your mortgage early is usually explained as follows:

Assume you have a 30-year mortgage for $100,000 at fixed 4.75% APR.  Your monthly payment – excluding taxes, insurance, etc. – would be $521.65.  By the time you pay off your mortgage 30 years later, you would have paid a total of $87,793 in interest.  Instead, you opt to pay an extra $100 a month towards the principal on your loan.  This extra amount reduces the interest you pay to $59,351 and causes your loan to be paid off 102 payments early.

Your total savings are $28,441:

$187,791 (total payments expected with original loan) – $159,350 [($521.65 + $100 extra payments) x 257] = $28,441

What could be wrong with that?

The case against:

As attractive as those numbers look, there are several issues which makes this less of a good deal than you might think.  Let’s look at them in detail.

1) How long will you live in your home?

Studies show that, on average, people tend to change houses every 5 to 7 years.  If you don’t plan on living in your house for the next 30-plus years, there is no financial advantage to paying ahead on your mortgage.  All the extra money you pay each month will be returned to you when you sell the house.  It’s kind of like getting a tax refund; it feels like a bonus, but you’re just getting your own money back at a 0% rate of return (more on that later).

2) Don’t forget inflation.

The savings you achieve by paying extra on your mortgage don’t happen all at once, but rather over time and in the distant future.  In this case, paying an extra $100 on our mortgage starting in month 1 causes us to stop making payments in month 257 – over 21 years later.  We know that we live in a world where inflation is a reality: the purchasing power of our money decreases at some rate over time.  However, many people who argue for paying extra on a mortgage are treating the money they get back 21 years in the future as having the same purchasing power of today.  Unfortunately, their values are quite different.

In the U.S., inflation has increased at an average rate of 2 – 3% yearly.  If we assume an increase in inflation of 3% per year, our $521.65 mortgage payment 21 years from now will be equivalent to a payment of $276.30 today.  By year 30, that value has dropped to $212.02.  Put simply, we are paying $100 to save around $250, not $521.65.  If we inflation-adjust the extra payments over time and the total savings over time, the net present value (how much paying extra saves in today’s dollars) equals $6,030.61 ($24,969 in savings – $18,938 in extra payments).  That’s a lot of extra work for not much return.

3) Your extra payments earn a 0% rate of return.

This is probably the most important point people overlook.  Every extra dollar you spend paying down your mortgage early earns you no money in return.  The value of your home increases or decreases based upon changes in the housing market, not how much money you put into your mortgage each month.  Let’s say you opt to put the extra $100 each month into an investment product which earns an average annual return of 8%.  By the end of 30 years, you would have accumulated about $148,015 in your investment fund.  Compared to the $87,793 you paid in mortgage interest over this period, you are $60,222 ahead.  Not only do you have more money, but this gives you cash you can access over those 30 years should you need it for medical bills, emergencies, or other unexpected expenses.  If all your money is tied up in your house, you will have to sell it, or take on more debt, to get access to the cash.

Is it never a good idea to pay off a mortgage early?

There are some circumstances in which paying your loan off early makes sense.  For example, if you are nearing retirement, you may want to pay extra so you don’t have a mortgage payment to contend with every month.  If paying your loan off takes five years or less, the effects of inflation and potential investment earnings are negligible, so you aren’t doing yourself a disservice.  Also, if you pay private morgage insurance (PMI) on your loan, and your loan originated before the tax law changed to make PMI payments tax deductible, there may be an advantage to paying ahead until you’ve created enough equity to eliminate those extra payments.

What should I do instead?

Invest your money.  Time is your best friend or your worst enemy when it comes to investing.  Don’t use the next 20 or 30 years paying extra on a mortgage when you could be doing something that can create real economic benefit for yourself.  Increase your 401(k) withholdings at work, or open an IRA account.  Contribute extra to your child’s college education fund, or add to your cash reserves, so you don’t have to rely on debt during tough times.

A great way to get ahead on your mortgage is to look into refinancing options.  In our current, low-interest rate environment, it may be possible to refinance a 30-year loan into a 20- or 15-year loan without increasing your monthly payment.  The lower interest rate and shorter time horizon will reduce the total interest paid on the loan without tying up any extra cash.  For example, let’s assume you started with a 30-year, $100,000 fixed rate mortgage at 5%.  After five years, you would have a loan balance of $91,282 and be expected to pay out $69,601 in interest over the next 25 years.  If you refinance that loan into a 20-year fixed at 3%, not only would you pay your loan off 5 years earlier, but your monthly payment would be $26 less each month, and you would pay $39,152 less in total interest.

Like any decision, there are many factors that influence how we spend our money.  It is important to consider all your options before committing your hard-earned extra money to your home loan.  By anticipating how long you will live in your home, and understanding what investment or refinancing options are available, you can make the best choice for how to handle paying off your mortgage.

Written by Real Life 101, Inc.

January 31, 2011 at 12:44 pm

10 Tips for Keeping Your New Year’s Financial Resolutions

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I know what you’re thinking – another New Year’s resolution article.  I promise this one will be different.  Every year we read one of these articles, and we get excited about making this year the one where we really take care of business.  This will be the year we finally get a handle on our finances.  However, by February or March we are back where we started from without any trace of optimism.  But this year can be different if we set ourselves up for success.  We’ve created ten tips to help put you on the right path and keep you there all year.

10. Pick something important to YOU.

The big reason most New Year’s resolutions fall flat is it’s too easy for us to give up.  Choose an area of your financial life that will make real, meaningful impact.  Perhaps you are overburdened by credit card debt, or maybe you are concerned about paying for your child’s college education.  Determine your biggest pain point, and address it head on.  If you can’t afford to ignore it, you will be less likely to abandon to the plan.  Financial problems are like cavities in teeth; they don’t get better by themselves, and the longer you wait to address the problem, the bigger the hole you have to fill.


9. Be specific.

When creating your resolutions, be specific in what you intend to accomplish.  It’s not enough to say, “I want to have less credit card debt,” or, “I want to save more for retirement.”  Goals like these are recipes for failure.  How much is less or more?  If you want to create meaningful change, set a specific, measurable goal. Paying off three of your credit cards or putting $10,000 toward your retirement are specific goals which can be easily measured.  You can track your progress through to achievement and know you’re making a meaningful impact on your financial life.

8. Run the numbers.

When setting a financial goal, do the math, and figure out what it will take to achieve your goal.  This helps you create a financial “roadmap”: you’ll know where you’re going and how you’re going to get there.  Don’t be discouraged by a big number; break down the total amount into monthly or weekly sums.  Focus on achieving the smaller, incremental numbers,  and over the course of the year, you will achieve your goal.

7. Incorporate change into your daily routine.

Once you know what you need to do each month or week, determine how that change will affect your daily routine.  For example, you may determine that you can save the $5 per day you need by skipping your morning latté.  Maybe another $20 comes from eating an extra meal in every week.  Whatever it is, make the commitment, and recognize the financial  impact every time you take action.  Think of it as an affirmation; “Paying off my credit cards this year is more important to me than having a latté today.”  It’s easy to lose track of the big picture when we get caught up in the moment.  By actually pausing to remind yourself why you are making certain choices, you are less likely to get derailed.

6. Phone a friend

Don’t feel like you have to do this all by yourself.  Share your goal with friends who are looking to make similar changes.  Talk regularly about your successes and challenges.  This will have several benefits.  You will feel more accountable to achieve what you set out to do and be less likely to give up.  Also, you will find that others will suggest ideas and strategies you  may not have considered as well as offer words of encouragement when you need them.



5. Win the little battles

Spending less is the obvious answer to how to find more money to put toward your financial trouble spots.  The answer which isn’t so obvious is where that money will come from.  With a little creativity and discipline, everyone can find ways to keep more money in their pockets.  Always remember – small, continuous efforts add up to big results.   With apologies to Benjamin Franklin, “a penny saved is a penny we can use to address our financial troubles.”  Here are some hints for finding extra funds.

Analyze – Look at your financial challenge, and make sure you are positioning yourself for success before you get started.  If you are paying off credit card debt, have you tried to negotiate a lower interest rate with your creditors?  Have you looked at a balance transfer to another card with a lower interest rate?  Have you explored a debt consolidation loan?  You may find a favorable circumstance which makes your problem more manageable than you initially thought.  Next, look at your spending habits, and see what stands out to you.  This is an eye-opening experience for most people when they discover some random category accounts for an unreasonably high percentage of their total spending.  Attack this area first, but evaluate all areas of your budget to see where savings can be found.

Eliminate wasteful spending – This is huge regardless of what your goal may be.  How much food do you throw out every week?  How many gadgets do you buy which end up on your shelf unused?  Be aware of every dollar you spend, and make sure you are getting maximum value in return.  For example if you know you are bad with leftovers, make a smaller portion, or freeze part of what you make.  Try not to pay full price for anything.  Retailers and manufacturers are competing harder than ever for your business; use this to your advantage.  Look for sales, closeouts, coupons, and other specials to stretch your dollar.  A little extra effort in your shopping can put a lot of extra money back in your pocket.

Economize – Cutting out isn’t the only way to generate funds; sometimes we can just cut back.  Spending $5 less a day puts an extra $1,825 back into our pockets every year.  Challenge yourself to find ways to trim a little bit out of your daily spending.  Getting a medium latté over a large may save $1.  A smaller size popcorn at the movies may save another dollar or two.  Have water instead of ordering a drink at a restaurant and save $3 or more.  These small changes add up to big dollars over time.

Downsize – If you need to be more aggressive in curtailing your spending, downsizing can be a good option.  Are you using all of the minutes you pay for on your cell phone, or is there a cheaper plan which can still meet your needs?  Some changes can have a domino effect.  Organize a carpool at work, and not only will you spend less on gas, but since you will put fewer miles on your car, you will spend less on maintenance and even car insurance.

Prioritize – Bigger goals call for bigger actions.  This means we have to give up things which are less important to us than achieving our resolutions.  What is more important to you, having premium cable channels or paying off your credit cards?  Which is more important, a new boat or starting a college fund for your children?  Remember, the more financial burdens you eliminate, the more money you free up for the fun stuff.  Put another way, if we don’t take care of our financial challenges first, we will never be in a position to comfortably afford the things we want to spend our money on.


4. It’s all about value

When making purchases, it’s easy for us to get fixated on price and lose track of value.  Consider shopping at a wholesale club.  The unit price of an item may be better if we buy in bulk, but we may end up buying way more of something than we can use.  That’s not a better value.  Try sharing the cost of a bulk purchase with friends, so each person ends up with the amount they need while still enjoying the cheaper unit price.  Does it have to be new?  With sites like eBay and Craigslist, many products can be found in excellent condition at a fraction of the cost retailers charge for new items.  Do you have to buy it?  Many items – like tools and equipment – may be rented at a fraction of the cost of purchasing.

3. Find it for free

Challenge yourself to find free or low-cost alternatives to some of your more costly budget items.  Instead of renting a movie, try your local library; if the title came out more than 30 days ago, it’s likely they have a copy.  There are over 1.8 million free e-books available for download from  Most cities have free public events, concerts, art exhibits, and more taking place every day.  There are many more events which have only a nominal fee relative to other sources of entertainment.  Not only does it help you save money, but it helps connect you to the culture in your local community.

2. Believe in yourself and your ability to affect change

Many people fail in their resolutions because they believe their problems are greater than themselves.  We need to remind ourselves that solving our financial crises is like creating a sculpture.  We have to chip away at them day after day, month after month, until we achieve our end result.  There is no quick-fix solution to these problems; it took time to get into this position, and it will take time to get out of it.  But even the smallest change can have a measurable result.  By paying as little as $10 a month extra against a high credit card balance, you can save yourself tens of thousands of dollars in interest.  Once you figure out where you’re going, and how you’re going to get there, it’s just a matter of doing it.


1. Don’t just treat the symptoms – cure the disease

Accomplishing your resolution is an important first step, but the real challenge is to recognize and address what got you to this point in the first place.  Were you trying to live beyond your means?  Did you underestimate what kind of financial reserves you needed for emergencies?  Whatever the case, be honest about what got you to this point, and make a conscious effort to change that behavior.  Let the discipline you used to get out of trouble help keep you from making the same mistakes twice.

Written by Real Life 101, Inc.

January 3, 2011 at 6:02 pm

10 Tips for Staying on Budget During the Holidays

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10 Tips for Staying on Budget During the Holidays

For many people, the holiday season can be a stressful time when it comes to gift giving.  Every year it seems like there is more people to buy for and less money to spend.  We’ve prepared a list of tips to help restore a little financial sanity to the holidays.

10. Determine what you can comfortably spend.

Don’t try to be a hero to everyone on your list; figure out how much you can spend without undue sacrifice to other areas of your budget or piling up credit card debt.  Try to remember, it’s not about how much you spend but how thoughtful you are in what you give.  Some of the most memorable presents I’ve received were inexpensive items that really showed how well a person knew me or how much they cared.

9. Just like Santa, make your list and check it twice.

Write down everyone you plan on buying gifts for, and double-check it to make sure you didn’t forget anyone.  If you already know what you intend to buy for a person, make sure you don’t forget things like batteries, carrying cases, or other accessories you think you might need.  Those extras and impulse purchases can add up quickly and turn a $100 purchase into a $200 budget-buster.  Worried about getting the wrong thing?  Gift receipts make exchanges easy, so the recipient can get the color or size that is perfect.

8. Consolidate your list if you need some extra room.

If you need some extra room in your gift-giving budget, look for ways to consolidate your purchases.  Can you buy a couple or family gift rather than individual presents for certain people on your list?  Can you go in on a gift with others to increase the value of your gift without overspending?  If you have a large family or group of friends, try drawing names for a secret santa gift.  This way, everyone gets a gift but doesn’t have the burden of buying for everyone on the list.  By applying a little creativity and thought, you can make some extra room in your budget.  How about a family bowling night for the neighbors?  A shipment of fresh fruit or a tin of popcorn can be enjoyed by all.

7. Avoid the big-ticket fad items.

Stop me if you’ve heard this one before.  You drive all across the city, fight traffic and irritable shoppers, and finally land the hot holiday item everyone’s talking about.  On the big day, the gift is opened, played with for about 15 minutes, and it subsequently finds a home on a shelf where it lives untouched until it’s sold in a garage sale two years later.  Fortunately, you put the item on your credit card, so you had the pleasure of paying it off for six months.  Remember with fads: what everyone wants today, nobody wants tomorrow.  If you have to endure outrageous expense or effort to obtain it, it’s not worth it.

6. Don’t wait until the last minute to do your shopping.

At Real Life 101, we always say it’s better to buy from a position of want than need.  When you give yourself time, you can figure out what you want to buy after doing your research: evaluating product options, reading consumer reviews, comparison shopping, etc.  When you finally make your purchase, you will know you’ve made the best decision.  If you wait until you need to get something, you don’t have the luxury of time.  Instead, you will take the first thing you find regardless if that is the best product or price.

5. Look for the perks.

What happens when you plan ahead?  You can take advantage of all the special offers and incentives retailers create for the holidays.  From free shipping or accessories to gift cards and rebates with purchase, there are loads of bonuses out there to help you stretch your gift-giving dollar a bit further.  If you are taking advantage of rebates, be sure to read the offer carefully and keep your receipts.  Also, it can take over 2 months to get your rebate check, so make sure you don’t spend more than your finances can handle waiting on a check.

4. Gift cards are for gift-giving weaklings.

Nothing says “I have no idea how to buy you a meaningful gift” like a gift card.  Not all gift cards are cop-outs; a music-lover may appreciate a gift card to iTunes or CD Baby, and it may be the best way to give them access to the music they love.  However, most cards scream laziness and desperation.  My advice: if you’re going to go gift card – go big, or go home.  A $100 card to a mega-store is infinitely more valuable than five $20 cards to various places, or worse, twenty $5 cards.  Instead, take a moment to find fun gifts that fit: a pocket multi-tool for the handyman, a book light for the avid reader, or a favorite movie poster framed for the film buff.


3. Re-think what a gift can be.

Our budget doesn’t always allow us to give everyone a present every year.  But that doesn’t mean we can’t find ways to make our friends and family feel special at the holidays.  Sharing a conversation over coffee, inviting friends over for dinner, a thoughtful card, or a phone call may do more for someone than any gift you could buy.  This is particularly true for older friends and relatives who may be alone or unable to get out of their home for the holidays.  Everyone always enjoys yummy, homemade gifts as well.  Look here for our favorite gift-giving recipes.

2. Make it, or think local.

Hand-made, personalized gifts can be treasured by their recipients for years and even generations.  One of holiday gifts I continue to cherish is a quilt my grandmother made for my wife and me the year we were married.  There are other, equally valuable items we hold dear that were made specifically for us.  However, if you are making something as a gift, it’s important not to overestimate your skill or underestimate the time involved.  If you lack the skill to make something nice, or you give a rushed or unfinished product, the receiver may interpret your efforts as a lack of care.  When in doubt, find a local artisan who can help translate your vision into something truly special and unique.

1. It’s never too soon to start thinking about next year.

According to my calendar, Christmas will be December 25th again next year, so you can start planning accordingly.  Begin your list and your budgeting process January 1.  Look at what gifts were successful as well as what interests and desires for gifts were expressed over the holidays.  This way, since you know how much you will spend and the types of things you want to buy, you can take action anytime you come across that perfect gift online or at a particular boutique.  The likelihood of you being able to remember where you saw something – or perhaps even being able to get it – is extremely low if you wait until the next holiday season rolls around.

Hopefully these 10 tips can help reduce the anxiety you may feel over gift giving during the holiday season.  Everyone can give great gifts regardless of how much or how little they have to spend.  With a little thought, planning, and effort, you can give the best gift under the tree even if it’s not the most expensive.

Written by Real Life 101, Inc.

December 14, 2010 at 11:49 am

Analyzing Financial Advice in the Information Age

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There is no question: when it comes to access to information, we are living in an amazing time. The internet and broadband revolutions have changed the world forever. With almost all accumulated knowledge available to anyone instantaneously, it has never been easier to access what you need when you need it. This has given rise to blogs, special interest websites, discussion groups, reference pages, and a myriad of other resources with advice for nearly every conceivable scenario. With all this available, you would expect us to be living in a utopian society, free from all worries and comfortable in the knowledge that we are doing everything right. And yet, the evidence is exactly the opposite.

Consider a subject near and dear to our hearts here at Real Life 101: debt. Millions of Americans are currently facing record-high levels of debt burdens leading to foreclosures and bankruptcies at an alarming rate. The most tech-savvy generation (18-34) actually represents the most likely candidates for bankruptcy. Why is the proliferation of information not helping those who are most likely to find it?

If you search on the term “debt” in Google, you will receive approximately 167,000,000 results. If you are more specific, and search for advice on paying off your mortgage, you are likely to come across a puzzling – yet typical – situation when it comes to financial advice. You will come across at least three equally qualified individuals who will offer one of three strategies: 1) never pay off your mortgage – keep refinancing and use the proceeds for other things, 2) pay off your mortgage as agreed over time, but never pay extra, and 3) do everything possible to pay extra money every month, and pay your loan off early.  All three will present clear, reasonable-sounding evidence as to why their method is superior.  Herein lies the dilemma; who is right?

It is possible to work our way through the maze and arrive at a good solution. Here is some of the advice we give at Real Life 101 when considering financial strategies (i.e.: paying off debts, investing, etc.):

Know thyself – Consider the reasonableness of a plan particularly as it relates to your own behavior. There are many sound financial management strategies that are based on strict discipline when it comes to saving and spending. If you don’t have the self-discipline the plan requires, it’s not a strategy which is likely to work for you. Personal behavior is certainly something which can be changed over time, but be honest with yourself about what is doable. If you regularly run out of money before the end of the month, it’s unlikely you will be successful with a strategy which requires you to save half your annual income.

Check out the other side – Nothing is greeted with universal acclaim; everything has its detractors. Seek out any criticisms of a particular strategy, and see if any of those resonate with you. You may discover that one side wasn’t sharing all the pertinent information or learn about other complications which might prevent you from being successful with a particular strategy. Plus, a critical vantage point may lead to you ask other questions before making a commitment.

Consider ulterior motives – Sometimes, we have to pull back the curtain to see if there is more at stake than simple advice. Does the person or company benefit from you acting upon their advice in some way? Perhaps they want you to purchase a series of books or videos. Perhaps they want you to deposit money in their bank or manage your retirement plan. Whatever the case, it’s worth trying to determine any potential hidden “costs” of following their lead.

Does it make sense? – Even the most sophisticated ideas in this world can be reduced to a basic level and understood if only in broad terms. I’m not a physicist, but I “get” the idea behind Einstein’s theory of relativity. If you’re not an investment banker or lending specialist, you should still be able to understand the basic principles behind whatever strategies are being presented to you. Don’t ever buy in to anything which is “too complicated for you to understand.”

Look Out for Muddy Waters – I’m not talking about the legendary blues guitarist. I’m referring to the decision-making process itself. Whenever we make a purchase, or other major decision, there are a number of factors which come into play: financial considerations, emotional considerations, etc.. It is always best to make financial decisions based on financial reasons. It would seem unreasonable to most people to make an emotional purchase based on purely financial reasons; I can’t imagine my wife being too understanding if I buy her a Christmas card on our anniversary because it was on the clearance rack. However, people routinely use emotional criteria to make critical financial decisions. The effect our purchases have on the way we feel does not last nearly as long as the effect they have on our finances.

Develop Context – If someone offered you an investment with an expected return of 4%, would it be a good investment or a bad investment? It depends upon the context. If the investment was a treasury security, it might be a solid investment. If it was a growth-oriented mutual fund, it would be a lousy investment. Classes like the ones offered at Real Life 101, which present the basic principles of finance, are a great way to foster an understanding of how the various pieces fit together.

We often talk about needing to “have all the information” before we can make an informed decision. But the need to know what to do with that information once we have it is often overlooked. Put another way, the value of information may be fleeting, but knowledge lasts a lifetime.

Written by Real Life 101, Inc.

October 15, 2010 at 3:32 am

Find your next vacation. Yes, YOU!

with 2 comments

If you’re anything like us, you know you want to go on vacation.  But you also work really hard for your money, so you want to go somewhere where you can get a deal AND also feel like you are having a NICE vacation!  Luckily, now, with a little bit of searching, you can find some GREAT deals and consequently have a FANTASTIC vacation!

Below I have shared with you some of my favorite ways to hear about travel deals, and I think you’ll agree—it’s easy to become inspired to go somewhere when you feel you’re getting a good value. Many times, these sites will even send the deals directly to you regularly, so you don’t even have to go searching.  You just choose <BUY>!  How easy is that?!

My favorite water in Maui...can't beat it!


Voyij allows you to find those deals which specifically apply to your departing airport.  So, you can select your departing airport (for me that’s Kansas City), and then you have four categories to address:

1) <Destination>: Where do you want to go (and you get a drop down list)

2) <Departing>:  You choose “all dates” or a specific date.

3) <Budget>: There’s a list of choices.

4) <Deal type>: Flight, Hotel, or Package

You can vary the results based on adjusting your selections from the four categories.  Once you’ve specified your wishes, you choose <find sale>.  Voyij will then—you guessed it—find the sale!  You will be amazed with the results.  Really.

You can also request a “Travel Deal Alert” where you can specify your home airport, destination, what kind of deal you’re looking for, specific month, price range etc…and they’ll just send you an email when those stars align.  It’s a beautiful thing.

The Twitter feed is also fantastic.  If you tweet, make sure to follow @voyij. (Oh and @Real_Life101 while you’re at it!)


This site has some really fantastic deals, and my favorite thing about it is the weekly VIP email they send me.  Fancy, it is not, but it makes vacation so accessible for everyone. This is where you’re going to find those really crazy $200 weekly deals, and it’s a GREAT place to find airfare deals particularly if you are going abroad or tropical.  You can save a TON of dough.  I recently saw a RT airfare from Kansas City to Maui for $365.  I mean, WOW!!  It makes me think I actually WILL get to take my belated Hawaiian honeymoon someday!

Sign up to receive the “Top 20 travel deals weekly” in the upper right-hand corner of the home page. You won’t regret it.  I promise.


This is a special and extremely valuable blog hosted by Conde Nast Traveler.  They scour all of the fantastic deals out there and find the best of the best.  Enter your email address, and again, they’ll send the deal to your inbox every time there is an update (about once or twice a week typically).

I will say—the deals on here are amazing—particularly if you like fancy schmancy vacations (as I must confess, I do!)—and even if you don’t, you’ll probably find something that strikes your fancy.  I would also say, this is marketed towards a clientele who is comfortable going all over the world, so these deals aren’t going to be the “5 nights in Vegas for $250” type-deals.  They’re going to be a little more exotic in nature, but I think that’s kind of fun.  It takes you out-of-the- box, so-to-speak.

A dock on White Sands Island in the Maldives.


Add these sites to your “favorites” folks because I promise, they do not disappoint! Just promise me you’ll read them… and you’ll click on the links… and you’ll enjoy ALL the possibilities…  Even if you don’t have a vacation anywhere in sight, these places will inspire you…to work harder… to enjoy life…to daydream…to think of all the possibilities out there for you….and that alone, has tremendous value.

Written by Real Life 101, Inc.

July 28, 2010 at 1:35 am