In the midst of all the bad economic news there are some positive stories. Like the story of Hal Colston's Good News Garage in Burlington, Vermont, which repairs donated cars and then makes them available to people in need for as little as a few hundred dollars. Quoted on Oprah.com, Colston said, "In so many ways, people are just a repair bill away from disaster. The car dies, they lose their job, and they just spiral out of control. I wanted to do something about this." Or the story of Dr. Dan Bell and his wife, Suzie, of Eureka Springs, Arkansas. They started the ECHO Health Clinic in a church gymnasium to make sure everyone in their community had access to healthcare. Twice a month, the Bells and 250 volunteers provide free medical care, counseling, and hot meals. Dan Bell said, "We were looking at how you really live your faith. We're at the age where you're looking at, 'Are you doing all you can do with your life and finishing strong?'"
Matt's View
According to an article
in the Wall Street Journal, the recession seems to be spurring a surge in people wanting to help others. Apparently, layoffs are prompting some people to rethink the direction of their lives and seek greater ways to make a difference.
Have our economic tough times prompted any changes in your charitable activities or those of someone you know? Please drop me a line
and let me know.
One element of the Obama administration's economic stimulus package is a tax credit for first-time homebuyers of up to $8,000. As described in an LA Times article
, the credit recently got even more valuable when it was made available to help cover closing costs or for use as part of the down payment.
Matt's View
For those who have been diligent about saving and avoiding debt, the recession has brought about some good bargains--one of which is real estate. Prices have fallen, mortgage rates are low, and this first-time homebuyer's credit is a great deal. I still encourage making a 20 percent down payment (made easier now that the tax credit can be used for part of that) and keeping your monthly payment for the combination of your mortgage, taxes, and insurance to a maximum of 25% of your monthly gross income.
There is more information about the first-time homebuyer's tax credit
, and specifically on how to access the money
for closing costs or down payment assistance on the National Association of Home Builders' web site.
There was an interesting post
on the Houston Chronicle's web site about the money management habits of the Amish. According to the story, Amish children all learn a trade such as farming, welding, or woodworking. Money earned through apprenticeships goes to their parents, who give the child 10 percent for spending and put the rest in a bank account. The account is then given back to the young person once he or she turns 21. Even Amish who work "traditional day jobs" usually continue practicing their trade, often selling handmade items in roadside stands. If they're not home to manage the stand, payments are made on the honor system.
Matt's View
One Amish trait I especially admire is their focus on learning a craft. We would all do well to identify and cultivate the various "crafts" within our jobs. You might think of yourself as a middle manager, but within that job are numerous crafts such as project management, leading a team, and more. Becoming great at specific crafts can go a long way toward staying employable.
And what if all young people saved 90 percent of what they earned? While I believe generosity should be fostered by encouraging children to give away a portion of what they earn as well, even saving 80 percent would go a long way toward paying for college or saving for a down payment on a home when they're older.
The Internet is making personal money management easier. I recently wrote a guest post
for U.S. News & World Report, looking at the pros and cons of various online budget tools. I'm using Mint
and enjoying it for the most part, but I plan to switch to Yodlee
next year because it offers a few additional features I like, such as a tool for reviewing year-to-date spending versus budget. I'd switch sooner, but then I wouldn't have all of this year's transactions. One item on my wish list for both tools is an easier way to track the use of cash.
Free online financial planning tools are becoming more readily available as well. One mentioned by The Wall Street Journal recently is SimpliFi
, where a virtual advisor helps you develop a plan.
Matt's View
I like the premise of SimpliFi--a one-stop shop for figuring out how to get out of debt, fund your retirement, help your kids pay for college and more. However, it has some bugs to work out. It lumps college savings in with retirement savings, and its recommended asset allocation for my retirement savings seemed overly conservative. I still prefer Fidelity's myPlan Snapshot
for retirement planning, the aptly-named World's Simplest College Calculator
for college funding needs, and the Accelerated Debt Payoff Calculator
for becoming debt-free.
As online tools proliferate, I'll provide reviews on a regular basis.
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