No matter how you look at things, the

Wall Street maestro Jim Melcher told the New York Sun that he is “worried about a recession. Not a normal one, but a very bad one. The worst since the 1930’s. I expect we’ll see clear signs of it in six months with a dramatic slowdown in the gross domestic product.”

Enough with the negativity! We all know what is coming for us and now, it’s time for everyone to sort out their game plan and try to weather the storm. Below, I give you five tips to help you survive the impending recession:

Don’t Panic! – Ah, it’s easier said than done, isn’t it? However, it is crucial that you think with a clear head when dealing with money. Don’t let your emotions get the best of you, lest you pass up some great money opportunities out of fear. Remember, the market will fluctuate and you may kick yourself later if you rashly pull out of some lucrative, long-term deals.

Diversify Your Investments – Hopefully, you have heeded the most basic personal finance advice and already have a diverse portfolio. If not, now is the time to start making safer bets until things stabilize. This will minimize your losses during the recession.

Update Your Resume – No, you won’t be jinxing yourself by preparing for the worst. Think of it as staying one step ahead of your competitors if it comes down to job loss. Professional traders are especially nervous in a bear market and for good reason. Keep your resume updated and handy, then tell yourself that there are plenty of opportunities for you, should your job security be threatened.

Start Saving – If you aren’t a frugal person; it’s time to tighten your belt and learn to be one. Start setting aside a bit of cash each month, even if it’s only a little. Cut out unnecessary spending, clip coupons, whatever it takes to make yourself more liquid.

Live in a Home You Can Afford – In other words, avoid foreclosure! If things are getting a bit tight with mortgage payments, consider other options before you become another statistic in this housing crisis. Selling a home isn’t easy right now, so if you have to downsize, you could even consider renting out your home.

It’s always best to think ahead when a storm is brewing. If you are an amateur investor, now is the time to have a meeting with a trusted advisor. Weigh your options, err on the side of caution, and remember not to panic. Good times will come around again and those of us who are prepared won’t suffer in the coming months.

By-line:

Heather Johnson is a freelance writer as well as a regular feature contributor for Reward Programs, a website which specializes in helping consumers select among the numerous AMEX rewards programs. Heather invites your writing job inquiries as well as comments and questions at her email address: heatherjohnson2323@gmail.com

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Isn’t being young a fun time in your life? There are numerous reasons why people always say “Man, if I was only young again I would do this “thing” or go to that “place,” but now that I’m too old I can’t do it anymore.” Whenever someone that is older than you says that statement, you should write it down and see if you should go out there and do it. Experiencing things and going to new places is a great way to develop your mind, body and soul. Remember that having a “NO” attitude will end up making you a person that will have numerous regrets in the future. And how can you directly link this perception on life into your finances? Take risks that older people do not have the ability to take. I’ve spoken to numerous twenty year olds about finance and they sound more conservative than fifty year olds that read AARP magazines.

One thing that did please me is the fact that some twenty year olds really do have some financial sense, but are taking the extremely slow and steady approach to money. With interest rates getting cut on a near monthly basis, that savings account and CD won’t look so attractive pretty soon. Are there still conservative investment vehicles out there that won’t open you to a mound of risk? Sure there are, but you still have to do your homework to find them. What’s a few hours of homework if you can retire 10-20 years earlier? If someone told you to do a certain activity every week and that you would retire earlier with a lot more money, wouldn’t you want to know what it is? Well, it’s not a secret and people have been doing it for a very long time. Invest now, let your money compound, and spend it later.

I had a conversation with a particular friend that has accumulated a small fortune for a 25 year old guy. He has about $60,000 in a CD yielding about 4.5% which will be available for withdrawal in a few months. Here’s some more background about my friend: He is looking to purchase a home and a new car in the next year or two and wants to put a nice down payment on both items. What do you think he should be doing with this money? I told him that he is investing like a 50 year old about to purchase their second home. He is a smart individual with a great education (he has an MBA from a great university) and is currently making a big move in his career. With all these tangible and intangible assets he posses, he should be a bigger risk taker.

First, let’s tackle him wanting to purchase a house in the next couple of years. He says he wants to put down a sizable down payment because that’s what his parents told him to do. Well times have certainly changed. In those times, people lived in their first house for more than ten years. That’s incredibly hard to do with the ever changing job market forcing you to relocate on a drop of a dime (especially in your early career). I told him to put less money down and try to find a mortgage that will suit his needs for the next seven to ten years. Why so long if they won’t be living in that house for an extended period of time? Because padding your risk with a few more years will be more beneficial in long run.  Heck, I would tell him to only get 30 year fixed rate mortgages for the rest of his if he wants to be extremely conservative. This will allow him to put less money down and keep money in his pocket to invest in different things. He can also put the money that he saved on his house into purchasing his new car.

His $60,000 has a lot of potential if he used the money in a correct way. I actually told him he has too much savings! You don’t run into an individual like this every day. His money is tied up in savings and not in a retirement account. All the interest he receives is still being taxed. I told him to open a Roth IRA and immediately max it out. What type of investments should be in his Roth? I told him that index funds are his best bet. If it was me, I would find five to six companies that pay a good dividend and let it ride. I always love going to my investment account statements and seeing a nice fat dividend that will be reinvested. It’s a beautiful thing.

No matter what your financial position might be. Always remember that you are only young once and that you should live for the present and invest for the future. Do not limit your present day fun for the dreams of doing it in the future. Because in the future do you want to be the person that says “God, I wish I could be young again so I could have done that” or do you want to be the person that traveled around the world? Be Christopher Columbus he was a bad a$$.

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Should you really shy away from a big night or take financial hit for a good time? Most savvy spenders will say “you can have a great time and still be on a budget.” While this is true, I still think that splurging once in a while for a good night is definitely worth it. For New Years, I attended an all-inclusive party which had a pretty nice price tag before you were allowed in the hotel. The tickets were on pre-sale for $170.00 before December 15^th and $205 after the 16^th. Fortunately, I searched on Craigslist and found a ticket for $140. It never hurts to make sure you are getting the best price possible. But this was just one of many purchases I would make that day.

Because I traveled back up to Atlanta for the holidays, I didn’t have access to nice clothing. I had to purchase some black shoes, and pants for the party so I didn’t look like a scrub. I was also in a time crunch so I had to purchase the “nice” clothing at Wal-Mart. Yes, Wal-Mart. I was pleasantly surprised that they had some nice clothing for under fifty bucks. Now my price tag is almost two hundred dollars for one night of fun and I haven’t even showered yet. Was it worth all the hassle and money? Of course it was. I realize that I won’t be doing this every night, so I decided that it was a great opportunity and I shouldn’t be worried about the price tag.

A lot of people get so consumed with money that they forget that having fun sometimes comes at a price. Money doesn’t always buy happiness, but it sure does help. I could’ve found a house party which doesn’t really cost much at all, but I’ve done that so much in the past. This year I am trying out new things that I’ve never experienced before and I have to say that it’s going really well. This lifestyle is a little more lavish than my life in 2007, but it is fun and interesting. I am not going to jump in a mound of debt because of the new lifestyle, but I realize that I won’t be saving as much as I used to. Sometimes you got to take one for the team though. I have all my life to save and make money, but I am only young once.

My New Years resolution isn’t saving money, increasing my income, or trying to pay down some of my debts. It is on the other hand, trying to have as much fun and excitement within my means. I know my views on life and finances are changing a lot right now, but my life changed a lot in the last quarter of 2007. Maybe later on this year I will be able to have as much fun as possible and save money (which would be totally awesome). Remember that life comes at you fast and if you don’t try to make the best out of every moment, you might miss out on something huge. Have a great New Year and let’s make 2008 even better than last year.

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I am currently holding “an in between job before I start swimming in the corporate ocean. I’ve held a lot of jobs over my college career ranging from sales representative at Best Buy and Circuit City to a banker. Now I’m back to being a waiter at a fairly large chain in the South. The one thing that I’ve noticed in my past jobs is the use of the company’s retirement benefits by nearly 99% of the employees. People contributed at least the minimum amount to their 401(k) to receive the company match.

At my current position, the company will match four percent of the contributor’s contribution. To be eligible to participate in the plan, you must be a full-time employee (working at least 1000 hours per year. Seems like a ton when you look at it right?). After speaking with nearly every single employee, guess how many people are contributing to the plan? Most people will guess around 20-30 percent. Well, it’s actually 0%! Goose egg! Most of the serving staff has been employed with the company for more than three years; which they have elected not to contribute. Some employees have stayed at the same location since its opening and still do not contribute (eight years this summer).

Then I thought that this is only an issue with the serving staff. I later asked one of the managers and she told me she didn’t even contribute! The only person that has company stock is the general manager because all managing partners are given stock options. I decided to call the HR department and ask what the average match the company contributes to a full-time server. The representative gave me an example of how much I could be earning if I contributed. He said I would receive about $60 dollars a month. I’m only working 25 hours a week and receive much less tips versus the veteran waiting staff. So I took my number and doubled it then increased it another fifteen percent. The average full-time server has declined ~$1700 a year! The one employee that’s been working there for seven years has essentially lost $12,000 dollars. And that is only company matched dollars!

Let’s now evaluate how much real money the employee has neglected to receive.

The stock traded for $9.5 seven years ago and is currently trading for $31. Using this calculator the annual growth is about 18.4%. The monthly contributions would be $276 ($138 from the employee and $138 from the company). Now using this calculator, you can put in all the figures and come up with about ~$47,000.00. The ShareBuilding what if I invested calculator says the total net worth would be $51,400 (I think it considers the two stock splits). The total dollar amount invested would be about $11,600; which means they lost about $40,000 in seven years!

*eFIPO’s Rule* Do not ever pass up the opportunity for free money! If your company provides a match on your 401(k) contributions, take it immediately!

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Are cash advance loans really that scary? Do they end up helping some people that are in need of financial assistance? Probably… I mean there are exceptions to every rule. I’ve only read and heard horror stories about payday loans and how they are out to get you. I will never apply for a payday loan (at least I hope so), but for some people it could possibly get them out of a rut if they end up paying the loan back in full on the day it is due. People need to always read the fine print and always plan ahead. If you ever end up applying for a payday loan, paying it back immediately needs to be your top priority. This should be a last resort and make sure you have exhausted all other types of financing (i.e friends, family, neighbors, and trying to be beggar on the streets).

I just received a new advertiser on eFIPO and decided to write a quick blurb about payday loans. They have allowed me to write my personal feelings on payday loans without any type of censoring.

The following statements are not mine and they belong solely to National Payday.

Cash advance loans, also known as payday loans, can be a necessity in a financial crisis. You may be forced to give up your paycheck to take care of emergency bills or the stress of living paycheck to paycheck is just too stressful at certain times of the month. There are several excellent finds on online for cash advance loans. You will be able to find many options from the comfort of your own home.

A cash advance is so simple to do over the Internet and many online lenders offer free cash advance loans to people who are using the service for the first time. This can save you a lot and make the process of getting a cash advance cheaper and easier. The process is a breeze and it only takes a few minutes to fill out your online application. All you have to do is show that you are 18, have a job and a checking account and you can be approved within minutes. The money can be in your checking account within 24 hours and your stress will be relieved. If you find that you have extra cash come in, you can pay your loan early on online or allow the lender to withdraw the amount on the loan’s due date.

Borrowing money has never been easier and thanks to the Internet it is as simple as ordering something off of eBay. You don’t even have to leave your house or be seen walking into a payday loan lending office, which is often a concern for some people.

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You know how I feel about college, but what about a view from a Generation X’er? Ben from MoneySmartLife and I decided to talk about how certain view points can change from the perspective of a different generation. I am graduating from college this May (thank God!) and Ben is starting to save for his son to go to college. His son is not even a year old and he is already writing an apology letter to his son.

Here are some highlighted points from the letter.

I hope you decide to attend college someday and experience all it has to offer, except the loans of course.

 We started saving money in a 529 plan before you were born but I’m afraid it just won’t be enough.

 We’ve been saving heavily in our retirement plans since we were married, at the expense of a college fund, because you can get a loan for college but we can’t get a loan for retirement.

P.S. In state tuition is much cheaper. Go Mizzou!

 

College Tuition Costs Gone Wild – An Apology letter to My Son

I wouldn’t worry Ben. Smart people can find a way to make things happen.

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College is a necessary part of life. Here’s a quick quote from Orange County explaining my feelings about college. “Shaun: I have to go to college. Cindy: Why? Shaun: Because it’s what you do after high school.” Those few lines sum up my feelings about college. Why go to college? Because educating yourself is a key part of life. One of the major reasons why people now attend universities is the incredible networking opportunities that unveil themselves throughout the college experience. It’s not what you know, but who you know. This old adage saying is becoming more and more important in today’s world.

Unfortunately, college ain’t cheap. There’s a large sum of money due before you walk down the aisle (and I’m not talking about getting married). Most people don’t have large stacks of money laying around for education. That’s where student loans come in. Let me be the first one to tell you that student loans are still one of the most powerful debt instruments in the world. They provide the financial backing for your future financial successes. There’s a strong correlation between education and yearly salaries. Here are some figures brought to you by the Census Bureau : $36,302 for a high school graduate and $60,020 for college grads. Double the education, double the pay. It pays to go to school.

The scary part is education costs are going up faster than inflation.

What can you do to receive a good education and not drown in student loan debt? Stick to in-state schools. A lot of research has shown that making the most out of your education will mean a lot more than the name of the college you graduated from. In-state schools will provide a tuition discount and will save you a boat load of travel expenses. After graduation, many local businesses will select in-state grads to fill positions before they scout for out-of-state grads. Do your parents and yourself a favor by sticking to in-state schools. It’s also good for your state economy which is a huge plus!

If you fail to plan – plan to fail. Don’t let scary TV shows about tuition increases get to you. You just need to plan ahead. College is a great way to meet new and exciting people while getting a ticket for more money in the future.

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Part one of the Money Quadrant Series- Are You a Debtor?

Check Casher-

Do you know people that rush to the back on payday to cash their check? Do you rush to the bank to cash your check? Well, in the banking world we call this type of person a check casher. They work hard all week to get that paycheck that seems to disappear by the next payday. There are a few that do manage to save some money before they pay their bills, but most live paycheck to paycheck. The three different kinds of check cashers that I’ve managed to differentiate are the true check cashers, filed for bankruptcy check cashers, and low income check cashers.

A true check cashier usually just likes carrying a ton of money on hand at all times. I think it gives them a sense of power (even though if they were ever robbed or misplaced their wallets they would be so screwed). I’ve seen a few that just cash checks at the bank that the check is drawn on, then bring it to their bank, but it was minimal. They are usually on a fixed budget, and don’t like to get themselves into any kind of debt (not a bad philosophy).

The filed for bankruptcy check cashier usually hates banks or any kind of financial institutions because they believe they are out to get their money. They live by the slogan “They’ve do it once. They’ll do it again.” A lot of the ones I’ve met also have managed to get the IRS on their backs because they don’t pay all their taxes. I’ve been able to discuss some form of personal finance with the ones that want to express their problems. Usually they get a credit card or checking account and overdraft their account within the first month. They’ve never learned cash management in their youth and it’s reflected by how many times they use their credit/check card. They just don’t remember how much is in their account and end up with tons of overdrafts. They are forced to close their account and they evade paying the overdraft fees by never opening up another checking account or credit card. Some that piled large amounts of credit card debt were forced into bankruptcy because they weren’t able to pay for the minimum payment.

A low income check casher is in very tight situation. Their jobs do not pay enough to make ends meat. They’re on a very tight fixed budget and can’t have many of life’s luxuries. Most of them do not have a high school education which puts a cap on their earning potential. My only advice for the low income check casher is getting a G.E.D. Education and hard work can really turn around your financial situation. You do not have to settle for a low paying job for the rest of your life.

The similarities between 97% of check cashers are:

• They don’t end up saving a dime
• Fixed budget
• They do not splurge on big purchases
• They spend every penny before their next paycheck
• A lot of wasteful spending

Solution-

When I left the bank and decided to get an easier job (the high-end liquor/wine retailer), I noticed a ton of check cashers purchasing large amounts of alcohol and cigarettes. Originally, I was kind of sad for the individuals that were stuck on a fixed budget, but this brought a new light to the situation. You cannot spend money on liquor or cigarettes when you can’t even afford car insurance! Stop smoking and drinking and make your life better. They would usually spend about $50 a week on booze and cigarettes which turns into a yearly amount of $2600. That’s a lot money that you could be putting into a retirement account… You need to find your latte factor and eliminate it from your life A.S.A.P.

You need to save all the money you would have spent on your latte and throw it into a high yield savings account. I would highly consider paying yourself first before you start spending when you’re on a fixed budget. This worked wonders for me. I could save 15% of my income then blow the rest on whatever I wanted. Once you’ve mastered this skill, you will now be considered a Super Saver.

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In the personal finance world, people are either classified as rich or poor. You’re either rich enough to buy expansive things, or you don’t have the money to purchase fine luxuries.  At eFIPO, I always encourage people to invest as much money as you can. But what about all the other people that are too far into debt or that live paycheck to paycheck to invest? This week, I will be discussing the ways to jump from the poorer side of the quadrants to the richer side. This will not be an immediate process for everyone. Every person’s financial life is unique, but there are core similarities that can be found if you dig deep enough.

Why should you take my advice when I am just a twenty three year old soon to be college student? First, I’ve been in three of the four quadrants and I am planning on moving to the fourth quadrant very soon. Secondly, I could throw in about fifty people in each quadrant and tell you their unique stories, but this will be more about the similarities that every group posses; which will paint a much more vivid picture.

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Is there one particular retail store you purchase all your electronic products? If you answered yes to the previous question, are you enrolled into their reward program and credit card? A lot of retail stores such as Best Buy, Circuit City and BrandsMart offer credit cards that award you gift points when you purchase in-store products and services and outside purchases. I like to shop at Best Buy and Circuit City, but I decided to get the Circuit City credit card because it rewards you 5% on every purchase versus the 4% through Best Buy. BrandsMart only you gives you 2% for purchases at BrandsMart USA ewww. What a bad deal. All three companies’ credit cards offer a 1% return for outside purchases which isn’t that bad.

Here’s a quick breakdown on your rewards points if you purchases a $1000 at all three retail stores.

• Circuit City -$50  Winner
• Best Buy- $40
• BrandsMart- $20

Another reason why I decided to go with the Circuit City card is because I have a lot more money invested in the company. I truly believe if you like a store enough to purchase products from them on a regular basis, why not purchases shares in the company? It’s a win-win situation.

This is a quick and easy way to save some money while rewarding the consumer for company loyalty. Customer loyalty is going to be the concentration for retail stores to make their profits in the upcoming years. *eFIPO’s Rule* Just because you signed up for the credit card does not mean you can go on a shopping spree. Respect credit cards and they will respect you.

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