Financial Strategies that Helped Me

Here are some simple financial strategies that have worked for us and I'm sharing with my kids.

• Pay yourself first.   Put 5, 10, 15% or whatever into a savings account.  When I first started working, I would pay all my bills and expenses first and whatever was left at the end of the month was my savings.   Except for my first month of working, I was pretty good at having something left at the end of the month.   Later, I realized a better approach would be to take out my savings first, and then pay my bills and spend on expenses afterwards.
• Buy only what we need.  Marketers are adept at getting consumer to buy stuff.  The challenge to sort the needs from the wants.   Do I really need the best smart phone, cable TV, a large screen TV or a luxury car?  The answer is probably not.  Not buying these can reduce spending by hundreds of dollars one time or every month.  A related rule to this is to live below our means.
• Spend cash for everyday expenses. Using only cash is an easy way to limit spending.  Once the cash runs out, the spending stops.  A corollary to this is pay off entire credit card bill due every month.

OK, not everyone can follow these strategies.  But if one can, it is one path to a successful future retirement.

For more on  Reflections and Musings, check back every Saturday for a new segment.

This is not financial, saving, spending nor retirement advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Like Father, Like Daughter - DIY Skills

I a big DIY and Fixit Dad.  It's part of my DNA as an engineer.   Before my daughter was in kindergarten, I used to have her help me assemble or repair things.   I also advised, but did not do, some of her physics and engineering projects.

My daughter is in college now, majoring in Biochemistry and Music Performance.   This year she is living off campus.  On move-in day, one of her roommates had the tension rod on her shower caddy come apart.  Her dad tried to fix it but could not. My daughter took over and repaired it.   He asked how did she know how do it.  Her reply, "My dad is an engineer and I watched him do things."   Made me proud.

I'm also including her in the financial aspects of paying for college education.  Ranging from how we invested to make it debt free to the paying for the cost each semester.  Hopefully, that rubs off on her in the future for financial skills.

Recently, I started showing her the DIY car maintenance that I do, since we will be lending her a car for this year.

For more on  Crossing Generations check back every Thursday  for a new segment.

This is not financial or parenting advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Student Loans - Just Say No

Student Loans are the worst consumer loans.

• Student loan debt is a crisis right now. 
• Student loans are offered to 18 year olds who usually have little financial understanding.  Often loans are used for living expenses in addition to college tuition.
• Many student loan borrowers are unable to pay off their student loans
• Student loans, except in extraordinary hardship, cannot be discharged by bankruptcy.

The Consumer Protection Financial Bureau, CPFB, ought to label student loans as Predatory Loans.

Here's my solution:

• Eliminate the federal funded student loan program.   Data shows that it leaves many borrowers with significant debt that they will not be able to repay. IMHO, this program is a failure.
• Enable future student loans to be easily discharged in bankruptcy.  Let the lenders/banks take the risk.

The result?    Tuition costs at many universities would be reduced without availability of easy money.   More people would consider alternatives to a 4 year degree.   Future graduates would no longer have onerous student loan debt for most of their lives.

For more on Ideas You Can Use, check back every  Tuesday  for a new segment.

This is not financial nor education advice. Please consult a professional advisor.

Copyright © 2024 Achievement Catalyst, LLC

Financial Mistakes that People Make

From ChatGPT:

There are many financial mistakes that people make, but some of the most common ones are:

• Not having an emergency fund: This can leave you vulnerable to unexpected expenses or income loss, and force you to rely on high-interest debt1.
• Paying off the wrong debt first: Some people focus on paying off small debts instead of high-interest ones, which can cost them more money in the long run1.
• Missing out on employer matching contributions: If your employer offers a retirement plan with matching contributions, you should take advantage of it as much as possible, otherwise you are leaving free money on the table1.
• Using credit cards for everyday expenses: This can lead to overspending and accumulating debt that is hard to pay off, especially if you only pay the minimum amount each month2.
• Borrowing money from friends or family: This can strain your relationships and create awkward situations if you can’t repay them on time or at all2.

1: CNBC 2: Investopedia

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2024 Achievement Catalyst, LLC

Higher Education Scam

For most students, a college education is not worth the cost they paid.

First, very few people can get a good paying job, i.e. support a family, with just a bachelor's degree in their major.   

Second, student loan debt payments far exceed what can be comfortably paid with a salary from an entry level job.

Third, the institutions that encourage the student to take or provide the loan have no vested interested in whether the student is able to pay back the loan.

Perhaps the government ought to pause the student loan program and address these issues before restarting the making student loans.

For more on  Reflections and Musings, check back  Saturdays for a new segment.

This is not financial nor education advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

Signal 30 Film for Potential Borrowers of Student Loans

When I took Driver's Ed in High School, we were shown a 30 minute film titled Signal 30.   It was produced -1959 by the Mansfield, OH police highlighting the severity of accidents when not driving safely.  Although it seemed extreme and unlikely, I remember thinking I never want to be in one of those accidents.

IMO, a similar type film ought to shown to potential student loan borrowers.  The film should feature the many student who complain that student loans have prevented them from a lifestyle they desired:  buying a house, getting married, having kids, taking vacations etc.   They also can talk about how they often have to make choices between food/rent and paying their student loan.

After watching this film, potential borrowers should be show what they can expect to earn after college and how much they will have to pay towards student loans before their other living expenses.  Students can then determine if they will be another story in the movie or if the loan will be worth it.

However, no higher education institution will do this since a majority of students would likely decide to not take the loan. That would reduce the number students able to attend college.   Conflict of interest.

 And if they do take the loan, they will know there won't be any forgiveness if they end up like students in the movie.

The mantra for student loans should be:  Just Don't.

For more on Crossing Generations, check back Thursdays for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

Forgiving Student Loans Rewards Poor Financial Decisions

"In politics, stupidity is not a handicap."  - Napoleon Bonaparte

AOC's latest comment on forgiving student loans, to those that paid off their loans:  "We can support things that we don't directly benefit from."   That is true.  But taxpayers shouldn't be asked to support the voluntary financial stupidity of others, whether they be individuals, banks or car companies.  

Here's the irony of AOC requesting that her own student loans be forgiven.   Even though AOC owns a earns $174,000/year, owns a Tesla and maintains two residences, she has chosen not to make regular payments on her approximately $19,000 outstanding student loan.   She just continues to advocate for $50,000 student loan forgiveness, which would benefit her.

Sorry, anyone that can afford a Tesla doesn't need me to support forgiving their student loan debt.

For more on  The Practice of Personal Finance, check back Wednesdays for a new segment.

This is not financial, educational, nor political advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

Great Advice On Whether to Take a Student Loan

Here's an article every parent and child considering attending college should read.

On college decision day, don’t sentence your child to decades of debt (msn.com)

TLDR:  Just say no.

For more on Crossing Generations, check back Thursdays for a new segment.

This is not financial nor education advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

On Solving the Student Loan Debt Problem

 “If I had an hour to solve a problem I'd spend 55 minutes thinking about the problem and five minutes thinking about solutions.” ~ Albert Einstein

Here's how I would define the problem:

We give unlimited loans to 18 year olds who may choose a major that is unlikely to lead to a job that pays enough to easily cover the loan payment after normal living expenses.

My solution is to gather the data on pay that graduates of different majors get from their jobs.   Normalize living expenses for location differences.  Calculate the maximum loan payment a graduate can make, assuming wage growth over 10 years.   Set a maximum loan amount for that major by school.

Seems relatively doable to me.

I would do this work before forgiving any student loan debt.  Otherwise, student loan debt will become an issue again in the future.

For more on Reflections and Musings, check back Saturdays for a new segment.

This is not financial nor education advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

Avoid Getting a Student Loan

"I guess some mistakes you never stop paying for." ~ Roy Hobbs in The Natural

In my humble opinion, student loans are one of the biggest financial scams that is legal.  Student borrowers are not evaluated on ability to repay the loan.  Students are told the loan is an investment.  Students are encouraged to take a large a loan as needed to pay college costs.  Who is advising student borrowers?  It's usually the educational institution receiving  the money.

What should a student do if they can't afford a going to a college of their choice?   Choose a cheaper college is the first option.  If all four year institutions are too expensive, choose a community college for the first two years, live with parents and transfer after two years.  Or start working, go to college part time, and even have your employer cover part of all of the costs.  Finally, join the armed services and afterwards, go to college on the GI bill. All these options enable a person to get a college education.

The best part is one can avoid, or at least minimize the amount of, student loan debt.  This would prevent a student from becoming one of the many overburdened by student loan payments.

For more on The Practice of Personal Finance, check back Wednesdays  for a new segment.

This is not financial nor education advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

Forgiving Student Loan Debt, Why Not All Debt?

Progressives continue to advocate forgiveness of up to $50,000 of student loan debt.   Apparently, excessive student loan debt is preventing borrowers from buying goods and helping the economy.  (Paraphrasing reason from Lizzie Warren, Senator from Massachusetts.)   

Let's assume that is true.    Then why not forgive all debt: mortgage, credit card, payday loans and car loans.   Without the burden of loan payments, these borrowers could then spend payments on other goods and further stimulate the economy.

As they say in Wall Street Bets:  Can't go tits up.   

On the other hand, does the economy really need more stimulation?   CPI was at 7% for December, the highest since June 1982.    Using Lizzie's reasoning, maybe we need to NOT forgive any student loans to keep from further stimulating the economy.

Key learning:   

• Except for a mortgage, don't borrow what one can't pay back.   Maybe not even for a mortgage.  
• Today's college education tuition is way over priced, cause primarily by availability of student loans.  Maybe true of cars also.

Final thought.  If I were in charge, I would allow new student loans to be eliminated by bankruptcy.   Institutions would then be more judicious about requirements to qualify for a student loan.

For more on The Practice of Personal Finance, check back Wednesdays for a new segment.

This is not financial, student loan, nor policy advice. Please consult a professional advisor.

Copyright © 2021 Achievement Catalyst, LLC

The Power of NO!

For us, a successful retirement has benefited from being able to say NO.

1.  No Debt.   We have no mortgage, no car loan, no outstanding revolving debt.   That has reduced our "required" payments each month.   My only regret is that I didn't pay off our mortgage right after retiring in 2007.  Instead I stayed invested and lost a significant amount of money in 08/09 that could have been used to pay off the mortgage, which we did in 2009.
2. No Living Large.  I drive a 17 year old truck and a 17 year old car, which we are saving for my daughter to learn driving.  My spouse drives an 8 year old car we bought from her mom, when she moved into independent living.  We take one or two vacations a year with the kids.   We have most of our meals at home, eating out a couple times a month.
3. No Supporting Adult Kids.   Both our kids are still under 15, but many of my retired friends are still providing some finanacial support to their kids, even post college graduation.
4. No Exotic Investments.   I have turned down various investments with "higher yields" and stayed with some stocks and mostly CDs and cash equivalents.   Yeah, we didn't beat the market, except for 2020 YTD, but we generally earned enough to cover annual expenses.

Of course, YMMV, but this approach has worked well for us.

For more on Reaping the Rewards, check back Fridays for a new segment.

This is not financial nor retirement advice. Please consult a professional advisor.

Copyright © 2020 Achievement Catalyst, LLC

No Such Thing as Good Debt

"Too much of a good thing can be wonderful."  ~ Mae West

When I first started blogging in 2006, there was a lot of discussion about good versus bad debt.  The common thinking was that home mortgage debt, student loan debt and auto debt was "good" debt.   Credit card debt and other debt was typically categorized as "bad" debt.

My personal perspective was that debt is financial tool and it is neither good nor bad.  It's how debt is used that is the good or bad.   For example, the Great Recession has taught me that home mortgage debt and student load debt can be a financial negative if the amounts are too high.    If my home mortgage exceeded the value of my home or my student loan debt significantly exceeded my salary, I would feel the debt was a significant financial burden.

Although we've taken out a home mortgage, college loans, and auto loans, we were generally conservative in our borrowing.  For example, we made a 40% down payment for our last house and paid it off after 6 years.  At this point, we are debt free and do not plan to take on any new debt since we've witnessed the significant issues caused by debt during the recent recession. 

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2013 Achievement Catalyst, LLC

Wimpy Economics

"I'll gladly pay you Tuesday for a hamburger today." ~ Wimpy, a character in Popeye cartoons.

Popeye cartoons were one of my favorite shows when I was a child.  Besides the main characters of Popeye, Brutus and Olive Oyl, there was a character name Wimpy whose famous line was, "I'll gladly pay you Tuesday for a hamburger today."  Even as though I was a six year old, I understood the humor in Wimpy's request, especially since he said the line with every appearance.

Little did I realize that Wimpy's view of paying for goods would become the norm.  Here are some examples of Wimpy economics today:

1. Credit cards.  "I'll gladly pay you next month for a purchase today."   I rarely use cash nowadays, even for a one dollar purchase.   That way I don't have to deal with change in my pocket or worry about having money.   And I can pay the bill the following month.
2. College education. "I'll gladly pay you after I graduate for an education today."   Borrowing to go to college is the norm, is encouraged, and is subsidized by the Federal government.  Unfortunately, some students borrow too much and can't afford to pay back the loan.
3. Government financing. "I'll gladly cut spending in the future for a if you give me more money today."   I betting the fiscal cliff negotiations will offer this approach.   Of course, I am skeptical of the promise. As Ronald Reagan once noted, "Government programs, once launched, never disappear." 

Unfortunately, Wimpy economics is not sustainable.  While the issues are masked in an expanding economy, an extended economic down turn will show the flaws of such an approach.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Student Loans Burdening Parents

When I attended college, student loans were of great help. I took out student loans, not because my parents couldn't pay, but to relieve the financial burden for my parents.  If I recall correctly, which is not guaranteed :-),  I took out the maximum Federal guaranteed student loan each semester in my sophomore through senior years.   I signed for the loan myself; my parents didn't need to co-sign.  For reference, each semester's loan was about 5% of my starting salary as an engineer and my total loan was about 40% of my starting salary.  Even at these amounts, I felt the burden of the debt for 10 years.

I've already read about how students are graduating with loans that two to three times their starting salary.  In addition, student loans may now be more of a burden than assistance to parents according to the article, Child's Education, but Parents' Crushing Loans which provides details on the plight of two students' parents.  Essentially, the parents co-signed their child's loans.  Despite their own poor financial situation, the parents are now responsible for the loans since their child missed payments.  Sometimes this results in reduction of tax refunds or Social Security benefits to cover loan payments.

Some lessons for me:  1) Don't co-sign a child's loan; 2) Save for college.   Some lessons for my daughter:  1) Borrow less than 30% of her expected starting salary; 2) Major in a field with a high starting salary.

For more on Crossing Generations, check back every Thursday for a new segment.

This is not financial or education advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Student Loan Debt Relief

"If it sounds too good to be true, then it probably is."  ~ adage

The Obama administration just announced a relief program for student loan debt.   “College graduates are entering one of the toughest job markets in recent memory, and we have a way to help them save money by consolidating their debt and capping their loan payments,” said Education Secretary Arne Duncan on a conference call with reporters on Tuesday. “And we can do it at no cost to the taxpayer.”

The final statement leads me to wonder who it will cost.  After all, if the goverment can magically make all debt cheaper at no cost to the anybody, why wouldn't the government apply it to all debt?

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2011 Achievement Catalyst, LLC

Good Debt Myth Debunked

Prior to the Great Recession, a common rationalization was to categorize debt as either good or bad.  Good debt was OK to have have.  Bad debt was not. People typcially put home mortgages and student loans in the category of good debt.  Car loans sometimes were good debt.   Credit card balances and payday loans were typcially bad debt.

However, the Great Recession has made even good debt look pretty bad.

Home mortgages.  This type of debt used to be the epitome of good debt.   Homes were appreciating assets.   Mortgage interest was subsidized by tax deductions.  Mortgage payments increased equity while rent payments were considered wasted.

However, since the 2006 peak, home values have plunged 31%.  25% of homeowners have underwater mortgages where the value of the mortgage debt is great than the value of the home.  Mortgage interest deductions have low value when mortgagees can no longer make the payments.   In many areas, rents are now much lower that the mortgage being paid on similar properties.

Student loans.  This type of debt used to be justified as an investment.  College graduates earn about 60% more than high school graduates on an annual and lifetime basis.  In 2008, those with bachelor's degrees averaged $55,700 versus $33,800 for those with only a high school diploma.

However, the high cost of a college education makes it more difficult of graduate to get a return on the investment.  With the cost of a top private college education exceeding $200,000, it would take 10 years at the higher paying job to recoup the cost of attending college.  Add to that the cost of repaying student loans used to finance the college education.   That's assuming the graduate can get a higher paying job, since only 51% are starting in jobs that require a college degree.

Home mortgages and student loans are no longer viewed as good debt.    Now they are just debt, as they always should have been.   As with any debt, home mortgages and student loans need to managed prudently to ensure they don't become a financial burden.
 
For more on The Practice of Personal Finance check back every Wednesday for a new segment.

Photo Credit: morgueFile.com, Author Name

This is not financial or debt advice. Please consult a professional advisor.

Copyright © 2011 Achievement Catalyst, LLC

Spend Less Earlier or More Later

For large purchases such as furniture, car or house, financial decisions are sometimes based on the size of the monthly payment. If the amount is affordable, then the purchase is made using monthly payments for a specific period. Personally, I like to evaluate the total cost when determining whether to make a purchase with cash or over time. Below are a two examples of the difference between paying immediately or over time.

	Home Mortgage @ 5.375% interest rate
Price	Payment Period	Total Spent	Difference
$150,000	30 years	$302,384	$152,384
$150,000	15 years	$218,826	$68,826
$150,000	10 years	$194,234	$44,234

	Car Purchase @ 10% interest rate
Price	Payment Period	Total Spent	Difference
$25,000	7 years	$34,862	$9,862
$25,000	5 years	$31,870	$6,870
$25,000	3 years	$29,040	$4,040

Essentially, the value in the difference column is the price for "paying later," which range from 16% to 102% of the money borrowed. For purchases other than a home, the premium for paying later isn't worth it to me and I try to pay cash immediately. For a home, our approach is to take out a 30 year fixed rate mortgage, but then try to pay it off as soon as possible, to minimize the difference in cost.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

U.S. Debt and Deficit

Ever wonder how bad the U.S. deficit and debt are? I came across the U.S. National Debt Clock a couple weeks ago. To me, the U.S. deficit and debt are pretty bad. Here's some information from the debt clock as of 2/20/2010:

Over $12 trillion gross national debt and growing

Over $40,000 debt per citizen and growing

Budget deficit of about $1.4 trillion for 2010

In the short term, it doesn't look like the U.S. deficit and debt situation is going to get better. To me, the long term won't be any better unless we make some significant reductions in what government spends. Otherwise, the U.S. may find itself in a financial situation equal to or worse than Greece.

Simply, we need to make the difficult choices now or suffer worse consequences later. I believe it's time we elect officials who are committed to reducing the national debt and improving the economy at the same time.

That would be change I can believe in:-)

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial or economic policy advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Spending because of Stimulus Money? Not Us.

Although we qualified for the Cash for Clunkers and the new Home Buyer's Credit program, we passed on on participating, for one of the same reasons we don't go to Black Friday sales -- if we needed it, we would have already bought it. The other reason we aren't taking advantage of these credits is that using them would cause us to take on debt or reduce our savings, neither of which we want to do. Here's our thinking on these stimulus programs.

Cash for Clunkers. We both drive vehicles that are 6 years old. Mine qualified for the Cash for Clunkers program because it is a truck. However, the trade in value of my truck was greater than the $4500 stimulus rebate I would receive, thus not making economic sense to participate. In addition, my truck only had 53,000 miles and the maintenance cost is only an oil change every three thousand miles, with a major tune up every 15,000 miles. Also, I was planning to drive it at least 10 years and over 100,000 miles.

Decision: Keep the truck.

Home Buyer's Credit. We did not qualify for the first time home buyer's credit, since we already own a home. We do qualify for the extended program, which includes all people buying homes, under certain income restrictions. However, since we just paid off our mortgage and achieved zero debt, we are not going to buy another home. Besides, we are happy with our current home and plan to stay until our daughter goes to college, in about 13 years.

Decision: Keep our house.

For us, the financial decision was easy. If we were currently looking to buy a car or house, we may have taken advantage of the tax credits. However, the new tax credits did not incentivize us to do something that we weren't already planning to do.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC