Carnival of Personal Finance – Meltdown Edition

The 172nd edition of the Carnival of Personal Finance (the Meltdown Edition) is posted at DebtKid.

If you’re not sure what a blog carnvial is, it’s where bloggers who write about a similar topic (in this case personal finance) submit their best articles to be compiled together on one website for readers to enjoy.

There were over 50 articles submitted this week.  Here are a few that look interesting to me…

• Money Beagle gets a really interesting insider look at the credit crisis.
• Trent from The Simple dollar goes into depth about the 12 biggest personal finance mistakes people make over and over again (plus their solutions!)

Smart Money Moves to Make In Tough Times

The recent financial news – banks failing, the Treasury taking over Fannie Mae and Freddie Mac, the stock market dropping several hundred points in one day – may have you feeling a bit helpless when it comes to your finances.

While you may not be able to make the market go back up or keep banks from failing, there are steps you can take to make your finances as strong as possible in these tough times:

1.  Fund your emergency fund.  It’s more important than ever to have an emergency fund, in case you lose your job, have unexpected medical expenses, or have a major house repair, so that you don’t have to sell investments (while they’re down), or rack up credit card debt.  The general rule of thumb is to have three to six months of living expenses set aside for emergencies.

2.  Reduce debt.  If you have high interest credit card debt, the greatest return you can get right now is to pay off that debt.  Start by calling your credit card companies and asking for a lower interest rate (if you have a good credit score, you could get your rates down to 8-12%, which is much better than paying 20+ percent).  Then make the minimum payments on all of your credit cards except the highest interest rate card until paid off.

Continue Reading Smart Money Moves to Make In Tough Times

When Will Things Get Back To Normal?

That’s what clients are asking (or at least thinking) about the current stock market.

Well, I hate to break the news, but this IS normal!  The stock market goes up AND down.  It’s a cycle, made up of periods of expansion and periods of retraction, of good times and not-so-good times.

The market goes up, and periodically it needs to retract.  Right now we are in a retraction.  However, those who adopt a reasonable investment policy, diversify and rebalance their portfolio as needed – these folks have positive long-term investment experiences.

Cara Grills me on Economics 101

My friend, Cara Mirabella of The Household Helper interviewed me this week on her podcast about the current situation in the economy.  It’s basically a lesson in Economics 101 so you can better understand what the media is making such a fuss about.

We talked about how the media focuses on the negative, how the election year affects our economy, what a recession is, and what economists think 2008 has in store for us.

We also talked about what we should be doing now (if anything) and what we can do to take advantage of the ‘down’ market. We also talked a little about the upcoming tax rebate check!

2007 a winning year on Wall Street?

Would you be surprised to hear that 2007 was a winning year on Wall Street?  My guess is that most people would be surprised to hear this.  Most people tend to focus on the negative, not the positive.  But in reality…

• The Dow Jones ended up 6.4%
• The S&P 500 ended up 3.5%
• And the Nasdaq ended up 9.8%

These may not be earth-shattering numbers, but after the volatility in the second half of 2007, the fall of the dollar and the rise in oil prices, these are solid returns for ‘07.