Tell everyone to beware of the 'Timeshare Trap'! Unless you
buy them outright, the amount you end up paying is almost double what you
finance! They make it so attractive with a low down payment and very low
monthly fees ... but please beware. When I saw the amount I still owed - and I
only used it maybe 3 or 4 times .. Crazy!!! 
My financial tip would be to urge people to
use CDs as one plank of their savings plan. Many Credit Unions have
$500 minimums (compared to the much higher minimums of commercial banks). Each month or
quarter (based on what you can afford) buy a $500 CD.
The longer the
terms 5 year vs 1 year, the higher the interest rate. Often the interest
rates on CDs are slightly higher than interest rates associated with regular
savings or money market accounts. I like to buy a 5 year CD every month.
At the end of one year that translates to $6,000 (plus interest) in
savings. At the end of 5 years that translates to $30,000 (plus interest)
in savings. You can designate beneficiaries for each CD. So if you would
like to designate sons, daughters, nieces and nephews – it's a way of providing
an inheritance.
At the end of the term, you can either cash out or let
the CD roll into another term. If you start this routine early in life, a
5 year CD could roll multiple times and be available for a future major
investment or as a supplement to retirement income.
- Take a look back at 2011 expenditures and calculate your regular expenses (ie. food, rent & utilities).
- Take the remainder and figure out what you will need for 2012 discretionary goals (ie. vacation costs or hospital bills for a new baby)
- Add on a 20% premium for unexpected charges since you are dealing with unfamiliar territory. There are all sorts of variables that can throw a monkey wrench in your finances; better to err on the side of safety.
Also think about long-term goals (ie. college savings)
but expect up and down years; don't get discouraged! Read reputable publications
like the New York Times and Wall Street Journal to figure out what to expect.
For example, the Ivy League is now offering financial aid to families who
earn up to $180k per year for college tuition. Reading papers, websites, etc. like these allows you first access to personal financial information such as this.
Thanks for sharing guys! Why don't YOU join us every Monday night 8-9p. ET for #MoneyCHAT! Real Talk about money and business!
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