From the monthly archives:

July 2009

Ok, I mean I am not an accountant but lets think about this. The US Government has suspended the Cash for Clunkers Program. See Peters post in my roundup for more on that. But why are people all in a tizzy about it. Lets say they really did spend all $1 billion dollars they had allocated for it. Doesn’t that mean they achieved their goal of bouying the auto industry. I mean that is like 222,222 cars if everyone got the full $4500 incentive. That is a lot of damn cars, of course it also means there is 222,222 cars going to scrap heaps which probably run ok and could be put to use somewhere.  Anyway kudos to the US government for underestimating the Americans and their cars, I kept my clunker, its paid for so why wouldn’t I. While I am in a kudos mood here are my roundup posts for this week:

@moneymatters from Bible Money Matters wrote, in lightning fast fashion, a post on the suspension of the cash for clunkers program. He goes a little more into the specifics than I did so check it out to get the skinny.

@ManVsDebt wrote about the battle between Ramit’s Big Wins and Trent’s Frugality. I personally like both schools of thought so why not be frugal while fighting for the big wins. Success comes when you learn to balance all aspects of your life to provide you with the most fulfillment. I was a sucker for the tigers in the picture too.

@AlanSchram begs the question Are Budgets Dead? Inspired by the fact that neither JD Roth or Trent Hamm use a budget, he wonders does anyone? I don’t think that budgets are dead, they certainly have their place. The true key here is to be aware of your spending, track your outflow of cash so you know where you can save.

Since we are talking about budgeting @ChristianPF has a look at the Mvelopes Budgeting Software. I haven’t had  a chance to look into it yet but it seems kind of neat from this review. Probably won’t help Trent or JD though.

Finally @NCN wrote What Works for Me – Debt Reduction Mindset. Debt reduction, or at least success and reducing debt, is definitely about a mindset. You need to be in the zone as it were to get it done and eliminate your debt.

Have a great weekend, and don’t forget you can get all of my posts here straight to your email inbox, just sign up using this simple form and enjoy five thoughtful and enjoyable posts from yours truly every week.

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Annual Percentage Yield is a reflection of the amount of interest you are likely to earn on a given investment. You will typically see this term when looking at the interest rates for savings accounts and CD’s because it takes into account compounding and is slightly higher than its counterpart the Annual Percentage Rate.

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Par rate is the base rate charged by a lender, this rate requires no buy down and the broker gets no Yield Spread Premium (YSP). This rate is pre-adjustments, fees, or yield spread premiums charged by the broker. The Par Rate is then adjusted based on several factors such as your credit score, the loan to value ratio, whether it is an FHA or Conventional loan, and how long you want to lock the rate for.:

Credit Score:

Your Fico is going to play a part in determining your base rate, the better your score the better your rate is going to be, a 720 or higher is going to provide the best rate without penalty. Lower than 720 and you are looking at potentially .50 to .75 point penalties depending on the lender.

Loan to Value:

Your percentage of equity vs your mortgage is taken into consideration in determining your base rate. While everyone tells you to shoot for no more than 80%, the rate schedule I am referencing actually penalizes you more for being between 75%-80% LTV

FHA Vs. Conventional:

Whether or not you choose to go conventional vs. FHA is going to affect the base rate, FHA loans are more limited in the funding options than conventional mortgages.

Lock Period:

The length of time you choose to lock your rate for could also affect your final rate. Where par may be 4.625% for a 21 day lock, it could be 4.750 for a 35 day lock.  You have a better chance of getting a lower rate the less time you need to get your loan funded.

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Adjusted Gross Income

July 31, 2009

Adjusted gross income is an American tax term referring to your gross income minus any adjustments to your income.   The adjustments to your income are usually in the form of deductions as defined by the IRS. Your adjusted gross income is listed as the last number on the first page of your 1040 form.

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Saving for College – Coverdell Education Savings Accounts

July 30, 2009

With one in the oven and one quickly approaching kindergarten age I think it is definitely time to get serious about saving for our children’s education. Our current method of saving is to automatically transfer $20 a paycheck into an ING Direct account for my oldest. Obviously this is not a cure all college fund […]

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