Mortgage market: Is it a good time to refinance?
Mortgage market can change, and homeowners' personal circumstances can, too. After marriage, is it a good idea to refinance a mortgage to include both spouses regardless of the mortgage market? Look to question No. 1 in the reader mailbag.
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Instead, I’d look for a personal finance book written with people like him in mind. A really good choice for a student leaving high school and entering college is Please Send Money by Dara Duguay, which I reviewed a while back.Skip to next paragraph
The Simple Dollar is a blog for those of us who need both cents and sense: people fighting debt and bad spending habits while building a financially secure future and still affording a latte or two. Our busy lives are crazy enough without having to compare five hundred mutual funds – we just want simple ways to manage our finances and save a little money.
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The biggest trick will be getting him to read it. You might want to tie the credit card to reading the book first.
Q7: Birthday presents for children
I have 2 small kids (6 year old son, 2 year old daughter). It seems like every month we are invited to at least 2 kid’s birthday parties, mostly friends from my son’s school. My son loves birthday parties and is very social but the whole presents thing is bringing me down. It seems like the gifts the kids receive (based on what my son was given at his own party and also when we do go to the rare party wherein the kid opens the present in front of everyone) are in the $10-15 range.
I am trying to be frugal but this month we have 4 parties which is $40 minimum and it is a tight month financially. I try to stock up when there is a sale on big winners like lego sets and board games and art supplies, but I would love any advice. $40/month x 12 months = $480 which seems like an awful lot to spend on birthday presents for kids that aren’t even my own!
On the flip side of that, if your kids are going to 48 birthday parties a year, then you have a plethora of kids who should come to your own children’s birthday parties.
I think that a small gift like this is the social cost for a young child attending a birthday party when there’s no other arrangement (like a parent saying “no gifts” on the party invitation). You bring a $10 gift and get a couple hours of fun and a few strengthened friendships out of the arrangement.
That doesn’t mean you can’t contact some of the other parents in this social circle and perhaps suggest that you all tone down or eliminate gifts for a year. That’s really the only way to change the culture of the situation. If I were in your shoes and my kids were going to that many parties, this is a change I would relish as I really would not want to accumulate 48 $10 toys in my home.
Q8: Handling extra cash flow
I finally managed to be able to have money available at the end of the month ($1000). What is not very clear to me is what to do with it. The first thing that comes to my mind is to use that money to reduce the debt in my line of credit ($40,000). But at the same time I don’t have an emergency fund. What would you recommend, focus on reducing the debt in the line of credit and then build an emergency fund or using part of the $1000 to build an emergency fund?
I would use the first $1,000 to build up an emergency fund. That amount will help you with most of the small emergencies you’ll face in life.
After that, I would use any additional monthly surpluses to first shore the emergency fund back up to $1,000 (if you’ve used any of it) and then use the rest to pay down your debts.
If you’ve eliminated your debt, I would probably start building up the emergency fund a bit more, up to about two months of living expenses (however much that is in your life). This will be incredibly helpful in the case of job loss or other large emergencies.