Recovery from Financial Disaster

Recovery from Financial Disaster

Ever wonder how you’d handle a complete reversal of your finances? I have a friend who had a lifestyle most people would envy and lost everything, including her marriage. I didn’t meet her until after her recovery from her financial disaster. She is one of 

Credit Cards: What You Need to Know

Credit Cards: What You Need to Know

Credit cards are a terrific convenience but also can be very costly.  Effective use of a credit card can make life easier and improve your credit score.  On the other hand, credit cards are an example of bad debt. It is easy to buy more 

The Basics of Loans: What You Need to Know

The Basics of Loans: What You Need to Know

Loans are the financial instruments people use to borrow money.  Whether they are getting a mortgage to buy a house, borrowing money to buy a car (as opposed to leasing or paying cash as discussed in this post),  or other large purchase, not paying off 

What is Diversification and How Does it Work?

What is Diversification and How Does it Work?

One of the key concepts used by many successful investors is diversification.  In this post, I’ll define diversification and explain how it works conceptually.  I explain different ways you can diversify your investments and provide illustrations of its benefits in this post. What is Diversification? 

Financial Decisions – Risk and Reward

Financial Decisions – Risk and Reward

Almost every financial decision is a trade-off between reward and risk.  In this post, I’ll use three examples to illustrate how financial decisions can be made in a risk-reward framework.  The examples are: Deciding what to buy with some extra money. Selecting a deductible for 

Financial Risk: An Introduction

Financial Risk: An Introduction

Understanding financial risk is key to making sound decisions.  Many people don’t have a good grasp on what risk means, particularly in a financial context, so I will focus this post on financial risk.  While I don’t provide any specific practical suggestions in this post, 

The Scoop on Credit Scores

The Scoop on Credit Scores

Credit scores are one of the most important financial numbers.  Credit scores not only affect the interest rate you pay when you borrow, but also your ability to borrow and other important financial transactions. It has been a long time since I’ve borrowed money, so I 

When Is It Good to Pay Off Student Loans

When Is It Good to Pay Off Student Loans

 This week, I’ll conclude the case study about Mary and her savings.  Her last question focused on whether to pay off her student loans.  The considerations include: The interest rate on her loans. How many more payments she has. What she can earn if she 

Retirement Savings/Saving for Large Purchases

Retirement Savings/Saving for Large Purchases

Case Study To help set the stage, I created a fictitious person, Mary, whose finances I use for illustration. Mary is single with no dependents. She lives alone in an apartment she rents. She makes $62,000 per year. Mary has $25,000 in a savings account 

Savings Framework and Emergency Savings

Savings Framework and Emergency Savings

You may be thinking you’d like to get started with investing.  Before doing that, you’ll want to look at how much savings you have and how much you can invest.  In this three-part post, I’ll illustrate a framework to guide savings and investing decisions, key