I spend a lot of time on The Budgeting Babe writing and worrying about savings, investments, financial security, and future stability. But in the end, no matter how financially prepared – or unprepared – I as an individual might be for the dealings of daily life, I am wholly unprepared for dealings with sickness and death. My age probably has something to do with that – I don’t know anyone in her 30′s who spends time making sure his/her own papers are in order. And my parents are young, in their 50′s; I know they’ve started pulling together paperwork (my mom just told me she has a kit set up) but truthfully I don’t want to spend any time at all thinking about days when they might not be here.

But, because I was curious and also because I’m just sitting around my parents’ house waiting for a phone call from the hospital, I Googled “life death financial planning” and found this disaster plan on Wise Up Women (a site I had never heard of before). It’s a good checklist to browse and a nice starting point for someone like me for whom financial disaster planning isn’t top of mind most days. I’m going to start exploring the web site for other tips, make a few notes to myself, and start compiling a disaster plan of my own, and also make sure I know where my parents’ plans are.

Then, I am going to return to praying for my Uncle to pull through this, and for my family to find peace.

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One of my favorite financial bloggers is Kim Palmer. Kim writes the “Alpha Consumer” blog over at US News and World Report and is also the personal finance columnist for the magazine. Kim and I became friends via e-mail years ago since we write about a lot of the same topics – finance for beginners, shopping, spending and saving, and generally being a smart cookie when it comes to your budget. (Also, per her answer to the last question, her down-to-earth nature and love of strong beverages makes her a girl after my own heart.)

Unlike me, Kim is a professional writer, and also unlike me, she actually knows what she’s talking about when it comes to personal finance. She has a great talent for translating that knowledge into easy-to-read language — that makes her a fabulous resource for folks just starting on their financial journey. She also happens to be one of the nicest people I’ve met in the blogosphere. She’s quoted me in her blog, interviewed me for a podcast and generally has been super supportive of my site throughout the years.

Kim and I have been in touch regularly in the past few months because she’s been working on – get this – a personal finance book (!) and she amazingly decided to include me in it. So I asked if she’d willing to do a Q&A with me on The Budgeting Babe to help me launch the new site, and she, being the fabulous person she is, agreed! 

So, I’m thrilled to introduce you to the talented Kim Palmer, author of the new book “Generation Earn: The Young Professional’s Guide to Spending, Investing, and Giving Back” (which I encourage you all to buy - it’s the most relevant book I’ve come across so far for young professionals, and I see a lot of them.) Without further ado, here’s my Q&A with Kim.

Q (me): You have a lot of faith in today’s young working professionals, but in my experience, a lot of 20-somethings are completely clueless when it comes to personal finance. I see interns making $10 per hour whose parents are paying their rent while they splurge on phones, designer sunglasses and clothes. What are you seeing differently that led to you to write this book?

A (Kim): You are right that some young people are like that, but I met so many young people who really want to get on time of their financial lives, even if they don’t know exactly how. They might be making $10 an hour, but they want to figure out how to double or triple that, and to spend and invest what they have in smart ways. I think the recession really taught us that lesson, and motivated a lot of people to try to stay away from debt, invest and save more, and generally become smarter consumers. I wanted to help make it easier to reach those goals.

Q: The recession has hit a lot of potential generation earners hard. I know so many smart, talented people who are out of work for extended periods of time. Do you see a light at the end of the tunnel?  Do you have any advice for those feeling a sense of frustration?

A: That is the hardest part about the recession – that it hit a lot of young people especially hard. The people who are thriving right now are the ones who are figuring out how to take advantage of the recession, by freelancing more (since so many companies have laid off full-time workers and need more help), starting up businesses (by taking advantage of cheaper than usual start-up costs), and investing in the real estate and stock market at lower prices.

Other than that practical advice, the most important thing is to focus on being grateful for what you do have, which can be easy to forget to do but can make you feel so much better.

 Q: Your book includes stories of so many characters and cool people, like Kimberly Wilson. How did you find such a smart, engaged, and successful group of young people?

A: Mostly through blogs! I had followed Kimberly Wilson’s blog for a long time just because I enjoy what she writes about (how to be more creative and more ‘tranquil’) so when I thought of a way I could write about her, I contacted her. That’s how it worked for many of the people quoted in the book, including you – I really enjoyed reading their blogs, so got I in touch.

Q:  Your book has some interesting suggestions for generating income outside of a nine-to-five job. What tips would you give to someone looking to make extra cash from a hobby or passion?

A: To get started, even if it’s in a small way at first. Maybe you need to reach out to an editor you’ve been wanting to pitch a story to, or purchase the domain name for your freelance business. I love the idea of doing taking one small step toward your goal every day, even if it’s just shooting someone an email.

Q: Why was it important to you to put a central focus on giving back in the book?

A: I think that’s one of the defining characteristics of our generation – we care about sustainability, the impact of our consumption, and making a bigger difference in the world where we can. I met so many young people who want to give back or even start their own nonprofit, so I explored how we can do that, even in small ways when we’re still getting on our feet.

Q: What have you done to give back?

 A: For some reason the movie Slumgdog Millionaire really moved me (maybe because I was thinking about having a baby at the time!).  After watching it, I wanted to do something that could help kids living in poverty in India… I found a nonprofit that works with so-called “street children” and made a donation. My sister, a med student, actually has made a much bigger commitment, and traveled to India to volunteer there.

Q: What do you think is the most important first step in “getting a financial life” for a complete novice?

A: To decide what your big goals are, so you know what you’re working towards. It could be a vacation to Turkey or first home or sizable retirement fund. Then you can start taking the steps to get there.

Q: What else should we know about your approach to personal finance?

 I like focusing on the positive side of money. It can do so much – make us feel secure, support our families, help us give back in the ways we want… Money can be so empowering, and that’s why I’m fascinated by it and love writing about it.

Q: Where can we find the book?

Everywhere! It’s on Amazon and you can select the online bookseller of your choice at www.generationearn.com.

Q: What kind of beverage do you like? Because I am taking you out for coffee, tea, or alcohol when you’re in Chicago!

A: I can’t wait to meet you! I’m personally a huge fan of strong coffee before 4 p.m. and beer anytime after that!

The post Q&A with Kimberly Palmer, author and US News personal finance columnist appeared first on The Budgeting Babe.

If you’re like me, you probably have bills in random places around your house. You may have shredded some stuff, and held on to others for years and years (I actually have an old plastic bin with paper copies of all my tax returns, bank statements and credit card bills going back to 1997!). You probably use a combination of online banking and bill pay and hard copy payments and records. You may have attempted to make a budget once or twice, but who knows where your finances go now.

So how are you going to “get your house in order” when your finances are literally all around your house?

Certified professional organizer Joshua Zerkel, founder of Joshua Zerkel’s Custom Living Solutions (www.customlivingsolutions.com), has some answers for us. He specializes in organizing home offices/small offices, managing paper clutter and helping clients deal with the never-ending influx of paper, email and other information that can clutter our daily lives.

Here are Joshua’s best tips:
1. Collect all your financial “stuff” and have it in one place (he likes Pendeflex accordion folders to stay organized). For me, this means going into my home office, my coat closet, Brian’s home office and our shared mailboxes to find all the financial paperwork lying around, some organized, and some not.

2. From here, use a tool like NeatDesk desktop scanner to get a sense on how much you spend across all the areas of your life to help you make informed decisions on how you can save.

• Joshua likes Neat because it gives you an overview of your spending and is a great way to manage paper clutter (and not just your financial papers so it serves other purposes for organizing your desk and home)
• He likes Quicken to manage your investments and have a comprehensive look at your portfolio. Neat scanners and Quicken have different tools and it’s a matter or what best suites you. (However, spreadsheets you create in Neat can be easily exported to Quicken.)

3. Another suggestion Joshua recommends for important papers is to store them offsite to have a backup in case your computer dies or there is some natural disaster- he likes Mozy and Anywhere Vault which are both web-based storage for scanned images and are low cost.

• As you scan into your computer, it’s important to shred these documents to make sure you don’t become a victim of identity theft.

• Another advantage to organizing your finances with digital tools is that you free up physical space in your home office – time to move out some of the filing cabinets!

Getting your house in order can go beyond your finances. Joshua also shared some tips for decluttering your home and office.

• Not to be confused with the web-based storage I mentioned earlier, physical off-site storage units can be a huge money suck each month, so if you have one, it’s time to get in there and see what you really need. Look for treasures and bring them home. Then donate (get a tax deduction while you are at it) or sell the rest on eBay.
• He often advises clients to access everything they use on a regular basis – cell phones, cable and even home services like loan or house cleaning. Call up each company and be honest with them – tell them you want to keep their service, but would like to look at ways to reduce extra fees, even if that means just through cutting back on services. He says they will often work with you.

Thanks Joshua! We’re thrilled to have your input. Now I’ve got to go start collecting, shredding and scanning (but not in that order). It’s a great way to spend a cold winter day.

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Don’t get me wrong – I’m the first to admit that I’m no expert in money management. And I know my financial journey in still on the first leg of the trip. There are decades, years, lifetimes of financial lessons I have yet to learn. However, here are some lessons I’ve learned along the way:

• Only I am responsible for my finances. I cannot blame my family for not bestowing a trust fund upon me, my boyfriend for trying to find his true calling via different careers, my school teachers for not educating me about money or any other life circumstance. Nor can I afford to simply take things as they come, with no plan of action. I am responsible for my financial past and future. Grumbling about where I’ve been (or haven’t been) does nothing.
• Learn what you can about money from those who have it. I wish I made the effort to talk to my Great Aunt Angie about money when she was alive. She came from the same family I did, yet she managed to save, invest, diversify, and make a killing off the stock market. She traveled the world. She had a career that she loved. And I never thought to ask her how she did it. I truly regret that.
I’ve started to talk more frequently with my friends about money. We chat about where our savings are going, we ask questions of each other. I talk about money with a financial advisor friend whenever I see him (he thinks I rely too heavily on Suze Ormon, for instance). I’ve learned there’s more to talk about with friends than celebrities, relationships and clothes.
The point is, resources are all around us. Opportunities exist each and every day to learn about money management, savings, investing and building a future.
• Invest in the future. You’re never too young to start a 401K or IRA. Never. I started mine at 25 and wish I started sooner. Think of this as a “have to” rather than a “can do,” resign yourself to your investment, and start socking money away. Anything less is not an option.
If your company matches investment funds and you’re still not investing, you’re loosing free money. Never forget that fact.
• Save, save and save. Think you’ll miss those $200 canary yellow kitten heels two weeks from today? I doubt it. In fact, I can guarantee you’ll feel worse having them on your credit card bill than not having them at all. If you don’t save your money, you won’t ever have any. Common sense right? So why is it so hard?
Start an automatic savings account that takes money out of your paycheck automatically. You won’t even know it’s missing. I promise.
• Find outlets to satisfy your spending cravings. I know, I know. You saw a Louis Vuitton bag two weeks ago and it’s STILL on your mind. Jessica Simpson was in Us Weekly carrying it this week. You HAVE to have it.
Honestly, I don’t know what will satisfy your shopping cravings. But for me, I find exercising, writing, knitting, or just staying away from the mall all help. Same goes for Target, which usually has a similarly styled bag for a fraction of the cost.
You know what doesn’t help? Going shopping with your best friend to get her opinion on a Louis Vuitton bag when you know she’s going to say it’s “sooooooo cute!” and that you “just have to have it because it matches your sunglasses AND your shoes and it would look so cute with that sun dress you got for your birthday last week!”
• Don’t fall victim to peer pressure. Here’s a typical weekend scenario:
Friend: “I really want to go out. Let’s go have a few drinks in Wrigleyville.”
Me: “I’m broke. And I have a headache, so I think I’m just going to stay in this weekend.”
Friend: “But I really want to go out and I have no one to go with! Take a Tyelonol. Come on, I’ll drive AND I’ll buy the first round.”
At this point you can either 1) Go out, or 2) Not go out. It’s really that simple. Your options here are NOT 1) Go out and remain in good standing with your friend, or 2) Not go out, thereby leaving that friend with no one to go out with, and thus, completely ruining her weekend. If she’s your true friend (and trust me, she is), she will understand. In my case, the call usually ends like this:
Me: Sorry lady, I just have to save some money. I’ll see you another time.
Friend: OK. I’ll call you tomorrow and tell you any good stories.
Five years ago, that same conversation would have ended like this:
Me: Well…. OK! Who cares if I’m broke and have a headache! I’m going out.
That’s $60 my savings account never saw, and really could have used.
• Saving is boring. Some nights I’m bored out of my mind and just want to shop or go out! Spending feels good AND makes me look cool. Saving takes forever and makes me feel like a loser, it’s true. But ultimately, what’s more important? The right now, or the long(ish) term? If you don’t care about the long-term, feel free to be all spendy and trendy. But make sure you have a cushion. Because your chic little Marc Jacobs dress with the fab little print down the left side that hugs your body “so perfectly” and the memories from your last Vegas trip aren’t gonna help you when you get sick, get pregnant, lose your job, need to move, get in a car accident, need a root canal, or want to buy a place.
I’m sorry. That was preachy. I totally feel your pain about feeling old and un-trendy. But seriously, folks, we just have to deal with it. We’re not millionaires. Yet.
• Sometimes, you have to splurge. Now I’m confusing you, I know. But if you can’t splurge every once in a while, what’s the point of saving? The interesting thing is, I find that being able to splurge on vacations, fancy dinners and yes, clothes, actually help me to be disciplined. I won’t buy tickets to see concerts, go out to movies, get expensive manicures, etc., if I know I’m saving for a big trip. I automatically become more disciplined because I have a nice, short-term goal in mind.
The key here is not to overdo it. If you’re splurging all the time, the expenses become a part of your everyday life, things you can’t live without. Make sure your splurges are planned, and that you can afford them (meaning they don’t affect your savings goals for the month, year or whatever).
• Investment returns are thrilling, and so is self-reliance. The more you put away, the more you get from it. Both financially and mentally. I never feel better than days I see my account growing. And not because I’m counting up all the material things I can buy. It’s because I’m creating security for myself. Security for my future.
• Life is about more than money. Don’t get too caught up in this stuff. It only takes one great conversation, one weekend hike, one amazing kiss, one moment of self-reflection, one life-changing experience to know that life is truly not about the money.

The post Reflections on money appeared first on The Budgeting Babe.

In moments like these, most of us don’t stop to reminisce about the fabulous brand of wallet we were carrying. Louis, Calvin, Kate…who cares!?! We only want to know that our finances are secure, that someone else has not bought all the items we only dared to dream about owning. In Brenna’s case, the theif spent $600 in two hours. It could have been worse; Brenna could have frozen, paralyzed by her “oh sh*t moment.” Instead, she came home, got on the phone and secured her finances, making it out for cocktails and smiles with the girls that weekend.

For those of us who haven’t experienced the “oh sh*t moment,” wallet-style, here are a few helpful hints for getting past it, courtesy of the Chicago Tribune’s Lorene Yue (December 5, 2004). You can find the full article here ( a free subscription is required): http://www.chicagotribune.com/business/yourmoney/sns-yourmoney-1205onthemoney,0,3523370.story.

• Keep a list of all your cards and customer service numbers in one place. Update the list frequently. When your wallet disappears, you can locate the list and make all your phone calls quickly – no scrounging around required.
• Don’t carry your social security card in your wallet. Bonus points if you can leave all cards listing your SSN at home.
• Keep an extra credit card at home. New plastic takes a few days to arrive.
• Call the three credit bureaus (Equifax, Experian or Trans Union – one call takes care of all three) and have a fraud alert placed on your account. If the theives have your SSN and your ID or license, they can steal your identity. Better to be safe!
• My own advice: always file a police report, write down the number and request a copy of the paperwork for your files. This can help you by offering credibility to your claim when dealing with banks and credit card companies, and can help you refute any suprises down the road.

These tips should help turn an “oh sh*t moment” into an action-oriented moment. Like Brenna, you’ll be ready to party with your girls again in no time!

Thing I Didn’t Buy Update:

Two things, actually. I did a lot of shopping this weekend and managed to stay on budget. But here are two things I’m still thinking about:

1) This gorgeous blue silk tube dress from Banana Republic:

http://www.bananarepublic.com/browse/product/259/product_259447.htm?cs_catalog=BR%5FHoliday2%5F2004&cs_category=2019

It has flowers on the side! And a matching purse! So cute for new years…I stared at it a long time.

Sadly, I managed to have a dream about this dress. Literally. I dreamt my boyfriend married another girl and this was her wedding dress. All I do was cry, “She has my boyfriend AND my dress (sob, sob).” Pathetic.

2) This super cool piece of cat furniture: The Cat Magnet

http://www.petsmart.com/global/product_detail.jsp?PRODUCT%3C%3Eprd_id=845524441778325&FOLDER%3C%3Efolder_id=2534374302025565&ASSORTMENT%3C%3East_id=2534374302023690&bmUID=1102393292027

I don’t know if that link will work, but this looks like something Nala would really enjoy. Nala is my super divalicious cat. She’s shedding and loves to rub herself on everything, particularly my black work pants. All the time. Sigh…

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