You are not alone!

In her own words, The Money Guide for the Young, Fabulous and Broke aims to be “not your parent’s money book.”

There’s a lot of financial advice out there, but much of it isn’t applicable to young people. Orman attempts to fill this gap. She claims to understand the specific problems of young people by having spent a lot of time talking to them. While the list of topics covered is pretty generic, that experience is reflected in the tone of the book. It does not read like a series of lectures; it is very conversational with a slightly casual but still credible and responsible tone. There is a lot of “don’t worry, you’re not alone, don’t panic” reassurance, not just for where you may be in your life, but also in the event you encounter difficulties trying to dig yourself out.

This tone creates a good sense of “it’s okay, your problems are common and you can get through them,” which I find financial advice books often lack. This could be a major plus if you’re feeling completely overwhelmed and want someone to hold your hand through the process. Despite this more casual tone, Orman uses “you” a lot, which keeps her on the level of adviser.

It even reads economically

The book is divided into several sections, each following an identical structure. There is a basic overview, a discussion and then a list of specific FAQs. Each chapter is also framed with key points and a summary section. This makes it very easy to skip sections you already know. For the most part, Orman states facts without getting preachy.

She doesn’t go too in-depth on any topic, but she hits the major talking points that will address the needs of a majority of young readers. Pleasantly, the book doesn’t hit you too much with the “don’t spend $4 on that latte or you will be in debt for ever” type of tone that I feel can be common in a lot of books that cater to young professionals. While she certainly encourages financial responsibility, she does it smartly and identifies a few common areas where you may be able to cut back while recognizing that you do need to still have a life you are happy living.

Her advice may surprise you

Perhaps the biggest surprise I encountered while reading the book was Orman’s philosophy on finding and getting started with a career. She actually tells her readers to focus on finding a job they love, even if it means racking up substantial credit card debit in the process. The idea of searching for a job you can be happy going to every day is a very smart one, and I do believe it will ultimately pay dividends down the line. However, I definitely wasn’t expecting to find it in a book focusing on getting out of debt and finding financial security.

For credit card debt, she advises limiting monthly spend on credit to 1% of your salary, while reinforcing that you cannot use this to splurge — only to get by while finding that perfect career. It’s smart and structured, so it’s sagacious as long as you can stick to it.

With regard to credit cards in general, the advice Orman gives is certainly intelligent, but following the credit crunch of the last few years, may be a little out of date. Zero percent interest on balance transfers and rock bottom interest rates are a little more difficult to come by these days. But if you can find them and play the rotating debt game, she does tell you how to use these necessary evils to get by most effectively.

All in all, for a financial advice book, The Money Guide for the Young, Fabulous and Broke is very approachable, encouraging and adapted for today’s young professionals. You might find parts of it a bit basic if you’ve been on your feet for a couple of years, but it’s easy to skip around, and almost all of the advice is inarguably sound. Even if none of the adjectives in the title describe you, you might still learn a thing or two from the book.

Have you read this book? What did you think? Please share your thoughts in the comments section below.

Other personal finance book reviews on the web:

LearnVest: A New Take on Classic Literature

Get Rich Slowly: Book Week

The Simple Dollar: Book Review Index

Financially Poor: Masters of Sales

Book Review: Money Guide for the Young, Fabulous and Broke by Suze Orman is a post from: PerkStreet Blog

In this post we’ll examine some recent banking offers in an attempt to pull back the curtain. I have slightly simplified these for clarity but I have not changed any of the relevant details. These are all real offers.

1. Reward Maximums

Turn your everyday purchases into bonus cash. With this special offer, earn 5% back on eligible daily expenses by using your credit card. From a tank of gas to visiting your favorite restaurant — enjoy more out of every purchase.

Sounds great, right? 5% is a big number for credit card rebates, and the bank is probably hoping they have you hooked right there. But let’s look at the fine print:

You will earn 5% cash back for the first $625 in eligible purchases you make through June 30, 2010.

The key phrase is: “first $625 in eligible purchases.” What this actually means is that you’ll earn an extra 4% above the 1% you’d ordinarily get for $625 of spend at the most. And that’s not $625 in bonus rewards. $625 * 0.04 = $25. That’s what this offer actually means. Spend $625 and you’ll get $25. Nothing to sneeze at certainly, but not as good as the open 5% this promotion seems to offer at a quick glance. For a customer spending $1000 a month and earning 5%, that would be an additional $120 over the three month period for which this offer was active. This offer is almost $100 worse than it sounds.

2. Cashback Tiers

Take a look at the following chart:

How much do you earn if you spend $12,000 a year? Someone sent this to us as an example of how they were earning more using their card, because they were getting $65 plus 1% back on their spend. The problem is that this is a graduated scale. You’re getting $65 plus 1% back only on your spend above $10,000. For our sample customer, that’s $2000 * .01 = $20. Add that to the $65 for a total of $85 back on $12,000 of spend. That’s a total of just above 0.7% cash back. If you don’t reach the upper tiers, that number just goes down from there. Once again, this offer seems to be about $100 better than it actually is.

3. Earn up to 5% unlimited cash back

This one gets mentioned a lot because it’s the main marketing point of one of the major cash back credit cards. Any time the words “up to” are used, you should be on guard. This offer is extra tricky because it uses both tiers and different spending categories. Here’s a summary from the terms and conditions:

For the first $6,500 of Eligible Purchases, the rebate is 1.0% for Everyday Purchases and 0.5% for all other Eligible Purchases; for Eligible Purchases of $6,500.01 or more, the rebate percentage is 5.0% for Everyday Purchases and 1.25% for all other Eligible Purchases. Everyday Purchases are Eligible Purchases made at the following categories of U.S. merchants: supermarkets, drug stores, and automobile gasoline stations.

Let’s take our same user spending $1000 a month, or $12,000 a year. Based on U.S. spend data, approximately 20% of the average household’s spend fits into the Everyday Purchases definition. If you use those assumptions and take the time to do the math, the average earn rate is 1.24% for an entire year. That’s a far cry from the 5% figure being used to pitch the program. In fact, in this example it’s a difference of over $450 a year.

No one likes to be tricked, but in reality many of these situations are avoidable. When you evaluate a new bank or card deal, you should spend the few minutes it takes to look at the details and punch the numbers into your calculator. You’ll probably be surprised by what you find, and even if your deal is as good as it sounds, you’ll be wiser for it.

Why you should care about math when making financial decisions is a post from: PerkStreet Blog

You’ve spent the last several hours on a cramped plane, you’re tired, and the last thing you want to deal with is more bureaucratic hassle. Yet what do we so often end up doing? Sitting in a long rental car line, waiting for a shuttle bus, and dealing with things like collision damage waivers. Not exactly the most pleasant way to start your vacation. Fortunately, if you’re on a multi-day trip, there may be a way to save yourself money while making things a lot more convenient. It won’t work for every trip, but the next time you’re planning a getaway, it’s worth considering another option.

Most of the main car rental companies have more than one office in each city. If you’ve ever taken the time to check them out, you might have noticed that in almost all cases, the one at the airport is the most expensive by leaps and bounds. This makes sense: the airport is where demand is highest, which leads to long lines and higher costs. Most cities also tack on high airport taxes and fees, driving the rates up even more. For a typical one week rental, the branch in the terminal can be as much as three times as expensive as an off-airport location.

Here’s another thing that many off-airport rental car branches locations offer: free pick-up and drop-off. They won’t pick you up at the airport, but they will go to most hotels. And many hotels in places where public transit isn’t as well developed have free airport shuttles. See where I’m going with this? When you get off the plane, skip the car rental entirely and just head to the hotel on the shuttle. Even if you have to take a cab, it may still be worth it. Drop off your stuff, take a shower, relax, do whatever it is you want to do to start your trip. Call the rental car company and tell them you want to be picked up for your rental. Now you get the benefit of the cheaper rates and you’re not dealing with another line at the airport. Depending on your flight times, this strategy may even help you save two days on your car rental time. If you get in late at night and are only using the car to get to the hotel, you’re paying a whole extra day. Ditto if you’re leaving early in the morning. Plus, returning the car while also trying to catch a flight is yet another hassle that this option lets you skip. You’ve already dropped off the car before you get to the airport, which means a much smoother departure.

Will this trick always work? Of course not. But I’ve used it before and saved hundreds of dollars while enjoying a far more pleasant experience. Plane travel is stressful enough already. Don’t let the rental car make the beginning and end of your trip even more unpleasant.

Why off-airport car rentals can be a great idea is a post from: PerkStreet Blog

That’s probably not something you’ll actually do, but the message behind it is still a very sound one. Fortunately, there are less drastic steps that you can take that serve roughly the same purpose. If you’re tempted by a large purchase that would stretch your normal budget, considering waiting for at least two weeks before you pull out your wallet. Write it down and keep the list in a handy place so that you can review it from time to time. Like waiting for the ice to melt, this forces you to think about whether you actually want that item, or whether you’re making a choice you’ll come to regret the next time you look at your bank statement. You’ll probably find that in many instances, after the two weeks are up, you aren’t so tempted any more. But even if you are, there are lots of other things you can do in that waiting period:

• Do some research to make sure that you’re actually getting the best deal.
• Look around to see if there are any cheaper options that will still satisfy your craving.
• Take the time to save extra cash so that the cost of the item is less noticeable.

Of course, this advice doesn’t always hold true, as there are certain times when the perfect item or an amazing deal may make purchasing immediately the best bet. But in most cases, taking a little time to think about it helps make sure you buy only what you truly want, and that you save money while doing so.

Save money by “freezing” your assets is a post from: PerkStreet Blog

If you’re buying an item that is sold in multiple stores, the first thing you should do is quickly check others to make sure you’re getting the best price. There are many sites that allow you to quickly compare prices across merchants. Google has a great one that you might not even know about at http://shopping.google.com. You simply type in the item name and it searches its database for places that sell it. It then gives you a well-organized table telling you each store’s price, estimated tax, and shipping costs, allowing you to compare them quickly and easily. Keep in mind that price shouldn’t always be the only factor since certain online sellers are better than others. Google helps you out there too, by giving you seller ratings as reported by actual users.

Sometimes what you’re purchasing is only sold in one place. Fortunately, there are steps you can take here as well. Many online stores have coupon codes that offer discounts on products and shipping. You probably don’t know them off the top of your head, but a quick search can help you find out if any exist. One of the simplest sites out there is http://retailmenot.com. You just type in the site name and it will provide a list of known coupon codes, telling you which are likely to work and which aren’t. Of course, a simple web search including a phrase like “coupon codes” after the merchant name can be useful as well.

Finally, you may be able to get bonus rewards for online purchases through your credit or debit card. The trick here is that you usually need to go through their site first in order to qualify. Check if your existing bank or credit card company offers such a program. It might be a little more hassle, but you’ll be getting real money back for less than a minute’s worth of work. Save that for your next Internet shopping excursion!

Before You Hit That “Buy” Button… is a post from: PerkStreet Blog

As an engineer and general tech guy, I often wonder, what’s next for the world of technology in banking? There are certainly plenty of ideas out there. The rise of smartphones like the iPhone have made basic mobile banking more prevalent. Several companies like PayPal and obopay now offer the ability to make payments to your friends via text message, and there are even rumors that a major player like Google might try to get into the game as well. In Japan and parts of Europe, customers have been paying for goods and services with their cellphones for years. And believe it or not, some banks now even let you make deposits using a scanner or a fax machine. All of this technology may sound cool, but here in the U.S. it’s clearly not in widespread use yet. Why is this the case?

A recent New York Times article reveals that part of the reason is that rolling out the systems to support these types of solutions is a complicated task that involves a lot of different companies coordinating with each other. This may be true, but it can’t be the only reason.

Here at PerkStreet we hope to be forward thinking when it comes to technology, but we also recognize that technology simply for technology’s sake isn’t always practical. Technology must serve a purpose, and in the case of banking, it is usually to make something more convenient. ATMs clearly made getting money more convenient. Does paying for a Big Mac with your cellphone instead of your debit card really make your life that much easier?

What do you think about technology as it relates to banking? Is there anything you’d love to see offered that would absolutely make your life simpler? Do you depend on your cellphone so much that you want it to do everything? We’d love to hear from you.

Technology in Banking is a post from: PerkStreet Blog