Adapt MoneyClub.com’s Dollar-a-Month Plan.  ” If you have a 30-year fixed rate mortgage for $150,000 at 6% today, just add an extra dollar to your $900 payment each month — $1 the first month, $2 the second month, $3 the third, and so on.”

You’ll end up paying off your 30-year loan in 22 years (just be sure your loan has no prepayment penalty).

Savings: Over 30 years, interest would probably total about $174,000; using the Dollar-A-Month plan, you’d pay approximately $122,000, an impressive savings of $52,000! Now that’s something to be happy about!


If you’ve been reading the Pazit blog, you probably know that we recommend getting your free credit score every three months, each time from a different credit bureau. You can do this easily by logging onto www.annualcreditreport.com. Problem is, it’s often difficult to decipher your credit score.That’s why I’m recommending a new tool called the Credit Report Card from Credit.com.

This FREE tool is similar to a report card — it gives you a letter grade corresponding to your approximate credit score. What’s great about the Credit Report Card is that it tells you how you’re doing in each of the categories: payment history (on-time payments), debt usage (what percentage of your total credit limit you are using; the lower the better), and credit age (how long your credit history is; the longer the better). (It doesn’t ask for credit card information…beware of “free” credit report services that do).

I was surprised to discover that I “lost points” in two categories: account mix (having a mortgage, which I don’t, is a plus); and inquiries (signing up for store credit cards can wreak havoc on your credit score!).

Still, the Credit Report Card isn’t a replacement for getting your free credit reports. That’s because there’s no way to tell whether there’s incorrect information. That said, it’s a useful tool (and is only a soft inquiry, so won’t harm your credit score).

A thought-provoking question

When you see a man cruise by in his $65,000 BMW 550i, what do you assume about him?

Kiplinger’s Magazine editor Knight Kiplinger posed this question to a group of high school students. Their answer? “He’s rich.”

And a man who drives by in a ten-year-old Chevy? “He’s struggling.”

The BMW, however, is probably leased (perhaps for three years, no money down), so we can infer only that the driver earns enough to handle a $1,131 monthly lease payment. We know nothing about his net worth, which may be great … or may be almost nonexistent.

And the man in the old Impala? Maybe he is struggling financially, but there’s another possibility: His income is just as great as that of the dude in the Bimmer, but he’s not saddled with a lease payment — and he’s investing the money in mutual funds that are growing at 10% a year.

The message in all this: The biggest barrier to becoming rich is living like you’re rich before you are. Why? Because all that discretionary spending — the chic apartment, frequent travel and restaurant meals, consumer electronics, fancy clothes and cars — crowds out the saving that will enable you to be rich someday.”

Love free stuff?

We sure do! Check out Kiplinger Magazine’s Fabulous Freebies 2009. The slideshow offers a wealth of goodies, including how to access free movies, videogames, birthday treats (ice cream!), and more. See how many freebie tips you already make use of.

One of the best ways to gain a hold of your finances is to have a regular (preferably, daily) reminder. Sign up for free blog post updates from free online personal finance management companies Mint.com or Thrive. Here’s a recent goody written by Chris Aviles on Thrive’s blog:

I am an English teacher. Like most English teachers, I hate math. I hate math because it is both immutable and not something I’m good at. In my class math is known as witchcraft, and is banned in my room.

And yet, without fail, I find myself having to teach a math lesson at least twice a month. This makes me very, very angry.

This makes me angry for two reasons: first, math sucks; second, your school system is doing your child a disservice.

The lessons I teach are not about square routes or polynomials (whatever they are), but about simple finance. For some reason, with all the importance most people place on money, there are no “money” classes in most schools.

I teach American literature. One of the first people we cover when the school year begins is Benjamin Franklin. When Franklin died he left the cities of Boston and Philadelphia 1000 pounds each, about $5000 in today’s money.

He left this money with the caveat that it not be touched for 200 years so it may collect interest. Inevitably, this is when the first hands go up. “What is interest?” I explain to the best of my ability and even labor through an example on the board, but every new financial term and concept I use begets more questions and confusion.

Next come the questions of curiosity: “Why is money worth something?” When I explain that the paper money in their pockets has been absolutely valueless since 1971, I nearly have a riot on my hands. They don’t believe me. When I attempted to explain what a fiat system is, I almost have to call security to extract me from the CZ that is now my classroom.

I explain that money only has value because people think it has value. I tell them that the Romans originally used salt as money, the Lenape around where we live used to use seashells and string, and Manhattan was bought for what would be roughly $72 in today’s world. I try to make them understand: something is only worth the value placed on it by others.

It goes on like this the entire school year. I field questions about how credit and credit card works, how to balance a check book, how to buy a house, what a mortgage is, what stocks and bonds are, what is an investment, what is debt, why is everyone losing their house, and all other manner of monetary, mathematical, and financial chicanery. It doesn’t take long to realize that most students have little to no understanding of how money works, and they’re already seventeen and eighteen.

Financially, we are the first generation in America not to be doing better than our parents. And I can promise you, if you leave it to the English educators to teach finance to your children it will stay that way. We need practical finance classes in our schools now!

As for Franklin, after 200 years his 1000 pound donation grew to $2 million for Philadelphia, and $5 million for Boston. What did these cities use the money for? Education, of course, because it is as Franklin said:

“The only thing more expensive than education is ignorance.”

Then try these tips, courtesy of Frances Cole Jones, author of The Wow Factor: The 33 Things You Must (and Must Not) Do To Guarantee Your Edge in Today’s Business World.

51mHV1-BoFL._SL500_AA240_In a recent DailyWorth blog post, she offers 5 snippets of advice. Here are our top three:

  1. Because women have naturally higher voices, it’s particularly important to ensure we’re speaking from our diaphragm which gives our voices resonance and authority. To check if you are, place your hand on your abdomen while you speak. If you’re hand’s not moving, your diaphragm’s not engaged. An easy way to practice engaging it is to lie on the floor with a heavy book on your stomach and breathe until the book is moving up and down. When you stand up, your voice will have dropped about an octave.
  1. It’s important for everyone to be aware of how they are taking up space. As women, we often make ourselves smaller, rather than larger. As you sit in your next meeting, look around at the posture and attitudes of others at the table. If you’re leaning back with your hands in your lap while others are leaning forward, move to the front of your seat, sit up straight, and lean in toward the group. Also, we trust you when we can see your hands, we don’t trust you when we can’t-keep you hands where others can see them.
  2. Listening without interrupting is a vastly underrated skill set– and interruptions come in many forms. As women, we often interrupt by agreeing and encouraging-“Absolutely,” we’ll say, or “I know exactly what you mean,” not recognizing that this can interrupt others’ thought patterns. Instead, I recommend signaling your encouragement and agreement via non-verbal techniques: leaning in, nodding your head, and smiling.

What advice do you recommend?

Trent Hamm, who blogs at “The Simple Dollar,” asked his Twitter followers to tweet their favorite money wisdom…in just 10 words or less. Remember, the tenetsistock_000007855481small of personal finance aren’t difficult; it’s sticking to them that’s difficult. Below are some of the popular responses:

Know what really matters.

Don’t spend money on other stuff.

Be content with what’s yours and you’ll always have plenty.

Don’t save at 2% when you’ve got debt at 10%.

Know what comes in, and what goes out.

Be mindful of how you spend money.

Don’t walk away from 401(k) match, regardless of debt situation.

Live below your means and save all you can.

If you try to get rich quickly, you will go broke fast.

Diversify. Minimize costs. Stay the course. I

f you can’t afford it, don’t buy it.

Save regularly and spend less than you earn.

Learn to love left-overs!

Change one money habit at a time.

Save and invest for the long term.

Working hard doesn’t mean you deserve anything you can’t afford.

Be thrifty but don’t forget to enjoy yourself. A penny saved is more than a penny earned.

What money advice would you share?

…then take a look at this telling graph from Visual Economics. The data is derived from the 2006 U.S. Bureau of Labor Statistics — so it shows pre-recession spending. Still, notice how housing ($16,920) and transportation: ($8,758) make up more than 50 percent of the  average American’s $49,638 in annual expenses. One way to cut expenses is to stop depriving yourself of the occasional ice cream or coffee and instead lower your housing and transportation costs. Of course, in cities like New York, that’s often difficult.


Pazit: Planning For The Future – An Interview with Tamar Snyder
By Michelle Katz
Posted Jul 01 2009

Even if you’re not the type of girl who would swipe your credit card at the drop of a hat, or at the sight of the cutest pair of Coach shoes you’ve ever seen, chances are you’re still in need of financial advice.

Tamar Snyder recognizes that most young women have unfortunately not been given the proper tools they need to manage their money.  Married or single, young women are in need of some guidance regarding their finances, especially in today’s frighteningly unstable economy. Pazit’s here to help!

Ms. Snyder recently spoke with The Jewish Press:

Michelle Katz: What inspired you to start this organization?

Tamar Snyder: When my husband and I got engaged, we were bombarded with a plethora of well-meaning advice on where to shop for gowns, which flowers to choose, and how to improve our relationship with one another (“Never go to bed angry “). Yet few family members and friends offered up any words of wisdom focused on our finances. Thankfully we were both raised in fiscally prudent homes. And so we sat down together and crafted a budget, set savings goals, and decided how we wanted to allocate our tzedakah for the year to come. We also made sure we were living within our means so we could invest our wedding presents to eventually pay for the down payment on a future home.

Unfortunately, many young couples in the frum community simply don’t plan financially for the future. Either they just don’t know how or they’re hoping G-d will provide without any effort on their parts. I think it’s more of the former than the latter, as well as a feeling of overwhelming hopelessness when faced with the myriad of costs necessary to lead a frum lifestyle – from kosher meat and tuition to shul membership and building fees. While I can’t solve the tuition crisis, I can help educate Jewish women (and the men they love) to confidently manage and plan for their financial futures. When a husband and wife see eye-to-eye financially, they’ll have fewer arguments and more shalom bayit, in addition to a better-looking bottom line.

What are your goals with Pazit?
Pazit (www.pazit.org) is a nonprofit organization dedicated to empowering Jewish women who want to take control of their financial futures. Many Jewish women whom I have interviewed say that while they pay the day-to-day bills, they leave the bigger financial decisions (such as allocating their 401(k)s and speaking with a broker or financial adviser) to their husbands or fathers. Even in the most loving marriage, this leaves them financially vulnerable. Pazit’s goal is to help Jewish women overcome that internal voice that tells them they cannot understand their finances. Pazit’s first public event (open to men and women) took place in Washington Heights and featured SerandEz’s Ezzie Goldish, who revealed the initial findings of his Jewish Economic Survey (see http://www.serandez.blogspot.com) to determine just how much money it takes to lead an Orthodox lifestyle. More than 60 people showed up, and a lively Q&A took place after Goldish’s presentation.

What’s next for Pazit?
Pazit is launching a Money Club that will provide groups of a dozen or so Jewish women a safe space to talk and learn about money. The sessions – which will focus on budgeting, savings, investing, debt, and philanthropy/tzedakah – will be infused with Jewish values. The goal is to gain crucial knowledge while shattering the taboo surrounding talking about money, a taboo that is especially strong among Jewish women. The pilot Money Club is booked solid, but those who are interested in attending or hosting a future Money Club are welcome to e-mail me at tamar@pazit.org.

How did you choose this unique name for the organization?
Pazit means “pure gold” in Hebrew. An Israeli friend of mine suggested it, and I liked the name because it has a feminine feel to it. At Pazit, we believe that money is a means to an end. The true goal is to manage your money in a way that allows you to lead a golden life, one that is well aligned with your values.

Why have you chosen to include young women, and not young men who might also possibly lack the financial independence that those in the secular culture are privy to?
While both men and women can benefit from financial literacy initiatives, Jewish men are more likely than women to gloat to one another about the great interest rate they found or how their stock has jumped even during this down market. Women, on the other hand, boast about how they saved $20 on a pair of shoes at DSW. The women aren’t saving; they’re spending. The key is to render it socially acceptable for women to talk openly about investing, and to feel comfortable consulting one another for financial advice.

Why are Jewish women at more of a disadvantage than their non-Jewish peers when it comes to money matters?
That’s a great question – and an area that Pazit is hoping to study in greater depth. Anecdotal evidence suggests that Jewish women are more likely to suffer from the “Balabuste syndrome”; they feel a need to satisfy everyone else’s needs before their own. This self-sacrifice often costs them, especially when it comes to finances. While women tend to live longer (necessitating a bigger retirement nest egg), they spend less time, on average, working fulltime and therefore don’t necessarily invest as much or as often in their 401(k)s or other retirement accounts. There’s also a tendency among Jewish women to feel insecure and experience a lack of confidence when it comes to taking care of the big-picture finances – such as investing, purchasing a home, and meeting with a financial adviser. These are generally viewed as male-dominated tasks.

What is your advice for recent college grads facing student loans, a slumping job market, and rising daily living costs?
Before choosing an apartment or deciding where to live, it’s important to take a hard look at your finances by creating a budget. Budgeting isn’t fun, but you’ll feel much better once you gain clarity. Start out by looking at your paycheck and figuring out how much you make each month – after taxes. Your expenses, including student loan payments, must be lower than this number.
Determining your expenses is trickier. An easy way to do so is to log onto a free personal finance site like Mint.com, Quicken Online, or Thrive (justthrive.com). The site will automatically show you how much you’re spending on food, gas, and other categories. Then fill out Pazit’s budget worksheet, available on our blog, http://www.pazitgold.wordpress.com or by emailing tamar@pazit.org.

As soon as you land a job, you should try to max out your 401(k) if you have that option, or at least put in enough to get a match from your employer (if your employer offers matches). If you’re in school and working part-time, open a Roth IRA and try to deposit the maximum annual contribution ($5,000 in 2009). Money in a Roth IRA grows tax-free and is not subject to taxes upon withdrawal (though some restrictions apply).

Get in the habit of paying yourself first. Arrange for a portion of your paycheck (be it $50 or $500) to be automatically deposited into a high-yield online savings account. Right now, the “high-yields” are a measly two percent. But that’s a big improvement over the one-half percent your local bank is offering.  And, because the money is in an online bank, you’ll be less likely to spend it. Research indicates that those who save with a particular goal in mind are much more likely to succeed. Mint.com allows you to create different savings goals, such as an upcoming vacation or a future down payment on a home.

What about newlywed couples struggling to get off the ground?
Financial planning should begin before the chuppah. In fact, singles are often in the best situation to sock away money to ensure that they’ll be able to live their lives the way they want, once day school/yeshiva tuitions and mortgages become a reality.

For newlyweds, I recommend that they spend a Sunday afternoon reviewing their expenses for the past several months, crafting a realistic budget, and talking about their attitudes toward money. Some questions to ask one another: Are we giving enough tzedakah, and are we giving it systematically to the organizations or causes we most believe in? What are our three top savings goals for the next six months, five years, etc.? Often, husbands and wives disagree about how money should be spent or saved. One spouse might want to take a vacation, while the other is worried about diminishing the savings account. The key is to be aware of your financial situation, and communicate honestly and openly about money matters.

A floor of…pennies!


Looking to decorate on the cheap? Check out the floor of pennies at the Standard Grill, in the Standard Hotel New York.