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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?