ING Savings Rate and Other Ramblings

ING, Debt, and Savings

Well, ING Direct dropped their rate for their Orange Savings Account yet again. This time to 1.490% APY (1.50% APR). So, my money is now working a lot less hard for me than it was before.

Still, it’s way better than my brick and mortar bank’s rate (currently 0.05%), and our emergency fund money is safe there, so I’ll keep slowly piling up money there every week.

Also, with savings account rates so low right now, it’s a great time to pay off debt. Do it, do it, do it. Make sure you keep a bit of a cash cushion in savings, but don’t be afraid to pound out some debt right now.

We don’t currently carry any debt (aside from the house), but my student loans used to be at a fixed rate of 3.375% APR. When ING Direct was giving me 4.5% APY on my savings, it made sense to put money into savings, rather than pay off debt. Essentially, we made more money on interest on the savings than we paid in interest on the loan. Now, even with the student loan interest tax deduction, it makes more sense to pay off the loan.

If you’re on the fence about paying off some debt, DO IT. I can’t tell you how calming it feels not to have worry about car payments, credit cards, or other debt.


Insurance Coverage

In other news, we’ve finally completed the finalization of our bills from the hospital for our most recent trip. The hospital charged the insurance company over $16K for my wife and over $4K for the baby, but thankfully we were responsible for much, much less. It was interesting to see just how inflated the charges from the hospital were and how much they'd actually accept from the insurance company. Examples? You betcha.

My wife's stay: $16,757.40. Insurance paid just $4,261.84. I paid $1,065.46. So, basically the hospital wanted almost $17K, but only got a little over $5K. Ridiculous.

The epidural: $3,280. Insurance paid just $880. I paid $220.

Baby's stay: $4,261.84. Insurance paid just $1,032.24. I paid $258.06.

It's crazy to me that the hospitals are willing to write off so much money (and charge so much to begin with). I know the reasoning behind it all, but I don't want to get into it right now. Suffice it to say, the way we handle insurance is stupid (and no, universal healthcare would make it worse, not better). Maybe that'll be another post some day.


Friends and Food

Since the birth of our son, we’ve had loads of people over to visit and especially to bring us food. Before Baby was born, I kind of poo-pooed the idea of everyone bringing food to us, thinking that I’m still more than capable of putting together a meal for us every night. But, I’ll definitely admit that it’s pretty nice having something in the refrigerator or freezer that just needs to be heated. I wouldn’t have believed it before, but it’s a little difficult sometimes to find 30-45 uninterrupted minutes to put together a nutritious meal. We’ve been very fortunate to have such wonderful friends and family, especially ones that can cook!

YFNN

What's Your Corporate Jet?

Earlier this month, the three CEOs from Chrysler, Ford, and GM were summoned to Washington, D.C. to explain their situation and beg for some good ol' taxpayer cash. Three companies. Three jets. Three CEOs. Begging for cash. Three people. Three jets. Anyone else see a problem?

Gary Ackerman (D-N.Y.) really nailed the sentiment:

"There's a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hands," "It's almost like seeing a guy show up at the soup kitchen in high-hat and tuxedo. . . . I mean, couldn't you all have downgraded to first class or jet-pooled or something to get here?"

These big-three CEOs got in front of congress, whined and complained about how high expenses are, how much they're hurting, and how badly they need government money, all the while ignoring the ridiculous luxury expenditures they authorize and enjoy. This is an extreme example to be sure, but I'm willing to bet that we've all got a "corporate jet" in our own personal finances.

It's that one luxury item that we've started to take for granted. It's the expenditure that while expensive and unnecessary, we just don't give it up, even if money is tight. Maybe it's the satellite TV with premium channels that stays activated while you miss credit card payments. Maybe it's the high-dollar cell phone plan you maintain while you contemplate bankruptcy. Maybe it's the case of beer that's purchased while you struggle to buy groceries.

With tough economic times here for some, maybe it's time to evaluate your expenses and see what can be pared back or eliminated, before you start whining about your plight.

Harsh, but true.

YFNN

Life Insurance is Cheap!

I cannot believe how cheap term life insurance is. Seriously cheap.

With the new baby on the way in a couple of short months, and my lovely bride now at home full-time, we decided that a larger life insurance policy was an absolute necessity. Before, when it was just the two of us, and we were both working, it was acceptable for us to carry minimal life insurance. We both only carried what our employers provided (two year's salary in both cases). That was plenty because neither of us was completely dependant on the other's salary to get by. If I died, she could have carried on with just her salary, and I could have done the same if she died.

But, with a baby coming, life insurance got vitally important. So we searched out some level term policies to make sure my wife and child could live comfortably if I passed, and I could get by if she passed.

There are lots of "rules of thumb" when it comes to the amount of insurance to get. Kiplinger's, CNN's Money magazine, Smart Money, etc., all have some really good guidelines. To get to my number, I used the 8-12 times my annual salary estimate. This way, the house would be paid off, and the wife and child could pay for college and still live comfortably (albeit not without some changes) for a long time. One million dollars covered us more than acceptably for my policy.

For my wife's policy, we elected to get a much smaller amount. When she's working, she makes less than I do, so we're much less dependent on her income than mine. Since she won't be working (for a while, anyway), we won't be dependent on her income at all. So, basically, the amount just had to cover childcare costs so that I could continue to work and get an income. We settled on a $250,000 policy for her.

For terms, we decided on a 30-year term for me and a 20-year term for her. Since this life insurance is so inexpensive for me right now, we felt it made sense to lock in my rate for 30 years. Granted $1,000,000 won't be worth as much in 30 years, but my health likely won't be as good when I'm 60 and getting insurance may be tougher. With a 30-year policy, I'm covered until our son is WELL out of college, and covered farther in case we decide to have more children.

For my wife's policy, since it's mostly about covering childcare costs, a 20-year policy seemed more than adequate. 16-20 year olds don't need day care.

So exactly how cheap were these policies? Well, since we're both fairly young (30-ish) and in good health (her moreso than me), they were really cheap. My 30-year, $1,000,000 policy was only $800 a year, and her 20-year, $250,000 policy was only $140 a year.

Unbelievable.

For more information on insurance policies and such, here's my recommended reading:

The Simple Dollar
Free Money Finance
Free Money Finance Again!

YFNN

Daily Interest & Motivation

What does a 14% interest rate on a $3,000 credit card balance really mean?
What does a 6% rate on $22,000 car loan balance really mean?

Sometimes, to fully understand the impact that debt can have on your life, you need to break it down into more meaningful chunks. For me, breaking down that interest cost to an estimated daily amount was very beneficial and eye-opening!

Let's say you have a credit card with a $3,000 balance and an interest rate of 13.99%. We can get a decent estimate the your daily interest rate by merely dividing your interest rate by 365 (days in a year).

13.99% / 365 = 0.0383% per day

Now, that 0.0383% sure doesn't sound like much, but when you multiply by your balance:

0.0383% * $3,000 = $1.15 per day!

By itself, you may say "it's only a little over a dollar a day!", but think of it this way: that's a $1.15 every day, whether you work all day, sleep all day, go on vacation, whatever. EVERY DAY. How would you feel if you woke up every morning and as soon as you walked out the front door, somebody would hold out their hand and demand $1.15? I'd get sick of that pretty fast! But, that's exactly what you're doing, just in a more deceptive way.

Want an even more extreme example?

Let's say you bought a shiny new car last year and owe $22,000 at 8.5% interest. I'll do the math again:

8.5% / 365 = 0.0178% per day

0.0178% * $22,000 = $5.12 per day!

In other words, you're forking over a Lincoln every single day just for interest on that loan! $5.12 a day would pay for my lunch every day!

Fortunately, every payment you make drops that daily interest down a bit more. Making extra payments on the principle drops it even faster.

As you can see, it wouldn't take long for your daily interest to add up to $10, $15, or even $20 a day. Couldn't you use an extra $10 a day?

YFNN

The Ramsey Plan vs. The Nerd-ey Plan

A reader commented on a previous post (thanks!) about my general financial strategy and how similar it is to Dave Ramsey’s Baby Steps. This post is a result of that comment. Also, before reading the details of my family’s strategy, please understand that I am not a financial planner. I don't have a degree in finance or even economics. I don't work in finance for a living (directly, anyway). I’m just a regular Joe that’s lucky enough to have a decent finance understanding and is willing to share my family’s long-term strategy!

I’m big fan of goal-setting, both short-term and long-term. I write them down, check on them regularly, revise them if necessary, and celebrate my successes when I reach them. I truly believe that once you set a clearly defined goal for yourself and write it down, you’re well on your way to achieving that goal. Just merely having a plan to follow makes decisions easier and keeps you focused on what’s really important to you.

So it shouldn’t surprise you that I’ve got financial goals...lots of them. I keep monthly, yearly and lifetime financial goals and they’re all meticulously documented, revisited, and revised regularly. They all help me make day-to-day decisions, and keep me moving the direction I want to go. One of the most important is my overall financial strategy.

Dave Ramsey's plan is a great starting point for the majority of Joe Q. Public. It's simple, easy to understand, and effective. But, I certainly don't think it's optimum, at least for us. The plan my wife and I follow to manage our finances and investments is more sophisticated than Dave Ramsey's plan, but I think it's a better fit for us. Yours may be totally different!

For comparison's sake, here's Dave's plan:

1) $1000 for a starter emergency fund.
2) Pay off all consumer debt using the debt snowball.
3) Accumulate 3 to 6 months worth of living expenses for an emergency fund.
4) Invest 15% of gross income into Roth IRAs and pre-tax retirement.
5) Fund college.
6) Pay off home early.
7) Build wealth with mutual funds and real estate.

My family's strategy varies in the steps themselves and in the amounts dictated by each step. Hopefully, I'm able to fully explain my reasoning for the changes I've made. Here are my steps:

1) Save $1000 per member of your family for a starter emergency fund. Personally, I don't think $1000 is quite enough, especially if you have children. It's a great goal for a single person, but if you've got a family, you've got more folks to cover and emergencies have the potential to hit a little harder. I realize for people with large families, this goal becomes significantly more difficult, so good judgment needs to be used when determining your personal amount.

2) If your company offers a match on your 401(k), take it. Invest only up to the amount required to get the entire match. If you don't do this step, you have the potential to leave a HUGE amount of free money on the table. Think of it this way: If on every payday, a man at the exit of your office's building would hand you a stack of 20-dollar bills ($100, $200, or $500) just for investing 5% of your income, wouldn't you take it? That's what your company match is: free money. Even better, it's free money that'll compound as your 401(k) balance grows over the years.

3) Pay off all consumer debt, starting with the smallest amount, using a debt snowball. In this instance I agree with Dave. Even though starting with the balance with the highest interest rate would result in a mathematically better result (minimally in most cases); I think the smallest balance should be tackled first, for a couple of reasons. First, if you go after the smallest balance first, you knock a minimum payment off your books quickly. This could be a big help if your family does get hit with some sort of financial hardship; it's one less minimum payment to make, which means your overall minimum monthly outlay is smaller. Second, there is a significant psychological boost over dropping a debt entirely, which does help to motivate you to keep moving.

4) Accumulate 4-6 months of living expenses for an emergency fund in a high-interest savings or money-market account. . I've written about the virtues of a solid emergency fund in the past, so this shouldn't be a surprise. Once you've got your debt paid off, accumulating this money shouldn't be too difficult. If you've only got one bread-winner, I think a six-month cash cushion is pretty darned important.

5) Invest 15-20% of gross income in Roth IRAs and tax-advantaged retirement accounts, up to federal maximums. I think that you can never have too much retirement income. Dave suggests 15%, but for us, 20% works up to the federal maximums. If you're fully funding two people's Roth IRAs (currently $5000 each), it doesn't take very much additional investment to reach that 20%! If you can make it automatic, so much the better. Fully funding a Roth IRA for one person is only $96 a week!

6) Fund 80-95% of college costs for your children. While you can certainly do 100% funding if you so choose, I like the 80-95% number a bit better. I firmly believe that when someone has a monetary stake in something, they take it more seriously, and in my mind, college is no exception. I fully expect my future son to contribute something to his college education (which is a long way off!).

7) Put 10% of your net paychecks into a mutual fund as a "freedom account". This is your "retire early" account, or your "travel around the world" account, or whatever-big-dream-you-may-have account. For us, it's retire early!

8) Pay off your home mortgage. Obviously, we'd all love to own our homes outright. Since a home mortgage is typically lower interest and tax-advantaged, I think this is the proper step to do it.

9) Build wealth with mutual funds, real estate, and businesses. When you get to this last step, you're living the good life. You'll have plenty of cash on hand, solid retirement accounts, a paid-for house, and fantastic cash flow. It's time to build it up even more through investing. If you choose real estate (rentals) or a business, that’s great. Mutual funds are great, too.

As I said before, this likely isn't the path that's right for you. Each individual needs something just a little different. Right now, this path is perfect for us. As things change in the future, our goals and needs may change, too. So, we're going to keep our strategy flexible.

So, what does your financial strategy look like?

YFNN

Reader Question #001 - Household Outsourcing

As I receive questions (or should I say if I continue to receive questions) via email or comments on the posts, I'll do my best to answer them to the best of my ability. I can't say that I'll answer all of them, but I'll definitely try to get to especially interesting ones. If the question is asked in the comment section, it'll probably be answered in the following comments. If I think it warrants its own post, that's what it'll get!

Anonymous writes:

"I am glad to see that YFNN is back to blogging. I especially enjoy your consumer tips, whether they are about kitchen equipment or how to put together a decent budget. Could you write something about hiring out jobs (like carpet cleaning, window washing, and installing appliances)as opposed to doing it yourself? Where's the tipping point?"

There are quite a few jobs that my wife and I outsource, so to speak. Carpet cleaning and appliance installation are some good examples. We determine whether or not those household jobs should be outsourced by evaluating the total cost of doing it ourselves vs. the total cost of outsourcing. What you've got to keep in mind is that your cost of doing something is not limited to the dollars that leave your bank account. It's also the time you spend doing the job. It's the cost of the equipment needed to do the job correctly. It's the cost of the education required to do the job right. Finally, it's your mental health or opportunity cost - I like to call this the "hassle cost". All of those costs need to be considered before a prudent decision can be made.

Here are some examples:

Changing oil in the cars, motorcycles, and lawnmower.

• Task cost - If I do the job myself, it costs about $10 in oil, a filter, and rags.

• Equipment Cost - I've already got the wrenches, drain pan, and funnel to do the job right, so my equipment cost is $0.

• Education Cost - $0 and zero time. Thanks to lots of experience, I've got the know-how to do things properly.

• Time Cost - It takes me about 20-30 minutes to change the oil in one of the cars if I move at a relatively relaxed pace.

• Hassle Cost - Low. I enjoy working in the garage and getting my hands dirty. At this point in time, the opportunity or desire to do something else is relatively low, since I have adequate time with my wife, my work, and my family already. 20 to 30 minutes in lost opportunity time isn't very critical right now.

So, my total personal cost for changing my own oil is about $10, 30 minutes, and low on the hassle cost. With the price of an out-sourced oil change up around $30 or more and close to the same amount of time, it's worth it to me to do it myself. When our child is born however, my hassle cost may increase, since I may prefer to spend that time with our family. At that point, I'll have to re-evaluate the total cost and make another decision.

Here’s another example:

Washing and ironing my dress shirts.

• Task cost - A few pennies per shirt for the cost of water, laundry detergent, starch, and electricity to run the washer, dryer, and iron.

• Equipment Cost - $0. We've already got a washer, dryer and iron.

• Education Cost - $0 and zero time. I feel that I know how to launder and press my shirts adequately. No books, videos, or training is required.

• Time Cost - I'm a slow iron-er (ironer? ironworker?). Even so, it probably takes about 10 total minutes to wash/dry/iron a shirt – 6 minutes in the washer/dryer and 4 minutes ironing (obviously, the per piece time is low when you wash a dozen shirts at once).

• Hassle Cost - This is where my cost is high. I dislike laundry and hate ironing. Hate, hate, hate ironing. I feel like it takes forever and it never looks quite as good as from the cleaners. There are also a ton of other things I'd rather do with that time, like scrubbing toilets and reading tax law.

This means that my total personal cost for washing and ironing my own shirts is about three cents, 10 minutes, and ridiculously high on the hassle cost. The cost for me to have my shirts taken care of at the cleaners is about $1-2 per shirt. From a strictly dollars-and-cents point of view, I'm a fool not to do my own shirts; it costs 30-50 times more to take them to the cleaners! But, once everything else is factored in, that $5 to $10 a week is VERY well-spent at the cleaners for me.

Obviously, each individual person's cost for a particular task is going to vary widely. The important thing to keep in mind is that your cost is not just your out-of-pocket dollar cost. The all-important hassle costs will vary greatly from person to person, as will equipment and education costs. All need to be weighed carefully before you can make a sound decision about outsourcing a job.

What are some of the tasks you outsource and why?

YFNN

The Importance of Communication

A short story, illustrating why it is important that each spouse share critical information pertaining to the financial comings and goings of the household:

A man is getting into the shower just as his wife is finishing up her shower when the doorbell rings. The wife quickly wraps herself in a towel and runs downstairs. When she opens the door, there stands Bob, the next door neighbor. Before she says a word, Bob says, “I’ll give you $800 to drop that towel.” After thinking for a moment, the woman drops her towel and stands naked in front of Bob.

After a few seconds, Bob hands her $800 dollars and leaves. The woman wraps back up in the towel and goes back upstairs. When she gets to the bathroom, her husband asks, "Who was that?” “It was Bob the next door neighbor,” she replies. “Great!” the husband says, “Did he say anything about the $800 he owes me?”

See? Communication about marital finances can save headaches AND unnecessary embarrassment.

YFNN

In Defense of Sound Personal Finance

June 13th, 2008: My lovely bride and I find out that we're expecting our first child.
June 23rd, 2008: I find out that my company is closing the facility in which I work. I will be out of work in only 90 days.
September 26, 2008: I lose my job.
October 20, 2008: MLB loses her job.
Summary: In just 120 days, both breadwinners lose their jobs and they find out that a new, expensive first baby is on the way.

The last several months could have been the financial downfall of our family. In fact, with the way many people live in this country, it would be for most. But, because of the way we've decided to handle debt, income, and spending, we're in fine shape regardless of the recent shakeups.

Today, my family lost a significant portion of our earning power. My lovely wife was laid off from her place of employment. She'll receive a few weeks of severance, but then nothing (well, unemployment, maybe). Now, at first, it sounds awful, horrible, and a devastating blow to our financial objectives and plans, especially after some major life changes already. But, for us, it's not really that bad.

First, my wife is currently almost six months pregnant with our first child, due on February 14th, 2009. My wife, bless her heart, does not handle stress well. At all. Not even a little bit. Even she will readily admit that small things become big things and big things become absolutely overwhelming. Add in some pregnancy hormones, and well, you get the idea. Work was a constant source of stress for her, and under advice of our OB, she was to try to reduce her stress levels. And, since work was a large source (nearly sole source) of her stress right now, that meant reducing its impact.

We had planned on her taking leave from work (and likely not returning) around Christmas this year. We're fortunate in that her severance pays through that time period, essentially mimicking our finances as though she had been working. But, she gets the added benefit of not actually having to work until late December. Add the possibility of unemployment benefits after the severance payments run out, and we may actually be better off with her being laid off.

The only monkey wrench in the whole situation is that she carried the insurance for our family. But, even that's not a huge ordeal. My new place of employment carries the same insurance (albeit slightly more expensively), so that's not a huge hassle.

However, even if circumstances had not been what they are, I firmly believe that we'd still be fine, due to the way we've been able to handle our finances. As I've stated in the past, we maintain a rather substantial emergency fund, carry very little debt (essentially, just the house) and keep a good tab on our spending. While we certainly haven't lived a painfully frugal lifestyle, we haven't been wasteful and frivolous with our spending either.

There's definitely a lot to be said for keeping a solid financial foundation. With a well-funded emergency savings, solid debt-management, and some good career choices, you can roll with nearly any punch that life may give you.

That said, you never know what cards you may be dealt in life, so ditch that debt, cut out some frivolous expenses and save some cash!

YFNN

Today's 401(k) Conversation

I had a conversation this afternoon with a former co-worker about his 401(k), the current economy, and his future. He's a bright guy, but not exactly money-savvy, and is pretty darned impulsive. Here's how it went:

~~~~~~~~~~~~~~~~~~

Him: My 401(k) has plummetted recently. I've lost about $35,000 just in the last several weeks.

YFNN: I'm sure. Everybody's getting hit hard.

Him: It's ridiculous. I can't stand losing that much. I'm thinking about pulling it all out and buying a rental property.

YFNN: WHAT?!? Are you crazy?

Him: At this rate, I won't have anything left in a couple months. Why not? I can try to find a foreclosure or something.

YFNN: First of all, you buying a foreclosure is a disaster. Second, pulling out of the market now is crazy. The rule about making money in the stock market is simple: Buy low, sell high. If you sell out now, you're doing the exact OPPOSITE.

Him: I just don't like it.

YFNN: So don't look at your account for a while, like six months or so. In the meantime, keep on making contributions.

Him: That's stupid. I've already stopped adding more. Why would I put money in it just to lose it?

YFNN: Because the market is LOW. Stocks, mutual funds, ETFs, they're all basically on sale for 30% off! If you continue to contribute, you're lowering your cost basis. You're buying things low, to sell them high. You've got decades to recover from this. Do you honestly think that the market won't recover by 2040 when you retire? Please.

Him: I guess. The news just drive me nuts though.

YFNN: If we were close to retirement it'd be different, but we've both got plenty of time to see some real gains. I've even stepped my contributions up in the last couple of weeks. You've just got to hang in there, regardless of what that airhead Katie Couric says to try to scare you.

~~~~~~~~~~~~~~~~~~

This has got to be the overall attitude from most folks around me, and I can certainly understand why since the "sky-is-falling" media is playing the market woes up for all their worth. But, if you're 50 or younger, you've got to remember to be a long-term investor. That money you're pumping into your IRAs and 401(k)s and such is meant to be for retirement, not for next year. Continue to invest now, while prices are low, and be well-positioned for the recovery!

YFNN

New Graduates and Focusing on Finances, Part Five - The Final One!

Finally, the last two foci on my list! I apologize for the long delay; the weather here has been beautiful lately, and I spent a lot of time in the garage putzing and working on the '75 Yamaha. I even took a half-day of vacation on Monday so that I could best use the great weather and continue my progress on the restoration. More on that later. Regardless, here's #9 and #10!

Focus #9: Create and maintain a budget.
This document is going to be your rock. It will guide you, help you make good, sound decisions, and keep you focused on your financial goals. It will keep you grounded and set you free at the same time.

It is absolutely imperative that you learn to work with a household budget. There's lots of good websites out there to help you get started, but here are my main points:

1) Know where you money is going. Track each dollar that you spend. You'll quickly realize where the leaks in your spending are, and where you can save some money. Once you know where it's going, you can make better decisions regarding where it should be going.
2) Give each dollar a job. Make sure that each dollar you receive in income is given a job. Make sure each income dollar is either put towards an expense, saved, or invested. Once each dollar has a task to perform, it's much more difficult to waste them. Idle dollars are easily blown on frivolous things.
3) Most importantly, spend less than you earn. That is the ONLY way to get ahead. If you're consistently spending more money than you have coming in, you're in a downward spiral into financial disaster.

I used to have a very elaborate spreadsheet that performed all the calculations, did all the tracking, and reminded me of bills. But, it got to be very big and clumsy. Now, I use a small program called YNAB Pro (available at www.youneedabudget.com). It works beautifully.

Focus #10: The time to invest is now!
Compound interest is a beautiful thing. The earlier you start investing, the more time you have for it to work for you. More than any one mutual fund or stock selection, the age you start investing will determine how much wealth you actually build. This may be difficult for some to grasp, so here's a real-world illustration:

Employee A, we'll call him Dave, starts putting away $100 a month when he's 22 years old, right after he graduates. Dave's money grows at a conservative 8% a year, and after ten years on his 32nd birthday, he decides to stop contributing and just let the money grow. Employee B, we'll call him Phil, graduates at age 22 but waits until he's 32 to start investing for retirement. He sets aside the same $100 a month, gets the same 8% return, but continues investing until he's 64 years old. So, who's got more money at retirement?

Dave does. When they both retire at 64, Dave will have $234,600 and Phil will only have $177,400. Even after only contributing 1/3 of the money that Phil did, Dave's way ahead. If Dave had just continued to contribute the same measly $100 a month until 64, he'd have $412,000! That's over $175,000 more than Phil, just by starting ten years earlier.

The lesson here is to start saving early!

To review my Ten Financial Foci:

Focus #1: Get a good, low-fee checking account and know how it works.
Focus #2: Use direct-deposit.
Focus #3: Get a high-interest savings account.
Focus #4: Start an emergency fund and feed it automatically.
Focus #5: Don't fall into the lifestyle trap.
Focus #6: Ditch your debt.
Focus #7: Make sure you're covered.
Focus #8: Take inventory.
Focus #9: Create and maintain a budget.
Focus #10: The time to invest is now.

I hope the foci I outlined over the last couple days have been insightful and inspiring to new graduates or future graduates. Getting a focus on your finances now, when you're still young is immensely beneficial later on. So, pass these lessons on to any graduates you might know!

YFNN

New Graduates and Focusing on Finances, Part Four

Numbers seven and eight!

Focus #7: Make sure you're covered.
You may not have thought much about health insurance as a student, but ignoring insurance now could be a pricey mistake. If you decide to go uninsured, you could wind up with expensive medical bills, not to mention poor health. You've got to make sure that you're covered in case of an emergency. At this stage in your life, you're likely pretty healthy, in decent shape, and unlikely to need regular prescriptions, but you've got to have insurance to cover the emergency situations. You're probably no longer able to be pulled along with your parents' insurance, so you need to find your own.

You likely have several options. First, your employer may provide insurance (at a reduced cost) to you. This is probably going to be your least expensive alternative, but many companies won't provide you with insurance until you've been employed for three or six months. Buying your own health insurance is an option, but it's expensive. The average annual cost for a traditional insurance plan is around $4,000,

I also recently learned that college grads are eligible for COBRA when they're no longer considered a dependent. College students who are on their parents’ health plans can sign up remain covered for up to 36 months after graduation. But, you must notify your parent’s insurer that you would like a COBRA extension within 60 days of graduation.

A COBRA extension certainly does have costs, though. You may be required to pay the entire premium for coverage up to 102 percent of the plan’s costs. In other words, you will be responsible for 100 percent of what your parents paid, plus what their employer paid along a 2 percent fee. Ouch.

Finally, you can get some short-term health insurance for relatively low cost. This type of policy is designed for folks without pre-existing medical conditions, and only offer coverage for 12 months. But, they're typically bought in one-month increments, which makes it easy to drop when you get an employer-sponsored insurance plan. One big drawback is that short-term insurance does not typically cover routine preventative care, like physical exams.

Your insurance coverages don't stop at just health insurance. Consider renter's insurance to protect your sweet autographed guitar and other valuables you've already acquired. It's relatively cheap protection, even if you don't have a lot of stuff. You definitely need to be covered in case of fire, theft, or other event.

Focus #8: Take inventory.
If your apartment or house burned down or was robbed tomorrow while you're at work, would you be able to remember exactly what was in it, down to the value of any jewelry or what kind of appliances you had? Me neither. That's why an up-to-date home inventory is something you should spend an afternoon putting together. This list of items will help you get any insurance claims settled faster (with better accuracy), verify your losses for your income tax return, and help you assess how much insurance you need to carry.

Putting it together is simple, especially if you're just setting up a household. Make a list of your possessions, describing each item and estimating its value. Also try to include where you bought it, and its make and model if at all possible. A spreadsheet is the perfect tool. At a bare minimum, include your big ticket items. If you've got the time and ability snap some photographs of your stuff, too. Scanned receipts would also be smart.

Then, store a copy of your inventory someplace safe, AWAY from your home. A relative's house or a safe deposit box is a good choice. MLB and I burn a copy of the photos and our list to a CD and keep a copy in our safe, and I keep a copy locked up in my desk at work. This way, if our home is ever damaged, our inventory isn't.

The final two tomorrow!

YFNN

New Graduates and Focusing on Finances, Part Three

Continuing the previous couple of posts, here are foci five and six.

Focus #5: Don't fall into the lifestyle trap (not yet, anyway).
It's all so appealing. You worked hard for the last several years and it finally paid off. You're out in the real world, making the big bucks. Surely you deserve that high-end apartment or that shiny new car, right?

Don't fall into that trap. Think about it. You've been living like a college student the last several years, and you've fallen into a routine. You're used to not eating out very often, pinching pennies on expenses, and putting off expensive purchases. You don't mind eating store-brand macaroni and generic cereal. When will it ever be easier to keep expenses so low and put back tons of cash? The answer is never. Once you find yourself financially able to enter the world of fine dining, fancy cable packages, and a shiny new car payment, it's darn near impossible to get out. Use this time to put back some money and pay off your debts. A little bit of painless scrimping now will pay off big in the future.

Focus #6: Ditch your debt.
If you're like the vast majority of the graduates in this country, you're probably graduating with some credit card debt, and maybe even some student loan debt. Now is the time to eliminate it for good! Debt is going to do absolutely nothing but hold you back for the next several years. Call up your student loan lenders and inquire about consolidating your loans at a lower interest rate. Call up your credit cards and talk down their rates. Do everything you can to minimize interest's impact.

As I said above, you're probably used to living the meager college life right now, and it's not that hard to continue living that life for a few months or a year. Now is the perfect time to pay down your debts with that extra cash.

Numbers seven and eight still to come!

YFNN

New Graduates and Focusing on Finances, Part Two

On Friday, I wrote about the first two foci I think a graduating college student should have as they begin their new life in the working world. Today, I'll continue with the next two. (Yeah, I know I technically said "tomorrow" on Friday, but I had a hectic weekend of dog-sitting. Trust me, they're monsters.)

Focus #3: Get a high-interest savings account.
I've already spoken at length of the benefits of the high-interest savings accounts like ING Direct and HSBC available on the internet. They provide security, flexibility, and an interest rate that actually makes you some money. In order to have a place to stash some cash for both short and long-term savings, you need a high-interest savings account. My favorite, for a plethora of reasons, is ING Direct. So, get an account, transfer your first dollars, and familiarize yourself with their functionality.

Focus #4: Start an emergency fund, and fund it automatically.
It's absolutely critical that you have an amount of money easily available to you for emergency situations. Things go awry in the real world: roofs leak, cars break down, and ambulance trips are required. In order to keep on track for your long term financial goals, you've got to have an emergency fund to cover these unexpected events. Ideally, you should have about six months of living expenses, but for most graduates (in fact, most people in general), that's a pretty tall order. At a bare minimum, keep at least $1000 earmarked for emergencies.

You've also got to fund it automatically. It doesn't have to be much (MLB and I only put in $40 a month), but it does need to be regular. This helps to avoid excuses like "I'll put some money in next week," and, "I just forgot last month.", and keep you on track. Finally, you need to completely forget that you even have an emergency fund exist, right up until you need to tap into it. No using it for TVs or guitars!

Numbers five and six will continue tomorrow.

YFNN

New Graduates and Focusing on Finances, Part One

My little brother graduated from college last weekend (congrats Dave!), moving into the real world: a world that can be frustrating, confusing, and certainly financially challenging, especially when you're first starting out. So, that got me thinking: What do I wish I would have known when I first graduated? What information would have helped me get off to a great start? I think I've come up with a pretty good list, and, since I'm a bit of a money fanatic, I think it makes sense to focus primarily on finances.

So, over the next couple of days, I'm going to write a few short posts about how to really get off to a good start financially if you're a new graduate. I'll try to focus on the financial decision-making, but I can't promise that my mind (and writing) won't wander into other areas. I'm going to try to keep it to two main points each day.

Focus #1: Get a good, low-fee, checking account, and know how it works.
Your checking account is going to be your main pipeline for all things financial. Most of your expenses will be paid from it, and your paychecks will likely be deposited into it. Make sure that there's not a high minimum balance ($100 or less is good), and that there are minimal fees. Many banks offer "free checking" accounts that have no fees, no minimum balances and online banking. The downside is that they offer zero or very low interest rates. But, since I think your checking account shouldn't be a long-term storage area for your money, I wouldn't be too concerned about the rate. Try to find an account that provides a debit card or check card. I'm a big fan of debit cards because you don't need to carry cash, they're almost universally accepted nowadays, and the amounts are immediately deducted from your checking account.

It's also absolutely imperative that you understand how the checking account, as well as your debit card, works. Even in the era of 24-hour online access to your accounts, it's important that you understand debits, credits, and how they affect your account balance. Also, make sure you understand that your debit card IS NOT a credit card: you can't spend money you don't already have in the account. Keep tabs on your checking account balances frequently, so that you're always aware of how much money is available to you and so that you can spot any errors quickly.

Focus #2: When you've got that job, set your paycheck up to directly deposit into your checking account.
Direct deposit makes getting your paycheck fast, easy, and error-free. You don't need to drive across town to make a deposit, you don't need to worry about making sure you get to the bank by six, you don't need to worry about misplacing your check (and your money!). It makes getting your money into your account completely painless. Since your checking account is going to be your main money pipeline, the easier and more error-free it is to deposit your money, the less headaches you're going to have.

The next two foci will come tomorrow.

YFNN

APRs and APYs...What's the Difference?

If you've got a credit card, a savings account, or any kind of loan, there's no doubt you've been exposed to APYs and APRs. They're both methods of stating interest rates, but what's the difference? When and why is each used?

First, a few definitions:

APR - Annual Percentage Rate
APY - Annual Percentage Yield
Compounding - Earning interest on previous interest

The difference between the two is all about compounding. The APR is the annual rate of interest, without taking into account the compounding of interest within that particular year. The APY does take into account all that extra compounding within the year. It seems like a pretty small difference, but it can actually add up to some major bucks. This is really better shown with some formulas, illustrating their inter-relationship.

APR = Periodic Rate X Number of Periods in a Year

APY = (1 + Periodic Rate)^(# of Periods) - 1

"Holy crap, FNN! I haven't had algebra since high school. What the heck does that mean?"

Okay, a more real-world example: Say you've got a credit card that has an APR of 18%. That means that each month, you're charged 1.5% of the balance (1.5% X 12 months = 18%). Pretty simple, right? Well, look at it from an APY perspective: plug the numbers into the formula:

[(1+1.5%)^(12 months) - 1] = 19.56%

That's a difference of over 1.5%!

So what does this actually mean? Well, if you only carry a balance for one month's period, you'll be charged 1.5%, or the equivalent yearly rate of 18%. But, if you carry that balance for a year, your effective interest rate becomes 19.56%. That higher effective rate is all due to the effect of compounding each month.

"That's all well and good, but I'm still not getting it. How does this affect me in a broader sense?"

Well, it depends on your perspective.

As a borrower, you should always be searching for the lowest rate. The lenders know this, and will usually specify their rate in the lower of the two methods, the APR. This is because it doesn't account for compounding, and is a lower number than the APY.

The reverse is true if you're the lender, like when you're shopping for a savings account. The banks will usually specify the larger number, the APY because it accounts for the additional compounding.

So, when you're comparing rates of banks, credit cards, mortgages, savings accounts and everything else in the financial world, you've got to make sure that you're comparing the same thing, either APRs or APYs. It can make a big difference in your wallet.

YFNN

Tax Refunds as Forced Savings

Yesterday, I wrote post about the inherent evils of tax refunds. To summarize it in a sentence: You're being temporarily cheated out of your own money. I also mentioned the MLB and I intentionally receive a tax refund at the end of the year, even though from a number-only point of view, it's a terrible decision. Today, I'll outline why we still do it.

I'd imagine that everyone who chooses to receive a big tax refund at the end of the year does it for the same reason: trickery. It's a big psychological trick on ourselves.

I've stated before that I'm a fan of forced savings (self-forced, NOT governmental) because it creates a state of artificial scarcity. It's pretty simple: if I put $500 a month into savings automatically, that's $500 less a month I have to spend. This creates a situation where I'm forcing myself to make more prudent decisions about the money I do have available to spend. Since there are things that I must pay for each month (like the mortgage, food, electricity, etc.), the artificial scarcity situation forces me to cut back on unnecessary spending, like a new set of speakers for the living room, or several meals at restaurants, or new pair of motorcycle boots. By cutting back spending on these unnecessary items, we continue to live below our means and put back more and more money towards debt (mortgage, etc.) and towards savings (IRAs, etc.). This is a VERY good thing.

So, by having more money withheld throughout the year from our paychecks, we're implementing another forcing savings, payable in April. Now, this extra bit of money only amounts to about $75 a week, which when paid to us on a weekly basis, is very easy to waste on frivolous, useless things. It's too easy to say "It's only $10...", or "I'll save some money next week..." when you're paid in small amounts. But, when taken away every week, and paid to us at the end of the year, this amounts to a sizable sum of money. And, when MLB receive a big windfall all at once, it's easier for us to say "Wow, we better do something smart with this extra cash!"

Having said all this, it's probably not entirely necessary for MLB and I to do this. We're both rather prudent with our money, and certainly not wasteful. We've developed enough self-discipline to use our money wisely, even when it comes in small chunks.

Even though I'm a big numbers person, I'm not going to argue that you shouldn't get a refund. Do what works for you. If you're disciplined enough to make good use of those smaller amount of money throughout the year, then forgo the refund. But, if it helps you to save or spend more wisely, like it does for MLB and I, get the refund. You just need to realize that you're paying a slight financial penalty for doing it.

I, for one, am okay with that.

YFNN

Evil Tax Refunds and Human Resources

With tax season here, millions of Americans are filing their tax returns and receiving sizable tax refunds shortly thereafter. To a lot of people, that extra money in March or April is like winning the lottery. But, in reality, it's just a sign that you're getting ripped off with your own money.

To understand why tax refunds are evil and what you can do about it, you really need to understand how the whole withholding and refund tax thing works. As I'm sure you're well aware, an amount of money is withheld from each paycheck to pay your federal taxes (and state, local, FICA, etc., but I'll only deal with federal for simplicity). The amount withheld for your taxes is dependent on how much money you earn, how many exemptions you claim, and how much additional withholding you allow.

"Exemptions? I think I remember seeing that on a form when I first started my job. Isn't that the thing where the HR lady just told me to put a zero or a one?"

Pretty much. Basically, that form you filled out is a W4. It helps to tell your employer how much money they should withhold from your paycheck to pre-pay your taxes for the year. That way, when tax day rolls around on April 15th, or April 16th this year, your taxes are already pre-paid (deducted from each paycheck) and the government doesn't have to worry about trying to squeeze you for the entire bill at once. When you receive a refund, you've essentially pre-paid too much money, and they're giving you the amount you overpaid back. The reason the smiling HR lady suggested that you only claim zero or one exemption is that it helps to ensure that the ignorant masses don't underpay their taxes for the year and aren't stuck with a tax bill in April.

“I’m still confused. I thought a refund was the government paying me?"

Think of it this way: Assume your electric bill only comes once a year. But, in order to make sure they get their money, the electric company makes you pay each month. Since they don't know exactly how much your bill will be for the year, they make a guess: say $110 a month. So, at the end of the year you've paid a total of $1320. But, what if your yearly bill only comes out to $1200? Well, you'd be refunded the $120 you've over-paid for the year. They're just giving the extra money back that you've paid them unnecessarily all year long.

So what can you do to keep from overpaying throughout the year? You adjust your exemptions. Basically, the more exemptions you claim, the less they'll withhold each paycheck, and the more money will end up in your pocket each month. But, if you claim too many exemptions, or withhold too much additional money, and they don't withhold enough, you'll end up owing money at the end of the year.

"Okay, so how come getting a nice big check for a refund is so evil?"

A couple reasons:

1) You're giving the government an interest-free loan. Basically, you're saying "Here's some extra money. I won't need it until April, so go ahead a use it until then."

2) You're cheating yourself out of additional interest money. When you don't pre-pay extra money, you have more money available to invest or pay off debts. That's pretty valuable time money-wise, since when it comes to interest, either on your mortgage, credit cards, or a savings account, time is money.

3) You're depriving yourself out of additional monthly cash-flow. Every extra dime you pre-pay the government is one less dime in your pocket each month. Those dimes could be used for groceries, the electric bill, or insurance.

Basically, loaning someone (the government in this case) money interest-free, while you could use the money is a very poor financial decision. From a purely financial, numbers-only standpoint, it's a no-brainer to try to eliminate your refund.

All that said, MLB and I are will be receiving a rather large tax refund in the next week or so, and we did it completely on purpose.

"What? After that long dissertation on why refunds are evil, you STILL get one?"

Yep, we sure do. More on why we intentionally make such a poor financial decision tomorrow.

YFNN

February Self-Tax Update

Since I haven't written another post on my "Self-Tax" since the initial one, I thought it would be wise to write a quick follow-up.

For those too lazy to click the above link and read the general premise behind my self-tax, it's okay; I totally understand. Here's a nine-word breakdown:

I pay myself a 10% tax on poor purchases.

That's it.

Anyway, it's been four complete months since the implementation of the self-tax, and it seems to be pretty effective. Since January, spending on lunches out has dropped by over 60%, and since MLB doesn't really eat lunch at restaurants very often, it's been mostly because of my choices. I can definitely tell you the decision to eat a packed lunch or a Wendy's hamburger (oh, baby), has been affected by the penalty of the tax. Well, the tax and the fact that I had to move my belt tab out a notch in January. Ouch.

So, for the rest of the data freaks, here are the numbers and the matching lame excuses for January and February:

January: $193.65 paid in tax. This was pretty high for a couple of reasons. First, I threw a small birthday party for MLB, and I had to buy prizes, food, and some other odds and ends. That drove the number up. Also, we replaced our CRT monitors in the office with some pretty 19" LCD ones, which kicked the tax up by over forty bucks. The good news is that the tax from dining out dropped by almost 70%.

February: $254.31 paid in tax. I can blame a sizable portion of February's tax on MLB. She went on a bit of spending spree for clothing (deservedly, though), and had a rather pricey hair appointment, so that punched it up about seventy bucks. Add in a payment to DD's daycare (boy, does that topic deserve it's own post), and a new color printer for the office, and some passport renewal fees, and the result is a sky-high tax. Again though, dining out spending was way down from December.

So, all things considered, the tax has brought down our expenses by more than enough to cover the tax itself, as well as put a little additional money into savings. Both are very good things.

YFNN

Heat Yourself With a Fan?

MLB and I operate our ceiling fans in the winter. We run them most of the time, actually.

"What?! Is he crazy? Ceiling fans in the winter?"

Yeah, crazy like a fox. Here's why: Ceiling fans can actually save on heating costs in the winter. The temperature of the air in a heated room varies in layers; it's stratified. Because warm air is less dense than cool air, the air near the ceiling is warmer than the air near the floor. A ceiling fan can help push the warmer air that is trapped near the ceiling back down into the room, de-stratifying (or breaking apart) the layers of air. This way, the warm air is circulated where it is needed (to the middle and floor of the room, where the people are), and the heating system doesn't have to work as hard to warm the room.

"Okay, I'll just walk over here and turn it on..."

Not so fast. It's not quite that simple; it has to be running the proper direction. Have you ever noticed that there's a small toggle switch on your ceiling fan? That switch controls the fan's direction, making it spin either clockwise or counter-clockwise. But, there's a catch. That switch isn't labeled with a "forward/reverse" sticker on most ceiling fans (none of ours, for sure). You have the beauty-conscious "form before function" folks to thank for that one.

"Great. I'll just flip that little toggle switch and..."

Hold your horses. It's a bit more complex than that. The direction the fan needs to turn is dependent on the height of your ceiling.

"Now I have to measure my ceiling? I'm all about saving money, but not if I have to do math. FNN, this is getting too complicated!"

Hang in there. I promise to keep it as simple as possible and you won't need a calculator. Basically, if you have a standard height ceiling...

"Whoa, whoa, whoa. A 'standard height ceiling?' Now, I'm a contractor?"

Alright, fine. Stand up. Stick your hand up in the air. Jump. If you can touch the ceiling, or almost touch the ceiling, it's a standard height ceiling, typically eight feet. If you can't touch it, and your tallest friend probably couldn't touch it, it's greater than standard height. See? No math required.

Anyway, if you have a standard height ceiling, then you want the fan to run in the reverse direction. Specifically, the fan blades should be running with the lower edge being the leading edge into the air. Having the fan run in this direction will pull the air in the room upward, which will push the warm air near the ceiling outward and force it to mix with the rest of the air without creating turbulence that you can feel. While it seems to be common sense that running the fan in the forward direction (as you would in summer) would also push the warm air down, it also creates a breeze in the room, which gives you an undesired cooling effect, much like wind-chill. Running it reverse avoids this wind-chill effect, but still mixes the air.

However, if you have a tall ceiling (greater than eight feet or so), you want to run your fan in the forward direction. Specifically, the ceiling fan blades should be running with the upper edge of the blade being the leading edge. This pushes the warm air near the ceiling down into the room. But, because the fan is far enough from you, the breeze that is created is dissipated before you can feel it.

"Okay, I got my fan running the right direction. So, how much can I save?"

Well, according to the manufacturer of the ceiling fan I installed last year, you can save about 10% of your heating costs in the winter. That's nowhere near the 40% you can save in the summer, but still noticeable. These savings are more noticeable homes with high or vaulted ceilings.

10% in the winter...and you didn't even have to do math.

Who's crazy now?

YFNN

Buck Your Brick Bank For Bang For Your Buck, Part Two

Yesterday, I posted about one of the big benefits of some of the internet banks like ING Direct, HSBC, and Emigrant Direct: the big interest rates. At the end of the post, I mentioned that there are two more benefits that are whoppers for MLB and me. We certainly make the most of them.

My experience deals specifically with ING Direct, so I can't speak to what is available at some of the other banks.

So here are those additional big benefits:

1.) I can set up multiple sub-accounts within our Orange Savings Account, each with a different nickname and purpose. And, since they don't have a minimum balance or any other fees, I can have very small amounts or even no money at all in them without penalty. This is important to me because I can have different small savings accounts (at the great 4.5% rate), each saving toward a different goal.

2.) I can set up automatic savings plans (ASPs) for each sub-account. What this means is that I can have ING Direct pull an amount of money from my checking account at a regular interval of my choosing. For example, I can have $20.00 pulled from my checking account and put into a savings account every other Friday, if I'd like. This is vital because it's completely automatic. That means I don't have to think about it, which means that I won't ever forget to do it, which means I always stay on track. Another reason this is important is because it creates a state of artificial scarcity in my checking account. That helps me to adapt quickly to the smaller amount of money that is readily available, and I spend less. That's vital because I can't waste what I don't have.

You're probably asking, "So how do I make this work for me?"

Well, MLB and I currently have eight savings sub-accounts. Yes, Cowboy Troy, you read that right; we have eight savings sub-accounts. We have an emergency fund, several short term holding accounts, and a couple long-term savings accounts. Basically, this is the way we make it work for us: our paychecks are deposited into our checking accounts every two weeks, or twice a month. This is our main holding area. Throughout the month, money is pulled from these checking accounts into the various sub-accounts. The amount and timing of these withdrawals varies with the sub-account, typically in three different ways for us.

Savings Technique #1: We make small deposits in regular intervals for our emergency fund.
Basically, every two weeks (or whatever interval we chose), we deposit an amount from our checking accounts, thus funding our emergency fund a little each time. Since this account is for emergencies (NOT a big LCD TV), we won't draw from this account unless we absolutely need to. This is a very important account because it ensures that a short-term emergency doesn't derail us from our long-term financial plans.

Savings Technique #2: We make small deposits in regular intervals for long-term savings.
At regular intervals, we deposit an amount of money into what we call our "future kids" and "forgotten money" funds. The "Future Kids Fund" is set up for future children, since they're so stinking expensive. Things like day-care, private school, and size 4 Air Jordans, will eventually come out of this account. Note that this IS NOT a college savings account. We've got a separate 529 account for that, which is invested in the stock market. The "Forgotten Money" fund is basically for whatever we decide to spend it on. That big LCD TV or big donation to an un-named dance organization might come from this account.

Savings Technique #3: We make deposits in regular intervals for short-term holding.
Aside from the emergency fund, this is probably the most important savings tool for us. These accounts are short-term holding areas for bills and events that happen on a regular basis, but not monthly. We've currently got one for insurance, vacation, holiday gifts, and a couple others. These accounts are the reasons we're never surprised or thrown off by semi-annual or annual bills. Throughout the month, we automatically put small amounts of money into these accounts, so they grow slowly behind the scenes. Then, when a big bill is due, we pull the money out and pay it from that account. For example, we pay our insurance (auto, liability, etc.) every six months. If we expect our 6-month bill to be $600, we'd put $100 a month, or $25 a week, into the account. That way, instead of getting that big bill in December or January, and then worrying about how we're going to come up with $600 for it, the money is already there! It's a lot less painful paying $25 a week for six months than to come up with $600 all at once. Plus, the money's been earning interest for us throughout those six months.

We do the same thing with holiday gifts. We each put $10 a week into the account, and when December rolls around, we've got over $1000 ready to go for gifts. And, since it's such small amounts at a time, we don't even miss the money! It works beautifully for us.

So, how do you start? Check out bankrate.com for a huge list of high interest savings accounts. Pick one, sign up and transfer some money from your checking account. Don't forget to set up an automatic withdrawal plan so you can slowly grow your savings without much pain. And, if you want a referral for ING Direct (you get a $25 sign up bonus if you use a referral), just leave a comment with your email address, and I'd be more than happy to hook you up.

YFNN