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Hello fellow personal finance readers. I go by the pen name “Teacher Man” due to the fact that I recently graduated from university and am in my second year of teaching high school. About 9 months ago my partner and I started a website called My University Money. It is aimed at helping young people (with a specific focus on post-secondary students) and just talking about financial and student lifestyle issues in general. Young & Thrifty was one of the first bloggers to really reach out to us and give us a little recognition when we were just starting off. When I read that Y & T was hitting a busy patch in life I offered to do a little staff writing for her, and she graciously accepted. Hopefully you readers don’t notice THAT much of a drop-off from the typical high quality posts you’ve come to enjoy here!

So if the Eurozone is all one big happy family, then Germany has got to be either the stern and conservative father, or the overachieving big brother.  There is no shortage of screw ups in this family either.  At first, it wasn’t too bad when the little guys were having problems.  After all, cute little Ireland decided to take most of their medicine on their own, and who doesn’t want to help those feisty little leprechauns (sorry if this is offensive Irish peeps, I just always think of Notre Dame when I think Irish).  But now the older brothers and sisters have been spending way beyond their means, and it’s quickly becoming apparent they should have got their hands slapped a little more when they were young, because now they would rather throw temper tantrums (*ahem* Greece rioters *cough cough*) than try to change.  If we take this analogy to its logical conclusion, I guess France would be the mother that is trying to help, but has been using her credit card a little bit too much as well.  This is basically what the European debt crisis has boiled down to.  Despite all the numbers and rhetoric you hear about on TV, it is becoming more and more apparent that the overall health of the Eurozone will ultimately be determined by whether Germany wants to take care of everyone, or burn the place to the ground.  That’s because this time around, good ole Uncle America and the rest of the developed world extended family is going through some tough times as well, and needs almost as much help themselves.

Tough Love or Hand Holding?

So what do you do if you’re Germany?  What do you do with that bratty little brother Greece who says he desperately wants to remain in the family, but whose citizens riot at the mention of the measures that must be taken in order to make the country solvent again?  What sort of help can you give to your other family members such as Italy, Spain, and Portugal?  These guys are too big to all hold up at once.  Would you as a German tax-payer, who has been relatively conservative with your money, help the rest of the Eurozone out?  There are basically two main options from what I can tell.

Do the “Mature” Thing

The first line of thinking says that Germany would be better off in the overall economic picture by helping stem this debt contagion, and helping Greece and Italy balance their books.  If these countries take major hits to their bonds, there is no question it will cripple Europe’s ability to raise capital for at least a decade.  There is also a good chance that the French banks would fall, and unspeakable direct damage would be done to the German economy, but this wouldn’t even be the worst of it.  Germany has built itself an enviable position of being an exporter of high-quality manufactured goods.  It has benefitted immensely from the Euro and the open flow of goods within the continent.  When an exporter’s consumer base just dries up, it doesn’t bode well for long-term growth, and the death of the Euro as a currency would take years to recover from.

Or Cut Thy Nose To Spite Thy Face (That Nose Had It Coming)

Then there is another, more interesting (in my opinion) stance.  Basically there are many Germans out there who want to effectively say, “Screw it, it’ll hurt us, but these little brothers need to wise up, take their licks, learn their lesson and move on.  If we keep bailing them out every time they get into trouble, they will never learn!”  I can definitely sympathize with this (I’m a big brother… who would’ve guessed?).  The phrase that people in the financial world throw around when discussing big bailouts is “moral hazard.”  The idea is that if someone knows there will ultimately be no consequences (and this has been proven), then what’s to stop them from repeating the behaviour?  You have to think that there are some days when Germany asks itself why it didn’t stay single like cousin England, despite the benefits it enjoyed for a time.  I can only imagine the righteous anger that German people feel when they watch TV and see Greek unions protesting despite the fact that the government is beyond bankrupt (probably states like North Dakota, who had small banks, and small government, felt something akin to this when they were asked to bail out the big banks that are headquartered in New York).  Relations between the Euro crew can be tension-filled at the best of times (and you think you’ve had fights in your family…), so this has to be a really tough pill to swallow for the Germans.

Debt Is Thicker Than Water

I’m sure that in the end the Germans will do the politically and economically smart thing and bail the other guys out.  It doesn’t really matter if they do it through raiding their tax payer coffers to raise money for an “emergency fund” or through the issuing of Euro bonds that the Germans will ultimately be on the hook for (these would allow all of the Euro countries access to more cheap credit based on Germany’s good name… just what they need right?).  The opposite path, while morally appealing, is too economically terrifying to truly consider.  What kind of voluntary “bond haircuts” would European banks have to take?  Would that be the end of any liquidity in Europe for years?  All I know is that the USA is lucky they have a cool little brother (that understands bank regulation and has natural resource money) like us Canucks!

Y&T’s input: It’s nice that Canada is regarded as one of the top countries for a safe and effective banking system.  We’re so used to being the underdogs!

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This is a guest post by Jake Ashaye who wanted to give some tips on saving up for big ticket items.

Since it’s Boxing Week (for those of you in commonwealth countries like the UK, Australia, and Canada), you’re probably thinking about buying (or have already probably bought) some big ticket items.  Some of these big ticket items you have been budgeting for all year long, scrimping and saving $100 a month just so you can buy that big item you have been lusting for all year round.

However, you really have to think about all the “little extras” that you have to purchase alongside in order to enjoy your big ticket item.

So what are some of these little extras that really add up?

Computers

Yes, that MacBook Pro was $100 during Boxing Day and it sure is an amazing machine.  But likely you will need to add software, like MS Office for Mac (since everyone uses MS Office) which can cost upwards of up to $200.  If you want to keep it pristine (or at least somewhat new looking 1 year from now) you would likely need some sort of protector for your laptop, which can run at around $50 for a decent cover to protect from scratches or debris.

If you’re buying a PC, you’ll likely need to add some antivirus software too, which usually doesn’t come cheap.  If you’re needing to look at Computers for Dummies before you get your machine, you may need to purchase the extra installation help at the computer store so that your computer is ready to go when you get home.

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This is a guest post by Jessica Bosari who is a mother of two and obsessed with personal finance.  She wanted to contribute an article to Y&T.ca.

Insurance companies like to know as much as they can about you and your personal habits so that they can create the best possible idea of your risks as a customer. Right now, they use accident rates in your area, your driving record, your credit rating, your marital status, and other public knowledge to build the most accurate profile of your risk possible. In some cases, the more details they know about you the better your rates would be, which can come in handy when you compare car insurance rates. That doesn’t always mean that you would be better off by showing your company all of the information you post on Facebook, though.

Insurance Companies Have a Different Perspective

Most Facebook users don’t think about how their posts would look to an insurance company. You might post about a long car trip because you’re excited and want all your friends to follow along. Your insurance company will give that post more than a passing glance, though. A long drive means that you have a higher chance of being involved in a car accident, which means there is a better chance you’ll have to file a claim. Insurance companies haven’t started changing insurance rates for drivers based on Facebook posts yet, but your posts could color the way your company views your overall risk when you are ready to renew your policy.

Privacy Less Limited than you Think

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This is a guest post by Jake Ashaye who doesn’t personally drive a modified car but he certainly remembers the days when he used to!

Today’s youth exhibit a greater sense of individualism than any generation before them.  Our “exterior manifestations” (or decoration, so to speak!) exhibits a unique sense of fashion that reflects our lifestyles.  Tattoos, piercings and hair dyes allow us to enhance our sense of distinction on our own bodies.  Heck, even our cell phones are adorned with skins and wall papers to suit our taste. Our generation has more options than ever before to express our personalities and young people are quick to take advantage of them.  And nothing gives us the freedom to express ourselves than the cars that we drive.

Unfortunately, there is also an important aspect to this that often goes unnoticed by youth.  Younger drivers are far more likely to trick their cars out in order to express their own zest for life.  While this may be great for self-expression, it can also lead to a financial disaster.  There are many ways that cars can be customized and nearly every one of them will lead to higher insurance rates.  Some modifications may even be illegal in some localities while being sold in another nearby.  It’s important for young people to take this into careful consideration before customizing or “modding” their vehicle.

Glow Kits, Spoilers, and Cops

Under glow kits are the perfect example.  They are considered by many to be one of the most interesting customized features among cars.  They give vehicles a futuristic look and even provide the illusion of the car floating.  However, damage caused by under glow kits can be significant.  They are also sometimes associated with more aggressive drivers; both of these aspects will lead to higher insurance rates, not to mention just ASKING for the cops to eye you like a hawk for any wrongdoing just so they can ticket you.

Adding a specialized spoiler to a vehicle can also raise a red flag among insurance providers.  Custom spoilers are popular among street racers, the most dangerous type of driver (as far as insurance companies are concerned).  They can also be expensive to repair, especially if installed improperly.  Due to so many do-it-yourself failures surrounding cars, insurance rates will rise quickly after making such a modification.

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