Archive for the ‘YoBucko’ Category

August 2012

Did you know that the average wedding costs $27,021, the average college graduate leaves school with $23,200 in student loans and the average Senator is worth $13.2 million?  Well, it’s true.  And so are many other interesting facts and figures we’ve compiled this summer in our series of infographics at YoBucko.  Here are links to some of the latest infographics to check out and share with your friends.

Latest Infographics

How Much is Washington Worth?
Student Loan Debt Statistics
How Much the Average Wedding Costs
How to Get Money for College

Tip of the Month – Guard Against Identity Theft

Last year, 8.1 million people were victims of identity theft in the US which cost Americans nearly $37 billion.  That’s ridiculous.  But there are some simple things you can do to guard yourself against identity theft.  Here are three ways:

1.) Get a Copy of your Free Credit Report – each year you are entitled to a free copy of your credit report from each of the three credit bureaus
2.) Opt-Out of Pre-Approved Credit Card Offers – lower your junk mail and the risk that identity thieves will get your personal information
3.) Sign up for an Identity Monitoring Service – While it costs money for these services, they can help protect you against identity theft and fraud
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Copyright © 2012 YoBucko, All rights reserved.
Our mailing address is:eric.bell@yobucko.com
3439 N. Powhatan St.
Arlington, VA, VA 22213

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Welcome to YoBucko!

YoBucko is the online personal finance guide that equips young adults with the knowledge and tools needed for financial success. Our mission is simple: to help you live a wealthier life.

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Financial Education

YoBucko helps you learn how to manage your money. From articles and videos to step-by-step guides, YoBucko connects you with reliable financial information that matters to you.


Articles ArticlesPersonal finance articles and news written in plain English. No gimmicks or fine print here. Just simple and honest financial advice.

Videos VideosTired of reading. No problem. Watch videos and online tutorials on basic personal finance topics.

Financial Calculators CalculatorsAt YoBucko, you don’t need a finance degree to make smart financial decisions. Try our free online calculators and avoid the money math.


YoBucko’s Guide to Budgeting

YoBucko’s Guide to Credit


Student Loan Debt Statistics

How Much the Average Wedding Costs

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Student Loan Entrance Counseling is a Joke

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How am I Going to Repay Student Loans?To humor myself, I just spent the last five minutes retaking the student loan entrance counseling quiz that I had to take prior to taking out approximately $120,000 in student loans. By my calculations, it is the most worthless, mind-numbing experience of my academic career and financial life. Anyone who has ever been through it may agree – student loan entrance counseling is a joke.

Student Loan Entrance Counseling: Built and Designed for Morons

In order to take out federal student loans, students are required, by law, to complete entrance and exit loan counseling. When you think of counseling, you typically think of sitting in a room with a person discussing the challenges you face. Well, let me tell you, student loan entrance counseling takes a totally different approach that would be an embarrassment to anyone in the history of the counseling field. Here is what it takes to get an enormous amount of debt:

  1. Click through the instructions and pick your school
  2. Read sixteen web pages of text
  3. At the end of each page, answer one or two questions (the answers are above the questions)
  4. Get the questions right or wrong (it doesn’t matter whether you learn anything or not)
  5. Confirm that you have read the Borrower’s Rights and Responsibilities Statement
  6. Click Submit

And you’re done! Oh yeah, if you need a little help, here is the answer key:

  • For every True/False question, the answer is TRUE.
  • For every multiple choice questions, the answer is ALL OF THE ABOVE

That’s it! You are now eligible to take out an enormous amount of debt, mortgage your future and take your spot in line for a lifelong struggle with debt. Enjoy!

Bureaucrats Pretending to Be Lenders

If you taught driver’s education and one of your students never went to class, failed the written exam, got into three wrecks, hit ten children, and got a DUI during the driving test, would you give them a driver’s license? I doubt it. When it comes to taking out student loans, there isn’t much quality control. You could be drunk, dumb and dying and still find it within yourself to pass through the student loan entrance counseling process. It is pathetic.

Student loan entrance counseling is a prime example of the ineptitude of government to manage the country’s financial affairs responsibly. Rather than educating people about student loans and offering access to legitimate financial counseling services, the powers that be prefer to create a ridiculous, online alternative that any nincompoop can pass. With student loan debt surpassing the $1 trillion mark, you would think the government would be less interested making it easy for people to get more loans and more interested in educating, equipping and empowering people to become better borrowers.

Back in my days in banking, we had criteria by which we made lending decisions. Our credit decisions were all based on the 5 C’s:

  • Character
  • Capacity
  • Capital
  • Collateral
  • Conditions

After completing the student loan entrance counseling process, I’m pretty sure none of those factors are considered. It seems to me that all you need to get a student loan and pass the student loan entrance counseling quiz was what I call the four P’s. You need a:

  • Pulse
  • Promise
  • PC
  • PIN Number

What is the Solution?

As the presidential candidates, Congress and the press debate over the student loan issue, there seems to be more people harping on the problems and very few offering viable solutions. If they are truly serious about fixing our student loan system, reducing the nation’s exposure to student loans and improving the financial futures of the next generation, there are a few key areas where they may want to focus:

  • Lowering Default Rates – Perhaps measures need to be put into place to ensure that students have at least a couple of the 5 C’s before writing them a blank check to pay for college. Rather than demonizing everyone who has worked in financial services, now may be a good time for our country’s leaders to learn a few lending lessons from the people who have done it for hundreds of years.
  • Educating Prospective Borrowers – Creating a system comparable to the driver’s education system in the United States may be a bit overboard. But directing resources toward financial education programs on college campuses may be a great way to improve financial literacy in America while lowering default rates.
  • Supporting Current Borrowers – The infrastructure to support the millions of student loan borrowers does not exist. There are informal support networks, credit counseling agencies and financial education programs out there to help people with student loan debt. Perhaps now may be a good time to invest in building out our country’s financial education and counseling infrastructure so we can get back the $1 trillion we loaned out to students.
  • Incentivizing Good Behavior – Remember when your parents used to give you $5 for A’s on your report card? Perhaps lawmakers should consider a similar approach to student loan entrance and exit loan counseling. If you score well, perhaps you get an interest rate reduction or some other incentive. They have similar incentives for setting up direct deposit. Why not give people an incentive to learn about the loans they take out as well?
  • Making Education Affordable – The cost of higher education has more than doubled the rate of inflation over the last 10 years. What incentive do schools have to lower costs if the Department of Education is willing to give students unlimited access to loans? Higher education is becoming a luxury in America, and it is high time to focus on fixing the problem.
  • Offering Competitive Interest Rates – It is cheaper for me to get a mortgage to buy a home than to take out student loans and go to school. What type of message does that send to the public regarding the value lawmakers place on education?

The Bottom Line

Our nation is facing a ton of financial challenges right now, not the least of which is its overexposure to student loans. Today, total student loan debt outstanding is greater than all credit card debt and car loans combined. That’s enormous. So rather than redirecting the conversation away from the real problems with student loan debt for political purposes, I challenge our country’s law makers to stand up and take action to solve this growing problem in America. Now is the time to quit your bickering, grow up and tackle this issue not as Republicans and Democrats, but as Americans. Our country’s future and the financial futures of millions of Americans depend on it.

  • YoBucko, YoBucko is a personal finance website that helps young people learn how to save, pay off debt and invest for the future. We offer free access to a wealth of information and tools to help people make smarter financial decisions.

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10 Financial Tips for Young Entrepreneurs

Posted by     yobucko.com

If you are young entrepreneur or startup, I applaud you. Building a company is truly one of the hardest things I’ve ever tried to do. A year and a half ago, I decided to quit my job to pursue my dreams of entrepreneurship and have learned a lot of lessons along the way. In this article, I’m going to share some of the financial lessons I’ve learned in the process of starting my business in the hopes that you won’t repeat some of the common financial mistakes many young entrepreneurs make.

Young Entrepreneur Regrets Mistakes

#1: Time is Money

When I first started building my business, I spent a lot of time traveling to meetings, meeting with people, planning for meetings, etc. Today, I wish I had all that time back. One of the most valuable assets entrepreneurs have is their time, and every moment you spend doing stuff that is unrelated to your business is time and money wasted. When I was first starting out, I recall one of my advisors saying to me, “a lack of time is a lack of priorities.” It’s true. If you are wasting your time going to meaningless meetings that are unrelated to your business, you can find yourself in a tough financial situation.

#2: Prepare for the Worst, Hope for the Best

Bad things happen to good people, and it pays to be prepared. If you are not financially prepared to take the leap into entrepreneurship, don’t quit your job until you are ready. There is no reason in the world to give up your income when you can work on your project on the side until you have traction. For most single people, I recommend having at least 3 months of living expenses in an emergency savings account. If you are going to be an entrepreneur, I’d recommend setting aside closer to six or nine months of cash in savings that you can fall back on if you need it. Bad things happen, customers don’t always pay on time and you need to make sure you have money set aside to keep you afloat during the tough times.

#3: Learn How to Manage your Cash Flow

One of my advisors shared a piece of wisdom with me recently when he said, “there are three reasons a company fails: they run out of cash, they run out of cash and they run out of cash.” Where I am was an optimist, he was a realist. But his words were very true. Cash flow is the #1 financial metric you should learn how to control when running a company. If you don’t know where your money comes from or where it is going, you put yourself at risk. Creating a budget and sticking to it is very important in a startup.

#4: Set Clear Goals and Milestones

When you are an early stage entrepreneur, it is easy to waste time over-thinking your concept. In reality, the time spent daydreaming about your idea instead of testing your concept with potential customers is wasted time. To mitigate this risk, set measurable milestones and deadlines early on and track your progress along the way. What is the difference between a goal and a milestone? Milestones are like sign posts along the way to your goal that show you how you are doing over time.

#5: Track your Spending

When you are first starting out in business, there is a lot going on. For many entrepreneurs, keeping track of their spending seems secondary to creating a business plan, talking to customers, etc. But it is very important to create a system to track your spending each month so you don’t have to scramble for information when you need it. There is nothing more frustrating than digging through paperwork looking for financial information at tax time or compiling financial reports for bankers when you don’t have the information readily available. So rather than wasting time on the back-end, do yourself a favor and set yourself up right from day one. I’d highly recommend using an online bookkeeping software like Quickbooks and inputting your own information for the first few months. If you find yourself having trouble finding the time, you can always hire a bookkeeper to help you out. Eventually, your information may get more complicated requiring the services of an accountant around tax time. But there is no need to overspend on professional services when you can very easily track your expenses on your own.

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#6: Understand the Value of Employee Benefits

There are a lot of luxuries I took for granted when I had a comfy job in banking – health insurance, parking reimbursements, 401k matching plans, etc. When you start your own company, many of the employee benefits you come to expect go away. So before you hand in your resignation letter, take some time to figure out how much money you’ll have to spend to replace those benefits. First, compare health insurance plans to see how much it will cost you to replace your current coverage. Next, think about what you are going to do with your 401k or 401k plans, IRAs and retirement savings at YoBucko”>retirement plan. You basically have four options: cash out and pay a penalty, roll it over into a new 401k plan, roll it over into an IRA, or leave it in your current plan. Finally, determine how much money you’ll need to earn each month to replace your benefits and factor that into your compensation.

#7: Focus on Finding your First Customer

If you don’t have customers, you are not a business. So rather than spending all of your time and money trying to determine who your customers are, go to a handful of potential customers and ask them a very simple question, “would you buy this?” If they say “no”, then ask, “why not?” The sooner you do this the better off you will be as a company. This was one of my biggest mistakes early on. I went to people I knew personally, who liked me and asked them “do you like this?” Being friendly and nice folks, they naturally said, “of course we like this, and we like you too.” While this made me feel really good about myself, it didn’t help me build a company. Find people other than your mother and best friend who may be potential customers and ask them for real feedback.

#8: Be Open and Honest with Investors and Lenders

There is nothing that gets people into more trouble in business than dishonesty and a lack of communication – this is especially true for early-stage businesses that are looking to raise money or get a loan. If you act shady and secretive, people won’t trust you. Similarly, if you are unable or unwilling to reveal the numbers that drive your business’ success, you can lose the trust of sources of capital. While my investors right now are friends and family, I’ve made it a regular practice to keep them “in the know” on our company’s financial situation. While it isn’t always a pleasant conversation it helps establish credibility and gives them opportunities to help us navigate the tough times. If you are an entrepreneur and don’t have investors, find some advisors and hold quarterly meetings with them to talk through the numbers. It’s both a good practice and a way to get some additional support and ideas for your company.

#9: Pay Yourself

After a year and a half of eating ramen and Trader Joe’s bean burritos I’ve finally learned an important lesson – you can’t eat equity for dinner. While many early stage companies don’t have enough revenue or cash to pay themselves big salaries, you’ve got to find some way to pay yourself along the way. If you don’t, you are doing yourself and the business a disservice. There is nothing riskier from an investor’s perspective than giving money to someone who “needs it.” People who are in desperate financial situations do irrational things. To avoid this risk, don’t be afraid to pay yourself a salary. Investors understand that you can’t get by on ramen and burritos forever.

#10: Keep your Fixed Expenses Low

In the early stages of starting a business, it is smart to keep your fixed expenses as low as possible. So renting a huge space in Midtown Manhattan on day one may not be the best strategy. As your company’s revenues grow over time, you can start taking on more overhead. But be patient. If you need office space, see if there are any low-priced, month-to-month options available to you. If there is an incubator program in your city, check it out. Also, consider turning your home or apartment into an office space. You’ll be able to write it off on taxes. So before you start signing high-priced two-year contracts with vendors, make sure you have the revenues or cash needed to cover your costs.

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Get a Wealth of Financial Information with YoBucko


Eric Bell wants his company to become the trusted source of financial information for Generation Y. With information on saving money, managing debt, and investing for the future YoBucko just might be it.

Young people are going online more often to shop for financial services, but there isn’t a single place where they can learn about money and shop for financial services that target their needs. Plenty of companies out there are creating financial tools like Mint or HelloWallet, but who is the Suze Orman for young adults?

YoBucko is a personal finance guide with a wealth of information. Users can sign up for free to gain access to financial education on everything from paying off student loans to investing in a mutual fund. Through easy-to-comprehend articles and surprisingly interesting videos, users get a ton of advice on how to manage their money. YoBucko even offers tools like net worth worksheets and over a dozen financial calculators to help users plan and save. The best part about the site is the Ask YoBucko feature, which helps users get to the bottom of tricky financial questions.

Founder and CEO Bell has a passion for finance – that’s right, for finance. “I love helping people learn about managing their money,” he told me in an interview.  “It’s kind of a weird interest for a 28-year old, but it is something I’ve been doing since I started an organization to teach young people about investing in college.”

After spending a few years in New York and Washington, D.C. at the Citi Private Bank, Bell decided to pursue this passion for financial education full-time by starting YoBucko. He’s learned a lot in the last eighteen months.

According to Bell, entrepreneurs should never assume people want their product. “If there is one thing I’ve learned, it is that assumptions of market potential are simply that – assumptions,” he said. Bell believes assumptions were made to be tested. “Rather than spending all of your time and money building something people don’t want (or use), build a simple prototype or version one, test it, and validate your assumptions before investing more money or time.”

Bell also advises against going it alone:

This has been one of the hardest things for my company – finding partners.  If you are a solo entrepreneur, like me, you can go a little crazy sometimes because you lock yourself in the basement and work twenty four hours a day.  Eventually, you start to forget that other people go through this too and you don’t have to do everything by yourself.  I’d recommend finding a partner to bring in from the beginning, and if you cannot, find organizations like Tech Cocktail or a local incubator where you can connect with other entrepreneurs.  One of the best things I’ve done yet is joining NVTC’s FastTrac program.

Finally, Bell likens entrepreneurship to a rollercoaster and suggests entrepreneurs prepare themselves for the ride.

Running a startup comes with a lot of highs and lows.  If you aren’t  prepared or don’t love what you do, it is easy to call it quits.  Make sure to have money set aside to cover your expenses for twice as long as you think you’ll need, and assume that it will take as much money as you plan for.  Also, if you have a spouse or partner, make sure they understand that they are going to take the ride with you.  Perhaps setting some reasonable expectations up front would be a good idea.

Bell sees a bright future for his company. “YoBucko has the potential to help a lot of young people get their financial lives started out on the right foot,” he said. “If we are able to provide reliable financial information in a way that young people relate to, it has the potential to educate and equip them with the knowledge and tools they need for lifelong financial success.”

YoBucko is one of our featured startups at the Tech Cocktail DC Winter Mixer tonight.

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