The Carnival of Personal Finance #159 is up over on Greener Pastures: Personal Finance. This week’s carnival is quite large and has a “zero-emissions” theme. Here are my faves from this week’s carnival:

How I Teach My Kids About Money and Life By Using Bricks at The Wisdom Journal. A great analogy which provides an inspiring visual goal - build a “rock” solid financial foundation!

Is Getting an MBA Worth It? Part 2 at Harvesting Dollars. I really enjoyed this 4-part series on pursuing an MBA.

Cool Your House Frugally at My Small Cents. Cross ventilation really does work. I have wonderful childhood memories of the draperies flowing in the cross breezes throughout our house on the farm.

Paying off a loan ahead of schedule is a great feeling. It means that you now have the freedom to spend that payment amount each month however you want. You can use it to pay down other debt, or even better, save it towards something else you want or need. How cool is that?

Before you get to experience that heady feeling, however, you have to pay off that loan. Paying a loan off early is easy; you just have to pay more than you are required to pay. Okay, maybe it’s not so easy. You’ll have to have a little discipline as you make those extra payments, but you can make it simpler by using one of these techniques to make your payments.

Round your monthly payment up a little. If your payment is supposed to be $321 each month, try sending a check for $330 each month. You won’t miss the extra $9, but over time that extra money will add up.

Automate your monthly payment at a slightly higher amount. Online bill payment makes it easy to send pre-determined amounts to your lender without having to write a check. Now you won’t be tempted to keep the extra portion of your payment if money is a little tight one month.

Pledge to send windfall amounts to the lender. Rebate checks, tax returns, and garage sale proceeds are all great sources of “found” money. Since you weren’t expecting this money, you won’t need it to pay your regular expenses. If it just feels too rigid to apply your entire windfall to the lender, send half. You can do something fun with the half you keep and still make some headway towards paying off your loan.

Make payments more often than you are required to make them. Check with your lender to make sure you can make frequent payments. If you can, divide your monthly payment by four and remit that amount weekly. Since four months out of the year have five weeks in them, you’ll end up making an extra payment every year.

photo credit: tomeppy

There are many aspects to being in good financial shape. You should be able to pay all of your bills in a timely manner and still save a little money each month. In addition, you should have a few financial goals that you are working towards and a plan for paying down or paying off your debt. However, even if you have achieved all of these milestones on the path to being financially fit, you may still find yourself in a difficult situation if you don’t have access to liquid assets.

You may be wondering, “what does ‘liquid’ mean?” The liquidity of an asset is simply the ease with which you can access the value of the asset. Cash, for example, is extremely liquid. If you have cash in your hand, you have access to that asset. Savings accounts are slightly less liquid. Although you can easily remove cash from your savings account, you do have to visit the bank to withdraw the funds (unless you can access them through an ATM card). Other types of accounts, such as certificates of deposit (CD’s), actually charge penalties if you remove money from them before the maturity date.

Not all of your assets need to be liquid for you to be in good financial shape. However, at least some of them should be. Long-term savings, like college savings accounts or retirement funds, shouldn’t be very liquid. You will earn a better return on your money by giving up some of its liquidity. On the other hand, your emergency fund, should be very liquid. If you needed to access that money, maybe to pay for emergency car repairs, you don’t want to have to pay penalties or transaction fees to get to that money.

As you create your financial plans, be sure to evaluate the liquidity of your assets. Although you certainly shouldn’t keep your savings account in a jar in the closet, you will want to keep some of that money in an easily-accessible account. As that account grows, you may want to siphon some of it out of your savings account to deposit it into a more powerful investment vehicle, such as a mutual fund or certificate of deposit. Just be sure to keep some money where you can get to it when you need it.