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Nearly every week, at least one of the contributors to the Lending Club blog mentions the importance of a budget. By now, you should realize that we discuss it so often because it is one of the most important aspects of a sound financial philosophy. Even if the minutia of tracking every penny is more than you can handle, you should still have a budget. For you, The 60% Solution may be the way to go.

The 60% Solution was created by Richard Jenkins and is described in detail in his article on the subject. The beauty of this budgeting method is its simplicity: Keep your committed expenses at or below 60% of your gross income. We'll go into a little more detail below, but that's the basic premise of this technique. Budgeting couldn't get much simpler than that, right?

The first question that usually comes up with this approach is how to define “committed” expenses. In addition to all of his monthly bills, Richard also includes food, clothing, essential housing expenses, insurance, charitable contributions, and taxes.

The remaining 40% of his gross income is then divided into four other areas that get 10% each. These categories, in priority order, are as follows:

Retirement Savings – 401K, IRAs, etc.
Long-Term Savings – Investments, Lending Club P2P loan portfolios, etc.
Short-Term Saving for Irregular Expenses – Vacations, car repairs, gifts, etc.
Fun Money – Anything you like

This technique follows the “pay yourself first” philosophy too, because savings are pre-allocated each month. You'll get used to living on your income without the amounts allocated to savings and likely won't even notice the difference.

The importance of a budget is often stressed, but not always followed. If a traditional budget seems too difficult for you, then you should consider a simple budgeting method like The 60% Solution.

Are you afraid that someone behind you is watching you as you type your PIN code at the ATM? Maybe the Man is watching you from afar? Well, the Cranking Widgets blog has a useful tip on how to hide your PIN code from potential miscreants.

The trick in doing so is to simply hit the “clear” button a few times as you type your password into the machine. By hitting “backspace” or “clear” keys, it appears as if you are hitting the 3 key (or the 0, depending on the layout of the number pad). If you do this a few times, you can confuse anyone who is watching you.

With the increase of identity theft throughout America, it is important to take precautions against having your own information used against you. Although this tip is a little severe, and probably mostly for the seriously paranoid, it doesn't hurt to take simple precautions against identity theft.

Mike Smith, in one of his articles here on the Lending Club blog, wrote about cataloging everything in your wallet---if you know what you lost, it's a lot easier to fix your situation. When I most recently lost my wallet, I was on the New York Subway about to board a plane---I had to take a train with no money and board a plane with no ID. Although it was difficult, I knew exactly what was in my wallet, so I was able to cancel all my cards while I was at the airport.

You can also use this technique when you’re at your computer logging into secure wesites, such as when you’re checking on your P2P loan portfolios on Lending Club. Just hit the “backspace” key a few times while you enter in your password and that person standing over your shoulder won’t be able to guess your password.

We here at Lending Club remind you to be careful with your stuff, and be extremely careful with your identity.

It’s not too often that the IRS gives a refund to the majority of taxpayers. Even rarer is taxpayers not taking advantage of such a refund. Are you one of the ones who missed out on the phone tax refund?

According to a recent article, only about half of the money allocated by the IRS for the phone tax refund has actually been paid out. To be eligible for the refund, you must have had long distance telephone service between March 2003 and July 2006. Service during that period included a federal tax of 3% that should not have been collected.

In order to get your money back, you needed to provide proof of payment of the tax during the collection period. While you would be due the actual amount that you spent, the IRS understands that many people don’t save telephone records for such a long period of time. As a result, the IRS also allowed a standard refund, which varied between $30 and $60, without the need to provide receipts.

Consumers lacking knowledge of the phone tax refund is cited as one of the main reasons why payments are lower than expected. The fact that only 71% of returns claimed the refund, even though a much larger percentage was likely eligible, indicates a lack of awareness.

In the ongoing quest for consumer education here on the Lending Club blog, we hope that you take advantage of this refund if you are entitled to it. If you did not collect the phone tax refund as part of your income taxes return last year, you should contact the IRS to see how to get your money. Then take your savings and invest in some P2P loans on Lending Club.

This week saw the fourth edition of Web 2.0 Summit in San Francisco. What is Web 2.0 and why should you care about it? The answer will depend to a certain extent on where you live, where you work, and whether or not you have teenagers and young adults in your midst.

Wikipedia, itself a quintessential Web 2.0 organization, defines it as “a perceived second generation of web-based communities and hosted services — such as social-networking sites, wikis and folksonomies — which aim to facilitate collaboration and sharing between users.” Wikipedia further characterizes Web 2.0 as the utilization of blogs, social bookmarking, podcasts, RSS feeds, social software, web application programming interfaces (APIs), and online web services to improve upon the more static, plain vanilla websites. Not to worry, though – if these terms are foreign to you (other than the notion of a blog, of course), you’re in luck – Wikipedia has great definitions of them all. The simple notion of “Three C’s of the Internet” (Content, Commerce and Community) is so last century.

Some of these concepts have arguably been around for years, but many of them are undergoing a reboot into new and exciting directions. In the past, around the age of “sneaker-net,” many of you used shared network drives and, later, intranets, to distribute and organize information. We at Lending Club rely heavily on our wiki and Google Docs to track and collaborate on projects, and we use Skype to chat among ourselves. Our executives are not only quoted in print but are also featured in podcasts.

Beyond that, Web 2.0 is also shaping business models, including that of Lending Club. In a recent Forbes article , our CEO recalls how Lending Club launched as a widget on Facebook. Like other Web 2.0 companies, most of Lending Club’s “content” (loan listings) is user-generated. And LendingMatch™, the matching engine on Lending Club, works a bit like Amazon’s book recommendation service to point lenders to the best loans matching their interests and preferences. In fact, our CTO Joaquin Delgado is a guest speaker at Recommender System 2007 in Minneapolis this weekend.

But you can also think of Web 2.0 as a mindset or lifestyle of sorts, particularly if you live in high-tech and startup centers such as the Bay Area, the Baltimore-Washington technology corridor, and Austin, Texas. These techie gadgets will permeate almost every aspect of life if you let them. When we celebrated Lending Club’s public launch, pictures of our sailing trip were posted on community photo-sharing sites within a few hours. We updated our friends on Facebook, and we wrote about our adventure here on this blog post to include you, our loyal readers, in the fun.

It’s never too late to get started, but beware: Web 3.0 is coming.

The hardest part of starting a new project is taking the first step. Personal finance books and blogs are everywhere, but no advice will make a difference if you don't actually follow it!

Getting started in investing can be a scary thing, but I have found that the easiest way to get started is to have a plan. Do you think you are ready to start? Make a plan! A good investment plan will have the following parts:

1) Available Money - You should know how much you currently can invest. Determine your available investment money by adding up all of your extra money in your bank account, under your mattress, etc., that you have immediate access to. Of course, you don't want to invest everything---you need to leave some money for emergencies and living expenses. Decide what portion of your available money you want to invest and write it down.

2) Amount you wish to continually invest - How much money do you want to put in each month? If you aren’t currently working, you might not be able to consistently put money in. If you are working, however, try to select a percentage that you can invest monthly. 10% is a good starting amount, but I know some people who invest close to 50% of their paychecks.

3) Assess your risk - You should assess your risk tolerance honestly to see how much you are willing to invest. Once you've assessed your risk, you can determine your asset allocation.

4) Asset allocation - I just wrote about dealing with asset allocation. Depending on your risk, you can determine how you should allocate your assets. If you can take on some risk, you might consider putting money in stocks and index funds vs. bonds or CDs. When you invest in person-to-person loans on Lending Club, you can set your risk tolerance level to determine your asset allocation.

5) Choose your individual investments - This step might be the hardest. You need to choose what funds or stocks you want to actually put your money in. Do your research and try to determine which funds and stocks meet your needs. Google is a great resource, as well as Yahoo! Finance and other finance web sites. On Lending Club, when you use LendingMatch™ to build a loan portfolio, the individual investments are the many pieces of loans that are included in your portfolio recommendation.

6) A timeline - This step is crucial: creating a timeline (or schedule) for investing will help you motivate yourself. Plan when you want to make your first investment and when you want to make your monthly payments.

7) Invest! - You need to actually invest your money at some point. Stick to your timeline and you are much more likely to actually get your investment started.

Creating a plan is an excellent way to actually start investing. Follow the steps above, and you'll be invested. Do it sooner rather than later--don't you remember the power of compound interest?