First30Days - Finances

A Very Recessionista Little Christmas

2008-12-03T14:41:28Z

On Monday it was finally made official: the U.S. is definitely in a recession. While most of us have been feeling the pinch for a while, the holidays bring an added challenge to stretch our dollars as far as we can. The good news is that from gift giving to decorating and dressing for parties, there are definitely stylish ways to celebrate this time of year on a tight budget. A few tips:

Gift Giving
Gift giving gets even more complicated when you’re pinching pennies, but it doesn’t have to be a total buzzkill. If you’re one of those characters who has a million people on her holiday list, consider scaling down the number. Suggest a kids-only rule among your family members, or have everyone draw a name for one adult to shop for. Give gifts in bulk: a gift basket to an entire family instead of separate gifts to each individual, a nice bottle of wine to people who live together with a set of glasses or some cool coasters.

Set a budget per person or household and stick to it. You can give great gifts for $25, $10, even $5, as long as the presentation is beautiful and the intention is genuine and thoughtful. For example, an inexpensive scarf from Forever21 is going to make a greater impact in a box, wrapped with matte purple paper and metallic silver ribbon than it would wrapped in plain paper with no bow at all. Be sure to check The Frisky’s guide to gifts under $25 for some more budget-friendly ideas.

Inexpensive homemade gifts like baked goods, mixed CDs, jewelry, and other crafty items are always cool if they’re presented creatively.

Decorating
The classiest way to decorate on a budget is to pick a color scheme and not feel boxed in by the traditional red and green combo. In fact, red and green can look kind of cheep and cheesy together. A more chic choice is sticking with one main color: various shades of green, all red, gold, silver, white, or even purple. If you put up a tree, make sure all the ornaments coordinate with your color scheme. To create a pulled-together, purposeful look, group items together: a few pine cones with greenery, some old school Christmas light bulbs, or small glass balls in a bowl.

Use produce—it’s cheap! If you’ve got a green theme, fill a clear cylinder vase with some limes and tie a ribbon around the base. For a red theme, fill a bowl with some pomegranates (they’re in season this time of year), or put a few cranberries in a clean, empty mason jar with a scented candle inside (fig is a great holiday scent that doesn’t overpower).

There are lots more tips at The Frisky, including how to dress for all those holiday events on a budget and making sure you get the most bang for your travel buck. Who knew being a recessionista could be so easy? Hey—if Hannah Montana can shop at Forever 21, you've got no excuse. -Wendy Atterberry

The End of Everyday Low Prices

2008-12-03T11:35:41Z

When Wal-Mart closes a store it raises an eyebrow or two. Afterall, aren't they the one store supposed to be gaining customers in a weak economy? Committed to everyday low prices and often slammed by critics because of their less than altruistic nature, they're the one store you'd think was immune. But let's not be sad, because besides assurances that the workers will find jobs in other locations the closing of a Wal-Mart store is a cause for celebration in some respects.

For those of you who haven't read The Wal-Mart Effect, it's a book written a couple of years ago by Charles Fishman that details how the pursuit of savings to pass onto the customer results in a decrease in the quality of what you buy as well as many other unsavory practices. Here is some of what Fishman had to say:

How does Wal-Mart do it? Not by focusing on profits, but rather on cost containment. Relentlessly driving pennies out of the dollar: driving jobs overseas (without much concern for how those jobs are fulfilled, so long as the result is a lower cost), driving costs of its own employees (locking them in its stores overnight, forcing them to work overtime without pay, skimping on their wages and health insurance, etc.), and driving its suppliers out of business."

For example, Wal-Mart has proved exceptionally adept at externalizing costs to its suppliers. Wal-Mart "charges many of its vendors with keeping product in stock on its shelves; Wal-Mart cascades data about its sales out to its vendors...but it gives those vendors the responsibility of analyzing those waves of data and reporting the insights back to Wal-Mart." (94-95)

So, while Wal-Mart may be a place to find great deals, they're not necessarily a company that adds to the overall health of our nation.

How do you feel about Wal-Mart? Do you think they should be more responsible as the largest private employer?

Frugal Giving

2008-12-03T10:45:50Z

With the holiday season upon us and an economy teaching us to save our money, it's little wonder that many charities around the country are struggling. But donating to charity doesn't always mean you have to give money or time. When you're cleaning out the closets and extra bedrooms to make room for guests, consider the items you might be throwing away. Some charities will take your used goods to give to someone who needs them.

Many companies will take your items in good condition. The following are just a few of the items they'll take, and you may be surprised by a couple of them!

Ink Cartridges. We learned something new with this one! Pet Smart, of all places, will take ink and toner cartridges and then use the proceeds from recycling them towards saving homeless animals. Of course, there are other places to take your cartridges if saving animals isn't your thing.

Hearing Aids. There are companies that will repair and sell old hearing aids and then take the proceeds to buy new hearing aids for those who can't afford them. This is also done to purchase new eyeglasses for those who need them, as well.

Dentures. Um, we're not sure we want to know what they do with the dentures, though we're confident they're not rinsed with Listerine and handed to someone who needs them. But, since they're on the list, think twice before you toss your old dentures in the trash!

Most people feel good when they give to charity, but not everyone who is living on a budget can afford to offer money or time. What are some other household goods that you know can be given to charity? And, does anyone know what they're doing with those dentures? Yeah, we're kind of curious, but you know you are too!

Investing in a Bad Economy

2008-12-01T00:02:28Z

Enough is enough. You've lost money steadily over the last few weeks and now it's time to do something about it. But...what?

Experts from around the nation have given their advice to investors struggling through the economic woes that have cost them thousands. Here's just a sample of what they had to say.

In Your 20s
Take comfort in the fact that time is on your side. In truth, while you may have lost quite a bit of money, you also have a lot of time to make it up. Don't confuse the principle of investing aggressively with making risky investments. Talk to your advisor and play it smart.

In Your 40s
Prioritize smart investing, even if that means you need to stop spending. Don't abandon the stock market at this point in the game as doing so would be financial suicide. It's important to keep your assets diversified and don't take any unnecessary risks (note the word unnecessary.)

In Your 60s
Your position here is a little tougher, but not without options. Some strategies to help you here are to put off Social Security as long as possible, consider a part-time job, and adjust your expectations so you can reevaluate your strategy. Cut spending and boost your savings where you can.

No one is going to tell you which stocks to pick or what fund to go with. Those decisions you're still going to have to make with the help of your advisor. But what the experts can tell you is to cut your spending and maximize your savings-including your investments. Yes, the market's down, but look at the stock market trend over the last 30 years. It will bounce back, make no mistake.

What have you done with your portfolio in this time of crisis? For those who've pulled out of the stock market completely, do you ever see yourself jumping back in?

Avoiding Black Friday

2008-11-26T08:08:15Z

'Tis the Season! For retailers to be worried, that is.

Black Friday, one of the biggest shopping days of the year, is causing some retailers a lot of nervous tension. Best Buy, Wal-Mart, and other big chains are slashing their prices even further than normal to draw in the crowds. But as most of us know by now, some deals aren't really worth the hassle of long lines and crowds.

And all of which have been cleverly designed to keep you spending-especially on things you can't afford-and put yourself further in debt. Don't get us wrong, we've been known to hear the siren's call of "buy one, get one" and all that. It's just that there are deals to be had year round, and we don't want to see you wild-eyed at 3:30 am, crushed against the door of Dillard's as the teeming masses yearn for cashmere and cable knits. It's so...undignified.

And the forecast for this Black Friday is rather grim. Experts are saying many consumers are saying 'no' to Friday shopping and are discovering that they can find these so-called "early bird" deals online, right now. Hmmm...shop in pajamas, next to a roaring fire? Yes, please.

Tell us, will you brave the wild and participate in the madness that is Black Friday, or will you stay snuggled in bed with a warm blanket and comfy pillow? Man! Decisions, decisions. We feel for you....we really do! Happy Thanksgiving!

Indulgence Overload

2008-11-24T14:49:46Z

When does a treat stop being a treat and start becoming routine? And would you recognize it if it did?

We've all got our little vices and we're not suggesting that you should give them up completely. But, there's a difference between an occasional treat and something that bleeds your wallet dry (Like that little trip to The Mega Coffee Chain EVERY morning.)

If you do enjoy the coffee, stop by your local grocery store and pick up a bag-at least you'll get more than one cup for the price. Get into the habit of turning on your coffee pot before your morning shower and taking a cup with you when you leave for work. Of course the coffee you buy at the grocery store won't be like they make it at your favorite place, but that's what makes it a treat. For your morning routine, a cup of good homemade coffee for pennies is just what you need. Pretty soon your new routine will feel just as comfortable and you'll save money in the process.

Coffee isn't the only "treat" we tend to have. Around here, it's the weekly mani-pedi and going out to lunch that's causing low cash flow. Share some of yours with us, and how you're managing them to stay frugal!

Wham, Bam, Thank you, SPAM!

2008-11-24T12:17:40Z

Introduced by Hormel in 1937 as Hormel Spiced Ham, SPAM has worked its way into popular culture as well as onto the shelves of stores in 43 countries. Although it's made from pork shoulder, it's been the butt of many jokes over the years, the most famous probably being the Monty Python skits.

A staple on camping trips, purchased regularly in Australia and eaten with eggs, rice or noodles as a breakfast meat in Asia, SPAM gained popularity in the United States during lean economic times and is currently making a comeback as wallets shrink and belts tighten.

Watch this video about the much maligned pink meat and chime in on your thoughts about SPAM.

The Scoop on Store Closings

2008-11-21T10:50:15Z

Going, going, gone. Stores are tumbling like dominos as a result of the current economic slowdown.

If you've been holding onto a gift card you might want to run, not walk to the nearest store and redeem it while they're still in business. At times like these retail stores respond by halting expansion and shuttering underperforming or redundant storefronts (think Starbucks).

But don't go by the lists floating around cyberspace--some of them are old. Snopes.com has a current list (11/18) with sources cited:

The Ann Taylor chain of women's clothing stores is expecting to close 25 Ann Taylor and 39 Loft outlets in 2008 (out of approximately 960 stores), with another 53 store closure by the end of 2009

The Caché chain of women's specialty apparel stores closed 14 underperforming outlets, but is still has 295 stores across the country and is still opening new stores.

The Charming Shoppes chain of plus-size women's apparel stores has closed 150 of its approximately 2,360 outlets.

The Circuit City chain of retail electronics stores filed for Chapter 11 bankruptcy protection in November 2008.

The CompUSA chain of consumer electronics stores was sold to the Gordon Brothers Group restructuring firm in December 2007 and began liquidating all 103 of its outlets in January 2008.

The Dillard's department store chain closed 20 outlets in 2008 and said it expects more store closures in 2009.

The Disney Store chain was re-acquired by the Walt Disney Co. in March 2008; Disney has since closed 98 of its 322 North American stores.

The Eddie Bauer chain of casual apparels stores shut down 27 outlets in the first quarter of 2008 and planned to close a few more stores by the end of the year.

The Ethan Allen chain of home furnishings stores closed 12 retail design centers and two service centers in 2008.

The Foot Locker chain of shoe stores chain closed 274 outlets (out of more than 3,700) in 2007 and another 60 in the first quarter of 2008, with more such closures likely.

Whitehall Jewelers acquired the remnants of the Friedman's and Crescent chains in early 2008 after that combined company entered bankruptcy, then Whitehall itself filed for Chapter 11 bankruptcy protection in June 2008 and began liquidating and closing all 373 of its remaining stores.

The Gap chain of clothiers, whose brands include Old Navy and Banana Republic, is closing 85 of its 2,677 stores (most of them branded Gap outlets) but is still opening new stores.

The Movie Gallery/Hollywood Video video rental chain filed for Chapter 11 bankruptcy protection in October 2007. Under the bankruptcy reorganization (which ended in May 2008), the chain closed 542 Hollywood Video stores and 378 Movie Gallery stores.

The Home Depot chain of home improvements stores announced in May 2008 that it would be closing 15 underperforming outlets.

The KB Toys chain of retail toy stores entered Chapter 11 bankruptcy protection in January 2004 and at that time announced plans to close 375 of its outlets. It emerged from Chapter 11 reorganization in August 2005.

The Kirkland's chain of home decor stores is expecting to close 130 (of its approximately 335) outlets by the middle of 2009.

The Levitz Furniture chain filed for Chapter 11 bankruptcy protection (for the third time in ten years) in November 2007 and shortly afterwards began the process of closing its stores and liquidating its remaining inventory.

The Macy's chain of department stores closed 11 (of its approximately 800) outlets in 2008.

Pacific Sunwear closed 74 underperforming stores in its d.e.m.o. line in 2007 and closed all 154 of its remaining d.e.m.o. stores in 2008. (The company has not so far announced plans to close any of its core Pacific Sunware outlets.)

The Pep Boys chain of auto supply and repair stores closed 31 low-return outlets (out of approximately 600 stores) at the end of 2007.

The Sharper Image chain of electronics and specialty gifts stores filed for Chapter 11 bankruptcy protection in February 2008, then began closing and liquidating all 184 of its outlets in June 2008.

Sprint, a global provider of voice, data and Internet services, announced in January 2008 that it would be closing about 125 of its 1,400 retail outlets.

Talbots Inc. announced in November 2008 that it was seeking to sell off its chain of J. Jill casual clothier stores. Talbots has already shed its Talbots Kids, Talbots Mens and U.K. businesses and has closed an additional 28 Talbots stores (out of about 1,400 total outlets).

The Wickes Furniture chain began liquidating merchandise and fixtures at locations nationwide in February 2008 as part of bankruptcy proceedings.

Wilsons Leather (the Leather Experts) announced that it would be closing all 260 of its mall-based locations & 160 will be shuttered permanently, and the remaining 100 will be remodeled and revamped as a "Studio" concept focused on fashion accessories for women.

Zales Corp,, which operates Zales Jewelers, Zales Outlet, Gordon's Jewelers, Peoples Jewellers, Mappins Jewellers, and Piercing Pagoda, closed approximately 105 retail outlets (out of 2,130) in 2008, half of them kiosks and half of them stores. However, the company also opened approximately 100 new outlets in 2008, so the net change in the number of Zales-operated stores was relatively small.

Source: snopes.com

The Lights Are Bright...

2008-11-19T11:07:28Z

If you're into the creative scene, particularly that of Hollywood and Broadway, then you know it takes A LOT of money to finance these projects. The upside is that these projects create jobs and get people working toward a common goal. The downside is that during economic hardships, funding for these types of projects is usually the first to go.

That's Entertainment.

Broadway used to be a happy medium between art and money, but in recent years the shift has been much like Hollywood's. It's all about what can sell. Creativity has long since been stifled to make room for cookie-cutter work with a guaranteed audience. But, even with all of that money, times are still tough and investors are scared—to say nothing of individual donors.

The response from Broadway to this problem is to cancel shows. While there are many that don't agree with simply canceling shows as the solution to the financial problem, the more "radical" suggestions won't be implemented until there are no other options.

What say you, patrons of the arts? Are investors right to pull out from their creative interests in favor of more sustainable investments? And what are arts organizations to do in times of crisis? Tell us if your plans for the coming year include taking in shows and films as a means to "forget your troubles, c'mon, get happy."

How to Get a Debt Free Degree

2008-11-17T11:06:17Z

It's possible to leave school with no debt...rare, but possible. There's a new blog in the blogsphere that's dedicated to students and saving them money. Officially, the blog release date is December 1st, but we're getting the jump on it a little early to share some great content with you guys.

Studenomics.com has a few tips on how students can actually graduate college debt free. Even better, the budding community has also chimed in with some great tips of their own:

Live at home. Yeah, we know. But it'll save you tons of money and make sure you don't have to come back home after school because of uncontrollable debt issues, which is so much worse.

Buy used textbooks and share with others. Most people don't even crack open their textbooks after class is finished, so finding creative ways to save on textbooks because they are the biggest culprits of credit card debt.

Take more credit hours. Many schools may allow for more credit hours that are already factored into your tuition rates. For example, some may allow students to take 21 credit hours rather than just 16. Sure, there is some major sacrificing on your part - especially with time and your social life-but think of the benefits. With that schedule, you'll probably finish a semester or so early. You'll save money, get a jump on your future, and you're more likely to have less debt because you didn't waste money on partying. Hey, we're just saying.

Alright, now it's your turn. What can students and their parents do to help cash-strapped grads leave school with little-to-no debt?

Tips From a Recessionista

2008-11-13T15:00:36Z

Unless you’re living in a cave somewhere in, I don’t know, rural Alaska, far, far from civilization, you’ve probably noticed that our economy is in the tank. And despite last week’s presidential election of Barack Obama and his message of change and hope, it will take some time before things stabilize and we’re back on track.

In the meantime, many of us are choosing to embrace our inner recessionistas, shunning the big-budget shopping sprees and pricey meals out that we may have enjoyed in the past in favor of clothing swaps and cozy dinner parties in. But quaint as all that sounds, it isn’t always easy to go from spendista to recessionista, to save for a rainy day instead of splurging on a cute, new pair of Wellies the second we spot anything less than clear blue skies. Luckily, our dear friend Wendy at The Frisky has some awesome tips for getting over the hump, like writing a budget, editing your wardrobe and beauty routine and how to get the most you can, secondhand. Who knows? You might actually use these tips even after the tide turns. After all, it pays to live frugally always.

How are you becoming more of a recessionista? Share your own tips!

Small Change, Big Difference

2008-11-12T12:02:49Z

Change is hard. There. We said it.

But that doesn't mean it can't be done! It's why we're here and it's why you're here. Not only does our community have some of the best tips on change available on the web, but we try to round up the best of the best online for you, too!

Like these from The Simple Dollar on reducing your debt. The writer, Trent, advocates a day-by-day approach, which sounds easier than it is. Therefore, he's given some useful tips for managing each day as you go.

Make your daily goals clear and concrete. As Trent points out, "I will spend less money today" is not specific enough. It relies on memory to tell you how much you spent the day before, even a week before. Instead, try to go with goals that are more measurable, such as "The only money I will spend today will be for groceries and bills."

Make your daily goals realistic. In order to succeed, you must understand that this process takes a little time. Don't set a goal where you prepare yourself for failure. "I will pay off three credit cards today" isn't realistic for most people. If it's within your range to do so, you wouldn't be reading this. Choose realistic goals that will help you be motivated along the way.

Consider the big picture. You have to consider whether or not your daily goals will have an adverse affect on your overall plan. If you say that you won't spend any money at all today, that likely means you're putting off spending for another day. Instead, try to focus on not spending any money outside of your budget.

Keep a journal to mark you progress. It's important to keep track of your accomplishments, and even your setbacks. You can analyze what you were doing and make changes, jot down ideas to make it easier, or just talk about your struggles. If you prefer to type, start a blog. It doesn't have to be public if you'd prefer to keep it to yourself. Either way, make it a part of your daily routine.

Trent had several other tips to help make the day-by-day planning a little easier, so we highly encourage you to check it out. Do you find that you are overwhelmed by the big picture, or do you already break things down to daily goals? Please share any experiences you've had with daily planning to reduce debt-we want to hear it!

When Daycare Costs More Than Your Salary

2008-11-10T11:48:58Z

For many families, spending is being cut to the bare minimum. Having cut everything they can, they're now turning to one of the nation's largest expenses in household budgets...daycare.

Many places with year-round wait lists are now struggling to fill open positions. It's no longer a matter of choosing daycare over owning a second car or some other expense. It's a matter of choosing to feed the family.

Parents are finding it exceedingly difficult to meet the demands of childcare costs when many of them are being laid off or having their hours seriously reduced. In those cases, they're able to stay home with the kids while they look for work. In other cases where the cost of daycare has outpaced that of rent and mortgage payments, parents are turning to friends and family for help. Some are even taking nightshifts for the extra money and the fact that their kids are asleep. Even more alarming are the reports that parents are simply taking their kids to work and leaving them in the car with food and water while they finish their shifts (a very. bad. idea.)

Something to consider if you're in this situation is a family co-op. We know lots of families in our neighborhoods who are sharing childcare duties. Perhaps there are a few stay-at-home moms and dads who wouldn't mind watching the kids for free while you work, as long as it's reciprocated of course.

What other daycare solutions can you think of or have you had to use? What advice can you give to other parents in this situation? [USA Today]

What Obama Needs to Do About Debt

2008-11-07T09:14:54Z

Now that the election's over, the real work begins. Already pols and pundits, as well as writers across the globe, are offering advice about what should take place in Obama's first days and weeks as President.

Gosh. And we thought that after you became leader of the free world, things got easier.

An interesting bit appeared today on what Obama should do to reduce the nation's debt during his first 30 days in office. The author says that the president-elect will have a very narrow window of about 30-60 days to send a clear message about where we are heading financially. Some points for action he includes are:

Sending a very clear signal that we are going to begin to live within our means, spend what we earn, eventually begin to save. This requires a bipartisan program that makes both Democrats and Republicans most unhappy as we begin to restructure our debt.
Picking and choosing who gets saved. We cannot spend a few hundred billion more, every week, without major consequences. Some banks, some major companies, cannot be saved.
Creating budget transparency. CEOs who exceeded a budget by as much, or hid as much debt, as most governments routinely do would, at best, be fired. More likely they would be jailed. We need to apply a simplified Sarbanes Oxley to business and to state and federal government. While cutting in some places, the U.S does have to keep fast-growing start ups alive; it's where more jobs are being generated.

His final point is perhaps the best one: this financial crisis WILL pass. But it's going to take work and commitment on everyone's part. Let us know what you think the new president should do about the economy, and what you're doing to reduce debt as well.

What Does McCain Do Now?

2008-11-05T14:12:23Z

John McCain fought a good, long battle for the Presidency. After his concession speech (which we heard some Dems in our neck of the woods actually thought was very gracious, generous and humble) our thoughts turned to what someone does after a bid for the White House.

McCain is well past the age of "official" retirement, but it's hard to imagine him just not doing anything. Fortunately, there are a great many things to keep one occupied when going to the (Oval) office is no longer an option. And then there's the fact that he still has two years left in the Senate this term, and could run again in 2010 (which would make him a rich 80 at the end of his career.)

Whether he retires or not, we're sure that some R&R is on the agenda in the coming days. What a long, strange trip it's been...

What do you think? After a run at the highest office in the land, should McCain be thinking of ways to spend his retirement? Or should people who are as passionate about their jobs as he is keep working as long as they can?

The 10 Most Expensive Colleges

2008-11-03T10:10:52Z

The economy has taken its toll on everyone--including universities. Unfortunately, you're the one who has to bear the burden! We don't know what schools you're looking at as you save for college, but consider the priciest of the pricey:

George Washington University: Washington, DC - $40,437

Sarah Lawrence College: Bronxville, NY - $40,350

Kenyon College: Gambier, OH - $40,240

Vassar College: Poughkeepsie, NY - $40,210

Bucknell University: Lewisburg, PA - $39,652

Carnegie Mellon University: Pittsburgh, PA - $39,564

Colgate University: Hamilton, NY - $39,545

Columbia University: New York, NY - $39,326

St. John's College: Annapolis, MD - $39,154

Wesleyan University: Middletown, CT - $38,934

Based on what we (and most of our cohorts) spent time doing during undergrad, we aren't sure it's worth this kind of coin. A college education is definitely important, but so is being able to get by after graduation without huge loan payments (especially if you leave one of these fine institutions with a Liberal Arts degree as most tend to do.)

Do you think an undergrad degree from one of these colleges would give you enough advantage to warrant the expense, or is State U good enough for you? Let us know how you plan to finance education for you or your kids.

7 Side Hustles to Help the Family

2008-10-30T12:16:26Z

Jason over at Frugaldad.com impressed us this week with his post on "Seven Unique Side Hustles to Keep Your Family Afloat." Of course, Jason and First30Days are not advocating that you go to the local billiard room and "pretend" that you're a newbie and makes some bets. "Side hustles are a little different from traditional part-time jobs in that they generally involve you starting up something on your own," Jason writes. "They can range in complexity from selling yard sale finds on eBay to starting your own small business."

His suggestions include:
* Dog-walking
* Babysitting
* House sitting
* Lawn painting
* Blogging
* Installing holiday decorations
* Participating in surveys

Of course, you're not limited to this list. With winter encroaching, why not offer up your services to shovel snow or even rake leaves? Or bake some great cookies and sell them locally? All you have to do to make some extra cash is be creative, find a need out there that you can fill.

Have you come up with side hustles to get some extra cash?

Beware Credit Repair

2008-10-29T09:08:22Z

Let's face it, sometimes we all need a little help. And when it comes to our credit, we're not always sure where to turn.
There are lots of people out there who want to help you, but a few also will do anything to make a buck off your fear and insecurity. Knowing whom to trust comes down to knowing your rights, as well as the rules of the credit repair game.

How to recognize a credit repair scam:

You're asked to pay before the company has done anything. A legitimate credit repair company cannot charge you until they have completed their services according to the Credit Repair Organizations Act.

The company recommends you NOT contact the credit bureaus directly (BIG red flag!!)

You are asked to commit fraud or illegal activities.

Sounds like most of what a legitimate credit repair company can do, you can do for yourself. You are entitled to a free copy of your credit report every year and you can dispute any inaccurate information yourself for free--don't pay someone to do that for you. If you really do need some help getting started, several legitimate companies offer credit counseling which can help get your finances on track, and that may be worth the fee for many people.

If you've used credit counseling with success, or have a story that could help our community, please share it in the comments!

Student Loans and You

2008-10-24T09:21:09Z

If you've taken out a loan for college, that's cool. Almost everyone needs some help these days with the rising cost of tuition. Just make sure you're using the funds wisely, or you may find yourself way in over your head!

Kristy from Master Your Card shared her experience on how she used her student loans in college. Essentially, she used them for more than just school. Kristy took out a loan for $20,000 and took six months off from work to live off the student loan money.

While she may have enjoyed the six months for free at the time, the repayment on that unnecessary amount was probably really hard to pay back! She freely admits it was a stupid money move, but she's learned from her mistakes and is sharing with others in the hopes it won't be repeated.

Pretty bold to share this story with others, we think. Tell us what you've learned about student loans.

Can You Be Too Frugal?

2008-10-20T11:00:12Z

Have you heard the term "carborexic" or "energy anorexic" used to describe someone who is conscious of their carbon footprint? Personally, we think the [word]orexic thing jumped the shark at pregorexic, but whatever. The point is that as more Americans try to save money, they're taking the green lifestyle to extremes.

Sharon Astyk, 36, is a writer and a farmer trying to reduce her family's energy use to 10% of the national average. From the sounds of it, they're making excellent progress.

Mrs. Astyk has unplugged the family refrigerator. During the warmer months on their farm, they use the refrigerator as an ice box with frozen jugs of water as the coolant. During the warmer months, they store their milk and butter outside. They have a homemade composting toilet and get their heat from burning wood in the stove. The four kids sleep huddled together to keep warm during the colder months. Being that they live on a farm, they grow and raise most of their own food. They spend approximately $1,000 a year in consumer goods, most of which they buy used. They also air-dry their clothes.

Mrs. Astyk says she's heard all kinds of comments about her lifestyle, from the nicer "they're just eccentric," to the more rude "they're completely nuts." Either way, she knows she's making a difference in the world and doesn't really care what others think of her. While we think that's a wonderful attitude to have, we're not so sure we're on the bandwagon for "carborexia."

It sounds a little like Survivor: Little House on the Prairie to us, but it seems to be working for them. What do you think? Is this too much, or are Mrs. Astyk and her family pioneers (pun totally intended) that will lead us to a cleaner Earth and less reliance on credit? [NYT]

It's About Sacrifice, Not Luck

2008-10-15T16:07:41Z

Being a stay-at-home parent takes effort and skill, and no one knows that better than Jason over at Frugaldad.com. When he was recently told that he was "lucky" because his wife was able to stay at home and take care of his child, he argues that his family has made their share of sacrifices to "pull off this lifestyle." Among them, he lists:

"We both drive old, used vehicles (mine is really old!). We did upgrade to an SUV when we had our second child, but we bought it used via a private sale and got a great deal. I drive an 18 year-old van back and forth to work."

"Our entertainment budget is virtually non-existent. We try to take an annual vacation, but we usually only get away once every two years or so."

"We have less money in savings. Since living on one income tends to be tight we have had less money to save and invest over the years, which will probably lengthen the amount of time I have to work."

"The opportunity for one of us to stay home with the kids is not granted by luck, rather by making other sacrifices in our lives. The bottom line is it is all about priorities. If you are willing to make certain sacrifices, being a full-time parent can be a rewarding experience for both you and your kids."

This got us wondering what you have to say. In what ways have you sacrificed to have the lifestyle you want? [Frugaldad.com]

A "New" New Bailout Plan

2008-10-15T11:11:28Z

With the final approval of the bailout, there seems to be a split on how people feel about it. Some think it's unfortunate, but necessary while others believe it's a complete waste of taxpayer dollars.

One American has written his own version of the bailout plan and how it's more beneficial to us, and it's been making the rounds on the internet. We got it in an email and thought it at least discussion worthy (if you can keep up with the math, anyway.)

"I'm against the $85,000,000,000.00 bailout of AIG. Instead, I'm in favor of giving $85,000,000,000 to America in a We Deserve It Dividend.

To make the math simple, let's assume there are 200,000,000 bona fide U.S. Citizens 18+. Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up.
So divide 200 million adults 18+ into $85 billion that equals $425,000.00. My plan is to give $425,000 to every person 18+ as a We Deserve It Dividend.

Of course, it would NOT be tax free. So let's assume a tax rate of 30%. Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam. But it means that every adult 18+ has $297,500.00 in their pocket.

A husband and wife has $595,000.00. What would you do with $297,500.00 to $595,000.00 in your family?

- Pay off your mortgage - housing crisis solved.

- Repay college loans - what a great boost to new grads

- Put away money for college - it'll be there

- Save in a bank - create money to loan to entrepreneurs

- Buy a new car - create jobs

- Invest in the market - capital drives growth

- Pay for your parent's medical insurance - health care improves

Remember this is for every adult US Citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back. And of course, for those serving in our Armed Forces.

If we're going to re-distribute wealth let's really do it...instead of trickling out a puny $1,000.00 ( 'vote buy' ) economic incentive that is being proposed by one of our candidates for President. If we're going to do an $85 billion bailout, let's bail out every adult US Citizen 18+!"

Some pretty interesting thoughts, and not totally invalid. Assuming the government required that each homeowner paid off their mortgage from these funds—or at least those in default—the remaining funds would be spent in one of three ways: People would blow it, which would help the economy by putting the money back into the cycle; People would save it, which would give banks more money to lend out, particularly to small businesses, which would create more jobs; or people would pay off their credit card debts and that helps the credit crisis. None of these options would be a bad thing.

What do you think? Obviously this wouldn't happen, but let's play 'what if.' What if this came true? Would it help the economy better than the current plan? Is there anything you'd take out or add to this plan?

Budgeting in College

2008-10-10T10:01:00Z

Kid, you're on your own! And while the freedom is heady, it can also break the bank. For parents reading this, you've probably tried to impress upon your student that the money you've given him is for emergencies. But in college, every social opportunity constitutes emergency. With that in mind, here are a few ways you (or your child) can manage the money a little better.

1. Balance your checkbook

Does anyone even have a checkbook anymore? Even if you don't write checks, you should be writing down your transactions- debit card transactions don't always clear immediately as it depends on how they're used. So, make sure you take the time to look at your account and reconcile your balance to what the bank says you have.

2. Pay your bills on time

If you're late, you get a late fee. That's money that you don't have to spend if you just set up a schedule that pays your bills on time. Set a reminder on your phone the week before the payment is due. Write it in big red letters on your wall. Stick a sticky note to your computer. Whatever it takes for you to remember, but paying your bills on time will save you money and establish a positive credit record.

3. Change your drinking habits

Most college students hit the bar Friday and Saturday. And Thursday, and sometimes on Sunday afternoons. Fiscally speaking, you're pouring money down the drain. The best solution to save money is simply to forego drinking. However, we know that's not going to happen overnight, so try drinking at home, or going to a party to drink, instead. Beer purchased from a store is much cheaper than from a bar. All we ask is that, either way, you drink responsibly.

4. Cut back on eating expenses

It's definitely important to eat, especially during those late night cram sessions, so we're not saying you should practice the starvation diet or anything. However, we are saying plan your meals and snacks ahead of time and you'll be able to save a ton of money by avoiding fast food and pizza all the time. You probably have a meal plan...use it! That's like free food, man!

These are just a few of the many quick tips that can help college students save money. What others can you think of? [College News]

Rich by 30

2008-10-08T10:24:46Z

Turning 30 means different things to different people. By 30, most of us feel like real life has pretty much settled in and is here to stay. Others feel like they've still got a few good party years left. Whatever your attitude towards turning 30, it's still a good time to reassess your goals and situation—especially when it comes to your money!

Here are some financial milestones to help you get your bearings:

1.Cut back on the credit cards

You know it already, but too many cards can lead to a lot of debt. Even one credit card can do lasting damage! Stop overspending, assess realistically where you are with your debt, and make a plan to get out of it as soon as possible. You don't want to carry it into your 40s—trust us.

2. Own a home-or have a plan

Right now may not be the best time to buy a house, particularly since you need a down payment. Make a plan and start saving. Having a home can be a valuable asset in the right market at the right time. If you're renting, get the best you can for the money you're spending—be open to different neighborhoods and options, especially if you need to free up cash for savings or paying off that debt!

3. Have skill sets

By the time you've reached your 30s, you should have a few years of job experience under your belt. Because today's market requires such diversity and adaptability, it's not a bad idea to take on extra skills and learn what you can when you can. It sets you apart from the rest. At this time, you might be considering grad school or courses to enhance your options. Weigh out the cost vs. benefits to your career, and then give it a go.

4. Give away money

Yes, you read that correctly. Here's the thing. We're a society that spends money to feel good. When something bad happens, most of us head to our favorite stores and slap down the credit card. Instead of wasting money on something you'll enjoy for a day or two or three, try donating to a good cause. Giving back to the community or to those in need can really put your financial picture and life in perspective.

5. To thine own self be true

Shakespeare really had it figured out. The truth is, most of us don't even know what's important to us because we haven't taken the time to figure it out. We go with the flow or with what's convenient and easy and that's where we get into trouble. Take the time to figure out your goals and parameters. Is it important to impress friends and strangers? Then why does everything need to be name brand? This is the time to use your money on the things that really matter to you.

6. Get to know smart people

You won't have all of the answers, and that's OK. It's a good idea to surround yourself with the right people, those who can really help you save money. For example, get yourself a good tax preparer, financial advisor, attorney, and insurance agent. You may not need them often, but when you do, get the best that you can afford.

If you're in your 30s, how do you feel about where you are financially? If you're a bit older, chime in with your own financial wisdom!

Four Rules for Financial Success

2008-10-06T10:18:31Z

It's disheartening to consider that back in 2004, Fed chairman Alan Greenspan actually believed that the economy and consumers would benefit if lenders provided more alternative mortgage packages than just the traditional fixed-rate mortgage. And so, thinking he was doing the country a great service, he started in motion what has ultimately lead us into a downturn.

But, he wasn't alone in his actions, and we can't lay the blame solely at his feet. The fact is, we as a nation bought into a life fueled by credit. Those who took on riskier mortgages, knowing they couldn't afford the payments (but spurred on by the American Dream) bear some of the blame for blindly trusting lenders. Lenders, of course, have had a good bunch of blame heaped on them recently, and for good reason.

Sadly, blame won't undo the mess, so let's move forward into what can be done. Suze Orman has some great rules of financial responsibility that we can all learn from that will help us keep our money in order:

1. Don't take anyone else's word.

The truth is, we should be learning about our finances every step of the way. We should be questioning those offering us advice and consider the source carefully. If someone offering financial advice is trying to sell you something, consider that there may be ulterior motives there. Make educated decisions based on research and understanding rather than listening to the word of someone else, even if it's the most venerated financial advisor in town.

2. Wishful thinking can lead to financial ruin.

As Suze says, "Making financial decisions based on what you 'hope' will happen is where the trouble begins." Take the mortgage situation for example. People took on these rate cuts upfront "hoping" the bubble would continue to grow and their homes would appreciate in value enough to refinance quickly. Home values inflated 35% within two years is unusual, but homeowners didn't stop to consider this at the time.

3. Plan for the worst.

This doesn't mean you have to expect the worst, it simply means you need to understand that things come up. So it's perfectly natural that you should have a back up plan, just in case. Energy costs have gone up, healthcare has increased on the out-of-pocket expenses, and the credit card bills seem like they're stacking up as most families just try to meet their ever day needs. This is why an emergency fund is important. Having at least three-to-six months expenses tucked away can help people deal with the unexpected in life.

4. If you can't afford it today, then don't buy it.

Putting something on a credit card knowing you won't be able to pay for it when the bill arrives is just adding to your financial trouble. Consider the amount of interest you pay. If you're lucky, you're looking at 7%. If you're a little riskier then you might pay upwards of 10%. If you're a downright financial mess, then you could be paying in excess of 20%. For an item that is merely a want (not a need), that doesn't make a lot of sense.

According to Orman, following these rules when making financial decisions can help us make better choices and feel more financially secure in them. What do you think? Do you feel you've made the right decisions when it comes to your finances? [Yahoo Finance]

Can Warren Buffet Save Us?

2008-10-03T12:01:47Z

Part of what's been so hard about this whole credit crisis is that we're not hearing from any economic leaders about how to fix the problem—we're relying on the government (which is in ridiculous debt all on its own) to tell us how to deal with it.

Enter Warren Buffet. For years, he's been a voice of reason on investing, reminding us that sticking with things for the long-haul is preferable to short-sighted investing or selling. Earlier this week, he sat down with Charlie Rose and shared his thoughts on the Congressional bailout plan and what the American people are thinking and feeling.

Buffet believes Congress needs to quickly approve the plan and move forward. He compares our situation to Pearl Harbor, saying that each day we wait to enact a plan digs us deeper into the war. He says he has never seen people so fearful economically, and that we need to do what's necessary now to rebuild both credit and trust, two things the American economy can't live without.

Rose also asked Buffet point blank what he's prepared to do personally (as the richest man in America, it's a fair question.) Buffet says he's willing to help the government in terms of advising when he's asked to do so.

It's a long interview at 55 minutes, but worth a watch if you've got the hour to kill. Buffet is, as Rose says, a trusted voice in economics and really does break down what we're going through into understandable language. Watch and let us know what you think.

Minding Your Money

2008-10-01T21:32:08Z

When the Dow plummeted earlier in the week, many investors got more than a sinking feeling—they panicked. It's natural, says First30Days expert Brent Kessel, co-founder of Abacus Wealth Partners."When experiencing financial distress, our natural inclination is to want to do something. With investing, this usually backfires," he says.

We asked Kessel what you can do today to feel better about your financial position when there seems to be nothing but bad news around every corner. Here are three things he recommends to help cope with these turbulent times:

1. Consider decreasing your discretionary spending in the short run. Then re-evaluate the need to reduce longer-term spending in January. While the dollars may not seem like a lot, shifting the momentum from "Yes" to "Not right now" has a tremendous psychological effect, and over time, a very positive financial impact as well.

2. Refinance your mortgage. Do this if you have less than two years to go in your fixed rate period (assuming you plan to stay in the home long-term), or if your rate is above today's rates. Call or email your advisor for a good mortgage broker recommendation if you don't have one.

3. If you have more than $100,000 in any one bank, wire the excess into your wealth management account so that it can be invested. As famed investor Sir John Templeton said, "To buy when others are despondently selling and to sell when others are avidly buying takes the greatest fortitude and pays the greatest reward." Now is such a time. Even if you'd prefer to have your extra cash in money markets, they will be more secure at TDAmeritrade than in a non FDIC-insured account at your bank.

In summary, says Kessel, this too shall pass. He and his associates believe that owning a diversified global mix of equities, along with a healthy dose of real estate, bonds and commodities, is the best way to ensure your financial freedom in the future. In plain english? Mix it up—don't keep all your eggs in one basket! For more great advice from Kessel, listen to his Change Nation podcast interview.

Understanding Student Loans

2008-10-01T11:26:06Z

With the rapidly rising cost in education coupled with the fact that Americans aren't saving as much as they need, student loans are inevitable. You can plan and prepare to the best of your ability—here's what you should know.

Generally speaking, there are two types of loans: subsidized and unsubsidized. The basic difference between the two is who pays the interest while the student is in school. With a subsidized loan, the government pays the interest until the student begins his or her loan repayment period. With an unsubsidized loan, the student pays the interest.

Each student is limited to specific amounts each year that they can borrow in subsidized loans. When borrowing becomes a necessity, it is recommended that students take the max available to them in subsidized loans first, then move to unsubsidized loans. There are several types of unsubsidized loans available to students and their parents, so it is recommended that you speak with an advisor to map out the best course for you and your child.

However, it's important to know that the loan repayment period on any student loan is vitally important. Student loans are not counted towards a bankruptcy and must be repaid. If a student defaults on their loans in any way, they can have their wages garnished, their tax refunds withheld, and/or they can be sued. It is important that student loans be kept current.

How are you fairing in your college preparations for your kids? Are student loans going to be in the picture? For those of you already there, how did you handle student loans, and what advice can you give parents getting ready to have kids in college? [College News]

Bailing Yourself Out

2008-09-30T11:41:13Z

Whether you are a victim of the credit crunch or just haven't been paying close attention to your finances, now is the time to regain control of your financial life. If there's anything to learn from the messy state of the economy its that we have to be prepared as individuals to ride the bucking bronco of the market no matter where it throws us.

So, be done drowning your sorrows! By taking action and committing to a more frugal lifestyle, you can hang on to what you have and feel like you're still living your life well. By the way, living frugally doesn't mean ramen noodles every night in front of network TV because you can't afford cable (though, come to think of it, cutting out cable might not be the worst idea ever.) This is just about making choices that will "bail you out" if you're struggling to make ends meet between paychecks.

Here are some tips to get you started:

1. Make do with what you have. Do you really "need" new boots and jackets this season, or can you still wear last fall's looks? Is there a way to update them with a new scarf, buttons or other accessories? Scour flea markets, resale shops and stoop sales for things to make your old things new again. And remember...no one is looking at you and saying "That's soooo last season." We promise.

2. Just say no. To going out, that is. If you've got $25 budgeted for the week's activities, don't blow it on impromptu drinks after work on Monday! You'll find yourself overspending because you don't want to bail on the things you've already planned. Another way to get through unexpected expenses is to say yes to hanging out, and no to spending. So when those aforementioned drinks are offered, say yes and leave your wallet behind, or offer an alternative free or low-cost activity.

3. Eat at home. It seems like a no-brainer, but going out to eat at lunch and dinner will wreck your finances. Stock up on groceries Sunday, pre-make some meals and snacks. If you're prepared and know there's food at home, you're less likely to order in, pick up take-out or go to dinner. Miss the social aspect of a shared meal? Invite friends over for a potluck dinner—keep the menu simple and light, and ask that everyone contribute a little something.

What have you been doing to keep personal finances on track? Share your frugal living tips with us!

The Credit Crunch Gets Animated

2008-09-30T10:53:24Z

Credit crunch? Bailout? Dow tumbling? You may be aware of these things percolating in the news, but do you know what it all means for your future investments and why these economists seem so freaked out?

If you're just as confused as the rest of us as to how these economic issues directly affect you, then check out this great video from Abcnews.com. Taking a page from the old "School House Rock" videos, reporter Robert Krulwich explains why a credit crunch could bring the economy to a screetching halt.

After you watch the video, share your thoughts here! Did it help you understand the current crisis a bit better?

Sneaky Debt

2008-09-29T08:59:22Z

Debt works a lot like this ninja cat. It creeps up slow and steady. And until it pounces, you have no idea you're in over your head.

According to a study conducted in July, younger generations are not faring well when it comes to debt. Of those carrying a credit card, one in three are over $10,000 in debt. At first the use is recreational and easy to pay off. But then it becomes habit, and it's easy to use that card every where you go. The more you use the card, the more you spend until suddenly, you've accumulated $10,000 in debt and you have no idea how you got there.

Rule number one to reducing debt: Stop spending.

You'll never reduce your debt unless you can find a way to stop relying on your credit cards to meet your monthly expenses. You'll have to learn to live below your means.

Reducing your debt requires commitment and a plan. You can tackle the approach many different ways, some we've talked about before. But, the key is that you have to find a way to stick to it.

So, what methods have you used to get out of debt? Did your debt sneak up on you like cat? Or were you aware and just in a place where you couldn't stop spending? [On Wall Street]

Race of the Conglomerates

2008-09-26T11:05:25Z

In a late Thursday night deal brokered by the FDIC, Chase has taken over Washington Mutual's banking operations for $1.9 billion. Not to fear though, according to the FDIC, business will continue as usual for customers come Friday morning. WaMu's shares have plummeted 90% in the last year due to concerns over their large portfolio in subprime loans.

The FDIC said that taking on the WaMu banking operations, like they did for IndyMac Bank, would have placed a serious strain on an already struggling insurance fund. But letting Washington Mutual fall under wasn't an option, as doing so would result in disaster. If WaMu had gone under, it would have dwarfed the largest bank failure in U.S. history - Continental Illinois National Bank in 1984 held assets of $33.6 billion. To compare, WaMu had assets over $309 billion at the end of last quarter.

So, those of you banking with WaMu, what changes have you experienced? Are you concerned about this takeover, or do you feel confident that Chase can handle the business? Are you concerned that Chase and Bank of America are closing in on the competition? [USA Today]

The Inexpensive Birthday Bash

2008-09-26T10:41:08Z

When it comes to living the frugal lifestyle, the folks over at Wise Bread sure do have some great tips! This time they've come up with some ideas that are fun for the kids, but don't necessarily cost a lot of money.

A word to the wise, though. If you're going to spend the money for a party, a great location where kids can let loose and have fun trumps decorations. Forget the directions, just let the kids have fun!

Check out these inexpensive ideas for wonderful birthday bashes:

- Basketball party held in your driveway

There's no cost, except for the cake, ice cream, and gift you buy your child. It's about the kids interacting and having fun, all while giving the parents a chance to mingle.

- Baseball party in the park

There may be a small fee associated with this, but it won't be much. While the kids expend energy running after fly balls, you can sit back and watch them have a good time (and be thankful they'll be tired by bedtime)!

- Sleepovers

Who doesn't love a good sleepover? With the girls, it's all about dressing up, debating who's the cutest boy in class, and endless rewatching of chick flicks. With the boys, well, we're not boys so their activities are a mystery to us. But, we've heard it's a good time to be had by all!

Other inexpensive venues that you can consider are your local church, YMCA, bowling lanes, and movie theater (which can be pricey depending on the area and the length of time you rent it).

The idea is to make it a good time without overwhelming the kids with too many activities. Let them have a little input and make the planning session a family event. Giving them responsibility may help them enjoy the whole process even more. It is their birthday after all!

What other frugal ideas on birthday parties can you share with fellow parents? Any activities that you found to be fairly inexpensive, but a big hit with the kids?

The Gift of Credit Hours

2008-09-24T09:42:34Z

With the holidays coming up, many people are making their lists and checking them twice. Some gifts are naughty, and some are nice (OK, enough with the holiday rhymes!) The point is, there is one gift that's sure to help your child's future and it doesn't come with rhinestones or detachable parts!

As many families are struggling with cash right now, the thought of saving for college is daunting. But it doesn't necessarily have to be a burden you carry alone. Many family members and friends offer your kids the gift of cash during holidays and birthdays, so why not have them direct that money to your designated 529 plan? It keeps your kids from blowing it and it lightens your load a little...maybe not a lot, but every bit counts.

Make it fun with your kids, too. Let them see how their money for college is growing and encourage them to make deposits themselves. It'll teach your child an important lesson in saving for the future (and we're sure they'll get plenty of other gifts they can enjoy today.)

Would you ask people to contribute to your 529 in this way? What other methods have you used to save for your child's education?

Saving in September

2008-09-19T13:02:00Z

Since we're already thinking about school schedules and whatnot now that September is in full swing, it's only fitting that Sallie Mae and UPromise want us to be thinking about saving for college. All.Month.Long.

That's right, everyone! Happy National College Savings Month! We didn't get you a gift or anything, unless you count the gift of useful information...

Did you know that only 9% of families paid for college last year using a college savings fund? That means most people out there don't know about 529 Savings Plans that can help them set aside money for college, free of federal income tax. Hello? Why aren't we all taking advantage of that?

There are so many ways to save for college, and even though the price of tuition is going higher and higher, don't let it stop you from saving what you can! Tell us how you're setting aside funds for your student (or yourself) as we get back into the swing of the school year. Do you have a 529 in place? Why or why not? [Forbes]

Sleep Tight. Don't Let the Bed Bugs Bite!

2008-09-19T11:10:25Z

When you think of you're child's living situation at college, you're probably envisioning the worst case scenario as pile of dirty laundry in the corner and a ring around the bathtub. But many college dorms are fighting a battle much worse than soap scum—bed bugs. Apparently, the little buggers get cozy in the summer months and by the time the fall season starts, they’re not ready to vacate their little nests. The result is that students are suffering the consequences, and many have reported severe health issues with the problem.

It's not that bedbugs pass disease to humans—in fact, as bugs go, they're totally harmless physically. According to one of our editors (who's apartment building went through a bed bug bout and decontamination) the challenge is psychological and lies in sleepless nights and the process of exterminating one's living space. You and your student may be forced to shell out cash for bed-bug proof mattress covers, exterminator costs, and laundry. Lots and lots of laundry (if sheets, towels and clothing have been exposed, they must be washed in hot water and dried at high heat to kill bugs and eggs, then placed in airtight plastic bags until the room is proven rid of bugs.)

The schools are doing everything they can, including bringing in bed bug sniffing dogs (which experts say doesn't really do anything) and a heating device that heats the room to 130 degrees, killing the bugs but not harming the students’ possessions (steam heat has been proven to kill bugs). That’s all well and good, but the fact remains that those costs have to be paid somehow. That money has to come from somewhere and it usually comes from the students in the form of tuition and fee hikes. So, if this problem persists, it could mean a slight increase in tuition.

When saving for college, it’s best to prepare yourselves. Try to inspect the room beforehand and make different arrangements if necessary. If the problem is bad enough, you may have to consider off-campus living, which will cost more. Consider running the numbers both ways, i.e. on-campus and off-campus living, and make sure you’re prepared for either eventuality.

Have you had an experience with bed bugs at your school, or your child’s school? What tips can you share with others facing a similar problem that will help them save money? Is this a big enough concern for you to consider your child living off-campus? [Bedbugger]

The $300K Question

2008-09-18T11:50:35Z

The issue really is more complicated than just money. A man desperate for some advice posted a question on a discussion board asking what others thought.

The problem was essentially this. He had been working for a job that went belly up and lost $100,00. At 38, he had very little to show for his years hard at work, and he was finding it difficult to get by on an income of $60,000 in Seattle with a stay-at-home wife and three growing kids. He's been offered a job in Iraq for one year with a salary of $290,000. Should he take it?

There's much to consider here. First of all, with a little frugality, the family could probably live quite comfortably on an income of $60,000. Most people live on less. The next issue is safety. Is the money worth putting your life at risk when you have a family depending on you? Even for a year? Then there's the issue of what that much distance and time will do to his and his wife's relationship.

Yes, the money is good and he's providing a service to his country, but is all of that worth missing time with his family and potentially damaging his familial relationships? We think there's more to life than having more money, but it's a tough situation. Share your thoughts in the comments!

Top 6 Financial Fears

2008-09-17T09:42:51Z

According to Yahoo's survey, many consumers are suffering from high anxiety, and it's no wonder with all the wonderful news out there right now (no, no sarcasm here, no siree). The best way to help lower your stress is to understand what triggers it in the first place. Here's a list of the top six financial concerns most consumers have, according to the survey:

1. The rising cost of living. The biggest issue here is the most folks are worried their salaries won't keep up with the cost of living. Isn't it amazing how even as your worth at work grows, you still seem to need more money? Perhaps some frugal living tips can help you budget as needed.

2. Economic downturn and job insecurity. In terms of job security, you have to make yourself versatile and valuable to the company. Take a class that teaches you a new skill—employees that can do multiple tasks within a company and still work efficiently are highly valued.

3. Consumer debt. A very valid concern. The average household is in debt an average of $25,000 or more. You can reduce debt by devising a repayment plan that involves organizing your debt in order of how you intend to pay them. Any method works fine so long as you stick to the plan. Once one debt is paid off, apply the amount from that debt to a new debt. Rinse and repeat.

4. Housing Crisis. With home values plummeting, people have reason to be concerned. This is where a diversified portfolio comes in handy and the reason that one shouldn't put all of their eggs in one basket. If the majority of your net worth was tied up in your home, you need to diversify. Work on building a portfolio and talk to a financial advisor to guide you.

5. Savings and retirement. Start putting money aside, even if it's just $5 a week. Surely you can cut a latte or some other small convenience once or twice a week to build a savings account. Also, live at least one raise behind. If you get a raise, don't change your spending habits, put that money in savings. And be sure you're contributing to your 401(k) up to at least your company's match. If you're not, you're missing out on free money!

6. Everyday transactions. Many polled felt that retailers and grocers play games with prices and it's too hard to keep up with. The best advice we can offer is to clip coupons and price shop. Before making a purchase, consider your options. Can you get it cheaper somewhere else? Consider shopping at large consumer clubs like Costco or Sam's Club and going in with family or friends to divide up the costs. For example, get a 20 pack of instant oatmeal for $3 and divide that with a friend or family member. You'll get 10 packs (same as a regular grocery store) for half of what you'd normally pay, though prices vary by area. Still, it may be cost effective.

Do these concerns match your own? If there's anything missing from the list, add it here! [MSNBC]

Another One Bites the Dust

2008-09-15T16:44:25Z

And another one gone, and another one gone. Another one bites the dust. Queen could probably make some serious royalties in the banking industry this year as two more banks have fallen despite the government's best efforts to keep them afloat.

You may have heard that two more banks fell over the weekend, causing quite a stir on Wall Street. Both Lehman Bros. and Merrill Lynch have gone under. Fortunately for Merrill Lynch, Bank of America stepped up to the plate and saved them with a $50 billion buyout, safely sliding Bank of America into the leader position in terms of deposits and investments and leaving Chase in the number two spot.

Sadly, there is no white knight for Lehman Bros. as the company filed for Chapter 11 bankruptcy. Under Chapter 11, the company will be able to restructure their internal workings while creditors are held at bay. It is likely they chose to go with Chapter 11 as opposed to Chapter 7 so that they could handle the liquidation process themselves. In Chapter 7, the court appoints a trustee who then takes over the process of liquidating the company.

Unfortunately, many investors could face losing some money under Lehman's deal; however, those with Merrill Lynch should be fine. The buyout brought Merrill Lynch shares to $29, which considering it was about to go bankrupt, isn't a bad place to be. So, those shares and the investment portfolios held with Merrill Lynch should be fine.

Does this news stress you out? Are you thinking about keeping your cash in the mattress or in a shoebox in the closet? [USA Today]

For Love AND Money

2008-09-15T13:02:10Z

We've all heard that most divorces are because of money problems, but the concept of marrying strictly for love is fairly new. For centuries, people have married because of the financial benefits such unions could provide. Now, we're not advocating an arranged marriage to a complete stranger for money, but finding someone with similar financial goals as yourself might be a good idea.

When looking to tie the knot, it's important to understand each other's money situation and whether or not you're financial "soul mates." Sometimes love blinds us to the realities of our differences, but when it comes to money, that's an area we can't afford to be blind in. So, make sure it's a discussion you have BEFORE the wedding.

If you discover that you're not financially compatible, don't panic. Even if you don't see eye-to-eye on all financial issues, there are steps you can take to ensure that your marriage is a happy and prosperous union.

1. Open Communication

Talk about your money and how you like to spend it. See if there are any areas that you match and find out where you can compromise on the areas that you don't. Remember, hiding things from your spouse because he or she will be angry is not open communication. Both parties need to be completely honest to avoid marital troubles down the road.

2. Run Your House Like A Business

Make a budget that is acceptable to you both and stick to it. Keep track of income, debts, and expenses and make any financial decisions together. Treating your household and the income within it like a partnership in a business allows both parties to feel some ownership over it and the results. Even if things go bad for a time, when you share the responsibility, you're able to handle it better.

3. Be Supportive of Careers

If you're successful professionally, that affects your household's bottom line. If you want to succeed as a partnership, then both parties have to be supportive of each other's careers and those occasional late nights. If kids are part of the equation, then discuss what options are best for them, as well as your partnership.

4. Invest In The Marriage

Spend both time and money together to strengthen the marital foundation. Think of it this way, you're making small contributions over time to build a strong and happy life together, just like you do with your retirement funds. If you wait until retirement to invest in the marriage, it's too late.

If all else fails, you can seek a mediator to help you and your partner work out your differences and find common ground. But, if you want a successful marriage, you'll need to find a way to make financial decisions that are best for you both.

What other tips can you offer fellow readers about making marriage and finances go hand in hand? Do you married folks still struggle with this sometimes, or have you found the secret to success? [NY Times]

Banking on a Bust

2008-09-12T11:37:52Z

Secondhand stores have always been somewhat of a niche in the overall market, but with the whole green movement and the financial need to be frugal, these stores are beginning to see more profits than they've had in previous years combined.

Consumers have found that if they have unwanted stuff around the house, they may be able to sell it for cash. Secondhand stores will usually take unwanted goods from people for a fraction of the cost, allowing consumers to put a little money in their pockets and the secondhand store to turn around and sell it for profit. Typically, the item is sold for half of it's retail value, earning the company a profit over what they paid for it.

So, if you have a pair of designer jeans that ran you about $150 when you bought them, you can earn about $25-40 for them when you sell them to a secondhand store. The store can then turn around and sell them for $75, making a small profit.

Obviously, $25-40 isn't much for something you paid $150 for, but beggars can't be choosers. Besides, it's got to be less painful than selling your plasma every week, right? So, if you're looking for a little extra cash, consider selling some unwanted household items instead of just throwing them away.

Have you had any experience with selling your items to secondhand stores? Is this a good way to recycle and make a little cash? [CNN]

More Than a Buck

2008-09-10T10:19:59Z

For those of you who are big fans of the 99 Cent Only stores, they've just announced an increase in prices for the first time in 26 years. Oddly enough, the price is still just under $1, but the move raises the prices enough to help the company offset the higher costs of business.

Fear not, you can still walk into your favorite dollar store and purchase an item for 99 cents. The price increase took it to 99.99 cents, which means a little more on the tax side. The company has reported two quarterly losses, and last month they lost $1.5 million-roughly two cents a share. This marginal price increase should be enough to help cover those losses while still letting frugal shoppers be frugal.

Have you ever shopped at a 99 cent store? Does this price increase really mean much? [USA Today]

Freddie and Fannie Get Owned

2008-09-08T09:39:28Z

In its most aggressive move to date, the government is now taking control of the nation's largest lenders in order to save them.

The government's plan is multifaceted and involves offering secured financing to both companies in order to pull them out of the financial trouble they currently face. Beyond that, the plan is to allow the government to buy the two companies' securities that are backed by mortgages, as well as receive $1 billion of senior preferred stock with rights to buy common shares equal to 79.9% stake in each company. Both Fannie and Freddie will be expected to pay the government quarterly fees beginning March 2010.

This aggressive takeover is believed to be beneficial as President Bush feels a collapse of either company would have serious consequences and pose "unacceptable" risks for the economy. According to Treasury Secretary Henry Paulson, a takeover was necessary because if either company were allowed to collapse or deteriorate further, it would "affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance."

What do you think of the government's actions in this case? Is it warranted, or do you have some reservations that the government now owns two of the nation's largest companies? [USA Today]

Parents Have Homework, Too

2008-09-05T13:13:49Z

Money's running short across the country, but when it comes to your kids' education, parents always feel a little guilty (or are made to feel guilty) when they don't fork over the cash to help with fundraising events and the like. Here's a few tips to get you through the fall bake sales and band-uniform drives.

First of all, realize that money isn't the answer to everything, and you don't have to BUY all of the baked goods for that cookie sale. Instead, donate a little of your time. Volunteer to help out with events and after school activities, if you can. Actually bake those cookies or cupcakes and take them to the school yourself. There aren't many schools out there where the faculty isn't overworked in some way, so realize that it's ok to offer your time as opposed to your wallet.

If time is a commodity you don't have, not to worry, there are other things that you can do to help shave some costs.

Lunch

This is a big one and works the same way as your daily lunch trips to the deli do...it's expensive to eat out. And, the healthier your child's cafeteria, the more expensive it is. Reduced lunches will save you some money on that end, but realistically, a packed lunch is best. Some kids will balk at the idea of taking a bagged lunch to school, but if you include some of their favorites every once in a while, you might find them more open to the idea.

After School

This one seems to be the big expense for many parents: day care or after school programs. They're expensive, plain and simple. But options aren't as limited as one might think. One idea is to get a group of parents together that can take turns watching kids after school. Check with your child's school about a PTA list and get in contact with someone to see if there is an interest in such a group.

School Supplies

Yes, there are a few teachers who are particular about certain items and you'll need to wait for the supply list for those; however, the majority of school supplies has remained the same for many years. You know they'll need general rule paper, No. 2 pencils, erasers, crayons (depending on their grade), pens, a three ring notebook or two, and so on. Look for sales and deals and pick these items up throughout the year and keep them on hand for the start of the next school year. You'll save a little money and a lot of headache. And, honestly, things like pens, pencils, paper, and so on can be picked up really cheap at places like the Dollar Store.

What other frugal tips can you share when it comes to saving money for school? [Wisebread]

Investors Prowl for a Good Buy

2008-09-03T11:08:07Z

One of the most closely watched measures of stock value is known as the price-earnings ratio, or P-E. This measurement is currently at an all-time low, lower even than the ratios at the bottom of the last bear market. Some investors are panicking, and losing money. Others are looking at this as a sale!

Since a P-E shows how much investors are willing to pay per dollar earned by a company, in theory, the lower the P-E, the better the buy on the stocks. David Sowerby of Loomis Sayles says that investors will have to go back a long time to find a market in such a good position, in terms of valuation. What that means is that while the P-E is low, now’s the time to buy.

So, for those looking to buy, here’s a couple stocks that have a P-E of 8 or less (and they‘re all on the S&P 500):

Qwest (Q)

Make no mistake, there’s some risk in taking on an investment with Qwest. The telecom industry has suffered some anyway with cable companies offering combo products, but Qwest is hit on other fronts as well. Because most consumers are using cell phones these days and Qwest doesn’t have a large presence in that arena, they’ve taken some losses, which is why their P-E is 2.5; however, they survive because they keep their losses to a minimum by focusing on business customers and lower overhead expenses.

Regions Financial (RF)

We know what you’re thinking, why would you invest in any bank right now? Well, that’s precisely why it could be a good idea, according to some. Because the credit crisis hasn’t passed yet, the stocks are at a great price. If chosen wisely, when the banking industry rebounds, there’s a good chance of making a ton of money. Regions Financial makes the list because the P-E is less than 8, but regulators are clearly not concerned with Regions portfolio failing, as evidenced by the $900 million in deposits that it took in when Fed closed down the Georgia bank last week.

Clearly there’s a bit of a gamble in taking on companies such as these; however, experts say in terms of valuation, the market offers a very compelling return. Do you think you’d invest in companies like these? Do you hold any stocks currently with P-E ratios less than 8? [USA Today]

Powdered Milk, Anyone?

2008-08-29T08:59:28Z

In our ongoing quest to live frugally, we're finding some interesting uses for common household goods. And not-so-common ones...one of our staff just admitted that as a child, her mother gave the kids powdered milk (anyone else experience this?) It got us thinking whether there was other stuff that could be done with it (as with baking soda, for instance.) The treasure trove that is the internet gave us the following:

In the Kitchen

-Can be used for cooking–breads, cream, and whipped toppings to name a few

-Thawing frozen fish–the fish will soak up the nutrients from the milk and make it taste fresher. Just mix the powdered milk with water and let the fish soak.

Beauty Uses

- Makes a nice shaving cream (in theory) –combine the milk with enough water to make a thick creamy paste and apply as you would when shaving. The nutrients are supposed to help make your legs feel silky smooth.

-Bug bite and sunburn relief–make a paste by combining milk and water in equal parts and then apply to the affected area. In both cases it will take away redness and any stinging sensation.

-Milk bath–this is still used in countries around the world. Add some powdered milk to your bath and soak for a while. It will moisturize your skin and leave it feeling soft.

Household Uses

- Remove ink from clothes–just soak in milk and water overnight and then wash normally the next day.

-Fix cracked china–we don’t know if this works or not, but supposedly you can boil the cracked item in milk (on low for 45 minutes) and the crack will disappear. Apparently, the milk reacts with the kaolin to fix the crack from the inside out, but this could just be an old wives tale.

-Paint a room – yeah, we’re not too sure this is the most cost effective use of powdered milk, but you can combine 1 part water and 3 parts milk until you get the consistency of paint. It will be a neutral white color, so if that works then paint away. Just remember to let dry between coats like you would normal paint.

So what do you think? Would you use powdered milk in any of these ways? Share your stories and ideas so we can all live the frugal life! [Wisebread]

The Stock Market's Kryptonite

2008-08-27T10:45:26Z

The stock market is all about the price of oil these days, and as gas prices go up, the stock market goes down. There were several days where gas prices continued to go down and we saw an increase in the stock market, but hurricane Gustav has prices climbing again.

The reason for the inverse relationship is because as gas prices go up, consumers compensate for that in other areas of their spending. As a result, businesses have to adjust accordingly and the loss of revenue usually means the price of their stocks go down.

Some industries, like the airline and trucking industry, rely on oil to run their business. In some cases they can pass the extra cost on to the consumer and in some cases they can’t. When it starts eating into their profits because they can’t pass it on, that’s another reason their stock prices take a dive.

As investors tend to be forward thinkers, they don’t all wait to see if the price of their stocks will go down—they already know it will happen. So, as the oil prices increase, they start dumping stocks. That’s a big reason that Wall Street is hoping for gas prices to level off. It will bring a little more stability to the stock market.

So, now that you know why oil affects the stock market, have you seen a decrease in your portfolio because of it? What kind of strategy do you have in place to minimize your risk in this area? [USA Today]