The Car Allowance Rebate System was signed into law last week, but there are already scammers out there trying to phish information from consumers looking to trade in their old cars. Here are some things you need to know to avoid these scams:

• If you come across any website that uses the term “cash for clunkers”, it’s not official by any means.
• The program will not get started until late July or early August, because regulators have up to 30 days to figure out a system for distributing and collecting vouchers.
• Avoid websites and “dealers” that ask for personal information or ask you to pre-register for the program.

Information about the real program:

• Allows up to $4,500 for a qualified trade-in to purchase a new car that gets better gas mileage than the trade-in.
• The purchase price of the new car must be less than $45,000
• Trade-in vehicles must be newer than 1984, get no better than 18 miles per gallon, and be registered and insured for the past year.
• You won’t get any more than $4,500 from the dealership, so make sure that your trade-in isn’t worth more than that. Don’t apply for the program unless you know that the car is worth less than $4,500 on the private market.

Here is a chart for the Car Allowance Rebate System qualifications. And remember, the mileage you get on a daily basis does not matter. The program will judge mpg based on the government data at FuelEconomy.gov.

There are many things that I hate paying for in life, but bank fees are definitely in my top three for most hated expenses. When you deposit your money into a commercial bank, you are already doing them a favor, because that increases their ability to loan more money to other customers and make money from the loan interest. Nickel and diming you with exorbitant fees is not good customer service, yet many banks still try to get away with it. Now with the government sticking their noses in banking interest rates and foreclosure costs, banks will look to fees more than ever to make up for lost revenue.

Overdrafting your bank account is not the bank’s fault, it’s your fault. This is a fee that you can prevent by taking a few steps to ensure it doesn’t happen. Here are some tips to make sure that you never pay an overdraft fee.

Stop using your debit card so much

The debit card is a great banking invention. It has made writing checks obsolete, but it has also made it harder to keep track of transactions. Before the debit card, you wrote a check for big purchases and paid cash for minor purchases. Now, you can go through an entire day using your debit card five to ten times on small and large purchases. The debit card is one of the biggest reasons for overdrafts. My wife and I do two things to avoid excessively swiping our debit cards. We give each other petty cash every two weeks to use on whatever want like a latte, lunch, or any other small purchase. We also take out cash for entertainnment, groceries, and household products.

Change your overdraft limit to $0.

Banks try to trick you into thinking they are providing a service to you by giving you an overdraft limit of “X” amount of dollars. This ensures that a check won’t bounce or your debit card won’t get denied. Then, they’ll slap an overdraft fee on you of $35, oh and by the way, it’s $35 for every transaction that goes through past $0, so you could end up with two or three $35 fees. Set your overdraft limit to $0, and your debit card will not be allowed to overdraft your account. If you are balancing your checkbook and keeping track of checks that you write, you should never have a problem with a check bouncing.

Use the ING Direct Checking Account

If you hardly ever write checks and your main deposits are your paycheck, the ING Direct checking account might be a good option for you. You get a debit card, the ability to write checks to anyone with an address, pay bills online, and set up direct deposit of paychecks. If you overdraft on your ING checking account, there are NO overdraft fees. It gives you a $500 overdraft limit and charges you a 7.25% APR on the overdraft amount. It’s still a fee, but much less than $35, unless you let it sit in the negative for a long period of time.

Here at Money Crashers, we want to help you keep more money in your pocket. Paying bank fees should not be in your vocabulary. They aren’t necessary, you have options, and if you are ever charged with a bank fee, most banks will credit it back to you if you take the time to call customer service and ask for them to remove the fee. I have had multiple overdraft fees removed, because I called customer service, explained the situation, and showed them that it was not a regular occurrence. Don’t pay overdraft fees!

During the summer, you will find great deals on LCD and Plasma TV’s, because manufacturers and retailers are looking to get rid of their older models to bring in new ones. As with any electronic device, manufacturers roll out a better model with more features every year to make consumers never be content with what they have. Apple does an amazing job with this tactic, and it’s one of the only things that annoys me about their company. The fact that the iPhone doesn’t have an FM radio, MMS text messages, and just recently got video playback is ridiculous. They have been adding one or two features to their iPods for the past five years, when they had the capability of adding all of the features from the beginning.

If you’re still in the “dark ages” and you haven’t bought an LCD or Plasma flat panel TV yet, you’ll pay significantly less than your peers as long as you don’t get sucked into buying the greatest TV since the ones last year. Analog television is done and retailers have a lot of incentive to draw you in their stores with deals on TV’s. Now is a good time to start looking for a deal on a flat panel if you have the money to buy one. I’m not going to get into all of the details about LCD, Plasma, refresh rates, contrast ratios, and all of that garbage, because there are millions of other sites that explain that stuff better than I ever will. If you are still wondering about the differences between plasma and LCD, here is my quick analysis.

LCD: It’s durable, it has vibrant colors, smooth pixalation, and it’s just better than plasma. There’s no glare on the screen, because it doesn’t have that plexi-glass covering that plasma displays have. It’s more expensive than plasma displays, but that’s because most people expect the existing plasma technology to go away soon.

Plasma: They are cheaper than LCD displays, they have a more clear and crisp picture than LCD. You can find bigger sizes with plasma. It’s less popular, because there are a lot of rumors that they will be changing the existing technology, and probably already have done so.

This post is not intended to educate you about what to buy, but instead, I want to help you save money once you’ve done all of your research. Here are a few quick tips:

1. Do your research! Knowledge is power. Use Google to your advantage, and read up on all of the different brands, specifications, and sizes. Evaluate your situation. Do you live in an apartment? Then, you should go for something in the 32″ to 42″ range. If you have a huge room, and you like to hold football watching parties, then 46″ to 50″ will suit your needs more. Also, figure out what is more important to you. Do you want a bigger television or one with a better picture? If you are upgrading from a standard CRT TV, then better picture shouldn’t be on your mind, because it will be much better than you are accustomed to.
2. Forgot about specifications that you don’t care about. The refresh rate, contrast ratio, and internet connection should not be important to you. TV’s have become like computers. The average user will never notice the difference between 1 GB of RAM or 2 GB of RAM. The average television watcher will never tell the difference between 5,000:1 and 10,000:1 contrast ratio. It’s silly to have someone at Best Buy try to upsell you a bunch of features that you’ll never care about. The only features you should really care about are resolution, the amount of HDMI jacks, and the size. You can find great deals on 720p resolution LCD TV’s right now, and they are great for your bedroom or as an extra TV. But for your main TV, you should go with 1080p, because it looks great for sports and movies. Also, don’t buy a TV with less than three HDMI jacks. All accessories that you buy now and in the future will use HDMI to hook into new TV’s, because you get audio, video and a great picture out of one cord.
3. Learn to negotiate. Retail stores will negotiate, but not if you don’t initiate it. There are two key ingredients to effective negotiation. You must have other options and knowledge. Knowledge is power, so don’t try to negotiate if you don’t know what you are talking about. Also, you need options. You need to show them that there are similar TV’s at a cheaper price from a competitor. Show a place like Best Buy, HH Gregg, or Wal-Mart that an online retailer has a cheaper price, and they will most likely match the price and give you 5% to 10% off that price.
4. Never buy HDMI and digital audio cables from a retail store. Monster cables are unbelievably overpriced, and there has been extensive research done by tech blogs that reveal that brand name HDMI cables are no better than generic HDMI cables. You can find HDMI cables from online retailers like Tiger Direct, Buy.com, and New Egg, for 60 to 75% cheaper than at a retail location.
5. Don’t buy into the paper-thin LCD TV’s. You can get LCD TV’s that are only 1 inch thick, and soon they will have ones that are only a 1/4 of an inch thick. This is crazy, and to pay $2,500 to $3,500 for this luxury just isn’t necessary unless you have a lot of money to blow. Don’t let the salesmen get you on this one.

If you have recently bought a new TV, we want to hear about your experience. What did you do to save money? Where did you buy from?

I was talking with one of my best friends today, and he was asking for my opinion about SEP retirement accounts, and how he can reduce the taxes taken from the self-employed income he earns throughout the year. He does some public speaking and lectures that earn him some side income throughout the year, and he noticed that the money he made in 2008 was taxed at about a 30% rate. He was asking me if it was wise to open a SEP account and contribute the maximum amount to it in order to reduce his taxable self-employment income. There are a few things to consider here…

Why is he being charged a 30% tax rate for his self-employed income?

If you believe that you will owe more than $1,000 in taxes due to self-employment income, the IRS requiires you to file quarterly estimates for your taxes. If you do not file quarterly estimates and your tax liability from extra self-employed income exceeds $1,000, the IRS will impose an 8 to 9% tax penalty on top of the taxes owed. If he was in a 15% income tax bracket with 8% SSN and Medicare taxes and an 8% tax penalty, that that’s a 31% tax liability! Yikes!

If this is you, then you should file a 1040-ES form with the federal government by April 15th of the current year, June 15th, September 15th and April 15th of the following year. Estimate any tax deductions and credits that you think you will take for the year, then calculate your estimates quarterly tax based on your adjusted gross income after deductions and credits. If this is side business income, it shouldn’t be hard to do, but if your self-employed income is the main source of income in your household, you should definitely pay a good accountant to help you file your quarterly returns. Don’t worry though, if you overestimate, you can claim the remaining back in your refund the following year.

SEP Accounts

A SEP Account (Simplified Employee Pension plans), is primarily used for small business owners who want to set up a retirement plan for themselves and their small amount of employees at a reduced cost with less red tape. It’s a better solution for small business owners to start a SEP plan to contribute to their own account and offer an added benefit to their employees. My friend has an EIN number, so he had a good idea of opening up a separate bank account, placing all side income into that account, and then contributing “pre-tax” dollars to the SEP account before he files his quarterly returns. SEP accounts allow employers to contribute up to 25% of their income per account holder. I explained to him that this is a decent short-term solution, because it helps reduce the amount of his self-employed taxable income, but it should not be his primary retirement account. I like ROTH IRA’s, because they take after-tax dollars, and the withdrawals are not taxed at retirement. Any professional whose income will continue to rise as they age, should always try to set up retirement money so it is taxed early on in life at a lower tax bracket rather than later on in life when he or she could be in a much higher tax bracket.

I am not an accountant, so please consult a qualified CPA before you make any tax decisions about self-employment income.

I found this on the Dave Ramsey Facebook page, which by the way, I was really impressed by his Facebook page. It gave me a good laugh:

Even though school summer breaks are just a distant memory for me, it’s still one of my favorite seasons, because I love the ragged-out, beach feeling, fireworks on the Fourth of July, and barbecues with corn-on-the-cob and watermelon. There’s nothing like it. Summer can also be a really expensive time of the year, because families are vacationing and parents are trying to keep their kids busy while they are out of school. With money being a littler tigher than usual right now, here are some tips for being more frugal during the summer while still having fun.

Family Dinners: Pick three or four family friends and start a family dinner night. If you have four families, then each family would cook once a week for the other three families. These are great nights for socializing and entertaining, because you can add a theme to your night and play board games or go out for dessert after dinner. You get a free dinner three days a month, and it’s something fun to do for free.

Create your own summer camp: If you live in a neighborhood with many stay-at-home parents, you can save a lot of money on summer camps by creating your own. Each stay-at-home parent would take the kids out to do something once a week. Choose a couple of free activities and a couple of activities that at a reasonable cost like a water park or the science museum.

Vacation within two hours of your house. You don’t need an elaborate vacation to have fun, and most people don’t need to travel far to find a great vacation destination. Rent a cabin at the nearby lake, a condo at the beach, or a hotel room in a city you’ve never visited before.

Ask your employer to work remotely during the summer. If most of your work is done on a computer and the phone, ask your employer if they will allow you to work from home for one or two days a week. This will cut down on costs for keeping your kids busy, and you’ll spend less money on gas and car maintenance. You’ll also be less stressed out during the summer!

Take advantage of local events and attractions. We often forgot about the vast array of local events and attractions that we pay for out of our taxes every year. Many towns, whether big or small, host many different summer events for the entire family. Local museums, libraries, and parks all have big things going on during the summer. Don’t forget about the little guy!

I have been playing with a fairly new personal finance application put together by Chris from Build My Budget. Sometimes, Mint.com and other personal finance budgeting applications do a little too much for some users. Build My Budget has a simple, easy-to-understand interface. it is a great application for people who want to build a monthly budget and stick to it.

There is a blog and forum to interact with other users, but the best part about the website is the massive educational center with a wealth of information about how to budget and WHY you should budget.

Chris, the creator of BuildMyBudget.com, was a successful financial advisor, but he left his corporate job behind, because he found himself selling products that he didn’t believe in to people who didn’t need them. He saw the need for people to get on a written budget. Many of his clients didn’t even know where their money was going on a monthly basis, and this was his inspiration for Build My Budget.

They don’t have the marketing budget of many of these other personal finance applications, so give it a try and come back to give me your feedback.

The reason many investors are skeptical about this stock market rally is because a little word called INFLATION has not reared its ugly head on our country’s economy. Don’t believe anyone when they say that inflation will not take it’s toll on our economy in the long term. We have spent money that we don’t have, so that means we printed money out of thin air without any backing. Check out this graph from the Heritage Foundation:

As you can see, the spending has run rampant when Republicans were in control of Congress and now when Democrats are in control So, the blame definitely crosses party lines. So as a smart consumer and investor, you need to start thinking about adding some investments that hedge against an increase in inflation.

Inflation Protected Treasury Bonds

These treasury bonds pay interest adjusted for inflation. The 20 year rate is about 2.4% above inflation. The rate isn’t great, but having about 5 or 10% of your tax-sheltered portfolio in TIPS could be a good hedging strategy.

Buying Gold

I am not a big fan of gold, because it has a horrible long-term track record, but in the past five years, we have seen unprecedented government spending, so I think it’s a good idea to have a small percentage invested in gold to hedge against inflation. Instead of buying gold coins and hiding them under your bed, put some cash into an ETF that tracks the price of gold such as GLD.

Sell Long-Term Bonds

source: Wall Street Journal

Sell any long-term bonds, too. A bond guaranteeing 7% a year for 30 years won’t be worth much if inflation hits 10% and CDs starting paying 11%. Treasury bonds have sold off sharply, but corporates haven’t. The yield gap between long-term investment grade corporates and 30-year Treasurys, which was nearly 5% in mid-January, has fallen to 3.5%.

Of course, if the stock market continues to do well while inflation increases, your money is better left in the stock market than in cash. The problem is that your stock market gains will be less, because inflation will eat up your gains. I am not saying that you should go out and buy a bunch of inflation-protected investments products, but just keep it in your mind, because it’s inevitable given our massive federal debt load.

The bill to regulate certain credit card policies has now passed through the Congress. Why is Congress regulating credit card companies? Because, they recongize the abusive consumer practices that credit cards perform each and every day, yet we still continue to use them. Here is an excerpt from the article from Fox News:

Meanwhile, the credit card portion is aimed at addressing consumer concerns.

The new restrictions would protect debt-ridden consumers from many of the surprise charges common in the industry, like over-the-limit fees and a charge to pay the bill by phone.

Some of the changes, including a requirement that cardholders receive 45-days’ notice before their rates are raised, are already on track to take effect in July 2010 under new regulations by the Federal Reserve.

But the legislation would put these changes into law and go further in restricting when and how banks charge people and who could get a card.

For example, the bill would require people under 21 to prove first that they can repay the money or that a parent or guardian is willing to pay off their debt if they default.

As banks scramble to make up for the lost revenue, cardholders who pay off their balance in full each month could also see annual fees become the norm and lucrative rewards programs canceled.

On the plus side for consumers, card holders who see their interest rate skyrocket because they have been late on a payment would get a chance at their older, lower rate if they pay their bill on time each month for six months.

Source: Fox News

I am about to sound like a complete pessimist, but that’s because I hate banks. These new regulations sound nice for the consumer, but banks will find a way to replace the revenue they will lose from the reduced interest rates. Going forward, it will be extremely tough to find a credit card without an annual fee and with perks such as reward points and cash back bonsuses. Basically, the government is going to make a bad financial product into a horrible financial product, because now you won’t even be able to get a gift card to chili’s or an extra $100 a year from paying all of your bills a credit card and pay it off immediately.

What are your thoughts on these new regulations? Will it improve credit cards or make them worse?

Here is a great skit from Saturday Night Live making fun of people who have no concept of not paying for something if they can’t afford it. I got a good laugh out of it.