Money Crashers

Charles Schwab’s 8 Step Savings Fundamentals Plan

author — Fri, 21 Nov 2008 04:28:44 +0000

I ran across this eight step plan rolled out by Charles Schwab to help others prioritize what to do with their money. Here is the list:

1. Contribute to your company’s retirement plan at least up to the amount of any match offered.

2. Pay off non-deductible, high-interest debt, such as credit cards.

3. Create an emergency fund with three months’ worth of living expenses (keep in a savings account).

4. Max out the rest of your 401(k) contributions.

5. Save for a child’s education (in a 529 savings plan or Coverdell account).

6. Save for a home down payment.

7. Pay down tax-deductible, high-interest-rate debt like mortgages, home equity loans, and student loans.

8. Keep investing.

The first four are the biggest priorities, and the last four are at your discretion and what stage of life you are in. I have to say that Charles Schwab did a good job with these steps. The only one I disagree with is lumping the student loans and home equity loans with a traditional mortgage. I know you can get tax deductions from the interest on student loans, but I would recommend getting them out of your life as soon as possible. Your degree doesn’t act like collateral the way a house does. The point of these steps is that you can still follow them no matter what the economy is doing. Unless you’ve lost your job, what the stock market does shouldn’t effect how you handle your money. I can speak for this blog and what I see written on many other personal finance blogs that you shouldn’t let hard economic times effect your personal financial behavior. What you really should be worrying about are the people who constantly try to make moves to increase the size of our federal government. The bigger it gets, the smaller your wallet gets and the more out-of-control spending occurs by the government. So, make a plan, get out of debt, and start saving money. You’ll need it, because the out-of-control credit era is coming to screeching halt.

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Bailouts, Bailouts, and more Bailouts

author — Wed, 19 Nov 2008 19:13:44 +0000

I could talk for days about these bailouts, but I don’t think you’re interested. We shoud be interested, but I’m just sick of it. Here’s the bottom line: We’re rewarding failure and punishing success. So many Americans want to tax the hell out of rich people and successful corporations, and they want to bail out companies that sowed their failures years ago. The auto industry has been failing for years. It’s not just because the economy is down for a year. They produced CRAP in the eighties and nineties. Toyota and Honda saw an opportunity, produced a quality, reliable product, and they took market share. The auto unions have gotten out of control, and they are sucking the life out of the industry. They have made it impossible for the “Big Three” to compete.

What’s your take? What do you think the long-term effect of all of these bailouts will be?

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6 Ways to Save Money On Your Holiday Party

author — Wed, 19 Nov 2008 18:13:07 +0000

The holiday party season is coming up, and your friends and family might be pressuring you to throw the Christmas party this year. Are you strapped for cash? You can still throw a pretty nice party on a strict budget. They key is spending less money on the small details. Don’t spend money in areas that most people don’t give a crap about. Here are 6 ways to save money on your party this year:

Send e-vite invitations either through Evite.com or Facebook. Some of your guest might not have facebook accounts, but for those guest that you know are facebook junkies, set up an event and invite friends and family to join the event page. It’s a great reference for them to look up the details of your party.
Do a pot-luck dinner. I know it sounds bad to be the host and ask people to bring food, but most guest don’t mind bringing one item. As the host, take care of the main dish, and prepare your own menu for side dishes and desserts. Then, give guest a specific dish to bring. They will appreciate the fact that you already thought through everything, and all they have to do now is follow directions.
Get a keg of beer. if you’re planning on having alcohol and you have a lot of beer drinkers coming, don’t buy cases of bottled beer. Beer cans look cheesy, so buy a keg and dress it up nicely in Christmas attire. You can get a keg of Bud Light for $40 to $50 at the grocery store. If you’ll be drinking wine, ask guests to bring their favorite bottle.
Buy in Bulk. Go to a wholesale store such as Costco or Sam’s Club to buy items in bulk that you’ll need for the party. Ask your guests to RSVP to make sure they are coming, because you don’t want to buy too much food that you won’t use.
Make your own decorations. Don’t fall into the trap of buying a bunch of extra Christmas decorations. Use what you have, and make extra decorations. Using outdoor lights inside is a good way to set the mood of your party, and if your house is decorated well on the outside, consider moving your party outside if the weather permits.
Plan Ahead. I always believe that when you have the time to think of ways to save money, you’ll save money. We often fall into the trap of spending more money because it’s convenient or we can get something quicker. If you want to throw a holiday party, start planning for it now and create a budget for it. Put a dollar amount for how much you want to spend on it.

Just talking about this makes me excited about Thanksgiving and Christmas. It’s such a great time of year!

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Choosing The Right Video Game System This Holiday Season

author — Tue, 18 Nov 2008 18:45:32 +0000

Whether you are buying for yourself, loved one, family member, or your kids, video game systems are one of the most exciting gifts to receive. But with the three major choices out there, it can be confusing for those that don’t read the latest gaming magazines. I don’t read the latest gaming magazines, but I’ve played all three systems quite a bit, and I own an Xbox 360. So, here is a little guide for helping you decide which system to buy this holiday season.

The Xbox 360

In my opinion, it’s the best overall system to own. The Xbox does the best job at making it an all-in-one solution for your home entertainment needs. And tomorrow, Xbox will be making a huge upgrade for all Xbox live subscribers to make it easier to watch HD movies and television shows and streem audio/photos from your computer to your xbox system.

The games are great, and the graphics are better. The insides of an xbox are basically a high-powered computer, and its abilty to process extremely complex graphics without hardly ever lagging is what makes Xbox so great. The Xbox live interface is also the best in my opinion. They have a great online marketplace, and the multiplayer servers work well.

The starter Xbox 360 is now going for $199, which will be very attractive for price-conscious buyers this holiday season. Just remember that this version does not come with an attached hard drive. The holiday pro bundle that comes with a 60gb hard drive is $299, and it should come with two games.

The biggest downfall for the Xbox 360 is that it runs like it’s going to blow up. Many users have experienced the dreaded “red rings of death”. When the Xbox overheats to the point that it damages the system, red rings around the power button show up, and you need to send in the Xbox to Microsoft to get fixed or replaced. Also, the accessories are very expensive. The wireless adapter is $99, but I suggest buying any accessories on ebay, craigslist, or discount site such as buy.com or amazon.com.

The PlayStation 3

The PS3 is very similar to the Xbox 360, because it offers many of the same features. I have never used its online environment so if you have a PS3 and use it online, please comment below about your experience with it. I have played the system, and it runs much more efficiently than the Xbox and the graphics and processing are amazing. PS3 is running a little behind on making it an all-in-one system for your home entertaining needs.

As far as prices goes, it’s the most expensive of the “big three” systems. You can pick up the 60gb hard drive version with two games and/or blu-ray discs for $399. The biggest advantage with the playstation 3 is that it plays blu-ray discs. So, if your family was looking to buy a blu-ray disc player this holiday season, and your kids want a new video game system, the PS3 is a great option.

Both the PS3 and Xbox 360 appeal more to teenage boys to middle-aged men. Titles like Call of Duty, Halo, and Gears of War are games that Nintendo’s graphics can’t keep up with and that is why so many teenagers prefer a PS3 or Xbox over the Nintendo Wii.

The Nintendo Wii

The Nintendo Wii is in a class all by itself. However, Nintendo has done the most annoying thing in the world and systematically manufactured these things making it extremely hard to find for the past three years. Recently, I have found it more often than in the past, so if you’re planning on buying it, buy it now and don’t wait until December.

The Wii Experience is completely different than any other video game system you’ve ever played before. It appeals to three year olds up to 80 year olds. The reason is that Nintendo has the made the Wii extremely easy to use and the interactivity of it appeals to all generations. Plus, it’s a good workout. The boxing game is literally a good cardiovascular workout. And now Nintendo has rolled out the Wii Fit which actually helps you put together a homemade workout plan. You can do an entire yoga class without leaving your house.

The Wii costs a reasonable $249, and the accessories are reasonably priced as well. The games are $49 dollars, compared to $59 for Xbox and PS3 games. If you have an 8 year old who wants a video game system, choose the Wii. If you are wondering what to get a family member or friend who would be intrigued by something like the Wii, then it’s a good choice as a gift. But like I said, if you get your 16 year son a Wii, he might crave certain games that the Wii is not designed to play. Likewise, the Wii is a great joint gift for you and your spouse, but if you are a girl with no desire to play video games, then get your husband an Xbox or PS3.

This isn’t the kind of review guide that you’ll find on the latest technology blog, but it’s an honest analysis based on my opinions about these systems. If you are still confused, I would say go with the Wii. The reason it is so popular is because it appeals to all generations. The games are childish, but highly interactive. And remember, buy video games and accessories at wholesale prices on ebay, craigslist, stores that sell used games, and garage sales. You will save a fortune by saving money on the smaller stuff.

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More Ways to Save Money This Holiday Season

author — Mon, 17 Nov 2008 18:30:09 +0000

David Bach was on Regis and Kelly this morning, and he gave some good tips for ways to save money this holiday season. Here they are:

- Start with a detailed list for gift giving: Write down all of the people that you want to buy a gift for, and then write down an amount you want to spend on them. Stick to that amount, but don’t go crazy over it. If you go over a few dollars, it’s not a big deal.

- Home Made Gifts: Make something for a loved one, and they will cherish it forever. But, don’t make something that looks like a three year old did it. If you’re not crafty, ask someone who is crafty to help you.

- Give magazine subscriptions: I love magazine subscriptions, but I hardly ever buy them for myself. They are cheap, and they make a great gift.

- Buy books as gifts: You can pick up a lot of classic fiction and non-fiction books for less than $10.00, and they make great gifts for people that you have a hard time buying a gift for.

- Buy in Bulk: Buy a box of wine, books, and gourmet candy for gifts for people like bosses, co-workers, hair dresser, landscaper, or trusted professional in your life.

- Secret Santa: If you and your spouse have a bunch of siblings, then ask them to participate in a Secret Santa game. Each couple will pick another couple secretly, and you can set a gift limit. Then, every sibling gets one nice gift, and you spend less by not buying for every family member.

- Re-use the bags: Re-use the bags you get at a department store for gift wrapping.

- Recycle newspaper, magazines, and wallpaper for gift wrapping.

- Christmas Cards: I’m not a big fan of online greeting cards, but there is another good way to save money on greeting cards. Take a digital picture of you and your family, then go online to Target, Wal-Mart, Kinkos, or any other store with photo printing. Upload the image and choose a holiday design. Last year, we got 25 online greeting cards for $12.00, and the envelopes were included.

- Cash in your reward points: Do you have a ton of credit card points saved up? Cash them in to buy items that you can give away as a gift.

There’s no excuse for not saving money this holiday season!

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7 Steps To Saving Money On Black Friday

author — Thu, 13 Nov 2008 18:21:09 +0000

The big day is coming up when retailers begin to smile and consumers go crazy over deals that aren’t really deals. I shouldn’t say that. There are some deals, but many people get caught up in the deals that aren’t really deals. There are basically three types of people when it comes to Black Friday.

The “I don’t care about black friday. It’s too crowded” person
The “I’m going to get that $300 flat-screen TV, hardcore to the max about Black Friday” person.

If you are the first person, then skip to the next article, but if you are one of the last two people, then read on for my tips about saving money on Black Friday.

Save money. Don’t go hog nuts with credit cards on Black Friday. If you go out on Black Friday with a $5,000 credit limit in your pocket, you’ll come home with more crap than you could ever imagine. Part of Black Friday that makes it so unique is that a domino effect occurs with shopping. You go out and see a bunch of people with carts full of stuff, and you feel like you need to spend more money. Saving a certain amount of money to spend on Black Friday is the only way to avoid impulse buys.
Bring Cash. If you don’t like carrying cash, then use your debit card, but I don’t even like using my debit card on Black Friday. Next thing you know, you can’t pay your utility bill in December.
Prepare yourself ahead of time. Visit Black Friday dot Info to familiarize yourself with the door buster and weekend deals.
Write a list of items you want to target. Make a list of sale items you want to grab first. This will help alleviate the impulse buy effect.
Avoid the crazy door buster deals. Most of these deals are set up just to get you in the door. They’ll only carry about 20 of them, and you’ll have to wait outside for a day to get in front of the line. I have not seen any door buster deals on blackfriday.info that are worth it yet. I know that Electronic stores put their off-brand, less quality items on door buster deals, and you can probably get the same deal the day after Christmas.
Take your time. Don’t get caught up in the frenzy. This is how you spend more money. There’s no rush, and it’s not a race to see who can rack up a higher bill first.
Go with friends or family. They can help you decide what to buy, if you should buy it, and if you’ll ever use it. Plus, you can make a day of it and spend some quality time with loved ones.

My wife and I started going out early on Black Friday as a little mini tradition. We do it more for the experience and the fact that it gets us in the mood for Christmas. Christmas isn’t about buying gifts, but being out at the store, listening to Christmas music and eating holiday goodies is a cool way to start off the Christmas season. If you find a deal on something that you have already been looking to buy, then go for it. I’ve found that parents can really save some good money on Black Friday, because the price of toys and games are dropped 10 to 20% over the Black Friday weekend of shopping. Good luck, and comment on your past success stories!

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Citi Announces Plan For Homeowner Assistance to Avoid Foreclosure

author — Wed, 12 Nov 2008 14:33:28 +0000

For those of you who own a house with a Citi mortgage, you might be interested in this announcement made by Citi Group to help homeowners avoid foreclosure.

Citi Group will reach out to a group of 500,000 homeowners to help them stay current on their mortgages, and it could result in a $20 billion dollar workout on existing mortgage balances. They will also extend their foreclosure moratorium to those homeowners with sufficient income to pay a restructured payment plan and work in good faith with Citi to stay in their home.

Citi is one of the last large mortgage lenders to roll out a homeowner assistance program, but it comes at a huge time of need. If you are behind on your payments or you think that you might get behind on your payments within the next two months, follow these three steps to help save your home.

Step 1: Immediately contact your lender and explain your situation. Prove to them with financial records that you cannot afford the current mortgage payment, but you want to save your home. Letting them know that you are interested in staying in the home is huge and being cooperative with your lender is the first step to saving your home.

Step 2: Start brainstorming ways to increase your monthly income. Can you take a certification course that will give you a raise at work? Can you take a second job? Can the stay-at-home mom take a part-time job? Do you have a ton of stuff that you can sell? Start brainstorming with your spouse or significant other to increase your income by about $500 to $1,000 a month.

Step 3: Create a support team. Let the people closest to you know that you are struggling to keep your home. You will be surprised at how they can help you, their ideas, connections, and the power of loved ones to support you.

Don’t give up on your home unless you have exhausted all possible options. It’s in your best interest to keep your home. No one wants to go through with foreclosure, including the bank. That’s why they roll out these assistance programs. Follow those three steps, and you will be on your way to keeping your house.

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Take Advantage Of Values In the Stock Market

author — Mon, 10 Nov 2008 17:32:07 +0000

Last night I had trouble sleeping, and for some reason, I started thinking about industries that are tanking and will be a value for investors in the future. So many of us are scared by the media when they throw out words like recession and depression. We automatically think we’re going to lose our jobs and all of our life savings. It’s simply not true. Yes, there are industries that are lagging, but the bulk of the economy is doing just fine. Circuit City filed for bankruptcy, but in my opinion, it has nothing to do with the economy. They were always the bastard child to Best Buy. They’re prices couldn’t compete, and their customer service was horrible. Sometimes, companies fail because they suck, not because the economy sucks. Getting back to my theme for this post, let’s take a look at the industries to keep an eye on and start buying at a value in the market.

The Real Estate Industry. It’s down right now, and it’ll stay down for a little bit longer, until the foreclosure situation settles down. Start investing in REIT’s and mutual funds that focus on real estate. The prices are so cheap, and this market WILL come back up in the next five years.
Renewable EnergyIn case you haven’t heard, Obama is now our president, and the democrats love talking about saving the environment. My guess is that they will pump a lot of money into efforts to continue to develop renewable energy sources. Look for mutuals and ETF’s that focus on companies dedicated to developing alternative energy sources.
The Financial Sector. They are down and investors won’t touch it. Snag financial services mutuals and ETF’s heavy on this industry, because you can buy it at a fraction of the price right now. Once the housing market comes back and the government cleans up the home lendinig industry, this industry will flourish once again with baby boomers starting to retire.

When interviewed by the media about the current state of the economy, Dave Ramsey always responds by saying that he looks at the stock market right now as a “half off sale”. It’s this kind of approach to money and life that makes people successful. If you wake up every day worrying about what is to come, you’ll never get ahead. But if you look for opportunities to become wealthy, increase your income, and develop a new career, you’ll get ahead in life. Think about that this week, and start looking into the real estate, financial, and renewable energy sectors for value stocks.

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Follow Me On Twitter!

author — Fri, 07 Nov 2008 18:52:51 +0000

This is social media week for Money Crashers. I have had a twitter account for a while now, but i’ve never got into it. I think if I had a cell phone with web access, i’d twitter more. Anyway, i’ve set up a twitter feed so that you can get an update on when a new money crasher’s or Erik Folgate dot com article comes out.

I want to increase my twitter following and if you follow me, I’ll follow you!

Twitter Me!

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FusionCash.Net: A Legitimate Website For Making Money From Home

author — Fri, 07 Nov 2008 15:32:04 +0000

I am sure you all are tired of the millions of scams and fake websites that claim you can make money from home. In a moment of weakness, you may have been tricked by one of these “infomercial-get-rich-quick” websites that promise you will make thousands of dollars per month. Then, you find out that there is always a catch or they keep billing you when they said it would only be a one-time fee. I know there are many stay-at-home moms and people just barely making it looking to make some extra cash. Fusion Cash is the only website that I have had good success with actually being paid for doing trial offers, taking surveys, and joining online clubs.

Here are some features about Fusion Cash:

It is COMPLETELY free. There are no sign-up fees or maintenance fees to start an account
They pay YOU to sign up. Right now, if you sign up for an account, they’ll start you off with $5.00.
You can link up a bank account to have the money directly deposited to it. They allow you to cash out after you’ve made just $25.00.
Their offers range anywhere from .25 to $30 per offer. You can choose offers that require you to put in credit card information or you can choose offers that require NO credit card information.

Watch Out For Sites Like This:

Don’t pay money to join a site that promises to make you money taking surveys or other offers.
Avoid websites that look like they were produced in mass. What I mean by this is that there are certain website programs that spit out websites with that certain “infomercial” feel to them. They have someone talking in a video, testimonials, very persuasive language, and other characteristics.
No website should ever ask you for your social security number. There’s no reason they need this information. Any income you earn would be reported on a 1099 tax form at the end of the year.

My Strategy With Fusion Cash Dot Net

First, you must have an email address that is not your primary email account. When you start doing these offers, almost all of them make you agree to allow them to send you massive amounts of spam email advertisements.
I do a mix of “no credit card needed” offers and trial offers that require a credit card. The ones that don’t require a credit card are easy, but you need to do about 10 or 15 of them to make it worth it. If you can average about $8 to 10 an hour doing these, then it’s worth your time. I like the ones that say “instant credit” because the money shows up quickly.
If you try the offers with bigger payouts, it will almost always be something where you sign up for a free trial of 7, 10, or 30 days, and they send you a product, software, or perform a service during that free trial period. Only choose the ones that say “instant credit”, but make sure you know exactly what needs to be done to receive the credit. Sometimes you need to become a paying customer to receive the credit, and that’s not worth it unless the offer is $30.00 and you can pay $5 to become a paying customer. You get my drift? Once you sign up for a trial offer, write down your account information and write down the date you signed up, how long the trial lasts, and the customer support number. You need the contact phone number to cancel the trial offer before they charge your credit card. Don’t wait until the last day, because they might pull something shady on you and still charge your credit card. Also, don’t cancel the offer immediately. The companies will pick up on this and stop using Fusion Cash as their affiliate.
Refer friends and family. you get $1 when someone signs up, $2 when they complete their first offer, and $5 every time they cash out for life. It’s a win-win situation for both parties, because they get $5.00 just for signing up. You don’t have to feel like one of those “get rich quick” jerks, because there is no risk on their part. Targeting stay-at-home moms is a good strategy, because they are always looking for ways to make a little extra cash while the baby is asleep.

So, are you convinced yet? I know this post probably sounds like an infomercial in itself, but I’m not being paid anything by Fusion Cash to write this post. I’ve been writing on this blog for almost 3 years now, so I think you can trust me when I say that this site is LEGIT. You won’t get rich off of it, but it’s a great way to earn some extra money to spend on entertainment, pay off debt, or invest in your retirement account. When I was using Fusion Cash on a daily basis back in 2007, I made $134.50 in three weeks. And I wasn’t even seriously using the site. If you commit to making $10 a day for 60 to 90 minutes per day, you can make $300 a month. That’s not bad considering it can turn into hundreds of thousands of dollars if you invest $300 a month for the next 30 years.

Click Here to sign up for an account and earn $5.00 instantly.

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