Wise Bread (Debbie Dragon)

How to Set Up Automatic Payments

Debbie Dragon — Tue, 15 Nov 2011 10:36:34 +0000

Using automatic payments allows you to pay your bills on auto-pilot. You don't have to sit down and write out checks to mail to your creditors each month, and you don't even have to log into your various online accounts to pay your bills online, either. When set up correctly, automatic payments will simply pay your bills at the frequency you indicate, with no further action required on your part. (See also: 6 Tips to Shrink Your Bills Every Year)

There are two basic methods for setting up automatic payments: through your own bank or through each individual creditor's website. Here is what you need to know.

Automatic Payment Options Through a Bank's Online Bill Pay

Most every bank offers online bill pay. This allows account holders to send money from their checking or savings accounts to whoever they want, at whatever frequency they want. Some banks physically print checks and mail them to your creditors, while others will transfer money electronically.

You can set up your automatic payments by logging in to your bank's bill pay website, setting up a new payee, and entering the account number of the creditor or utility you want to pay in the appropriate fields. Most banks allow you to set up recurring payment frequencies — which means you can schedule your credit card payments, for example, to send each month before they're due and not have to worry about sending the payment on time. Some banks will not allow you to create recurring payments, in which case you will still need to sit down at the computer every time you need to make a payment.

The benefit of using a bank's online bill pay service over individual creditors' websites is that you can log in to one account and view all your scheduled payments in one place rather than logging in to multiple accounts.

If your current bank does not have automatic payments or doesn't allow you to set up recurring payments, then you can use a service like MyBankTracker.com to compare banks and find checking and savings accounts that do offer online bill pay services.

Automatic Payment Options Through Your Creditors' Websites

The other option you have for setting up automatic payments is through each of your creditor's and utility account's websites. Most credit card companies and utilities have online account management systems that allow account holders to log in and schedule payments. Many also offer options for setting up recurring payments — for example, you can set up most credit card accounts to pull money from your bank account each week, biweekly, or monthly.

Many utility companies allow you to set up automatic payments that will pull your payment from your bank account when it's due without any further action from you to make sure it gets paid on time.

Automatic Payment Pitfalls to Watch Out For

With all of the benefits offered through automatic payments, there are some pitfalls and potential problems to watch out for. The biggest pitfall people sometimes experience with automatic payments is a little mistake that can add up to hundreds of dollars. Let's say you set all of your accounts to get paid automatically, but then have an unexpected change in your income. If your income fluctuates, or a paycheck isn't deposited on time for any reason, you may find yourself with a bank account balance that isn't high enough to cover all of your automatic payments. This results in overdrafts that can quickly add up. If you had not been using automatic payments, a change in your income or delayed deposit isn't as big of a deal, since you could just hold off making your bill payment until the deposit clears.

If you are using your bank's online bill pay feature, make sure you know whether or not there is a fee for this service. Some banks offer online bill pay through savings accounts or checking accounts for free, while others charge a monthly service fee for access. Most online banks offer online bill payment for free.

When you use an individual creditor's website for automatic payments, sometimes there is a limit to how many payments will be made automatically before you need to log back into your account and schedule more. Thus, you might set everything up to make your payments on time and then realize three months later your automatic payments have stopped. Since you had been expecting your payments to get sent automatically, there's a good chance everything will be late before you realize the automatic payments ceased. Double check each of your creditor's and utilities' websites for details on the frequency of payments, and if you have accounts that only allow you to schedule a limited amount of payments at a time before you need to set it up again, make sure you mark it on your calendar or set an alert on your phone so you remember to log in and set it up again.

Written by Debbie Dragon and published on Wise Bread. Read more articles from Wise Bread.

Ways to Track Debt

Debbie Dragon — Fri, 09 Sep 2011 10:36:11 +0000

Debt — it's the four-letter word nobody wants to think about. But if you're not thinking about your debt, you're not keeping track of it — and if you're not keeping track of your debt, you're probably not making much progress toward paying it off! Knowing exactly how much you owe, who you owe, and how much your debt costs is the first step to paying it off. I personally feel you can't effectively manage your debt without keeping track of your entire financial situation in general — which is why many of the tools listed here also provide ways to create and manage your budget in addition to tracking specific debts. Here are some tools to help you track your debt and better manage your money. (See also: 4 Places to Start Your Debt Management Crusade)

Spreadsheets

The Money Management Template from Vertex42.com is a free alternative to Quicken. For the average family, an easy-to-use spreadsheet for creating and managing a budget is all the functionality you need to stay on top of your finances without wasting time trying to figure out the extra “stuff” provided in most financial software. Plug in all of your expenses and income, and keep track of where your money goes. Once you have your budget in place, or if you're just looking for a fast way to track debts without worrying about the rest, you can use the Debt Reduction Calculator (with the snowball method for paying off debt) to focus on paying off your debts as quickly as possible.

DebtTracker from It's Your Money is a simplified Excel spreadsheet that allows you to see a list of your debts all in one place, and then sort them by type of debt, interest rate, or current account balance. You can see about how long it will take to pay off each debt and figure out a few financial metrics like how much of your available credit you're using or your debt-to-income ratio.

Personal Finance Software

Mint.com offers free personal finance software that will pull in information from all of your financial accounts (once you set it up). Use their goal setting options to create debt payoff goals, and you can see how your debt payments relate to the total money you have coming in each month versus where your money is going. As a bonus, you can also access your information via a smartphone and set reminders for bill payments.

The You Need a Budget software helps you assign a “job” to every dollar you earn. The personal finance software makes it easy to import bank transactions, monitor all incoming and outgoing money, and take free finance classes online that teach you both better money management skills and how to use the software. In the process of all this budgeting and financial management, you'll keep track of each of your debts and focus on paying them off. (Editor's note: YNAB is one of Wise Bread's recommended budgeting software. Click here to see screenshots and our review of YNAB.)

Smartphone Apps

Pay Off Debt, an app for iPhone, iPad, or iPod Touch, gives users a quick and easy method for organizing and keeping track of their debt. The app uses the debt snowball method for suggesting payments on each of your accounts and is the perfect solution for people who like to manage their finances easily from their phone, iPod, or tablet instead of their computer.

DebtTracker Pro also uses the snowball system of paying off debt, but you can choose from other built-in payment strategies or come up with your own if you prefer. The app will give you a recommended payment for each account based on your payment strategy, allow you to view progress of debts paid, and provide payment reminders.

Written by Debbie Dragon and published on Wise Bread. Read more articles from Wise Bread.

Tax Penalties for Early Retirement Withdrawals

Debbie Dragon — Thu, 18 Aug 2011 09:48:14 +0000

There are many different types of funds and plan options that allow you to save for retirement. Many plans are provided by an employer as a benefit. The following are examples of some of the common retirement plan options:

401(k) — This is a retirement savings plan funded by employee contributions and typically matched by employer contributions. These plans are tax free until they are converted or collected.
Individual Retirement Account (IRA) — This is a plan that allows you to contribute a certain amount during your working years and defers the taxes on the earned interest until the plan is cashed in.
Pension Plan — A savings account that is arranged to be funded in part or full by your employer on your behalf.

Best of all, most retirement savings plans are tax-deferred until the time when you begin collecting on them after retirement. Encouraging saving for the golden years was the idea behind retirement savings, and thus early withdrawal from a retirement account comes with heavy consequences. (See also: The 10-Step Staircase to a Comfortable Retirement)

The Consequences of Withdrawals

Withdrawing from a retirement fund before retirement age is tempting, especially if an unforeseen situation puts you in financial hardship. But there are heavy penalties that come along with early retirement withdrawals. Consider every option before resorting to borrowing from your retirement savings.

The Internal Revenue Service (IRS) governs the tax-related fees and penalties associated with early withdrawal from your retirement plan. All plan distributors must follow the IRS rules. In addition to the IRS penalties, specific retirement plan administrators may impose additional penalties for early withdrawal — some heavier than others. Many of these penalties add up and end up being very costly.

The following penalties are common among most retirement plans:

Being penalized for borrowing from a plan prior to the age of 59-1/2 or before formal retirement occurs.
The amount borrowed becoming a part of your yearly taxable income.
A 10% tax placed on early withdrawals unless you can qualify for an exception with the IRS by meeting certain criteria.
The loss of the potential tax relief from having the money in a structured retirement fund.
The loss of the potential gains from having the money invested in stocks or bonds. By withdrawing funds, you lose the opportunity to gain on the investments you could have earned from that money.
In addition to the taxes you must pay on the money, many plans impose an additional penalty for early withdrawal.

These are just a few of the consequences of borrowing from your retirement funds. This is not an all-inclusive list, but rather a general idea of some of the common penalties imposed on those who borrow from a retirement savings plan.

Alternatives to Taking an Early Retirement Withdrawal

Due to the financial consequences of taking money out of a retirement account early, you should consider alternatives before resorting to the withdrawal.

401(k) Loan

If you have a 401(k) retirement plan, you may be able to take a loan from the account rather than a hardship withdrawal. When you borrow money in the form of a 401(k) loan, it is not taxable as income unless you fail to pay it back. When you pay back your loan, you are paying yourself back.

Roth IRA

If you have a Roth IRA, you are making contributions with after-tax money. This means you can take withdrawals from a Roth IRA at any time without penalty or having to pay income tax. For that reason, if you have more than one type of retirement account, it is always advisable to withdraw from the Roth IRA before any other retirement fund.

Bankruptcy

If you are in an extreme hardship, you may want to consider bankruptcy instead of pulling money from your retirement plan. Money in an employer-sponsored retirement plan or an IRA is excluded from bankruptcy — meaning a creditor cannot take from a retirement account to satisfy your debts.

The best advice is to consider every alternative before making an early withdrawal from any retirement fund. The financial consequences that come along with early withdrawal can be so heavy that making an early withdrawal from any retirement investment is almost never a sound financial decision — or a good way to invest in your future.

Written by Debbie Dragon and published on Wise Bread. Read more Retirement articles from Wise Bread.

Back-to-School Time Savers

Debbie Dragon — Wed, 17 Aug 2011 09:37:12 +0000

As summer comes to an end, it comes time to say goodbye to carefree mornings and prepare for the more structured days of the school routine. If your school mornings generally consist of everyone rushing around in the house, fighting over the bathroom, trying to make lunches, eat breakfast, and make it to school and work on time — and your after-school hours filled running from one kid's activity to the next — maybe the following tips will help your family get out the door on time with less stress. Ease into the school year with these back-to-school time savers. (See also: 10 Ways to Save Time With Batch Processing)

Retrain Your Internal Clock

A week or two before school starts, start getting the kids to bed earlier and waking up about the time you will need to wake up on school mornings. This is particularly helpful for families who have no set schedule during the summer weeks, and can help everyone ease back into the early morning routine.

Create a Morning Routine With Checklists

Children have greater success when they know what is expected of them, especially young elementary children. Figure out what needs to be done on school mornings, and what order it should be done in and create checklists for the kids to follow. For children who can't read yet, simple picture-based charts will work (a picture of clothes to show it's time to get dressed, cereal bowl for breakfast, toothbrush, etc.).

For older children, make a simple step-by-step list of things to do before heading out the door and slide it into a clear page protector. Then your child can use a dry erase marker to check each item off their list as they get ready for school each morning. When your children know what to do next without the need for constant reminders from you, it gives you some extra time to prepare their breakfast and lunches — and to get yourself ready, too.

Use the Night Before

Many families try to do everything in the hour or so after waking up. You can reduce a lot of morning-time stress by using the night before to get organized. Get clothes for the next day ready for everyone in the family, including shoes and accessories. When clearing the table after dinner, prepare lunches for the next day and get everything ready for breakfast — even set the table. Make sure all homework or work materials are packed in bookbags and briefcases and the bags are waiting by the front door or in some other designated spot. The more you can do the night before, the less hectic your morning routine will be. Starting the day more relaxed helps everyone continue the "good day" vibe for the rest of the day.

Post a Family Planner on the Fridge

Get a large dry-erase calendar to use as your family planner and keep it where everyone can see, at a glance, what is happening for the week or month. Consider using dry-erase markers in different colors for each family member's schedule to make it easy to see where each family member will be at any given time (Joey's baseball practice, Sarah's piano lessons, etc.).

Create a Study Area

Homework and study time is easier to manage if there is a designated area for each family member. You may create a desk area in each of their bedrooms or set up the dining room table as the study area — the location should have minimal distractions and all the supplies they may need to complete their assignments. You could keep a drawer in the china cabinet filled with pens, pencils, crayons, paper, scissors, and glue sticks, or ensure each child's desk has all the necessary supplies for getting the job done. If homework time is an issue in your home, establish a rule from the first week of school that requires homework or quiet reading at a specific time each day in order to gain video game or television privileges.

A little preparation and organization before the back-to-school rush begins can help keep your family on track, on time, and less stressed. Who knows? Implementing these tips in your own household might even give you a few extra minutes of sleep each morning!

Written by Debbie Dragon and published on Wise Bread. Read more articles from Wise Bread.

4 Things to Consider Before You Open an Online Savings Account

Debbie Dragon — Wed, 13 Apr 2011 10:24:08 +0000

Opening an online savings account is a fairly simple process that offers a number of benefits, from a higher interest rate to convenient access options. But before you switch banks or open an account with the first online bank you find, there are a few things you should consider. (See also: Think Twice Before Ditching Your Current Bank)

1. Interest Rates

Online savings accounts often have higher interest rates than their brick-and-mortar counterparts. This is because they have lower operating expenses and can pass on the savings to their account holders.

When a local bank advertises high-interest savings accounts, customers usually have to meet certain criteria for eligibility — such as providing a larger initial deposit, maintaining a minimum balance, keeping additional bank accounts with the bank, or limiting transactions in or out of the high-yield savings account.

When considering online savings accounts, make sure to compare interest rates and choose a bank offering the highest rate with the lowest requirements or fees.

2. Policies for Deposits and Withdrawals

If you have never used an online bank before, you may be wondering how you make deposits or withdrawals. While each internet bank may have its own policies, the basic functions are similar.

Deposits

You can mail checks made out to you with a deposit slip, although this can take a while to process. You have the option of setting up direct deposit from your employer to have all or part of each paycheck deposited into your online savings account. Most online banks also allow you to “link” your account to other bank accounts you maintain, such as a checking account with your local bank. If the bank you are considering allows linked accounts, you can set up money transfers from one account to the other. Some online banks contract with brick-and-mortar banks and can accept deposits at certain ATMs.

Withdrawals

Online savings accounts will provide you with an ATM card to access money. You can visit an ATM and withdraw cash, or you can use the ATM card like a credit card and the money will be deducted from your savings account. If you link other bank accounts with your online savings account, you can transfer money out of your savings and into the bank account of your choice.

As you compare various online banks in search of an online savings account, make sure you take a look at how to deposit and access your money. If you want to transfer money between accounts, verify that the bank you are considering allows linking. If you're perfectly happy to perform all deposits and withdrawals via ATM cards, make sure they allow that option.

3. FDIC Insurance

Before opening an online savings account, you want to make sure the bank you're considering is legitimate and FDIC insured. Check the bank's website for the “About Us” page and see where the bank has its main office or headquarters, and look for information about FDIC insurance coverage. You should see the FDIC logo or the phrases “FDIC Insured” or “Member FDIC” right on the bank's website.

Finally, to verify that the bank is legitimate, you can check the FDIC's Bank Find database for details on the bank you are considering. If the bank is in fact insured, you'll see the insurance certificate number and can open an account with confidence. If there are banks that claim they are members of the FDIC but do not appear in the Bank Find database, contact the FDIC immediately so the bank can be investigated for potential fraud.

4. ATM Access and Fees

Since the primary method of instantly accessing money in an online savings account is through ATMs, you will want to take a look at which ATMs you're allowed to use and how much the bank charges for each transaction you make. Some online banks even give you rebates when you use ATMs that charge fees, which can really add up to big savings if you use the machines frequently.

Considering each of these aspects when opening an online savings account will ensure you get an account best suited to your needs. Verifying FDIC insurance will protect you against bank failures, and comparing interest rates as well as various bank fees will help you lower your cost of banking and maximize your savings.

Written by Debbie Dragon and published on Wise Bread. Read more Banking articles from Wise Bread.

Dealing with Post-Holiday Credit Card Debt

Debbie Dragon — Sun, 23 Jan 2011 22:00:22 +0000

Here we are about a month after Christmas, and the first credit card bills from the holiday season are starting to arrive. Many consumers are experiencing a little sticker shock at the extent of their overspending. According to Consumer Reports, shopping with credit cards during the holidays often leads to overspending by an average of 16%. This is part of the reason that the same Consumer Reports survey revealed that 13.6 million Americans were still paying off holiday purchases from 2009 in November of 2010.

The cost of credit card debt is often a hidden expense, particularly for people who are juggling multiple credit cards. It is easy to overlook the total interest expenses when they are spread across three, five, or even seven credit cards.

But credit card interest expenses add up quickly. Having an average monthly balance of $3,000 may not seem like much, but at a 15% interest rate, it can cost you $450 a year.

Now is the time to assess the situation and make a plan to pay off the debt.

3 to 24 Months: Transfer Your Balance

If you know you can’t realistically do it in two or three months, seek out a credit card that offers a 0% balance transfer. With a balance transfer, you pay a small transaction fee, typically 3%, to move your high-interest debt to a card that charges no interest for anywhere from 12 to 24 months.

During this time of no-interest repayments, all payments you send to the credit card will reduce your debt directly. This will help you pay off the holiday debt faster than sending a minimum payment each month and paying interest all year long.

Balance transfers are a good option for consumers with good credit, but these offers should be used with caution. Refrain from running up new debt when you transfer the balance to a new card — and focus on paying down what you already owe.

24 Months or More: Credit Counseling

If you have more than $10,000 in credit card debt and are beginning to feel like you’ll never pay it off, using a non-profit credit-counseling service may be your best option.

Credit counselors work with your credit card companies to come up with a repayment plan that fits your budget. Make sure to research credit counseling agencies before you sign up — not all agencies work with all credit card companies. Also, you want to make sure you choose a reputable credit counseling agency. You can use the Better Business Bureau to find out about consumer complaints and a company's reputation.

Generally, credit counselors will negotiate lower interest rates on each of your credit card accounts, so more of your payments go towards debt. Legitimate non-profit credit counselors do not offer to settle your credit card debt for pennies on the dollar. Avoid companies that use this language, as these companies often charge high upfront fees and can end up hurting your credit while doing little to improve your credit card debt situation. Visit the National Foundation for Credit Counseling to learn about credit counseling and search for approved companies in your area.

Avoid Credit Card Debt Next Holiday Season

As you are concentrating on paying off your post-holiday credit card debt from this holiday season, you can also prepare to avoid credit card debt for the next year! The winter holidays come the same time every year, and the best way to manage them is to prepare for them well in advance.

Take a look at your total holiday spending for the most recent holiday season. Divide the total amount by 12 months, and you'll see how much money you should set aside each month for next year's holiday spending. Consider opening a Christmas Club account at your local bank or credit union or an online savings account dedicated to holiday savings.

Ignoring credit card debt or only paying a fraction of your debt every month can cost you a lot of money in the long run. Consider a balance transfer credit card or working with a reputable credit counseling agency to get out of credit card debt and avoid paying high interest and fees.

Written by Debbie Dragon and published on Wise Bread. Read more Credit Cards articles from Wise Bread.

Ready-to-Eat Meals for Weight Loss: Can They Fit into Your Food Budget?

Debbie Dragon — Fri, 14 Jan 2011 14:00:09 +0000

As each new year approaches, millions of people resolve to lose weight or get into shape. Gyms, fat camps, and diet programs all experience a surge of new customers during January and February. If you have considered joining a diet program that provides ready-to-eat meals, like Nutrisystem, but thought the costs of the program were too great to justify joining, here's what you need to know.

The Average Cost of Groceries

It's hard to pinpoint how much everyone pays for groceries, because there are a number of factors to consider — the number of people in your family, the ages of each family member, and any special dietary needs.

The U.S. Department of Labor creates an annual Consumer Expenditure Survey, which shows the average amount of money spent by consumers in various types of households, including annual food expenses:

According to 2009 data, a single person spends an average of $4,352 per year or about $84 per week on food. This includes both food eaten at home and food purchased from restaurants or take out facilities.
A couple without children spends $6,906 per year, or $132 a week.
A couple with children (although it doesn't specify how many children) spends an average of $9,369 per year, or $180 per week.
A single parent with children (again, it does not specify number of children) spends an average of $5,348, or $102 per week.

The Average Cost of Nutrisystem

Nutrisystem (one of the leading weight-loss programs with ready-to-eat meals) costs about $11 a day for the basic four-week (28-day) program. This is equivalent to about $77 per week for the program, but you also need to add in the cost of your fruits and vegetables and additional dairy and/or protein servings. Based on my own experience, I spend at most another $2 per day for additional grocery items (skim milk, fresh fruits and vegetables, yogurt, meats, etc.) with my Nutrisystem meals. (You can read more about my personal Nutrisystem experiences on HealthyTheory.com.)

Does Nutrisystem Fit into Your Existing Food Budget?

For a single person on Nutrisystem, this puts your total food bill at $91 a week, ($77 per week for Nutrisystem and $14 per week for the add-on groceries), or $4,732 annually. Compared to the single person's grocery expenses from the U.S. Department of Labor survey, doing Nutrisystem for a year will cost you about $380 more.

If you look at Nutrisystem as a temporary solution to losing weight, which will be followed by healthier eating in general (and therefore a lower weekly food budget ongoing), the costs may be easier to justify.

It gets a little harder to compare the expenses between Nutrisystem and groceries for households with more than one person and/or households containing children. For example, if a family is spending $180 a week on food before Nutrisystem, they're not likely to immediately start spending $84 a week less (the average amount a single person spends) on groceries simply because one person decides to start Nutrisystem. Most people will buy the same amount of food they've always purchased for their family even when one is eating the majority of their meals through Nutrisystem and supplementing with a few add-on grocery items. This can increase your food budget beyond your means, but for individuals who really want to use Nutrisystem to lose weight, you can make a few minor modifications to work the cost of a ready-to-eat diet program into your budget.

With one person eating the majority of his or her meals through the diet program, grocery shopping should involve purchasing smaller quantities of food. When making your grocery list, keep in mind you are feeding one person less while he or she is on Nutrisystem. You can buy smaller packages of meat, less bread, less cereal, less snacks, etc.

The family could also help support the individual on the weight loss program by skipping some of the take-out and restaurant meals consumed, which will greatly reduce your weekly food budget.

It appears that for many families, a weight-loss program with ready-to-eat meals that cost about $11 per day can fit into your existing food budget — but it may take a little effort to reduce the food expenses for the rest of the family.

Disclosure: I received free Nutrisystem meals for review, but the views expressed in this blog post are my own.

Written by Debbie Dragon and published on Wise Bread. Read more Food and Drink articles from Wise Bread.

How Much Does Your Credit Card Debt Cost You?

Debbie Dragon — Tue, 07 Dec 2010 14:00:15 +0000

Credit cards sometimes make a purchase hard to pass up. For example, they make it possible to buy something for $3,000 and pay just $60 per month until it's paid off. Most people can afford a $60 monthly payment, but what is often overlooked is how much you end up paying in interest. A common mistake people who are new to credit cards often make is paying just the minimum payment on their credit card bills. The small monthly minimum payments seem insignificant and comfortable in most budgets until you look closer at what your credit card debt is really costing you over time. (See also: 6 Steps to Eliminating Debt)

How to Calculate True Credit Card Debt Costs

If you carry an average daily balance of $3,000 in credit card debt, your minimum payment will be around $60 a month (assuming a 2% minimum payment requirement — but some cards may have a different minimum percentage). If the credit card charges a 15% APR, interest could cost you between $400 and $450 per year.

Here's how to figure it out:

Divide your APR by 365 days per year. 15% / 365 = (about) .04%
Multiply .04% by 30 days per month. .04% x 30 = 1.2, or .012%
Multiply .012% by the $3,000 original balance = $36.00 a month in interest

With a $60 minimum payment, $36 goes toward interest each month and $24 goes toward your $3,000 credit card balance. So after you send your first $60 payment to your $3,000 credit card bill, you will still owe $2,976.

If you only pay your minimum balance due each month (2% or $25 minimum), it will take approximately 16 years to pay off your $3,000 debt. During those 16 years of making the minimum payments, you will have paid $3,641 in interest, turning your $3,000 purchase into a $6,641 one, according to results from a minimum payment calculator on CreditCards.com. Whatever you purchased for $3,000 will likely be broken and forgotten long before you've paid for it in full!

Avoid Becoming a Credit Card Victim

Credit cards are important in our lives now — you need one to reserve a hotel room, rent a car, or book tickets for travel. They can provide a source of emergency funds if you've been injured or have another emergency that must be paid for right away. But you want to get into the habit of paying for your credit card debt in full each month as often as possible to avoid paying interest — or at least pay as much as you can toward any credit card debt to reduce the amount of interest you pay rather than making just the minimum payment.

How to Reduce Your Current Credit Card Debt

If you've already racked up debt on a credit card or two and want to avoid paying the credit card company high interest amounts, you'll want to become proactive in paying off your credit card balances.

Start by creating a budget that allows you to allocate as much money as possible to credit card debts, rather than sending just a minimum payment to each account every month. Get a debt management plan in place.

You should also take a look at balance transfer credit cards. If you are eligible for a card with a 0% interest promotional offer for balance transfers, you can move your higher-interest credit card balances to the lower-interest card and focus on paying off your debt. Since you won’t be charged interest during the promotional period, all of your monthly payments will be applied toward the principal balance, which will help you pay your debt off faster.

Finally, if you find you are barely able to pay just your minimum credit card payments, you should contact the National Foundation for Credit Counseling for advice.

Written by Debbie Dragon and published on Wise Bread. Read more Credit Cards articles from Wise Bread.

Veteran Business Owners Benefit from a Marketing Makeover

Debbie Dragon — Thu, 05 Aug 2010 13:24:22 +0000

Military members have access to an array of benefits and opportunities earned by their service. Credibility and marketability in the business world just happens to be an added bonus.

There are more than 25 million veterans nationwide. Those who become entrepreneurs and small business owners can use their military service as a springboard to new customers and repeat clients. About 7 in 10 Americans would rather patronize a veteran-owned business than one owned by a civilian, according to the National Veteran-Owned Business Association, or NaVOBA.

But scores of veterans fail to capitalize on the power of their stories and service. Part of it may be an unwillingness or uncertainty about touting that record. In other cases, it's simply an awareness issue. The reality is that veteran-owned business owners who take steps to tout their backgrounds can reap significant rewards, from government contracts to increased industry recognition.

For some, it's a matter of seeking certification and official declarations. But for thousands of others, the key is a basic shift in the way they present their business to the world.

Veteran Contractors

Veterans who own small contracting firms should strongly consider registering with the Department of Veterans Affairs. As with having a minority- or woman-owned business, a veteran-owned business has access to a dedicated pool of federal contracts.

The VA coordinates an official registration process that includes verification of a veteran's military service. The base requirements are that a veteran must own at least 51 percent of the company or its stock and directly control the daily operations. Along with that comes a long, hard look at the business's finances, management structure, inventory, tax documents and other key data.

Now, not every small contractor is in a position to compete for large government contracts. But those that are can boost their chances by obtaining formal certification as a veteran-owned business. There's also a special certification class for veterans with service-connected disabilities. Veterans with a documented disability rating have access to their own pool of contracts, which the government is required to set aside.

Small contractors must also register with the government's main contracting clearinghouse, the Central Contractor Registration.

Veteran-Only Business Loans

Veterans who qualify have perhaps the most potent home loan program on the market: the VA Loan Guaranty program. But you can't use a VA home loan to purchase a commercial building or inject capital into a business.

To help cover the gap, the U.S. Small Business Administration created a pilot program that provides funding for veterans seeking to start or expand small businesses. The Patriot Express loan program offers low-interest loans for up to $500,000, which can be used for a host of purposes, including equipment purchases, working capital and real-estate buys.

Small Steps, Major Impact

Veterans outside the construction sector might still want to take the time to register with the VA. Consider it the first step in a marketing makeover designed to broadcast your service record and credibility.

But there's certainly no requirement if you're more of a mom-and-pop operation. What's essential, though, is making sure prospective and existing consumers clearly understand they're dealing with a veteran-owned operation. That might include revamping your suite of marketing materials and signage — both brick-and-mortar and online — to incorporate that "veteran-owned business" tagline. Embrace it in emails, mailers and promotions. Heck, don't be afraid to mention it when you answer the phone.

This isn't about "cashing in" on a veteran's proud service. This is about recognizing and celebrating it.

American consumers are clamoring for the chance to support veterans and their families. Why not make it easier for them to do so?

Written by Debbie Dragon and published on Wise Bread. Read more Entrepreneurship articles from Wise Bread.

Why Roth IRAs Are Ideal for Young Professionals

Debbie Dragon — Fri, 07 May 2010 12:00:04 +0000

The sooner you start saving for retirement, the more time you have to save for it and the greater the likelihood that you will have a large nest egg. Young professionals (20s and 30s) who make a decision to start saving for retirement can do so in many different types of savings and retirement accounts.

Financial Challenges for Young Professionals

Most young professionals are still becoming established in their career, so their incomes may fluctuate. For those who are single with no children, they are being taxed at the most disadvantaged tax filing status. So theoretically, they pay more in taxes. For others who decide to get married and start a family, they have to deal with expenses such as wedding costs, larger living space, more vehicles, childcare expenses and other expenditures. This is also a time when people begin making payments on college loans.

When it comes to saving for retirement, young professionals need a way to save for retirement that will allow them to have great flexibility and as many tax advantages as possible.

Roth IRA Flexibility

A Roth IRA may be the answer for most young professionals. You can go online and open up a Roth IRA in a matter of minutes. Whenever you choose you can contribute money to it. You can contribute up to $5,000 per year or up to your taxable income for that year, whichever is smaller. Money in a Roth IRA grows tax-free and can be withdrawn tax-free.

Roth IRA Tax Advantages

Unlike most other retirement accounts, if a young professional wanted to withdraw money that they contributed to their account, with Roth IRA rules, they can make tax-free withdrawals at anytime. This is huge, because withdrawing money from most other retirement accounts before age 59.5 will leave you with a 10% tax penalty along with being taxed as ordinary income. If the money that was contributed to the Roth IRA has any earnings like interest, dividends or capital gains, this money can be withdrawn after a seasoning period and justification period. The simplest seasoning and justification period is reaching age 59.5, but there are other seasoning and justification periods such as becoming disabled or being a first-time home buyer. So when you go to purchase your first home as your primary residence you can withdraw up to $10,000 of earnings tax-free. All of these tax-benefits are not available in any other retirement vehicle, so the Roth IRA is an ideal retirement account for young professionals.

Saving for the future can be a difficult task, especially while you are in your 20s and 30s. Therefore, you need as much flexibility and tax-advantages as possible. A Roth IRA can be the retirement account of choice for most young professionals.

Written by Debbie Dragon and published on Wise Bread. Read more Retirement articles from Wise Bread.

Don't Have Enough To Pay Your Taxes?

Debbie Dragon — Fri, 12 Mar 2010 17:00:01 +0000

What do you do when you finally get all of your information together to file your income taxes, and you find out that not only aren't you getting a tax refund, but you actually have to pay taxes?! It's not a problem if you have enough money set aside to pay it off, but for people who don't have enough money in their bank account to pay their taxes, this can be a very scary experience.

First of all, you don't need to panic. You are not the first (or the last!) person to owe the IRS money and not have access to the money immediately to pay them back. Here are some tips for paying your taxes when you don't have the money readily available.

File your taxes on time.

Even if you owe a ton of money and have no idea where you'll get it, you need to file your taxes on time (including filing for an extension). If you send your information in late, you'll be adding fees and penalties to the amount you owe. If you decide not to file your taxes at all — you'll be looking at criminal charges.

Check all resources.

Take a look in all of your savings accounts and investments to see if there is any way you can come up with the money to pay your taxes. Think about friends or family who may be able to lend you the money.

Get an installment plan.

The IRS can also help you set up a payment plan if you can't pay for your taxes in one lump sum. When you file your return, you'll receive a letter from the IRS that states how much you owe. Begin saving money and looking for ways to pay your taxes. If you know for sure you won't be able to pay your taxes in a lump sum, ask the IRS for the installment plan. You can indicate how much you feel you can afford and as long as you will pay off the balance in a 12 month period, the IRS will usually grant you an installment plan. Having an installment plan will cost you additional money in fees, but it gives you an opportunity to pay it over time.

Apply for Offer of Compromise.

If you get turned down for the installment plan with the IRS, you might consider the Offer of Compromise. This lets you make a one time payment or schedule several payments over time but is a much more involved process than asking for an installment plan. It also costs $150 to apply and each person is evaluated individually based on their financial situation. You are not guaranteed approval even if you pay the $150 application fee so you will want to try the installment plan option first.

If you owe money to the IRS, the worst thing you can do is sit back and hope it goes away. The longer you wait, the harder it will be to pay it because the penalties and fees will continue to add up. The best you could hope for after waiting and hoping it will all go away is a tax settlement of some sort! You need to establish a plan of action that works for your financial situation right now, and follow through with it until the amount you owe is paid in full.

Written by Debbie Dragon and published on Wise Bread. Read more articles from Wise Bread.

Get Out of Debt First, Then Focus on Saving

Debbie Dragon — Mon, 23 Nov 2009 14:00:02 +0000

When you’re in debt, it’s nearly impossible to save money. To motivate yourself for the mission of getting out of debt, ask yourself these two questions:

How much money am I paying towards my debt monthly?
How else would I like to use my money?

The money you save while paying off debt is not likely to earn as much interest as the interest you pay towards your debt. It makes much more sense financially to commit to paying off high interest debts first, and then you'll have more money to save. Sometimes, it even makes sense to use your savings to pay off debt. Here are some tips for getting out of debt so you can save or invest the money you're currently using to make your debt repayments.

Designate your money with a budget.

This allows you control where your money gets spent rather than wondering where it all went. Stretch your budget dollars by using coupons alongside sales papers and use an allotted amount of cash rather than your debit or credit card. Also, use the Internet for numerous sites offering coupons and freebies.

Make your primary mission to become debt free.

While it saves you money to pay off debts with the highest interest rates first, sometimes it helps to pay off your debts from the smallest amount to largest. It gives you a sense of accomplishment faster. Remember though, each time you pay off a debt, that payment amount is now available to apply towards to the next debt to significantly reduce the time it will take to achieve financial freedom.

Consider transferring your high interest debt onto a 0% balance transfer credit card.

They are available for six months or twelve, introductory rate, and offer the opportunity to pay off principal debt rather than paying primarily on interest.

Get a new insurance quote.

You may very well be paying much more than necessary for your auto, home, and life insurance. You can easily compare insurance quotes online through sites like netQuote and esurance. Type in your info once and get multiple quotes, for each insurance type, and do comparison shopping from the comforts of home.

Dining out is not a priority.

Until you’re free from debt, dine out as seldom as possible. Plan your meals in advance and build your grocery list according to your week’s menu. This will save you money on your grocery bill and on eating out too frequently. Let your slow cooker/crock pot work for you. This includes breakfast and lunch; make your own coffee and pack your lunches (yours, the kids’, and dad’s too). Dinner leftovers can be used for another meal or lunches.

Once you designate where your money is being spent and strive for financial freedom, then you’re able to consider saving for short term (Christmas club) and long term funds (College & Retirement). The sooner you pay off high interest debts, the sooner you can begin saving and benefiting from the interest your savings earn.

Written by Debbie Dragon and published on Wise Bread. Read more articles from Wise Bread.

Cavalcade of Risk - November 4, 2009 - How Much Assurance Does Your Insurance Offer?

Debbie Dragon — Wed, 04 Nov 2009 16:36:29 +0000

Welcome to the November 4, 2009 Cavalcade of Risk — the How Much Assurance Does Your Insurance Offer edition! As I was going through the submissions for this particular carnival, I noticed a large number of insurance related topics. Does that mean we're becoming more concerned about whether we have enough (or the right types) of insurance? Or was it just a coincidence? Whether you've got concerns about life insurance, car insurance, health insurance or business insurance — you can find information in this carnival.

LIFE INSURANCE

FMF takes on the life insurance debate, with How Much Life Insurance Do You Need? posted at Free Money Finance, saying, "A simple formula to determine how much life insurance you need."

Jeff Rose always looks at whether things make good financial "cents" or not. Here's his theory on Should You Buy (ROP) Return on Premium Term Life Insurance?

Tom @ Canadian Finance Blog discusses life insurance and children. I have life insurance for my children but have always wondered whether or not it's a good use of money. Tom thinks not — here's his take: Insurance You Can Do Without — Life Insurance For Your Child posted at The Canadian Finance Blog.

Peter helps us decide when is the right time to get that life insurance policy in When Should I Buy A Life Insurance Policy? Should I Wait Until I Have Children Or Dependents? posted at Bible Money Matters.

CAR INSURANCE

Colin Robertson asks Do I Need Car Insurance if I Don’t Own a Car? posted at The Truth About Insurance.com.

HEALTH INSURANCE

Henry Stern, LUTCF, CBC sent us High Risk Obamacare from InsureBlog, saying, "Bob Vineyard explains that a new high risk pool included in ObamaCare could really end up hurting the very folks it seeks to help."

David Williams presents Fears of the public option are overblown posted at Health Business Blog, saying, "Big business thinks the public option will put them at risk for cost shifting and the elimination of the private health insurance industry. I think their fears about the risk are overblown."

Jason Shafrin talks about the cost of health care — “Health care, at any level, cannot be equated in dollars and cents.” at Healthcare Economist

Jaan Sidorov gives us More Implications on the Suspended Animation of the Medicare Medical Home Demonstration

BUSINESS INSURANCE

Nancy Germond, ARM, AIC, ITP presents Admitting You Are Wrong May Limit Claims posted at AllBusiness.com — Risk Management for the 21st Century

OTHER RISKS

Peak Personal Finance tackles the risks involved with Lending Money to Friends and Family posted at Peak Personal Finance, saying, "Lending money to friends and family can be risky business!"

Silicon Valley Blogger presents Stock Market Timing: Advice For Investors posted at The Digerati Life, saying, "Is market timing a way to reduce or manage risk? Or is it a highly risky strategy when investing? The debate rages on."

Dugan presents Why Release People we Think are High Risk? Well, who said risk wasn't controversial? Dugan Z wonders about allowing sex-offenders to live in family-centric neighborhoods is a good idea, and is stunned by how easy it is to use Google-maps to find them.

Thanks for checking out the carnival! If you have some time, check out some of the great posts from the bloggers on Wise Bread — there's a little something for everyone here. Submit your blog article to the next edition of cavalcade of risk using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Written by Debbie Dragon and published on Wise Bread. Read more articles from Wise Bread.

Tips for Preventing Swine Flu Naturally

Debbie Dragon — Wed, 04 Nov 2009 15:00:01 +0000

It is impossible to avoid coming into contact with the Swine Flu (H1N1), or any other strain of flu for that matter. Because it can take three days before germs entering your body proliferate and become the actual illness, often times people are out in public without any known symptoms, yet they are still carrying and spreading the infection.

While you are healthy and not showing flu symptoms, you can help decrease your chances of getting the swine flu with the following natural tips.

Gargle

The only portals of entry for the flu into the body are the mouth, throat and nostrils. By gargling twice each day with warm salt water or Listerine, the proliferation of H1N1 may be prevented. It is believed that gargling with warm salt water as a healthy person is similar to the effect that an infected person receives from taking Tamiflu.

Clean Nose

Blowing your nose hard at least once per day will help clear germs from your nasal cavities. Follow up the nose blowing with a swabbing of both nostrils using a cotton bud dipped in warm salt water.

Drink Warm Liquids

To help wash viruses from your throat and prevent proliferation, drinking warm liquids works in a similar manner as gargling with warm salt water — except it moves the viruses in the other direction. Once the germs are in your stomach, they can't survive or proliferate.

Boost Natural Immunity

It has been shown that vitamin C plays a role in boosting your body's natural immunity. Increase your intake of foods with Vitamin C (citrus fruits) or take Vitamin C supplements. If using supplements, you'll also want to take zinc to improve your body's absorption of vitamin C.

Decrease Sugar Intake

During flu season especially, it's a good idea to reduce the amount of sugar in your diet. Sugar is absorbed fast by the body but if it is not burned off quickly, it remains in the bloodstream. The problem with excess sugar is that it prevents the ability of white blood cells to do their job and fight foreign organisms.

Unless you never leave your home and never allow others to come into your home, it is impossible to completely avoid contact with H1N1, other flu strains, and illnesses in general. Using these tips, along with frequent hand washing, keeping your hands away from your face, and disinfecting surfaces in your home with a germ-killing cleanser, you can help decrease your risks of getting the flu naturally.

Editor's note: This has been revised to reflect the information provided by readers that the doctor originally quoted was a fake. The information in this article was obtained from a school newsletter that credited the doctor. These tips are not intended to be a substitute for professional medical treatment, advice or diagnosis.

Written by Debbie Dragon and published on Wise Bread. Read more articles from Wise Bread.

You Can Watch Your Netflix Instant Queue Using Your Xbox 360

Debbie Dragon — Fri, 21 Aug 2009 17:00:30 +0000

I've been a member of Netflix for about a year now, because I was previously guilty of forgetting to return movies on time and spending a fortune in late fees. My family watches movies at night a couple times a week in the summer months, and then in the winter we tend to watch a little more. We work around this by adjusting the membership to a lower cost, less-movies-per-month plan for the summer and can increase it for the winter months when we watch more.

Recently, my son noticed that the Netflix logo appeared on his Xbox 360, when he was just browsing through his “dashboard.” He knows way more about the Xbox than I ever will, but when he showed me the Netflix logo I investigated it and sure enough – you can watch the “instant queue” movies from your Netflix account on your television, streaming through the Xbox 360 Live.

We currently have a free membership to the Xbox 360 Live. There are a number of options for continuing the membership after our membership runs out, from $7.99 per month on a month-to-month plan, to $19.99 for a 3 month plan, to $49.99 for a full year. Doing an internet search online showed me a few ways to get redemption codes for Xbox live, too. If you're not aware, the Xbox Live community allows you to download game content, and play multi-player games with real people in real time. Turns out many of the games that you would buy in the stores are available for download, at a reduced price over purchasing the physical game – but eventually you would run out of hard drive space on your Xbox to store downloaded games and content.

Connecting the Netflix account to our Xbox 360 wasn't as easy as I expected. The Xbox gives you a special code to enter into your Netflix account, but we ended up having to restart the Xbox about three times and enter three different codes before it was accepted and “connected.”

Once the connection was established, it was just a matter of scrolling through the “instant queue” using the Xbox 360 controller and the television screen. We found a movie we wanted to watch, selected it, and it streamed directly to the TV.

Netflix has a variety of devices which can be used to watch movies from the “watch instantly” collection (which by the way, doesn't include every movie in Netflix's database) but most of them are rather expensive. If I didn't already have an Xbox 360, I certainly wouldn't have run out to buy one just to stream movies from Netflix, in the same way that I wouldn't run out to buy any of the other instant devices just for that purpose. But, for anyone who already has both the Xbox 360 and a Netflix account – you might consider connecting them to enjoy your Netflix movies via the television instead of the computer screen.

Written by Debbie Dragon and published on Wise Bread. Read more articles from Wise Bread.

Save Money on Travel Accommodations

Debbie Dragon — Thu, 20 Aug 2009 14:01:57 +0000

I don't know about you, but when I travel somewhere it's because I'm going to experience an attraction, see friends, or participate in an event for my business. I don't travel just to sleep in fancy hotel beds, and I prefer to keep as much of my travel budget available for entertainment as possible! Finding cheap hotels or inexpensive hotel alternatives will keep your travel expenses down.

Most of the time, I just need a comfortable and safe place to sleep when I'm traveling out of town. If this describes your own travel-sleep needs, you might be able to save money on your travel accommodations with the following tips:

Go Camping. I realize camping is not for everyone, but if you can handle pitching a tent and blowing up an air mattress, chances are good that you can save a ton of cash. Campgrounds charge between $5 and $40 a night, depending on the amenities of the campground and whether they're in a popular location or not, but when you compare those prices to the $40-$200 a night for a budget to moderate hotel, you can see how camping can really stretch the budget. Some campgrounds even have electric hook-ups and wireless internet.

Get Out of Town. If you're traveling to a popular destination or event, most hotels will take advantage of supply and demand and increase their rates accordingly. If you don't mind driving fifteen or twenty minutes between your hotel and event location, you can almost always get a less expensive hotel room in a neighboring town.

Stay Longer. Many times you can rent an entire house or condo for a week for less than you would pay for a hotel for three or four nights – especially if staying in popular vacation destinations. For example, there are fabulous three to six bedroom homes in the Orlando, Florida area (complete with swimming pools, kitchens, dining rooms, living rooms, game rooms, and sometimes even a community center nearby!) that rent for around $700 per week; but if you stay in a moderate hotel room in Disney, you can expect to pay $280 a night or more. The larger accommodations also make it reasonable to share with another family or two and reduce your costs even more.

Use Discounts. If you're a member of AAA, a member of the military, or own an Entertainment Book, you have discounted travel options available to you. Most hotels offer discounts under these situations. The 2010 Entertainment Book (affiliate link) is now available, and the 2010 coupons are valid now.

Create Discounts. If you're not a member of an organization that receives hotel discounts, you can always try to create your own! Find out how much it would cost you to stay the duration of your travel in one of the popular hotels in town. Then call a less-popular hotel and ask them if they can offer you a free night or discounted rates if you choose them over the popular hotel. You might be surprised at what they're willing to do to earn your business.

This post was included in the Money Hacks Carnival.

Written by Debbie Dragon and published on Wise Bread. Read more articles from Wise Bread.

Carnival of Personal Finance #205: Pay it Forward Edition

Debbie Dragon — Mon, 18 May 2009 12:15:28 +0000

Wikipedia tells us that the expression "pay it forward" is used to describe the concept of asking that a good turn be repaid by having it done to others instead. More specifically, the creditor offers the debtor the option of "paying" the debt forward by lending it to a third person instead of paying it back to the original creditor. In this week's edition of The Carnival of Personal Finance, I ask everyone to think about the concept of "Paying it Forward". Does someone owe you money or a favor? Consider asking that they repay their debt to you by doing something nice for someone else instead!

In the Pay it Forward movie released in 2000, (based on the novel by Catherine Ryan Hyde) a 12 year old school boy was given an assignment to come up with a plan that would change the world through direct action. The boy comes up with the plan to "pay it forward" by doing a good deed for three people who must in turn each do good deeds for three other people, and so on down the line. A beautiful concept. I hope you enjoy this week's edition of the carnival - there were close to 80 submissions!

Featured Selections

Work at Home Mom from Empowering Mom: presents Today We Lost a Client. This is a good way to view change, not only as it applies to your business or career finances, but also life changes in general. Every change is the opportunity for something better to come along.

InsureBlog presents Lower Cholesterol, Have Sex, While Unemployed, "How does getting paid to make love AND reduce your cholesterol sound? InsureBlog's Bob Vineyard reports on one drug company's new outreach program to help folks who've been recently laid off." Hmmm...

Deposit Accounts from Deposit Accounts presents Tips for Beginning Investors. You may already know these investing basics, but it never hurts to review.

Debt Kid shares What Puking Taught Him About Finance. I love the title of this post. The tie-ins between puking and finance are an entertaining read, too.

American Consumer News presents No Action Needed to Receive Social Security Stimulus Check. Trisha Wagner helps people understand the latest stimulus checks, who qualifies, and how to get yours.

Fine Tuned Finances presents What Exactly is "bounced protection".

Money Smart Life presents Improve Your Credit Score in 5 Simple Steps. An increasing number of people are struggling with lower credit scores as a result of the economic climate - here are 5 steps to improving your score and getting on track of better credit offers and lower interest rates.

Loved by Wisebread: Frugality Topics

In case this is your first visit to Wisebread.com, you should know that it's a community blog based on the concepts of Living Large on a Small Budget. Take a look around, there are many great articles to be found on this site, as well as tips for saving money, finding great online deals, and forums to discuss it all with like-minded individuals.

That One Caveman from One Caveman's Financial Journey presents Save Money By Buying the "Good" Toilet Paper, and says, "Sometimes buying the cheapest option can end up costing you money - toilet paper is no exception. By buying better toilet paper, you can use less and your cost-per-use actually drops below the "cheap" toilet paper." I really agree with this except when you have young children in the house. They tend to use too much toilet paper no matter what kind you buy and can throw your cost-per-use way off.

Savings Toolbox provides more Tips to Find the Best Deals on the Internet.

Money Beagle from Money Beagle presents Unplanned Spending That I Hope Is Worth It.

Penelope Pince from Pecuniarities presents DIM (Did-it-Myself!) Country Kitchen Storage Shelf, and says, "How we built a country-style kitchen shelf for storing fruits, vegetables, flour, rice and miscellaneous foodstuff with leftover paint and lumber for under $10. Also, frugal storage solutions for above-mentioned items.

David Nofsinger from Spiffy Links Personal Finance presents Finding Cheaper Transportation

Beyond Paycheck to Paycheck presents Americas increasingly frugal habits. "How much of the "new frugality" will stay with us when the economy eventually rebounds?"

jim from Bargaineering presents 2009 Sales Tax Holiday Schedule. Find out when your state offers tax-free shopping, and plan your shopping trips for those dates to save some money.

Aryn from Sound Money Matters presents That Makes Me Stabby: The Handbag as Investment. I was unsure at first how someone might convince people a handbag was an investment, but I think Aryn does a pretty good job of it here!

Doctor S from Finance Your Life presents I Spend Too Much Money On..., and says, "We all have certain aspects of our budget that we splurge on. My problem is fast food and, in particular, one fast food spot. "

linke from Man and his Money presents The frugal beauty of an old truck. "Basically, it's a love story. I have driven the same truck for 17 years and over 225,000 miles. I contrast the meager amount I spend to drive and maintain my truck with what the average consumer would spend over the same time period. I believe length of ownership is key to keeping transportation costs to a minimum." Completely agree! I drove a basic Chevy Cavalier for 12 years, and for 190,000 miles. I would have driven it longer if it didn't finally start having some mechanical issues - at that point, fixing the car would have been more expensive than the vehicle was worth. But for 12 years that car was PAYING me to drive it!

Olivia from Independent Beginnings presents Up-Front Spending Can Work Against You.

Fabulously Broke in the City presents The True Cost of an Item. "I propose that instead of just looking at a cost of an item, check out the accessories that come with it as well, and factor that into your purchase as it's "true cost".

MLR from My Life ROI presents Spring Cleaning Checklist: Medicine Cabinet, and says, "This spring cleaning chore falls into money management for a few reasons: You wind up throwing away expired meds that you bought in bulk to lower your cost/unit, if you do this task every so often you could wind up saving yourself money in health care costs, you could prevent accidents from happening, and you will be better prepared for emergencies."

Debt & Credit

Debt Free Destiny from Debt Free Destiny presents Retired and in Debt: Now What?.

Debt Freedom Fighter from Discover Debt Freedom presents The Worst Credit Card Company Practices Revealed.

Apply4-Credit.com from Apply4-Credit.com presents A Students Credit: A Report Card for Life.

J. Money from Budgets Are Sexy presents Paying extra towards your loans now, goes a long way later!, and says, "The more you pay off now, the less you pay in interest later - It's like kickin' compound interest in its head and getting away with it :)"

Mr Credit Card from Ask Mr Credit Card presents The Banking Industry Responds to the Proposed Credit Cardholders Bill of Rights Act of 2009.

Erica Douglass from erica.biz presents Cash Back Rewards Credit Cards, and says, "Which credit cards pay more than 1% cash back? They're getting harder to find, but here are two (plus a bonus guide on easily switching from one card to another!)"

David from Credit Card Offers IQ presents 4 Credit Cards After the Federal Reserves Own Heart (if it had one), and says, "Here are four credit cards that are already following many of the Fed's credit card regulations that do not go into effect until 2010."

Chris Holdheide from Stumble Forward presents How I Made Over $500 With My Blog To Pay Off Debt, and says, "How I made $500 in 8 months with my blog."

MFD from My Findependence Day presents 9 Questions To Help You Choose The Right Credit Card.

Chief Family Officer from Chief Family Officer presents Does the mortgage interest deduction make carrying a mortgage worthwhile? .

Tyler Metzger from Taking Charge presents Does your credit card make you smile?.

Investing

The Dividend Guy from The Dividend Guy presents 4 Benefits of Employer Share Purchase Plans and Pensions and 1 Downside, and says, "An important component of many people's savings is an employer share program - here are some benefits of those programs and 1 downfall."

Wealth Pilgrim presents Stock Market Rally - Should You Buy or Sell Now?.

SVB from The Smarter Wallet presents Use Candlestick Charts, Trading Signals To Evaluate The Stock Market

Pinyo from Moolanomy Personal Finance presents Penny Stocks Are Not Cheap Stocks, and says, "Dispel a common misconception among beginning investor that low priced stocks are cheap."

Matt SF from Steadfast Finances presents 20 Questions to Ask Yourself Before Choosing an Online Discount Broker.

p>D4L from Dividends Value presents High-Quality Low-Risk Dividend Stocks. "We are a product of our environment. Our life experiences not only shape out behavior, but at its very core, they shape our thought process. The Great Depression forever changed a generation of people. It appears the Great Recession may be having a similar effect on another generation."

Shadox from Money and Such presents Slumdog Millionairre and Investment Strategy, and says, "Connecting games shows, movies and investing in one fun post."

Joe Light from Invest Wisdom presents Can new asset classes improve your diversification? "Last year, nearly every asset class--whether it was stocks, bonds, real estate, or commodities--lost money. That's led many people to say that diversification "failed" and led some money managers to introduce new asset classes that can improve investors' diversification. But did diversification really fail and can new asset classes really make things any better?"

Jeff Rose from Good Financial Cents presents How To File a Complainst Against Your Broker. "If you have a run in with a sleazy broker, here's some steps you can take to file a complaint. "

Saving

Jeff from StretchyDollar.com presents Set Your Own Interest Rate!

Simon from Realm of Prosperity presents Getting $10 Removed On Late Fee For Late Credit Card Payment.

Blogging Banks from Blogging Banks presents E-Trade Savings Account APY Decreases to 0.95%.

Money Management

FMF from Free Money Finance presents Money Lessons from Monopoly, and says, "You can pick up a lot of good money management skills by playing Monopoly."

Helen from Affine Financial Tips presents Why do I need to create an LLC?, and says, "With the economy in the doldrums, many folks are starting a business -- either on the side or as their new full time employment. If you do, be sure to consider creating an LLC to protect your personal assets."

Frank Curmudgeon from Bad Money Advice presents Millionaires as Role Models.

Jennifer from Getting Ahead presents Do you have a Freedom Account?

Silicon Valley Blogger from The Digerati Life presents Best High Interest Savings Accounts In Online Banking

Matt from My Financial Recovery presents Allowance And Chore System For The Kids, and says, "We have a new chore and allowance system in place to teach the kids money management and responsibility."

Brad Chaffee from Enemy Of Debt presents 3 Proven Steps To Debt Freedom

pfincome from Passive Family Income presents Personal Finance Lessons I Learned Growing Up, and says, "The lessons I learned growing up helped shape my frugality today."

Careers

Mr. ToughMoneyLove from Tough Money Love presents For Some Jobs this May Be As Good As it Gets, and says, "Middle class incomes are stagnating. Employers are entering an era of new frugality, perhaps permanently. You may be living in the wrong place at the wrong time."

Erick Simpson from Managed Services Blog presents Why Your Organization Needs a Sales Manager.

vh from Funny about Money presents Incorporating for Fun and Profit.

Wojciech Kulicki from Fiscal Fizzle presents Don't Play the Recession Victim at Work - Boost Your Productivity.

Dan from Darwin's Finance presents 10 Ways to be Annoying at Work and Ruin your Career, and says, "This article highlights 10 incredibly annoying tactics and behaviors in the workplace and how to tackle them head on."

Finance

Mr. GoTo from Go To Retirement presents Plans for Retirement Income, and says, "Baby boomers and other are adjusting their plans for retirement income. Where do your plans fit in?"

B Simple from Simplifed Financial Lifestyle presents Avoid Those Financial Teasers

ElizabethG (Modern Gal) from Modern Gal presents Why I Increasingly Distrust Financial Reporting.

MoneyNing from Personal Finance Blog by MoneyNing presents The Mistake of Waiting Till the Last Minute, and says, "Don't let last minute surprises ever happen."

DR from Doughroller presents Lies, Damn Lies and Personal Finance, and says, "Is personal finance a myth that has wrongly replaced the role government should play in our lives? Find out why one reporter thinks so, and why she is so wrong."

Todd from Gloomberg News presents FMyLife Financial Advice, and says, "Some of the most valuable lessons are learned when things hit rock bottom. FMyLife & Gloomberg present you with 3 Financial Mistakes and How to Prevent them!"

The Incidental Economist from The Finance Buff presents Health Insurance in Retirement, Part I: How Much Health Care Will You Use?

Ray from Financial Highway presents Importance of Wills and Powers of Attorney in Financial Plan-Step 6 Financial Planning, and says, "We often focus so hard on building wealth that we forget some other important aspects of personal finance, such as a will and power of attorney."

Real Estate

Smarty from Growing Money presents Rental Property Update May 2009, and says, "Damages and Renovation at Rental Property"

Dan Melson from Searchlight Crusade presents You Want an Agency That Can Pay ENOUGH Attention to YOU.

Baker from Man Vs. Debt presents Why Australia?: Financial Implications of Our Overseas Move

Carrie from Carrie...On The Cheap presents 10 Reasons To Rent.

Economy

Marie from Moneymonk presents End of Middle Class? .

Reviews

Kate Kashman from The Paycheck Chronicles presents A New Sort of Auction, and says, "There's a new sort of online auction, but it isn't a good one for the consumers."

Chance from Personal Finance Software Reviews presents Personal Finance Software Comparison

Next week, Greener Pastures is hosting the Carnival of Personal Finance. If you would like to submit your personal finance themed blog post for possible inclusion in the carnival, you can use this submission form.

Written by Debbie Dragon and published on Wise Bread. Read more articles from Wise Bread.

How to Find Freelance Clients: Part Three

Debbie Dragon — Fri, 15 May 2009 13:55:47 +0000

Previously, this series for finding freelance jobs covered what you needed to do to prepare yourself for freelance life in Part One; where to find the clients in Part Two; and in the last article of this series - I'll give you some tips for actually applying or bidding on the freelance jobs you find.

How to Apply or Bid for Work

Applying for freelance work is an art form in itself – once you master the techniques, you'll be on your way to a thriving freelance business. Applying for work on job sites and contacting potential clients directly involves a different process than bidding for work on freelance bidding sites.

Bidding for Work

When you use a freelance bidding site to “bid” on jobs, you are rarely asked to provide a complete resume. The trick is to sum up your abilities and answer any questions their job specifications indicate within a paragraph or two as you are placing your bid. A sample bid response for a freelance writing job involving writing 10 articles for a blog about fish that are due on March 15th might read something like this:

I am a freelance writer and fish enthusiast – I would love to write 10 articles for your blog on the topic of fish. I can write and deliver ten 100% unique articles on or before March 15th, completely free from plagiarism. They will be spell checked and ready to post to your blog upon receipt. Thank you for your consideration.

Notice there isn't a ton of information in a “bid”. If you have experience directly related to the topic, you might mention that. In this example, if you have an aquarium in your home, or worked for the local fish store, that might spark interest in the buyer because you are already familiar with the topic. In most cases, you can write articles on topics you aren't familiar with simply by doing research, so it's not a requirement for the majority of writing jobs.

The most important aspects to include in a bid for a freelance bidding site are to show you understand the assignment (10 articles before their due date, 100% unique), and to write your bid without typos or spelling errors (particularly if you're applying for writing work!) There are many non-english speaking service providers bidding on the same work (and often at rock bottom prices if the buyer's currency is worth more than the providers currency), but you would be surprised at how many don't take the time to spell check or proof read their bid.

Apply for Work

On the other end of the spectrum, when you find assignments posted to job sites or when contacting a potential client directly, you need to use a different strategy for applying. These situations expect more information from you in order to consider you for the work.

It's a great idea to create a resume, summary of qualifications, or professional experience document that can be used for all freelance work you apply for. It doesn't have to be boring like the resumes you made as a high school student – and in fact, it is in your best interest to jazz it up a bit to stand out from among the hundreds of other people who may be applying for the same jobs! Here are 10 tips for landing a gig online, by Wisebread's Andrea Dickson. These tips are excellent and will help you with your applying or bidding process!

Use your freelance logo if you have one, and don't be afraid to use decorative fonts for the headings of categories on the document. If you have links to work samples that are accessible online, include a few so the prospective client can click and quickly see something you've worked on. You may want to include a small, professional head shot of yourself as well just to make it a bit more personable.

When you apply for work, write a “cover letter” email (or follow the instructions given in the job listing for how to apply), and include your resume or professional experience document. It's a good idea to paste it into the email directly as many businesses will not open email with attachments. You can always include a short note in your closing that you are happy to forward your resume or any other information upon request.

Getting the Job

After you start applying and bidding for work, you will start to get responses from the prospective clients. A freelance bidding site is your opportunity to get selected and get the just based on your “bid” alone; while most freelance jobs from a job site or direct contact will not hire you from your first contact alone. Expect to exchange a few emails and maybe even talk on the phone once or twice before you are selected as the freelancer for the assignment. Be professional with every communication you have with the prospect, and be sure to treat each client as if they will generate hundreds of new jobs for your freelancing business – because you never know which clients may turn into long term clients or your biggest referral source for new clients.

When you've gotten your first client and completed your first job – be sure to follow up with the client to see if he or she has any additional work you could provide. In fact, add the client to a mailing list and make it part of your routine to contact clients once a month or so after you do work for them, just to remind them you are still in business in case they have a need to hire a freelancer again. This is how you turn a one-time client into a repeat client – which is necessary for long term success in the freelance world.

Written by Debbie Dragon and published on Wise Bread. Read more articles from Wise Bread.

How to Find Freelance Clients: Part Two

Debbie Dragon — Wed, 13 May 2009 14:20:10 +0000

Last time, "How to Find Freelance Clients: Part One" discussed some of the things you would need to do to prepare for freelancing. In Part Two of this article, we'll cover where to find the actual clients who pay freelancers.

Where Your First Client is Hiding

Everyone has a different level of comfort with marketing activities. Some people become freelancers in hopes of not having to deal with the public as is necessary with most other professions. Despite the fact that you might work from your home or a small one-man (or woman) office; you will need to network and market yourself to become successful.

Wouldn't it be nice if there was a rock out there that you could just turn over and find your first client's hiding place?

Instead, you need to do a little investigation to find your first client; and probably step outside your comfort zone at times.

Freelance Bidding Sites: One possible place to find your first client is through the use of freelance bidding sites. These sites are similar to auctions, in that a buyer posts the specifications of the work he or she needs doing; and then multiple service providers/freelancers place “bids” to complete that work.

Freelance bidding sites are controversial among the freelance community. Some freelancers swear by them, and get most (or even 100%) of their clients through the use of these websites. Others refuse to use the sites because of the tendency for the work to be on the low end of the pay scale when compared to the freelance industry pricing as a whole.

As a new freelancer, you might find the bidding sites to be an easy way to land yourself your first client or two, gain a testimonial from a happy client to add to your growing “proof” pile, and make a few dollars in the process.

Some of the bidding sites are free to use as a service provider, but you'll pay a fee if you land a job through the site (typically a percentage of the project price). Other bidding sites require a membership fee from providers, or a pay-per-bid price.

Take a look at a number of bidding sites to see the types of jobs that are posted, and which bids are being selected as the service provider. Not surprisingly, buyers who use freelance bidding sites are often after the lowest price; but there are buyers who use the sites for convenience and make their selection based on who they feel can provide the best quality within their deadline and price range. When you are reviewing the bidding sites and projects listed, also look to see what the winning bidder is including in their “bids” - how they are worded, what type of information they include and what they leave out, whether they are well-crafted or casually written introductions about their freelancing skills. Try to model your own bid responses on the style of bids that seem to be winning projects.

Using freelance bidding sites is a bit of a numbers game; you might have to apply for (bid) a number of jobs before you “win” one. As soon as you win a project, do your best (even if the project pays less than you intend to charge your clients moving forward) as you are starting your reputation as a freelancer with this first client.

Examples of freelance bidding sites you may want to try:

www.rentacoder.com (I found my first freelance clients here)

Getafreelancer.com (affiliate link)

Elance.com

Odesk.com (affiliate link)

www.guru.com

99Designs: Are you a designer? 99Designs.com is a site which allows prospective customers to request their logos, web design, t shirt designs and other design needs as a contest through the site. You can register for a designer account with 99Designs and start entering your designs to open contests. If chosen, you win the contest fee.

Direct Contact: Use the internet to find businesses who typically use the services you offer. For example, you could contact marketing agencies to offer your graphic design skills for their brochures, business cards, and direct mailings. If you are a web developer, instead of looking for a new business without a web presence to help them get online with a site – try contacting existing web design businesses that seem to be doing very well to see if they have a need to outsource any of their work. You can make initial contact via email or contact forms on the websites of the businesses you decide to contact – or you might phone them directly. Both options are free (with the exception of your time) and are very effective for drumming up your first client (as well as finding clients regularly!)

Ask Everyone You Know: Don't be afraid to let your friends, family and co-workers know that you're starting a freelance business and ask if they know of anyone who might need your services. Word of mouth and referrals is by far the best type of marketing there is, and these people are all included in your “warm market”. If a friend refers someone they know to you, you already have the trust of that prospective client simply because their friend referred them. Having the trust of your prospects is key to turning them into paying clients.

Try eBay: eBay.com is not really designed to market yourself as a freelancer, but if you type in “freelance” in the search box on eBay.com, you'll find a few hundred people who are advertising on eBay. It only cost a few cents to list an ad, so if you can figure out how to present yourself to potential eBay users, you might be able to benefit from the hundreds of thousands of visitors the site receives each week. Keep in mind that most people are visiting eBay to buy products, not services, but there have been freelance writers and graphic designers who have done very well for themselves by adding an auction listing for their work. You can sell web content articles for $10 or $20 a piece; a single logo design for $50 – whatever service you offer as a freelancer can be listed on the eBay in an auction format. It may not be the best long term strategy for incoming business (although never say never!) but you may be able to find yourself your first client with a little auction posting of your own.

Job Sites: Even though job sites are primarily for full time and part time positions, many online job listing sites include jobs for freelancers; sometimes classified as “telecommute” or “contract work”. All of these terms basically mean the same thing – you're working from your own home or office and you're not considered an employee of the company for tax purposes. Try searching the major job sites and classified listings for jobs that are in your area of expertise and are offered on a contract, telecommute or freelance basis.

Here are a number of sites to help you get started on your search:

www.craigslist.org (under jobs category for every state and city of the US, you can find your industry and then view the listings for free. Apply to any that are contract or telecommute that you can do).

www.creativeheads.com

www.monster.com

www.careerbuilder.com

www.aboutfreelancewriting.com

www.freelanceswitch.com

www.problogger.net

www.allfreelance.com

www.allgraphicdesign.com

www.webprojobs.com

www.krop.com

www.sologig.com

www.authenticjobs.com

www.freshwebjobs.com

www.designcrowd.com

www.freelancers.net

In "How to Find Freelance Clients: Part 3", I'll give you some tips for applying for the freelance work found online.

Written by Debbie Dragon and published on Wise Bread. Read more Entrepreneurship articles from Wise Bread.

How to Find Freelance Clients - Part One

Debbie Dragon — Tue, 12 May 2009 11:31:58 +0000

With the number of people getting laid off increasing daily, it's no wonder why more people are looking at freelancing or self employment options to make ends meet. Once you hang your “open for business” sign, the hard part begins! Finding clients to pay you for your products or services can be the most challenging aspect of starting and running a business. After all, without clients buying what you have to offer, you certainly can't remain in business for long.

Getting your first client will accomplish a few things for you, business-wise. First, you'll of course have a client who is paying you, which is necessary for earning a profit and is the life blood of all businesses. Second, that first client can very well open the door to many other clients, through referrals and word of mouth; and can even turn into long term, consistent work – even if you thought it was a one-time project. Once you're ready to start your freelance business, what steps do you need to take to find your first client – and then every client after that?

Regardless of the type of freelancing you do, the process of getting your first client is similar across all industries, and will require focus and discipline on your part to make it happen!

Prepare to Prove Yourself: As a new freelancer, hanging your “open for business” sign isn't enough to prove you are capable of providing high quality work. Prospective clients are weary of new business owners, and many will prefer to work with experienced freelancers in your industry. How do you prove your abilities if you've just started out?

Previous Work Experience: Before you decided to go-it-alone, chances are you were employed by another business at some point in time. Perhaps you are still employed, and are looking to freelance on a moonlighting basis until your business takes off and profits. Either way, think back to any work you have done for your employer which is an example of your abilities. If you are looking for freelance writing clients, you can probably dig up a letter or manual that you worked on for your employer. As long as it isn't confidential information, you can probably use this type of writing as initial samples for prospective clients. If you are a freelance graphic design or web developer, anything related to your line of work that was completed for an employer may very well be sufficient to prove your abilities in the field.

Do Some Volunteer Work: If you don't have anything suitable to use as samples to show your ability to do the work, consider volunteering to help a nonprofit organization. Create a website, develop logos or graphics, or write marketing materials at no charge; in exchange for using the item(s) you create as samples of your work.

Build a Portfolio: Many new freelancers, particularly those in the creative industries, feel trapped in a catch 22 when it comes to building a portfolio! How can you have a portfolio if you haven't had any clients, yet? On the other hand, who is going to hire a writer, artist, or web designer without seeing a portfolio of your best work? The solution is to get to work creating a portfolio that shows off what you can do – and keep adding to your portfolio as you develop more samples. For individuals who haven't had any clients yet, it's an opportunity to come up with your own creative pieces to include. For example, you will need business cards, a web site, and other items for your business – you may as well start your portfolio out with the creative pieces you'll need to start and run your own business. Whatever your area of expertise is, do the work and include in the portfolio. Proving your ability is essential for clients to trust in your services and have confidence to hire you. As a new freelancer, you won't have testimonials of happy clients to back up your own claims of expertise, so your best option is to have samples of work you've completed ready to show off whenever you have the opportunity to communicate with a prospective client.

Once you have samples and/or a portfolio ready to go – where do you start finding prospective clients? We'll discuss this in "How to Find Freelance Clients: Part Two".

Written by Debbie Dragon and published on Wise Bread. Read more articles from Wise Bread.