Wise Bread (Debbie Dragon)

6 Ways Working Out Makes You Smarter, Too

Debbie Dragon — Fri, 11 Oct 2013 10:24:04 +0000

Everyone knows that regular exercise is necessary for good physical health, but regular physical activity can improve more than your physical body; it can increase your intellectual capacity, as well. Exercise has been shown to improve memory and cognitive function, helping us think and learn better. (See also: Ways to Revive Your Resolution to Exercise)

1. Improves Test Scores

Working out just 30 minutes a day can dramatically improve the way you think, process, focus, and comprehend information. The University of Texas conducted a study on more than 1,100 students. Researchers found that students who averaged an 'A' on their weekly grades also worked out for at least 30 minutes a day for 3.52 times a week. When your body is working harder, your brain reaps the rewards.

2. Increases Energy

Just 15 minutes of daily exercise increases your energy at a cellular level, providing your body with the much needed endurance and strength it needs to stay focused and to think clearly. When you exercise, the increased blood flow to the brain strengthens short-term focus and it and it can ultimately help the brain improve its function later on in life. (See also: 7 Ways to Have Energy After Work)

3. Moving Muscles Feed the Brain

Every time your muscles move, your body revs up production of a protein in the brain called BDNF (PDF). BDNF supports existing neurons and promotes the growth of new neurons and synapses — contributing to improved learning. Brains that have higher levels of BDNF have a greater capacity for knowledge, according to John Ratley, the author of the book "Spark: The Revolutionary New Science of Exercise and the Brain."

4. Releases Endorphins

Exercise releases endorphins that improve memory, enhance your mood, and assist in impulse control. When endorphins are released during exercise, the brain's ability to prioritize and focus improves, allowing you to block out unnecessary distractions so you can stick to the task you set out to do. (See also: 6 Tools That Stop Computer Distractions)

5. Expands Memory

Your brain has the ability to remember more during moderate exercise. The American College of Sports Medicine published results of an experiment that showed that students who pedaled an exercise bike moderately while being shown a series of unfamiliar words recalled them more accurately than students who sat quietly or pedaled more vigorously. Dr. Kirk Erickson of the University of Pittsburgh also concluded that older adults who started working out after the age of 65 still benefited from physical activity. After a year of exercising, an MRI revealed an increased volume in the hippocampus and improved memory function. (See also: How to Improve Memory and Get Smarter)

6. Enhances Productivity

The benefits of exercise contribute to an overall increase in productivity. A study to be published in the Journal of Occupational and Environmental Medicine showed that workers who increased their physical activity accomplished more at work, they achieved a greater work capacity, and they were not as sick.

Do you exercise regularly? Do you feel like it helps your mind as well as your body?

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This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Lose Weight and Eat Better With the 8 Best Diet Apps

Debbie Dragon — Mon, 22 Jul 2013 09:48:32 +0000

Staying accountable and keeping track of what you eat when you diet are two things that contribute to a successful weight loss program. With an increasing number of people carrying a smartphone with them everywhere they go, dieting apps make it possible to remain accountable to your goals and keep track of what you eat no matter where you are. Here are eight great dieting apps for reaching your weight loss and fitness goals. (See also: 10 Self-Improvement Apps to Make You Smarter, Stronger, and Happier)

1. Lose It!

Create individualized goals for weight loss, nutrient consumption, exercise, sleep, and more with the free Lose It! App for iPhone. There is a searchable database where you can find and keep a log of the foods you eat, or you can use the included barcode scanner to scan barcodes of packaged foods you consume for quick tracking. You can even keep track of calories and other nutritional facts in complete recipes that you make yourself.

You can get started by entering your goal weight — and let the Lose It! app calculate a daily budget for number of calories to consume based on your current weight and height in relation to your goal weight. The Lose It! app will integrate with many wireless scales, other workout apps, and pedometers, and there are options to turning it into a social experience as you can connect with friends who also use the app.

2. Noom Weight Loss

Similar to Lose It!, Noom Weight Loss app is available free on Android. Each day, "The Coach" gives you tasks to help you make positive lifestyle changes to encourage long-term results. Noom will help you create your weight loss goal, keep track of what you eat and how much exercise you get, and guide you toward healthier choices for eating and physical activity. The Noom Weight Loss app even has a built-in pedometer to track how many steps you take each day.

3. Weight Watchers Mobile

If you are following the Weight Watchers diet plan, the Weight Watchers Mobile app is the ideal way to keep track of your points each day. The app is free to people who subscribe to the Weight Watchers plan, and it offers a database with more than 30,000 foods and their corresponding Weight Watchers point values. As you use the app to track what you eat, it will let you know how many points you have available each day. Available for iOS and Android.

4. MyFitnessPal

Designed for just about every smartphone on the market (iPhone, Android, Windows Phone 7, and Blackberry), MyFitnessPal lets you track your exercise and calories burned as well as your calories consumed. There is a huge database containing the nutrition information for restaurant menu items and over two million foods. You can use MyFitnessPal Mobile with your online account to synchronize things you enter via your phone or your computer, so you can always have an up to date account to keep you on track no matter where you are.

5. Eat This, Not That!

If you get tired of simply tracking what you eat and what physical activities you participate in, you might want to use the Eat This, Not That! game for your iPhone. The app will show you two different meals or food products, and you get to guess which one is healthier for you. While the app will not immediately contribute to your ability to lose weight by tracking calories or exercise, the knowledge you gain from learning which foods are healthier can guide you toward making better decisions when choosing what to eat in the future.

6. The Eatery

You can use The Eatery app for the iPhone to keep track of what you eat by taking a photo of it. Over time, this will help you see trouble areas and find ways to improve what you eat to lose weight. But then the Eatery also takes things to a social level, allowing other members to rate your meals based on whether they feel it is healthy or not. Instead of counting calories, you aim to eat healthier.

7. Calorie Counter PRO MyNetDiary

Android users can buy the Calorie Counter PRO MyNetDiary app ($3.99) to help keep track of calories consumed and burned. There are over 416,000 foods in the MyNetDiary database to help you quickly keep track of the nutrients in the foods you eat, and your purchase also includes access to the website for additional food entry and backing up of your data. The app includes a barcode scanner and an analysis tool to help you find ways to improve what you're eating. There are over 500 activities in the exercise section, so you can quickly choose your daily exercise and see how many calories were burned, or you can enter custom exercises and calories burned.

8. Fooducate

With the Fooducate app, you can scan the barcode on products you eat to get a health grade between "A" and "F". Try to eat healthier foods based on the health grade to reach your health and fitness goals. You can use the app to keep track of your weight and to create healthy grocery lists. The app is free and available for both Android and iPhone users.

Did I miss your favorite dieting and weight loss app? Please share in comments!

This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Tax Document Checklist: What to Gather Before Doing Your Taxes

Debbie Dragon — Mon, 18 Feb 2013 11:25:50 +0000

It’s that time of year again, and you may start feeling overwhelmed when you think about getting your paperwork together and calculating your income tax payment or refund. Tax season can cause anxiety for even the most relaxed people! Steady your nerves with this checklist to help you prepare for filing your taxes and go into everybody's least favorite season with an organized plan of attack. (See also: 15 Surprising Facts About Income Tax)

Gather Personal Information

You need several documents to get started.

Social Security number
Spouse's and/or dependents' Social Security numbers
Last year’s tax return

Gather Financial Information

As you get ready to file your income taxes, take some time to locate the following documents. If you’re like me, they’re not already in an organized filing cabinet where they really should be!

Employment W-2s
Income statements for self-employment or business, including MISC-1099s and Schedule K-1s
Information for any taxes you have paid during the tax year (estimated tax payments, property tax, sales tax)
Mortgage interest statement if you own a house
College tuition statements, student loan interest, education expenses (if you are a college student)
Retirement account contributions or distribution documents
Charitable donations made throughout the year
Medical expense statements and receipts, medical savings account contributions
Job search expenses or moving related expenses
1099-C forms, if you cancelled any debt during the year
Investment forms for dividends or interest income earned
Record of alimony received
Health insurance payments (if self-employed)
Energy efficient home improvement records and receipts
Child care records, if you have children and pay for daycare or babysitters so you can work

Gather Home Business Information

If you run a business out of your home, you’re going to need additional information to complete your taxes.

Records for income
Office and supply expenses
Utility expenses
Total square footage of your home
Square footage of your office space or supply storage (so you can deduct a percentage of your utility bill, rent or mortgage, etc.)
Car mileage or expense records if you use your vehicle for business

File Your Taxes

Once you have all of the necessary documents in an organized pile, you will find it much easier to file your taxes, whether you do them by hand or use tax preparation software to help. Even if you enlist the service of a professional tax preparer, having everything you need in hand, before you schedule your appointment, will make the entire process easier — and a lot less stressful.

What do you do to make your tax filing go as smoothly as possible?

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This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

An Organized Year: A Month-by-Month Guide

Debbie Dragon — Wed, 02 Jan 2013 11:24:29 +0000

Do you find yourself scrambling from one thing to the next all year, procrastinating until the last minute and running out of time? Get your act together and organize the tasks that you do every year into a month-by-month schedule. If you have a plan of action, you will be less likely to put things off or forget them, which means less stress and more success! (See also: 25 Easy Organizing Changes You Can Make Today)

January

Resolve Resolutions

Did you make a New Year’s resolution? Now is the time to get the goal “booked” on your calendar. Break the overall goal up into smaller, more manageable pieces and schedule a date for completion of each piece of your resolution on your calendar throughout the year. Seeing it on the calendar that way should help you become one of the few people who do not abandon their resolution by February!

Declutter Your Decorations

As you are packing up your holiday decorations, make sure you throw away anything that is broken, missing pieces, or no longer your style. There is no point in storing and holding on to anything you know you will not use again.

Tackle Tax Time Early

Now that the previous year has come to an end, it’s a good time to start preparing to file your income taxes. Hopefully you have kept up with your paperwork and all receipts and statements are filed neatly and orderly — but if not, don’t wait until April to start the process. If you are going to use a tax preparer to file your income taxes, you might want to start looking for an accountant now as they will start getting booked very quickly.

February

Get Ready for the Holidays

The holiday season is safely behind us at this point, but now is the ideal time to start preparing for next year’s holiday shopping. Take a look at what you spent over the holidays in the previous year and work out a monthly budget. If you spent $1,000, plan on saving about $100 a month over the next 10 months. By the time the holiday shopping season rolls around, you will have the cash on-hand, and you won’t need to rely on credit cards to make it through the season!

Review Insurance Policies

Take a close look at your insurance policies and health records. Now is a good time to get them organized and make sure you have all of the insurance you need and get rid of any policies you don’t need. It’s also a good idea to make a few phone calls or check online to make sure you are getting the best rates.

March

Change Smoke Detector Batteries

As a good way to remember to do this task, you should replace batteries in your home’s smoke and carbon monoxide detectors when you change your clocks for Daylight Savings Time.

Get Up-to-Date on Car Maintenance

Take a look at your vehicle maintenance records. When was the last time you had the oil changed? What about the brakes, windshield wipers, or other maintenance needs? Schedule service appointments as necessary to ensure your vehicle is running at its best.

April

Finish the Taxes You Started in January

It is income tax month, so pull out everything you started organizing in January and get to work. If you file your own taxes, make sure you give yourself enough time to meet the deadline. If you use a tax preparer, check in with him or her to see how the progress is going and make sure they have everything they need to file your taxes.

Inspect Your Home for Maintenance Needs

Walk around the outside of your home and check for any areas that need maintenance, repair, or updating. Schedule a yard clean-up day, and start making plans for any landscaping you want to do this season.

May

Spring Cleaning

For most of the country, May marks the beginning of warmer weather. It’s a great time to start your spring cleaning and home organizing. Clean all of the areas that tend to get neglected throughout the year. Make piles of items you no longer need — a pile to give away to charity, a pile for a yard sale, and a pile of items that need to be disposed of. Decluttering your home regularly will help keep it comfortable and maintained.

June

Turn Your Clutter Into Cash

Get rid of the clutter you collected during spring cleaning with a yard sale or garage sale, or by listing items online for sale. Most all homes have items they no longer need in them, taking up valuable space and making it harder to keep your home clean.

Plan Your Fall or Winter Vacation

Do you like to take a vacation and travel someplace warm during the winter months? Now is a good time to start planning and setting aside money for your trip. Don’t wait until December to figure out where you will take your January or February vacation.

July

New Year's Resolution Reminder

You’ve just passed the half-way mark for the year, so it’s a great time to review your resolution progress and evaluate how you are doing in relation to any goals you have set for yourself this year. Take a close look at your budget to make sure you are on track financially, reorganize yourself, and figure out what needs to change in order to achieve your goals this year. There is still time to turn things around if you have gone off track!

August

Get Ready for Back-to-School

If you have school-aged children, the beginning of August is the prime time to start gathering their required school supplies and preparing for a new school year. You’ll beat the rush of last minute back-to-school shoppers and still be able to take advantage of school supply sales.

September

Inspect Your Furnace

Has your furnace or heating source been maintained recently? Most companies recommend that your furnace or chimney be maintained at least once a year. Check to make sure your heat works now, before you need it, so when the temperatures drop you aren’t scrambling around trying to get it fixed.

Get Ready for Halloween

Do you have children who celebrate Halloween? September is the ideal time to start thinking about their costumes, especially if you like to make your own.

October

Schedule Checkups

Take a look at your schedule — when is the last time you and your family visited the dentist or doctor? If anyone is due for healthcare checkups, make sure you get the appointments scheduled. Preventative maintenance is always cheaper and easier to deal with than treating problems after they occur.

Get Your Home Ready for Winter

Start winterizing your home in preparation for the coldest months of the year. Many winterizing tasks can help save money on your utility bills.

November

Start Thanksgiving Preparations Early

As the month of November begins, start thinking about Thanksgiving. Will you host the family dinner? If so, begin meal planning and preparing your home as early as possible. Starting early gives you plenty of time to tackle everything a little at a time, rather than trying to do it all in the last few minutes. You will greatly reduce your stress level and help make the holidays more enjoyable.

Plan Vacation Days for the Upcoming Holidays

Do you like to take time off from work over the December holiday season? Take a look at your schedule and work-related tasks and see what you can start doing in advance in order to make taking time off easier. If you own your own business, you may be able to schedule some tasks in advance so they will happen automatically during the holidays, or take steps now to reduce your workload later.

December

Declutter Your Email Inbox

Is your email inbox overflowing? Take some time to unsubscribe from all the various newsletters and subscriptions you somehow joined throughout the year. I like to do this by sorting my inbox by sender, so I can see a group of emails that come from the same sender all together in a list — it makes spotting the newsletters I never even open easier! Click on the unsubscribe links and then delete all of the unread or unneeded emails from your inbox in preparation for the New Year.

Start Your NYE Planning Early

Are you hosting a New Year's Eve party? Don't wait until the 30th to start planning! The earlier you plan, the easier it will be to have a fun party and stick to a budget.

Take some time to reflect on the current year and think about anything you would like to change in the New Year. Make resolutions or goals for the upcoming year, and write them down.

What do you have planned for the upcoming year?

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This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

When You Should Fire Your Accountant

Debbie Dragon — Thu, 08 Nov 2012 10:36:51 +0000

Having an accountant can help you keep track of finances, reduce your tax burden, and make more efficient use of your money. If you own a small business, it’s especially important to hire an accountant, but even individuals can benefit from their services. Those advantages, however, only happen when you have a professional accountant who can do the job well. If you have had some doubts about your accountant's abilities, then you should know when it makes sense to fire your accountant and find someone else. Here are some reasons to consider firing your accountant. (See also: 3 Things Your Accountant May Not Be Telling You)

Dishonesty and Over-Billing

Your accountant's job isn't to scam you out of money or find ways to make your bill larger. Dishonest accountants can cost you thousands of dollars in fees every year.

Typically you can gauge an accountant's honesty by asking him to teach you some basic accounting and bookkeeping skills that you can do on your own. Your accountant shouldn't have any problems teaching you these simple methods to help you save money. If he's unwilling, and you think it's because he wants to earn more money by performing menial tasks, then you should consider letting him go.

Poor Communication

Few people will ever know as much about your life, especially your financial life, as your accountant. Without such intimate knowledge, your accountant couldn't make educated recommendations that will help you do more with your money.

Good communication based on trust, therefore, is incredibly important. If you feel uncomfortable talking to your accountant or you just don't like his communication style, then you should feel free to move on to another professional. You shouldn't expect an accountant to become your new best friend, but you should expect him to provide good information in a manner that you can understand.

Vague Advice

Your accountant needs to give you specific advice that will help you save money. Vague advice like "you need to save more money for retirement" doesn't get the job done. You need specifics.

A reliable accountant should be able to give you advice that considers the advantages and disadvantages of:

Buying or leasing equipment for your business
Saving money in IRA, Roth IRA, and other specific retirement accounts
Reducing your tax burden by finding more deductions
Choosing accounting software for your business

Outdated Advice

Tax laws, tax filing, and business regulations change all the time. Accountants have to keep up with those changes to offer their clients quality advice. Unfortunately, not all accountants are good at learning the evolving tax code and regulations.

If you suspect that your accountant is giving you outdated advice, then you might want to make an appointment with another CPA to see what suggestions she gives you. If you find that her advice is much better and up-to-date than the advice provided by your current accountant, then it's time to move on. Getting outdated advice not only costs you money, it could get you in trouble with the IRS and regulatory agencies.

The vast majority of accountants do their work very well. Occasionally, though, you will find one that doesn't meet your needs. When this happens, you should know the warning signs so you can fire him and move on to someone with better skills.

This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Get Free or Cheap Internet Access

Debbie Dragon — Tue, 16 Oct 2012 10:24:44 +0000

It is not unusual to pay $15 to $70 a month for cable or DSL Internet service in your home. The lower price is normally obtained by bundling your Internet with other services, such as your home phone and cable television. If you are looking to reduce your monthly expenses but still want to use the Internet, here are some ways you can get free or cheap Internet access. (See also: Cutting the Cable Cord Has More Than Financial Benefits)

Consider Dial-Up Internet

If you don’t use the Internet frequently or don’t have a need for lightning-fast service, you may consider using dial-up Internet service instead of DSL, cable, or FIOS. You can get dial-up Internet for as low as $9.99 a month through NetZero, provided you live in an area the company services. Juno advertises a dial-up plan for $10.95 a month. EarthLink offers a plan for as low as $12.50 a month if you prepay for a year at a time.

Internet Service Through Your Cell Phone Provider

If you already have a cell phone plan, you might save money by using a data plan through your cell phone company rather than having both a cell phone plan and a separate Internet service. Verizon charges between $50 and $100 a month for a cell phone and data plan, depending how much data you use per month. For some people, even the higher price of $100 a month for a data plan and phone service with Verizon would be less expensive than their existing monthly phone service and separate monthly Internet service bills. Verizon also offers a prepaid service for unlimited talk, text, and a data plan starting at $50 per month with no annual contract. If you don’t like the idea of checking your email or social media accounts on your phone, you can often use the cellular data plans through other device, including tablets or laptop computers, by turning your phone into a Wi-Fi hotspot.

Limit Your Internet Use to Free Wi-Fi Locations

If you’re not a college student, finding free Wi-Fi can be challenging if you are looking for an always-on, always-available location. If you don’t have an absolute need for Internet access in your home, you can get free Internet access from most public libraries. For some people, the library is conveniently located on their way to or from work and could easily take the place of Internet at home if you are someone who only uses the Internet for email or for occasional research.

If you have a wireless-enabled device such as a laptop, phone, or tablet, you can find free Wi-Fi through a variety of coffee shops, restaurants, hotels, and even some bars. Use a site like Wi-Fi FreeSpot to search for free Wi-Fi locations according to your location or where you plan to travel.

Internet for Low-Income Americans

There are government programs that exist to provide free or cheap Internet service for lower-income Americans. The availability of programs depends on location, availability of funds, and the applicant’s income level. The FCC announced a program called “Connect to Compete,” which will provide low-cost computers to low-income homes, and Internet access for $9.99 a month.

You may also have luck finding a program for low-income Americans on CheapInternet.com, as well as a listing of possible free Internet programs on this page (while I’m pretty sure the “Google TISP” was an elaborate April Fool’s joke that went a little too far, the other options for possible free Internet look legitimate).

This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

7 Free Ways to Get Out of the House

Debbie Dragon — Thu, 09 Aug 2012 10:36:41 +0000

If you work from home or simply spend most of your free time at home, you may be looking for something to do that gets you out of the house for a few hours. If you’re on a tight budget, leaving the house can seem nearly impossible, since most activities or events you think of will probably have a cost associated with them. Here is a list of seven free ways you can get out of the house and enjoy some social interactions or get a change of scenery. (See also: How to Be Frugal (Without Being a Hermit))

1. Visit Friends

It doesn’t cost a dime to spend some time visiting friends! Get on the phone or send an email to some friends you haven’t seen in a while, and ask if they’d like to get together and catch up. You can simply say, “When would be a good time for me to stop by? I’d love to catch up!” and chances are, your friend will invite you over — getting you out of your own house for free and giving you both the benefit of social interaction. Once you reconnect with several of your friends, don’t be surprised if you start getting phone calls and email invites to events and get-together’s more frequently.

2. Go Hiking, Biking, or Walking

There are hiking trails all over the world, and many of them are free to use. You can find trails by state and location with TrailLink website. Not only will this activity get you out of the house for free, but you’ll enjoy the great outdoors and get exercise at the same time. You might also considering joining a local group on Meetup.com for hiking, biking, or walking.

3. Go on a Picnic

You don’t always need an actual destination to get out of the house. Pack your lunch or dinner in a cooler and head outside. You can enjoy your meal in your own backyard, or visit a nearby park and do some people watching. (Or bring a book or magazine in case there is no one else out and about.) The fresh air will help clear your mind and reduce stress.

4. Visit a Park

Even if you don’t like to eat outdoors, you can still visit a local park. Walk around the park and enjoy the sights, sounds, and smells of the area. Try to meet new people, or simply enjoy being in different surroundings and give yourself permission to relax. If you live near a national park, consider going for the day. More than half of all national parks never charge an entrance fee; others have free-entrance days. Find out where the parks are located and when they offer free admission by visiting the National Park Service website.

5. Go to the Library

If you don’t regularly visit the library, you may be unaware of all the community resources the library offers for free. Not only can you check out books, but you can often borrow movies and music as well. The library has an extensive magazine and journal selection, most have computers and internet access for the public, and many will host free community events. Visit your local library to see what it has to offer, and don’t forget to look at the community bulletin board to see what else is happening in your area.

6. Go to a Free-Admission Museum

Many museums have free admission. Other museums have certain days each year where they do not charge admission. This is a great activity for a rainy or cold day, when you are looking for something to do indoors but still want to get out of your own home. Read How to Visit a Museum for Free to for information on how to find local options.

7. Go to Free-Admission Festivals

Most communities will put together a variety of events and festivals throughout the year for people to attend. There may be live music, plays, or outdoor festivals held during the warm weather months that offer free admission. You can go and walk around and socialize even if you don’t buy anything from the vendors. Farmers markets are another opportunity to get out of the house for free — and even though the vendors are set up to sell their goods, it can be fun just to walk around and see what everyone is selling.

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This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

25 Great Things to Do With Your Spare Change

Debbie Dragon — Tue, 07 Aug 2012 10:24:42 +0000

For many, spare change accumulates all over the house — piling up on night stands, in the dryer, in candy dishes, and in our cars. Have you ever stopped to think about how much money you really have each year in the form of loose change? If you did, you might be more inclined to do something purposeful with the money, rather than leaving it in piles wherever you change your clothes or empty your pockets! (See also: 25 Places to Look for Spare Change)

Here are 25 great things to do with your spare change.

1. Save All Year for Holiday Shopping

Every time you get change back when paying for a purchase, put it in a jar or piggy bank, and don’t touch it until you start your holiday shopping.

2. Save All Year (or Longer) for a Vacation Fund

When I was in high school, I worked at Dunkin’ Donuts. We had tip jars on the counter, and every day I would go home with a coffee cup full of change. I saved the majority of my change over a three year period and then cashed it in to go on a road trip to Virginia. The change paid for the gas for the car from NY to Virginia and back, the hotel room, most of my meals, and even a trip to Busch Gardens.

3. Use as Your Coffee Fund or for Work Lunches on the Run

Instead of swiping your debit or credit card for small purchases like a cup of coffee on the way to work or lunch from a fast food place, grab a handful of change.

4. Donate It to Charity

If you’re not already doing anything productive with your spare change, you may as well roll it once a year or so and donate it to a charity.

5. Pay Down Debt

Use your spare change to help pay your debt off faster. Every time you get enough change to match a credit card payment, cash it in and send a double payment to your creditor. Alternatively, you can save it over a longer period of time and make a larger payment all at once to one of your creditors.

6. Use It When the Tooth Fairy Visits Your Home

If you have children, you may need to keep money around in case someone loses a tooth. Most children are not expecting the tooth fairy to pay with a debit or credit card!

7. Pay for Someone’s Meal in a Restaurant

Roll your change and exchange it for cash or deposit it to your bank account. When you go out to a restaurant, pay for someone’s meal as a random act of kindness.

8. Start or Add to a Savings Account

Use your change to start or add to your savings account. You can make a deposit each month with all of your spare change (giving it the chance to earn interest once deposited into an interest-bearing account), or you can wait and make your deposits once or twice a year to get a larger amount to deposit at a time.

9. Use It at the Laundromat

If you don’t have access to your own washer and dryer, keep your spare change available for the laundromat. You can buy your laundry detergent and dryer sheets, and pay for the washer and dryer all with quarters.

10. Go to the Casino

Take an annual trip to your nearest casino and try your luck at turning your bucket of spare change into a lot of dollars!

11. Keep in Your Car for Parking Meters and Tolls

Having spare change handy in your vehicle is ideal for feeding parking meters or paying road tolls. Just try to keep it out of sight, so thieves aren’t tempted by a big pile of change they can see when peering through your car windows.

12. Keep in Your Car for Volunteer Firemen or Kids Sports Teams

If you keep your spare change in your vehicle, you will always have access to money to help support the local volunteer firemen or kids sports teams when they stand by a stop light collecting donations or have a table set up in front of a store. Just reach into your container and donate a handful of change to a good cause.

13. Buy a Scratch-Off Lotto Ticket

Some people like to buy a scratch off ticket or two each time they have a few dollars in spare change. It’s a fun activity that just might give you a few dollars back once in a while.

14. Tip the Bartender

Most bartenders don’t mind if you leave a few dollars in quarters as their tip. If you’re going out for a drink or two, bring a long a stash of coins for tipping, or at the very least, putting good songs on the juke box.

15. Sponsor Someone in the Checkout Line

Brighten someone’s day with a random act of kindness! Deposit your spare change before you go to the grocery store, and watch as people check out. When you see someone with a grocery bill about the amount of your spare change deposit, offer to pay for the bill. No one will expect it, everyone will remember it, and you will feel good about doing something nice for someone without any expectations for getting something in return.

16. Buy a Stock or Two

If you are someone who tends to leave money in jars or all over the house for years at a time, you would be better off cashing the money in at regular intervals and buying a stock or two in various companies. These stocks can pay dividends which you may choose to reinvest — and this method will turn your spare change into a growing investment.

17. Pay Your Kids an Allowance

You can gather all your spare change each week and use it to pay your kids an allowance. They can then decide whether to feed their piggy banks with the change or do something else with it.

18. Use for Unexpected Car or Home Maintenance

If you save spare change around your home for a long time, you probably have a couple hundred dollars or more built up. This can come in handy if you unexpectedly need new brakes on your vehicle or have to replace an appliance in your home. While you may not have enough to fully pay for an unexpected maintenance need, having money to contribute that isn’t counted as part of your monthly budget can really reduce the stress many families feel when an unexpected expensive comes up.

19. Treat Yourself

Use your spare change every month to treat yourself to something you wouldn’t ordinarily spend your money on. Maybe this is a massage or a new haircut, getting a makeover or buying a new book or some other special item.

20. Buy Stamps From Vending Machines

You can buy stamps from a vending machine using spare change. This helps you avoid waiting in line at the post office, especially during the busy holiday season!

21. Use in the Self-Service Line at Your Grocery Store

When grocery shopping, if you go through the self-service cashier line, you can feed spare change into the machine to pay for your purchases. While you can pay for purchases with change in the regular checkout lines, there is almost always a line of people who will get annoyed with you for counting your change. In the self-service line, there are less people waiting and you can quickly feed the money into the coin slot to pay for your items.

22. Buy Savings Bonds for Kids

If you have children or buy gifts for other people’s children, cashing in your spare change for savings bonds is a great use. Children have a lot of time for the savings bonds to earn interest, which means your small gift will become a much larger gift if the child waits for the bond to fully mature and stop earning interest before he or she cashes it in.

23. Use for the Ice Cream Truck

Does the ice cream truck pass by your home regularly? Keep your spare change handy to buy a treat once in a while.

24. Put Gas in Your Vehicle

Once a month, deposit your change into your bank account and use it to fuel your vehicle. It will help eliminate some of the strain on your regular budget for gas and is a good use of your change.

25. Pay One Bill Each Month

Depending how much money you accumulate each month in spare change, you may find you end up with enough to pay one of your regular expenses. If you have $50 or more each month, consider rolling and depositing your change regularly and using it to pay one of your bills.

Many of these methods require saving the change over the long term, and then rolling it to deposit or cash it in. Counting and rolling change can be time consuming! Here are some of the best ways to count and cash in your change.

This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Defining What Financial Success Means to You

Debbie Dragon — Mon, 25 Jun 2012 10:24:08 +0000

There is an old story about a young boy who is asked by an adult what he wants to be when he grows up. Not one to waste time as a fireman or an astronaut, the young boy gets right to the point and announces that when he grows up, he wants to be rich. (See also: Do You Really Want to Be Rich?)

The boy’s ambition is one you likely share. After all, how many people do you know who aspire to become poorer as they get older? But what does it mean to be “rich”? While some people might define financial success as achievement of a particular net worth, that may be the wrong way to think about it. As Adrian J. Cartwood, author of the soon-to-be-available book “Share Your Number” and the financial blog 7 Million in 7 Years, explains, "People, even rich people, are often dissatisfied with their level of financial success because they have failed to make the one true connection: that your life isn't about money, rather your money is there to support your life."

Instead of thinking about financial success as a mere number, Cartwood suggests that the best way to achieve monetary fulfillment is to first understand how you want to spend your money — only then can you figure out how much you will need to finance your dreams. "It's only when you find your life's true purpose and calculate how much money you need in order to support the life of your dreams — whether that be $100,000 or $100 million — will you really know what financial success means to you," he explains.

So how does one do this?

1. Take a Closer Look at Your Life

Start by asking yourself questions about what you enjoy doing. This will help you create a clearer picture of your goals for your future and give you a starting point for figuring out what that future will cost. Ask:

What are your favorite activities, interests, and hobbies right now?
Do you think you will want to continue doing them in the future?
Is it feasible to continue some of the things you enjoy now as you get older, or do you anticipate stopping some of them?

2. Dream Big

If money was not an object, what would you love to do? Sail around the world? Build a tropical vacation home? Start your own business? Simply be able to fish every day in the pond near your home? Do not be afraid to name your dreams out loud, no matter how far-fetched they seem. The more specific you can be about your goals for your life, the easier it will be to develop a plan to reach them.

3. Figure Out the Costs

Once you know what you would love to do with your life, you can start to determine how much money you need to pay for your dream future. Depending on your plans, this might be as simple as looking up the cost of buying and maintaining a recreational vehicle or as complicated as estimating how much money it would take to open a restaurant in your neighborhood. Either way, you will need to have an idea of how much money you are going to need to finance your desires and still pay for your day-to-day living expenses.

4. Develop a Savings Plan

Finally, you need to figure out how you are going to earn and/or save the money you need to reach true financial success. The amount may not be enormous; after all, if your dreams are inexpensive, then your personal definition of financial success will be modest. Of course, if you have grand plans for your future, you will need to figure out a way to put enough money away to be able to live the life you desire. And more importantly, you will want to start living that life as soon as possible. Consider your current earnings, how much you are likely to earn in the future, and how much money you can put away on a regular basis. Talk to an investment advisor to help develop a plan to make your savings grow.

It may take hard work and planning, but having the money available to give you the life you truly desire is a worthwhile and reachable goal — and it's the true measure of financial success.

This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Great Ways to Generate Passive Income

Debbie Dragon — Fri, 04 May 2012 10:24:15 +0000

Earning income passively is a dream for most people, since it essentially means you make money without putting in a significant time investment. Most sources of passive income will require time and some money to get started, but if successful, these opportunities can generate income for you long-term and without your direct involvement. (See also: 4 Reasons Why Everyone Needs Side Income)

Here are some great ways to generate passive income.

Create a Product

You can earn passive income by creating a digital product, whether it is an e-book, audio file, video, or some type of presentation, and then sell it over and over again automatically. Once the initial creation of your product is complete, the sales of the product become passive if you set up an automated system to deliver prospects to your sales page, collect payment, and send out their purchased product.

Other opportunities for passive income by creating a product might include writing a physical book and getting it published — ongoing sales of your book are earned passively. Some people become television writers, and when their series is picked up for reruns, royalties earned are considered passive income.

Sell Advertising

As a website owner or publisher of a popular e-zine, magazine, blog, or newsletter, you can sell advertising space. While you will have to do the initial legwork to create a successful website with a large following, once established, advertising revenue is a passive income opportunity where other business owners will pay you to include an advertisement on your website or in your newsletter.

Own a Business

When people think of passive income, chances are they will immediately think about an online business of some type. The internet makes it possible to start and run a business with low start-up costs and low overhead expenses — which means more profit in your pocket. It also creates opportunities for automation, and anything you can automate provides a potential passive income stream.

While it’s often easier to break into the world of passive income online, passive income is not limited to the internet. Any business you own can generate passive income for you if it is established the right way. If you hire people to fulfill the day-to-day activities of your business, your business should generate a profit after all the expenses are paid. The profit you receive as the owner of the business is passive if you aren’t directly involved in the daily operations.

Become a Landlord

People who own apartments or commercial space earn passive income through the rent payments they receive from their tenants. You receive the payment every month simply because you own the property; and you aren’t exchanging a direct service or time for the rent payment. There are of course, responsibilities that come with being a landlord — but many people find the experience rewarding and a way to establish consistent income without directly trading their hours for dollars.

Investing

A variety of social lending opportunities online allow you to earn a return by helping fund other people’s loan requests in peer-to-peer lending. Your total investment in the peer-to-peer lending site is generally divided up across multiple borrowers to help reduce your risks, but your money helps others gain the money they need, and you benefit by earning a return on the investment in the form of interest. Two of the more popular social lenders include Prosper and Lending Club.

When saving your money in a bank, take some time to compare savings accounts to earn as much interest on your money as you can. If you meet minimum balance requirements, you can also earn interest on money saved in a checking account. Earning interest on your money is a passive way to increase your income, so you may as well take some time to discover your highest earning potential.

You can also build an income investing portfolio to create passive income while growing long-term investments. You may include a variety of investments from dividend stocks to CDs, bonds, and annuities, with the goal of earning money quarterly, semi-annually, or annually without having to sell the investment.

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This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Great Summer Jobs for Kids and Adults

Debbie Dragon — Mon, 09 Apr 2012 10:24:08 +0000

The lazy days of summer may not be here yet, but for many kids and adults, now is the time to start thinking about a summer job. There are summer jobs for children of all ages, and some new opportunities for earning income as an adult become available during the summer months, too. Here are some ideas to get you started. (See also: 25 Ways to Make Money Today)

Jobs for Kids Under 12

Once children realize that having money means they can buy fun things, they want to earn some money of their own. Until the child is old enough to get working papers, they’re not allowed to get a job. To encourage their entrepreneurial spirit and desire to earn some money, here are some ideas for helping young children earn some summer cash:

Lemonade stand
Bake sale
Car wash (in your driveway)
Yard sale
Summer chores around your home
Yard work (perhaps there are some elderly neighbors who could use a hand raking their yard or clearing away brush?)

Jobs for Tweens 12–16

As children reach their young teen years, they’re often more determined to make some spending money of their own. This is the age when the kids begin asserting more independence and spending more time out with friends, and thus, the desire to have money in their pockets increases. Unfortunately, they’re still too young to get on payroll at most places, but they have a few more opportunities for earning money than the younger children. Here are some ideas:

Lawn care
Babysitting, mother's helper, or junior camp counselor
Pet sitting or dog walking
Selling their outgrown toys and video games on eBay or Craigslist
Online businesses

Jobs for Teenagers With Working Papers

Once a teenager is old enough to get working papers, he or she can start applying for “real jobs.” There are limitations on the type of work they are allowed to do, but some common summer jobs for this age group include:

Fast food employee
Restaurant waitstaff
Paper delivery person
Camp counselor
Lifeguard
House cleaner
Amusement park staff/ride operator
Telemarketer
Administrative assistant

Once your teenager is old enough to get on the payroll of a company, you should stress the importance of saving a percentage of their income if you haven’t already. You can even help your teenager earn their first million dollars, since they have adequate time to use the power of compounding interest.

Jobs for Adults

As an adult looking to earn extra money during the summer months, you have a wide range of options, from temporary employment at local tourist destinations to part-time evening or weekend jobs centered around your existing career. You can even start a summer business to grow your income. Here are a few ideas to get your creative juices flowing:

Lawn and garden service (See also: The 6 Best Lawn Mowers)
Tourist destinations: hotels, day camps, resorts, and campgrounds
Bartending
Babysitting (many parents are in a jam during the summer months when school is out)
Freelance and work-at-home jobs
Farmhand
Organizing assistance (help others get their garages, basements, closets, etc organized)

This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Pay Yourself First: What It Means, and How to Do It

Debbie Dragon — Wed, 28 Mar 2012 10:24:29 +0000

If you have ever read a retirement planning brochure or any website about investing, there’s a good chance you have read the phrase “pay yourself first.” Some financial experts refer to this as the Golden Rule of Personal Finance! But what does it mean to pay yourself first, and how exactly do you do it? (See also: A Comprehensive Guide to the Debt Snowball Method)

Pay Yourself First: What Does It Mean?

This commonly used phrase refers to the practice of automatically making a savings contribution or investment with your income before it can reach your wallet. You “pay yourself first” when you contribute a percentage of your income to your retirement plan or savings account each pay period. The transfer to your savings or investment account is done automatically, before you receive the rest of your income for paying your monthly living expenses. When you pay yourself first, you ensure the specified amount of money you want to save really does make it into your savings account or investment, since it happens before you have the opportunity to use the money for something else.

If you don’t pay yourself first, you will probably find yourself at the end of each pay period or month without any money left over to save or invest. If you plan to save what you have after you pay your rent, groceries, loan payments, credit cards, and entertainment costs, there is a very good chance that there will be no money left after your expenses and discretionary spending. Making the decision to pay yourself first removes the temptation to skip a planned contribution and keeps your savings and investment goals on track.

Creating a system for paying yourself first establishes a priority for your savings and helps you develop strong financial habits. People who spend their money in the reverse order — paying everything else before saving — generally reach their retirement years without a nest egg.

Setting Up Automatic Savings Plans

The easiest way to make sure you save a percentage of your income each and every pay period is to pay yourself first with an automatic savings or investment plan. Consider your savings or investment another expense that you must pay, and set it up just as you would any other automatic payment made to one of your creditors. Then you can forget about it. The money is invisible to you, and you will learn to adjust the rest of your spending habits to the income you have after your savings or investments are made.

If you receive a paycheck from an employer, you can usually designate a certain percentage of each pay period to your employer’s 401(k) plan or to a savings account. Some employers will allow you to have more than one direct deposit created, which means you could contribute a specific dollar amount or percentage of each paycheck into your 401(k) plan, and a specific dollar amount or percentage of each paycheck into your savings account.

If you are self-employed or receive income sporadically, you can still take advantage of the “pay yourself first” strategy. Each and every time you receive income, deposit a specific percentage in a designated savings or investment account before you use the money for anything else. This requires more financial discipline than having your employer deposit the money before you get paid, but if you make it a habit, you can still pay yourself first and benefit.

Additional Tips for Paying Yourself First

The biggest challenge of paying yourself first seems to be the mentality of not making enough to save and finding it hard to get started. If you feel like you aren’t making enough money to save, try starting with a very small amount, such as 1% of your income. From every paycheck or income received, simply save 1% of the amount, each and every time. You will not miss this amount, and over time, you will have saved some money.

When you pay off existing debts and find yourself with more discretionary income each month, or when your income increases due to a pay raise or promotion, you should increase your savings percentage.

This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

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.

This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great 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.

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This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great 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.

This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great 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!

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This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great 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.

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This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great 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.

This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great 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. 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.

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This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great 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?

This article is from Debbie Dragon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: