Free Money Finance

Posts of the Week -- August 31

Here is a list of my favorite posts this week:

• How Would You Change the US Tax Code? (49 great comments so far!)

• How to Find the Perfect Home: The Four C's

• It's a GREAT Time to Buy a House

• Help a Reader: How Much is 90 Minutes a Day Worth? I especially like this one -- you all done good! (read the comments)

Have a great weekend!
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Free Money Finance is brought to you by (note: all revenue from this site is given to charity): Blue Cash from American Express - I recommend it because it made me almost $500 last year.

One Year Ago This Week -- August 31

Here are some posts worth re-reading from one year ago this week:

• Another Way to Get an Incorrect Medical Bill Corrected

• Money Saving Tip: Calculate the "Per Use" Cost

• How I Set My Retirement Number

• Best of Free Money Finance: Career Posts

• How to Save Money While Living in a Big, Expensive City

• Why I Like Index Funds (Updated)

10 Easy Ways for Single Parents to Save Money

The following is a guest post. See the end of the article for author information.

In 2006, according to the US Census Bureau, there were approximately 14 million single parents in this country, and those parents are responsible for raising 21.6 million children. Eighty-three percent of single parents are mothers, and 30.3 percent of all single parents receive public assistance.

Child care subsidies and public health insurance can help with closing the gap between low income and what it takes to make ends meet. Not all low-income families receive the benefits for which they are financially eligible. Families who receive multiple work supports can lose assistance before they reach self-sufficiency. Single parents often struggle with buying basic necessities and paying bills and usually live paycheck to paycheck. Single parents often do not have any savings and are in debt. Here are 10 easy ways for single parents to save money:

1. Buy a Used Car. Buy or trade in your current car for a used car with a cheaper note. This will either eliminate your car note or save you $50 to $200 a month on your car payment.

2. Use Coupons. Buy whatever items are on sale or buy items with coupons. This can save you $50 to $300 a month. There have been instances where shoppers had a total bill of $200 and ended up paying $5 using coupons and buying items on sale.

3. Buy Generic. Buy everything generic: household items, clothing, prescriptions, toiletries, dry goods, canned goods, paper products, etc. This will save you on average $5 to $50 a month.

4. Buy Washable Clothes. Buy clothes that do not require dry cleaning. This will save you on average $50 to $150 a month.

5. Image. Do you own hair and nails and buy your makeup from a drugstore, such as CVS or Rite Aid. This will save you on average $40 to $100 a month.

6. Gas. Buy regular gas for your car unless the owner's manual suggests otherwise. Find the cheapest gas in your neighborhood to purchase. This will save you on average $.05 to $.20 per gallon.

7. Shop at Discount Stores. Buy household items in bulk, such as paper products, cleaning supplies at discount stores such as Target, Wal-Mart, Costco, etc. This will save you on average $5 to $50 a month.

8. Reduce expenses. Reduce or cancel your cable plan, cell phone or Internet service, or get the cheapest plan available. This can save you $20 to $100 a month.

9. Buy groceries at superstores. Buy your groceries at superstores or wholesale stores such as Wal-Mart, Costco, Sam's Club, etc. Buy nuts, grains, spices, legumes at wholesale or health food stores. This will save you $30 to $200 a month on processing costs charged at regular grocery stores.

10. Fun with Kids. Check your local library or newspaper to find free activities that you can do to with your kids. This can save anywhere from $5-$100 a month.

For more ways to save money visit www.stretcher.com or www.budgetdial.com

Harrine Freeman is the CEO of H.E. Freeman Enterprises, a credit repair and personal finance services company. She is a member of the American Association of Daily Money Managers, a credit repair expert and the author of, "How to Get Out of Debt: Get an ‘A’ Credit Rating for Free Using the System I’ve Used Successfully with Thousands of Clients.” For more information visit http://www.hefreemanenterprises.com.

Jim Cramer Doesn't Know Stocks

Here's a piece I find interesting to say the least. It's from MSN Money and is based on a Barron's study of Jim Cramer's (the Mad Money host) stock picks. Turns out, he's not very good at picking stocks (who would have guessed?) Their summary:

Over the past two years, viewers holding Cramer's stocks would be up 12% while the Dow rose 22% and the Standard & Poor's 500 Index ($INX) gained 16%, according to a record of 1,300 of the CNBC star's "buy" recommendations compiled by YourMoneyWatch, a Web site run by a retired stock analyst and loyal Cramer-watcher.

We also looked at a database of Cramer's "Mad Money" picks maintained by his Web site, TheStreet.com. It covers only the past six months but includes an astounding 3,458 stocks -– "buys" mainly, punctuated by some "sells." These picks were flat to down in relation to the market. Count commissions and you would have been much better off in an index fund that simply tracks the market.

The piece goes on and on -- for four pages -- on the efforts the author took to try and get Cramer or CNBC to refute the fact that Cramer's picks underperform the market. Read it if you will, but the short version is that he got nowhere. They stonewalled, didn't respond, gave excuses, and so on.

A couple thoughts here:

1. Jim Cramer is an entertainer as much as he is anything else. He does well at providing a good "show" and that's on reason people like/watch him. Yeah, they think he can earn them some money too, but his flamboyant style is certainly part of his appeal.

2. Is anyone surprised any more when they find out that an "expert" isn't all they're cracked up to be? Or that a financial advisor of some sort is just as interested in making money for himself as he is at helping a viewer/client? Personally, I've lost all sense of shock on this topic.

3. Forget Cramer and his stock picks and go with index funds. Check out these recent posts for thoughts on why:

• Facts on the Benefits of Index Investing

• Illustration of How Costs Can Greatly Hamper Your Investment Returns (And Why Index Funds Do So Well)

• Warren Buffet Recommends Index Funds

Two Keys to a Great Credit Score

Money magazine's August issue had a piece on how credit scores can impact your car and homeowner's insurance rates. A chart accompanying the article showed what percent Fair Isaac (the organization that sets credit scores) attributes to various data they collect on each of us to get a credit score. These really boil down to two key measures that we all need to do well on to get at least a decent score:

• Payment history (40% of what calculates credit scores)
• Outstanding debt (30% of what calculates credit scores)

The others are length of credit history (15%), pursuit of new credit (10%), and credit mix (5%) and while we all would like to do well on all of these measures, payment history and outstanding debt are the two keys to a good credit score. A good credit score, in turn, can save you a boatload of money -- maybe even up to $1 million.

I haven't checked my credit score lately (on my list) but since I haven't missed a payment of any kind in years and I have no outstanding debt, I should be good, right?

Build Your Own House Blog (And Final Giveaway!)

Today we wrap up a month of talking about the book Be Your Own House Contractor. It's been a fun time, I've learned a lot, and I hope you've enjoyed it too (with giveaways, what's not to love?). I'm going to end the series by pointing you to author Carl Heldmann's blog. It's just getting up and running, but if he keeps it up, the blog should be a great resource for those of us thinking of being our own general contractor.

And now for the final book giveaway. You can win a free copy of Be Your Own House Contractor. Here's how it works:

1. Leave a comment below -- any comment.

2. Sometime Monday, I'll stop by the post, stop the submissions, and name the winner.

3. It will be that person's responsibility to check back to see if they are a winner and then email me their contact information.

4. I'll send all the winners their books in one mass mailing going out the second week in September.

A few rules for these giveaways:

1. You can not win more than one prize.

2. I will be the complete and final judge.

3. Legal disclaimer: I can not guarantee safe delivery of the items. I'll send them via US Mail, so it's likely they'll be fine, but I can't control it and won't be held accountable if the mail system messes up.

4. If you win something and do not contact me within a week of winning, I reserve the right to give your prize away to another winner. Note again: I won't track down the winners -- it's your responsibility to come back and see if you won.

Good luck! Post a comment below for a chance to win this book!

Star Money Articles for the Week of August 27

Here are some recent interesting posts from the MoneyBlogNetwork and beyond:   

• Five Cent Nickel discusses longevity insurance.

• Blueprint for Financial Prosperity gives details on Wilmington Trust Direct.

• Consumerism Commentary kicks off a series on rental property.

• AllFinancialMatters advises us all not to panic.

• MightyBargainHunter passed over a couple of deals.

• The Digerati Life lists 17 ways to stay cool.

• The Sun’s Financial Diary details how long it takes to triple your money.

• Generation X Finance tells what bills to pay first.

• Lazy Man and Money suggest we keep level heads in this market.

• Money Smart Life warns not to loan out your identity.

• Money, Matter, and More Musings covers past stock market dips.

• Consumerist says pizza is a magic food.

Enjoy!

Why Having a Budget Is the First Step to Getting Out of Debt

The following is a guest post. See the end of the article for author information.

Many people constantly complain about being in debt, but when you ask, “Do you have a budget; Do you know how much you owe,” or when you suggest they cut back on expenses they look at you as if you are speaking a foreign language, or they just plain out refuse. I am always amazed at this, how can you ever get out of debt if you don’t change your mindset or if you aren’t willing to work hard and make sacrifices? There is no quick fix or cure-all to get out of debt. It takes a long time to get in debt, and you will not get out of debt overnight.

Many people do not know how to create a budget for themselves and many don’t even know where to start. Luckily, I was taught at an early age how to create a budget for myself. I knew how much money I spent and how much I had left. This skill helped me when I became an adult and got into debt. How did that happen, you say? Well, although I knew how to budget my money I didn’t have a clue about how credit cards worked. I thought it was free money, but that is another article.

Anyway, the first step to getting out of debt is creating a budget for yourself. The basic premise for creating a budget is to know what you have coming in and what you have going out, in other words, how much money you bring home and how many expenses you have (creditors, loans, utilities, cell phone, day care, dry cleaners, etc.). Make the budget flexible so you have room for unexpected expenses such as house repairs or car repairs. If you don't have an emergency fund or savings to cover these expenses, you can readily see in your budget areas where you can reduce your expenditures to get money to pay for those unexpected items.

Having a budget makes you responsible and accountable for your finances. Most people don't think about how much money they spend per week or per month, but when you write all of your expenses down on paper it provides awareness of your spending habits.

Once you create your budget you can easily see if you have too many expenses or if your money is not being managed properly. The easiest task to accomplish is determining if you have too many expenses, you simply cut down on your expenses and you will have additional money. To pay down some of your debts, some expenses you can reduce include:

* bringing your lunch to work
* canceling your pager, cable or cell phone service or get the cheapest plan available
* carpooling, or catching the subway or bus to work
* using coupons when buying groceries or shopping at wholesale stores like Costco or Sam’s Club
* selling unused items at a yard sale or donating to charity.

If you are mismanaging your money, or spending your money on wants instead of needs, that is a little harder to overcome because this takes willpower and discipline. It takes 23 days to develop a habit so you have to practice good spending habits every day. Each week it will get easier and easier. It also helps to develop financial goals for yourself, such as you want to get out of debt within a specific time period, you want to buy a house, take a vacation - whatever your goals are write them down and give yourself a target date.

Don’t get alarmed if you miss your target date for a financial goal because your main focus is changing your spending habits. Remind yourself that you are working toward achieving your goals. It may take some time, but I know you can do it. Being debt-free is worth the hard work and discipline required. Financial freedom is so sweet. Just think how nice it would be to wake up each morning not worrying about having to pay a creditor, not worrying about creditors calling your house asking for a payment, being able to see yourself in a house, or buying investment property or taking a vacation every year.

So many things are possible when you are debt-free and live on a budget. I make a decent salary and only have one bill, my mortgage, and I still put myself on a budget every payday. Sometimes people ask, “Why do you worry about money?” and I say I always liked to be prepared, because you never know what may happen.

Harrine Freeman is the CEO of H.E. Freeman Enterprises, a credit repair and personal finance services company. She is a member of the American Association of Daily Money Managers, a credit repair expert and the author of, "How to Get Out of Debt: Get an ‘A’ Credit Rating for Free Using the System I’ve Used Successfully with Thousands of Clients.” For more information visit http://www.hefreemanenterprises.com.

How to Find the Perfect Home: Convenience

I'm highlighting Money magazine's excellent resource on how to find the perfect home. Today, we'll talk about considering the home's convenience. Their thoughts:

Cities offer great job and cultural opportunities, but they generally come with high real estate costs. To get more house for your money, you might look along the edge of a hot neighborhood or in a smaller town nearby. But will you miss the pace? Will you end up with a longer, pricier commute than you'd prefer? Will family and friends ever visit?

Money goes on to note that the average commute in 1990 was 22.4 minutes but in 2005 it was 25.1 minutes. That doesn't seem like a big gain, but when you consider you spend an extra 2.7 minutes each way for 250 days a year, that ends up to being an extra 22.5 hours a year! (not to mention the extra gas and car maintenance costs.)

Money also suggests you look at other factors like the nearest hospital, supermarket, pharmacy, and airport as well as the quality of the schools as a factor of convenience.

These are all factors to us with distance to work, distance to church, schools, and distance to supermarket being the key factors. It's a series of trade-offs for sure -- and we're yet to find the right mix.

Click here to read part 1 of this series.

Make Your Death Easier on Your Heirs by Writing a Letter of Instruction

Something I've had on my to-do list for quite some time is to write a letter of instruction to my wife and kids. It basically tells them where all the financial records are, what key passwords are on our computer, what's in each account, etc. -- stuff that I know well but that would take them awhile to sort out. I go through all of this verbally every year with my wife, but I'm positive she doesn't remember most of it and I need to write it down for her.

Money magazine recently covered this issue and listed some things you should consider in writing a letter of instruction. Their thoughts:

• Be specific. Include the sort of end-of-life wishes you want the person who holds your health-care proxy to know.

• Consider what not to write. Resist the temptation to unload and say all the nasty things you might have liked to say in life.

• Talk about it. Make sure your kids know the letter exists.

• Update it. Read the letter once a year to make sure it reflects any changes you've made in your financial life or in your thinking.

They also have a list of what you should write including:

• The location of key documents
• Policy/account numbers for key policies/accounts
• Phone numbers for all your major family contacts

After getting your will straightened out, this is probably the best thing you can do to make sure your death is as easy as possible on those you love.

How to Get a Really, Really, Really Good Deal on a Home

MSN Money has an article on EXACTLY the strategy I'm using as we look for a new house. As I've said, now is a great time to buy a house, and one reason it's so good is that prices are coming down, everything is negotiable, and sellers are not discounting any offer (even if it's a very lowball offer, they still have to ask if it's worth taking it now or risking holding on to the place for another year or so.)

This piece gives details on how to lowball a home seller. The highlights:

Home sellers are not automatically turning up their noses at offers that come in far below their asking prices these days as prices stagnate and the inventory of homes for sale remains elevated in many markets.

And here's an example of what's happening:

Before he even made an offer, the asking price had dropped by about $80,000, he said. After O'Heron made his case for an even lower price, he bought the home for $270,400, with about $11,000 in other credits. The net price ended up being $115,000 below the initial asking price.

And here's how he was able to do this:

O'Heron was able to take advantage of a market in which buyers decidedly hold the upper hand, with its excessive for-sale inventory due in large part to job losses in the area.

This is exactly the situation I'm facing. We're in a market that's been hit at least as hard as the national averages -- probably harder. We've had some job losses as a community and a state (Michigan), home inventory is up, time on the market is up, and selling prices are down. I think nothing of seeing a $375,000 home and thinking the "real" price is probably in the $325k range.

So here's what I do:

1. I identify homes we may be interested in. My agent emails me new listings based on my criteria, I have access to the local city MLS system, we search the paper each weekend, and we have friends and family (including a banker friend) on the lookout for us, telling us of new places they find.

2. Once we have a vague idea that the home is something we could be interested in, I go online and download the MLS information giving me all the details on the home. I get a consumer-based report, not the ones the agents get, so if I need extra information, I call or email my agent.

3. If it still looks good, we set up a visit and see the place. We match it up against our criteria and see decide whether or not it's a possibility.

4. If it's at least in the ballpark, I flag it on our agent's website and I get email updates on any changes in the property (sold, price reduction, etc.) Then I wait...and watch the price drop. One spot I have had my eye on started at $459k and is now at $419k a few months later. If it drops another $50k or so, we may make a move.

5. So far, none of the houses we've liked have been sold out from under us. And if they were, that would be ok, we haven't been absolutely in love with anything yet. But if we did find something we just HAD to have, I think we'd make an immediate offer. We'd still go low, but probably not as aggressively lower as we might otherwise. Who knows what would really happen, we haven't been to that point yet.

Should You Shop in One Place for All Your Home Needs? (And Giveaway!)

This month we're talking about the book Be Your Own House Contractor. Today, I'm highlighting a piece from the book's companion website at http://www.byoh.com/ that says you should shop in one place (as much as you can) for all your home needs:

Q: I found better deals for some items at various building supply companies. You say shop for as much as you can under one roof. I don't get it. If the main way to save money in this business is to shop well, you're wrong aren't you?

A: Well, it wouldn't be the first time! My reasons for buying as much as you can from one source haven't changed much over the years, its just gotten easier to do it as home building centers have grown and become more competitive. Your time is worth something (although one book reviewer who obviously never read my book accused me of not taking one's time into account), and shopping item by item takes a lot of time. You will get better service and a fair price, and you can still bicker over certain items with the one stop store.

If you can get one place to give you a quantity discount and you think they are close in price to what others would charge, then I'd say to stick with one place too. Why spend hours and hours more shopping to save a few pennies -- or even a few dollars. Then again, if you can save a boatload by shopping around, then it's probably worth the time and effort.

Want to know more? You can win a free copy of Be Your Own House Contractor. Here's how it works:

1. Leave a comment below -- any comment.

2. Sometime tomorrow, I'll stop by the post, stop the submissions, and name the winner.

3. It will be that person's responsibility to check back to see if they are a winner and then email me their contact information.

4. I'll send all the winners their books in one mass mailing going out the second week in September.

A few rules for these giveaways:

1. You can not win more than one prize.

2. I will be the complete and final judge.

3. Legal disclaimer: I can not guarantee safe delivery of the items. I'll send them via US Mail, so it's likely they'll be fine, but I can't control it and won't be held accountable if the mail system messes up.

4. If you win something and do not contact me within a week of winning, I reserve the right to give your prize away to another winner. Note again: I won't track down the winners -- it's your responsibility to come back and see if you won.

Good luck! Post a comment below for a chance to win this book!

Free Money Finance Carnivals This Week

Here are the carnivals Free Money Finance is in this week and my posts that were included:

• Carnival of Debt Reduction - Should You Prepay Your Mortgage or Invest Instead?

• I hosted the Carnival of Personal Finance

• Carnival of the Capitalists - What I'd Do with a High-Paying, Unrewarding Job

• Festival of Frugality - Is Bottled Water Worth It?

• Festival of Stocks - Now’s a GREAT Time to Invest

• Carnival of Money Stories - What I'd Do with a High-Paying, Unrewarding Job

Stop by these carnivals to read some great posts!

Carnival Hosts: As a reminder, I post all carnivals I'm in for a given week as long as the host either emails me a link to the carnival or sends me a trackback.

The Best Days and Times to Save on Airfare

In Money magazine's piece on how to get the best airfare, they list the best days and times when you'll have the greatest selection of new fares. Their list for domestic flights (all times are eastern time):

• Saturdays -- 7 am to 9 am
• Weekdays -- Noon to 2 pm; 2:30 pm to 4:30 pm; 10 pm to midnight

And here's the list for international flights:

Weekdays -- 7:30 am to 9:30 am and late afternoon

As I've shared, we got a killer deal on our flights to Disney by being flexible. I can't remember what time we booked the flights for sure -- I think it was on a weekday in the morning. It's hard to imagine we could have done better, but who knows.

Anyone out there have any other money saving tips when it comes to booking airfare?

How to Find the Perfect Home: Capacity

I'm highlighting Money magazine's excellent resource on how to find the perfect home. Today, we'll talk about considering the home's capacity. Their thoughts:

To squeeze into a budget, you might have to get a smaller - wait, I'm a real estate agent: cozier - house than you'd like. So forget about square footage, often a misleading number. More important is how that space is allocated.

They go on to say you should ask the following questions:

• Does it have enough closet space?
• Are there enough bedrooms?
• Does the kitchen suit my needs?
• Is there a spot to work from home?

A few thoughts on this issue from me:

1. This is probably the biggest area of disagreement between me and my wife. I want a house a bit bigger than our current place, she wants a house that's easier to clean (which means smaller.) I've offered to pay for a cleaning person to come in and take care of the cleaning for us all, but she doesn't want to do that. So, we remain in disagreement.

2. The comment about square footage and layout is correct. If designed properly, 2,000 square feet can seem like 2,300. And if done poorly it can seem like 1,600. That's a BIG difference.

3. Closet (and storage) space is key. We've seen some houses with closets so small you could barely fit a hanger in them.

4. Bedrooms is an issue for us too. We'd like to have rooms for our family, a spare room, and office, and a workout room. But I'm not sure we can find all this in our price range. That's six bedrooms if the place doesn't have a den, library or something similar. One solution for us: a basement designed the way we want it.

5. I ignore the kitchen when we look at homes -- my wife spends 50% of her time there while looking. :-)

6. I would love to work from home some day and want a place that gives me that option.

Money ends this section with a few interesting facts:

• The median American single-family home has gotten 61% larger even as household size shrank.
• Median American single family home in 1970: 1,385 square feet; In 2005: 2,227 square feet.
• Median American single family home in 1970: 3.14 people; In 2005: 2.6 people.

We have four people. Does this mean we can get a 3,426 square foot house and just be average? ;-)

Click here to read part 4 of this series.

Click here to read part 1 of this series.

Help a Reader: How Much is 90 Minutes a Day Worth?

I recently received this email from a reader:

I have found myself with two job offers that I must decide between. The first job pays $12,000 more per year but is a 40 mile (1 hour) commute.  The other is only a 10 mile (15 minute) commute.  Both jobs are essentially the same from a career standpoint.  The question really comes down to this, "Is $12,000 a year worth the extra commuting costs and losing 90 minutes per day with my family?"  I would love to get others thoughts on this, it is a tough decision from me at this point.

I emailed him back with the following question:

One question: do you mind telling me the actual salary numbers? The answers/suggestions might be different if we're talking $40,000 or $28,000 versus $112,000 or $100,000.

His response:

$57,000 v. $69,000 (essentially a 21% "jump" for the longer commute, or 17% pay cut if you look at it that way), paying down student/car loans aggressively, 2 children, etc.

So there you go. It's a tough issue. On the one hand, $12,000 extra per year will be part of his pay from here on out. His annual increases will be based on an extra $12k per year and if he takes another job, his new job will factor in that extra $12k per year when they make him a new (better) offer. On the other hand, 90 minutes a day is a TON of time -- not to mention an expense.

What would you suggest he do?

Asking for a Raise Can Yield Big Financial Results!

Here's a comment that was left on my post titled Should You Ask for a Raise When You Take on Additional Responsibilities?:

Depends on the 'promotion'. I just asked for, and got, a HUGE pay rise. (Well... huge for me. Went from $60k inc bonus to $70k incl bonus. Take home pay went up by 15%). BUT! I asked for it SUCCEEDING 6 months of solid performance at a level exceeding my job description. If your promotion is to another level of work, then you need to be paid at that level. If your promotion is just because they're adding "a line item" or you're suddenly getting more complicated projects...my advice is to be thankful for the opportunity, tough it out, SUCCEED, then put your hand out when you DESERVE it. Then, if they're not interested, leave. Either way you win, because your current employer has just made you more valuable by increasing your marketability.

A few thoughts on this:

1. Yes, the answer to the original question depends on whether the extra job responsibilities are just a few more tasks or a true promotion. Since it read as if it was a promotion, I said the person should ask for a raise.

2. A 15% pay increase is HUGE! If he only gets 3% raises for the rest of his life (I'll assume 30 more working years), that extra $10k will net him over $700,000!!!!! (and this doesn't include the extra amounts he could earn by investing the surplus.) This is EXACTLY what I'm talking about when I encourage people to actively manage their careers because it can make a huge financial difference.

3. A KEY part of asking for a raise is that you need to deserve it. Over-perform, make the company a bunch of money (or save them a bunch), and so on and you'll be setting yourself up for a nice pay bump.

4. If you want more thoughts on how to ask for a raise, see Six Steps that Will Get You a Raise.

Don't Pre-pay Subcontractors (And Giveaway!)

This month we're talking about the book Be Your Own House Contractor. Today, I'm highlighting a piece from the book's companion website at http://www.byoh.com/ that tells you not to pre-pay subcontractors:

Q: My foundation sub wants 25% down before he will start my job. This makes me nervous. What do you think?

A: I think you have good reason to be nervous. Find someone else. Paying for labor in advance has never worked and it is counter-productive to what you really want to accomplish, which is for your subs to do your job quickly and on schedule. Paying even honest people in advance destroys the incentive to do your job before someone who won't pay in advance. If they already have a healthy sum from you, the pressure is off to do your job. Besides, what if they get hit by a truck and die before they finish your job (assuming they ever start). Bye-bye deposit. Never pay for labor in advance.

Think about it this way -- if they get your money upfront, what's the incentive for them to do the job quickly and with excellence?

Want to know more? You can win a free copy of Be Your Own House Contractor. Here's how it works:

1. Leave a comment below -- any comment.

2. Sometime tomorrow, I'll stop by the post, stop the submissions, and name the winner.

3. It will be that person's responsibility to check back to see if they are a winner and then email me their contact information.

4. I'll send all the winners their books in one mass mailing going out the second week in September.

A few rules for these giveaways:

1. You can not win more than one prize.

2. I will be the complete and final judge.

3. Legal disclaimer: I can not guarantee safe delivery of the items. I'll send them via US Mail, so it's likely they'll be fine, but I can't control it and won't be held accountable if the mail system messes up.

4. If you win something and do not contact me within a week of winning, I reserve the right to give your prize away to another winner. Note again: I won't track down the winners -- it's your responsibility to come back and see if you won.

Good luck! Post a comment below for a chance to win this book!

How to Find the Perfect Home: Condition

I'm highlighting Money magazine's excellent resource on how to find the perfect home. Today, we'll talk about defining the acceptable condition of your home. Their thoughts:

Unless you're buying brand new, expect your home to need some upgrades. Just be sure the issues aren't structural. Better to go with a home needing cosmetic work or at least a less extensive overhaul. The investment you make in resolving these will improve your quality of life while living there and increase the resale value.

Money has included a green, yellow, and red light system as well to tell readers which repairs are ok to deal with, which are fine but may require a bit more expense, and which ones they definitely do not want to mess with.

In addition, Money cites a Harvard study that says new homeowners spend an average of $2,300 annually on improvements. Is that all? If we find a place and all it needs is $2,300 of improvements/changes, you'll find me outside in front of the house -- dancing in the street! ;-)

Click here to read part 3 of this series.

Click here to read part 1 of this series.

Free Chicken Sandwich and Coke

Chick-fil-a is giving away free chicken sandwiches and Cokes. Thought you all would like to know.

Hat tip: Wise Bread.

Are You on Track for Retirement?

Money magazine's August issue has some great pieces on retirement. One asks if you are doing the right things to prepare for retirement. Money says you are if you can say "yes" to these four questions:

1. Are you maxing out your 401(k)?
2. Are you keeping tabs on your progress?
3. Are you grabbing every tax break you can?
4. Have you created a safety net?

Here's how I stand on each of these:

1. Yep, I've been maxing mine out for years now.

2. Yes. Every year I review my retirement goal and progress towards it, making any needed adjustments.

3. I'm desperately grabbing every tax break I can. I wish there were more!

4. I do have extra savings as well as life and disability insurance.

The thing that amazes me is that though I'm doing all these things, it still takes a TON of time and discipline to save up what's needed to retire. It's simply such a big number to swallow!!!!

For more on retirement, see these posts:

• When to Take Social Security

• Calculate Your Retirement Number -- And You'll be Happier You Did

• The Last Words on Roth IRAs Versus Traditional IRAs (At Least for Today)

It's a GREAT Time to Buy a House

This whole subprime mortgage meltdown (by the way, have I said I told you so lately?) has really created a couple great buying opportunities for those of us who have managed our money correctly the past several years. First, the stock market has (and may continue to have) offered some great opportunities to load up on depressed stocks -- chances to get some stocks on sale as I like to say. (I know, Kurt, that you hate that phrase, but please indulge me) Second, for a potential house buyer like myself, now's a GREAT time to be a buyer. If you have some cash, low (or no) debt, and good credit, you can get houses for a steal these days. It's really just a matter of finding the right situation for living -- that's the biggest issue for us. Once we do find something we like, we'll be able to move quickly to get it at a great deal.

While now is certainly a great time to buy a house, the question is whether it's the best time to buy. Will prices go down even more? Will they be flat for awhile? Or have we seen the worst of it? Before I state my position on the issue, I thought I'd share a few facts. First, it appears house prices will be going down for a while longer:

Homeowners trying to sell last month faced the biggest glut of homes on the market in about 16 years, as declining sales and growing problems in the mortgage market helped push home prices down for the 12th straight month.

The National Association of Realtors said sales by homeowners slipped to an annual rate of 5.75 million last month, down 0.2 percent from the revised 5.76 million pace in June. Economists surveyed by Briefing.com had forecast the sales rate would fall to 5.7 million in the latest reading.

Not only did sales slip but the number of homes for sale jumped 5.1 percent, the group said, meaning there is now a 9.6-month supply of homes for sale, up from 9.1-months in the June reading. It was the biggest supply of homes by that measure since October 1991.

"We are literally swimming in an ocean of homes for sale. In fact, at 4.59 million units, we have the most raw inventory for sale in history," he said. "Until we work through this extremely large inventory glut, we're not going to see any momentum in home prices."

Basic economics tells us that a higher supply of homes along with lower demand (not as many buyers can even get mortgages to buy the homes they want) tells us that prices will need to give. There are more price declines to come:

"These are 'PC' figures -- pre-crunch," said Larson. "The mortgage credit crunch that began very late in July and picked up steam in August will likely put more downward pressure on home sales and prices this month and into the fall."

The report comes after Friday's government reading that showed new homes selling at a better-than-expected pace. But the reports showed more weakness in prices - which have become a major concern for the U.S. economy as a whole.

Here's what I'm thinking:

1. We haven't seen the worst of it yet -- prices will be dropping more. And in my market, we're a bit worse than the national averages, so we're probably due for more drops too.

2. But how much more is the key. I'm thinking we will see drops into the spring or maybe summer of next year before prices stabilize. Then I'm expecting a year or two of flat prices. That means we have plenty of time to select the best house for us -- and get it at a great deal.

3. That said, if we found something we really loved, we'd jump on it now. After all, we plan to live there a long time, so even if we buy now and the price drops continue, we'll reap it back in three to four years. Besides, what if I'm wrong and we've seen the worst of it, and prices start to go up. In that case, we've missed a bargain.

4. Or I could be wrong and we're going to see price drops for a year or so more, maybe longer. This is why it's important for us to buy a place we really like -- so we can stay there a long time and weather the storm.

5. As a seller, the current market is a nightmare. I'm looking at some creative ways for us to unload our house once we buy a new place. I'll keep you updated on those if we get to them.

$10k Challenge: Start a Blog

Here's another idea for those of you playing along with my quest to raise an additional $10k this year in income -- extra income outside my regular job. (The numbers I ran show that making this amount and socking it away year after year can yield quite a sizeable next egg.) What's the idea? Start a blog, of course! Here's what CareerJournal has to say about making money by having a blog:

Most self-employed bloggers take in between $2,000 and $10,000 a month from ad sales, says Henry Copeland, founder of BlogAds.com, a Web advertising concern based in Carrboro, N.C. The few that have huge audiences make significantly more, he adds. During election time, for example, a political blogger can bring in $20,000 to $30,000 a month, says Ken Layne, West Coast bureau chief for Wonkette.com, a political gossip blog owned by Gawker Media.

Ha! I wish it was that easy! ;-)

Then again, you can earn a decent side income with a blog -- if you do it the right way. For my thoughts on how to start and run a successful blog, check out How to Get Your Blog to 100,000 Visitors and Beyond.

How to Get Good Subcontractors to Work for You (And Giveaway!)

This month we're talking about the book Be Your Own House Contractor. Today, I'm highlighting a piece from the book's companion website at http://www.byoh.com/ that tells how to get good subcontractors to work for you:

Q: All of the subs I've talked to say they're too busy with their regular builders to do my job. I'm only building one house. The guys they work for keep them busy all year. This is not easy! How do you do it?

A: I offer them more money than their regular builders and I tell them that they will be paid immediately, as soon as the job is done. Most builders don't pay their subs fairly or on time and they're always trying to beat them up on cost. It's a fact. Use it to your advantage. Money does talk. You are saving tens of thousands in this process of building your own home. Don't be greedy or cheap and your job becomes easier.

Oh yeah, money talks for sure! ;-)

Want to know more? You can win a free copy of Be Your Own House Contractor. Here's how it works:

1. Leave a comment below -- any comment.

2. Sometime tomorrow, I'll stop by the post, stop the submissions, and name the winner.

3. It will be that person's responsibility to check back to see if they are a winner and then email me their contact information.

4. I'll send all the winners their books in one mass mailing going out the second week in September.

A few rules for these giveaways:

1. You can not win more than one prize.

2. I will be the complete and final judge.

3. Legal disclaimer: I can not guarantee safe delivery of the items. I'll send them via US Mail, so it's likely they'll be fine, but I can't control it and won't be held accountable if the mail system messes up.

4. If you win something and do not contact me within a week of winning, I reserve the right to give your prize away to another winner. Note again: I won't track down the winners -- it's your responsibility to come back and see if you won.

Good luck! Post a comment below for a chance to win this book!

Resources You Can Use to Build Your Own Home (And Giveaway!)

This month we're talking about the book Be Your Own House Contractor. I'm going to keep looking at some pieces from the book's companion website at http://www.byoh.com/ for now. Today, I want to highlight the site's list of resources you can use to build your own home including budgeting, loan, home design ideas and more. In particular, see #10 where it says:

Subcontractors: The Best Place to find the lowest labor prices is on NEW home construction sites…we GC’s keep labor costs low! You do NOT want remodeling contractors. Here’s a Free PDF from me on: Subcontractors, finding, scheduling, overseeing, & paying them.

Did he say "free"? That's my favorite word! ;-)

Want to know more? You can win a free copy of Be Your Own House Contractor. Here's how it works:

1. Leave a comment below -- any comment.

2. Sometime tomorrow, I'll stop by the post, stop the submissions, and name the winner.

3. It will be that person's responsibility to check back to see if they are a winner and then email me their contact information.

4. I'll send all the winners their books in one mass mailing going out the second week in September.

A few rules for these giveaways:

1. You can not win more than one prize.

2. I will be the complete and final judge.

3. Legal disclaimer: I can not guarantee safe delivery of the items. I'll send them via US Mail, so it's likely they'll be fine, but I can't control it and won't be held accountable if the mail system messes up.

4. If you win something and do not contact me within a week of winning, I reserve the right to give your prize away to another winner. Note again: I won't track down the winners -- it's your responsibility to come back and see if you won.

Good luck! Post a comment below for a chance to win this book!

Great, Cheap Way to Learn Building Skills -- Volunteer to Build a Habitat for Humanity House

As most of you know, we're talking this month about how people can save a bundle being their own general contractors while building their own homes. In one of the book giveaways I'm doing in conjunction with this focus, a reader left the following comment that I thought was excellent:

I'd recommend you work with Habitat for Humanity on a house, it will give you a lot more insight into building a house.

Great idea! You learn a ton about building a house and help people at the same time!! very cool!!!

I have thought about this in the past and this comment jarred my memory. I think when my son gets to the age where he could be useful in building that this would be a great idea for both of us to do together.

Anyone ever worked on a Habitat house? What was it like? Did you learn a lot?

How Would You Change the US Tax Code?

Lots of suggestions on how to change the US tax code on my post titled Is This Right? 60 Million American Adults Don't Pay Taxes? Here's what one commenter suggested:

Simple tax solution:

Get rid of income tax (and property tax - BS!) and increase sales tax to 25-30%. The more people buy, the more they get taxed. People making min. wage shouldn't be buying expensive stuff like Gucci purses (even though they do) and that way, they won't be taxed as much. It may hurt the economy for the first year or so when people see the large costs to buy something, but Americans don't care - they have credit cards. The rich don't care either, they want to look high class with their 200 jeans and beamer.

or

People with incomes under 15k or 20k pay no taxes. People over that pay a straight 20%, no deductions or any need for a tax advisor or software. If you make 1mil/year, you're taxed 200k. You make 100k, you're taxed 20k a year. Seems fair to me.

Another option:

The spending is the problem. A sales tax to replace all income, payroll, and capital gains taxes would be best because it would give people the incentive to work, save and invest, but as long as government keeps spending the money there's no solution. I read a study in college that showed that all the governments in the world spent about 10-15% of GDP on defense, roads, public safety, and law. Right now we spend more than 35% of GDP on all levels of government. I've seen some estimates that the U.S. economy would grow by almost 7% per year if taxes were cut by 25% (to about 27% of GDP) , but to cut total taxes to 10-15% of GDP, we'd have to cut taxes by more than 65%.

There are a lot of idiots who think they paid no taxes when they get a tax refund, but they forget the gas tax, sales taxes, property taxes, hospitality taxes, car taxes, fees, etc. It's still bad that a lot of people don't pay income tax though, because they will obviously vote to increase the tax they don't pay rather than the ones they do pay. The system will become even more unjust, and people with mobility will leave America or never come in the first place. We are in a global economy and the countries that treat entrepreneurs and business as sponges to be squeezed to pay for welfare will soon find their competitiveness decline. Kind of like the U.S. today. India, China, Russia, Eastern Europe and even the socialist EU countries are having to cut or are cutting taxes big time. The U.S. is falling behind.

And another:

I, for one, would like to see a per-capita tax. Take the total annual spending of the US government, divide it by the number of non-disabled working-age adults, and send those people a bill for their share. It's perfectly efficient, because no wealth would be destroyed in the process of trying to avoid it. Also, disenfranchise anyone who doesn't pay their share of the taxes so that the entire electorate clamors for less and less spending each year.

My contention is that we could fix the whole budget deficit if we simply found a sharp businessperson to identify all the waste in government. This commenter agreed:

The real problem is government spending. I work for a government contractor, and I can tell you from firsthand experience that government can't help but use resources stupidly. People deciding how to use other people's money will never do as good of a job as people deciding how to use their own money.

Now, eliminating the income tax in favor of a national sales tax would probably eliminate some waste associated with collection and compliance, but as long as the government decides how to allocate upwards of 40% of our resources, that staggering waste will dwarf whatever changes we make in the tax system.

So, let's say you were made king or queen of the US. How would you change the tax system? (Assuming you wanted to raise enough money to only cover legitimate government expenses -- not just to fund your own kingdom!) ;-)

How to Find the Perfect Home: The Four C's

Money magazine has an excellent resource on how to find the perfect home. Here's a summary of the piece's philosophy:

[The perfect home] isn't the one that has everything. It's the one with more of what you want and less of what you don't. This system can guide you to it.

Their "system" boils down to focusing on what they call the four C's which are as follows:

• Cost
• Condition
• Capacity
• Convenience

Since I'm in the market for a new place, I was especially interested in their thoughts. And upon reading them (and after looking at a ton of homes the past few months), I can tell you that they have some good ideas. As such, I'll be focusing on one of the four C's over each of the next few days. Today, we'll start with cost. Here's what they recommend to find the perfect home you can afford:

I see a lot of buyers make a basic mistake: When deciding if a particular house fits their budget, they look only at listed price and their probable mortgage payments. But to make an honest comparison of the houses on your list, you must consider all the costs you'll be facing. In addition to mortgage payments, there are maintenance costs, property taxes and homeowners association fees, utilities and insurance.

Ah, yes. The mortgage is only the beginning (as any homeowner can tell you.) In addition to the costs they note above, you may need to add in some money (hopefully a one-time expense) to get the house in the shape you want it in. For instance, when we bought our last home, we factored in costs to re-do the paint and carpet in the entire place when we made our bid. It changed the entire appearance of the house and made it the home that we've now enjoyed for almost eight years.

A couple other tips from the piece also include being sure to budget for landscaping costs and for rising property taxes.

Click here to read part 2 of this series.

Carnival of Personal Finance

Welcome to this week's edition of the Carnival of Personal Finance.

For those of you looking for/expecting the book giveaway I've been doing all month, please check back for the next one at the end of the day on Monday.

For those of you who do not know what a carnival is, check out Best Practices for Driving Traffic with Blog Carnivals and How to Get Your Blog to 100,000 Visitors and Beyond, Step 13; Participate in Carnivals. This particular carnival is one where personal finance bloggers submit their best posts for the week and a host (me) posts them. Then readers scan through the list (a lot in this case -- it's a popular carnival) and read the posts that interest them.

I'm sticking with my usual method of hosting a carnival -- listing a summary of each piece with the author's reason for submitting the post to the carnival (for those that submitted one) and/or a bit of the post itself as a summary -- so you readers know what to expect before you get to the post. In addition, I am posting the entries in the order they were submitted.

With that said, here we go with my picks as the best of the bunch:

• Smart Money Remains Fully Invested - The market hasn’t been performing too hot lately. Should you care? As I read posts of personal finance bloggers liquidating accounts and encouraging readers to get out and wait until they feel confident in the market again, I see people falling into the single biggest trap in investing: trying to time the market.

• You Don't Own Real Estate. Real Estate Owns You. - Many Americans believe that real estate can do no wrong as an asset class upon which they can build wealth. I disagree. Building wealth through real estate depends on your ability to distinguish among the three types of real estate ownership – investment, speculative, and personal. If you don’t know the differences, you may soon discover that you don’t own real estate, real estate owns you.

• What Were You Thinking When You Purchased Your Home? - So one might wonder, why Michael purchased a home he could not afford. His rationale, an interest-only loan helped us buy a house in an expensive county where we wanted to live and eventually send our children to school.

• Cheap Healthy Vacation Food: 61 Tips for Travel Eats on a Budget - What follows is the ultimate guide to saving dough on food while you’re away, with extra emphasis on healthy options.

• Choosing Between the Roth or Traditional 403b/401k : Our Decision Process - This is about our personal decision process in choosing between a Roth or Traditional 403b retirement plan at work.   We cover both the basic differences and also our specific situation and outlooks.

And here are the rest -- still lots of good stuff here. Just because something isn't at the top of this list doesn't mean it's not good. These entries are mostly listed in the order in which I received them:

• Charities and their Management Expense Ratios - This article deals with calculating the management expense ratios of charities.  This will help determine if the charity in question is using your donation dollars efficiently.  The basic premise being that the charity should minimize their internal expenses and maximize the amount of money that goes towards the intention of the charity.

• How To Avoid Defaulting on Mortgage Payments - In the US, and to a lesser extent in the UK, increasing numbers of homeowners are struggling to meet their mortgage payments and are facing the possibility of their home being repossessed. If this is the case and you are struggling to pay your mortgage, these are some  actions, which can potentially save your home being repossessed.

• Should the State Make Our Will? Better Not! - The state assumes everyone's objectives are exactly the same. Do we want our assets to be distributed exactly the same way as my neighbor, the grocer or the librarian? Obviously our assets, our beneficiaries and our wishes are not necessarily the same as those of others.

• What to do with an extra $2000? - What should we do with an unexpected bonus from work? Goof off, or be financially responsible with it?

• How Long is Your Lever? - As the financial markets have recently displayed, leverage can work for or against its user.  Learn more about financial leverage and how to lengthen your lever...

• Floyd Norris -- Greatest 25 Years in Market History - The past 25 years have been the best period of that length in stock market history.

• Upgrading Your Home: Want vs Need - How do you know when it is time to upgrade your house?

• Pay yourself first, and not just financially - Personal finance isn't just about using dollars and cents as the only way to measure money. If time = money, then your time spent at work, is also considered to be a financial expense. So take a break, and take stock of how much money (time) you are spending at your company, and how much of an return you are getting out of your invested time.

• ETFs Vs. Mutual Funds - An article comparing ETFs Vs. Mutual Funds for use in an IRA.

• A Holistic Approach To Finances and Happiness - Finances may feel important, but over obsessing about money is unbalanced and certainly not healthy. Here are tips for more conscious living and developing a
  different perspective.

• Top 10 money wasters, are you guilty? - From my personal experience, I can sincerely say these are the biggest money wasters around.

• Why Our Next Car Will Be New - In order to buy a used car with confidence, we'd have to do way more research and preparation than we have the time or inclination for.

• On "Averaging Down" - In a simple fashion, this means reducing the mathematical average of your cost of an equity by purchasing more shares after it declines in price.
• How to Deal With Market Volatility - Some suggestions about how to avoid panicking when your portfolio drops in value.

• Newlyweds and Foreclosures -- Why Home Purchasing and Wedding - Today on the front page of Yahoo! Finance there was an article reporting that foreclosures went up 93% since last year. This made me wonder how many of those foreclosed homes belonged to young newlyweds.

• How to find money - My personal account about how I found over $1500 of my rightfully earned
  money just by picking up the telephone, and how others can do the same.

• The New Investor's Toolkit - A list of helpful free or low cost resources for investors just getting started.

• Three Ways to Make Money Investing - Here are three ways I have found to make money in the stock market.

• Yet another post about insurance - The perfect way to decide whether you need insurance.

• 7 Helpful Tips When Moving - Moving is tough, both physically and emotionally. Here are 7 tips to make moving a little easier and make a stressful activity less stressful.

• Does plug-in hybrid car really save money? - Let’s get down to earth and examine what financial benefits the plug-in hybrid (PHEV) actually offers besides the cool factor of investing into green technology and saving environment.

• PF Blogs I read, and Why - This post is about the PF blogs a relative newbie to personal finance reads--never mind that the newbie is 58 years old!

• Frugal Wedding Tips - Here are some simple, and practical money saving tips for planning a wedding.

• You can't trust that Carfax report! - So the lesson here is this: Always take the used car into a trusted mechanic for inspection before sealing the deal. Oh, and be sure to ask whether the car has been in any accidents. Don’t just trust the Carfax report alone.

• Emergency funds and how they are hurting our savings - I have a recommendation to everyone out there that is just beginning to think about saving. Don’t listen to the experts. Sure its great advice and we should all have an emergency fund, but we all should also all have at least a million saved by retirement (but how many of us actually will). My recommendation is to start with a micro-goal.

• Budgeting For Dummies Part 2:  Evaluating Your Budget - We are going to evaluate that budget and see how effective it is. There are 5 main steps we are going to follow: Tracking, Assigning, Assessing, Establishing, and Applying Surpluses.

• 5 Things The Marshmallow Test Can Teach You About Money - Tina is an intellectually-gifted bartender who struggles to pay her bills. Tina serves martinis to Susan. Susan is no more intelligent than Tina, but Susan is a millionaire. If not intelligence, then what explains the difference between success and failure? And what do sticky, gooey marshmallows have to do with it?

• Getting Rid Of Clutter - Stopping The “But I Paid For This Already!” Syndrome - Just because you paid for something does not mean it is bringing any value to your life; on the contrary, it could be causing you great distress.

• Be Wary of Foreclosure Assistance Scams - The following story about Jennifer Falke and her family is one that you should be knowledgeable of if you are looking towards a third party to help you negotiate a positive resolution to your foreclosure woes.

• Optimizing Medical and Auto Insurance - One of the things I’ve been looking at lately was how to optimize our insurance policies. Here’s what I came up with.

• Twentysomething’s Quick Guide to Retirement - In our age group, saving for retirement comes in one of two forms - IRA or 401(k). Both are easy to understand and I’ll explain them both right now.

• Using A Public Claims Adjuster - Before you hire an adjuster, make sure you really want the help. Then, after you’ve shopped around, check into the background of the one you’re thinking about signing with. You can check with the National Association of Public Insurance Adjusters for information about your adjuster and see how he or she has been doing.

• Mamacita's Nursing Care - How about a first-class nursing home that runs less than $50 a
  day, plus all the warm, beautiful weather you can stand?

• How to Profit from the Cyclical Nature of Biotech Stocks - Anecdotally, I've heard before that Biotech stocks do well in the fall due to the preponderance of trade/medical conferences where they highlight their clinical findings, pipelines and emerging technologies. My findings actually support this claim and I have the perfect strategy to capitalize on this phenomena.

• Has The Housing Bubble Burst Yet? A Closer Look At The Signs - Is it time to make your move or should you wait a little longer and see if the price declines even further?

• True Story of Landlord-Tenant Dispute - This is a true story of how a shady landlord tried to bilk his tenants for more money than they really owed; and how a judge put the smack down on the greedy landlord. Good advice for both landlords (don't be like this jerk) and tenants (know how to stand up for your rights) inside.

• I Could Use Someone Else's Credit Card to Buy My Groceries - Credit cards are very insecure!

• When Would Be the Best Time for Leveraging? Right Now! - As the market just went down by a few percent, many people wonder if it's a good timing to borrow to invest. In fact, it is one of the best time to start.

• Big Party, Small Budget - The obvious challenge of having a large party is tackling the expense of feeding and hosting so many people. I’m happy to report that we managed to throw our shindig for roughly $100, give or take - and that was being generous, almost half of that going to beer. Here’s some pointers for your next big bash.

• Bad Credit Card Application Fees and Fineprints - If you have bad credit and need a credit card, there are issuers who are willing to issue credit cards to you. But these cards will have more fees than regular credit cards. These are the fees you have to be aware of.

• Financial blogging differences between men and women? - Discusses financial books targetting women and if there are blogging differences between men and women.

• Re-Balancing - While I encourage people to re-balance their portfolio periodically, the current recommendations are misplaced due to the fact that many of the securities recommended are still grossly overvalued.

• How to Save Money and Make Your Clothes Last Longer When Doing Laundry - An article on how to do laundry in a manner that keeps your clothes lasting longer and your wallet in better shape.

• Free Books Online - Here are some ways to save on books.

• City Dweller's Income Slashed, Happiness Discovered - Why life has become more fulfilling during unemployment.

• Why Do People Accept Wedding Gifts? - By merely "accepting" gifts are we in fact "expecting" gifts? If thoughts and good wishes are all that matters, why accept gifts in the first place?

• Thank You For Being a Friend - 11 Lessons About Frugality and Simplicity That I learned From The Golden Girls.

• Money Markets Galore - I have a money market account, but until recently, I didn’t realize their was more than one kind, and after beginning my research, I quickly realized that their isn’t a single good source of information.  At least, not one that I found.

• Stop Being Poor! What Low-Income Earners Can Do To Get Off Minimum Wage - How do the working poor survive with such earnings especially in areas where the cost of living is through the roof?

• 6 Ways to Retire Poor - A satirical take on how NOT to retire.

• Very Happy With Illinois 529 Savings Plan - Gives the main benefits of the Illinois 529 plan.

• 50 Ways You Know You Are An Emotional Investor - You know you are an emotional investor if...

• How to Make Money in the Stock Market - Considering that there are roughly 250 trading days in a year, this means that missing out on the best 0.02% of the investing days over this 20 year period (i.e., the best 10 of 5000 days) would’ve reduced your total return by nearly 40%!

• Ten Life Lessons I’ve Learned In The Pursuit of Getting Rich - Each and every job we have can teach us important lessons. Here are 10 lessons I've learned from 10 different occupations I've held.

• Zen and The Art Of Personal Finance in 4 Steps - Explores applying some of the principles of Zen to personal finance.

• My experience with LendingTree, and free gift cards - LendingTree is not so much a “search engine for mortgage loans” as it is an owner of patented automated loan-facilitation technology and a seller of mortgage loan leads.

• Didn't Get a Raise, Now What? - You asked for a raise, and even though you made your case very well, your request was denied. This article offers a few ideas about how to take the "no" and move forward in a productive way.

• Americans’ Net Worth in the Federal Reserve’s Survey of Consumer Finances (SCF) - Net worth is a favorite topic in the buck-o-sphere (personal finance blog-o-sphere) and many people pounce on a government or media report to see how they stack up against their fellow Americans. You need to understand the source of the information and know how to read economic and financial reports correctly.

• A Reader Asks #6 - The post is a response to a comment from an earlier post, "What Happens When You Die?"

• The Real Estate Bubble and Tips to Protect you from it - This is an article about real estate bubble and what is the relationship between it with your journey to financial freedom.

• MBA Options Part 1: Do You Need an MBA? - I'm looking at getting an MBA and I've started a series looking into the entire decision process. Hopefully the series will help some people decide for themselves whether or not an MBA is something that can further their career and is worth the cost.

• How to Start Your eBay Business Without Credit Card Debt - You can start selling on eBay without going into credit card debt to fund your initial investment.

• <Sarcasm>Ah... The Joys of Home Ownership </Sarcasm> - After all, how much can a microwave cost, right?

• 401k Mistakes - When I joined my current company, I simply rolled over the funds from my previous company’s 401k into the new one’s. Big mistake.

• Bank fees are almost always reversible - Just talking about how if you call up the bank and talk to them, they will generally reverse many of those silly fees that they charge you. In my case, I got charged $5 for typing a number in wrong on the ATM machine!

• The Stay-At-Home Parenting Question Hits Home Hard - As much as a part of me cries out to be a stay at home parent, it simply isn’t in the cards for us right now. That doesn’t change the fact that my son’s shouts of “Dad! DAD!” and subsequent crying as I was leaving tore me up to the point that I stopped my truck on the way to work because I was so upset.

• What Do You Do With Your Coins? - I only store coins less than a quarter. I find it easy to spend quarters so I keep quarters outside the jar.

• Learning More About My 403b Plan - I work for a tax-exempt organization so, instead of having a 401k, I have a 403(b). My retirement contributions are sent by my employer to the company that operates the 403(b), but the responsibility for allocating those contributions rests with me. I’m rather new to the “investing game” and I’m taking the time to research the various mutual funds available to me inside my 403(b) plan.

• Lose Weight, Not Money - One of the ways to save money in the long term is to maintain good health. And one of the main ways to maintain good health is to exercise and be physically fit. The only problem is that while getting in shape may save money in the long term, joining a gym takes a whack at your wallet in the short term.

• How to Find, Choose and Open an Online Savings Account - Online savings accounts are one of the newest, safest and best ways to make your money work for you.

• I Just Turned One Hundred! - I just turned one hundred posts old!  This is a list of what I've accomplished, what I've learned, and how I've grown!

Thanks for visiting the Carnival of Personal Finance!

There is Not a Replacement for the Tithe

Here's a question I hear quite often. It was left on my post titled Dave Ramsey's Take on Tithing During Tough Times:

What if your church really does want/need more gardening or painting, or website management, or whatever? Would it be ok to give time in lieu of tithing then?

Uh, no.

Think about it this way:

1. Does the federal government allow you to forego taxes by cleaning public property, setting up government websites, and the like?

2. Which is more important, giving to God or giving to the federal government?

We need to remember that God doesn't really need our money (I think we can all agree on that, can't we?) That's why the purpose of tithing is not to increase the church's bank accounts, help us earn our way to heaven, or even help out those who are lest fortunate. But the purpose of tithing is to teach us to put God first in our lives.

Tithing is a sacrifice. It requires discipline. And it is 10% of your income (or "increase" as used in the old agricultural terms) -- not some sort of donation you can make in time, effort, or a partial work/time trade-off. Here's how Dictionary.com defines tithe:

The tenth part of agricultural produce or personal income set apart as an offering to God or for works of mercy, or the same amount regarded as an obligation or tax for the support of the church, priesthood, or the like.

So by definition, it's 10% of income. It's in money terms, not in terms of time, effort or whatever.

But some may think this is harsh and still ask "Why can't I give in time, effort, skill, or whatever? Why does it matter?"

I simply refer those people back to questions #1 and #2 above.

Leverage Your Contacts for Business Marketing Success

The following is a guest post. See the end of the article for details on the author.

Starting a new business is always difficult, especially if it's a lifestyle and a professional change. New networks, new people, new experience, new learning curves, new opportunities, new failures...new everything!

Getting caught up in the newness of everything, we can sometimes forget about the luxury of current and former contacts, and taking full advantage of who and what we know. Just because you're in a new industry, doesn't mean your current and past relationships can’t be an asset.

As you consider your contacts, decide how you can best leverage your relationships in the most respectable and honorable way possible. You want to ensure that your contacts will benefit as well. Don’t make it all about you and your business. Ask about them, their family and consider ways you could benefit their business. Do you know anyone you could refer to them? Help others succeed, and they will help you succeed.

Be sure you never misuse or abuse your relationships. You do not want to tarnish your relationships or leave your contacts with a bad taste about your business. Remember, you do not have to ask old pals for hand-outs; ask them for support. Offer free samples, free consultations, free education and so on. If applicable, offer yourself as a speaker, consultant or expert in your industry. There should not be a hard sale to sell anyone; instead, share a positive view with confidence, grace and respect.

Never underestimate your startup and your self-worth. Lose confidence and it'll show. Be ashamed to promote your new business startup and it'll also show. Remember, your home business reputation is your personal and professional reputation. Don’t be afraid to tell others about how excited you are about your business. Your confidence and enthusiasm are sure to win many new advocates for you.

Dominate your market by being yourself--a leader of your new business start-up. This way, no matter who you meet, whether they are colleagues of your past or present, you're still a leading professional with confidence, enthusiasm and a winning attitude that draws people to you and your business.

Lesley Spencer Pyle is founder & director of HBWM.com, Inc (Home-Based Working Moms™), a professional association and online community of parents who work from home and those who would like to. She is also the author of The Work-at-Home Workbook.

Posts of the Week -- August 24

Here is a list of my favorite posts this week:

• The Keys to Getting the Best Reward Credit Card for You

• Should You Prepay Your Mortgage or Invest Instead?

• Cheaper Way to Get Details on Your "Check Engine" Light (see the comments)

• Is Bottled Water Worth It?

• Can You Charge a Car on Your Credit Card?

If you're a regular reader of Free Money Finance and enjoy the content here, would you do me a favor and tell three (or four) friends? I sure would appreciate it! And if you're not a regular reader, what are you waiting for? You can subscribe easily to Free Money Finance by using this link.

Have a great weekend!
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Free Money Finance is brought to you by (note: all revenue from this site is given to charity): Blue Cash from American Express - I recommend it because it made me almost $500 last year.

One Year Ago This Week -- August 24

Here are some posts worth re-reading from one year ago this week:

• Which is More Important -- A High Starting Salary or Higher Average Salary Increases?

• How to Maximize Credit Card Rewards (And Why Cash-Back Cards are the Best for Most People)

• I Set My Retirement Number and Boy It's a Doozy!

• How to Know When It's Time to Quit Your Job

• Why I Shop at Bed Bath and Beyond -- They Know Customer Service

• Yes, Moving to a Cheaper Cost-of-Living City Can Make You Rich

Co-signing Means Taking a Risk a Lender Won't

A friend shared with me recently that he had had several people in the past mad at him because he wouldn't co-sign a loan for them. He just couldn't get them to understand that if the bank thought they were a bad risk, then he did too.

Personally, I don't co-sign loans I feel the same way this commenter to my post Don't Co-Sign a Loan Unless You're Ready to Pay It states it:

In the banking industry there is a commonly used synonym for a cosigner: "Idiot with a pen."

And Bankrate gives us this same message in a different form -- courtesy of the FTC's Facts for Consumer Publication titled "Cosigning a Loan":

When you're asked to co-sign, you're being asked to take a risk that a professional lender won't take. If the borrower met the criteria, the lender wouldn't require a co-signer.

Yep. Remember this post if someone asks you to co-sign a loan. Unless you are willing to pay off the debt completely for the people, simply DON'T CO-SIGN A LOAN.

When to Take a Pension

Here's a question I recently received from a reader:

I was wondering what your take on a pension is. Here's my question. Would you suggest taking a pension as a lump sum if you believe the company you work for is not doing well?

Before I did anything, I'd talk to my CPA or someone else knowledgeable on pensions (which I am not that versed on.) But without that information, here's the direction I'd lean towards:

1. If the pension is administered by the company and the money is in their possession, I would certainly take the lump sum if I thought there's a potential they could default on the amount.

2. If the pension is guaranteed in some way (held by a third party that's stable, in a holding company separate from your company, etc.), then you need to go through the process of determining what the best option is for you -- lump sum or payments.

Anything I missed here, readers? I'm sure there is. Please fill in what I've missed below in the comments.

Is College the New High School?

I was talking to a friend the other day when we got into a conversation about how important college is to career development/potential these days. We noted that it used to be that someone with a high school diploma could do "ok", but nowadays it seems like you have to have a college degree even to be considered for the most basic jobs. There's no doubt that having a college degree can help you financially in a big, big way, but now it seems like you need one to do things that really shouldn't require a degree -- tasks that high school grads used to be fine for.

Anyone else feel this way?

We got into the discussion when my friend suggested that maybe one of his kids wouldn't go to college. I was aghast! How would he survive? And why did I think he was "in trouble" if he didn't go to college. Plenty of people have done fine without a college degree. It was strange, got me to thinking, so I wanted to run the concept by all of you.

Can someone please straighten me out here?

How Much Money Can You Borrow to Build Your Own Home? (And Giveaway!)

This month we're talking about the book Be Your Own House Contractor. And this week, we're looking at some pieces from the book's companion website at http://www.byoh.com/. Today, we'll discuss how much you can borrow when building a new home. The site does a good job of answering this question, but what I want to note is the importance your credit score plays in how much you end up paying on your loan. The details:

The higher your FICO score, the lower your payments! See for yourself. 30 Yr fixed $300,000 mortgage:

• 760-850 = 6.387% = $1,874 per month
• 700-759 = 6.609% = $1,918 per month
• 660-699 = 6.893% = $1,974 per month
• 620-659 = 7.703% = $2,140 per month
• 580-619 = 8.883% = $2,389 per month
• 500-579 = 9.853% = $2,600 per month

Just the point we've discussed a few times here at Free Money Finance. For more details, check out Your Bad Credit Could Cost You $1 Million.

Want to know more? You can win a free copy of Be Your Own House Contractor. Here's how it works:

1. Leave a comment below -- any comment.

2. Sometime Monday, I'll stop by the post, stop the submissions, and name the winner.

3. It will be that person's responsibility to check back to see if they are a winner and then email me their contact information.

4. I'll send all the winners their books in one mass mailing going out the second week in September.

A few rules for these giveaways:

1. You can not win more than one prize.

2. I will be the complete and final judge.

3. Legal disclaimer: I can not guarantee safe delivery of the items. I'll send them via US Mail, so it's likely they'll be fine, but I can't control it and won't be held accountable if the mail system messes up.

4. If you win something and do not contact me within a week of winning, I reserve the right to give your prize away to another winner. Note again: I won't track down the winners -- it's your responsibility to come back and see if you won.

Good luck! Post a comment below for a chance to win this book!

Star Money Articles for the Week of August 20

Here are some recent interesting posts from the MoneyBlogNetwork and beyond:   

• MightyBargainHunter hopes to make money by journaling.

• Five Cent Nickel says TIAA-CREF got canned.

• Blueprint for Financial Prosperity discusses identity theft insurance.

• Consumerism Commentary got a good deal on bedroom furniture.

• AllFinancialMatters disputes some financial advice.

• Money, Matter, and More Musings wonders about being frugal.

• The Digerati Life discusses the cost of kids.

• The Sun’s Financial Diary suggests where to put cash in an uncertain market.

• Generation X Finance answers an insurance question.

• Lazy Man and Money covers market timing and 401k contributions.

• Money Smart Life asks how you know when to invest in a down market.

• Consumerist notes that Ben Stein has some retirement advice.

• No Credit Needed talks about his 403b plan.

• Saving with Me discusses upgrading your home.

Enjoy!

Some Good Financial Calculators to Help You Set Your Retirement Number

I often get asked how much they should save for retirement and I usually point people to the process I used to set my retirement number. But now I have some additional options to suggest -- some good retirement calculators I found at CareerJournal They highlight the following and have these comments:

• Ballpark Estimate - This calculator is easy to use, and it allows you to include other income, such as part-time work. The downside: The results are somewhat confusing, and you have to re-enter every number if you go back to rejigger your results.

• Nationwide's Retirability Check - This tool offers interesting data on how Americans overall fare on the same measures. Also, home equity is calculated as an asset. However, the solutions offered are general and not specific to the data you enter.

• AARP - While this calculator isn't quite as slick as some others, it offers some of the easiest-to- understand results, including a graph, followed by a "What if I change..." option to easily enter different variables.

• Fidelity's MyPlan (click on the "MyPlan" ad) - This tool is easy to use. Plus you get a range of results, making it clear how important market performance is. However, the tool assumes you want just 85% of preretirement income. Also, many Quick Check results seem intended to steer visitors to Fidelity products.

I tried the Fidelity calculator and REALLY liked it. It was easy, fun, and gave me a very good take on where I stand financially. And it gave me almost the same number I got doing my own calculations, so it must be good. ;-)

So check some of these out and let me know what you think.

And if you want some more thoughts on saving for retirement, see these posts:

• Calculate Your Retirement Number -- And You'll be Happier You Did

• The Last Words on Roth IRAs Versus Traditional IRAs (At Least for Today)

• 10 Retirement Pitfalls

Air or Nitrogen in Your Tires?

When I bought my new tires at Costco last fall, they filled them with nitrogen instead of air. When I asked the attendant what the difference between air and nitrogen was, he said, "not much." In addition, the main mechanic at my dealership said the same thing about nitrogen -- except that he said it was a "marketing gimmick."

Then I saw this piece from Bankrate on the difference between air and nitrogen in car tires. They list all the theoretical reasons nitrogen is a better option, but they then go on to debunk all those reasons. In the end, their conclusion is that there's not much difference between the two. Here's how they say it: 

When it comes down to a dollar decision, it's hard to argue that spending as much as $40 for nitrogen in a set of tires is a good fiscal move. Save your money and just keep an eye on your tire pressures.

My tires are rotated every 7,500 miles by Costco for free and they fill up the tires with nitrogen each time they rotate them. In the meantime, I fill them with air (I was told this was ok.) I don't think I'd buy nitrogen if I didn't already have it, but maybe others have some good reasons for doing so.

Anyone out there think nitrogen is the way to go?

The Keys to Getting the Best Reward Credit Card for You

Most of you know that I'm a big fan of the Blue Cash from American Express card (it earned me almost $500 last year) and use it as my main cash back credit card. But there are a lot of reward cards out there and I thought some of you might like to have some guidelines on how to find the best one for you. Here are my thoughts on the issue:

1. Decide what is most important to you. Everyone's different. Some people like cash (like me), others travel a lot and want airline points, and others have special interests in one area or another. This GREATLY impacts what reward credit card will be the best for you. So start the process of searching for your card by thinking through what reward you'd like to get.

2. Consider how you spend money. What you charge on your card can make a big difference in the reward you get. For instance, some cards give bigger rewards for spending at gas stations or grocery stores. If you charge very little at gas stations or grocery stores, it's likely these cards aren't for you. Review your budget or Quicken file and take note of the major purchases you charge to your current card.

3. Decide how much time and effort you're willing to put into maximizing your reward. It's highly likely that your absolute maximum reward will come from using a strategy that requires using multiple cards. But do you really want to deal with the hassle of getting, carrying and using a boatload of cards? Personally, I don't, so I carry two -- a main card and a back-up used in certain situations. You may be willing to deal with the hassle of using many cards, but you certainly need to consider the "hassle factor" before you decide on your strategy.

4. Be sure to minimize fees. In almost all cases, your best reward card will have no annual fee. There are exceptions, but if you have to pay for a card, you have to have some really, really, really great benefits from it to make it the best reward card for you.

5. Pay off the card each month. This should go without saying, but if you get a card and carry any sort of balance, it can quickly wipe out any rewards you earn. It's usually better not to have a card and forfeit the rewards than to use the card and carry a balance.

6. Consider where the card can be used. Some cards are accepted in more places than others. Visa and MasterCard can be used almost everywhere and American Express is used in most places (including Costco -- the only card they take), but others (Discover for instance) are accepted in far fewer locations.

7. Think of the ease of redemption. How you get your rewards can make a big difference. Some companies make the process seamless and simple (for instance, my card simply credits my account for the reward amount once a year) while others seem to be designed to make it difficult to get your reward (you earn "points" and have to go through 10 steps to actually redeem them.) No matter how much you earn, if it's a hassle (or impossible!) to get the reward, it just may not be worth the effort.

8. Charge all you can on the card. Once you have the above figured out and decide which card or cards are best for you, make the most of it (them) by charging all you can. Look at all your big purchases and see if there's a way to put them on your card. Look at regular, on-going purchases and see if you can pay these (with no cost) via credit card. Especially look at all those purchases that give you extra rewards (such as the gas and grocery store extras noted above) and be certain to get as many of those charged as possible. For a couple creative ideas, check out Can You Charge a Car on Your Credit Card? and Donate to Charity with a Credit Card.

So how's that list? Anything I missed or should change?

College Education Still Pays for Itself

Here's a piece from MSNBC where they're trying to make something from not much. In this case, they are attempting to highlight the evils of college debt. They start with this ominous section about college students' post-graduate debt:

Nearly two-thirds have outstanding loan balances according to the latest Postsecondary Student Aid Study, published by the U.S. Department of Education.  While these balances average just over $19,000, 25 percent of the students owe nearly $25,000 and a tenth were expected to graduate owing in excess of $35,000. And, this excludes any borrowing done on credit cards or by their parents.

But soon thereafter, they admit that college is a good deal:

Over a working lifetime, even after the cost of attending college and forgoing several years’ worth of earnings while in school, most graduates can expect a financial payback.  But the payback often lessens with the amount of debt carried to finance the degree.

So you make more plus it's likely that you're more fulfilled (doing something you like.) So what's the big deal?

The big deal is the extreme end of the spectrum -- people who borrow a ton of money and end up picking a career that doesn't make much. That's certainly a financial burden for them for years to come. That's why I suggest matching your debt with your potential post-college earnings.

The rest of the piece does advocate something I believe in -- getting the best education you can while borrowing the least you can. They go on to list several money saving tips, most of which I've covered. (If you want details, check out Best of Free Money Finance: College and Education Posts.)

In the end, college is a good financial deal. yes, you spend a lot of money and time (four years or more) to get a degree, but you usually end up earning a ton more money which pays for your education and a lot more. For detailed discussion of this issue, see these posts:

• College is Expensive, but Well Worth It Financially (Or: Give Four Years and $40,000 and Get an Extra $1 Million)

• Make the Most of a College Education -- It's Well Worth the Investment

• Why Education is So Important to Your Financial Future -- And How You Can Pay for College

• College is Worth the Expense

Costs to Build for Various Sizes of Homes (And Giveaway!)

This month we're talking about the book Be Your Own House Contractor. And this week, we're looking at some pieces from the book's companion website at http://www.byoh.com/. Today, we'll discuss the costs to build various sized homes:

Q: Is the cost per square foot to build the same for any size house?

A: No. Homes are measured in square feet of living area (heated space). More square footage equals more money. That's pretty simple. However, the actual building cost per square foot actually drops as the house gets bigger because the cost of certain expensive items is spread out over more square feet. For example, a 1500 sq.ft house has only one kitchen with all the normal appliances. A 3000 sq.ft house also has only one kitchen, so if tastes in appliances, cabinets, etc. didn't increase too much with the larger house, the house per sq.ft of a kitchen in the 3000 sq.ft house is the same as the 1500 sq.ft house. Let's say a kitchen costs $15,000. That's $1.00 per sq.ft in the smaller house, but only $.50 per sq.ft in the larger house. (Cost per sq.ft is usually spread over the whole house, even if only speaking of a certain room or item.) So, as the house gets bigger, the overall costs will rise (more lumber, more roofing, etc.) but the cost for some specific items, based on a cost per sq.ft of building will drop.

Let's take roofs as an example of how to increase size and decrease cost per square foot. Depending on the pitch of the roof (angle), a 1500 sq.ft house will have X sq.ft of roofing costs. If you double the size of the house to 3000 sq.ft, will you double the roofing costs? No. Only if you add the extra 1500 sq.ft adjacent to the existing square footage. If you put it under or over the existing square footage, the cost of the roof stays the same. This also applies to foundation costs. Get the picture?

Other design features to be leery of in shopping for your house plans - features that can destroy a budget in a heartbeat - are steep roof pitches; large (and many) windows; lots of turns and offsets in the shape of the structure; expensive siding; long, long driveways; soils that require engineered septic systems; large room spans requiring more expensive framing or structural steel, to name just a few. But if certain design features are important to you, to the point you don't want the house if you can't have them, cut back somewhere else (size perhaps) in order to afford them. Study cost estimating carefully. Do it carefully. It is a builder's most important tool. It is now your job, your budget. After all, you are the builder!

I had heard that it was cheaper to build a two story home than the same amount of square feet in a ranch style because of roofing and foundation costs -- and now I know why. Good information!

Want to know more? You can win a free copy of Be Your Own House Contractor. Here's how it works:

1. Leave a comment below -- any comment.

2. Sometime tomorrow, I'll stop by the post, stop the submissions, and name the winner.

3. It will be that person's responsibility to check back to see if they are a winner and then email me their contact information.

4. I'll send all the winners their books in one mass mailing going out the second week in September.

A few rules for these giveaways:

1. You can not win more than one prize.

2. I will be the complete and final judge.

3. Legal disclaimer: I can not guarantee safe delivery of the items. I'll send them via US Mail, so it's likely they'll be fine, but I can't control it and won't be held accountable if the mail system messes up.

4. If you win something and do not contact me within a week of winning, I reserve the right to give your prize away to another winner. Note again: I won't track down the winners -- it's your responsibility to come back and see if you won.

Good luck! Post a comment below for a chance to win this book!

Free Money Finance Carnivals This Week

Here are the carnivals Free Money Finance is in this week and my posts that were included:

• Carnival of Personal Finance - Going Against the Flow

• Festival of Frugality - 12 Ways to Save on Cooling Costs

• Festival of Stocks - Going Against the Flow

• Carnival of Debt Reduction - Your Bad Credit Could Cost You $1 Million

• Christian Carnival - How'd You Like to be Taxed for Going to Church?

Stop by these carnivals to read some great posts!

Carnival Hosts: As a reminder, I post all carnivals I'm in for a given week as long as the host either emails me a link to the carnival or sends me a trackback.

10 Tips for Avoiding Home Business Scams

The following is a guest post. See the end of the article for details on the author.

Starting a home business has become a wonderful and attractive alternative for parents across the country. With the advent of the Internet, email and cell phones, working at home has been a very viable option. No other alternative allows parents the opportunity to create their own hours and work around their children’s schedules while earning an income. But before investing in any home business opportunity, it is wise to take appropriate steps to research the opportunity and the company. Unfortunately, there are deceitful businesses ready to take advantage of parent’s deep desire to be at home with their children.

1. Research the company and always check them out with the Better Business Bureau (http://search.bbb.org/search.html) located in their city.

2. Ask for at least three references of people they have worked with. Call each person and ask about his or her experiences with the company.

3. Be cautious of any company that asks for money for a work-at-home job (such as money for registration, applications or instructions).

4. Don't be fooled by ads claiming you can make large amounts of money in short periods of time. And be cautious of companies that require you to sign up immediately. If it sounds too good to be true, it usually is.

5. Get specific information in writing from the company such as how long they have been in business, where they are located (not just a P.O. Box), how many customers they have, what their refund policy is (read it thoroughly), how long it takes to get paid and if there are any restrictions on payments, etc.

6. If you do invest in a business opportunity, use your credit card instead of cash. It may be easier to dispute the charges with your credit card company rather than trying to get your money back from a fraudulent company.

7. Research current scams on web sites such as ScamBusters at: http://www.scambusters.com.

8. Call the National Fraud Information Center at (800) 876-7060 for information or visit their web site at: http://www.fraud.org.

9. Report any scams or fraudulent companies to the Federal Trade Commission http://www.ftc.gov, your state's Attorney General and the National Fraud Information Center, PO Box 65868, Washington, DC 20035, (800) 876-7060.

10. Don't invest in any opportunity that you are not sure about. Instead, find something that you are interested in and will enjoy doing. (Do what you love, and the money will follow.)

Lesley Spencer Pyle is founder & director of HBWM.com, Inc (Home-Based Working Moms™), a professional association and online community of parents who work from home and those who would like to. She is also the author of The Work-at-Home Workbook.

How to Quit the Rat Race

And while we're talking about moving to a job you like versus one you don't, what about the issue of hanging it up altogether -- quitting work for good? Who hasn't dreamed of doing that?

MSN Money has some thoughts on how to do this in their five minute guide to quitting the rat race. Here are a few of their thoughts that I thought were especially good:

• Don't immediately quit your day job.

• Calculate how much you need to live on. Try it out for six months before you commit to a reduced lifestyle. You have to know if you can truly live without the comforts you have or envisioned for yourself in the future.

• Consider relocating to a more rural area. Can you ply your skills in a smaller setting? You'll likely earn less, but the cost of living will be lower and you'll spend less time commuting.

I would really, really, really like to echo tip #1. As I said earlier today, the pain of not having a job is usually much worse than the pain of staying in your current position (even if you hate it now.)

I also like the other two ideas. It's good to try out what you think you want before you take the plunge because you may find that the grass isn't greener on the other side. And as far as moving to a new location, I've told you before that you can save millions doing this. :-)

For more thoughts on your career, see these posts:

• Managing Your Biggest Asset: Your Career

• Six Steps that Will Get You a Raise

• How To Find Your Career Passion

What I'd Do with a High-Paying, Unrewarding Job

Last week I offered a question in What Would You Do If You Had a High-Paying, Unrewarding Job? as follows:

What do you do with an unrewarding high-paying position? The so-called "Golden Handcuffs". I've got great benefits and a 401k in an industry where such things are very very rare. However, I have zero job satisfaction and zero potential for advancement. What next?

I let readers address the issue and there were many useful, helpful suggestions. I withheld giving my thoughts for the time being, but thought I'd give them now.

I've actually been in this situation a couple times: good pay but not really enjoying my job. The first time it happened, the job was actually fine for the most part, but I knew it was a dead end and I had to eventually leave. The second was torture. A new boss came in and he was a nightmare. But in both cases I used the same strategy and it worked out great. Here's what I did:

1. I started looking for opportunities immediately. I talked to a few (very few) trusted friends who I knew were connected and could keep quiet. I also contacted a couple executive recruiters I'd been in touch with through the years. I even looked at a few job websites off and on (though none of the job I ever applied for online even got me a call back.)

2. I toughed out the current job. I've seen many people hate a job/company/boss so much that they quit without having another job. I would NEVER do this (unless, I guess, my life was threatened or some very unusual circumstance occurred.) I have never seen this strategy work out well for those who did it and many have languished for a few years before finding something else to do. (And since your career is your biggest financial asset, this is a big kick in the gut to your finances.) For me, the pain of not having a job is greater than dealing with a good paying but miserable job.

3. I kept succeeding. In both cases, I had several big accomplishments during the time I decided to look for another job and when I actually took it. Some of these successes actually helped me secure my next position.

4. I took my time. In both cases, it was a two-year process before I got the new job. Yes, I had to deal with a lot in those two years (especially in the second case -- the first was not that bad actually) but it was worth it. I kept earning a decent salary, kept my career in tact, and ultimately ended up with a better-paying job that I liked far better.

Have you ever faced a situation like this? What did you do? Or maybe you're facing one now. What's your game plan for making a change?

Should You Prepay Your Mortgage or Invest Instead?

One of the on-going debates in personal finances is whether to pay off your mortgage or keep your mortgage and invest extra money in stocks (or some other investment.) The two sides of the story were recently highlighted in a couple different pieces -- both suggesting a different outcome. First, here's David Bach making a case for paying off your mortgage early:

Like some of my fellow Yahoo! Finance columnists, I'm often asked if it makes more sense to prepay a mortgage or invest the money in stocks and bonds. Rather than ponder which asset will get you a higher return, I think the better question is which investment decision will free you financially and allow you to retire earlier.

In my 9 years of experience as a financial advisor for Morgan Stanley, the clients who paid their debts off early -- specifically their mortgages -- retired 5 to 10 years before those who didn't.

He goes on to tell how to pay off your mortgage early -- make bi-weekly payments (don't pay for the service), automating your extra payments, etc.

This is what I've done and have now been without a mortgage for about 10 years. We did it by keeping our expenses very low, well below my income, then using as much possible to pay off our mortgage. We also applied gifts, bonus money and extra income from a side business to the mortgage. And we did this while fully funding my 401k.

But if you do prepay, be sure to fund your retirement first or else it could cost you:

A recent study suggests these households blow more than $1.5 billion a year, or $400 per household, by accelerating their mortgage payments instead of contributing more to their retirement accounts.

The research found that at least 38% of those who were making extra payments on their mortgage were "making the wrong choice." Instead, these households would get back 11 to 17 cents more on the dollar by putting the money into a workplace retirement plan like a 401(k).

Then there's the other side of the argument -- the one that says to keep the mortgage and invest instead (FYI -- there's a more recent piece than this one, but I just can't find it. But this one will do):

My take is that as a purely financial matter, you're probably better off investing the extra $500 a month given your low mortgage rate.

If you repay your home loan ahead of schedule, you're basically earning a 5.25% return, which represents the amount of interest you avoided paying by making the extra payments.

I think you should be able to do better than that over the long term by investing in a diversified portfolio of stocks and bonds.

I've said before that there's a big difference between planning to do something and actually doing. And one thing I've seen over and over again is people who plan to keep their mortgage and invest what they would have put as extra against the debt. But what most end up actually doing is keeping the mortgage and SPENDING the extra amount. So they end up with a long-term mortgage and no additional investments (or at least not much.)

What's your take on the issue?

Where to Find House Plans (And Giveaway!)

This month we're talking about the book Be Your Own House Contractor. And this week, we're looking at some pieces from the book's companion website at http://www.byoh.com/. Today, we'll discuss where to find house plans:

Q: Where do I find, or how does one get, house plans? Where do you start?

A: Start by visiting open houses near where you live, and preferably, if possible, near where you plan on building. You cannot begin to hope to understand house plans on paper (or on a computer monitor) until you become an expert at what they look like in reality. Carry a tape measure with you (the only tool besides a cell phone a builder needs, with the exception of maybe a broom); measure the actual sizes of rooms you like while visiting these open houses. Thanks to technology, you can now buy an electronic measuring device (for under $100) that allows you to measure more quickly, easily, and discreetly. After you have a feel for room sizes and room flow, you can more intelligently look at these features on paper (or on your computer).

Sample house plans are available in a myriad of places - magazines, plan books, home building centers, kit manufacturers, log home companies, home design computer software, home designers listed in the Yellow Pages, and architects. The cost of these plans will vary tremendously from almost nothing - if you design your own on your home computer - to a few hundred dollars from some of the other sources, to thousands of dollars if you hire an architect. Personal taste and budget will influence where you get plans, but one thing and only one thing will determine the most important thing to look for in choosing house plans. That is, the size of the house. The bigger the house, the more it will cost. Other factors do influence cost too, but it is size to watch out for. You need to study cost estimating before you get too serious about spending your money on what may or may not be your dream house.

We spent a month seeing newly built homes in our city's "Parade of Homes" and have spent another couple month's looking at properties for sale (we have a realtor, but if nothing else you could do this with no commitment by going to open houses.) As a result, we've learned a lot about what we do and do not want in a new house.

Want to know more? You can win a free copy of Be Your Own House Contractor. Here's how it works:

1. Leave a comment below -- any comment.

2. Sometime tomorrow, I'll stop by the post, stop the submissions, and name the winner.

3. It will be that person's responsibility to check back to see if they are a winner and then email me their contact information.

4. I'll send all the winners their books in one mass mailing going out the second week in September.

A few rules for these giveaways:

1. You can not win more than one prize.

2. I will be the complete and final judge.

3. Legal disclaimer: I can not guarantee safe delivery of the items. I'll send them via US Mail, so it's likely they'll be fine, but I can't control it and won't be held accountable if the mail system messes up.

4. If you win something and do not contact me within a week of winning, I reserve the right to give your prize away to another winner. Note again: I won't track down the winners -- it's your responsibility to come back and see if you won.

Good luck! Post a comment below for a chance to win this book!

Cheaper Way to Get Details on Your "Check Engine" Light

Ever had the "check engine" light come on in your car? I have had this happen a few times and it's not a good feeling. The last time it happened, I drove home and then called the dealership. They told me (I THINK -- I could have this backwards) that as long as the light was on steady, it was drivable and I could bring it in anytime within the next few days. But if the light was blinking, I should stop the car immediately and have it towed to the dealership. Good to know -- AFTER I'd driven it 10 miles home!!!!!

Anyway, the pain of the light going on is that the only way to see what the problem was (and to get it to go off) was to go to the dealership. They plugged in a machine that spit out a code and told them what was wrong (usually it was something VERY minor.) It took them maybe 10 minutes to do this. Cost: $75. Ouch!

But there's now another option. Here's what Bankrate tells us about the new way to check your check engine light:

A Connecticut company, Environmental Systems Products, has started putting a kiosk-style diagnostic bay at gas stations that allows a driver to pull up, plug into the car's on-board diagnostic port and get a plain English explanation of what the check engine light is trying to tell you. Cost is just $15, which is far below what many mechanics would charge for the same information.

It's a nice idea, but I'm not sure they will catch on -- doesn't seem like there would be that much demand for them. Still, I'd use one to save $60.

Anyone seen one of these machines at a gas station?