Free Money Finance

How to Save and Make Money Right Out of College

Here are some tips on saving and making money right out of college from a Free Money Finance Reader. She left the following comment to my post titled How to Save on a Small Income, Part 1:

I think the most important thing to do is to make a budget and be willing to adjust your lifestyle. Many college students don't realize that the "spending money" they have in college provided by their parents or extra loan money is considerably more disposable income than once they are out and having to pay all their own bills. If you try to maintain that lifestyle on a 20 or 30-something thousand salary, you will oftentimes get into debt. Having roommates is the #1 way (IMO) to save money on a low income out of college. It can be tempting to finally live on your own, but it is SO much more expensive, especially because you're not splitting utility bills, etc. Also doing everything you can to avoid a car payment, which is often equal to or close to your rent payment when you're young, is important, even if that means driving an old car, sharing one, or even just riding the bus or a bike for a little while.

Also, when you're young and in a new job, it's often not as demanding as jobs you will have later in life (ie: you really can only work 40 hours a week and be just fine), so now is a great time to pick up a second job to meet new people, have fun and occupy extra time, and of course, make extra cash to save. Even 10 hours a week in a retail store at $7 or $8 per hour will get you an extra $300ish per month - a lot more than your average twenty-something is putting into his/her savings account each month.

There's some good stuff in here. My thoughts:

1. I did have a budget when I was right out of college though it was a very "rough" one. ;-)

2. My challenge was to NOT change my lifestyle. My suggestion to college students today is to try and live like you're been living -- as a poor student -- for the first few years out of college so you can pay off bills and get some money saved in the bank. At least this worked for me. Of course, my parents didn't fork over tons of cash while I was in college.

3. Yes! Yes! Yes! Roommates can save you a TON of money. I saved a boatload this way...

4. ...then I spent the savings on a new car. Paid sticker price (nearly.) Big mistake. Learn from me -- don't do it.

5. I actually had LESS free time right out of college than I do now. But at that point I was a new MBA, single, and out to lay the foundation for my career. So I was ALWAYS at work -- much more than I am today.

How to Save Money and Make Money at the Same Time

Here's an interesting comment left to my post titled The Top Five Steps to Grow Your Net Worth. My tip #1 was to spend less than you earn while my tip #2 was to make more money. One reader responded with the following comment:

I've found a way to do both #1 and #2--mystery shopping. Before #2 was born I did it more frequently, but now I mainly do restaurants. My husband and I are going out to a VERY nice restaurant tomorrow night, for free! And we won't go out again until we have another shop. So that's both saving money, and (sometimes) getting extra money.

Great "work," huh? But I wonder just how you go about becoming a mystery shopper. Anyone know?

How to Make More Money

I've talked about the fact that if you can make a bit more money each year and save it, you will end up with a fortune at retirement. So I've been writing a ton of posts on how to make money, and I thought it would be nice to have them all (or at least most of them) in one place. So here are some ideas on how to make some needed extra cash: 

• Free Money Finance Guide to Making More Money

• Make Money with Credit Cards

• Ask for a Raise

• Maximize Your Investments

• Sell Stuff You Own

• Turn Your Hobby into an Extra Income

• Turn in Tax Cheats

• Make $3K Turning Blood into Money

• Make Money at Auctions

• Get Money Owed to You

• Get Your Fair Share of Back Taxes

• Some New Ways to Make More Money

• Even More Ways to Make More Money

• More Creative Ways to Make More Money

Any other great money making ideas out there?

How to Get to the Top Tier of American Express Blue Cash Quickly

As I've noted before, I love and use the Blue Cash from American Express card . Last year it made me almost $500 and I hope to beat that in 2007. It's great to earn that kind of money doing something I'd do anyway (buy stuff.)

As I detailed in Free Money from American Express, the Blue Cash from American Express card has two rebate levels -- one lower level before you charge $6,500 and a higher level after $6,500. Needless to say, the sooner you can get to $6,500 and start earning the higher rate, the better return you'll get for the year.

Which leads me to this question posted here by a commenter:

If anyone has a way of getting to the 2nd tier of blue cash quickly, for example buying bonds with it (which I think is not possible anymore), I would love to hear it.

I'd love to hear it too. Leave your thoughts in the comments below and enlighten us all.

$10k Challenge: More Creative Ways to Make More Money

I'm on a 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.

I've received several comments from readers over the past couple weeks listing ideas they've either thought about or are implementing themselves to add some extra income to their bottom lines. I thought you'd all like to hear them and we'd add them to the growing list of $10k ideas. Here's the first:

I'm about to embark on a MAJOR debt repayment adventure and I plan on moonlighting and using all the income to reduce my debt. Some ideas I have for moonlighting:

• Working at a store offering a discount on products I use, i.e. Best Buy
• Driver for Airport Shuttle service
• Waiter

I also have a part-time, home based travel agent business I am not using as a business. I was previously using this for myself and family.

I'm also going to do some Focus Group work and some Mystery Shopping work. I'm blogging about my journey to keep me accountable so not really counting on making significant money that way, although it would be great if it happened.

Some good ideas here, huh? Here are some more:

Some other ideas off the top of my head:

• Filling out paid surveys online
• Buy items on sale and sell them on ebay
• Sell things you no longer need around the house on ebay
• Look for rare coins / bills
• Baby-sit / Pet-sit
• Spring clean for somebody
• Weekend job such as waiting, or cashier

One last idea:

I'm not sure if this has been mentioned, but taking a trip at work can earn some extra cash for me. I usually eat cheaper than the per diem and can pocket an extra $25-50 a day. Of course it comes at the expense of being away from home.

So, any other good ideas out there?

$10k Challenge: Even More Ways to Make More Money

I'm on a 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.

I already have quite a sizeable list of money making ideas, but I'm going to add several more in this post thanks to a piece I saw on MoneyCentral that lists a few ways one woman makes some extra money:

• I earned $35 for watching a porn film. I sell my blood, a couple of teaspoons at a time, to medical researchers. I get a monthly rent credit for being the go-to gal in my apartment building.

• An acquaintance gave me $120 to watch her dog for four days. I get $10 to $15 an hour to care for children who go to bed 90 minutes after I arrive. I was paid to buy $179 sunglasses and then tattle on the sales clerk for not doing his job right.

• Medical testing, child care, dog-sitting, mystery shopping and apartment management helped keep me afloat last year. This year I'm scaling back on the side jobs, but I haven't given them up entirely. Extra income is always welcome.

Wow! You'd think that with all this going on this woman would be quite well off. Then again, if she was well off she probably wouldn't be doing many of these things.

Ok, it's your turn to add to the list. Are there any ways you're making extra income on the side that the rest of us should know about? ;-)

$10k Challenge: Some New Ways to Make More Money

I'm on a 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.

I already have quite a sizeable list of money making ideas, but I'm going to add several more in this post thanks to a piece I saw on Yahoo titled Nickel-and-Diming Your Way to Riches. In it, they list several ways to make extra money including:

• He has his paycheck deposited directly into a high-yield savings account, where the money sits until he transfers it to his checking account to pay bills. His reward: $35 to $85 in interest each month.

• Borrow from credit cards with 0 percent introductory rates and then use the money to earn a little interest, often stashing the cash at EmigrantDirect, HSBC Direct or one of the other banks with high-yield online savings accounts. ["One year] I made $1,800 in interest."

• Mr. Bilker says he hasn't paid to take his family to the movies for two years. He's also got $500 in convenience-store gift cards, and he garnered a $1,700 discount by charging $17,000 in kitchen remodeling expenses.

Here's the problem with these for me -- they take a TON of time to implement relative to the reward. Sure, it's worth my time to manage accounts based on interest rates if I could make $5,000, but $1,000 seems like a small reward for all that effort.

But they do have a solution for those of us who still want to earn extra money but don't want to spend a boatload of time doing it:

Sound too risky -- and too much like hard work? Forget shuffling back and forth between your checking account, your savings account and the latest, greatest credit-card offer. Instead, go for the easy money.

Pile your expenses onto a good rewards card and be sure to pay off the balance every month. Let's say you charge $1,000 a month to a credit card that earns frequent-flier miles. That should give you enough points every two years to get a domestic round-trip ticket worth perhaps $400 -- and maybe two or three tickets if the card pays double miles and gives you a sign-up bonus.

This is basically what I do, but instead I go for cash. I'd prefer to have it over miles anyway. Last year I made almost $500 charging on a cash back credit card. I'd say that's pretty good for spending no additional time and money.

How to Make Easy Money

Like to make easy money? Me too. Here's how:

1. Adjust your federal income tax withholding so you owe no taxes at the end of the year and get no return.

2. Take the money each month ($212.33 on average -- more on this later) that would have gone to the government and put it into an interest-bearing account at 5% (you may be able to do better, but I picked 5% for ease of calculating.)

3. At the end of the year, you'll have $58.44 more than you would have otherwise.

If instead you invested that money and it returned 8%, you would have $93.51 more dollars than you would have had otherwise.

Now think about how much extra money this would be over 20, 30 or 40 years of a working career.

Ok, so these amounts aren't fortunes, but you get the idea. And why let free money pass you by.

What's spurring this suggestion from me? I recently saw that income tax refunds are averaging $2,548 so far this year. The details:

With nearly half this year's tax returns filed, the average refund is up more than $100 from last year at $2,548, Internal Revenue Service Commissioner Mark Everson said Tuesday.

Everson, in remarks prepared for a House hearing, said the tax agency had issued 50.5 million refunds out of the 60.9 million returns received as of March 10, for a total of $128.7 billion. He said the average refund was up about $125 from last year.

Why give the government an interest-free loan? Adjust your withholding and get your $58!!!! ;-)

By the way, anyone out there know of any good calculators that help people set their withholding to the correct amounts?

$10k Challenge: Get Your Fair Share of Back Taxes

I'm on a 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.

I've already suggested ways I'm working on this $10k including the following:

• $10k Challenge: Turn in Tax Cheats

• $10k Challenge: Make $3K Turning Blood into Money

• $10k Challenge: Make Money at Auctions

• $10k Challenge: Maximize Your Investments

• $10k Challenge: Ask for a Raise

• $10k Challenge: Get Money Owed to You

• $10k Challenge: Sell Stuff You Own

• $10k Challenge: Make Money with Credit Cards

• $10k Challenge: Turn Your Hobby into an Extra Income

Here's the next idea for consideration: get your fair share of back taxes owed by the IRS.

You may be thinking that there's not a whole lot of money in this. If so, you'd be wrong. There's currently $2.2 billion owed to 1.8 million Americans for the 2003 tax year alone. Here are the details:

Apparently, three years ago 1.8 million individuals decided they had better things to do than file their 2003 tax returns, even though they were due refunds. In total, more than $2.2 billion from that tax year is still sitting in the Internal Revenue Service account.

Taxpayers can still get their old refund checks, which the IRS says could be more than $700 for some folks. But the claim, via a 2003 Form 1040, must be made by April 17. After that, the federally allowed three-year window of opportunity from the original filing deadline, which was April 2004, closes forever, and Uncle Sam gets to keep the cash.

The IRS estimates that the median refund -- meaning half of the checks will be larger and half smaller -- is $611. Some of the money is likely owed to taxpayers in every state and the District of Columbia, as well as to residents of U.S. territories and military filers who didn't file returns that year.

Ok, the median may be $611, but simple math will tell you that the average refund is $1,222. So some people are due to get REALLY BIG refunds.

Think you wouldn't qualify? Being owed a refund isn't as unusual as you might imagine:

Despite the staggering amount, the IRS says that unclaimed refund money isn't that unusual.

Each year, some people don't file a return because they don't owe taxes. But without the documentation, these folks won't get any refunds they're due. The IRS doesn't send refunds unless it gets a Form 1040, 1040A or 1040EZ that details just how big the government's check should be.

For simplicity sake, let's say you're owed $1,000 for taxes filed in 2003. And another $1,000 for 2004. And another $1,000 for 2005. That starts to add up to some serious money (30% of our annual $10k goal.) And even if you "only" get $611, it's free money, isn't it?

Here's how you get your money:

If you think some of the refund stash is yours, you can download a 2003 Form 1040 from the IRS Web site. If you need an old 1040A or 1040EZ instead, you can find them at the agency's index of past-year forms. Be sure to check out the 2004 and 2005 documents if you didn't file a return for those years either. The IRS won't send you your 2003 cash unless you filed in subsequent years.

Your Hobby and Taxes -- Can You Deduct or Do You Owe?

I've suggested before that a great way to earn some extra income is to turn your hobby into a business.  That said, some of you may prefer to keep your hobby just that -- a hobby (as in non-income producing.) But how the IRS views your hobby -- as a hobby or as a business -- is different than how you may view it.

As you may have guessed, like other things related to the IRS, this can be quite a complicated situation. The Motley Fool tries to explain when your hobby is a hobby, when it's a business, and how you should treat either of these come tax time. Here are their key points:

The IRS has a relatively simple test for determining whether someone is engaged in a hobby or a business. The main issue is whether you are trying to make a profit through your work, which is a goal of businesses but typically not of hobbyists.

However, just because you don't make a profit in a given year, that doesn't mean you didn't intend to make money. The IRS looks at several factors to determine whether you have a profit motive. These include the way in which you operate, how much time and effort you spend on the activity, whether you're financially dependent on the activity for your livelihood, what your level of expertise is, and what actions you take to try to make the activity more profitable. The IRS will also look back to see whether you've made profits in a good number of past years. If you have, you'll more likely be treated as a business for tax purposes. But if you consistently spend more in expenses than you earn in income, the IRS is likely to decide that you don't really have an interest in making money from your labor and will classify what you're doing as a hobby.

Depending on whether your hobby is a business or just a hobby then dictates how you handle it on your taxes. Is it a deduction? If so, what can you deduct? And where? Or did you make money and you owe taxes on it?

I've only had one hobby that was even close to making money (writing magazine articles), and I treated it as a business from the get-go. Why? Because I always intended to earn money doing it and did so from the start. I kept expenses low too, so I always had a profit.

That said, I know many people go from having a hobby for pure fun to developing some income through the years to a point where it's now a business. Just when it goes from being a hobby to a business tax-wise is a tricky question. If you're in this situation, refer to the info above or simply click through and read the full article.

Some Great Ideas for Growing Your Income

I recently found a piece by David Bach titled Five Ways to Grow Your Income by 20 Percent. As the title suggests, he offers five ideas for growing your income -- some of which I like and some I don't. Here they are:

1. Change your thinking by asking better questions.

Weak. I'm passing on this one.

2. Start a side business.

Good idea. I call this turning your hobby into an income but it doesn't HAVE to be a hobby. It can be simply a new, side business you think will make you some extra $$$$$$$$.

3. Raise your rates.

Yeah, this CAN work, but sometimes in a competitive environment, you don't have this choice.

4. Get extra work -- at work.

A new, original, good idea. Think about what your company is paying others to do and see if you could do it as well as or better for the same amount or less.

5. Get a raise.

I like this idea and have written about it before. Good!

This said, maybe none of these ideas work for you. If that's the case, check out all the articles in my making money category -- there has to be something there that can add an extra boost to your income.

Selling Your Stuff Can Turn Useless Items into Cash

Here's a comment left on my post titled $10k Challenge: Sell Stuff You Own that illustrates exactly what I was talking about:

I've been doing this myself and have already made almost $700 on Amazon selling old books & videos. Not only do I have more money, but more room, too. Still have a lot to go through - we are trying to declutter and get back to basics. The stuff isn't making us happy - but the money will! :-)

$700? Not bad at all. That's $700 that wasn't being used, but that can now be put to great use by being part of this person's $10k in additional money this year. And we all know that $10k per year invested properly can earn a nice, big return.

Here's a list of my $10k posts so far -- in case you'd like to earn a bit extra this year:

• $10k Challenge: Make Money at Auctions

• $10k Challenge: Maximize Your Investments

• $10k Challenge: Ask for a Raise

• $10k Challenge: Get Money Owed to You

• $10k Challenge: Sell Stuff You Own

• $10k Challenge: Make Money with Credit Cards

• $10k Challenge: Turn Your Hobby into an Extra Income

$10k Challenge: Turn in Tax Cheats

I'm on a 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.

I've already suggested ways I'm working on this $10k including the following:

• Make Money at Auctions

• Maximize Your Investments

• Ask for a Raise

• Get Money Owed to You

• Sell Stuff You Own

• Make Money with Credit Cards

• Turn Your Hobby into an Extra Income

Here's the next idea for consideration: turn in tax cheats you may know and get a reward for doing so. The details:

The Internal Revenue Service estimates that the difference between what Americans owe in federal taxes and what they actually pay is about $345 billion annually.

In an effort to close this huge "tax gap," Congress and President Bush in December enacted a measure designed to give people more motivation to tattle on dishonest employers, employees, co-workers, acquaintances and former spouses.

But the enhanced incentives -- in the form of higher cash rewards to those who blow the whistle on tax cheats -- will go only to those informants who provide specific, useful information.

The new law doubles the maximum reward to 30 percent of the total recovered, now including interest as well as tax and penalties.

The more helpful the information, the higher the reward. Those who have allegations but little evidence can get a reward of 1 percent to 10 percent of the amount recovered.

But if the IRS discovers a big tax fraud (one involving at least $2 million in lost revenue) based on specific information provided, especially documents, the informant would get 15 percent to 30 percent of the amount collected.

Here's how you use this idea:

1. Find someone who is cheating the government out of $30,000 or so.

2. Get documentation.

3. Send it in to the IRS.

4. Have them go after the bum.

5. They collect the money.

6. You get $4,500 to $9,000.

Of course you have to be comfortable with the fact that 1) you're a snitch and 2) the person you turn in might not be happy with the fact that you did it (and may want revenge?) That and you actually have to know someone who owes that much, is cheating and you have access to proof.

So maybe it's not such a great idea. Then again, there's $345 billion waiting out there -- someone reading this should be able to turn in something.

Hat tip: Consumerist.

Woman Reads Free Money Finance, Changes Investment Options, Makes Over $123,000

Yes, I'm getting a bit over-the-top on the headlines. Guess I've been reading the Consumerist too much. ;-)

But I'm so excited about what happened here! When I wrote $10k Challenge: Maximize Your Investments, this is EXACTLY the person I was thinking of. A comment left on that post:

I just moved my rollover IRA from the default option (the same company the 401(k) was with) to Vanguard. I'm going to save close to 1% in fees, which is like earning another 1% on the investments. Check your investment fees, you might find a place to "cut the fat" and save some cash.

This young lady (I can say "young" since I'm over 40) at age 30 has 40 or so more years of investing left. That extra 1% will earn her over $123,000 if it simply moves her from a 9% return to a 10% return and she invests $10k a year. If it moves her from 10% to 11%, she earns even more. For specifics, check out $10k Challenge: Maximize Your Investments.

So what's the point for the rest of us? It's a reminder that costs matter if you want to maximize investment returns. Keep your investment costs as low as possible and you'll be on your way to building a significant portfolio.

More Thoughts on Making Money with Credit Cards

I received a couple comments recently on posts related to making money with credit cards. I thought they meshed nicely with each other, so I'm sharing them today with everyone. Here's the first, left as a comment to my post titled $10k Challenge: Make Money with Credit Cards:

How about this for earning extra cash....I travel a ton with my job. I always travel on Southwest Airlines. I basically earn a free flight every 8 weeks, sometimes faster. I make it known to all of my friends that I keep flights in the bank and that if they are looking to save on airfare on last minute flights or on vacation flights that they should give me a call. I always charge less than the posted airfare and usually make it worth their while.

I earned over $2,000 last year. I am using the money to help pay off debt. That is even better than the credit card that pays you money back. I am thinking of getting a Southwest credit card to earn even more.

Wow! $2k a year? Sweet!!!!

But this wouldn't work for everyone -- you'd have to be a frequent traveler to make the most of it. Which brings me to the second comment, one left on my post titled The Best Cash-Back Credit Card:

It is clear that there is no such a credit card that offers the best deals on everything. The smartest thing is to have several kinds of cards: a gasoline card for buying gas, a cash rebate card for buying things, a frequent flyer card for traveling. It is much more profitable to have a frequent flyer card from a bank than to have an airline company frequent flyer card because you get additional bonus as with any other credit card. Of course, the issue always is whether it is smart to use frequent flyer cards for shopping. I would say, better get a different kind of, such as cash back credit cards.

There's a lot of time investment and hassle associated with applying for, carrying, and using a set of cards. So I prefer to carry just two -- the two that I think make and save me the most money. I suggest you do the same. Think about what you use a credit card for and what sort of rewards matter the most to you, then select a card or two that help you make the most of the way you do business.

For more on this topic, see these posts:

• Why I Use Blue Cash from American Express

• An Example of Making Money with Credit Cards

• More Reasons to Love Blue Cash from American Express

• The Best Credit Card for Making You Money

I Made Close to $500 by Using the Right Credit Card

In the past, I've detailed why I use the Blue Cash from American Express credit card including the fact that last year using the card made me $330. And now the results are in for this year -- and I did even better! Here's the final tally for 2006:

• Amount charged to the card: $26,279.67
• Amount earned back as rebate: $482.38
• Rate of rebate: 1.84%

A few thoughts on this:

1. Wow! I am really happy with the amount! Almost $500 for doing nothing that what I'd do anyway! That's my idea of earning some extra income.

2. The rate is good as well. Last year I earned 1.68% and thought that was pretty good. However, I had more charges this year which meant more money rebated at a higher rate (the card has a tiered system -- the more you charge, the higher the rebate) and thus a higher total percentage. And when looked at in the absolute, it's a good number too. From what I've seen regarding credit card rebates, 2% seems to be the gold standard and is difficult to achieve. But I'm almost there!

3. 2007 may be even better. I have two major purchases planned and a few big ones are bound to pop up to supplement these. Maybe I'll earn more than $500 this year.

For those of you interested, here's a link that gives details and an application for the Blue Cash from American Express card.

Become a Millionaire by Turning Your Hobby Into an Income

In $10k Challenge: Turn Your Hobby into an Extra Income I suggested that we all could pad our pockets a bit this year by making money from our hobbies. Then I read a piece about someone who did just this -- yet she took it to an extreme. In the end, her hobby made her a millionaire (her company is valued at $10 million). She's now written a book about it (of course) and is making more money (the company's website has details on the book) Here are some thoughts from the book's introduction:

“How did you turn that kitchen table idea of yours into a million dollars?” It’s a question I hear everywhere I go as I tour the country on business as President of Green Daisy, Inc. Whether I’m at tradeshows in cities across the U.S. or at lectures I give to women’s and community groups, everyone wants an answer to that question!

It became clear to me that there was a real need for a How to Make a Million Dollars book. You don’t need to be the next Bill Gates or Steve Jobs to make a million dollars on the next big thing. Becoming a millionaire is not about luck, being a genius, or having any special talents. You don’t have to be selling the next high-tech invention to get rich. You can do it with something as simple as a Wuvit®! What’s a Wuvit? A simple little gift I made at my kitchen table that I turned into a million dollars in just over three years.

Wouldn't we all like to be in her shoes -- taking something we love to do and making a fortune off of it? Well, some of you reading this can certainly do so (be sure to remember me when you make it big!) And many others can add a substantial amount of money to your annual income if you simply take a few steps to turn your hobby into an income.

Let's see, which should I pick:

• Writing?
• Growing roses?
• Cycling?

$10k Challenge: Make $3K Turning Blood into Money

I received the following email from a reader the other day:

I love your $10K Challenge series and have already started putting a couple of your ideas to work! I thought I'd write in to let you know about one idea I hadn't seen you mention...

This may very well depend on where you live, but in my area one GREAT opportunity to make a bit of extra money is by donating plasma. Obviously you have to be healthy -- their screening process is pretty strict -- and not squeamish about needles or blood. The procedure is basically like a normal blood donation, except that the red blood cells are put back into your body after the plasma is separated. This doesn't make it any more painful, although I've noticed a kind of strange, cooling sensation while this is happening. It does take a bit more time, though. I'm usually there over an hour. You have to eat immediately before you donate and they encourage you to drink plenty of water and eat plenty of protein. You can donate up to twice a week and the center I donate at pays me $20 for the first visit in one calendar week (Monday through Saturday) and $30 for the second visit in the same week. They also offer bonuses for referring friends, donating 8 times or more in one month, agreeing to have a tetanus immunization (this makes your plasma more valuable) and more. Even if you don't go for any of the bonuses, and just go faithfully twice a week, that still adds up to more than $2,000 a year!

Besides the financial aspect, it's also a great cause to participate with -- the plasma is used to manufacture medicine for all sorts of patients, from trauma and burn patients to pregnant women and sick infants. Not a bad deal for a couple hours a week!

Actually, it's $2,600 a year if you go twice a week for a year. Throw in some bonuses and you're probably looking at well over $3,000 a year for 104 hours of work. That's almost $30 an hour! Not bad at all -- GREAT idea!!!

Anyone else done this? Any comments on it either positive or negative?

For more posts in my $10K series, see these links:

• $10k Challenge: Make Money at Auctions

• $10k Challenge: Maximize Your Investments

• $10k Challenge: Ask for a Raise

• $10k Challenge: Get Money Owed to You

• $10k Challenge: Sell Stuff You Own

• $10k Challenge: Make Money with Credit Cards

• $10k Challenge: Turn Your Hobby into an Extra Income

The Best Credit Card for Making You Money

I recently got an email from a reader of Free Money Finance who had this to say:

I just recently came across your blog, and it's very interesting.  I'm a fan of finance and building net worth as well, and it seems our philosophies are generally in line.  I saw your post about Amex Blue Cash and the Subaru Platinum Mastercard as being your go-to cards, and it reminded me of an email I wrote last month (below). I was going to send it to my family, but I sent it to my Dad first to see if he thought family members would be offended (apparently the older generation doesn't talk about money at al l-- I'm 28), and he nixed it so it was never sent out.  I will, however, share it with you.  Let me know what you think about my choices (and my reasoning)...

I liked his thoughts/thinking and asked if I could reprint it here and ask my readers to comment on it. He said, "go for it," so here it is -- his letter to his family:

Hey folks-- just wanted to share some of the research I've done on credit card rewards. Recently I realized that I haven't been taking advantage of all the great reward programs that are out there, remaining satisfied with getting just 1% back, which isn't bad at all, but isn't as good as I could have been doing. So I went online and did a lot of research to see what kind of offers are out there, and I've found a lot of interesting deals. To keep you from having to duplicate my efforts, I've taken the time to lay out the best ones I could dig up.

First of all, let me tell you what I was looking for. I've learned lessons in the past about cards that offer "points" for purchases which you can redeem for gifts, often at inflated prices, and often for things that you don't want or need. I wanted cards that used percentages to determine their rewards-- actual cash percentages back-- and ones that actually cut you a check for the cash that you accrue that you can take to the bank-- literally. There were a lot of cards that sounded great in theory, but really weren't that great. This is not a surprise-- credit card issuers want to make their rewards programs sound good and offer you trash in return. But I saw through their web of lies, and kept my eyes on the prize: cash back.

I was a little surprised by the fact that no airline-sponsored credit cards made the cut. Most of them offered a flat 1% cash back for purchases, with maybe the exception of purchases made with their airline, which were usually loaded with exceptions. Besides, in my trips from Maryland to Dallas, I've used American, Air Tran, ATA, United, and Continental-- whoever gave me the best price. Having an airline-related card didn't make sense for me, since that would lock me into using one particular airline, and it might force me to redeem my reward at full-price meaning that I'd have to build up more points than normal to redeem it for a ticket-- 25,000 points was a standard baseline for a ticket within the same "zone," but since Maryland and Dallas aren't in the same zones, my point cutoff was usually 30,000 points-- equivalent to $300 if it were a cash-back card. I can find a ticket for less than $300...

Other things of note... I disqualified any card that has an annual fee, or cards that had no annual fee for a year before it kicked in-- no annual fees AT ALL on the cards I recommend below. And while promotional offers help, I tried to ignore immediate benefits and gave more weight to post-promotional period benefits. I also paid no attention to the interest rates offered for the cards-- I pay off my charges every month, so I'm not concerned with interest rates, just rewards. One more note: I had no preference between Visa, Mastercard, American Express, or Discover-- I treated them all as the same and just paid attention to their rewards.

So without further ado, I'll give you the names of the cards, a link to one of the credit card research sites that I used that has a good summary of the program (and which also has a link to the application page for the cards), and the highlights of the rewards programs. The top two: Citi Dividend Platinum Select Card and the BP Visa Rewards Card.

Citi Dividend Platinum Select Card

• Long-term benefits: Earn 2% on purchases made at supermarkets, drugstores, gas stations, convenience stores, and for utility bills (including cable and satellite tv). Earn 1% on all other purchases. I'm going to use this card for groceries, drugstore stuff (including prescriptions), non-BP/Amoco gas (see second card below), and all my utility bills. Utility bills for me here in Maryland are $200+ a month, so the extra one percent over the 1% that I currently get will add up quick...

• No promotional benefits.

• Downsides: $300 annual cash-back limit (although that equates to $30,000 spent at the 1% rate, so it's probably not a concern). Also, checks only come in $50 increments, so you have to accumulate at least $50 cash back to get a check-- therefore, make sure this can be a long-term card for you before you apply for it.

• Postscript (2/27/07): I've soured on the Citi card because BGE, my gas/electricity company for whom the card was primarily aimed, won't accept it, and the card doesn't have a Bill Pay system like I had with my old card.  It will now just be my backup to the BP card, with only occasional use for groceries and drug/convenience stores.

BP Visa Rewards Card

• Long-term benefits: Earn 5% cash back on gas purchases from BP or Amoco stations, which is really nice for people like me with a BP station just a few blocks away... Earn a 2% rebate on purchases at dining establishments (non-fast-food), airlines, lodging facilities, and on car rentals; and a 1% rebate on all other purchases (except gas purchases at non-Bp or Amoco stations, for which you get no rewards, so use the other card for that). No annual restrictions on cash-back. I'm going to use this card for BP/Amoco gas, restaurants, airfare, hotels, and car rentals.

• Promotional benefits: Earn double rewards for the first 60 days: 10% cash back for gas purchases at BP/Amoco stations, 4% cash back for those travel-related and restaurant purchases, and 2% for everything else. I was going to wait to get this card until I knew I would be flying home so I'd get 4% off the airline ticket instead of just 2%, but the upside of that would be just $5 for a $250 round-trip ticket, so I'm getting it now instead.

• Downsides: Checks for the cash back come only in $25 increments, which is half as much as the other one, but it's still a restriction. But that's the only restriction I could find really.

• Postscript (2/27/07): This card is indeed truly awesome, and I've been using it for a full month now.  This has long-term potential, as long as they don't change the benefits...
  
  That's it, folks. If you want to use another card that gets more than 2% for some of those items, go for it, but I wanted to keep my total number of card in my wallet to just two--and, like I said, I didn't want to limit my rewards options, and these pay in cold, hard cash. If you feel comfortable with having more than two credit cards in your wallet and you get rewards that suit you better than the ones that I've found, then stick with what you've got.  Also, keep in mind that these are just suggestions-- be sure to read the rewards details to ensure they will meet your needs. There are other rules and restrictions that may apply, so be such to do your research for these programs before applying for and using them. I don't want y'all to be taken by surprise on something...

Some other credit hints: Do NOT cancel your current lines of credit, especially your oldest. One of the ways that your credit rating is determined is by length of credit history, which is measured by your oldest line of credit. If you cancel your oldest line of credit, your credit score WILL go down. Another reason not to cancel your credit lines: your credit score will NOT necessarily be damaged by having a higher amount of available credit, and in fact, could be improved by it. One of the ways the credit score is calculated is by the ratio of how much credit currently in use and the amount of available credit, so the higher your credit limit, the lower that ratio will be (as long as spending levels are the same). However, if you have a tendency of using however much credit you have, then applying for more credit may not be the smartest thing to do. Your credit score WILL, however, take a temporary hit due to the inquiries into your credit history that will occur by these companies as a part of the credit card application process-- the score dip won't last very long, though, so it shouldn't be a concern unless you're planning on making a major purchase (car, house) in the next 3-4 months.

I hope this helps you out a little. I know talking about financial stuff is somewhat tricky, but I want to help those I care about (this includes YOU!), so if this is a way I can help, then I hope you take it in the spirit it was intended. Happy buying, all!

Personally, I use Blue Cash from American Express as it does quite well for me, but his rationale seems good to me. So what do you think?

$10k Challenge: Make Money at Auctions

I'm on a 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.

I've already suggested ways I'm working on this $10k including turning a hobby into an income, making money with credit cards and selling stuff you own. Today's suggested idea for those of you playing along: make money at auctions.

I've detailed a couple times how this can be done. In Another Way to Make Money at Auctions, I highlighted a comment where a reader turned a quick $300 by seeing something he knew was valuable but was at a bargain-bin price. And in Make Extra Money at Estate Auctions and Garage Sales, another reader's grandfather "made a small fortune" doing something similar.

And, if you don't want to buy at auctions and then re-sell, going to auctions and getting stuff you need is still a great idea as it can save you 30% or more.

A few keys to be successful using this approach:

• You have to have the time to go to the auctions.
• You have to have knowledge about the cost/value of the items you're looking for.
• The auction has to have these items (this can probably be found out in advance by calling the auctioneer.)
• You need a situation when someone else is not going to bid the item up too high for you to be able to re-sell it. The "bad weather" strategy seems like a good idea (fewer bidders when the weather is bad.)
• You have to have a way to sell the item for a profit. (such as on eBay)

$10k Challenge: Maximize Your Investments

I'm on a 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.

I've already suggested ways I'm working on this $10k including turning a hobby into an income, making money with credit cards and selling stuff you own. Today's suggested idea for those of you playing along: maximize your investments.

It's shocking how much a simple 1% more can return you over the life of an investment portfolio. Consider these results for the same $10,000 investment over 40 years -- the only difference is the rate of return:

• At 7% annual return, you'll have $139,948 in 40 years.
• At 8% annual return, you'll have $201,153 in 40 years.
• At 9% annual return, you'll have $288,160 in 40 years.
• At 10% annual return, you'll have $411,448 in 40 years.
• At 11% annual return, you'll have $585,593 in 40 years.

See how just 1% can make a world of difference over time? If you improve the results of a single $10,000 investment by and earn an extra $150,000 over 40 years (that's $3,750 a year), just think what will happen if you earn an extra 1% on a much higher level of investment for 40 years. You'll easily have your $10k per year made in this one area alone.

So, that begs the question, what can you do to maximize your investment returns? Here are some suggestions:

• Invest regularly.

• Set investment.

• Don't take unnecessary risks.

• Keep time on your side.

• Diversify.

• Minimize investment costs including taxes.

• Allocate your investments properly and rebalance your portfolio regularly.

• Don't listen to the financial media.

For me, all this adds up to investing in index funds.

Maximize Your Income by Knowing What You're Worth

Here are some similar thoughts from the book The Net Worth Workout: A Powerful Program for a Lifetime of Financial Fitness (see my rating for details) on maximizing your income:

Amazingly, most people don't know their own worth! One journalist I know worked for the same publisher since graduate school. After almost ten years, he took a sabbatical to write his first book. To his amazement, prestigious offers started flowing in unsolicited. This was the first time he had any inkling of what his salary package should be.

Count on it: If you're unsure of your value, your company will underpay you! To get a feeling for your worth, ask yourself two questions: What is the salary range for this position? Which companies (or types of companies) should you compare your role to when determining salary for these positions?

It's certainly true that your career is your most valuable financial asset, offering you many financial benefits. You can make the most of it by getting a college degree and managing your career to its full potential. Doing this well can earn you millions of dollars in extra income throughout your lifetime. One step in the process of managing your career is asking for a raise when you feel you deserve one.

More Reasons to Love Blue Cash from American Express

As I said in Why I Use Blue Cash from American Express, I'm a big fan and user of the Blue Cash from American Express credit card. A reader responded to that with the following comment:

I have the cash back card from AMEX and applied for it through Costco. I get 3% on travel, 2% on food, and 1% on everything else. I am waiting for my $630 check to come in February. I travel a lot for work, so every airline ticket, hotel, and entertainment meal goes on this thing. I am also an executive member at Costco, so every purchase I make there is like a double whammy because Costco gives executive members extra percentage off purchases (executive membership is only an extra 50 bucks a year I think over regular membership, so its really worth it if you shop there even occasionally).

Wow, an extra $630 -- not bad at all. That will go a long way towards helping hit $10k in one year.

For more info, check out details on Blue Cash from American Express.

How to Create More Cash (And Make Money Too)

Here's a comment recently left on my post titled More Creative Ways to Create Cash:

I don't like your idea about cashing in on insurance - however I never even thought about changing withholding and restructuring debt to come up with that little extra every month that I can now put away in savings. If I do as your calculator provides, I'll have saved over $2,200 this year alone. Great recommendations, I had no idea how large your site is.

Wow! $2,200 is not bad at all for a couple simple steps, huh?

For those of you who would like to make a bit more money (I'm working on making an extra $10k this year), check out these links:

• $10k Challenge: Turn Your Hobby into an Extra Income

• $10k Challenge: Make Money with Credit Cards

• $10k Challenge: Sell Stuff You Own

An Example of Making Money with Credit Cards

Here's a great comment left on my post titled Why I Use Blue Cash from American Express that illustrates several principles you need to use to make money using credit cards:

I have 5+ years of AMEX Blue Cash Back experience and rewards. I have all bills except mortgage and electricity (PG&E just doesn't get it) going to the card each month. Plus, I charge school on it as well for an extra boost!!! I average $700-1000 per year in cash back. The only retailer that I "frequent" that will not take AMEX is Fry's Electronics (so what......they pay Visa and Mastercard 2-3% per purchase, what's wrong with 5% for AMEX).

I recently got a Jupiter Visa card while purchasing some hardware from Apple.com. I will switch my bills to the new card since each $2500 charged (outside of Apple) gives you a $25 iTunes reward!!!!!!

As you can tell, I go back and forth depending on what my wants/desires are. Regardless of the plastic choice at the moment, I never carry a balance.....creditors lose!!!! :-D

The key principles to making money with credit cards highlighted here:

1. Selecting a card that's appropriate for the situation -- and moving back and forth when needed.

2. Charging as much as you can on credit cards...

3. ...while also paying them off every month.

Good stuff.

As I said in the original post, I prefer Blue Cash from American Express. It's part of my effort to make an additional $10k this year.

$10k Challenge: Ask for a Raise

I'm on a 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.

I've already suggested ways I'm working on this $10k including turning a hobby into an income, making money with credit cards and selling stuff you own. Today's suggested idea for those of you playing along: ask for a raise.

I've discussed this idea several times before (see How to Ask for a Raise and the links at the bottom of it for details), so I won't cover those details again. But I did want to bring up the topic again since it's a great way to earn extra income. Just consider the numbers: if you earn $40,000 a year and can get a 5% raise one-time, that's $2,000. And not only is that $2,000 you'll have this year, but it's an extra $2,000 you'll have year after year after year. That can go a long way to helping you earn $10,000 every year and becoming rich as a result!

Now let's say you make $75,000 a year. An extra 5% is looking real good at this level.

So think about asking for a raise this year. If you deserve it and if it's done in the right way, this can be some (relatively) easy money.

$10k Challenge: Get Money Owed to You

I'm on a 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.

I've written several times about how there's "lost" money out there that's owed to millions of people. There are billions of dollars in abandoned retirement accounts, insurance policies, bank accounts and the like -- simply sitting in the government's hands, waiting to be found by their rightful owner. For more details on this issue, see these posts:

• You Could be Rich and Not Know It!

• How to Get Your Share of Billions of Dollars

• Make a Fortune by Finding Lost Money

Following the advice in these posts, I had a couple readers find money that was owed to them -- one found almost $300.

Even if it's "only" $300, that's $300 the reader didn't have before. And who knows -- you or I may have $500, $1,000 or more waiting for us. Time to check it out (by following the steps noted in the posts above.)

$10k Challenge: Sell Stuff You Own

I'm on a 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.

I've already suggested ways I'm working on this $10k including turning a hobby into an income and making money with credit cards. Today's suggested idea for those of you playing along: sell stuff you own.

As I wrote in How to Make Money: Sell Your Stuff, an AC Nielsen study says that the average American household has approximately 16 unused items worth nearly $2,200. So sell them and pocket the cash!!! Have a garage sale, go on eBay, or put an ad in the paper. However you go about it, sell the stuff you don't need/use and you'll be on your way to $10k.

We cleaned out our home this summer while our kids stayed with my parents and we identified several candidates for sale that could earn us a decent amount including:

• China set with gold plating made in occupied Japan
• Set of family rings that we haven't used in years
• Mini-coin/stamp collection that looks like it has a few valuables in it
• Old comic book collection
• Wedding dress
• Slightly used (but still in good shape) bed

The surprising thing is that I would have never remembered that we even had most of these things if we hadn't done our big cleaning. So if you can't think of anything you might be able to sell for money, you might want to do a big cleaning of your own. It's likely that you could find an extra $1,000 to $2,000 just sitting around waiting to be sold.

Why I Use Blue Cash from American Express

In $10k Challenge: Make Money with Credit Cards I promised to detail why I use the Blue Cash from American Express credit card. Here goes:

1. It makes me a good return. In 2005 I earned $330 with the card and in 2006 it will be more (I'm just waiting for my final statement for confirmation of the number -- I'll post on it when I get it.) I averaged almost 1.7% cash back from the card -- a pretty good amount these days. I may have been able to earn more with other cards (I'll do that analysis in a later post as well) and could certainly have earned more with a multiple-card strategy. But I don't want the hassle of carrying/managing several cards and when all is said and done, 1.7% is a good return for time investment (which is very little.)

2. I trust American Express. I've had cash back cards before, but the banks have always changed the rules of the game several times to cut my returns down each time. I don't think American Express will do this. I think they came a bit late to the cash back game and, as such, had time to see what worked and what didn't -- and they set their rates accordingly. That said, the second they change the rules, you'll see a post from me on it saying how they cut the value of their program.

3. American Express is accepted at Costco (and most other places.) We shop a ton at Costco (and get gas there too) and if you want to charge something there, it has to be American Express. In addition, Amex is also accepted at most other major stores. Some smaller, local stores/websites only take Visa or MasterCard, and for those cases I use the Subaru Platinum MasterCard from Chase (which has saved me a bundle of money, by the way.)

I've used the card for a few years now, love it, like the returns, and would suggest Blue Cash from American Express to anyone who would ask me to recommend a good cash back credit card.

Anyone else out there use the card? What do you think of it?

Anyone else have what they think is a better cash back credit card? I'm always looking for a better deal. ;-)

Key to Financial Security: Spend Less than You Earn

Here are some thoughts from the book The Net Worth Workout: A Powerful Program for a Lifetime of Financial Fitness (see my rating for details) on the importance of spending less than you earn:

Too many people believe a better job and a bigger paycheck will solve their financial worries. Naturally, you want to earn as much as possible, and from every part of your compensation package. For the time being, though, your best short-term payoff is to optimize today's paycheck and benefits package.

A few thoughts on this:

1. The reasons I think spending less is more powerful than earning more is because it's something you have more control over and something that can be managed in the short-term. You can cut spending today and see a benefit today, but it takes months and years to grow your income -- and even then, even with your best effort, your income may not increase like you want it to. I realize there is a difference of opinion on the value of spending less versus earning more, but spending less than you earn is still my best piece of financial advice.

2. That said, I'm also a big fan of doing all you can to grow your income -- which (usually) means concentrating on your career. Your career is your most valuable financial asset, offering you many financial benefits. You can make the most of it by getting a college degree and managing your career to its full potential. Doing this well can earn you millions of dollars in extra income throughout your lifetime.

3. In addition to maxing out the potential of your career, you can also earn some extra income in a variety of ways.

4. Many people say the key to their financial problems is making more, but I don't believe this. When they make more, most people simply spend more (at which time they say they need to make even more) and are no better off financially. It doesn't matter if you make $25,000 a year or $1 billion a year, if you spend more than you make, you're going backwards financially. People who internalize and act upon this concept are the ones who do a great job at growing their net worths.

$10k Challenge: Make Money with Credit Cards

As part of my challenge to earn an extra $10,000 in income then save it and become wealthy, I'm listing potential money making ideas to get myself (and as many of you who want to come along) to that goal this year. Today's idea is to make money with credit cards.

Let me start off with a caveat. Most of you know that I think you need to pay off your credit card every month. If you're not up to that point yet, then some of these strategies may either simply get you further in debt or cost you a ton in extra interest. Therefore, don't use them. These ideas are for people who have control of their debt and now want to focus on making extra money.

That said, there are actually several ways to make money with credit cards:

1. Use a cash back credit card to earn a few hundred dollars a year. Keys here are to select the right cash back card and then charge everything you can on it. I made $330 doing this in 2005 (FYI, my 2006 report should be in soon and I'll be over this.) My recommendation for a great cash back credit card: Blue Cash from American Express. I'll give the reasons I use/like it in another post, but for now just let me say it's been the best cash back card I've seen/used and I've been using it for 2-3 years now. Picking the "best" card for you depends on how you shop and what you buy. Some other examples of cash back card offers (valid on 1-24-07 -- I can't vouch for them after that):

• Discover Platinum American Flag Card -- 5% cash back bonus in specific categories, 1% on everything else (or pick sea life if you're not feeling patriotic)

• American Express SimplyCash Business Card - Earn 5% cash back on auto gas, office supplies, and wireless services, earn 1% cash back on virtually all other purchases.

• Chase PerfectCard MasterCard - Works well if you have a lot of gas purchases. Cash rebates are 6% rebates on ALL gas purchases at ANY gas station for the first 90 days, 3% rebates on ALL gas purchases at ANY gas station after the first 90 days, 1% rebates on ALL other purchases made anywhere else.

2. Save money with credit cards (and put the savings into your "extra income" fund.) I do this with my back up card and it's saved me a ton. I use the Subaru Platinum MasterCard from Chase.

3. Apply for cards to get the free incentives (cash), pocket the money, and don't use the card. The facts are that credit card companies spend tons of money to get new customers ($200 per account according to Money magazine) and they are willing to give some of that money back to you to entice you to sign up for cards.  They do this because they assume (based on past history) that you'll keep the card, spend a ton on it, and pay them a gazillion dollars in interest. But what if you instead simply take the reward and then don't use the card? Here's an example (valid on 1-24-07 -- I can't vouch for it after that):

• One from American Express -- Get $50 to jump-start your savings after your first purchase.

So, you take an hour (if that) to apply for the card and get $50. $50 an hour turns out to be a pretty good rate of income for a part-time income. (If you could do it for 40 hours a week all year, you'd earn $104,000. Not bad at all.)

Several years ago, I was part of a team at work that was tasked with finding the right company to offer our soon-to-be-announced retail credit card. As part of the process, I applied for five or six credit cards from various companies, used them, called their customer service, etc. to see how each did. In the process, I developed a mini-extra income for myself. Many of these card companies gave valuable incentives for me to sign up for their card. Why? Because they "knew" that I'd spend a ton on them and pay a lot in interest. Boy, were they disappointed. ;-) But I still made my money.

One caution: opening up a ton of credit card accounts can have a negative impact on your credit rating, so if you're looking at borrowing money for any reason (home purchase, car loan, etc.), you'll need to do some extra research to see what impact it will have on your credit rating. For me it was no big deal since I had an excellent credit rating and didn't plan on borrowing any money, but your situation may be different.

For sure I'll be doing #1 and #2 and I'll be combing through the best of the best cash-related credit card offers and taking up a few of those as well. As I find additional opportunities, I'll be sure and point them out to you.

$10k Challenge: Turn Your Hobby into an Extra Income

As you may have read a couple days ago, I'm on a 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.

My first step towards $10k is to use my freelance writing "hobby" (or side business if you prefer) to earn $2,000 in extra income this year. I make $400 or so per article on average (depending on the length of the piece as well as the publication), so this means I only need to get five pieces picked up. I could do more (I've written upwards of 30 in a year before), but it takes too much time and effort -- and I think I can find other options to get me to $10k with less effort.

So what about you? Do you have a hobby that you enjoy that you could turn into an extra income? I'm sure many of you do.

Want some more thoughts on this subject? Then check out:

• Turning a Hobby Into a Small Business

• Turn Your Hobby into a Career and Love What You Do While You Earn

• Turn a Hobby into Income

Want to Get Rich? Get in Shape

I've talked about the relationship between money and health before -- in particular the fact that you can save a boatload of money simply by being healthy. But since it's the new year and people are thinking about both health and money, I thought I'd bring up the subject again. This time, Kiplinger's says that if you want to get rich you should get in shape. Their thoughts:

Studies show that healthy people miss fewer days of work and are more productive on the job, so they are more likely to get promoted or earn higher salaries. "Healthy people also tend to look better, and, like it or not, a good physical appearance pays in many ways, including higher incomes," say Dwight Lee and Richard McKenzie, authors of Getting Rich in America: Eight Simple Rules for Building a Fortune and a Satisfying Life. Healthy people may choose to stay in the workforce longer, building up even greater savings and earning more interest on their money over the long term. Plus, research shows that the healthier you are, the happier you are, which has been tied to higher income.

They also detail the flip side of this equation -- unhealthy habits can cost you a bundle:

For example, let's say a pack of cigarettes costs about $4. If a 25-year-old kicks a pack-a-day habit and invests the money saved each month for 40 years earning an 8% average annual return, he could have more than $428,000 saved by the time he turned 65 -- not to mention he'll increase his chances of living to age 65 and will likely spend less money on health care.

The piece then offers five strategies to get you on the path to achieving both your financial and physical New Year's resolutions:

1. Start small.

2. Put your goals on autopilot.

3. Pace yourself.

4. Avoid quick fixes.

5. Check your progress regularly.

Good advice in my opinion. Not only do I have annual financial goals, but I also set yearly physical fitness goals that include exercise and healthy eating. The former are really not hard for me to hit since I am a cyclist and ride my bike around 1,500 miles a year. The latter are a bit more difficult for me. It's harder to put down the Moose Tracks ice cream than it is to pick up the bike. That said, the two do go hand-in-hand -- the more you bike, the more you can eat more of the "bad" stuff that tastes so "good." ;-)

Make Extra Money Each Year -- Your Guide to Wealth

I've been thinking about earning extra income lately. You know, not the kind of income that's from your job, but side income gained from various sources. As such, I'll be sharing several ideas over the next few months that we all can use to earn some extra income. We all could use a bit more money, couldn't we? ;-)

My goal is to earn an extra $10,000 this year.  I got to thinking what the value of an extra $10,000 would be if I was able to earn it and sock it away -- year after year after year. If I was able to do this and could earn 10% on my money, here's what I'd have after each of the periods detailed below:

• 10 years -- $159,374
• 20 years -- $572,750
• 30 years -- $1,644,940
• 40 years -- $4,425,926

Not bad, huh? And while $10,000 isn't simple to earn, it's not out of the realm of reason for most people either. So if you'd like a few ideas on how you can earn your extra $10,000 this year, stay tuned -- the ideas will be coming soon! 

9 Keys to the Best Credit Card Rewards

I've noted that last year I made over $330 on my cash-back credit card (and saved a good bit using another one), so I'm in favor of using your charges to earn cash/rewards (as long as you don't spend more just to do so.) That's why I was interested in this piece that details 9 keys to the best credit card rewards from Money Central. Their list:

• See how much you spend.
• Review your current cards.
• Review your bills.
• Check out competing offers.
• You can do better than 1%.
• Beware of annual fees.
• Limit your choices.
• Beware of transaction fees.
• Lobby your billers.

Basically the tips boil down to three simple steps:

1. Get the right cards to maximize the rewards you get for the spending you do.

2. Maximize the number of bills/expenses you pay with credit cards (as long as you couldn't get a better deal by paying in cash.)

3. Minimize expenses of this plan such as annual fees, interest costs and overspending since they can quickly eat away at any money you make.

Making Money by Charging EVERYTHING on the Right Credit Card

Last year I wrote how I made over $330 on my cash-back credit card (and saved a good bit using another one), but I'm an amateur compared to the people who charge everything detailed in this Money Central piece. Here are some of their earnings:

• One of Larien Koci's credit cards provided the Knoxville, Tenn., woman with $4,500 in free gas.

• Boston resident Alex Perri's card has bestowed six free business-class trips to Europe.

• Maury Malaise of Montgomery, Ill., saved $3,400 on the purchase of two cars with credit card rebates and has $1,300 banked for his next car.

• Johnna Frantz of Hillsboro, Kan., used credit card rewards to buy a refrigerator, pave a patio, update her husband's wardrobe and get presents for relatives. Her next bonus: a new dishwasher.

Wow! But how do they do this? It's simple -- they set up their accounts so almost EVERY bill they pay is on a credit card:

Fortunately, racking up rewards is getting easier as a growing array of businesses, utilities and government agencies accept plastic payments. Virtually all of my household and business bills are now charged automatically to credit cards, as are most of my other purchases.

They even have strategies to maximize their rewards:

• Sometimes that means switching cards based on the type of purchase. Michel Washington of Owings Mills, Md., divides her spending this way:

• Books, restaurant meals, music and movies go on a Citi mtvU Platinum Select Visa Card because it offers 5% back for those specific purchases.

• Certain other types of spending wind up on Washington's Discover Card, which offers 5% rebates on spending categories that change four times a year. In the fall, the cash-back bonus applied to apparel; starting in January, travel will earn the rebate.

Just about everything else goes on his Chase Cash Plus Rewards Visa card, which earns 5% rebates on gas and 1% on all other purchases.

We pay for as much as we can on credit (paying off the balance every month), but to earn even $1,000 at 3% (assuming you could charge enough in a right way to get this blended rate) means you'd have to charge $33,333 a year. I'm just shy of $20,000 a year, but "only" earn 1.68%. So I'd have to get both my spending up as well as my rate of return to really get some big bucks. All that would take a ton of time, effort, and management, something that would likely costs me more than what I'd earn. In addition, I don't have that many big bills to pay with credit. My biggest potential areas to generate extra charges are not really options for me: taxes (I don't think Uncle Sam allows me to pay by credit card without a fee), mortgage (I don't have one), and giving (it dings the charity, so I only use this option when it's a necessity.)

But there are downsides to this plan:

"I think having the cards probably makes me spend more money than I would otherwise," said Stephen Berenson of Vienna, W.Va. "Having the cards obviously makes spontaneous purchases easier, and the points probably do provide an incentive to spend more."

Yeah, if you spend more, it won't take much to wipe out any gains you may make. In addition, many of the items these people charge (like home remodeling) could likely be purchased at a cheaper price if they used cash instead of credit.

How to Get a Tax Refund Owed to You

In Does the IRS Owe You Money? I asked if you may be owed a refund from the IRS (believe it or not, there are a lot of unclaimed refunds out there.) In this post, I'm going to give you a quick tip on how to get a tax refund if you find out they owe you one:

Just visit www.irs.gov and use the "Where's My Refund" tool linked on the home page. You'll have to enter your Social Security number (don't worry, it's a secure site), along with your filing stats and the refund amount submitted on your 2005 tax return. You'll get a display showing the status of your refund.

If there's a problem with your account (like a bad address), you'll receive instructions on how to resolve the issue. If you'd rather not share your personal info over the Internet, use the phone version of "Where's My Refund." Just call 1-800-829-1954.

Pretty simple, huh? And with the average refund owed being $871, it's certainly worth your time and effort to get the money owed to you.

Your Odds are Improving of Getting a Bonus this Year (And if Not, You Can Give Yourself a Bonus)

Good news for those of you who are hoping to get a bonus this year -- more and more companies are canceling the holiday party and giving cash gifts/bonuses instead. The details:

Forty-seven percent of small businesses are planning a holiday party for their business, store, or office in 2006, according to Waltham, Mass.-based Constant Contact's 2006 Small Business Holiday Outlook survey. That's down 8 percentage points compared to last year's survey.

Thirty-nine percent of those surveyed said they will give out bonuses this year, up 2 percentage points from 2005.

"This year we are seeing more small businesses prioritizing holiday bonuses over office or store festivities, which shows that financial incentives still work best for many businesses," Gail Goodman, CEO of Constant Contact said in a statement.

Personally, I was blessed to get both. ;-)

Here's a similar piece that says people are getting more holiday bonuses, but less time off. The details:

First, some holiday cheer. This year a record number of companies - 49 percent - will be giving their employees year-end gifts or bonuses.

BNA didn't ask survey participants this year how much they were planning to give. But in years past, the median bonus came in between $200 and $300, and it is likely to be somewhat higher this year given that the economy has been strong, said BNA research director Joshua Joseph.

But paid time off for the holidays beyond the days of Christmas and New Year's has been steadily declining for the past two decades.

So pay is up and time off down, huh? Isn't this why people have vacation days anyway -- to save them up for the holidays if they want to? I took the week of Thanksgiving off and plan to do the same for Christmas week.

Finally, if you're not fortunate enough to get a bonus this year, here's how you can give yourself a bonus -- by adjusting your income tax withholding. The details:

The average taxpayer is having nearly $185 too much withheld from his or her pay every month. Wouldn't it make more sense to get that money when you earn it? Particularly at this time of year?

Fortunately, it's easy to tell your Uncle Sam to take less so your boss can put more in your paycheck. But you have to get cracking. You need to act quickly to knock down withholding before the end of the year.

To cut withholding, all you have to do is file a new W-4 form -- Employee's Withholding Allowance Certificate -- with your employer and increase the number of "allowances" you claim. You can claim an allowance for yourself, your spouse and your dependents, for example. But don't stop there. You can also claim allowances based on the deductions and credits you'll claim. Each allowance basically makes $3,300 of your annual income off-limits for withholding. Claiming extra allowances will automatically push down withholding ... and push up your take-home pay.

I've suggested this tip several times, but it's especially meaningful at this time of year. You now have the opportunity to make the needed changes and take advantage of the extra income throughout 2007. So get hoppin'!!!!

Does the IRS Owe You Money?

Here's a unique way to "earn" some money -- see if you're one of the 84,000 taxpayers that the IRS owes money to. The details:

[$871 is] the average amount of the tax refund checks that were returned to the Internal Revenue Service because they were undeliverable. Of course, that's an average amount. Your unclaimed check might be less, but then again, it could be more. And any amount of money would be a nice holiday gift as long as you let the IRS know where to send it.

In all, the IRS is looking for about 84,000 taxpayers who are owed $73 million in refunds, mostly from their 2004 filings. The main reason the checks came back is simple: The owed taxpayers moved after filing their last tax return and then forgot to let the IRS know their new addresses.

If you have an IRS refund due to you, you can use the IRS refund locator to track it down.

Ok, so maybe it's not a great way to make money -- "only" 84,000 people can take advantage of it. But here are some ways that most people can make more money. Check it out if you could use some more $$$$ in your pockets.

ReviewMe.com Launched, Should I Use It?

If you're a blogger and you're looking to make a bit of extra money, there's a new site out there called ReviewMe that you'll want to check out. Here's what the site says about itself:

Get paid to review services and Web sites that are of interest to your readers, and reap the benefits of conversation with advertisers.

I know, kinda vague. Basically, you submit your site and advertisers ask you to write posts about them (along with a stated fee for the post.) The post can be positive or negative (so at least in theory it's an honest review), and once you write it, you submit the URL and get paid. Not, bad huh?

Personally, though, I'm not sure how much I'll use this. It is good money (for instance, I get $125 just for writing this post about the service. Yes, even this is a paid for post.) And since I give all my revenues to charity, that's $125 to help out some needy people. But still, it's kind of cheesy -- being paid to write reviews. It seems like it's a built in conflict of interest. Then again, I get paid whether it's a positive or negative review, so what's the problem?

So I'm asking you readers -- what do you think of the idea? Should I use it? Why or why not?

How Does Your Income Compare?

Here's an interesting little tool from Kiplinger's. It allows you to plug in your income and then spits out where your income ranks compared to that of other Americans. In addition, it reports what percent of the tax burden your group bears. As an example, here's what it says for someone earning $75,000 a year:

Your income puts you in the top 25% of earners. Together, you and the other 32.6 million taxpayers with incomes of $60,041 or more paid a total of $705.9 billion in federal income taxes.

The top earning 25% of taxpayers reported 66.1% of all AGI and paid 84.9% of total income taxes.

Quite an incentive to earn more huh? Make more so the government can take more. ;-)

It's not particularly helpful (it won't really change what you're doing/need to do), but it is interesting and fun to try. And, of course, income isn't the real measure of financial wealth -- net worth is. Remember, it's not what you make, but what you spend that matters most.

But if you do want to improve your income, see the Free Money Finance Guide to Making More Money.

Increase Your Income by Temporarily Moving to a More Expensive City

Here's an interesting comment. It was left on my post titled Yes, Moving to a Cheaper Cost-of-Living City Can Make You Rich, but it actually turns the advice around. It's from someone who lives in an affordable market who's thinking of moving to a higher-priced market to get a salary bump, then moving back to the lower-priced market (hopefully with the same, high-priced market salary) to be better off financially. His thoughts:

I have wondered about moving to a more expensive city, temporarily, just to have the extra money, and then moving back to a less expensive city. I currently live in the Indianapolis Metro Area, and it is VERY affordable. I do quite well, being a fairly young guy. I am at the age where a typical person would have about three or four years of experience under their belt after going to college, but I have nearly eight years and am just finishing college. My pay is inline with someone of my experience level with college, for the area. But, I looked at a couple of jobs in New York City last night (it was the first time I ever looked at jobs outside my metro area, for some reason), and the salary for a job similar to mine paid more than twice as much.

I know that it would certainly cost more to live there, but what if it were just for a short stint, maybe two years. I could see about building up a some money, keep my current home and rent it out, and then move back in a couple of years. However, while I think NYC might be exciting, I would probably stick with Chicago, as it is only two and a half hours away...I could possibly even stay where I am and just rent a small place up near Chicago and come home on the weekends.

I'm not sure this will work, but it's an interesting concept. Anyone out there tried this or have any thoughts/suggestions on it?

The Best Way to Boost Your Take Home Pay

Here's the next item I wanted to cover from Kiplinger's "The Best List" (November issue.) Today, we're highlighting the best way to boost your take home pay:

The Best Way to Boost Your Take Home Pay: Don't overpay your taxes.

If you regularly get a [tax] refund, you're paying too much. Give yourself a pay raise by using our tax-withholding calculator. Then revise your Form W-4.

Ok, so it's a bit of self-promotion for Kiplinger's, but it's still a good tip. I'm not sure if it's the best way to boost your pay (see Free Money Finance Guide to Making More Money for other suggestions), but it's certainly an easy one that can add some extra money to your check rather quickly.

I've written on this topic a few times myself. See Get Next Year's Tax Refund Now and Getting a Tax Refund is Costing Americans Billions for details.

Another Way to Make Money at Auctions

In Make Extra Money at Estate Auctions and Garage Sales, I shared the story of a reader whose grandfather made some extra cash by finding old trunks at auctions, restoring them, and selling them at a good profit. Another reader submitted this comment to that post, giving us all another way to make some extra cash:

I did this last spring. I was at a Auction and this lawn mower attachment, I knew was worth a couple hundred dollars. No one was bidding on it so I picked it up for $15. Someone at the sale asked what I would do with it and I said E-bay. I got $340 for it on ebay. I have been thinking about doing more of this but you really have to know the value of the item to see if you can make money on it. I am waiting for bad weather sales when other bidders might stay home.

Some keys here:

• You have to have the time to go to the auctions.
• You have to have knowledge about the cost/value of the items you're looking for.
• The auction has to have these items (this can probably be found out in advance by calling the auctioneer.)
• You need a situation when someone else is not going to bid the item up too high for you to be able to re-sell it. The "bad weather" strategy seems like a good idea.
• You have to have a way to sell the item for a profit.

Overall, this seems like it could take some work but none of this is rocket science, so it's certainly something many people could do. Plus, if you could make a few hundred dollars every weekend, it would certainly be worth it. Could be fun too -- the "hunt" for the right item is often just as thrilling as the "find." ;-)

Are You Owed Money?

In You Could be Rich and Not Know It!, I wrote about how millions of people are owed money that has been collected by the government -- money that they once owned and then forgot about. I also detailed how you can check and see if any is owed to you. Well, a couple of Free Money Finance readers went hunting and found that they were owed some money after all. Here's the first comment I received:

I just found 99.99 in unclaimed money!!

Thanks for posting this!

$100! Not bad, huh? But it gets better:

Wow, found $296.84! Thanks for the info!

Good stuff!

Then, there was comment from someone who has seen how a good amount of money can be found:

State of CT has a web site for this kind of thing, also publishes lists in newspapers periodically. A library aide from our local elementary school called one day to tell me she read my son's name on one of these lists - he was 25 at the time and she remembered his name! - anyway he had a $600+ check waiting for him. Somehow he either didn't pick up a last paycheck or didn't cash it. Anyway, point is in CT the claimed money comes from a special account the state has, not a company so no reason not to claim it.

Want to see if you're owed any money? Then check out You Could be Rich and Not Know It!

Make Money by Staging a House You're Trying to Sell

In The Benefits of Staging Your House for Sale -- Another Sign of Softness in the Housing Market. I said that "staging" a house was new to me. While it is new to me, it seems that many people have been doing it (with quite a good amount of success) for a long time. Here's a comment left by a reader on how she made a bundle by staging her house:

I sold a house in 2004 and staged it beforehand. It's actually unusual to see a house for sale in Northern California that isn't staged. Everyone expects it now. Most buyers have little or no imagination. I staged the house myself, having a pretty good eye and understanding of what buyers want to see. I priced the house high - very high - and expected to negotiate. Instead, I had an offer from a buyer who not only wanted the house, but wanted to buy all the furniture, artwork, bedding, etc. that I had used to stage it. I received full asking price for the house, plus an extra $14K for everything else.

Full asking price plus $14k, huh? Not bad. Not bad at all. I'm sure many people with houses for sale in Northern California would love to have this same result today.

How NOT to Make Money on Real Estate (And Some Ideas on Earning Extra Cash)

Check out the posterboy for the housing bust. His key stats:

• Casey Serin
• 24 years old
• 6 money-losing properties
• $2.5 million in debt

Here's the SFGate's take on his story:

Taking a page from the no-money-down gurus he had already ruined his credit scores learning from, he didn't let the fact that he was under-employed with no financial assets slow him down. He bought one house at a discount and sold it for a profit of $30,000, which he used to wipe out his credit card debt and bring up his credit scores. The next house purchase wasn't quite so lucrative -- it had a negative cash flow, but this didn't dissuade him. In fact, the negative cash flow only convinced Serin to think he needed more investments "to keep me busy with profit in the pipeline." In January 2005, he took a three-week leave from his job to get "enough deals in contract" so that he could give his employer two weeks' notice.

All proceeded according to plan. He quit his job and in the next four months he acquired six more properties. All in all, his portfolio included eight single-family homes, including two houses in Sacramento and one in Modesto, a seven-bedroom fixer-upper in Highland, Utah, a model home in Rio Rancho, N.M. and five-bedroom, four-bathroom ranch house in Dallas, Texas.

But (surprise, surprise) the profit didn't appear in the pipeline as planned. "I didn't manage my cash flow and the market changed on me," he told me. "I guess I didn't have enough exit strategies."

And here's their summary of his situation:

What Serin reveals about himself is that he's a sucker for every real estate myth that the industry has been feeding us for the past 10 years: that the market will always go up, that if you buy at a discount you're safe from financial risk, that gurus are doling out useful advice for the beginning real estate investor -- and that if you make enough deals, you're sure to come out ahead.

Do I need to say "I told you so?"

This is exactly the sort of get-rich-quick stuff that often derails honest, hard-working, determined people (like Casey). If he had just channeled all that energy into something a bit more positive (and with a bit more experience, learning, training, etc.), I'm sure he would have done much better.

So, what are my suggestions for making money? Check out these posts to get some ideas:

• Free Money Finance Guide to Making More Money

• Turning a Hobby Into a Small Business

• Make Money Selling Coupons on eBay

Make Extra Money at Estate Auctions and Garage Sales

I've posted several money making ideas in the past (see Free Money Finance Guide to Making More Money for a good list) and here's another one to add to the group. It was left as a comment to my post titled Save 30% or More on Antiques and Collectibles at Estate Sales where the reader offered this idea:

My grandfather has made a small fortune going to estate sales and garage sales to buy old beat up trunks. He gets them cheap, completely refurbishes them and then sells them for a handsome profit. It takes a little more work then just finding cheap antiques but he has plenty of time on his hands, being in his eighties. This has supplemented his retirement income for the past 10 years. I've actually helped him complete a few of these. It's almost like buying beat up houses, but with much less start up capital. The materials are cheap and the market for these trunks is high in demand.

Not to mention, I bet the grandfather enjoys both the hunt for a trunk as well as the process of restoring them.

If you have some extra time and a special skill or two on your hands, something like this may be a way for you to earn some extra cash.

Does Your Company Pay You to Stay Healthy?

While reading Smart Money's list of ways to maximize your benefits plan, I ran into this paragraph that I found very interesting:

Plenty of companies offer financial rewards in exchange for a pledge of healthy behavior. Pioneer Natural Resources Company in Dallas, for example, offers workers up to $700 a year for exercising regularly, not smoking and minimizing sick days and major medical claims. Employees at Westinghouse Electric in Monroeville, Pa., get $200 annually for performing 10 minutes of aerobic exercise three times a week.

Wow! Cool!

I'm sure that the company benefits financially from arrangements like the ones noted above. After all, an employee who exercises will probably save the company money on medical insurance, medical bills, lost time at work, and so on -- probably saving much more than the incentive the company is giving the employee. And the employee wins as well -- not only financially, but also simply by feeling better and living a more productive life.

My company doesn't offer a benefit like this (we're all pretty healthy anyway -- many runners and cyclists here), but I began wondering how many companies do. Does your company? If so, let us all know what it offers and how you like it in the comments below.

For more thoughts on the relationship between money and good health, see these posts:

• Save Money: Some Insurers Pay You to Get Healthy

• More Important than Money: Your Health and Your Mind, Part 1

• How to Stay Younger

Make Money Selling Coupons on eBay

Here's a great suggestion from a Free Money Finance reader. It was left in response to my post titled Simple and Easy Money Saving Tip: Buy Coupons for Pennies on the Dollar where it was suggested you could save lots of money by buying coupons on eBay. The reader took it one step farther -- and turned it into a money making idea. His comment:

That is a great idea! Further, if you often find yourself with great coupons for products that you wouldn't use, you could collect them and sell them on eBay.

Good idea. I'm sure there's someone out there who's doing this and making a decent amount of extra income at it. If you have access to good value coupons on a regular basis and have the time and ability to do this, you might want to consider it as a side business. It could turn out to be a good amount of extra income in your pocket each month.