Archive for August, 2009
Monday, August 31st, 2009
I recently asked if you “would consider a move for more job opportunity?” As a follow up to that post, I’m sharing a guest post from Adrienne Carlson, who regularly writes on the topic of accredited online universities. Adrienne welcomes your comments and questions at her email address: adrienne.carlson83@yahoo.com.
Change Jobs = More Money
With the way the economy is, it’s probably a moot question anyway – Would you change jobs if it meant you are going to be earning more money? But, it is a question that needs to be answered, because if the situation does present itself, you need to know how to act. In my book, it’s not wise to change jobs when it’s a matter of just more money, because money comes and goes – what’s more important is job satisfaction and the extent to which you enjoy your job.
Consider a Job Change If…
Although the economy shows a few signs of picking up, jobs, especially the ones that offer the combination of stability and a good pay packet, are still scarce and few and far between. This means that it is wise to hold on to the job that you do have rather than go looking for something that pays better, unless:
- You absolutely hate what you do: The most important aspect of a job is that you love what you do; if you don’t, you’re likely to be miserable and just go about the motions because you need the money. This in turn leads to mistakes and possible termination. So if you don’t love what you do, do what you love or learn to love what you do.
- You really need the money: If you must make extra money to take care of debts that must be paid back, it’s ok to take up a new job that pays more if you’re sure about the reputation of the company and if you don’t have to make too many sacrifices in the process.
- You don’t have to relocate: or make any other significant changes in your life that affect its quality. When you have to make too many changes in your life, you end up resenting it and take it out on your job.
When you change jobs just for the money, there’s no end to it; you tend to keep job hopping all your life, flitting like a bee from flower to flower without really gathering anything of substance. In short, you’re a rolling stone that gathers no moss. When you’re in a position in life that requires stability, it’s best to act with more responsibility and stick to something that you know and trust rather than tread into the unknown where your salary may not be steady or your job secure.
Have you ever changed jobs for more money? I know I have, but I’d love to hear your story below in the comments…
Carnivals from last week: Money Mistakes, Best of Personal Finance, Money Hacks, Frugality, Debt Reduction, Pecuniary Delights, Twenty Somethings, Personal Finance, Financial Planning
My Blog Post at the Quicken Blog: Time Management Tips: Make the Most of the Lazy Days of Summer
Posted in Make Money, Personal Finance Links | 6 Comments »
Friday, August 28th, 2009
The Cash for Clunkers program came to a close earlier this week. But many people still have questions about the Cash for Clunkers tax rules. Before I get into the tax rules, here’s a quick review of the program:
Cash for Clunkers Ends
The Cash for Clunkers (or CARS) Act was passed into law earlier this summer. It’s intended to stimulate the economy and get more clean vehicles on the road. The Act included giving a credit to consumers who traded in an old, gas-guzzling “clunker” for a new more efficient car. See more about the law at my previous post, Cash for Clunkers Bill.
The CARS program is now over and after a one-time extension of Cash for Clunker funds, here are the results according to the official website, Cars.gov:
“The CARS program ended sales on the Monday night with nearly 700,000 clunkers taken off the roads, replaced by far more fuel efficient vehicles. Rebate applications worth $2.877 billion were submitted by the 8 p.m. deadline, under the $3 billion provided by Congress to run the program”
I have my own opinions on the success of the Cash for Clunkers program.
Questions About the Cash for Clunkers Tax Rules
There seems to be a lot of confusion surrounding the taxability of the cash for clunkers credit. The Drudge Report today reported, “Surprise, Tax on ‘Cash for Clunkers’ Rebate” while linking to an article from South Dakota referencing the sales tax rules specific to that State.
So what’s the answer? Is there really a tax on the Cash for Clunkers credit? It really depends on what you mean by tax and where you live.
Federal Income Tax
If you’re talking about federal income taxes, then the answer is no. As a consumer, you won’t owe taxes to the Federal government for the credit you received as a result of the Cash for Clunkers trade-in. The official program website, Cars.gov is very specific about this. See this excerpt from their FAQs:
“Is the credit subject to being taxed as income to the consumers that participate in the program? NO. The CARS Act expressly provides that the credit is not income for the consumer.”
There are some complex rules on how a business must treat the sale of the clunker. For more on those rules, visit Cash for Clunkers Business Tax Rules.
State Sales Tax
But what about individual state sales tax rules? Yes, some States are including the Cash for Clunkers credit in the price of the vehicle when they are calculating the State’s sales tax due on the purchase of the vehicle. Therefore, in effect, there is a tax levied on the $4,500 Cash for Clunkers credit. It’s just not an income tax. It’s a state sales tax. Got it? Here’s more from the official website, Cars.gov:
“Do I have to pay State or local sales tax on the amount of the CARS program credit? MAYBE. The question of whether a consumer must pay State or local sales tax on the amount of the CARS program credit depends on the sales tax law of each State or locality. Consumers should review the law of their respective States or consult a tax advisor to answer this question.”
With that in mind, I’ve put together two lists: (1) States that charge tax on the Cash for Clunkers credit, and (2) States that do NOT charge a sales tax on the credit.
States Charging Tax on the Clunkers Credit
- Arizona
- Idaho
- Nebraska
- New Jersey
- New York
- Ohio
- South Carolina
- South Dakota
- Virginia
- Washington
Remember, this is not an income tax. It’s a State sales tax. The Cash for Clunkers credit is included in the price of the vehicle when the State calculates the sales tax.
States Charging NO Tax on the Clunkers Credit
- California
- Connecticut
- Florida
- Georgia
- Illinois
- Indiana
- Kansas
- Kentucky
- Louisiana
- Massachusetts
- Mississippi
- Minnesota
- Texas
- Wisconsin
For more details on these State’s tax rules and links to their authorities’ websites, see Cash for Clunkers: Taxable or Not? If your State isn’t included above, it’s likely they haven’t communicated their approach online. Be sure and call your State authorities for the facts.
More Information
Cash for Clunkers Payments – Tax Rules
Cash for Clunkers Tax Rules – The Truth
Cash for Clunkers Tax Rules
Cash for Clunkers Taxable Income?
State Taxes on Cash for Clunkers
Cash for Clunkers Tax Rules
Tax Rules and Consequences of the Cash for Clunkers Program
Cash for Clunkers Stats: Who Benefited?
Does Cash for Clunkers Affect Your Taxes?
Is There a Cash for Clunkers Tax?
Cash for Clunkers Tax Rules
Posted in Tax and Government | 16 Comments »
Friday, August 28th, 2009
I know you’re out there trying to make the most of your time and money. Luckily you don’t need to spend a dime to stay organized and get things done. There are plenty of free online time management tools available.
I recently shared some time management tips over at the Quicken Blog. I centered my tips around the use of a simple prioritized to-do list, and a calendar to help drive an effective use of your time.
I realize to make this work, most people in the corporate world will probably use some combination of MS Outlook Calendar and Tasks (or a simple text editor). Most “offline” people likely use a simple piece of paper and a daily planner to manage their time.
But what about freelancers? Or what if the offline folks are looking to come online, but don’t have access to Outlook? What are some good options for them?
I did some research and discovered (thanks to FreelanceSwitch.com and go2web20.net) that there are actually a ton of free online time management tools. Here’s some of the one’s that looked worth while. All should be free or in some type of beta.
Free Online To Do Lists
“Todoist features a simple and intuitive interface that helps you get organized without getting in your way. You can also use keyboard shortcuts to achieve blazing efficiency.” It also comes with a built-in calendar. http://todoist.com
”Ta-da List is the web’s easiest to-do list tool. Make lists for yourself or share them with others. It couldn’t be simpler.” This also works on a mobile browser. Looks pretty lean and mean. Nice app. http://tadalist.com/
“Evernote allows you to easily capture information in any environment using whatever device or platform you find most convenient, and makes this information accessible and searchable at any time, from anywhere.” This is a very popular tool. Probably the most recognizable of the bunch here. http://www.evernote.com/
”ForceDo is a free online to do list. You can add as many tasks as you want and start a timer which will force you to get things done. ForceDo will help you beat your procrastination.” This is another tool that uses the getting things done methods. http://www.forcedo.com/
”Manage tasks quickly and easily. Get reminded, anywhere. Organize the way you want to. Locate your tasks. Work together to get things done. Add tasks wherever you are.” This looks to be a great tool for task management. If you’re looking for something compatible with other programs choose this one, http://www.rememberthemilk.com/
Free Online Calendars (and more)
Touted as the World’s best online calendar, 30 Boxes comes with access to your own calendar page that allows you to quickly add in your calendar items. The tool does a lot more and is big on connectivity with friends and family. http://30boxes.com/
Create events, set reminders, connect with others. This tool does it all and if you’re already a Gmail user, it makes the most sense to go with this calendar. http://www.google.com/calendar
”Matchbox Calendar is an online calendar which allows you to share and plan events in your life.Plan events, Read news, Organize timetables, Arrange meetings, Integrate your calendar, Share your calendar with friends.” http://www.matchboxcalendar.com/
“A reminding service.You add events on important dates or subscribe to shared groups. myMemorizer will then send you a reminder as an e-mail or as a SMS/Text Message to your cellphone.” http://www.mymemorizer.com/
”Soshiku is a simple but powerful tool that manages your high school or college assignments. Soshiku keeps track of when your assignments are due and can even notify you via email or SMS.” http://www.soshiku.com/
Free Online Time Tracking
”RescueTime is a tool that allows you to easily understand and optimize how you and/or your team spends their time and attention. You install a small application on the computer and they magically track what software and which web sites are actively being used.” http://www.rescuetime.com/
Free Online Project Management
Thymer is currently in beta. I’m not a project manager, but this tool looks really cool. “Thymer has a novel one-page-design, uses Natural Language Processing to figure out what you want, and has a lightweight, intuitive and powerful interface that makes common tasks as simple as humanly possible. http://www.thymer.com/
Easily organize your actions and projects online with this neat tool based on the getting things done concept. Has a nice iPhone app to accompany the tool. The free version is somewhat limited. http://vitalist.com/
More Free Time Management Tools
”Nirvana is all about getting things out of your head and into a trusted system, then effortlessly drilling down to the thing you should be doing right now.” http://www.nirvanahq.com/
”To-do’s are too simple, calendars are overly complex, sometimes you just need to be reminded. Superminder is a micro-application that will make sure you don’t forget.” http://www.superminder.com/
Do you use any of these tools, or know of more free online time management tools? I’d love to hear your thoughts in the comments below.
Posted in Frugal Living, Organize Your Finances | 6 Comments »
Wednesday, August 26th, 2009
I little more than a year ago I created the Personal Finance Blogger Map. I initially thought it would only be a resource for us personal finance bloggers to connect with one another, plan meet-ups, etc. For that reason I haven’t really promoted it to you, the reader. But over the past year I’ve received many submissions and the map has grown to include over 100 personal finance bloggers from all over the US, and several from around the World.
The page is pretty simple to navigate (just like Google maps). Once you’re on the page, you just click on the markers and a pop-up bubble will show you a link to a blog in that area. Head over and give it a try.
So why the heck should you care? Well, I thought it might be useful as a resource for you, the reader, to locate someone in your area in order that you might get a more local personal finance perspective. Now I’m not looking for you to stop reading Prime Time Money. I just thought it might benefit you if you found someone that might be in touch with what’s going on in your area. For instance, it might help to be reading someone that:
- Understands the State/Country laws that are affecting your finances.
- Knows where to find the best deals to help you save money in your area.
- Uses the same regional terminology (slang) as you.
At the end of the day, we bloggers are all just people like you. We all have concerns about what’s going on in our own back yards. Therefore, even if the blogger doesn’t write specifically about his/her local area, they’re going to know about it. And most of us don’t mind receiving an email to discuss local issues or to share our local money saving tips. So go ahead. Find your local blogger and reach out for that local perspective.
In case you don’t want to use the map (which is way funner, by the way), I’ve included a list of the bloggers included in the map. Don’t forget to scroll down to see the international bloggers.
Personal Finance Bloggers by State
AL, Birmingham – No Debt Plan
AR, Jonesboro – The Wisdom Journal
AZ, Mesa – Wide Open Wallet
CA, Berkeley – Financial Wellness Project
CA, Riverside – Money Funk
CA, Sacramento – Our Fourpence Worth
CA, San Jose – Save and Conquer
CA, Silicon Valley – The Digerati Life
CO, Fort Collins – The Penny Saved
CO, Lakewood – Rocket Finance
DC, Washington – Mrs. Micah
DC, Washington – Budgets Are Sexy
DC, Washington – Money and Values
DC, Washington – Brunette on a Budget
DC, Washington – Milk Your Money
DC, Washington – One Million Bucks
FL, Jacksonville – Remodeling This Life
FL, Orlando – Not Made Of Money
GA, Alpharetta – Thornton Wealth Management
GA, Atlanta – Single Guy Money
GA, Cumming – Everything Finance
GA, Cumming – The Money Hawk
GA, Decatur – Your Finances 101
GA, Marietta – Amateur Asset Allocator
HI, Kane’ohe – Uncommon Cents
IA, Huxley – The Simple Dollar
IL, Chicago – My Debt Blog
IL, Naperville – Millionaire Money Habits
IL, Springfield – One Caveman’s Financial Journey
IN, Indianapolis – Rich Like You
IN, South Bend – Generation X Finance
KS, Chanute – Engineer A Debt Free Life
LA, New Orleans – Think Your Way To Wealth
MA, Newburyport – Greener Pastures: Personal Finance
MA, Norwood – Don’t Feed The Alligatos
MD, Baltimore – Blueprint for Financial Prosperity
MD, Bethesda – Money Blue Book
MD, Columbia – Buy Like Buffet
MD, Rockville – Clever Dude
MD, Severna Park – The Paycheck Chronicles
MD, Silver Spring – Online Savings Blog
ME, Ellsworth – Breaking Even, Inc.
MI, Ann Arbor – Me vs Debt
MI, Monroe – Monroe on a Budget
MN, Grand Rapids – Northern Cheapskate
MN, Shakopee – Bible Money Matters
MN, St. Paul – Cash on the Barrel Head
MO, Blue Springs – Credit Withdrawal
MO, St. Charles – Christian PF
MO, St. Louis – Financial Ramblings
MO, St. Louis – Spending Less 101
NC, Cary – Working For Financial Freedom
NC, Raleigh – Green Panda Treehouse
NC, Wake Forest – Get Out of Debt
NC, Waynesville – Gather Little By Little
NH, Upper Valley – Kids Meal Crowd
NJ, Delran – The Happy Rock
NJ, Maple Shade – Red Stapler Chronicles
NJ, Princeton – Consumerism Commentary
NM, Taos – My Two Dollars
NY, Albany – The Finance Journey
NY, Brooklyn – The Dangling Conversation
NY, East Rochester – Poorer Than You
NY, Fresh Meadows – Free From Broke
NY, Jackson Heights – Moolanomy Personal Finance Blog
NY, New York – Realm of Prosperity
NY, Queens – My Journey to Millions
NY, Rochester – Spilling Buckets
OH, Cincinnati – Building Equity
OH, Cleveland – Personal Finance Mastery with a Pinch of Motivation
OH, Dayton – My Daily Dollars
OH, St. Henry – Stumble Forward
OR, Medford – Being Frugal
OR, Portland – Finally Frugal
PA, Erie – On A Quest To Be Debt Free
PA, Harrisburg – Be Thrifty Like Us
PA, Philadelphia – Finance Your Life
PA, Pittsburgh – Sense to Save
TX, Austin – My Money Adventure
TX, Corsicana – How I Save Money
TX, Denton – Prime Time Money
TX, Fort Worth – Goliath Debt, David Income
TX, Houston – Wealth and Wisdom
TX, Plano – My Money Minute
UT, Layton – Personal Finance Firewall
UT, Provo – Financial Nut
WA, Everett – Antishay Ventenne
WA, Issaquah – Dividend Pirate
WA, Kent – My Investing Blog
WA, Seattle – A Money Lady
WA, Seattle – Debt Kid
WI, Madison – My Dollar Plan
WI, Sun Prairie – Sharpe Investing
International Personal Finance Bloggers
Australia, Melbourne – Frugal Logic
Australia, North Sydney – Smarter Wealth
Australia, Sydney – My Journey to Eliminate Debt
Bulgaria, Sophia – Natisparite.com
Canada, Hamilton – Colourful Money
Canada, St. John’s – Million Dollar Journey
Canada, Toronto – Quest For Four Pillars
Canada, Vancouver – Saving For Serenity
France, Grenoble – Almost Frugal
France, Marseilles – Esprit Riche
Great Britain, Aberdeen – Holly is Stopping Shopping
Great Britain, London – The Year of Frugality
Great Britain, Yorkshire – Miss Thrifty
India, Bangalore – Engineer’s Finance
India, Mubai – RaagVamdatt.com – Financial Planning Demystified
I’m interested in your opinion: Does it matter where a blog is geographically? Does the physical location of a blogger have an effect on whether you’re willing to follow along?
And in less interesting news, blog carnivals from last week… Carnival of Personal Finance, Festival of Frugality, Carnival of Twenty Something Finance, Carnival of Money Stories, Money Hacks Carnival
Posted in Personal Finance Links | 13 Comments »
Monday, August 24th, 2009
Let’s talk about free credit reports. Today I thought I’d review some of the reasons to get your free credit report, as well as, share some of the websites that will give you your credit report for free.
5 Reasons to Check Your Credit Report
It’s important to occasionally review your credit reports. Here are a few of the reason’s why I do it:
- Check Your Reports for Fraud – It happens everyday. Someone uses your personal information to open up a credit line. Then they run up a huge balance and never pay the bill. You don’t find out about it till it’s too late. There’s a big negative on your credit reports. When you try and apply for credit on your own, the lender won’t do it because of the negative history. Checking your reports a few times a year is a good way to ensure you aren’t being taken advantage of by someone.
- Review it for Errors – In addition to fraud, there’s actually a good chance that your credit reports have errors on them. The errors could be things like accounts that aren’t yours, missing information, incorrect credit limits, missed payments that aren’t accurate. These errors could be negatively affecting your credit score. It’s important to check your credit reports so that you can fix these credit report errors.
- Prepare for a Loan – If you happen to be planning on getting a significant loan in the near future, like a mortgage, then it’s crucial you review your reports for the types of fraud and errors listed above. The rate on the mortgage, car loan, or small business loan are going to be based on what the credit agencies are reporting about you. This could mean thousands in savings by having the score you deserve.
- First Time Credit Check – If you’ve never reviewed your credit report, this is the time to do it. It’s easy and free.
- Make Sure You’re Getting Credit – Another reason to review your credit reports is to make sure you are getting credit for the history you have. It’s not uncommon for one of the three reports to be missing important information, like an old account that had positive payment history. Take a second to review your report and make sure you’re getting credit for your positive history.
AnnualCreditReport.com
The best and only place to get your free, “no questions asked” credit report from the three reporting agencies is from AnnualCreditReport.com. This website was set up by the three credit reporting agencies (Experian, Equifax, and TransUnion) based on a requirement from the Fair Credit Reporting Act.
The website has done wonders for the individual consumer. AnnualCreditReport.com allows you to freely view your three credit reports once a year. So, you can ensure for yourself that information contained on the reports are accurate. Some people like to space their three free credit reports out so that they get a free report every 4 months. Pretty smart if you ask me.
There are three big problems with only using AnnualCreditReport.com as your source for credit reports:
- The Big Up-Sell – When you use the AnnualCreditReport.com website to get your three reports you’ll be pressured to sign up for a bunch of services that will cost you. Now there’s nothing wrong with paying for something of value, but if you’re going there with the intention of just getting your free report, you’ll have to fight through the many sales pitches that are going to be thrown at you. The Fair Credit Reporting Act should have explicitly prevented this. But they didn’t go that far.
- No Free Extras and No Free Credit Score – While going to AnnualCreditReport.com will definitely get you a free credit report, it won’t give you anything else for free. There are no credit monitoring services or credit score that can be had for free by going there. All you get is your three free credit reports.
- Limited to One Per Year – The biggest limitation of AnnualCreditReport.com is the fact that you can only get one credit report from each of the agencies each year. Most people think to check their reports at the beginning of the year when motivation for budgeting and getting things in order is strong. But then later on in the year, you may be considering a loan, or may suspect some type of fraud. At that point, most people either do nothing, or they fork over money to get their credit report. But you don’t have to pay. You can sign up for a free trial using one of the services listed below. Just make sure you cancel your account prior to the free trial running out. See below for the other ways to get your free credit report.
Free Trials and Credit Reports
Like I said above, there’s no reason to settle for AnnualCreditReport.com as being your only source for a free credit reports. There are other places that will give you a free report AND offer you additional services through a free trial. These places aren’t scams. They’re just not free forever. You have to take advantage of the free trials. But just make sure you remember to cancel your free trial before the time is up. Here are some of the best options available.
myFICO.com
Free 30 Day Trial of Score Watch®
This deal gives you access to a Equifax credit report and a FICO® score from Equifax (2 of each are allowed). Again, these reports and scores will have to be viewed over the 30 day free trial so that you can cancel and aren’t charged the annual fee of $89.95. That’s right. myFICO.com gives you 30 days but then automatically charges you the annual fee unless you cancel. Be careful with this one. In addition to the reports and scores, with myFICO you’ll receive credit monitoring and their alert service.
TrueCredit.com
Free 30 Day Trial of 3-Bureau Credit Monitoring
This isn’t a bad deal. You get access to all 3 of your credit reports and a score from TransUnion, alert service, the ability to lock/unlock your TransUnion report, and even $25,000 in ID theft insurance. I would say that this appears to be the best value of the free alternatives. But like the others, you need to set yourself a reminder to cancel your free trial before it expires.
Equifax.com
Free 30 Day Trial of Credit Watch Gold™
With this free trial you get unlimited free credit reports from Equifax. You also get a free 3-bureau credit report, a free FICO® score, and a free Score Power Report. This is all in addition to their credit monitoring service which covers all three reports. Just remember to cancel the free trial.
FreeCreditReport.com
Free 7 Day Trial of Triple AdvantageSM Credit Monitoring
You’ve seen the commercials. This is easily the most popular free credit report site on the Internets. They have the best marketing campaign hands down. But what can you get from them for free? Well, to start you get your free Experian credit report and credit score. You’ll also receive credit monitoring and alerts of any activity. There’s also a $50,000 triple advantage guarantee that looks interesting. Just remember to cancel the 7 day free trial.
CreditReport.com
Free 7 Day Trial at CreditReport.com
This is a pretty straight forward service. They offer the typical monitoring and alert services, plus you get access to your three credit reports (a 3-bureau report) and you get access to all three credit scores (a 3-bureau score). This seems to be the broadest reaching service provided. But I can’t say that they have all the bells and whistles you get with the other guys. Remember to cancel before 7 days if you use these guys.
CreditReportsandScores.com
Free 7 Day Trial – One Report and One Score
With this free 7 day trial you get access to one of your credit reports and one of your credit scores. To get all three you need to sign up for additional service, which they call their triple bureau credit reporting and credit score monitoring. If you’re looking for just one report and score without the need for any monitoring this is the way to go.
More Options
If none of these options looks interesting to you, you can always check out CreditKarma.com (who offers a free score from TransUnion) and Quizzle.com (a Quicken product offering a free Experian Report and Score).
Posted in Credit Cards and Credit | 6 Comments »
Friday, August 21st, 2009
With college starting up soon for most students, I thought it’d be a good idea if we discussed the idea of credit cards for college students. Below I provide some smart money tips for students and their cards, followed by a list of some of the best student credit cards available today.
Students and Credit Cards
I can’t believe it’s fall already. Time for students to head back to campus, or move off to college for the first time. Parents often find it convenient to begin the process of educating their kids on the proper use of credit cards during this time. It makes sense because the parent can’t be there for every purchase like they were in the high school days. And a card, along with proper use, will help the student begin to build a positive credit history.
I loved my time in college, but can’t say I was that great at managing the credit card I had when I was there. I got my card without my parents knowledge and used it foolishly throughout my time in college. Studies are showing that college students are still doing this today.
If you’re a parent, don’t let this happen to your student. Set them up with their own card, on your terms, and with your guidance. And if you’re a new student, pay attention to the tips I provide below for using your new credit card.
If you’re absolutely against credit card use, then at least educate your kids. They will be bombarded with credit card offers on campus this fall as the credit card companies make one last push before the Credit Card Act of 2009 kicks in. You don’t want to leave them alone without some of this knowledge.
How College Students Should Use Credit Cards
I’ve put together a quick list of tips for college students and parents when they get their new card:
- Emergency Use Only – Parents, you and your college student can decide that the card should be used in case of emergency only. This is a good approach. Especially if the student doesn’t have a job. You don’t have to worry about payments every month, or if your student overspent their credit limit. Have your kid keep it somewhere safe in their dorm room. Put it away and forget about it until that emergency situation occurs.
- Set a Low Credit Limit – When you learned to ride a bike, you probably started with training wheels. The same concept should apply to student credit cards. Parents, don’t allow your college student to “fall” by ringing up a huge credit balance. If the limit is low, and they go on a spending tear, they won’t do a ton of damage.
- Schedule a Monthly Review - Both parents and the college student should schedule a monthly phone call where the finances are discussed. If you’re using the card for more than emergencies, you should use this time to review the bill and talk about the balance, how you’ll pay it off, interest charges that will occur if you don’t pay,
- Pay it Off Monthly – The balance on the card should be paid off every month. This is the most important thing any college student should know when using a credit card. Unless you have an introductory 0% rate, carrying a balance on a card means you are paying high interest on the debt. Therefore, you are paying debt interest payments for something you didn’t have the money for in the first place. This is the wrong way to use credit.
- Get the Right Card - Lastly, the card that the student gets should reflect the type of use the card will recieve. A card for emergencies only needs to have a small credit limit, and it need not have an annual fee (for extra services). A card that will be used for a little spending should provide the student some extra benefit from a good reward program.
Best Student Credit Cards
If you decide a student credit card is the right thing for you, check out these options below. All of them come with no annual fees.
Citi® Forward Card - My Top Pick!
- 10 ThankYou® Points on every dollar spent at bookstores, record stores, restaurants (including fast food), motion picture theaters and video entertainment rental stores for the first 3 months and 5 points thereafter.
- You will earn 1 point per dollar on other purchases.
- 0% APR for 6 months on Purchases & Balance Transfers.
- 6,000 bonus points after $50 in purchases are made within 3 months of account opening
- 2,500 bonus points when you sign up for paperless statements within 3 months of account opening
- Apply
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Citi® mtvUTM Platinum Select® Visa® Card for College Students
- 10 ThankYou® Points on every dollar spent at bookstores, record stores, restaurants (including fast food), motion picture theaters and video entertainment rental stores for the first 3 months and 5 points thereafter.
- You will earn 1 point per dollar on other purchases.
- 0% APR* on Purchases and Balance Transfers for 6 months if you qualify based on your application and credit history
- Earn 25 ThankYou Points every month when you pay on time and don’t go over your credit limit.
- Earn up to 2000 ThankYou Points twice a year for having a good GPA.
- Apply
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Discover® Student Card
- More Ways to Earn More Cash than Anyone Else(SM)*
- Unlimited Cash Rewards, Automatically
- Up to 20% Cashback Bonus® When You Shop Online*
- Double Rewards with More than 100 Cashback Bonus® Partners*
- Customer Service in Less than a Minute, Anytime You Want
- *View Discover® Card Rates, Fees, Rewards, and Other Important Information
- Apply! Also comes in Tropical, Clear, and Monogram versions (all shown above).
I’d love to hear your experience with these student credit cards if you have one. Let us know in the comments below.
Photo by: bobster855
Posted in Credit Cards and Credit | 16 Comments »
Wednesday, August 19th, 2009
I was recently introduced to the Munny Journey Keepsake Journal, and I have to say, I’m really impressed. Here’s my review of this really cool product that combines basic personal finance concepts with the hopes and dreams you have for your child.
About the Journal
The Munny Journey Keepsake Journal is modeled after traditional baby keepsake journals. Except it has a focus towards money, or munny. The book is both a keepsake journal, as well as an educational tool for first-time parents. It contains 95 pages, including an area for keepsakes, pictures, your writings, and a fold-out Munny Mountain growth chart.
The journal is filled with wonderful illustrations, and also comes with an audio CD that walks you through some of the concepts in the book.
Munny Keepsakes
The journal has several pages to put some really cool keepsakes. There’s a spot for:
- special coins (your State quarter and coins minted in the year of birth),
- a place for your baby’s first dollar,
- and my favorite, an “On the Day You Were Born” page, where you can record the financial events from the day your child was born.
There are also pages to records your baby’s first savings account, stock, etc. Very cool.
Compounding Interest: Grow a Munny Mountain
From an educational standpoint, you, as a parent, will be the one initially learning the basic financial concepts. While you might not use all the information in the book, odds are your topic of interest is covered. The main theme throughout the journal seems to be the power of compounding interest, and how starting to save early can really make all the difference for your child’s future financial needs.
“It’s possible to create a millionaire by age 65 for just one dollar a day starting from birth.”
The Munny Mountain represents the total of your child’s savings, stocks, bonds, mutual funds, etc. The Munny Mountain can be recorded and tracked on the fold-out growth chart provided with the journal.
Who Needs a Munny Journey Keepsake Journal?
Most new parents will love this journal. And if your kids are a bit older, don’t worry, you can complete most of the pages retroactively. I would highly recommend these for new parents. And these make great baby shower gifts as well. The Munny Journey Keepsake Journal can be purchased straight from MunnyJourney.com and is currently selling for $29.95. They also have a soft cover version for $10.95.
Get 10% off your order. Just use this coupon code: PT89
Posted in Money Books | 3 Comments »
Tuesday, August 18th, 2009
I recently helped Mrs. PT complete a 403(b) rollover to a traditional IRA. A rollover is simply taking funds from one retirement account and transferring them to another without suffering any tax consequences. This is typically done when you leave a job. The rules for the 401(k) rollover are very similar, if not identical, but I have recent experience with my wife’s 403(b). So that’s what I’ll cover here. Here are the details of my wife’s rollover, how you can complete a rollover yourself, followed by some good reasons to rollover a 403(b) when you leave your job:
My wife, a teacher, left the classroom back in the Spring of 2008 to go back to school (a different classroom) and to be a full-time Mom. She’s enjoying her time away from teaching, as well as being a Mom. But neither have left her much time to address her old retirement accounts with the school district. For a long time we just weren’t sure what we wanted to do with the funds. Here’s a breakdown of the different funds she had:
- Teacher Retirement System Account
- 403(b) Retirement Plan
- Roth IRA
Our state offers teachers a nice pension plan, the teacher’s retirement system. She really has no choice with this plan. She was forced to contribute and unable to make any investment decisions. The way I understand it, she invested in that system in lieu of social security. So we tend to treat it like social security, and use a “don’t count on it” approach.
Therefore, as you see above, she also had invested in a 403(b), as well as a Roth IRA. The school district offered a very generous match with the 403(b). I assume this is to encourage folks not to rely on the pension alone. The 403b funds, along with the Roth IRA were being managed by Primerica. As an aside, that’s something I wasn’t too happy to discover when I met my wife. But, to their credit, they had her getting the district 403(b) match and diversifying tax-wise with the Roth.
Not to turn this into a bashing session, but Primerica’s fees are just too high compared with other investment brokers. And their sales tactics are questionable. My wife said that the advisor was more interested in getting her friends’ and families’ names and phone numbers than they were in actually providing financial guidance. Regardless, they had her in a good mix of accounts and diversified in various investments.
Back to my wife’s rollover. She’s planning on returning to the school district at some point. But we just don’t know for sure when that will be. Nor do we know if she’d stay for very long (we might have another child, she may want to just stay home full-time, etc.). So, moving the funds to another place seemed like a nice idea. We just didn’t know where.
Then, in the Spring of this year, my wife and I opened up Roth IRAs with Vanguard. This was part of our goal to max out our Roth IRA contributions. Now that we had the Vanguard account ready and waiting, we decided to make the move. I called up Vanguard and requested the forms to rollover the 403(b) to a Traditional IRA with Vanguard and to transfer the Roth IRA funds to her new Roth IRA with Vanguard (I’ll discuss the differences between a transfer and a rollover in a later post). The forms were easy to complete and we should see the funds being moved within a few weeks.
How to Rollover Your 403(b)
Assuming you’re in Mrs. PT’s situation, here are the steps to rolling over your 403(b):
- Be Sure to Request a Direct Rollover - A direct rollover is when the funds go directly from your 403(b) account to the new IRA account. The money is never in your possession. So don’t go asking your old employer to send you the funds, so that you can do the rollover yourself. They’ll mail you a check, less 20% taxes. This forces you to try and comply with the IRS 60-day rule and scramble to get the funds reinvested in an IRA, using new funds to cover the 20% hit. They give you the 20% back in a credit if you do this, but the whole thing is just a hassle. Avoid it by insisting on a direct rollover. See more under the IRS rules for a tax-free 403(b) rollover.
- Know What Your Old Plan Requires - It’s a good idea to call up your old employer or old fund manager and learn the rules from their end for having the funds pulled. Also, make sure you’re aware of any fees or forms you might have to send them to give permission for the rollover.
- Open a New IRA- Your funds need a home. Determining exactly where that is, is up to you. There are many places to open up a traditional IRA. You can go through your bank, or an investment firm like Vanguard, Schwab, or Sharebuilder.
- Complete the New IRA Rollover Forms – Step 3 and 4 may be one in the same for your investment firms, but once you have your new account picked out, find their process for opening up a Rollover IRA. Be sure to have your statement and old account’s transfer info available to complete the forms. Once it gets rolling, the process may take a few weeks, but it’ll likely be worth it. Here’s why:
Reasons to Rollover Your 403(b)
While there might be a few reasons not to roll over your 403(b), for most people it’s a postive thing. Here are a few of the good reasons to do it:
- Consolidation of Your Accounts – We’re changing employers more than ever these days. After some time, your accounts can become spread out across different accounts. This can make it hard to properly manage your asset allocation, and generally, just a hassle. Rolling all your old 403(b) accounts to one traditional IRA makes sense for most people.
- Opportunity for Lower Fees – In most cases the mutual fund expenses associated with 403(b) accounts are going to be higher than what you can find on the open market through a traditional IRA.
- Typically More Investment Choices- Most 403(b) plans allow you to contribute to a pre-selected list of funds. When you roll your funds to a traditional IRA (through a large investment firm), you’ll typically have the option to invest in
- It’s Easy – Once you open up your new traditional IRA account with the new firm, they will be glad to do all the work for you. They do rollovers everyday and can typically take the hassle out of it for you. They’re getting your funds, let them do the work.
- It’s Tax Free – Last but not least, doing a direct rollover should have no tax consequences. You saved your hard-earned money, tax-free, for years in your 403(b). The last thing you want to do is retroactively pay the taxes on those funds. The rollover will prevent you from having to do that. Thus, your original goal for the funds (tax-advantaged retirement savings) remains intact. If you’re not interested in keeping the same tax strategy, see Rolling to a Roth IRA.
If you’ve completed a 403(b) rollover, I’d love to hear about it. Share your experience in the comment section below.
Posted in Investing and Retirement | 5 Comments »
