Tuesday, June 3, 2008

How many Fruits and Vegetables do you Need Each Day

How many Fruits and Vegetables do you Need Each Day?
Are you getting 5 to 9 servings a day?
Children ages 2 to 6, women, some older adults who need about 1,600 calories each day should have 2 servings of fruit and 3 servings of vegetables each day.

Older children, teen girls, active women, most men who need about 2,200 calories each day should have 3 servings of fruit and 4 servings of vegetables each day.

Teen boys and active men who need about 2,800 calories each day should have 4 servings of fruit and 5 servings of vegetables each day

Why Children Hate Vegetables

Why do kids turn up their noses at broccoli but beg for ice cream? It may be genetic. A study done by researchers at Monell Chemical Senses Center in Philadelphia shows that a gene called TAS2R38 may be responsible for children's aversion to bitter tastes. Every one of us carries two of these genes. There are two different versions of this gene, with one being more sensitive to bitter tastes than the other. If one or both of those bitter-sensitive genes are present, we are more likely to dislike bitter tastes.
The study included 143 children and their mothers, and over 79% of the children had one or two copies of the bitter-sensitive gene present. Interestingly, the presence of the bitter-sensitive gene made a bigger impact on the children's food preferences than their mothers. The mothers tastes seemed to be influenced more by race and ethnicity than the children. In a sense, they grew out of their aversion to bitter foods.

If this study holds true, then about 80% of children aren't going to be thrilled about eating broccoli and cauliflower. It may be difficult to convince your children to eat more vegetables if they are over-sensitive to bitter flavors.

You don't need to look longingly at those 20% of youngsters that do like vegetables while cringing at your own bitter-sensitive kids' reaction. You can disguise the bitter taste, or choose sweeter vegetables. Over time, your children's aversion to bitter tastes will ease.

Monday, June 2, 2008

Start Investing With Very Small Amounts of Money

Use Direct Purchase Plans
If you want to get started in investing but don't have a chunk of change to plop down for a signficant investment, are you doomed to wait until your cash flow improves? No. There are ways for beginners to invest with the amount of money most people spend on soda or coffee every month.
One easy way to get started is through direct investing, a method of buying stock directly from the company without going through a broker. Not only can you invest small amounts (often as low as $25 or the value of one share of stock), but you can find Direct Purchase Plans (DPPs) with fees that are less than those you'd pay to brokers.

Companies are forbidden by law to advertise their direct purhcase plans, so to find them, visit a site like Direct Purchase Plan Clearinghouse and Direct Investing.

You can also enroll in programs to have a fixed amount deducted monthly from your bank account and automatically invested in the stock, even if your monthly deposit isn't enough for a whole share.

For instance, if you invest $25 per month in a DPP and the stock price is $50, you can purchase 1/2 of a share.
If you don't have thousands of dollars to invest at a time, this is a great way to get started in investing and build a portfolio that will allow you to save for your future, pay for college, and fund your retirement.

How do you find companies that offer DPPs? Sharebuilder.com is one online service that allows you to research companies by using a searchable database of over 5,000 stocks and Exchange Traded Funds (ETFs). You can invest any amount you want. There are no account minimums and no inactivity fees. Trading fees are very low, averaging $1 to $4 per trade.

If you have specific companies in mind that you're interested in investing in, use the Stock Finder tab on Sharebuilder.com to see if they offer direct purchase plans and view information about the company.

Benefits of plans like Sharebuilder's include automatic investing with automatic deductions from your paycheck or bank account, a wide selection of over 5,000 stocks and ETFs, real-time information about your portfolia online, and practical investing advice.

Remember, it's important to choose your investments carefully. For first time investors, it's a good idea to choose a company you know--one you do business with regularly and are familiar with. It could be a music company, a chain of restaurants, the maker of your favorite food, or an automobile manufacturer, for example. Before buying, look the stock up at Morningstar, where you can get information and ratings of many stocks and mutual funds.

Broke! A College Student's Guide to Getting By On Less

Advice For College Students From College Students
Broke! A College Student's Guide to Getting By On Less, by Trent Anderson and Seppy Basili, is down-to-earth, practical money advice for college students, by college students.
This is not your parents speaking. There's no finger shaking, no censure, and no guilt. These practical and realistic tips on what works and what doesn't are down to earth and obviously from the mouths of those who have "been there, done that." In fact, each tip is from a college student or recent graduate, sharing secrets to living on less while having a great time in college. The student's name, major, and college is included for each tip.

Topics covered include:

asking Mom and Dad for money
budgeting
banking
credit cards
debt
managing loans and scholarships
saving money on textboooks and supplies
eating out or in
entertainment
costs of sororities and fraternities
paying for spring breaks
traveling affordably
housing
coming up with quick cash
Broke! is a 4 x 6" paperback that you can easily slip into your backpack or tote bag and read while you're waiting in line, between classes, on the bus, or waiting at the drive-up window at Dunkin' Donuts.

Unlike most personal finance books, you can read it in short bursts of a minute or less without losing any of the essence. That's because the entire book is written in one or two sentence snippets. No need to read it from cover to cover, either; the advice is just as good if you open it randomly at any page and start reading.

Bottom line: it's a great little book for any college student.

Eight Warning Signs That You May Be Headed for Bankruptcy

And Eight Tips for Avoiding It
Bankruptcies are at an alarming level in the United States. Bankruptcy doesn't happen just to financial deadbeats. It could happen to your family member, your neighbor, your friend. It could even happen to you. Here are eight warning signs that you're headed for possible bankruptcy, and eight tips for avoiding it and changing course before it's too late.

Bankruptcy Warning Sign #1: No health insurance or inadequate coverage. Medical bills are a factor in one out of five bankruptcies.

Bankruptcy Warning Sign #2: Maxing out on your credit cards or charging more than you can pay off each month. Credit card debt is one of the major factors in many bankruptcies. A good rule of thumb is to use no more than 30% to 40% of your available credit at any one time. This gives you flexibility in case of job loss, illness, divorce, or other threat to your income.

Bankruptcy Warning Sign #3: Over-using home equity loans. Think twice before you use your home equity loan or line of credit for items other than home improvements. Make sure you can afford the payments comfortably.

Bankruptcy Warning Sign # 4: No emergency fund. If you live from paycheck to paycheck with little or no savings for emergencies, you're at higher risk of going bankrupt. 43% of American households have less than $1,000 saved, an alarming statistic.

Bankruptcy Warning Sign #5: Paying the minimum balance on your credit cards. Since it can take 20 to 30 years to pay off your credit card balance when you pay only the minimum payment, if that's all you can afford to pay, you really can't afford to buy whatever it is you've been buying.

Bankruptcy Warning Sign #6: Co-signing a loan for someone else. Co-signing loans is a common factor in many bankruptcies when the person you co-signed for defaults on the loan payments and you're held responsible by the lender.

Bankruptcy Warning Sign # 7: Tax lien or foreclosure on your home, or repossession of a car or other item you failed to make timely payments on. These are signs that you've lost your grip on your financial situation. Take them seriously.

Bankruptcy Warning Sign #8: Borrowing too much on student loans. You may end up finding your student loan payments so high you can't afford your living expenses.
The key to avoiding bankruptcy or other, less dire but no less unpleasant financial problems is to have a firm grip on your finances by following these eight tips:


Avoid impulse spending.

Don't use a credit card unless you have the cash to pay it off.


Tear up credit card offers you receive in the mail.

Set up a budget and stick to it.

Don't buy more house than you can comfortably afford.

Make sure you're adequately covered by insurance (medical, homeowners, auto).

Don't make speculative or high-risk investments.

Don't incur joint debt with others who have questionable financial habits.

Home Improvements - Will They Pay Back What They Cost?

Deciding Whether a Home Improvement Makes Financial Sense
Millions of homeowners have taken advantage of low mortgage and home equity loan interest rates to make home improvements or remodel their homes over the last several years. When they sell their homes, many of them are unable to recoup the money they put into the improvements. Not all home improvements are created equal, so how do you know which ones will pay you back the money you put into them?
Home improvement payback values vary widely by region and even by neighborhood. In general, expect to recoup less of your investment in a slow real estate market than you would in a hotter real estate market where houses are appreciating rapidly in value.

One of the most popular projects, finishing your basement, has one of the lowest rates of return,. The average payback for finishing a basement is less than 50% of your costs, so if you spend $10,000, you can expect to increase the value of your home at resale by less than $5,000; the other $5,000 comes out of your pocket.

Kitchen remodeling and bathroom additions often pay back 75% to 90% or more of your costs. In-ground pools end up being notoriously bad investments, averaging a payback of less than 10%. Whirlpool baths, fireplaces, and decks don't fare much better. Remember that what's important to you may not be important to a potential buyer.

Improvements that potential buyers are most likely to be willing to pay for include:


Adding or remodeling a bathroom
Kitchen improvements
Adding a room
Landscaping
Adding a bedroom
Adding a garage
You can't always make a decision about home improvements based solely on the financial aspects. You may need extra space for an expanding family or have a home improvement that just can't wait, like a new roof. But if you're planning a home improvement project that doesn't have to be made, how do you decide if it makes financial sense?

Remember that when it comes time to sell your home, it's never a good idea to have the biggest or most expensive house in the neighborhood, because it will be more difficult to sell if the asking price is higher than other homes. The same principal applies when remodeling. If you make your home significantly larger or more expensive than others in the neighborhood, your likelihood of recovering your costs declines.

So, think carefully before tapping the equity in your home to make improvements. If you plan to sell in the next five or so years, you may recover only a small percentage of the money you put into your home improvements. You could even end up owing more to the bank than you can get for your house when you sell it.

If you're planning to sell and are considering making improvements in order to increase the selling price, do your homework first. Talk to experienced realtors, builders, and other industry professionals about whether you're likely to make back the money you put into the improvements.

Five Worst Money Mistakes to Avoid When Buying a Car

Big Car Payments Can Lead to Credit Card Debt
Many young adults (and quite a few older ones) have such high car payments that they struggle to meet their other financial obligations. The shortage of cash forces them to use their credit cards for day-to-day expenses, getting deeper and deeper into debt. They may not even realize that their car payment is the root of the problem. Here are the top five mistakes to avoid to prevent excessive credit card debt caused by buying too much car.
Not Knowing How Much Car You Can Really Afford
Financial experts recommend spending no more 12 to 15% of your after-tax monthly income for car payments. To calculate how much car you can afford, multiply your monthly net pay (take-home pay after taxes are deducted) times 15% (.15). Your car payment should not exceed this general guideline.
What's the highest car sticker price that much money will buy? To find out, use the "How Much Car Can You Afford?" calculator at Bankrate.com and see the example at the end of this article.
There's more to the cost of a car than just the purchase price - there's the cost of owning your new car. Insurance rates vary widely depending on theft, damage or repair costs for each make and model, as well as other factors, so ask your insurance agent for quotes on several different makes and models. Also consider the costs of repairs and maintenance and the repair record of the car, available from Consumer Reports and other consumer organizations.


Buying New Versus Used Cars
New cars depreciate in value signficantly during the first two years of ownership (30 to 40%). If money is an issue, let someone else pay for the depreciation on the first year or two of your car - buy used. If you're very concerned about warranties or determined to have particular options and specific features, and the rapid loss of value in the first few years of ownership is not a big concern (for example, if you intend to keep the car for 5 to 7 years), buying new may suit you, but go into it with your eyes open.

Not Knowing the True Worth of a Rebate Versus a Low Interest Rate on New Cars
What if your dealer offers a choice between a cash rebate on your new car or a very low interest rate? How do you determine which is the best deal? You may be surprised, so use the quick and easy Rebate/Interest Rate Calculator on Bankrate.com to find out you which deal will save you the most money.

Choosing a Long-term Loan Versus a Short-term Loan
There was a time when the average car loan was 36 months. Now 60 months is more the standard and many dealers are offering 72 months or more. This allows you to buy more car than you can really afford, by stretching the payments out until the car is almost fully depreciated. You also end up with higher interest costs, and you may become upside down on your loan (see #5, below). Try to buy only as much car as you can afford to pay off in 48 months, or even better, 36 months.

Being Upside Down on Your Existing Car Loan
Long-term loans (and quickly depreciating cars) are also the reason people get "upside down" on their loan, where they owe more than the car is worth. If they trade it in or sell it, they have to pay the lender money out of their own pockets or add the old loan balance to their new car payment. If you still owed $3,000 on your old car and you rolled the balance into your new car loan of $17,494 from the example below, your new car payment for 60 months at 6.5% interest would be $409 instead of $292, an additional $117 per month for 60 months, for an additional $7,020. Rather than stretch your payments out over five years or more, buy a cheaper car, or a one- or two-year-old car, and pay it off over a shorter period.
Do you see why people get in trouble with car-buying decisions? Use the tools available to you online (at sites such as Bankrate.com) and educate yourself about the true costs of buying a new car. You'll save a lot of money.

Example: Your annual salary is $30,000 or $2,500 per month before taxes. Check your most recent tax return to deterine your federal tax bracket by dividing the total tax you paid for the year (including taxes you paid with your return, or refunds you received) by your adjusted gross income. Add your state tax bracket to this federal tax bracket to get your total tax bracket, a modest 22% in this example.

Your taxes are $550 ($2,500 salary before taxes x 22%). Your after tax income is $1,950 ($2,500 salary before taxes - $550 taxes). You can afford a maximum car payment of $292 per month ($1,950 monthly salary after taxes x 15%).

If you don't already have a car payment and you won't be making a downpayment, the maximum sticker price you can afford is $14,949 at 6.5% over 60 months.

If you made a $3,000 downpayment or trade-in, the maximum sticker price you could afford would be $17,949. You would finance the remaining $14,949, paying an additional $2,601 in interest over five years, for a total cost of $20,550 for the car (including your $3,000 downpayment).

Save Money on Air Conditioning Costs

Cut Your Cooling Costs With These Money-Saving Tips
If you have central air conditioning or a window air conditioning unit, you can cut your electric bills significantly, especially in very warm climates, by following these energy-saving cooling tips this summer.

When buying a window air conditioning unit, more is not necessarily better. Base the size of the air conditioning unit on the size of the room, the other factors that affect the temperature in the room, such as how many windows it has and whether it faces south, north, etc. An air conditioning unit that is too big for the room will work harder and cost you more.

When you're shopping for a central air conditioning system, make sure the SEER number (seasonal energy efficiency ratio) is 13 or better (14 in warmer climates). A less efficient system will cost you more to run.
Look for an EER (energy efficiency ratio) of 11 or higher for room air conditioners. A high efficiency unit costs more, but if you live in a hot climate, it will pay for itself in a few years by reducing electricity bills.

Perform regular maintenance on your air conditioning unit. Replace the filter monthly during the cooling season and have a professional service your system at the beginning of each cooling season.

A cooling system is one of the biggest energy guzzlers in your home (second only to your heating system, depending on where you live). If you have an old air conditioning system with a SEER rating of less than 8, it may be worthwhile to consider replacing it with a more energy efficient system. You should be able to recoup the cost in just a few years.

Install a programmable thermostat so you can vary the temperature according to when you're home. Set it to 78 degrees when you're home. If you'll be gone for more than a few hours, it makes sense to set the air conditioning at 85 degrees while you're gone.

Make sure your air conditioning condenser is located in a shady spot and has room to dispose of the heated air it removes from your house. Don't crowd it with shrubs or anything else.

Plant shade trees and shrubs around your house to help reduce the heat of the sun, especially on the west and south sides. This can reduce your cooling costs by up to 30%.

Close drapes on the sunny side of your house.

Install awnings on the windows on the sunny side of your house.

Sealing up air leaks in your house will reduce your air conditioning costs as well as heating costs. Caulk or seal places where utilities come into your home (plumbing, electricity, dryer vents, etc.). Fill gaps around chimneys. Weatherstrip around drafty windows and doors.

Install energy efficient ceiling fans and run them on hot days. If it's just a little too warm for comfort, use the ceiling fan without air conditioning. If it's hot enough to require air conditioning, using the ceiling fans at the same time allows you to raise the temperature setting by five degrees, which will reduce your costs. Use the ceiling fan only when you're in the room, because running the fan doesn't actually lower the temperature. The moving air increases the amount of evaporation from your skin and helps cool you off.

The darker the color of your house, the more heat it will absorb, so if you're building, buying, or considering repainting, choose lighter colors for the exterior.

Thirty percent of the heat in your house is absorbed through the roof. Make sure your attic is properly ventilated. Vents in the eaves allows cooler air to enter. A ridge vent or an attic fan can significantly reduce your cooling costs.

Consider putting reflective window tint on your windows to reduce the amount of heat absorbed.

Any heat that's generated inside your home has to be removed by your cooling system, so avoid generating heat inside your home whenever possible. Cook on your outdoor grill as often as possible, or use a crockpot and the microwave oven. Use the 'air dry' setting on your dishwasher.

Close off rooms that you aren't using and the cooling ducts to those rooms.

Make sure the cooled air coming from your air conditioning vents is not obstructed by furniture or draperies.

Turn off lights when not in use. Lights produce heat, which makes your air conditioning system work harder (and cost more).

Your computer and other home office equipment also generate heat. Turn them off when not in use

Ten Tips for Late Starters To Boost Their Retirement Savings

In Your 40s or 50s With Little or No Retirement Savings?
If you're one of millions of Americans who are on the other side of 40 and don't yet have a substantial retirement nest egg, don't despair. It's not too late, but time is of the essence.

Estimate roughly how much money you'll need to live on in retirement. Don't get bogged down by conflicting advice on how to calculate the amount. A ballpark figure is a good starting place, and you can use one of a number of good online retirement calculators to get an estimate.

Once you have an idea of how much you'll need for retirement, calculate what will be available from sources other than your savings. For example, what is your expected Social Security benefit at retirement age? Do you or your spouse have a pension from a previous or current employer? If you have a 401(k) plan, what is its expected value at your planned retirement age? Use a conservative rate of growth to avoid overestimating.

Set goals for reaching the amount you'll need to make up the difference between Social Security, pensions, and any other retirement funds you already have.

If your employer has a 401(k) or 403(b) or other voluntary contribution retirement plan, and you're not already participating, sign up today and try to contribute the maximum allowed by law.
Remember that the tax savings on your deductions will soften the blow. If you're in a combined federal and state income tax bracket of 35%, your contributions will only cost you 65 cents for every dollar you put into your account.
The maximum contribution for 2006 is $15,000 for those under 50 years old and $20,000 for those over 50. If you're currently 45, you have 21 years until retirement. Your $15,000 a year contribution will grow to nearly three quarters of a million dollars (pre-tax) in 21 years at a seven percent rate of return. (This is a very rough estimation that depends on if you contribute the "catch-up" amounts each year and other unknown factors.)

If your employer matches a percentage of your contribution, that's free money you should never pass up. Add your employer match to your own retirement contributions and you'll have a tidy additional sum of approximately $364,000, assuming a 50% employer match, for a total of well over one million dollars.


Go for the Roth. If you make under the income thresholds, you can contribute to a Roth IRA in addition to your 401(k) or 403(b) plan. The contribution is not tax deductible, but the earnings will be tax-free in retirement. The maximum contribution for a Roth IRA in 2006 if you're under 50 years old is $4,000 ($5,000 if you're over 50). $4,000 a year will grow to nearly $208,000 in 21 years at a 7% rate of return, and you will owe no taxes on any earnings in your Roth IRA.

Don't Be Too Conservative. Even at 45 or 50 years old, you have several decades for your retirement earnings to grow, so invest a large percentage in carefully researched, proven stocks, or better yet, mutual funds.

Consider relocating or downsizing. If you live in an area with a high cost of living, moving to a less expensive area and investing your savings for retirement could make a big difference in your ability to amass a nice nest egg.
If your kids have left the nest and you're still living in a big house that has appreciated in value, consider selling it and buying a smaller, less expensive home. You'll save not only on your mortgage payment, but in less obvious places like the cost of heating, cooling, insuring, and repairing your home, property taxes, etc. You can sock all the savings away for retirement or use some of them to enjoy your life now.


If you're worried about ever being able to amass enough money to retire, consider taking on a second job and investing your earnings.

Play catchup. The tax laws now allow those over 50 to contribute a little extra to 401(k)-type retirement plans and IRAs, so they can do a little catching up as they near retirement age. Take advantage of this if you're over 50.

Get out of debt. If you carry thousands of dollars of credit card balances and pay the minimum payments each month, your potential retirement savings is going directly to your credit card company in the form of interest. Paying only the minimum payment on credit cards is one of the worst financial mistakes you can make. Start applying as much as possible to your credit card balances and once they're paid off, resolve to pay the balance in full each month. You'll be amazed at how much money it frees up for retirement savings over time.
The older you are when you start seriously saving for retirement, the harder you'll have to work at it, but it can be done by following the advice above, so don't let doubt or discouragement keep you from starting right away, regardless of your age.

When Buying a Used Car, Beware of Cars Damaged by Hurricanes or Other Storms

How To Tell If a Car Has Been In a Flood
If you're in the market for a used car this year, beware flood-damaged cars that have been declared a total loss by insurance companies following flooding caused by Hurricanes or other storms.
Experts estimate that as many as half a million cars submerged in the toxic waters around New Orleans during Hurricane Katrina alone were "totaled" by insurance companies and then sold at auction. Add to this number the cars damaged in the more recent flooding all over the country, and you have a lot of cars that have been cleaned up by salvage operators and dealers and resold to hide the fact that the cars have been damaged in a flood. Many of these cars are shipped far from the original flooded area, so don't assume a car you're looking at couldn't be a flooded car just because you don't live near a recently flooded area.

Be especially cautious if the sales price seems like a real bargain.
Potential problems with flooded cars include:


Electrical system failure
Transmission failure
Anti-lock brake system failure
Airbag failure
Mold and musty smell
Rust
To avoid being a victim, follow this advice:


Have the car thoroughly checked out by a trusted mechanic.

Run a search on Carfax.com to obtain a history of the car you're considering purchasing. Some car sellers will pay for a Carfax report, but if not, you can do it yourself. All you need is the vehicle's 17-digit Vehicle Identification Number (VIN), which you can find on the dashboard. The cost is $19.99 for one car or $24.99 for unlimited reports.

Inspect the trunk, glove compartment, dashboard, and below the seats for sand, mud, rust, or other signs of water damage. Look for water marks around the engine, on the floor, and behind the dashboard.

Check the upholstery and carpeting closely, looking for discoloration, fading, or staining that could indicate water damage. Be suspicious of carpeting or upholstery that doesn't match the interior or doesn't fit properly, indicating that it may have been replaced.

Thoroughly test all warning lights, gauges, interior and exterior lights, windshield wipers, turn signals, radio, heating and air conditioning to make sure all are operational.

Sniff around the interior of the car to check for damp or musty odors caused by mildew.
Taking these precautions before buying a used car could save you many headaches and a lot of money.

New Bankruptcy Law May Make It Harder for Some People to Erase Their Debts

Major Changes of the New Law
If you're thinking of filing for bankruptcy, it may be harder to erase your debts than you think. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made big changes to bankruptcy law, making it more difficult for some people to erase debts by filing for bankruptcy. These changes were prompted by years of complaints by banks and other financial services companies who believe that the banktuptcy laws have been abused by gamblers, compulsive shoppers, and others.
Opponents of the new law claim that the changes will fall hardest on low-income families, single mothers, minorities, and the elderly, and will take away the protection that was once available for those with unmanageable debt burdens due to job loss or medical bills.

Some of the features of the new law include:


Your income must be below the median income for families the size of yours in your state or you'll be required to go through a bankruptcy means test to see if you qualify for debt forgiveness (Chapter 7).
If the court believes that you have $100 or more per month in disposable income that you could apply towards your debt repayment after allowances for child support, food, housing,and related expenses, you'll be pushed into a repayment plan under Chapter 13, which requires repayment of some debts, instead of qualifying for Chapter 7, where most debts are forgiven.

There's also less flexibility in determining what's reasonable for housing and food allowances. IRS guidelines will be used, which are approximately $200 a month for food and less than $800 a month for housing and utilities. Active duty military, low-income veterans, and people with serious medical conditions can receive special treatment under the new income test.

Under the new bankrutpcy law, you must take credit counseling courses within 180 days of filing for bankruptcy.

The new bankrutpcy law makes child support a priority over other debts.

The state you live in allows you to protect part of the equity of your home from creditors. The new bankruptcy law overrules the unlimited homestead exemptions in some states that allow rich people to file for bankruptcy while keeping their mansions. Under the new law, if you bought your house less than three years and four months before filing for banktuptcy, the exemption for your house is limited to $125,000 regardless of your state's law.

Credit card billing statements now must include information on how long it would take to pay off your credit card balance at a certain interest rate if you make only the minimum payments.
The new bankruptcy law also includes changes affecting businesses who file for bankruptcy.

What You Need To Know Before You Can Get Out of Debt

To get out of debt, you need to :

Assess your financial situation
Understand the basics of how credit works
Get help when you need it
Budget and cut costs
Avoid credit and debt mistakes

1000 Best Smart Money Secrets for Students

New Book by About.com Financial Planning Guide Debby Fowles
In 2003 my first book "Everything Personal Finance in Your 20s and 30s" was published. I now have a second book, "1000 Best Smart Money Secrets for Students," a personal finance guide for college students with advice on how to find money, save money, and make money.
Topics covered in the book include:


Making money while still in school
Maximizing your eligibility for financial aid
Avoiding credit card debt
Managing student loans
Reducing the costs of your college education
Controlling spending painlessly
Finding student discounts
Having fun without a lot of money
Tips for graduate students and non-traditional students
The easy-to-read format of the book allows you to read from cover-to-cover or read tips randomly.

Save Money on Bank Fees

Cut Your Banking Costs by Hundreds of Dollars
You probably don't give much thought to the cost of banking: monthly checking account fees, ATM fees, bounced-check fees, etc., but if you can shave banking expenses, you can save money and put it in your own pocket. Remember: it's easier to find lots of ways to save a little money than it is to earn more income, and lots of little savings add up.
Save Money on Your Checking Account


If you're paying for the use of your own money by paying fees to maintain a checking account, look for a bank with no-fee checking. Many banks offer no-fee checking if you keep a minimum balance in a savings account or maintain a minimum combined balance in your savings and checking accounts.

Get information from several banks and choose the one that best fits your habits. If you always dip below the minimum balance, it does no good to have "free" checking, since you'll incur a fee if your balance goes below the minimum.
Potential Money Savings: $96-120/yr.

Buy your checks through a discounter such as Checks Unlimited (www.checksunlimited.com)1-800-204-2244; Checks in the Mail (www.checksinthemail.com)1-800-733-4443, or CheckWorks (www.checkworks.com)1-800-971-4223. Discounters charge around $6.00 to $8.00 for 200 checks, as opposed to the $20 to $25 your bank charges. Potential Money Savings: $15-38/yr.

Balance your checkbook every month and do not bounce checks. Typical fees for a check written against insufficient funds range from $20 to $35. If more checks clear before you're aware of the problem, you can easily bounce two or three additional checks for a total cost of $100 or more. Potential Money Savings: $100 or more/yr.

If you keep a significant balance in an interest-bearing account, keep it in a bank that uses the average daily balance method for calculating your minimum balance and interest. You're much less likely to be charged a fee if you dip below the minimum balance during the month (as long as your average daily balance for the entire month is not below the minimum), plus you earn interest on all your money. Other methods of calculating interest can cost you hundreds of dollars a year in interest that would have been credited to your account under the average daily balance method. Potential Money Savings: $100-300/yr.
Save Money on ATM Fees


Move your checking account to a bank that has a large ATM network with branches near your home and work. Potential Money Savings: see below.

Use only Automated Teller Machines (ATMs) that don't charge fees. If you withdraw $20 from an ATM and are charged $1.50 by the ATM owner, you have in effect paid a 7 1/2 % surcharge for access to your own money. Your bank may also charge you an out-of-network transaction fee, doubling the actual cost to you. Potential Money Savings: $78-156 or more/yr.

Save Money on Your Credit Cards

Cut Your Credit Card Costs
You can easily save thousands of dollars a year with very little effort by following even a few of the cost-saving measures in the "Save Money" series. The more cost-saving measures you adopt, the more money you'll save. See the links on the right for more ways to save money.

If you're paying more than 12% interest on your VISA or Mastercard, you're paying too much. With the prime interest rate in the single digits, lenders that charge 13% to 21% interest on credit card balances are gouging you. With good credit, you should be able to find a credit card rate (as of summer of 2004) for between 9% and 12%. For a list of the lowest credit card rates, visit bankrate.com. Potential Money Savings: $450-1000/yr.

If you can obtain a lower interest credit card, you can usually use cash advances to pay off the balance on your other credit cards and transfer this debt to the lower rate card.
Some cards charge a higher fee for transferred balances, so be sure to read the small print before applying, and make sure you can pay it off or transfer your balance again to another card before the introductory period rate expires. Potential Money Savings: $200-500/yr. (more if you have a lot of credit card debt at high interest rates).

Consider using part of your savings to pay off consumer debt, if you can do so without using all of your available cash. With banks paying less than 1% on passbook savings, and credit card debt carrying 10% to 21% interest charges, you could come out way ahead. Be careful to leave yourself enough savings or borrowing power to fall back on in case of an emergency. Potential Money Savings: $200-500/yr.

If you don't have enough savings to pay off your consumer debt, consider a home equity loan. Interest rates on home equity loans are much lower than most credit cards, so you win in two ways: (1) you slash your interest costs, say from 16% on the credit card to 6 or 7% on the home equity loan, and (2) you can deduct the home equity loan interest from your taxable income. Be cautious, though. Remember you're putting your home at risk. Potential Money Savings: $1,000 - $2000 yr.

Look for no fee credit cards (be sure to consider all the other factors such as grace period, interest rate, etc., as well). Even if you are charged an annual fee, you can may be able to get the fee waived by calling your bank and asking them to remove it. Potential Money Savings: $25-50/yr.

Whenever possible, avoid finance charges on credit cards, especially cards with high interest rates. If you pay down your credit card balance by just $500 you can save $100 a year in interest charges. Potential Money Savings: $100-1,000/yr.

If you have a balance on more than one credit card, use this money-saving strategy, which I call the Credit Crunch: Pay the most you can afford each month on the card with the highest interest rate, and make the minimum payment on the others. Once the card with the highest interest rate is paid off, begin paying as much as possible each month on the card with the next highest interest rate, and so on. Potential Money Savings: varies

Save Money on Your Home Expenses

Cut Mortgage, Utilities, and Other Home-Related Costs
You can easily save thousands of dollars a year with very little effort by following even a few of the cost-saving measures in the "Save Money" series. The more money-saving measures you adopt, the more money you'll save. Potential savings will vary, depending on your personal situation. See the links to the right for more money-saving ideas.


Save Money On Your Mortgage

Consider refinancing your mortgage. For every $10,000 of your mortgage loan, 1/2 % difference in the interest rate saves you over $40/year or $3.40/month in interest expense. A $100,000 loan at 9 1/2% refinanced at 7 1/2% saves $142/month or $1,704/year, for a total of $50,991 over the life of a 30-year mortgage. Potential Money Savings: $1,700/yr.

For even more dramatic long-term savings, consider a 15-year mortgage rather than a 30-year mortgage.
A $100,000 mortgage at 9 1/2% over 15 years saves $114,747 over the life of the loan compared to a 30-year mortgage at the same interest rate. At 7 1/2%, the savings between a 30-year and 15-year mortgage of $100,000 would be $84,854. A 9% loan of $100,000, refinanced for 15 years at 7 1/2% would add $86/month to your payment but would save you a whopping $135,845 over the life of the loan. Potential Money Savings: $84,000-136,000

You can achieve similar results by paying an extra principal payment on your 30-year loan each month. (In the early years of a loan, the principal portion of your payment is very small. On a 30-year $100,000 loan at 7 1/2%, the monthly principal payment in the first several years is approximately $75 to $85/month).Potential Money Savings: $85,000-136,000.

Still another way to achieve these results is to pay one half of your monthly mortgage every two weeks. Potential Money Savings: $85,000-136,000.

Save Money On Utilities - Electricity

Install the new type of fluorescent bulbs in lights you leave on for long periods. They provide four times as much light and last ten times longer than incandescent bulbs. Potential Money Savings: $10-$50/yr.

Lower the temperature on your hot water heater to between 110 and 120 degrees. It's not necessary to have it any hotter and wastes energy. Potential Money Savings: $20-40/yr.

Find out if your utility company offers free energy audits, where they inspect your home for energy effectiveness and recommend inexpensive ways to cut energy costs, such as insulating hot water heaters, weather-stripping, etc. Just insulating your hot water heater could save you $25 a year. Potential Money Savings: $50/yr.

Set thermostats no higher than 68 degrees in winter and no lower than 78 degrees in summer. Turn your heat down even further at night or when you're not home (unless you have a heat pump, which operates more efficiently at one consistent setting). Each extra degree in winter can increase heating costs by 3%. In summer, each degree can raise cooling costs by 6%. Potential Money Savings: $325 to $500/yr.

Cut back on the use of your clothes dryer. Not only is it a big energy drain, it can also suck heated air out of your house very quickly in winter. Hang clothes on a clothes rack to dry and use the dryer for towels and other heavy items. Potential Money Savings: $25-50/yr.

Use your microwave instead of your oven whenever possible and save up to 50% in energy costs for cooking. Potential Savings: $50/yr.

Save Money on Air Conditioning Costs

Cut Your Cooling Costs With These Money-Saving Tips
If you have central air conditioning or a window air conditioning unit, you can cut your electric bills significantly, especially in very warm climates, by following these energy-saving cooling tips this summer.

When buying a window air conditioning unit, more is not necessarily better. Base the size of the air conditioning unit on the size of the room, the other factors that affect the temperature in the room, such as how many windows it has and whether it faces south, north, etc. An air conditioning unit that is too big for the room will work harder and cost you more.

When you're shopping for a central air conditioning system, make sure the SEER number (seasonal energy efficiency ratio) is 13 or better (14 in warmer climates). A less efficient system will cost you more to run.
Look for an EER (energy efficiency ratio) of 11 or higher for room air conditioners. A high efficiency unit costs more, but if you live in a hot climate, it will pay for itself in a few years by reducing electricity bills.

Perform regular maintenance on your air conditioning unit. Replace the filter monthly during the cooling season and have a professional service your system at the beginning of each cooling season.

A cooling system is one of the biggest energy guzzlers in your home (second only to your heating system, depending on where you live). If you have an old air conditioning system with a SEER rating of less than 8, it may be worthwhile to consider replacing it with a more energy efficient system. You should be able to recoup the cost in just a few years.

Install a programmable thermostat so you can vary the temperature according to when you're home. Set it to 78 degrees when you're home. If you'll be gone for more than a few hours, it makes sense to set the air conditioning at 85 degrees while you're gone.

Make sure your air conditioning condenser is located in a shady spot and has room to dispose of the heated air it removes from your house. Don't crowd it with shrubs or anything else.

Plant shade trees and shrubs around your house to help reduce the heat of the sun, especially on the west and south sides. This can reduce your cooling costs by up to 30%.

Close drapes on the sunny side of your house.

Install awnings on the windows on the sunny side of your house.

Sealing up air leaks in your house will reduce your air conditioning costs as well as heating costs. Caulk or seal places where utilities come into your home (plumbing, electricity, dryer vents, etc.). Fill gaps around chimneys. Weatherstrip around drafty windows and doors.

Install energy efficient ceiling fans and run them on hot days. If it's just a little too warm for comfort, use the ceiling fan without air conditioning. If it's hot enough to require air conditioning, using the ceiling fans at the same time allows you to raise the temperature setting by five degrees, which will reduce your costs. Use the ceiling fan only when you're in the room, because running the fan doesn't actually lower the temperature. The moving air increases the amount of evaporation from your skin and helps cool you off.

The darker the color of your house, the more heat it will absorb, so if you're building, buying, or considering repainting, choose lighter colors for the exterior.

Thirty percent of the heat in your house is absorbed through the roof. Make sure your attic is properly ventilated. Vents in the eaves allows cooler air to enter. A ridge vent or an attic fan can significantly reduce your cooling costs.

Consider putting reflective window tint on your windows to reduce the amount of heat absorbed.

Any heat that's generated inside your home has to be removed by your cooling system, so avoid generating heat inside your home whenever possible. Cook on your outdoor grill as often as possible, or use a crockpot and the microwave oven. Use the 'air dry' setting on your dishwasher.

Close off rooms that you aren't using and the cooling ducts to those rooms.

Make sure the cooled air coming from your air conditioning vents is not obstructed by furniture or draperies.

Turn off lights when not in use. Lights produce heat, which makes your air conditioning system work harder (and cost more).

Your computer and other home office equipment also generate heat. Turn them off when not in use.