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10 Budgeting Tools You'll Love

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Have you been putting off budgeting because it seems overly complex -- or just plain annoying?

It's OK; you can 'fess up. You wouldn't be the first person to shirk this basic money management strategy because you just don't feel like dealing with it. You're looking for tools and tactics that can make budgeting as easy as possible.

Luckily, there are a slew of great tools out there to help even the most budget-averse person feel at-home tracking their cash flow. Let's take a look at 10 of the best -- and what each has to offer.

1. BudgetPulse

Cost: Free.

Method of input: Manual or via file import.

Those who worry about online security will like the fact that BudgetPulse doesn't link to your bank accounts like other tools; it gives you the option to either enter this data manually or import it via computer file (like Quicken or CSV).

Once your data is entered, you can view spending allocation charts, set savings goals for yourself, and even share your goals via social media for extra accountability.

2, BudgetSimple

Cost: Free (for web app); $4.99/month (for mobile app or for the ability to link to bank accounts).

Method of input: Manual or linked to bank accounts.

Create a realistic, sustainable budget that works for your life with this tool, which analyzes your current financials and provides you with a suggested budget. It also recommends ways you can cut costs and boost your savings.

3. BudgetTracker

Cost: Free.

Method of input: Manual or linked to bank accounts.

Get a firm grip on your cash flow with this tool, which gives you lots of different ways to track your individual transactions. Tell the tool the specific details you want to track -- or choose a customized application already created by other users-to get only the information you need.

4. Buxfer

Cost: Free (for basic features); $3.99/month (for Plus access); $4.99 (for Pro access).

Method of input: Manual or linked to bank accounts.

Specializing in budgeting and tracking for shared expenses, this tool is great if you're running a household budget, managing funds for a group or club, or tracking reimbursements for a small business. It's also good for focused budgeting, like planning for a vacation or family event.

5, GnuCash

Cost: Free.

Method of input: Manual or linked to bank accounts.

Whatever platform you prefer to work on, GnuCash is likely compatible with it -- it can even import those weird QIF and OFX files banks tend to use when sending you electronic statements and reports. Based on professional accounting principles, it's great for those who have trouble keeping their books straight.

6. Mint

Cost: Free.

Method of input: Manual or linked to bank accounts.

One of the highest-praised free budgeting tools out there, Mint links not only to your bank accounts, but also to your credit cards, investments and other financial accounts. It sorts your transactions into categories for you and warns you when you're about to go over or when it senses unusual spending. Simple, intuitive and automatic, this tool often lands on "top budgeting tool" lists.

7. MoneyDance

Cost: Free for 100 transactions; $49.99 to purchase after that.

Method of input: Via file import or linked to bank accounts.

Set up like a check register, MoneyDance lets you coordinate multiple kinds of financial transactions. Set up recurring payment reminders, track investments, even print checks. It's a great overview for those who want all-in-one money management capability.

8. Mvelopes

Cost: Free (for basic features); $95/year (for Premier access); customized personal coaching packages also available.

Method of input: Linked to bank accounts.

Based on Dave Ramsey's famous envelope system, this tool lets you see at a glance how much you've budgeted in each category and how much you've spent so far. Link it to your bank accounts, credit cards, even PayPal to track all your spending in a way the old-school envelope system would never be able to.

9. PowerWallet

Cost: Free.

Method of input: Manual or linked to bank accounts.

Stay on track and plan for the future with this tool, which not only tracks your transactions, but also offers features like bill due date alerts and personalized deals based on your location and spending habits.

10. You Need a Budget

Cost: Free for 34 days; $60 to purchase after that.

Method of input: Manual or via file import.

Perfect for those with irregular income or trouble making their paychecks stretch, YNAB is an entirely different way of approaching budgeting. It's a flexible, "living budget" that lets you deal with cash flow ups and downs and roll with the punches of sudden expenses. It also offers tons of courses and tutorials to help you finally get off the paycheck-to-paycheck roller coaster.

Paula Pant ditched her 9-to-5 job in 2008. She's traveled to 32 countries, owns seven rental units and runs a business from her laptop. Her blog, Afford Anything, is a gathering spot for revolutionaries who understand that they can afford anything -- just not everything. Visit Afford Anything to learn how to crush limits, create wealth and live life on your own terms.

 

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Why Low Oil Prices Could Be Bad for Jobs in America

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Oil prices are plunging, and one byproduct almost everyone in the U.S. has noticed is the falling price of gasoline. In some locations gasoline has fallen below $2, and the rest of the country won't be far behind if the price of oil keeps falling.

Most of the time, lower gas prices are seen as a good thing. They put more money in consumers' wallets, which right now can be spent on items just in time for the holidays. As a result, retailers and the economy as a whole should get a bit of a boost as long as prices stay low.

But a side effect that shouldn't go unnoticed is the potential loss of thousands of jobs in the oil extraction industry. States like North Dakota and Texas have seen a boom in oil-related jobs, and if oil falls much further, drilling could dry up altogether there, pushing thousands back to unemployment lines. It's a repercussion that could have a big impact in parts of the country.

Oil and Gas Have Been a Boon for American Jobs

Since the shale boom began in earnest a decade ago, the number of people employed extracting oil and gas has risen sharply. As you can see below, the entire mining industry, which includes oil and gas and support services, has added about 360,000 jobs in the past decade, according to the Bureau of Labor Statistics. Oil and gas extraction alone has added nearly 100,000 jobs, and hundreds of thousands more jobs benefit from this economic activity.

Source: U.S. Bureau of Labor Statistics

This growth -- except for a dip in 2009 when oil prices plunged -- coincided with a rise in oil prices, and for the last few years, prices have been hovering around $100 per barrel. If we're in a "new normal" for oil where prices are below $60, or worse, below $40, the industry could reverse the course of the past decade. Thousands of jobs could be lost if oil prices stay low for long.

Where Jobs Would Be Hit Hardest

States that drove the oil boom would certainly be affected, but so would large swaths of the country that aren't normally known for oil drilling.

Below is a map of the location quotient for natural resource extraction. This measures which states have higher and lower than average exposure to the industry based on the national average. Blue is high exposure, orange is low. As you can see, North Dakota, Oklahoma and Texas are three of the most heavily dependent on energy, particularly oil.

Source: U.S. Bureau of Labor Statistics

The advantage for states in the South is that they're involved in the collection and processing of oil in the U.S. Even some oil from North Dakota makes its way to states like Oklahoma for refining. They'll be somewhat insulated because of this exposure if oil prices fall.

Hardest hit will be northern states like North Dakota, Montana, Wyoming and Alaska, which have expanded oil drilling rapidly in the past five years. The industry could be all but abandoned there if oil prices fall too far and stay down for long.

The Other Side of the Story

There are a lot of benefits to low oil and gasoline prices, but now that the U.S. imports only about 20 percent of the oil we consume, versus 60 percent in 2005, there's also a downside to lower prices. A lot of people's jobs rely on the growth in domestic energy production, and it's likely job cuts are on the table as drillers consider cutting back production.

Travis Hoium is a Motley Fool contributor. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.

 

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12 Things That Will Be Less Expensive in 2015

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By Josie Rubio

The Great Recession may have technically ended over five years ago, but that's probably a surprise to millions of Americans still worrying about their budgets. A modicum of relief is on the way in 2015, as prices fall on some popular goods and services -- including one major necessity that affects many others: gas.

From cranberry sauce to a Kia sedan, read our predictions for items that will drop in price in the coming year. Peruse the list, then consider also checking out what items are increasing in price in 2015 -- as well as signing up for the DealNews Select Newsletter, so you can save money on everything else in the coming months.

Gas Prices

According to the government's Energy Information Administration, gas prices will average about $2.60 a gallon in 2015 -- even lower than the initial November prediction of $2.94 a gallon. In eight states, prices could even slip below $2 a gallon. If it seems to be good to be true, consider some gas stations in Texas and Oklahoma were already offering gas below $2 a gallon in December.

Transatlantic Flights

Though fuel prices are falling, most air travel prices are increasing. However, the price of transatlantic flights could decrease because of added flight capacity, according to the American Express Global Business Travel annual forecast. Several airlines are also offering cheap transatlantic trips, including Norwegian Airlines, which started offering flights between London and New York City for about $255 each way in June 2014, as well as bargain flights from Los Angeles and Fort Lauderdale. Iceland-based WOW Air recently started offering flights between the U.S. and Europe for as low as $99 each way.

TV Content Packages

Since 2010, the top 40 cable channels have lost more than 3 million viewers because of "cord cutters" quitting cable TV, and cord nevers, who have never paid for cable at all and instead watch shows online. The big news in 2015 is that HBO will start to offer a streaming service for nonsubscribers in April, just in time for "Game of Thrones." CBS also is offering a la carte on-demand TV with its CBS All Access service.

For this reason, too, pay-TV providers are increasingly looking to lure the "cord shaving" crowd, offering cheaper bundles with fewer channels at low prices in the hopes that these customers will eventually upgrade. And some even say that cable bundles might be the better deal, as a la carte TV options can add up, making cable bundles the better deal in some cases. So weigh your options before embarking on winter binge-watching. (Check out our feature on cable-cutting myths.)

Cloud Storage

Cloud storage companies are continuing to cut prices and increase storage in what's being called "the race to zero." Consider the trend this past year: When Amazon dropped cloud storage prices by 22 percent, Microsoft did the same the very next day. Across the board, price drops continued throughout the year, and the trend is set to continue.

In fact, Aaron Levie, CEO of cloud company Box, recently predicted "a future when cloud storage is free and infinite." Amazon is considered to be at the forefront of keeping things competitive, and the company recently added unlimited photo storing services for Prime members. Just consider storing all those nudes photos someplace safe.

4K TVs

This Black Friday, DealNews saw super-cheap prices for Ultra HD 4K TVs, ranging in price from $375 to $1,300. (Keep in mind that in 2013, prices were in the $5,000 to $7,000 range, and $1,099 was the lowest price.) These TVs that offer a 3840 x 2160 pixel resolution are hailed as the next big thing, and as they become more popular, prices can be expected to drop. (Remember when VCRs were expensive? Remember VCRs?)

And there's more to actually watch on 4K TVs as well. Amazon recently started 4K streaming limited content at no additional cost to Prime members. And Netflix has recently expanded its offerings at $3 more for 4K content, but as competition increases, prices for content should drop. (Check out our discussion on whether it's time to buy a 4K TV deal.)

Smartphones

By the end of 2015, LTE smartphones are expected to be as cheap as $60, even before subsidies. The global growth of smartphone sales is slowing, according to a forecast from International Data Corporation, meaning competitive pricing and lower prices. Those looking for smartphones for less than $200 can also expect more for their money, including HD screens.

Smartwatches

The much-anticipated Apple Watch is set for release in early 2015, at a price of $349 to potentially thousands, and an estimated 10 percent of consumers report that they're considering buying one. If you're looking to spend less, technology research firm Gartner (IT) predicts that smartwatches will make up to 40 percent of wrist-worn devices by 2016 and the increased demand for wearable tech will cause prices from some manufacturers to drop below $150. In fact, some smartwatches could be as cheap as $30 in 2015, and Chinese company Xiaomi sells a fitness tracker for only $13.

Tech Gear (like GPS Devices and Software)

Speaking of China, after negotiations at the Asia-Pacific Economic Cooperation summit in Beijing in November, tariffs that have added 25 percent to the cost of tech products in the United States could be a thing of the past. According to a White House statement, more than 200 tariffs will be eliminated, potentially affecting the prices of medical equipment, GPS devices, computer software, and video game consoles. We'll most likely see lower prices on products manufactured in China, possibly even Apple products.

Video Game Consoles

As a special holiday promotion, the retail price of the Xbox One dropped from $399 to $349 through January 3, 2015. During Black Friday, we saw a lot of Xbox One and PlayStation 4 deals for even less; in fact, the Xbox outsold the PS4 because of these deals, and we suspect Microsoft will be hesitant to inflate that price back up again. And even if they do, retailers might be forced to continue offering deals if customers are now accustomed to the lower price point. Plus, with the recent trade agreement between the United States and China expected to reduce prices of video game consoles, it's a safe bet that gaming systems will cost less in 2015.

Kia Forte

The 2015 model of the Kia Forte is $10 less than last year's model, making it cheaper than the Nissan Sentra. And if $10 in savings doesn't sound significant, keep in mind that this makes the Forte officially the year's least expensive compact car.

Butter

Since 2013, butter prices in the U.S. doubled, reaching an all-time high of $2.85 a pound in September. By October, butter had fallen to $2.53 a pound and dropped by a third in November, with lower overall dairy prices predicted by the USDA in 2015.

Cranberries

The cranberry sauce for your Thanksgiving feast may have cost a bit less this year, and prices may continue to drop. News of cranberry excess surfaced as early as 2013, and to deal with the cranberry surplus -- nearly at 100 percent with 16 million barrels -- the U.S. government just purchased 680,000 barrels' worth in juice, sauce, and dried berries for distribution in food banks and schools.

Which price drops are you looking forward to? Do you have your own predictions for 2015? Tell us in the comments section below. And make sure to sign up for the DealNews Select Newsletter to save money year round, or check out our monthly buying guides to get a leg up on seasonal changes.

 

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Keurig Recalls 7 Million Machines That Burned 90

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More than 7 million Keurig Mini Plus Brewing Systems sold over the past five years in the U.S. and Canada are being recalled because they can spray hot water, leading to 200 incident reports and 90 reports of burns, the U.S. Consumer Product Safety Commission said on Tuesday.

The incidents have involved hot water spraying from the brewing machines. Keurig reported that the problem is most likely to occur when two cups of hot drink are made one after the other and recommends that consumers remain at least an arm's length away when using one until they are fixed.

Consumers with the recalled Keurig machines should contact Keurig Green Mountain to arrange for a free repair. Keurig can be reached weekdays at 844-255-7886 between 8 a.m. and 8 p.m. Eastern, and from 8 a.m. to 3 p.m. weekends or at keurig@inmar.com. Additional information is on the Keurig recall site. The call center will be closed Dec. 25 through Jan. 1.

Sold for About $100

The machines were sold at major retailers including Kmart (SHLD), Kohl's (KSS), Target (TGT) and Walmart (WMT) and online between December 2009 and this month for about $100.

The recalled machines are the model K10 (which was previously identified as model number B31). They have identification numbers that begin with "31" followed by a string of other numbers that are printed on a white sticker on the bottom of the brewer. These single-serve brewers measure about 11 inches high and came in 13 colors with silver trim.

Each has three brewing options: 6 ounces, 8 ounces and 10 ounces. They were made between December 2009 and July 2014. The recalled serial numbers, listed here, will identify those involved in the recall.

 

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It's Raining iPhones and Androids This Christmas

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The smartphone revolution is showing no signs of letting up. Industry tracker Gartner reports that 301 million units were sold during the third quarter, a meaty 20 percent jump over the prior year's showing.

No one is shocked to see portable computing take off, but the actual strength is a bit of a surprise. Yes, we knew that Apple (AAPL) sold 26 percent more iPhones than it did a year earlier. However, Samsung (SSNLF) -- the global leader that sells more smartphones than its three nearest rivals, including Apple, combined -- saw a decline in its Android-fueled devices. Overall growth is being fueled by Asian manufacturers populating the globe with attractively priced Android hardware that's gnawing away at Samsung's market dominance.

Huawei saw its sales spike 37 percent over the past year as the world's third-largest smartphone maker. China's Xiaomi isn't a household name in the U.S., but it has skyrocketed to become the fourth-largest provider of smartphones with its cheap iPhone-like devices that run on Google's (GOOG) (GOOGL) Android. It's on pace to top 60 million handsets this year as it expands outside of its home market.

The Rich Get Richer

Samsung's slide notwithstanding, it's a great time to be a smartphone maker as long as you're championing Android as your mobile operating system of choice -- or you just happen to be Apple. Android and Apple's iOS combined to power a whopping 95.8 percent of the smartphones sold to vendors this past quarter, up from a 94.1 percent dominance a year earlier.

Between Android at 83.1 percent and iOS at 12.7 percent, the two leading platforms are powering 19 of every 20 smartphones sold in the world. That's probably not too much of a surprise for BlackBerry (BBRY) watchers. The smartphone pioneer has been fading in recent years. However, seeing Android and iOS only get stronger has to be painful for Microsoft (MSFT).

The world's largest software company has invested heavily in its mobile offerings. It even acquired Nokia's (NOK) handset business, shelling out $7.2 billion late last year to give its fledgling Windows Phone platform greater visibility. It's taking baby steps in the right direction, moving 9 million handsets in its latest quarter. However, that's marginally up from 8.9 million a year earlier. It also means that Windows commands a mere 3 percent of the smartphones sold this past quarter. It's not growing as quickly as the smartphone market in general, and its market share has fallen from 3.6 percent a year earlier.

That's not a good place for Microsoft to be in a booming technology where developer support is everything. After all, if your platform can't play "Angry Birds," browse leading social media sites, or stream music and video through popular apps, you're not going to convince iPhone and Android owners to make the switch. Microsoft has the developer support for most of the applications that matter, but it may not always be that way. Developers would prefer to have to program and offer support in just two operating systems, especially since they now account for 95.8 percent of new smartphone purchases. Microsoft can try to make a difference with proprietary features, but these days, in a world where Android and iOS continue to be the only two platforms that matter, the pedestal for the bronze medalist is pretty low.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Apple and Google (A and C shares). The Motley Fool owns shares of Apple, Google (A and C shares), and Microsoft. Try any of our Foolish newsletter services free for 30 days. Check out our free report on the Apple Watch to learn where the real money is to be made for early investors.

 

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5 Ways You're Sabotaging Your Future Net Worth

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By Laura Woods

You may not realize it, but the actions you take now can greatly impact your sense of financial security down the road. Many Americans inadvertently minimize their future net worth by focusing only on the short-term. It can be great to live in the moment, but in some situations it's a good idea to take a step back to evaluate the long-term impact of your decision.

1. Renting a Home Instead of Buying

Purchasing a home is probably the biggest investment you'll ever make, but if you choose a property wisely, it's definitely worth it. Sure, you'll need to come up with an initial downpayment and you're responsible for all upkeep and repairs, but in most cases these costs pay themselves back.

When you own the property, you build equity in an investment that will likely increase in value over time. Rather than making monthly rent payments to someone else, your mortgage payments are essentially an investment in your future. Homeowners enjoy the stability of knowing their monthly housing expenses are for the long term, whereas renters never know when their monthly rent will increase. Additionally, interest and property tax paid by homeowners is tax deductible, offering the chance for an annual break from Uncle Sam.

2. Not Paying Into a Retirement Plan Early in Your Career

When you're young, saddled with student loans and barely making enough money to pay the rent, it's easy to put off saving for retirement because it's still 40 years away. However, waiting until you're older to start saving can have a significantly negative impact your financial stability in your golden years.

The earlier you start saving, the more money you'll earn in interest. For example, if you opened a 401(k) account in your mid-20s, saved a total of $30,000 and realized an 8 percent rate of return, you would have approximately $280,000 by age 65. However, if you save the same amount, realizing the same rate of return, but wait until your mid-40s to start the process, you'll have only about $60,000 at age 65. Many companies also have a 401(k) match program, where they'll match your contribution to a certain percentage or dollar amount, so you're essentially turning away free money by not taking full advantage of this opportunity.

3. Waiting Until Withdrawal to Pay Taxes on Retirement Plan

Traditional 401(k) and IRA plans allow you to make tax-free contributions into your retirement account, with the deductions made in retirement when you withdraw funds. However, it might be smarter to open a Roth 401(k) or IRA, where taxes are deducted upfront, allowing you the benefit of making tax-free withdrawals in retirement. This can be a savvy move, as there's a very good chance you'll be in a higher income tax bracket when you retire than you were when you opened your retirement account. There's no need to pay more taxes on your money than necessary.

4. Leasing Vehicles Instead of Financing

At first glance, leasing a vehicle can seem like an attractive option - less money down, lower monthly payments and the ability to drive a higher-priced car than you could afford to finance. However, leasing won't add any gains to your future net worth. The monthly payments you make are essentially rent to the dealership, as you don't get to keep the vehicle at the end of the lease. Rather than paying off the car and driving it for a few years payment-free, you're forced to return it and immediately start making payments on another model - and continue the cycle every few years when your lease is up. Additionally, you're limited to the number of miles you can put on a leased vehicle, you have to pay extra for excess wear-and-tear charges and you'll pay sky-high early termination fees if you need to break the lease early.

5. Using Credit Cards to Overspend

Everyone wants things they can't afford, but offers for zero or low-interest credit cards can make it very difficult to avoid temptation. It might seem harmless to book a vacation or purchase a new furniture set using a credit card with little-to-no introductory financing, but what if you can't pay the balance off before the promotional period ends? It's not uncommon for interest rates to rise from zero to 18 or 20 percent, which can seriously increase the initial price of your expenditures and leave you with a mountain of debt that can take years to pay off.

Making savvy financial choices now can help ensure you're able to enjoy stability later in life. Sometimes it's worth making initial sacrifices now to allow yourself to ultimately come out ahead. Always consider the impact the choices you make now will have on your long-term happiness before jumping head first into a decision you'll grow to regret.

 

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Are You a Victim of Price Discrimination?

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By Edward Stepanyants

Each and every day, seemingly small decisions about coupons, bundles, sales and retail pricing are made by retailers. The truth is almost all of these decisions are calculated with a purpose, based on consumer data and behavior. Here's what you need to know about these retail pricing models, which some call price discrimination.

What Is Price Discrimination?

Price discrimination is the act of selling an identical product or service to different people at different prices. Of course, the word "discrimination" implies a negative undertone -- and understandably so. After all, does anybody really like the thought of someone else getting a better deal for the same product?

You might experience price discrimination most often in the travel, insurance and internet/cable industries, but the retail industry is somewhere price discrimination also happens on a daily basis. But while price discrimination sounds pretty bad, it can, in fact, be a win-win situation for both retailers and consumers.

Examples of Price Discrimination

Technically, there are a number of qualifications that need to be met for price discrimination to occur; for the sake of simplicity, the most important thing to remember is that the retailer often needs some degree of market power (the ability to set prices) and a way to segment its market in order to vary its prices among individuals or specific consumer groups.

Coupons

Coupons, it may surprise you to learn, are a fantastic way for retailers to discriminate according to consumers' willingness to pay for products. Coupons allow retailers to sit back and relax while a customer segment with a lower willingness to pay comes to them. Organizations draw more surplus out of the consumer (money that could've been saved or used elsewhere) and are able to sell to a bigger market, while still profiting from discounted items (there is often still a markup, just not as big).

Meanwhile, the coupon clippers are happy as clams knowing they can get a discount on a product they may not have originally purchased. Even those customers with a higher willingness to pay can take advantage if they are frugal and patient enough to wait for coupons. Otherwise, they will almost certainly end up paying more for the same exact product.

Time

There can also be pricing discrimination across a certain time frame -- for instance, that new gaming system that was $500 in the first month of its release is now, three months later, down to $400 with a game bundle to boot.

The people who bought the system when it was marked up to $500 had a higher willingness to pay because they wanted to be the first to have it, and once the system manufacturer calculates they have milked as much as possible from its high-paying customer segment, it then lowers the price to attract the next tier of consumers. This is why it's usually advisable to avoid buying a brand-new tech product until it has been released for some time, in addition to rapid advance of technology and quality issues.

Menu Pricing

Price discrimination can take other forms, some of which are even less obvious. Have you ever been walking down the shampoo aisle at your local retail store and noticed just how many different shampoos are offered by a single brand? Often, it's several -- one the salon-quality product, the other moisturizes and gives volume -- and they all offer slight differences in price due to additional features or perceived quality.

This is often referred to as menu pricing, and while it isn't technically pure price discrimination (the products aren't identical after all), there is often a disparity between how significantly the productions costs vary versus the mark up in store. For example, the perceived higher quality product could cost 50 cents more to purchase, but it might have only cost an extra 4 cents to produce. Here, the manufacturer is presenting a pricing choice to the consumer, which forces them to select which segment they fall into.

Using Your Data

The major component of price discrimination that would probably make consumers most uncomfortable is that the practice requires gathering and tracking individual spending behavior and using the data to make these pricing decisions, and even selling it to other retailers so they can do the same.

What retailers and other companies are beginning to do, mainly by way of data mining through online shopping profiles, store cards and other firms' information, is gather a wealth of data in order to profile consumers. Companies such as Facebook (FB) and Verizon (VZ) (to name a few), which have massive amounts of information about all of their users, are actively selling it. All the while retailers like Target (TGT) carefully track customer information -- to the point their analysts can predict whether certain customers are pregnant and even how far along they are. All of this is used for the purpose of personalized advertising and pricing.

Why Price Discrimination Isn't All Bad

At the end of the day, price discrimination can be a good thing if the company implementing it isn't looking to scam or swindle their consumer base, or use the data gathered for the purposes of price discrimination in illegal or unethical ways. In fact, according to Federal Trade Commission commissioner Joshua Wright, it can make pricing more equal across incomes: "One important aspect of the economics of price discrimination is that it is almost always the case that it involves reduced prices for the price-sensitive group and higher prices for the price-insensitive group. To the extent that it is true that the lower income groups are the price-sensitive group, price discrimination generally benefits the lower income group at the expense of the higher income group. It is quite ironic that a type of discrimination actually has the potential to equalize the purchasing power of lower income groups with the purchasing power of those with higher incomes. It's getting easier and easier to imagine a world where bus stop billboards and mall ads light up and begin speaking to you as an individual, knowing your purchase history and preferences in depth, suggesting items and discounts which are personally tailored to you."

Although the trend might seem a little too Orwellian to some, price discrimination doesn't necessarily mean bad news for consumers, especially those who are less willing to pay higher prices. Regardless of class, consumers can, and often do benefit from price discrimination and personalized advertising.

 

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Ask Stacy: How Safe Are Budgeting Sites?

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Identity Theft: The Latest Ways to Protect Yourself

By Stacy Johnson

After the data breaches at Home Depot, Target and others too numerous to mention, it's safe to assume that at least some of your personal information, including the financial kind, may now already be in the hands of hackers. Mom was right. You really can't trust strangers.

Among the strangers we're supposed to trust are those that do our budgeting for us. Sites such as Mint and PowerWallet offer free expense tracking, allowing us to easily budget and keep track of our expenses. As with online shopping and banking, these services afford a vast improvement over past methods. But are they safe?

Here's this week's reader question, from Lisa: "Time and again I've seen you recommend PowerWallet as a useful tool to manage a budget. However, I'm really nervous providing my user names and passwords for all my financial accounts to a third party (and online). What if my PowerWallet account gets hacked? Hacking seems to be happening more and more these days. What can I do then if someone gets my account information and steals my identity? Thanks for any information you may have to ease my mind."

Now we'll explore the safety of online budgeting sites and apps. But first, let's talk about what these things are and why you should use them.

Why You Should Use a Budget

Every business tracks its income, expenses and profits. You should, too. Knowing what's coming in, going out and left over is critical, for a simple reason. It's the money that's left over that allows you to reach your financial goals. Whether it's a comfortable retirement, a home of your own or college for your kids, the only way to get there is to find the money you'll need. And the best way to do that is with a spending plan, also known as a budget.

A budget allows you to establish goals and deadlines for reaching them. It allows you to make adjustments to your expenses, and by doing so, increase the amount you save.

Working without goals and a spending plan is like aimlessly driving around, hoping to somehow arrive at a desirable destination. Working with them means saying exactly where you're going and mapping out the shortest path to get there.

Why You Should Use a Budgeting App or Site

In the old days, and by that I mean before 2006, there were two ways to track your expenses. The first was by hand. You'd write down everything you spent, then keep track of it, perhaps with a budgeting spreadsheet. The second was to buy software, install it in a computer, then manually type in your income and expenses.

Both techniques work, but are time-consuming. And when it comes to things like budgeting, the less hassle, the better.

Finally, someone came up with an idea to automate the process. You give a site or app your checking and savings account numbers, and based on what's happening in those accounts, it automatically tracks and categorizes your income and expenses for you. You provide a budget, including your goals and spending limits; it tells you instantly if you're on track.

Just as online shopping can beat traditional trips to the store, these services beat the pants off traditional budgeting methods. They're simply easier.

Why Money Talks News Partnered with PowerWallet

There are several sources for online budgeting sites and apps, any of which will get the job done. Here's why Money Talks News chose to partner with PowerWallet.

I'm nearly 60, which puts me at a disadvantage tech-wise to many in the online world. But as many of you reading this can verify, being older also has its advantages. One is experience. Another is connections.

Long before there was an Internet, I was doing personal finance stories on TV. As a result, I came to know the owners and managers of many financial companies, from banks to credit counseling agencies. One example? PowerWallet. Bob Sullivan (not the Bob Sullivan whose articles appear on Money Talks News) and Howard Dvorkin are the principal owners of PowerWallet, and I know them both very well. In fact, when PowerWallet was still on the drawing board, our team provided input to theirs. This website was their first partner.

That's the kind of relationship I prefer. Does it mean I have an inside track on every detail of their business? No. I can only guarantee the results of businesses I directly control, and I don't control PowerWallet. But when it comes to recommending someone else's business, I vastly prefer those whose principals I know personally. That's why we partnered with PowerWallet.

How Safe Are These Sites?

As I explained earlier, sites like Mint and PowerWallet are able to track your expenses because you're allowing them to access to information from your bank, credit card, savings, investment and other accounts. That means giving them the user names and passwords to all of those accounts. Scary stuff.

It will come as no surprise that these companies say they're safe. You can read Mint's security security page, and PowerWallet's. A few bullet points from PowerWallet's security page:
  • PowerWallet is a read-only product, which means we don't store your data. No one can transfer or remove funds.
  • Our site goes through rigorous testing every day to provide the highest level of security and ensure the maximum level of protection against identity theft, viruses, spyware and other online threats.
  • PowerWallet will not sell or distribute your personal and confidential information at any time, for any reason. We safeguard your online privacy and are 100 percent committed to protecting your personal information.
Of course, as Home Depot and Target will attest, no store or site is totally safe. But it's important to remember that even if a crook broke into Mint or PowerWallet, they can't steal your money because you can't make cash withdrawals or transfers on these sites.

Then there's the final layer of protection. At the end of the day, you're typically not liable for fraudulent transactions, whether they arise from a hack to your bank's website, malware planted on your computer or a stolen credit card. Big hassle? You bet. But it shouldn't be a big loss.

What's the Alternative?

Unfortunately, the same feature that makes budgeting sites handy makes them scary to some people. I joined Mint years ago, and joined PowerWallet before I suggested it. I feel confident in the security they employ. But, as I said earlier, while I know the people behind the site, I can't absolutely guarantee anything.

One way to reduce the chances of having your accounts breached or your identity stolen is to avoid being online entirely. In my opinion, that's too high a price to pay. But if online budgeting is too scary, there's a simple solution. Don't do it. Budgeting spreadsheets, or just a simple piece of paper, have worked for generations and will still work just fine today.

Stacy Johnson founded Money Talks News in 1991. He earned a CPA (now inactive), and he has also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate. Got some time to kill? Learn more about me.

 

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Don't Be Duped by Gender-Biased Pricing -- Savings Experiment

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Don't Be Duped by Gender-Biased Pricing
These two bottles of big-name body wash are nearly identical, except that one is marketed towards men and the other one is marketed toward women. The thing is, the ladies' bottle can cost you up to $2 more. Here are a few more instances of gender-biased pricing that you and your budget should watch out for.

Let's start with deodorant. At some stores, this name-brand men's deodorant can go for about $2.79 for a 3-ounce bottle, while the pricier women's version can cost up to $2.99 for a 2.3-ounce bottle! That's nearly 30 percent more per ounce. In situations like these, buying an unscented men's deodorant will not only be cheaper, it'll be just as effective.

Razors are another product notorious for gender-pricing. While there is no proven advantage of using a women's razor for shaving, these designs can routinely cost you more.

Refill cartridges can cost up to 50 cents higher as well, so using the a men's razor can help you save while you shave. And speaking of shaving, let's not forget shaving cream, which also tends to cost more. For example, these two cans hold the same amount, yet the female-branded one goes for about 30 cents more. Like deodorant, going with the unscented men's version will work just fine.

So the next time you're shopping at your local drugstore, keep your eye out for gender-biased products. Shop smart, and you won't have to pay different prices for the same product ever again!

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U.S. Economic Growth at Its Fastest in a Decade

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GDP
Paul Sancya/APFord F-150s move along the production line in Dearborn, Michigan.
By Martin Crutsinger

WASHINGTON -- The U.S. economy grew at a sizzling 5 percent annual rate in the July-September period, the fastest in more than a decade, on the strength of higher consumer spending and business investment. The resurgence in growth last quarter provided the latest evidence that the U.S. economy is steadily strengthening and outshining most others around the world.

When the U.S. stock market opened for trading, the Dow Jones industrial average traded above 18,000 for the first time. In midmorning trading, the Dow was up 75 points to 18,035.

In its report Tuesday, the Commerce Department sharply revised up its estimate of third-quarter growth from a previous figure of 3.9 percent. Much of the increase came from consumer spending on health care and business spending on structures and computer software.

Consumer Spending, Income Also Up

It was the fastest quarterly growth since the summer of 2003, and it followed a 4.6 percent annual growth rate in the April-June quarter. The government separately reported Tuesday that consumer spending rose at the fastest pace in three months in November, while income posted the best gain in five months. Both were encouraging signs for growth.

Most analysts think the economy is slowing to an annual rate of around 2.5 percent in the current October-December quarter. And they foresee growth around 3 percent in 2015. That would still be the strongest expansion since the economy grew 3.3 percent in 2005, two years before the Great Recession began.

The 2007-2009 downturn, the worst since the 1930s, cost millions of people their jobs. Since then, the economy has struggled to regain full health. Even after the recession officially ended in June 2009, the economy has turned in tepid growth averaging 2.2 percent annually.

Strong Jobs Report

But many economists think growth is set to accelerate as more businesses have grown confident about hiring. The country is on track to have its healthiest year for job growth since 1999. In November, employers added 321,000 jobs, the sharpest one-month increase in three years. With more people working and having money to spend, solid gains are expected in consumer spending, which accounts for about 70 percent of the economy.

For the third quarter, consumer spending grew at a 3.2 percent rate, the best showing this year and a full percentage point higher than the estimate the government made a month ago. That upward revision was driven by higher spending on health care. Business investment spending rose at a 7.2 percent annual rate, 2.1 percentage points more than the government's previous estimate. Much of the new strength came from investment in structures and computer software.

The estimate released Tuesday was the government's third and final look at third-quarter growth in the gross domestic product -- the value of all goods and services produced in the United States.

 

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Apps to Keep Your Diet on Track -- Savings Experiment

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Apps to Keep Your Diet on Track
Did you know you can lose weight without losing money? Whether in person or online, joining a diet program can get pretty pricey -- some cost over $200 per year. Why shell out all that cash when you can get the same weight-loss results for free and on your phone?

Apps, like Diet Point, offer plenty of different eating plans to choose from. This fan favorite provides you with food plans, shopping lists and mealtime notifications. It even estimates how much weight you'll lose with each plan, saving you calories and cash.

Speaking of saving money, there's another app out there that will help you eat healthy and cheaply all at once. It's called Zipongo. This app automatically alerts you to weekly sale items and digital coupons, helping you build a healthy shopping list around current savings.

It then pulls those healthy "GO foods" on sale from your local stores and grocers and customizes recipes just for you. The best part: no tracking, calorie counting or coupons needed!

So download one of these weight-loss apps today and you'll find that you don't have to drop dollars to drop pounds.

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Being Uninsured Will Cost You More in 2015

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Health Overhaul Penalties
Don Ryan/AP
By RICARDO ALONSO-ZALDIVAR

WASHINGTON -- Being uninsured in America will cost you more in 2015. It's the first year all taxpayers have to report to the Internal Revenue Service whether they had health insurance for the previous year, as required under President Barack Obama's law. Those who were uninsured face fines, unless they qualify for one of about 30 exemptions, most of which involve financial hardships.

Dayna Dayson of Phoenix estimates that she'll have to pay the taxman $290 when she files her federal return. Dayson, who's in her early 30s, works in marketing and doesn't have a lot left over each month after housing, transportation and other fixed costs. She'd like health insurance but she couldn't afford it in 2014, as required by the law. "It's touted as this amazing thing, but right now, for me, it doesn't fit into my budget," she said.

Ryan Moon of Des Moines, Iowa, graduated from college in 2013 with a bachelor's in political science, and is still hunting for a permanent job with benefits. He expects to pay a fine of $95. A supporter of the health care law, he feels conflicted about its insurance mandate and fines. "I hate the idea that you have to pay a penalty, but at the same time, it helps other people," said Moon, who's in his early 20s. "It really helps society, but society has to be forced to help society."

Add Fines to the Financial Risk

Going without health insurance has always involved financial risks. You could have an accident and end up with thousands of dollars in medical bills. Now, you may also get fined. In a decision that allowed Obama's law to advance, the Supreme Court ruled in 2012 that the coverage requirement and its accompanying fines were a constitutionally valid exercise of Congress' authority to tax.

In 2015, all taxpayers have to report to the IRS on their health insurance status the previous year. Most will check a box. It's also when the IRS starts collecting fines from some uninsured people, and deciding if others qualify for exemptions.

What many people don't realize is that the penalties go up significantly in 2015. Only 3 percent of uninsured people know what the fine for 2015 will be, according to a recent poll by the nonpartisan Kaiser Family Foundation.

A Complicated Calculation

Figuring out your potential exposure if you're uninsured isn't simple. For 2014, the fine is the greater of $95 per person or 1 percent of household income above the threshold for filing taxes. It will jump in 2015 to the greater of 2 percent of income or $325. By 2016, the average fine will be about $1,100, based on government figures. People can get a sense of the potential hit by going online and using the Tax Policy Center's Affordable Care Act penalty calculator.

Many taxpayers may be able to get a pass. Based on congressional analysis, tax preparation giant H&R Block says roughly 4 million uninsured people will pay penalties and 26 million will qualify for exemptions from the list of more than 30 waivers. But it's unclear whether taxpayers are aware of the exemptions.

Deciding what kind of waiver to seek could be crucial. Some can be claimed directly on a tax return, but others involve mailing paperwork to the Department of Health and Human Services. Tax preparation companies say the IRS has told them it's taking steps to make sure taxpayers' returns don't languish in bureaucratic limbo while HHS rules on their waivers.

TurboTax has created a free online tool called "Exemption Check" for people to see if they may qualify for a waiver. Charges apply later if the taxpayer files through TurboTax.

Key Deadline Feb. 15, Not April 15

Timing will be critical for uninsured people who want to avoid the rising penalties for 2015. That's because Feb. 15 is the last day of open enrollment under the health law. After that, only people with special circumstances can sign up. But just 5 percent of uninsured people know the correct deadline, according to the Kaiser poll.

"We could be looking at a real train wreck after Feb. 15," said Stan Dorn, a health policy expert at the nonpartisan Urban Institute. "People will file their tax returns and learn they are subject to a much larger penalty for 2015, and they can do absolutely nothing to avoid that."

The insurance requirement and penalties remain the most unpopular part of the health care law. They were intended to serve a broader purpose by nudging healthy people into the insurance pool, helping to keep premiums more affordable.

Sensitive to political backlash, supporters of the health care law have played down the penalties in their sign-up campaigns. But stressing the positive - such as the availability of financial help and the fact that insurers can no longer turn away people with health problems -- may be contributing to the information gap about the penalties.

Dayson says she's hoping her employer will offer a health plan she can fit into her budget, allowing her to avoid higher fines for 2015. Moon has held a succession of temporary local and state government jobs that don't provide affordable coverage. The penalties are on his mind. "When it gets up to $325, I hope I have a career that actually offers me a good health care plan," he said.

Associated Press social media editor Eric Carvin contributed to this report.

 

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Chinese Food Distributor Cited by FDA Over Rodents, Birds

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Chopsticks on Chinese food container
Tom Grill
A food company that distributes products to Asian restaurants throughout the East and into the Midwest was cited for numerous violations by the U.S. Food and Drug Administration after rodents and other pests were found in a warehouse.

A just-released letter -- sent earlier this month from the FDA to Brooklyn, New York-based New Yung Wah Trading Co. -- detailed an Oct. 15-30 inspection that found less-than-sanitary conditions including live and dead rodents and birds "landing and defecating on stored food products." The company appears to mainly ship to Chinese restaurants and has distribution facilities in New York, Pennsylvania, and Virginia.

Among the findings in the inspection of the company's McKees Rocks, Pennsylvania, warehouse:
  • A rodent's nest with multiple rodents in a plastic-lined box in a cooler that had thawing rib meat on top of melons.
  • Four dead rodents.
  • Birds flying throughout the warehouse.
  • A pallet of pineapples in boxes gnawed on by rodents, an apparent nest they made and rodent feces.
  • Rodent feces in a cooler.
  • A path of rodent feces leading to a hole in a bag of flour.
  • Rodent feces, urine and nests in and around bags of monosodium glutamate.
  • Workers smoking while handling food being prepared for distribution.

In addition, FDA inspectors said they found and identified other problems that didn't appear to be addressed, including a floor drain that didn't drain, causing puddles of standing water. Another problem, the FDA said, was the use rodent poison without taking precautions to keep it from contaminating food.

Problems Throughout the Warehouse

"This rodenticide was placed on plastic plates next to stored food products along the exterior walls of the facility," the FDA said.

And the entire warehouse was so densely packed with bags of food, the FDA said, that those working there couldn't inspect for rodents. The FDA letter said: "Pallets storing food products were stacked approximately two high and six to eight deep, covering an area of approximately 3000 square feet. The pallets were stacked directly against one another, which did not allow adequate spacing to inspect or observe possible rodent activity."

The FDA noted that the company claimed it had taken actions to fix the violations, yet it provided no evidence of that.

"FDA has serious concerns that our investigators found your firm operating under these conditions," the FDA letter said. "Further, your response states that your firm is committed to maintaining and operating a facility which provides the highest quality service to its customers and to the consuming public. We do not consider this response acceptable because you failed to provide documentation for our review, which demonstrates your noted corrective actions. This documentation may include photographs, invoices, work orders, voluntary destruction records, certification of actions performed by a licensed exterminator, other actions performed to control unauthorized entrance of pests, and/or any other useful information that would assist us in evaluating your corrections."

Earlier this year, the company was in hot water from Pennsylvania officials after an Ohio-bound delivery truck with 150 pounds of spoiled food headed for Chinese and Japanese restaurants was intercepted by police. The fish, chicken and pork was allegedly at unsafe temperatures, between 58 degrees and 68 degrees, and dripping onto other food causing cross contamination, Pennsylvania officials told the Sharon Herald.

New Yung Wah did not immediately respond to a request from DailyFinance to comment.

 

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Young Americans Are Very Serious About Volunteering

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AP Poll Young Volunteers
Carolyn Kaster/APIn lieu of a holiday party, Patrick McAnaney and other staffers from a startup called 1776 volunteer at Bread for the City. More young Americans are volunteering.
By Connie Cass

WASHINGTON -- Tired of hearing people grouse about a tuned-out, apathetic younger generation? Here's a comeback: Today's young Americans are more serious about giving back than their parents were. In fact, those under age 30 now are more likely to say citizens have a "very important obligation" to volunteer, an Associated Press-GfK poll finds.

The embrace of volunteering is striking because young people's commitment to other civic duties - such as voting, serving on a jury and staying informed -- has dropped sharply from their parents' generation and is lower than that of Americans overall. Among six civic activities in the AP-GfK poll, volunteering is the only one that adults under 30 rated as highly as older people did.

"I want to make my city where I live a better place," Morgan Gress, 24, of Washington said after sorting and hanging donated clothes with co-workers who chose to volunteer in lieu of an office holiday party. After you volunteer, she said, "You never walk away feeling you didn't have a great time, or help someone out, or learn something new."

Today's young adults grew up amid nudges from a volunteering infrastructure that has grown exponentially since their parents' day, when the message typically came through churches or scouting. Gress doesn't find it unusual that her employer, a hub for tech startups called 1776, encouraged workers to sort clothes at Bread for the City during office hours. Most of her friends work at companies with some sort of volunteer program, she says. Community service was required at her private high school in Buffalo, New York, like many other schools across the country. Volunteer opportunities were plentiful as a student at American University.

A Thousand Points of Light Burning Brighter

In the decades since President George H.W. Bush championed America's volunteer groups as "a thousand points of light" at his 1989 inaugural, the number of nonprofits has skyrocketed. The Martin Luther King Jr. holiday and Sept. 11 have become days of service. Individuals launch community projects through social media, instead of hanging posters and making phone calls.

Twenty percent of adults under 30 volunteered in 2013, up from 14 percent in 1989, according to census data analyzed by the Corporation for National and Community Service. It seems likely that the Millennials' volunteering rate will climb higher, because past generations have peaked in their 30s and 40s, when many parents give their time to schools, youth groups or community improvements.

"We're on the crux of something big, because these Millennials are going to take this spirit of giving and wanting to change communities and they're going to become parents soon," said Wendy Spencer, CEO of the Corporation for National and Community Service. "I am very encouraged by what we're seeing." The vast majority of Americans believe citizenship comes with an array of responsibilities. But the strength of that conviction has weakened since the General Social Survey asked about obligations of citizenship in 1984.

Seventy-seven percent say reporting a crime you witness is very important, down from 90 percent three decades ago in the survey conducted by NORC at the University of Chicago. Three-quarters call voting in elections very important, about the same as in the 1984 survey, though only about 36 percent of eligible voters cast ballots in November's midterms.

Being Informed Is Tough

The biggest decline among the six obligations tested? Keeping fully informed about news and public issues. A majority -- 56 percent-- of Americans considered that very important in 1984; now only 37 percent think so. Young adults are even less interested in keeping up. Despite unprecedented access to news and information, 28 percent feel no obligation to stay informed. A similar number say there's no obligation to volunteer, but the trends are moving in opposite directions.

The share who call volunteering very important has climbed 10 percentage points, while staying informed dropped 13 points. The importance of voting, jury duty, reporting a crime and speaking English as obligations of citizenship also declined among young adults.

Peter Levine, associate dean for research at Tufts University's college of citizenship, said while the nation was building up its institutional support for volunteering, many of the organizations that promote political and civic involvement, including labor unions, churches and newspapers, were shrinking.

Could experience gained while volunteering lead more young people to other civic roles, such as banding together to solve local problems, following national issues or joining political parties?
There are some positive signs.

Opened Eyes

Kaleigh Gordon, a junior at the University of Southern Mississippi, has a history of volunteering but says she hasn't followed politics much because "there's so much negativity." Now, a trip to Washington to help care for homeless people has her thinking about how to solve some of their underlying problems, such as untreated mental illness. "This is different from anything I've done before. It's been very shocking," Gordon, 21, said before serving lunch at So Others Might Eat. "The government should do more - we need more funds -- and people in the community need to be stepping up to do more, too."

But Rutgers University Professor Cliff Zukin, who studies civic engagement, sees little prospect that volunteering will lead to a strong return to political participation and other civic virtues that were in decline well before today's young adults came of age. "They're starting at a very, very low point," he said. "And each generation seems to have peaked at less than the previous generation."

The AP-GfK Poll of 1,044 adults was conducted online July 24-28, using a sample drawn from GfK's probability-based KnowledgePanel, which is designed to be representative of the U.S. population. The margin of sampling error for all respondents is plus or minus 3.4 percentage points. Respondents were first selected randomly using phone or mail survey methods and later interviewed online. People selected for KnowledgePanel who didn't otherwise have access to the Internet were provided access at no cost to them.

AP polling director Jennifer Agiesta contributed to this report.

 

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Beyond Solyndra: Some Successes in Clean Energy Program

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In this photo 2014 photo provided by Abengoa, a load of biomass, agricultural crop residues, is delivered to Abengoa's biorefinery in Hugoton, Kan. The plant, built by Seville, Spain-based Abengoa, is the largest cellulosic biorefinery in the world, producing up to 25 million gallons of ethanol fueled by non-edible waste. The Hugoton cellulosic ethanol refinery was funded in part by a loan guarantee from the Department of Energy. The same program funded high profile flops like Solyndra, the California-based solar company that filed for bankruptcy and led to hearings over the Barack Obama administration�s backing of unproven green-energy projects.(AP Photo/Courtesy Abengoa)
Abengoa/APThe largest cellulosic biorefinery in the world, in in Hugoton, Kansas, was funded in part by a federal loan guarantee.
By Henry C. Jackson

WASHINGTON -- At the RV Park he owns in a remote corner of southwestern Kansas, Jan Leonard is seeing the benefits of one of the federal government's most contentious programs. Development is booming in tiny Hugoton, a town of roughly 3,900 people. The town is the site of a new cellulosic ethanol refinery that was funded in part by a loan guarantee from the Department of Energy. The same program funded high-profile flops like Solyndra, the California-based solar company that filed for bankruptcy and led to hearings over the Barack Obama administration's backing of unproven green-energy projects.

But in Hugoton, which Leonard describes as "pretty far from nothing," more trailers are rolling in to his park and new businesses are popping up. "There's a Dollar General getting built, a new motel getting built. Another grocery store getting built," Leonard said in a phone interview. "There's a lot of different people coming to town. It's been big."

The plant has a work force of 75 and an annual payroll of $5 million. When it was established in 2009, as part of Obama's stimulus package, the clean energy loan guarantee program was billed as a two-fer: It would provide billions of dollars for environment-friendly energy and it would create jobs. Instead, the program became synonymous with failure and a regular talking point for conservatives.

Besides Solyndra, three other subsidized companies went bust at a cost of $780 million. Critics, especially Republicans in Congress, seized on it as an example of government waste. But roughly six years on, there are more signs that the program is working. In California, Tesla Motors has flourished, paying back a $465 million loan nearly 10 years early. A handful of companies have opened solar energy sites and signed long-term contracts to sell power to utility companies.

Profits Projected

And then there is the Abengoa biorefinery in Hugoton, where Energy Secretary Ernest Moniz came in October for the opening. He was joined by two Kansas officials who voted against the stimulus package: Republicans Sen. Pat Roberts and Gov. Sam Brownback, a former senator. "This program, let me say, not only here in Hugoton, but across the board has been a tremendous success," Moniz said. "I mentioned $30 billion in loans with a 2 percent default rate -- that is a pretty enviable in any portfolio."

Roberts and Brownback say they voted against the stimulus package for other reasons. "The governor strongly supports the Abengoa project," said Eileen Hawley, a spokeswoman for Brownback.

Despite the program's failures, the department now projects a profit of between $5 billion and $6 billion over the next 20 to 25 years. Overall, 20 of the program's 30 enterprises are operating and generating revenues so far, according to the department.

The successful projects include a site in Alamosa, Colorado, that is the world's largest generator of high-concentration photovalic energy, which is a type of solar power. The operator, power company Cogentrix, has 10 permanent operations positions in addition to supply line jobs. Overall, the Department of Energy claims the program has created or saved roughly 35,000 permanent jobs.

Partisan Perspectives

Republicans have argued that the investments are risky and the program mismanaged, as Solyndra demonstrated, though improvements have been made. "We are not out of the woods by any stretch," said Michigan Rep. Fred Upton, chairman of the House Energy and Commerce Committee. "Our oversight efforts will continue as problems still persist, and more needs to be done to protect billions of dollars in taxpayer interests."

But supporters say government investment is necessary for innovative energy enterprises. "It's very hard to get commercial scale financing, especially for these types of projects," said Nancy Pfund, a managing partner with DBL Investor, a San Francisco-based venture capital company with holdings in two companies backed by the program. "It's been a very positive force in that respect."

Mike Garland, CEO of Pattern Energy Group, a company focused on wind energy investments, said he was turned down by the program in part because he could get other financing. "I kind of respected that about the program," said Garland. "I would have liked to have had a lower cost of capital, lower cost of debt. But it is run in a way that said, 'your deal is too good. You don't need it.'"

The loan program's director, Peter Davidson, said the program had a specific target. "Commercial lenders are often unwilling to finance the first few commercial-scale projects that use a new technology because there is not yet a history of performance or operation," he said.

The refinery in Hugoton, built by Seville, Spain-based Abengoa, is the largest cellulosic biorefinery in the world, producing up to 25 million gallons of ethanol fueled by non-edible waste. About $132 million of the plant's $500 million cost was backed by the loan guarantee program. Abengoa buys biomass from local farmers that would otherwise be useless and sells the refined biofuels through trading companies in the U.S., Europe and parts of Asia.

 

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Market Wrap: A Flat Day With Another S&P High

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A man plays a Laterna instrument in the streets of Athens
Pacific Press/Getty Images

By Chuck Mikolajczak and Rodrigo Campos

NEW YORK -- U.S. stocks were little changed in thin trading on Monday as the S&P 500 notched its latest record high, but gains were curbed when an early rally in energy prices lost momentum.

Equities have trended to the upside of late, buoyed by data showing an improving economy and the U.S. Federal Reserve's commitment to be "patient" about raising interest rates. After the S&P 500 gained nearly 6 percent over the prior eight sessions, it notched its 53rd record close of the year on Monday.

The S&P energy index advanced 0.3 percent, pulling back from a gain of more than 1 percent as Brent and U.S. crude oil turned lower. Brent settled down $1.57 at $57.88 and U.S. crude settled down $1.12 at $53.61 a barrel.

Good News for Retailers

In contrast to the fall in oil prices, consumer discretionary names were among the day's best performers, up 0.7 percent. General Motors (GM) rose 2.6 percent to $34.60. The S&P 500 retail sector rose 0.8 percent as Macy's (M) advanced 1.8 percent to $65.22, and Amazon.com (AMZN) was up 1 percent to $312.04.

"The nearer-term picture is, consumers are enjoying lower gas prices, it's almost as if it is an alleviation of taxes," said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey. "Someone is getting hurt in this while the consumer is benefiting, and at some point it could come back to bite the market and the economy."

The Dow Jones industrial average (^DJI) fell 15.48 points, or 0.09 percent, to 18,038.23, the S&P 500 (^GPSC) gained 1.8 points, or 0.09 percent, to 2,090.57 and the Nasdaq Composite (^IXIC) added 0.05 points to 4,806.91.

A Quiet Week

The speed and scale of the rally could cap further upside, especially in the final trading week of the year, when many market participants are out on holiday and catalysts are limited. Volume is expected to remain light, which could exacerbate volatility. The stock market will be closed on Thursday for New Year's Day. About 4.78 billion shares traded on U.S. exchanges on Monday, well below the 7.18 billion average this month, according to BATS Global Markets.

Gilead Sciences (GILD) rose 3.7 percent to $97.30 as one of the S&P 500's biggest percentage gainers after Morgan Stanley upgraded the stock to "overweight" from "equal-weight." LiveDeal (LIVE) jumped 19.1 percent to $3.92 on volume of 13.6 million shares, to dwarf its 50-day average of about 455,000 shares, after the company reported 2014 results.

NYSE advancing issues outnumbered decliners 1,800 to 1,299, for a 1.39-to-1 ratio; on the Nasdaq, 1,438 issues rose and 1,320 fell for a 1.09-to-1 ratio favoring advancers. The S&P 500 posted 68 new 52-week highs and five new lows; the Nasdaq Composite recorded 160 new highs and 39 new lows.

Trouble in Greece

Greek Prime Minister Antonis Samaras failed to get enough support for his presidential nominee and will call a national election for Jan. 25. Stocks in Athens plunged as much as 11.3 percent before closing down 3.9 percent, while yields on 10-year Greek bonds touched their highest since September 2013. Greece's Syriza party, which could come out ahead in the election, wants to wipe out a big part of the country's debt and cancel the terms of a bailout from the European Union and International Monetary Fund that Athens needs in order to pay its bills.

"Greece is always worth paying attention to, but it's a hiccup," said Mark Martiak, senior wealth strategist at Premier Wealth/First Allied Securities in New York. "I don't see it as anything that makes a difference in the overall market."

Hurt in part by the sharp decline in crude prices in the past six months, Russia's economy shrank sharply in November. The ruble resumed its slide on Monday, down 8.4 percent to 58.45 per dollar. Copper fell to its lowest level in four and a half years on concerns about a strong dollar and a slowdown in top consumer China.

 

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6 Purchases Where It Makes Sense to Pay More

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What's the difference between "frugal" and "cheap?"

While there are many ways to answer this question, here's one popular response: cheap people look for the cheapest option, while frugal people search for the overall best value.

In fact, there are times when you might save more money in the long run by purchasing something more expensive upfront. Here are six reasons why it might be smarter to spend on a pricier item or service than the cheapest option.

Paula Pant quit her office job in 2008, traveled to 32 countries and became a successful real estate investor. Her blog Afford Anything is the groundswell of a rebellion against standard, tired old financial advice that says you should skip lattes and chain yourself to a desk for 40 years. Afford Anything is dedicated to crushing limits, creating riches and maximizing life.

 

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Are You Doing All You Can to Prevent Identity Theft?

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Identity theft
Alamy/Brian Jackson
Identity theft is raging across the Internet. But one company wants to put out the fire.

It playfully calls itself Credit Sesame, but this company has a serious mission. In cooperation with other members of the nonprofit The Identity Theft Council, Credit Sesame is promoting a nationwide initiative dubbed "100 Cities in 100 Days." Through it, Credit Sesame and its partners aim to educate consumers about the risks of identity theft, and gather together in one place the best ideas for how to stop it.

To this end, Credit Sesame and the Council this month began distributing a free pamphlet. They're making it available to the public in hopes of convincing at least "100 cities" across the nation to set up programs to educate consumers about ID theft. They also hope city governments will begin cooperating with one another to codify some best practices to combat the threat.

How Bad Is the Problem?

"Last year, 13.1 million consumers suffered identity fraud and the problem continues to grow," says Credit Sesame CEO Adrian Nazari in the pamphlet. Credit Sesame expects 2014 to end with 16 million Americans affected by ID theft -- with one new victim created every three seconds. Identity theft is now the No. 1 consumer complaint in America, says the Council -- as it has been for the past 14 years.

What Do the Thieves Want?

For the most part: money. You've got it; they want it. Identity thieves want to steal your digital identity and use it to take out credit cards and other loans in your name, or to sign up for utilities services when their own poor credit histories might make it difficult for them to get approved. They'd like to charge their purchases to your credit cards. Make withdrawals from your bank accounts. And have your IRS tax refunds sent to them instead. And that's just for starters.

Among other factoids described in the Council's Think Security First! pamphlet is the observation that the street value of your Social Security number could be greater than that of your flat-screen TV. What's more, on the black market for confidential data in general, criminals pay as much as 30 times more for private medical information than for financial information.

How Can You Keep Thieves From Getting What They Want?

If you've spent any time at all here on DailyFinance, you're familiar with the basics of how to avoid getting taken in by Internet scams, guard your credit data when shopping, and stymie ID thieves' efforts -- but it never hurts to review these basics.

Here, then, is just a small sampling of the first steps the Council, Credit Sesame, and privacy experts in general recommend you take to protect yourself from ID theft:
  • Read your mail. The world's gone digital, but for the time being, the USPS is still in business -- and still delivering a treasure trove of credit card applications, medical bills, and Social Security statements to your mailbox. Read them when they arrive to minimize the time between when you're victimized by fraud and when you find out.
  • Then shred your mail. Recycling paper products is great for the environment. But when you put sensitive documents on the curb intact, you're inviting trouble. So shred first -- and then recycle.
  • Read your email, too. These days, lots of us get our bank statements and bills over the Internet -- and pay our bills with online bill pay. It's convenient, and it also lets you instantly check on the status of your bank and credit card accounts, to see if there's any hanky-panky going on. But only if you do it. Without the prompt of an envelope arriving in your snail-mailbox, you're going to have to remember to check on these things yourself. Daily if possible, say some experts. Weekly if not. But at least once a month.
  • Protect your email (and Web browsing, and computer files). This may seem daunting to the not-technologically-inclined. But you can get a good start with just three simple steps: (1) Think up at least one strong password -- consisting of numbers, symbols, upper- and lowercase letters -- and use it. (2) Install a good antivirus and anti-spyware program on your home computer. (3) Install one on your smartphone as well.
Final point: If all of the above seems like too much work to you, feel free to outsource. Credit Sesame itself offers a free credit monitoring service. And in the Think Security First! pamphlet, you'll find info on free services such as Dashlane and LastPass that will manage your passwords for you, recommendations for free antivirus software programs, and even a tip on a good program to lock down your smartphone.

And a whole lot more.

Motley Fool contributor Rich Smith was pleased to learn from the pamphlet that his Internet password -- "PASSWORD123" -- is currently the most popular password on the Internet! (Yes! We're No. 1!) Neither he, nor The Motley Fool, has any financial interest in any companies mentioned above. Is your portfolio ready for the new year? Check out our free report on one great stock to buy for 2015 and beyond.

 

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Evaluate Your Retirement Accounts in 15 Minutes or Less

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How to Review Your Investments in 15 Minutes or Less

By Maryalene LaPonsie

Do you know how hard your money worked for you in 2014? If not, it's time to do a 15-minute checkup of your investments and make some plans for 2015.

Step 1: Check Your Performance

The first thing to do is pull out recent statements for all your investments, including retirement plans such as IRAs and 401(k)s, or check them online. If you don't have a recent paper statement or online access to your accounts, you may have to wait until the year-end statement arrives in the mail.

But let's assume you have your statements in front of you. The important number you are searching for is your fund performance. Once you find that number, your next question should be: "Is that good?" To find an answer, you'll need to compare your funds with indexes that include similar investments. For example, if your funds are invested in large-company stocks, you might compare your performance with the S&P 500 (^GPSC). If you have a small cap fund, look to the Russell 2000 (^RUT) for guidance. For more tech-heavy investments, Nasdaq (^IXIC) might be the best comparison.

I know it would be easier if I could simply tell you that if you hit a certain percentage, your investments had a great year. However, anyone who boils your fund performance down to such basic terms is doing you a disservice. You need to have an apples-to-apples comparison. That means comparing bond funds to bond funds, balanced funds to balanced funds and so on.

In addition to indexes, you can also see how your funds performed by comparing them with funds offered by such well-established fund companies as Vanguard, American Funds or Fidelity. Don't freak if your fund is a few percentage points off the returns offered by indexes or similar funds, but if your large-cap fund earned 5 percent this year when the S&P 500 earned 28 percent, that should be a red flag.

Step 2: Review the Fees

After you check out fund performance, the next step is to look at what you paid to achieve it. In other words, fees. If you're investing in mutual funds, this should be listed on your statements as the expense ratio. If for some reason you don't find it on your 401(k) paperwork, you may need to call your employer's HR office and ask.

Obviously, lower fees are better. Some mutual funds have expense ratios as low as 0.10 percent. Others might have combined fees that top 3 percent. Look at the fund families in the links above for comparisons. With so many excellent, low-cost investment choices available today, there is little reason to have a fund with more than a 1 percent expense ratio.

Step 3: Rebalance Your Assets

The final step is to rebalance your portfolio. Over time, as certain funds underperform or outperform, your asset allocation may become skewed. For example, because stocks did so well in 2013, you may have more of your savings in stocks than you're now comfortable with.

That's important because the type of investments you have is directly related to the amount of risk you're taking. Stocks often earn more than bonds or money market funds, they certainly have this year, but if the market crashes, you could lose big.

Ideally, you should have a balance of stocks, bonds and other investments that are based upon your individual goals. If you are 22 and saving for retirement, you can probably be stock-heavy since you have time to weather the market's ups and downs. But if you're 60, you'll want more of your money in bonds and money market funds so you don't risk wiping out your life savings as you approach retirement.

When you opened your investment account, you may have gotten guidance on the right asset allocation for your situation. Now is the time to rebalance your investments so they reflect that advice. Stacy Johnson offers advice in "A Simple Way to Invest for Retirement" or consult with a fee-only investment professional.

Bottom line? Make an investment review part of your year-end planning. Set 15 minutes aside, follow these three easy steps, and you'll feel a lot more confident that your money is ready to meet the new year.

 

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5 Financial Milestones to Reach in 2015

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Hands holding piggy bank
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Whether it's getting fit, eating better, traveling to new places, experiencing different things, making progress in a career or relationship -- we all have a few ways we'd like to take action to make the next year even better than the last.

When you're thinking about the goals you'd like to set and reach in 2015, don't forget to consider how you'd like to improve your personal finances and create a better situation for yourself. Not sure where to start? Try incorporating one of these five financial milestones to reach in 2015 into your new year's resolutions.

1. Learn More About Personal Finance

Did you find yourself wanting to learn more about your retirement accounts but didn't know who to ask? Have you been curious about HSAs or not sure what a certain investing term means? Did you want to learn more about money, but didn't know what questions to start asking?

Make 2015 the year to increase your financial knowledge and get the answers to the questions you've been asking (or figure out the right questions to start asking!). Read some general personal finance blogs like MoneyUnder30 -- and then look for other sites that talk about specific topics or issues you relate to (DailyFinance, of course, is a great start). Check out books at the library on financial planning. Tune in to financial podcasts. Book a call with a financial planner to see how a professional could help develop an action plan for your money goals.

And mark your calendar for the fall of 2015. In October, you can attend Financial Planning Days. These events allow you to book a free session with a financial planner to answer questions you have about your personal finances. You can attend classroom-style informational lectures, too.

To reach this milestone of continuing your financial education, make a list of three to five of your most pressing financial questions. Make it your mission to find the answers -- and take action on your new knowledge.

2. Boost Your Income

If you're happy in your current position and want to continue progressing in your chosen career path, it's time to think about boosting your income. Make it a goal to negotiate a raise in the new year.

Your first step: ensuring that you've actually earned that raise. Consider your strengths and look at the value you've provided to your company over the last six months to a year. When it's time for your performance review, explain to your boss how you go above and beyond and back up your claims.

Not quite there yet? Ask for additional responsibilities. Knock your next project out of the park. Look for innovative ways to get work done and provide solutions to common problems in your position. Taking action now can help you earn more from your job before the end of 2015.


3. Track Your Spending and Create a Plan

Yes, some people call it a budget, but I like the term "spending plan" because it sounds less restrictive. It's important to know where your money is currently going and then be able to redirect some of it toward your financial goals.

In other words, stop keeping every other receipt and calling that good enough, or trying to keep up with your spending and income in your head. Put a system into place and stick with it this new year.


Mint.com is a helpful financial tool that syncs up your debit, savings, credit card accounts and even loans you pay. With Mint, you can set a budget, like $200 a month for groceries, and see how much your groceries actually cost you a month. You will know how much you spent without having a running tally in your head.

You can also use spreadsheet templates and input information yourself, or use a more complicated software like You Need a Budget. The tool you choose isn't important -- what's important is that you choose something that helps you track your money, spending and goals -- and it's something you'll stick with throughout the year.

4. Increase Your Net Worth

You should also be tracking your net worth. Make this a habit in 2015. Your net worth is simply your assets minus your liabilities. Every time you add to your savings, you're building your net worth. That goes for paying down debt, too. The more debt you repay, the higher your net worth rises.

Tracking your net worth allows you to see your entire financial picture all on one page. It also enables you to see your progress -- or identify spots where you need to work to make that progress you want to see.

Sometimes we make our saving and debt repayment automatic and so it feels like we're not making much progress, but once you check in on your net worth, you'll see how much your plan is paying off!

5. S
tart a Side Hustle

Capitalize on your skills or monetize a hobby to create a side hustle in 2015. Doing so can help you develop extra income -- which you can use to accelerate your progress to other financial goals.

This is a financial milestone that everyone should reach, no matter how much you love your current job (or the full-time business you already run). Side hustles allow you to create diverse streams of income and open you up for new opportunities, experiences, and chances to learn new skills and abilities. It's a way of investing in yourself, while making extra money at the same time. Anyone can benefit from side hustling, including people established in their careers.

Not sure where to start?
Think about what you're good at and what you enjoy doing. Then consider ways you may be able to sell whatever that is to others. If you need some inspiration, be sure to check out Carrie Smith of Careful Cents, who used her side hustle as a freelance writer to pay off $14,000 of debt before turning her side gig into her full time business.

Do you maintain the website at your full-time job? Consider taking those skills to a freelance marketplace. Have specialized knowledge? Monetize what you know by offering consulting services. Artistically inclined or talented in a crafty way? Use an online shop platform like Etsy to host and sell what you can make.

When you're thinking about resolutions and goals this time of year, don't forget to consider how you can develop a commitment to improving your finances. Reaching some -- or all -- of these financial milestones in 2015 will allow you to feel more empowered and able to manage your money and hit other big goals in the future.


Sophia Bera is a virtual financial planner for millennials and the founder of Gen Y Planning. She is location-independent but calls Minneapolis home. She offers a free Gen Y Planning newsletter and is getting ready to publish her first ebook to provide a Gen Y guide to empowered personal finances.

 

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