It's OK to be a little fuzzy on this topic. It's also OK to feel a little paranoid if you observed your portfolio losing a lot of value due to the Fed's recent announcements. Just because someone has an IRA or a diverse portfolio, this doesn't mean that they understand the economic underpinnings that cause their portfolio values to rise and fall. In times like these, when just about everyone invested in the stock market is singing the blues, it's important to take some time to better understand various aspects of this complicated system. One key piece in this puzzle is THE FEDERAL RESERVE.
What's Up With the Fed and the Stock Market?
We hear a lot about the Federal Reserve. Politicians tell us that it needs to be broken up and/or audited. News media outlets bloviate about its role in interest rates all around the country. But what specific actions does that Federal Reserve play in the rise and fall of the stock market? If you ask many investors, they won't always have a clear answer for you.
The real answer is multifaceted. While the Fed doesn't impact the stock market directly, it's decisions cause ripples that can make it rise or fall in seconds. Of the many things that the Federal Reserve does, its most important action related to stocks is its control of interest rates. The Federal Funds Rate is set by the Fed. This is the rate of interest that banks charge each other to borrow money. This interest rate is a benchmark for the interest rates extended to ALL BORROWING ENTITIES EVERYWHERE, whenever they borrow money for any purpose.
Because you are not a bank with billions of dollars in available assets, you will be charged more interest for any loan you take out in your lifetime. Banks run almost no risk of defaulting when they borrow money from another bank. You on the other hand...
This means that every person who takes out a mortgage loan, every business who borrows money to expand its operations, every teenager buying their first car: all of these will have interest attached to the loan. And it will always be at least as much as the Federal Funds Rate, usually a lot more.
After the 2008 Financial Bubbleburst, the Fed lowered this rate as far as it could possibly go. They did this because it would motivate people at all levels of the economy to borrow, buy, and invest, thus spurring the economy through the tough times of the Recession. This sort of worked, but growth has recently stalled and economists are split over the best way for the Fed to act in response.
Several months back, you may remember that the Fed raised the interest rate to (as much as) 0.5%. Historically, this is bottom-of-the-barrel low! It's also a sign that the Fed trusts the strength of the economy to support itself, at least somewhat. You've got to remember that this interest rate used to be in the 20's in 1980. If you have bought a house or started a business in the past couple of years, you have enjoyed a rare opportunity.
So Why Does Raising the Interest Rate Make the Stock Market Freak Out?
When it costs more for businesses to expand (due to the higher cost of borrowing), these businesses likely become less valuable to investors. Because the Fed's interest rate impacts every loan that happens in the entire country, no business is unaffected. People who are intimately involved in the stock market start to divest themselves of their suddenly devalued dividend potential, and the entire market drops. It doesn't matter that interest rates are historically low. Any increase hurts stock returns, and thus throws a temporary wrench in the markets.
If you have an IRA or any other investment account, you are feeling the pinch at this moment. So are rich people, like Jeff Bezos. The thing is, the Fed must raise interest rates eventually, and the global market will just have to learn to deal with it. But with so much riding on the Feds' decisions, and no one wanting to repeat or exceed the Recession of 2008, you can understand why the Fed's under some pressure right now.
So What Should I Do?
Don't freak out, please. If all of this comes as a surprise to you, this is an important lesson in the fundamental economics of American investing. And it doesn't mean that the bottom is going to fall out of your portfolio. Hopefully (and nobody can tell the future, no matter what they might say on the internet) the economy will continue to recover, and the stock market will grow based on internal robustness, not artificial support from the Federal Reserve.
As I constantly remind people, sensible stock investing should be about the long game, not about blips in the radar. If you've followed past posts, you know that I always recommend Index Mutual Funds for at least a significant portion of every portfolio. You can track stocks at the new stock directory module on my website, for a closeup look at individual winners and losers. By investing in the strength of the stock market as a whole (the index fund approach) and learning about the inner workings of individual stocks (through the link I suggested), you'll be in a position to survive hard times and make decisions that take full advantage of the good times.
The Fed will do what it does, and it won't always be in the best interests of your short term investment interests. The portrayal above is just one little sliver of what the Fed does. But by better understanding it, you'll be more likely to steer clear of investment fear-mongering, and stay the course to long term investment success!
It pays to repair a broken credit report, but avoid scams that could cost you thousands.
Removing negative items from your credit report can help improve your FICO score, making it easier to buy or rent a home, get insurance, buy a car - and sometimes even make the difference in getting a job. A higher credit score can mean lower interest rates when you go to acquire a mortgage or car loan.
For example, say you put 20 percent down on a $300,000 home. According to online mortgage calculators, like one we tested at Zillow, over the 30-year life of your $240,000 loan, at a 3.5 percent interest rate you'd spend $147,974 in interest; at 6 percent, you'd spend $278,013 in interest.
That's why so many people try to repair their credit. Many turn to professionals for help, but experts, including Money Talks News' Stacy Johnson, will tell you to be careful as there are many scammers out there.
The Federal Trade Commission, for example, recently asked the courts to help shut down one allegedly bogus firm that traded on the consumer protection agency's name. The Los Angeles-area company called itself FTC Credit Solutions, but the initials really stood for First Time Credit Solution, the agency said.
The firm's actions, it alleged, were typical of scammers illegally charging customers upfront fees, falsely promising they could remove negative information such as late payments, foreclosures and bankruptcies from consumers' credit reports and guaranteeing consumers a credit score of 700 or above within six months or less.
While experts say there is nothing a credit repair company can do for you that you can't do for yourself, many consumers still turn to professionals. Prices on allegedly legitimate firms run $59 to $89 a month, according to some reports, and some charge an initiation fee.
We've partnered with Debt.com, accessible through our Solutions Center, to match you with reputable, trustworthy experts who can help guide you through the process of repairing your credit.
Meantime, follow these four don'ts and five do's of credit repair.
Don'ts
These gimmicks, experts say, indicate you may be dealing with a scammer:
New number trick: Some credit repair agencies advise you to start a new credit file by getting a new tax ID number - CPN, credit profile number, or EIN, an IRS-issued Employer Identification Number - to use in lieu of your Social Security number. The new number may resemble a Social Security number. This trick is illegal. The FTC warns that scammers may be selling stolen Social Security numbers, often taken from children. By using a stolen number as your own, the con artists involve you in identity theft.
Lying trick: Scammers may tell you to give false information on your applications. The FTC reminds consumers it's a federal crime to lie on a credit or loan application, misrepresent your Social Security number, or obtain an EIN from the IRS under false pretenses. You could go to prison instead of to the head of the credit repair class.
Protest trick: Credit bureaus remove from your credit history the items that you protest - at least while they investigate. While those things are off your credit report, some people will apply for new credit. That's fraud.
Upfront charges trick: The law requires credit repairs companies not to collect a dime from you before they perform any services.
Do's
Get free copies of your credit reports: Visit AnnualCreditReport.com to get a free copy of your credit report from each of the three credit reporting agencies, then thoroughly scrutinize the information in the reports for errors, omissions and fraudulent accounts. Be on the lookout for negative marks that should have dropped off your report because they're more than seven to 10 years old. Most bad items drop off in seven years.
Fix errors: Notify the credit reporting agency online or by letter (see a sample by the FTC here). It will contact the other credit reporting agencies. A letter should include your name and address, the items in dispute, your argument and any supporting facts to support your claim, a formal request to resolve the issue. Send copies (not originals) of documentation that supports your claim the information is wrong. The credit reporting agency will have 30 days to investigate and communicate its decision.
Request a goodwill adjustment: If your credit reports contain contents that are accurate but negative, write to your creditors and ask they remove the bad information right away. Be polite; they aren't required to comply with your request. However, Johnson notes, they may be more willing if you still have a business relationship with them.
Know your rights: The Credit Repair Organizations Act (CROA) makes it illegal for credit repair companies to lie about what they can do for you or to charge you before they've performed their services. This law, enforced by the FTC, requires credit repair companies to explain:
Your legal rights in a written contract that also details the services they'll perform.
Your three-day right to cancel without any charge.
How long it will take to get results.
The total cost you will pay.
Any guarantees.
5. Exercise your recourse: If a credit repair company you hired doesn't live up to its promises, the FTC says you have these options:
Sue them in federal court for your actual losses or for what you paid them, whichever is more.
Seek punitive damages - money to punish the company for violating the law.
Join other people in a class action lawsuit against the company, and if you win, the company has to pay your attorney's fees.
For more on the do-it-yourself route, see our earlier story here.
Have you tried to repair your own credit or used a professional? How'd it go? Share with us in comments below or on our Facebook page.
As the spouse of a Foreign Service officer, Cathy Lincoln moved frequently and changed jobs with each new post while raising two children. She had neither the time nor the inclination to pay attention to her retirement accounts. "I had a set-it-and-forget-it attitude," says Lincoln, 56, of Washington, D.C. After a divorce, however, she wanted to see if her investments were on course. Rather than run the numbers herself, she consulted an adviser at the Royal Bank of Canada, which administers her IRA. On the adviser's recommendation, she tweaked her investments and rolled a 401(k) held by a former employer into the IRA. The fine-tuning put her accounts in good running order, she says. "A financial adviser pulls it all together."
Planning for retirement is like taking a long road trip. At first, you put your plan on cruise control, letting your employer make some or all of the calls about how much to save and in which investments. Later, as your finances and priorities become more complicated, you take the wheel yourself, tweaking those investments and dialing up (or paring back) your contributions. By the time you're approaching retirement, you may want to turn over the driving to an expert (at least temporarily) who will look under the hood and calibrate your investments to your exact needs.
No matter what stage you're in, your employer-sponsored 401(k) plan is key to getting you where you need to be. These pretax accounts, also called defined-contribution plans, now far surpass pensions as the retirement savings vehicle of choice among private companies. In 2014, more than 90 million Americans were covered by a defined-contribution plan, with assets totaling more than $6.5 trillion, according to Vanguard. The average account balance with Vanguard was $102,682. Employers played a key role in fattening those balances, bringing the average contribution rate to 10.4% of annual pay, including a 6.9% average contribution rate by employees.
These six steps will help you get the most out of your 401(k) and take advantage of the momentum your employer offers.
1. Get a head start
Given the daunting prospect of financing your own retirement, you'd think that throwing money into your 401(k) from the start of your career would be a top priority. In fact, many young (and not-so-young) workers go with Plan B: procrastinating. In recent years, companies have countered that tendency to stall by automatically enrolling employees in the company plan. Workers are given the opportunity to opt out, but relatively few do. In 2014, employees whose plans included automatic 401(k) enrollment had an 89% participation rate, compared with 61% for employees in plans with only voluntary enrollment, according to a 2015 study of Vanguard plans.
The gentle push to begin steadily saving makes for a powerful head start. A recent Wells Fargo study showed that people ages 55 to 59 had accumulated three times the retirement stash of those 60 or older. How so? The younger group had started saving consistently at 31, six years earlier than the older group. "It's only a six-year difference, but when you think about the power of six years of savings compounded over 25 years, that's significant," says Joseph Ready, director of institutional retirement and trust for Wells Fargo. "The message is, don't lose the power of time. Start saving as early as possible."
2. Step up the pace
The downside of relying on your employer to make your savings decisions is getting lulled into thinking you're saving enough. About half of participants who are automatically enrolled in a Vanguard 401(k) start at a 3% deferral rate, and many are content to stay there. "They think that this must be the right savings rate, and they leave it alone," says Ready.
Lately, more employers have taken advantage of that very tendency by initially setting contributions at 4% or more and automatically hiking the contribution rate by one percentage point a year, most often up to 10%. Employers also increasingly offer a dollar-for-dollar match rather than the once-common 50 cents on the dollar. A recent survey of large employers by Aon Hewitt, a benefits consulting firm, showed that 19% of companies match contributions dollar for dollar up to the first 6% of salary, and 23% offer the match up to the first 3% to 5%. "Plan sponsors are trying to make the plan as appealing as possible. They're telling you to invest your retirement funds with them because they can help you the most," says Rob Austin, director of retirement research at Aon Hewitt.
If your employer doesn't pave the way for you with automatic nudging, you'll have to get there on your own. Aim to contribute at least 10%, including the company match, within the first few years of your savings career; you should contribute more if you get a late start. Many retirement experts recommend saving as much as 12% to 15%, including the employer contribution, from the get-go. (Some 24% of Kiplinger readers who responded to a recent poll save 11% to 15% of their income for retirement, and 34% save more than 15%.) In 2016, you can kick in $18,000 and, if you're 50 or older, another $6,000 in catch-up contributions, for a total of $24,000.
The get-go is also a good time to start contributing to a Roth 401(k), if your employer offers one. This option, offered by six out of 10 large employers, lets you contribute after-tax dollars to your account. Withdrawals are tax- and penalty-free if you have had the account for five calendar years and are 59 1/2 or older. Given that your salary and tax rate will likely go up as your career progresses, your early career is a good time to start funding a Roth. You can contribute the annual max to the Roth 401(k) or split your contributions between the pretax and after-tax accounts.
3. Get the right mix
Imagine someone handing you the keys to a powerful vehicle that you have little or no experience driving. You'd want to read the manual and maybe take a few lessons, right? Nah. The majority of people enrolled in a 401(k), currently the most powerful engine of retirement saving, have little interest in learning about plan details, much less poring over investments and coming up with a mix suited to their age and risk tolerance, says Kenny Phan, a 401(k) consultant in Phoenix. "I've been to many 401(k) meetings on investment options, and employees don't show up."
Partly in response to such do-it-for-me investors, employers have added target-date funds to their 401(k) lineup and are using them as the default investment for participants who are enrolled automatically. Target-date funds put you mostly in stocks when you're in your twenties and grow more conservative -- say, a mix of 60% stocks and 40% bonds -- as the target date approaches. For instance, the Vanguard Retirement 2060 fund currently invests 90% of participants' holdings in stocks, reflecting the risk capacity of people whose retirement date is 44 years hence; by 2060, the mix will have adjusted to roughly 50% stocks and 50% bonds. In 2014, almost two-thirds of participants in Vanguard-administered plans had invested some or all of their accounts in target-date funds, up from 5% in 2005.
Target-date funds are designed to be a one-stop solution, so you defeat the purpose if you also invest money elsewhere. That said, combining a target-date fund with other types of investments or other target-date funds can work if you're mindful of your overall asset allocation. With these funds, you can be confident that your portfolio will not only be appropriately allocated but also well diversified.
If you're assembling a portfolio on your own, be sure to include domestic large-company and small-company stocks, international stocks (including those in emerging markets), and domestic and international bonds. Also, make sure your investments reflect the appropriate risk for your age. A recent study by Fidelity showed that 11% of people ages 50 to 54 and 10% of people 55 to 59 had invested 100% of their 401(k) in stocks, leaving them dangerously exposed to a market downturn as they close in on retirement. "With 401(k)s, you only have to get two things right -- save enough and invest appropriately," says Jean Young, a senior research analyst with Vanguard Center for Retirement Research.
4. Review fees
A few years ago, news reports warned that excessive 401(k) fees were reducing individuals' retirement accounts by tens of thousands of dollars. But here's the good news: 401(k) fees, including investment management fees and administrative costs, have declined over the past few years. A recent report by BrightScope and the Investment Company Institute showed that the average cost of a 401(k) plan had dropped from 1.02% of assets in 2009 to 0.89% in 2013.
One reason for the change is that since 2012, employers have been required to spell out 401(k) fees to plan participants, and plan administrators must disclose their fees to employers. "Because of those rules, employers and employees are more aware of the costs associated with the plans," says Phan. "And because employers have the fiduciary responsibility to evaluate their plan, they are making sure the fees are competitive with other plans."
Fee disclosure rules have also changed the way plan sponsors -- that is, employers -- calculate administrative fees, making them fairer and easier to understand, says Austin. In 2011, 83% of companies charged administrative fees as a percentage of assets. Now, 39% impose a flat-dollar amount per account. The median flat fee per person was $64 in 2015, according to NEPC, an investment consulting firm. Not only does the change mean that savers are paying equally for the same services, says Austin, but it "also gives participants a clear line of sight on fees."
For all these improvements, you can't know how your 401(k) fees measure up unless you compare costs with benchmarks shown on the statement as well as with plans at similar-size companies (to compare plans, go to www.brightscope.com). For instance, you might find that the fund you're invested in charges a higher management fee than a comparable one with the same performance, in which case you've got a clear signal to switch. Similarly, if the fee for administrative costs seems out of whack compared with other plans, bring the matter up with your employer.
If all else fails, you could invest in a traditional or Roth IRA outside your 401(k), after contributing enough to the 401(k) to meet the match. In 2016, you can contribute up to $5,500 (plus $1,000 if you are 50 or over) to a traditional IRA or a Roth.
5. Put the pedal to the metal
If you're in your late forties or early fifties, you may have fallen off the savings track -- say, to cover college bills or buy a bigger house. Contributing less to your 401(k) for a few years won't devastate your retirement prospects, especially if you started saving early. But remember that retirement is your first priority, says David Meyers, a certified financial planner in Palo Alto, Calif. "You can't fix that. It's harder to retire on less than to live in a smaller house."
Carving an extra $50 or $100 out of your budget to beef up your 401(k) is helpful, but ideally your earning power is now at a point that you can contribute the max, including the catch-up contribution. And if you have a high-deductible health plan that qualifies you for a health savings account, you can also save $3,350 a year if you're single ($6,750 for families) in 2016, with a $1,000 catch-up amount if you're 55 or over. Maxing out those two savings vehicles alone gets you almost $30,000 in pretax savings a year. "If you can do that for five or 10 years, you can really catch up," says Ready. "It's never too late."
By this age, you probably have a decent idea of whether your income -- and thus your tax rate -- will go up or down in retirement. If your employer offers a Roth 401(k), consider contributing to it now, if you haven't funded it already. You'll probably want to go this route if you believe your tax bracket will go up in retirement rather than down. But even if your income will likely drop, you would be wise to squirrel away some money in a Roth in case tax policy changes, says Austin. "You'll have a buffer from taxes later," he says.
6. Enlist the experts
Has life gotten complicated? You'll need more help. "A 25-year-old in a retirement plan can simply pick a 2065 target-date fund," says Austin. "But when you get to 55, one person may have paid off his mortgage, another not. One might have a huge pension, another doesn't. And how do you fold in spouses? For those people, it's nice to have more input."
Enter managed accounts, offered by more than half of employers as an option in their 401(k)s, according to the Aon Hewitt study. With these accounts, a professional advisory service will discuss your financial circumstances, perhaps both online and over the phone, and tailor a portfolio accordingly, periodically monitoring and rebalancing it. Managed accounts offer a high degree of personal advice, so they're most appropriate for investors who have complex finances -- say, multiple 401(k)s, a pension or company stock outside their retirement account, says Sangeeta Moorjani, senior vice president of Fidelity's Professional Service Group. "They realize they can't do it on their own." For that help, you'll pay a fee of about half a percentage point of your assets; some employers pick up the tab.
If you don't have access to a managed account or want more face-to-face advice, schedule a few sessions with a financial adviser. Advisers streamline your accounts, coordinate your income and assets with those of your spouse, and assess your retirement readiness. Meyers, for instance, offers a portfolio review plus Social Security planning and a retirement income analysis. "Before I dive into a portfolio, I add up all retirement assets and all nonretirement assets to get an idea of the total picture and project what it will take to achieve the level of spending the client wants in retirement." The best part of his job? "Every now and then, I'll look at the numbers and say, 'You can retire yesterday.' That's really cool."
Did you know that President's Day weekend features some of the biggest sales of the year? While often overshadowed by "bigger" retail holidays, you can actually save bundles on President's Day - if you know what to shop for!
Want to look presidential in a new peacoat? You can find winter apparel for as as low as 85 percent off, as retailers try to clear out their inventory to make room for their spring and summer lines.
The same goes for electronics. Since tech companies tend to unveil their latest products early in the year, electronic retailers will be slashing prices on President's Day to make room on their shelves.
Finally, maybe you're a "good candidate" for new furniture. Since new furniture collections are usually released during the first two months of the year, you can save big this President's Day when furnishing your bedroom, or "home oval office."
So remember, you don't have to be commander-in-chief to command big savings this President's Day.
The Internet is a great place to launch entrepreneurial efforts. People have made money by creating useful products and functional websites, while others have found ways to make money in creative and interesting, yet strange, ways. Here is a sampling of some unusual online commerce.
Online Eating - Mukbang, a combination of Korean words that mean eating and broadcasting, is quite popular in South Korea. Viewers tune in to chat and watch people eat, and donate cash-redeemable "star balloons" to the eaters. According to a Business Insider video, the most-viewed eater on the streaming service Afreeca TV earned a whopping $250,000 in 2013. "Gastro voyeurs" have around 3,500 online eaters to choose from, some of whom are sponsored by restaurants. So instead of "What do you want to eat tonight?" the question is, "Whom do you want to watch eat tonight?"
Facial Advertising - Two lads from Great Britain hit upon the idea of paying off their student debt in a creative way - selling space on their face. Using only a makeup pencil, Ross Harper and Ed Moyse sold daily advertising space on their face for a full year. After initial sales at only a few dollars, the site caught on and the two ended up selling space for $600.
The catch was that the duo would film themselves doing stunts or other attention-getting actions (some requested and paid for by the client) and post the results on their website, Buymyface.com, which in turn directed traffic to the client's website. They managed to retire nearly $60,000 of their $80,000 debt before shutting the site down.
Selling Shares in Yourself - Mike Merrill (aka KMikeyM) decided in 2008 to divide himself into 100,000 shares and offer himself as an IPO of sorts for $1 per share. Shares can be purchased at his website that embraces "Community through Capitalism." Shareholders do not receive money or dividends in return, but they can log in to cast votes on aspects of Merrill's everyday life, such as whether or not he should invest in a Rwandan chicken farm (yes) or get a vasectomy (no).
As of this writing, the last vote was to "produce a live theatre production exploring the issues of identity and celebrity" with the title of Understanding Jason Bateman. Bateman is allegedly set to star in a movie being made about Merrill's life. Just another case of life imitating art imitating life.
Wearing T-Shirts - The advertising principle strikes again with Iwearyourshirt.com. The site is no longer around, but its owner, Jason Sadler, made serious money by wearing T-shirts with a different company logo each day. In his first year, Sadler made $70,000 - and ended up making as much as $500,000 a year, by some reports. At one point, Sadler had a team of five t-shirt wearers, or human billboards, spread throughout the country and a client base that included Nissan and Starbucks. To increase the advertising value, Sadler posted videos of himself on various social media sites discussing his client of the day.
Sadler has moved on to other ventures but continues to dabble in the world of unique methods of making money. He has legally changed his name twice for advertising money. Auctioning off his name in 2012 earned him $45,000 and the name Jason HeadsetsDotCom. In 2013, he became Jason Surfrapp.com for $50,000. He has most recently changed his last name to Zook, but that was for personal, not professional, reasons.
While these are certainly strange ways to make money online, rest assured that there is a much deeper level of moneymaking strangeness out there on the Internet. Search for even more-out-there things at your own risk, and do not be surprised by anything that pops up in your targeted advertisements. Don't say we didn't warn you! Now, how much would you be willing to pay to watch me eat an egg salad sandwich?
Thinking about retiring your current wheels? If so, it might be wise to skip a brand-new model and instead purchase a new-to-you vehicle.
Buying a gently used car spares you the depreciation that befalls a new car as soon as you drive it off the lot. You'll save a lot of money while still getting a quality vehicle that will last for years.
But before you buy, there's some homework required. That used car might look sleek, but you must find out if it is actually dependable.
Here are some tips for doing research before you go car-shopping.
1. Check reviews and ratings
Have you ever bitten into an apple, only to be disappointed that it was brown and mushy to the core?
The same principle applies to cars. It may look shiny, but after a few drives, you may realize it's just not the right fit for you. Or, it may disappoint in performance. Perhaps worst of all, you may find it is expensive to repair.
Before you go for a test drive, check reviews and other sources of information on the Internet.
First, simply do a search of "most complained about cars." You'll find an impressive amount of information from a variety of authoritative sources.
Now, do the same for "most reliable cars." You'll find articles about ratings by organizations such as J.D. Power and Consumer Reports.
You may also want to search "complaints" and the make, model and year of a vehicle you're considering. Forums can be very helpful.
Other sources:
If the car is still in the running, the next step is to analyze its affordability. Take a moment to crunch a few numbers using an affordability calculator to determine if the monthly payment is feasible.
Take into consideration the cost of the taxes, tag, title and any other add-ons. They could easily add up to thousands of dollars, depending on the purchase price of the car and your state of residence.
Also, check out the model's depreciation trend. If the car has historically lost thousands of dollars in value year after year, the purchase may not make much sense.
Finally, is the asking price too much? Sites like Edmunds.com and Kelley Blue Book can help with that.
3. Consider maintenance costs
Now for the kicker: maintenance costs. The cost of labor isn't the only thing you should be concerned about - find out how much replacement parts cost. If you're thinking about purchasing a high-end foreign model, be prepared to absorb high maintenance and repair expenses.
Once again, do an Internet search for "most expensive cars to repair" and "most expensive cars to own" and you'll find plenty of results.
4. Compare insurance premiums
The next line of business is auto insurance. Some cars cost a lot more to insure than others. Our friends at Insure.com do an annual ranking of the most expensive and least expensive cars to insure, and allow you to search for the average insurance rate for a vehicle. Look for similar rankings from other sources as well.
You may be able to get a better deal when you're actually shopping for insurance, but it's still smart to find out if the average insurance cost for the vehicle you're looking at fits into your budget.
5. Check for recalls
If a car is often recalled for mechanical issues, that's a red flag. Check out "What You Need to Know About Car Recalls" to find out about the recall history of the vehicle in which you are interested.
6. Think about suitability
Think hard about this one because you'll probably drive the vehicle for a long while. It may be tempting to purchase that sporty new two-door because the guy two houses down is offering it for an irresistible price. But if you have four kids in tow each day, the purchase just doesn't make sense.
Do you have any additional suggestions? Let us know in our Forums. It's a place where you can swap questions and answers on money-related matters, life hacks and ingenious ways to save.
All told, the average American household spent $53,495 in 2014, according to the Bureau of Labor Statistics.
While the bulk of that money went for housing, we still spent more than $1,786 on apparel and services, $2,728 on entertainment, and another $2,787 on food away from home. Then there is that mystery category, "all other expenditures," where we rang up, on average, $3,548.
Fortunately, there are a number of tried and true ways to save money on virtually everything you buy. In fact, we call them our 15 golden rules to super savings, and here they are.
1. Never buy new what you can buy used
To start, if you want to save money on everything you buy, you should never buy new. Well, nearly never buy new. You might possibly want to buy new underwear from time to time.
But for most everything else, let someone else take the depreciation hit. The average new car loses 11 percent of its value the moment it's driven off the lot according to insurance site TrustedChoice.com. After five years, new vehicles typically lose about 63 percent of their value.
Cars might be the best-known example, but virtually everything depreciates over time. Jewelry, furniture, appliances, and even video games and movies can depreciate faster than you can say "impulse buy." Check out Craigslist, eBay and Half.com for practically new items being sold for a song.
2. Save big with bulk purchases
Let's say you use a lot of batteries. Why buy four batteries when you could buy 40? Buying in bulk can be an excellent way to lower your per-unit cost. Check out Amazon prices on Duracell AA batteries as an example. As of this writing, you can buy 10 for $8.35, get 20 for $10.10 or splurge on 40 for $14.70. (The 40-pack comes out to about 37 cents per battery compared to the 10-pack, at 83 cents per battery.) Plus, bigger packages come with free shipping. Bonus!
However, not every bulk buy is a steal. If you're thinking about going the warehouse route, read this article on what to buy at warehouse stores before you start shopping.
3. Tame impulse buys with a list
It's hard to put a number on how much impulse buying costs us each year, but 84 percent of confess to making a purchase on the fly, according to a 2016 CreditCards.com survey.
Tame the tendency to impulse buy by limiting yourself to what's on your shopping list. Don't think that list is only for groceries either. Create an ongoing list of planned purchases. When you notice your shoes are wearing thin, add shoes to the list. When you decide you need a bigger slow cooker, add that to the list.
Then when you are tempted to buy something on the spur of the moment, refer to your list. If it's not there, remind yourself that you don't need it and that money spent on impulse takes away cash that could be used to buy something you really want.
4. Remember that generics equal more green in your wallet
If you're buying a brand name, you're likely spending extra cash and may not be getting much in return.
Consumer Reports compared name-brand and store-brand grocery products and found that consumers can save anywhere from 30 to 52 percent by buying store brands. In addition, the study revealed that in blind tests, most items tied in terms of their taste and, in some instances, the store brand was actually preferred over the name brand.
Then there are generic drugs. The Food and Drug Administration says consumers can save 80 to 85 percent by buying generic prescriptions. No need to worry about their safety either because generic drugs must meet the same quality standards as brand names and must also include the same active ingredients in the same strength as their more expensive counterparts.
You're missing out on great savings if the only time you negotiate is when you're buying a new car or are at a yard sale. Read Stacy Johnson's "Confessions of a Serial Haggler" for a rundown on the fine art of bargaining. Also check out this story offering tips for successful negotiation.
6. Stop being the early adopter
Always having the latest and greatest gadget might make you the cool kid in your circle of friends, but it's also going to empty your wallet in a hurry. You're paying top dollar for something you could probably get for significantly less a short year later.
Why do you need to upgrade anyway? Why buy a 50-inch TV when your 37-inch one works perfectly fine? The Internet exploded during the 2013 football season when Dallas Cowboys owner Jerry Jones was photographed using a - gasp! - flip phone. Some people laughed, saying he was behind the times, but he's a billionaire so, really, who's getting the last laugh?
7. Make a habit of sharing purchases
Is there really a need for everyone on your block to own a weed whacker? If you are going to rent a carpet cleaner for an afternoon, could a friend or neighbor use it, too?
Make a point to look for ways you can share purchases with others. Maybe that means something as formal as creating a neighborhood co-op where families come together to make shared purchases, or it could be as a simple as calling up your friend and asking if she wants to go in on a purchase or rental of a particular item.
8. Consider whether you can make it or do it yourself
You can save a boatload of money if you do things yourself rather than paying someone else. From making your own laundry detergent to home repairs, many of the things you buy could be replaced by your own ingenuity or a little elbow grease. That said, we don't recommend do-it-yourself dentistry.
9. Compare, compare, compare
Knowledge is power, and your money will have more buying power if you take the time to do a little research. Never make a purchase without first checking prices at other retailers and online. Websites such as PriceGrabber, Shopzilla and Nextag make it easy to find the lowest price.
Of course, slick salesmen and retailers won't want you to shop around. They may pressure you for an immediate sale, arguing that prices have never been so low or their manager is making a special deal for you that will only be available for the next 15 minutes.
They are toying with you, my friends. Like a cat plays with a mouse, they are trying to back you into a corner where you feel you can't possibly say no. But competition is fierce, and the reality is there will always be another sale.
Don't buy unless you've done enough research to know the deal is good. Plus, going back to strategy No. 5, walking away can be your most powerful negotiating tool.
11. Try doing without
You may be inclined to run out and buy something as soon as the old version has worn out or breaks. However, wait a couple of days or, even better, a couple of weeks before making a purchase. You may find you can do without the item, or you may discover you have another item that can work as a perfectly acceptable substitute.
12. Look for a coupon
We all know about coupons for grocery store items, but that's not all these little money-savers can be used for. Coupons are available for everything from auto repairs to online purchases.
If you dine out regularly, see if a coupon book or key card would be a good investment. These are often sold as fundraisers through schools and clubs, but you can also buy Entertainment Books online. Be sure to check which coupons are included to ensure they match your tastes. Often, these programs provide more discounts to local, independent establishments than to chains.
You can also get coupons by signing up for the mailing lists of your favorite stores or agreeing to receive mobile alerts.
In addition to coupons, you can save money by taking advantage of online rebates. Our favorite is Ebates, but a simple Web search will turn up many others. You can also use rewards programs. You may not get savings upfront, but you can receive a nice check or other rewards later.
14. Use a rewards credit card
Like rebate websites, rewards credit cards don't drop your initial cost, but they do provide overall savings on your purchase in the form of cash back or rewards points that can be redeemed for merchandise, gift cards or travel.
The one caveat of rewards credit cards is their interest. If you don't pay off your balance in full each month, the amount of interest you pay could negate any rewards you receive.
If you don't already have a card, you can find a comprehensive list of rewards credit cards here.
Finally, if you really want to save money on everything you'll ever buy, only pay with cash. Research shows that using cash discourages spending, while credit cards and gift certificates may encourage it. In addition, spending cash keeps you accountable by ensuring you only use the money you have on hand rather than basing your purchases on some vague notion of what might be available in your bank account or on your credit card.
When you carry a balance on a typical credit card, the credit card company is simply extracting money from your wallet. If you carry a $2,500 balance for a year on a typical 20 percent APR card, that means you're giving the credit card company $500 of your hard-earned cash just to keep that $2,500 balance. That's $500 that just blows away in the wind. The higher the balance, the worse it is - and the higher the APR, the worse it is, too.
One of the best money-saving strategies is to simply reduce that interest rate. If you knock an interest rate down from 20 percent to 10 percent, you save $250 a year in the example above. That's a lot of money.
The first step is easy: Just call the number on the back of your card. But you might need some help once you're actually on the phone. Here are some tips for negotiating a better rate on your credit card.
Make sure you have a position to negotiate from. Have you been a customer of this company for years? Do you pay your bills? Do you also maintain a balance on this card? Could you financially survive if this credit card were to be closed out? Do you have better interest rate offers on the table?
If you're answering "yes" to those questions, then you're in good shape to negotiate a better interest rate. If not, you don't have much leverage to negotiate.
Credit card companies want to keep customers who consistently pay their bills (a few days late on occasion is fine, but skipping months isn't), but also maintain a balance on their card. Those are the ideal customers. Is that you? If not, then the credit card companies won't do much to keep you around, as you're not worth much to them as a customer.
Similarly, you need to be in a position where you could survive without this card. Do you need this card to make ends meet each month? One potential outcome of this type of negotiation is that you end up closing your account - or the credit card company ends up closing it.
Be polite, always. No matter what happens during the phone call, refrain from getting angry. Don't raise your voice. Don't ever skip over polite phrases in your speech. Don't start calling the person on the phone names.
The second you resort to these tactics, your chances of getting a better interest rate drop to zero. The person on the other end will stop cooperating with you and you'll be left with your current rate.
If you're frustrated, simply say, "Thank you for your time!" and end the call, then vent your anger once you're off the phone.
Make sure the representative actually has the power to lower your interest rate. When you start speaking with a customer service representative, you should first make sure that the person you're talking to actually has the ability to lower your interest rate.
As always, be polite. Try saying something like this: "I have been a good customer, and I'd like to keep doing business with you. However, my interest rate seems high, and I'd like to talk with someone about that. Do you have the authority to change my interest rate?"
If they answer yes, then keep talking. If not, politely ask if you can be transferred to someone who does have that power. Say something like: "In that case, could I please speak to a supervisor who does have that authority?"
Use other offers for leverage. If you've done your homework, you should have a credit card offer with a lower interest rate than the card you're negotiating. Even better, you may already have another card with a lower interest rate. Use that as leverage when negotiating on this card.
Say something to the effect of this: "This card currently has a 19.9 percent APR. However, my other card, a Visa issued by Citigroup, has a 13.9 percent APR. I would prefer to use your card rather than the Citigroup card if they had the same interest rate."
Offer to transfer a balance. Another tool you have in your arsenal is the suggestion of transferring a balance to the card you're negotiating. If you're successful in getting a lower rate than the card you would be transferring from, this will save you money and entice the company to lower your rate.
Say something to the effect of this: "I currently carry a balance on my Citigroup Visa. If you were willing to lower the interest rate below the rate on that card, I would transfer my balance to your card."
Be willing to play hardball. If they won't help you at all, don't hesitate to close the card. There's no reason continuing to do business with a company that does not appreciate you.
If your attempts are denied, try saying something to the effect of this: "In that case, I would like to close my account with you and pay off my balance." If they don't respond with a good offer, make sure that they send you written notification of the account closure.
Carrying a credit card balance puts a real strain on your finances. While paying the balances off is the best solution, negotiating a better interest rate is a powerful interim step that can keep money in your pocket - where it belongs.
An entire kindergarten class at Rio Vista Elementary School in Anaheim, California, has a free golden ticket to college, thanks to the generosity of a complete stranger.
Marty Burbank, an attorney and Navy veteran from Fullerton, California, went from stranger to hero after he pledged $1 million to pay the college tuition of all 26 kindergartners, The Orange County Register reports.
The 51-year-old Burbank and his wife, Seon Chun-Burbank, a professor at Vanguard University, had plans to buy a new 40-foot sailboat just a few short months ago. But that plan changed after Burbank heard a December church sermon on giving.
"Sailing has been a big part of my life," Burbank, who began sailing at age 3, told the OC Register. "(But) the boat seemed like a real selfish thing to me at that point. This is something significant that I think is going to impact a lot more people than just me."
Burbank's offer includes funding two years of community college and two years at a California state university (or the equivalent if they plan on attending a different college), plus money for books for teacher Tessa Ashton's entire class of kindergartners - the Class of 2032.
Burbank set up a private foundation for the kids' college funds, which he plans to contribute to each year until $1 million is reached. He said he will delay his retirement and he's scrapped his dream of purchasing a new boat.
"I'd rather not have a boat and get these kids through school," he told the OC Register. "Maybe one day they'll buy me a boat."
Burbank said all the kids have to do is draw a picture or write an essay each year about what getting a college education will mean for them and their families, CNN Money explains.
"I'm a strong believer in visualizing your goals, and this way they'll be thinking about this each year for the next 12 years," Burbank told CNN Money.
Burbank knew Ashton from church. He had previously donated his time as well as several gifts to Ashton's school, including a power washer, more than 1,000 notebooks and a pallet of granola bars, according to the OC Register.
Ashton's entire kindergarten class speaks Spanish at home. CNN Money said they started kindergarten knowing very little English. Ashton said she talks to them about college every day.
"I tell them that they need to sit and listen, because that's a skill they'll need when they go to a place called college," she said.
The families of the kindergartners told the OC Register that they are grateful - and overwhelmed - by Burbank's generosity.
"May God bless him always for helping people who truly need his help," Silvia Escobar, whose son Roniel Garzo is in Ashton's class, said in Spanish. "There are no words," she said of Burbank's kindness.
When adjusting for inflation, the average domestic fare has not been this low in the third quarter since 2010, when it was $370.
CNN Money reports that expansion of budget airlines has helped fuel the decline in airplane ticket prices.
The founder of Airfarewatchdog.com, George Hobica, tells CNN that major airlines are being forced to reduce their rates to compete with low-cost carriers like Spirit and Frontier:
The major airlines are flying scared and looking over their wing tips at these low-cost carriers that are definitely taking up market share, despite their horrible reputation. ... On some routes, they are matching prices dollar for dollar, so we are seeing fares 50 percent lower than a few years ago.
Low oil prices have also helped airlines.
According to Department of Transportation data, domestic airlines paid $1.44 per gallon in December. That's down from $2.32 in December 2014 - and the lowest it's been in any month since March 2005, when domestic airlines were also paying $1.44.
In light of airlines paying less for fuel than they have in more than a decade, however, Money calls reports of cheaper airfare "misleading":
When you look at it from that perspective, a 6 percent discount seems just a little bit stingy, especially when you consider that airlines hauled in a record-breaking amount of cash last year - almost $18 billion in profits in the first three quarters of 2015 alone.
The publication also points out that the $24 difference between the average domestic airfare in the third quarters of 2015 and 2014 "isn't a whopping difference" for passengers, as that savings could essentially be nullified by fees for checked bags, snacks and Wi-Fi.
Money reports that, with few exceptions, the prices of such fees "aren't budging."
If you're considering that dream vacation regardless, check out "17 Proven Ways to Save on Travel."
Did you know: Buying a smart thermostat could be a smart investment for your home?
A smart thermostat automatically learns your habits and temperature preferences every time you adjust it.
If you're someone who doesn't mind programming their thermostat manually, or if you're someone who moves often, a smart thermostat might not be for you. But if you're someone who might benefit from being able to program their thermostat remotely, investing $250 to $500 on a smart thermostat could be a sound investment.
Plus, if you're someone who forgets to set their analog thermostat, a smart thermostat could save you up to $180 in energy bills!
So just remember - a smart thermostat could be smart way to warm your home without burning your savings.
There is some bad news for people hoping to find a good deal on a home to rent or buy: The vacancy rate for American homes fell by 9.3 percent over the past two quarters, a new report shows.
Daren Blomquist, RealtyTrac vice president, says most U.S. real estate markets have too few vacant homes. In a press release, he explains the possible side effects of such a low vacancy rate:
"The razor-thin vacancy rates in many markets are placing upward pressure on home prices and rents. While that may be good news for sellers and landlords, it is bad news for buyers and renters and could be bad news for all if prices and rents are inflated above tolerable affordability thresholds."
RealtyTrac's analysis is based on the real estate website's address-level property data for nearly 85 million U.S. residential properties, defined as those with one to four units. This data - which includes foreclosure status, owner-occupancy status and equity - was then cross-checked against the U.S. Postal Service's updated data on properties that have been flagged as vacant by the postal carrier.
The analysis included 147 metropolitan areas with at least 100,000 residential properties.
The areas with the highest vacancy rates are:
Flint, Michigan (7.5 percent)
Detroit (5.3 percent)
Youngstown, Ohio (4.4 percent)
Beaumont-Port Arthur, Texas (3.8 percent)
Atlantic City, New Jersey (3.7 percent)
Other major metropolitan areas with vacancy rates above the national average include:
Indianapolis (3 percent)
Tampa , Florida (2.9 percent)
Miami (2.8 percent)
Cleveland (2.8 percent)
St. Louis (2.6 percent)
At the other end of the spectrum, the areas with the lowest vacancy rates are:
San Jose, California (0.2 percent)
Fort Collins, Colorado (0.2 percent)
Manchester, New Hampshire (0.3 percent)
Provo, Utah (0.3 percent)
Lancaster, Pennsylvania (0.3 percent)
San Francisco (0.3 percent)
Other major metropolitan areas with vacancy rates below the national average include:
While 2016 is in full swing, if you haven't thought about a resolution yet, don't give up. Maybe it's time to make one that has the potential to stick. If you're often wondering how money slips out of your wallet, consider becoming the crash test dummy for better spending habits. Test drive some of these ideas below to develop better ones.
Be your own cheerleader.
Patting yourself on the back after following through on a behavior you want to increase goes a long way to help cement a behavior. Ginger Dean, psychotherapist and website owner of GirlsJustWannaHaveFunds.com explains the power of rewards: "When making smart money choices, celebrate them by rewarding yourself. Yes, make rewarding yourself a habit. For example, when you make it through a pay period and adhere to your spending plan, treat yourself to something nice that doesn't break the bank." She points out that this creates what we call positive reinforcement, which helps you connect good decisions with positive rewards.
According to research by Wendy Wood, a social psychologist and provost professor of psychology and business at the University of Southern California, a behavior only has to be rewarded initially to form a habit. So once the habit is established, you can relax and let momentum take over.
Cheat a little.
While it's great to start the New Year off with a new idea, give yourself a lead and start with a familiar task. Repeat the task on a regular basis. Research shows you won't have to train yourself to do the task, you just train yourself to do it repeatedly. For example, if you like drinking water when you eat at a restaurant, choose to do it more frequently. Set rules for yourself, like, "When I eat out, I will order water." Before you know it, a small gesture will become a string of little actions that can have a big impact on how you spend. It can also do double duty for your bank account if you send the money you didn't spend straight to savings. Once you establish one good habit, move on to another like trimming a little bit of your grocery budget every time you shop. Start with as little as five dollars and put that in savings, as well.
Keep using the Benjamins.
Let your dollars see the light of day and allow the real thing to get some exercise. Fans of carrying cash can do this more so in the New Year if it helps you control your spending. If you know you tend to do major dollar damage in just one swipe of a credit card, then this tip might work for you. Curtail the urge to go on a spending free-for-all when using a credit card as a short term loan and pay in cash whenever possible. Make using cash a habit if you find it keeps you on track. Choose a dollar amount to withdraw on a regular basis and challenge yourself to not to go beyond that amount.
Graduate from a spending spree.
Limit how much time you spend in a store. Research shows the slower you shop, the more you spend. Get what you need and go. Set a timer if you have to or have your eyes stay glued to your shopping list, then pay and skedaddle. This way you can avoid impulse buys and filling every nook and cranny of your shopping cart with items you didn't plan to get. Side step a budget-busting aftermath and make it a habit to make short trips to stick with your spending plan.
Do a happy dance after checking out.
When you have carried out a small, smart money choice like spending less time in the store, celebrate it. As stated above, positive reinforcement can work wonders for habit formation. So if you accomplished all of your shopping in record time, celebrate your small win afterwards. So when you're looking to applaud yourself for getting out of the store quickly, think of what Han Solo said in The Force Awakens when Finn and Rey reunited: "Escape now, hug later."
If you originally couldn't bear the thought of making a resolution, reconsider. Just know that people tend to stay with activities that are manageable. Consider following some of the ideas above to take a step in the right direction when it comes to spending this year. They can be beacons for long-term financial change and help you meet your goals. They can also help you shortcut your way to success by following research that gets results. Employ one of these tips to establish a money smart habit today.
Food is among the most expensive costs in the average American family's budget. And we don't make it any easier on ourselves by dining out so often in restaurants.
In fact, the average U.S. consumer spends nearly one-third of his or her food dollars in restaurants, according to the U.S. Department of Agriculture.
By cutting back on dining out, and enjoying the occasional home-cooked meal - you remember those, right? - you can save a lot of money.
Following are nine great websites and apps that can help you save at the grocery store, or that suggest ways to stretch your ingredients further.
Cash-back and coupon websites and apps
1.iBotta: This app is a frugal favorite, and it's no wonder why: The app pays you cash back for groceries you need to purchase anyway.
Here is how it works: First, download the iBotta app. Then, look for deals on popular products. Once you find a deal you like, qualify for the offer by performing a simple activity, such as watching a video or filling out a survey.
Then, go to an eligible store - including Walmart, Target and many major grocery chains and drugstores - and purchase the item. After you have done so, take a picture of the receipt and you will be credited.
Once you have earned at least $5, you can ask iBotta to put cash in your PayPal account. This app takes couponing to the next level!
2.Checkout 51. Similar to iBotta, this app/website presents grocery cash-back offers - updated every Thursday - that you can redeem for cash back after purchasing the item and uploading your receipt.
However, unlike iBotta, you can shop at any store to redeem the offer. And you do not have to fill out surveys, watch videos or perform any other action.
Two things to keep in mind, though: The offers usually are available in limited quantities. So make sure to both purchase the item and upload the receipt promptly. Also, you must earn at least $20 in offers before you can redeem for cash.
3. Walmart Savings Catcher. Walmart is the retail giant that prides itself on its "unbeatable prices." With the Walmart Savings Catcher app, shoppers scan their Walmart receipt barcode and wait while the app quickly compares advertised prices at top competitors. If the items are available for less elsewhere, you get a refund in the form of an e-gift card.
4. Ebates. Another very popular site and phone app with frugal shoppers, Ebates lets you get up to 25 percent cash back from more than 1,500 retailers. Foodies can save if they buy anything from retailers in the Ebates Food & Restaurants category.
We recently told you how to get a free $10 Walmart gift card simply by signing up at Ebates. If you haven't done so, now is the time!
5.Coupons.com. Attention bargain hunters: Coupons.com offers free printable coupons for a wide range of grocery items, ranging from coffee to fresh chicken breasts and everything in between.
Simply install the site's coupon printer on your device, browse the extensive coupon gallery, select and "clip" the coupons you want, and print and redeem. Does it get any simpler?
You can also install the the Coupons.com app for on-the-go savings.
Apps that make grocery shopping easier
6.Out of Milk. It has happened to all of us at some point: You buy a carton of milk only to discover that your spouse picked one up, too. The Out of Milk app helps you avoid this frustrating mistake by allowing you to create and categorize grocery lists and share them with others in your household.
That way, you are less likely to "double buy" and waste your hard-earned cash.
7.Grocery Pal. Wondering where all the sales are in your area? The Grocery Pal app notifies penny-pinching shoppers of weekly savings and sales at many leading supermarkets, retailers and pharmacies. Shoppers can even redeem digital coupons with the app.
8.Supercook. "Dinner's met its match" is the slogan at Supercook, which helps you create meals out of whatever ingredients happen to be lying around your house.
Just input the ingredients in your fridge, and this clever culinary site suggests a meal. Supercook actually scans all the top cooking websites to find delicious recipes based on your available ingredients. You can even add cuisine preferences, dietary restrictions and meal types to customize your results.
And yes, folks, an app is in the works! Sign up to be alerted when it is ready.
9.$5 Dinners. Is your grocery budget spiraling out of control? If so, $5 Dinners is a smart site that may offer the frugal help you've been seeking. This site provides a wide selection of recipes for your family, all for under $5. And don't let the name fool you - $5 Dinners provides suggestions for breakfasts, lunches, snacks and desserts, too.
Do you have a favorite website or app that helps you cut the cost of groceries and meals? Share it in our Forums. It's a place where you can swap questions and answers on money-related matters, life hacks and ingenious ways to save.
Residents of states with higher state tax burdens are more likely to want to move, a new study shows.
Gallup's recently released State of the States 2015 study found that residents of states with the highest aggregated state tax burdens are 10 percent more likely to say they would like to move permanently to another state compared to residents of states with the lowest burdens.
This aggregated state burden includes state income, property and sales tax rates and is based on data from the nonprofit Tax Foundation.
Gallup concludes:
Even after controlling for various demographic characteristics including age, gender, race and ethnicity, and education, there is still a strong relationship between total state tax burden and desire to leave one's current state of residence. ...
These data suggest that even moderate reductions in the tax burden in these states could alleviate residents' desire to leave the state.
For the study, Gallup polled about 500 adults in all 50 states and the District of Columbia and categorized each state into one of five groupings, or quintiles, based on their aggregated state tax burdens.
States in quintile 1 comprise the 20 percent of states with the lowest aggregated state tax burden, and states in quintile 5 comprise the 20 percent with the highest tax burden.
The states whose residents are most likely to wish to move are:
New Jersey (which was categorized into quintile 5): 46 percent of residents would move to another state if they had the chance
Connecticut (quintile 5): 46 percent
Illinois (quintile 4): 42 percent
The states whose residents are least likely to wish to move are:
Montana (which was categorized into quintile 1): 13 percent of residents would move to another state if they had the chance
Oregon (quintile 1): 17 percent
Washington (quintile 1): 19 percent
For a list of each state's quintile and percentage, scroll down to the end of Gallup's study. According to Gallup:
Despite having a desire to leave one's state, few actually report that they intend to move permanently to another state. For example, only 12% of Connecticut residents who report they would like to move say they plan to do so in the next 12 months.
If you had the opportunity, would you like to move permanently to another state or would you prefer to continue living in your current state? Let us know in our Forums. It's a place where you can swap questions and answers on money-related matters, life hacks and ingenious ways to save.
In the kitchen, you use salt in just about everything. But what most people don't realize is that salt can be used for a lot more than cooking. Here are a few unexpected ways you can use salt and save a few bucks at the same time.
Hard-boiled eggs can be a tasty treat, but there's nothing more frustrating than having them fall apart when you try to peel them. Salt can help with that: If you add a teaspoon into the water before you heat things up, once they're done, those shells will slide right off.
Now let's tackle grease and burnt-on food, which can be a real pain to clean. Again, here's where salt steps in to save the day. Sprinkle a thin layer on the inside of your pan, then add some water and let it sit for about ten minutes. Then grab a sponge, and that grease and grime should wipe right off.
And finally, there's the dreaded fridge cleaning. But don't worry, you can ditch the chemicals for this one. Put 1/2 cup of salt and 1/2 cup of vinegar into a spray bottle, fill the rest with water, and shake! Using this solution will keep your fridge just as clean, and it won't scratch your glass either.
So while too much salt may be bad for your health, it doesn't mean it can't help you in other ways. Start sprinkling, and you'll be surprised at how much time and money you can save.
If you really enjoy perusing the aisles at Target, you're not alone. In fact, Target is among America's favorite places to shop.
The discount retailer ranks third among mass merchant sellers, behind Walmart and Costco and ahead of Amazon, according to the National Retail Federation.
Shoppers turn to the famous Target bull's-eye because they aim to save money on everyday purchases. But there are many hidden ways to chip away at Target's already-low prices.
Following are eight overlooked ways to save at Target.
1.Buy discounted gift cards
Buying gift cards at a discount can save you cash on every Target purchase. For example, Cardpool recently listed available Target gift cards that were discounted up to 6 percent.
If you aren't particularly mathy, we'll break that down: In essence, it means you are getting an extra 6 percent off anything you buy at Target when you use the card. It's a no-brainer!
2. Sign up for the REDcard
Nod your head vigorously the next time the cashier asks you if you'd like to sign up for a Target card. The retail giant offers two Target REDcards - a debit card and a store credit card. Saying yes to either of these boasts three major benefits.
5 percent off every purchase
Free shipping on every purchase at Target.com
30 extra days on returns
Of course, it's important to note that every time you open a new credit card account, you risk hurting your credit score slightly. And that is something you need to weigh before signing up for the REDcard, especially if you plan to take out a mortgage or another loan and need your credit score to be in tip-top shape.
But also remember that the drop in your credit score is only temporary, and it may be worth the small ding to your credit if you shop at Target often. We're talking 5 percent off every purchase here, people!
Cheap is nice, but "free" is tough to beat. Listen carefully, because we're about to unearth a well-kept secret: Target.com offers free samples of items at its Samples Spot page. To qualify, you simply have to answer a few survey questions. Then, Target will send the item to your home.
The biggest drawback here is that you have to work for your freebie. Target samples are only available for a limited time, so you need to check the page frequently.
4. Shop clearance first
If you are going to buy something, why not get it at its cheapest price? Hunting around the store for items marked at clearance rates is a fun challenge for some. For others, it's a headache.
But don't worry. You won't have to sacrifice savings if you fall into the latter camp. Savvy buyers can find all of Target's clearance items at one page on the website. You also will find other special offers here. For example, through Feb. 20, you can get a $10 Target gift card if you buy a Chromecast.
5. Use the Target Cartwheel app correctly
Just about every bargain shopper now realizes that signing up for Target's Carwheel app can save them money every week. However, not everyone knows how to fully exploit this savings tool.
For starters, you don't even need a smartphone to redeem Cartwheel offers. Simply go to the website to browse and assign offers to a unique barcode that you can print out and bring into the store for savings.
Target also notes that you can even take Cartwheel offers and "pile them on top of other coupons, sales and your debit or credit REDcard savings."
Use the app often for even greater savings. Shoppers are initially allowed 10 offers per transaction, but those who use Cartwheel regularly can unlock "badges," which translate to extra offers.
Be sure to check Cartwheel offers frequently. New offers come out on Sundays, but many limited-time, high-value offers pop up randomly throughout the week.
6. Bring a reusable bag
Did you know that every time you shop at Target and carry items out in a reusable bag, you save 5 cents off your purchase? Even better, Target says it gives customers "a 5-cent discount for each reusable bag they use."
Use 10 bags each week (a conservative estimate if you're buying groceries and other items for a family of four), and you've saved 50 cents. Although that may not sound like much, it adds up to $26 over the course of a year. And you're helping to protect the environment. Talk about a win-win!
7. Sign up at the Target registry
If you have a big upcoming event in your life, sign up at the Target gift registry and you can earn additional savings on the items you need.
Sign up in the baby registry and eight weeks prior to your event date, you'll get a 15 percent discount for you, friends and family to complete your registry.
Those who use the wedding registry get their discounts after the event date - 15 percent off the items remaining on the registry, plus coupons for family and friends.
Finally, the college registry offers a coupon for 15 percent off when you shop for remaining registry gifts online. It kicks in two weeks before the event date.
8. Use a cash-back website to shop
If you plan to shop from home by visiting Target.com, make sure to stop at your favorite cash-back website before making any purchases. For example, log on to the popular cash-back site Ebates.com and you'll earn an additional 2 percent cash back on your Target purchases.
Do you have other tips for saving at Target? Share them in our Forums. It's a place where you can swap questions and answers on money-related matters, life hacks and ingenious ways to save.
For Valentine's Day, we hope you bought a thoughtful gift for your significant other. It's the thought that counts, of course, but let us give you a tip or two: women like jewelry. And, when it comes to fine jewelry, you should give thought to insurance.
Fortunately, your family's everyday jewelry is probably covered by standard homeowner's or renter's insurance (at current market value less any deductible), assuming you carry such insurance. However, if you have valuable or very sentimental pieces of jewelry, the coverage may be lacking.
How can you tell whether your coverage is adequate? The following steps can help you reach the best decision.
Inventory and Appraisal - You cannot figure out if your coverage is sufficient if you do not assess what you have. You need a list of items and their current value for any insurance claim, as well as for a police report in case of theft.
Create a spreadsheet with each piece listed, along with the corresponding dollar value. Take separate photographs of all special or valuable pieces, and a "group picture" of the rest. Store the pictures in a safe place, along with all original receipts and certificates of gemstone quality - and, of course, your list. If you have a safety deposit box for some of your jewels, keep these papers with the jewels.
For heirlooms and more valuable pieces of jewelry, it is best to have them professionally appraised. Depending on the specific piece, the time and research involved, and where you live, the cost will vary. A good starting expectation is $50-$200 per piece. However, if you have made multiple purchases at a good jewelry store - and they consider you a valuable customer - they may provide appraisals at little or no cost.
Assess Current Coverage - Homeowner's or rental insurance policies can be constructed several ways. There may be blanket coverage on all valuables, a separate blanket for all jewelry, or coverage on specific pieces of jewelry. All types of coverage go up to a specific dollar value, so check your limits in all cases.
Limits vary, but ballpark figures are $1,000 to $1,500 for any single item, with blanket coverage running between $2,500 and $10,000.
You can usually obtain a rider on your existing policy to cover specific, high-value pieces of jewelry. These are known as Scheduled Personal Property coverage, or "floater" policies. They may allow a higher dollar value, fewer exclusions, and different replacement options - with appropriately scaled premiums.
Along with the dollar value, check the other policy details. For example, what exclusions apply? Is accidental loss covered as well as theft? If so, what is required to prove loss?
Replacement and Repair Options - What do you consider a proper replacement to be? Is a cash value replacement acceptable, or are there specific pieces you want to have replaced by as close of a duplicate as is possible - for example, a wedding ring handed down by generations of your family, or a customized ring or necklace from your spouse?
A policy may direct you to a specific jeweler, or allow you to select your own. If that is important to you, verify the policy terms regarding jeweler options.
Verify if appreciation is included, and what happens in case appraisal costs do not cover your desired duplication.
Check Alternatives - If your current insurance company does not offer suitable coverage through an addition to your existing policy or a comprehensive replacement, consider a homeowner's policy through a different insurer, or a completely separate policy for your jewelry.
Some insurers specialize in jewelry coverage. They may work with jewelry stores, and offer coverage to their customers, or offer independent individual jewelry coverage. You will likely pay more for this coverage, but you will probably have greater control over the replacement. If replacing customized pieces with detailed exact duplicates is important to you, these policies may be more to your liking.
We hope that these tips will provide you with guidance on choosing the best policy for your needs. At the very least, you will have a proper inventory and appraisal should you need it. Also, why not take the time this week to confirm that the women in your life have suitable insurance in place to protect their jewelry and other valuable items? Your inquiry will certainly prove more valuable and last longer than a pretty bouquet.
One day, you may decide to retrieve your FICO score, only to discover it has taken a tumble because of a seemingly small mishap on your part.
This happened to me a few years back because I misplaced a bill for a whopping $12.70 that ended up being reported to the credit bureaus. Worst of all, the problem stemmed from a charge through automatic billing on a credit card I no longer used.
The result was an 80-point decrease and several months of regret. My credit score has rebounded since then, but thinking about this small oversight still haunts me.
With my precautionary tale in mind, here are some additional mishaps that can damage your FICO score:
1. Car rental reservations
Planning to rent a car? If you use a debit card to make the reservation, the rental car company might require a credit screening, which can ding your credit score.
Here's a better option: Confirm the reservation with your credit card to avoid the unnecessary credit inquiry and settle the final bill with your debit card upon returning the vehicle.
2. Past-due rent payments
Paying rent on your own time frame may not immediately earn you an eviction notice. But that doesn't mean the landlord won't report your delinquency to each of the three credit bureaus.
My advice: If you're having trouble with rent, meet with the landlord and propose an alternative payment plan until you're caught up. That way, you can salvage your good name and credit rating.
When you check out a stack of books or DVDs, it's easy to forget to return them by the appointed time. But the consequences for this oversight can be worse than you'd think.
My local library assesses a fee of 25 cents per day for outstanding items. Once the account reaches $25, an additional fine of $7.95 is tacked on, and the entire account is forwarded to a collection agency.
Get your materials in on time. And if you lose them, fess up and pay the fees. Otherwise, you'll take a hit to your wallet in the form of fines and, potentially, a lower credit score.
4. Outstanding medical bills
We've reported on the option of making payments to ease the financial burden of major medical bills. But if you sign up and don't hold up your end of the bargain, expect to receive a call from a collection agency.
Promptly tending to the matter bolsters your chances that the payment privileges will be reinstated. However, muting the ringer or sending the calls to voice mail will eventually result in a blemish - in the form of a collection account - to your credit report. Those marks stick around for at least seven years.
5. Delinquent tax obligations
Did you receive a hefty bill from Uncle Sam's headquarters or the local tax collector for unpaid taxes? You can run, but you can't hide. They will eventually track you down and demand what they're owed.
If you fail to respond and work something out, expect your credit score to take a dive.
6. Defaulting on recurring bills
If you are slightly past due on a bill from cellphone, utility or other providers of recurring services, chances are you'll receive several notices before services are terminated.
But when they've had enough, expect to be turned over to collections and subsequently reported to the three credit bureaus. So, don't ignore correspondence or fail to settle your outstanding obligations.
7. Breached gym membership contracts
Tired of forking over your hard-earned cash each month for a gym membership you aren't using?
Understandable. But walking away without properly closing the account could cost you in the form of early termination penalties and a damaged credit score.
8. Unpaid traffic citations
Most of us are aware of the consequences associated with ignoring tickets issued by law enforcement. But what about those random tickets issued by parking services at the local university or the downtown street patrol?
Ignoring them and failing to pay probably won't land you in the slammer, but you may be taken aback when the amount - plus a host of fees - shows up as a collection in your credit profile.
9. Closing credit cards
Now that your credit is in stellar condition, you may decide to cancel all credit cards with zero balances. Or maybe your credit card issuer will close the account because of inactivity.
However, the effect on your credit score may not be pretty, because you lose a portion of your available credit. That increases your credit utilization ratio, which accounts for 30 percent of your credit score. An increase in this ratio has a negative effect on your score.
Ten percent of your FICO score is determined by how you shop for credit. According to MyFICO:
If you have been managing credit for a short time, don't open a lot of new accounts too rapidly. New accounts will lower your average account age, which will have a larger effect on your FICO(R) scores if you don't have a lot of other credit information. Even if you have used credit for a long time, opening a new account can still lower your FICO scores.
So, remember that the next time you're offered a credit card at the checkout counter that can save you a decent amount of cash on the purchase. The price of that one-time savings may be a lower credit score.
11. Inadequate credit mix
If you're looking to establish or rebuild your credit, it may be necessary to apply for a credit card unless you plan to go another route. (See "7 Ways to Build Your Credit Score Without a Credit Card"). But opening a single credit card account is likely to have only a modest impact on your score.
The credit mix usually won't be a key factor in determining your FICO Scores - but it will be more important if your credit report does not have a lot of other information on which to base a score.
12. In-house zero-interest financing
Strapped for cash but in desperate need of that new mattress or laptop? It may be tempting to take advantage of zero-interest financing if it's offered by the seller. But if the credit line is only equal to the total purchase amount, be prepared for a spike in your debt-to-available-credit ratio.
Simply put, your credit score will take a tumble because 30 percent of your FICO score is calculated by the amount owed to creditors.
13. Maxed out credit cards
Have you ever swiped your magic plastic to cover an expense, knowing full well it was maxed out? Chances are you incurred a penalty and a reduction in points to your FICO score because of an inflated utilization ratio.
Have you experienced a surprise hit to your credit score? Tell us about it in our Forums. It's a place where you can swap questions and answers on money-related matters, life hacks and ingenious ways to save.
After a long week at work, come Friday you may be aching to unwind with a nice dinner and maybe a martini or two.
But nights on the town can be an expensive indulgence. Dinner, drinks and Uber rides can add up quickly, taking a big chunk of money out of your hard-earned paycheck.
That doesn't mean you have to spend your nights at home alone, watching Hugh Grant movies with a box of wine and a sleeve of Thin Mints. With a solid plan of action, it's possible to paint the town red without going broke. Learn more by checking out our guide to going out on a budget:
Withdraw cash for the night. Decide how much you can afford to spend on your night out beforehand. Withdraw the amount of cash you've allocated for the night so you won't lose track of how much you spent later on. When your wallet is empty, you'll know it's time to stop spending.
Find a designated driver. Cab rides and ride sharing can be one of the most expensive parts of going out. Look out for both your safety and wallet by finding a designated driver who can drive you and your friends to and from the bar. Of course, it's not always easy to convince a friend to be a designated driver - try arranging an alternating system with your friends, where one person agrees to be the designated driver each week.
Start at home. You can save money by starting your night at home. Invite your friends over to share a few beers, and you'll end up spending less money on drinks when you're out. Drinks at a restaurant or bar can cost upwards of $8, but a six-pack from your local grocery store can cost as little as $6.
Hunt down restaurant deals. On restaurant deal sites like Restaurant.com, you can purchase gift certificates to local restaurants at more than 50 percent off. Simply plug in your ZIP code and you'll be presented with a variety of deals for restaurants in your area. You can also check out discounted gift card sites like Raise and Cardpool to score gift cards to popular chains at a discount.
Split meals. Many restaurant dishes fall well beyond the range of the USDA's recommendations for sodium, fat and calories. Splitting a meal is not only a healthy choice, it's a cost-conscious one. Consider ordering a salad and a main course to share with a friend. Pack up leftovers, and you'll have lunch taken care of tomorrow.
Look for specials. Once you're finished with dinner and ready to hit the bars, do a bit of homework beforehand to find out which bars have the best drink specials. Search local event guides to find listings of promotions and specials, and plan your night accordingly. At a bar, don't be shy about asking the bartender if they're running any drink specials you might have missed.
Stick to beer. Cocktails, wine and shots are typically marked up anywhere from 350 to 500 percent at bars. With beer, you often get the best value for your money - especially if you can buy beers on tap or by the pitcher.
Avoid brand-name liquors. If you prefer liquor to beer, make sure to specify that you would like the house alcohol rather than the brand-name in your mixed drinks. Many bars will charge more for premium spirits, so it's a good idea to be specific about your house alcohol preferences to avoid being charged top-shelf prices.
Finish at home. Instead of staying out late and shelling out more money at the bar, consider bringing the party back to your house. You can continue to enjoy each other's company (and continue to drink) in the safety of your own home - where the drinks aren't marked up, you don't have to tip and there's never a cover charge.
Stay in. Your friends won't be devastated if you turn down an invitation to go out every once in a while, and they're likely to be understanding if you explain your reasons. Next time your friend asks you to come out, try saying something like, "I've really had fun going out with you before, but I can't make it tonight. I'm really trying to stick to my budget." Everyone can identify with wanting to be more responsible with their spending habits. By deciding to stay in one night, you allow yourself a little more wiggle room next time you go out. You're bound to enjoy your next night out much more when you're not pinching pennies.
Remember just because you stay home doesn't mean you can't enjoy yourself. Take the time to relax with a bubble bath, cook a delicious dinner or read that book you've been meaning to finish.
Did you know that President's Day weekend features some of the biggest sales of the year? While often overshadowed by "bigger" retail holidays, you can actually save bundles on President's Day - if you know what to shop for!
Did you know: Buying a smart thermostat could be a smart investment for your home?
In the kitchen, you use salt in just about everything. But what most people don't realize is that salt can be used for a lot more than cooking. Here are a few unexpected ways you can use salt and save a few bucks at the same time.
