World Savings: 6.01% APY for 15-Month Internet CD

As I mentioned yesterday (Capital One cuts Money Market rate, will others follow?), I had been keeping an eye on the 5.91% APY 13-month internet CD offered by World Savings. I went to check out their web site today, and the previous deal had been replaced with a 6.01% APY 15-month internet CD.

I found that hard to pass up, so I gave World Savings a call and was connected with a CSR almost instantly (a good sign). Applying for the CD was easy, but for some reason you have to mail them a check to fund the account. I figure that my check won't arrive until sometime next week due to the bank holiday, but the CSR stated that would be no problem since this rate is locked in for 10 days after you apply.

It's a good deal, now I just need to keep on top of the interest rate situation when my CD matures in 15 months.

Free Stuff: Box of Weight Watchers cereal

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Weight Watchers® has created six amazingly tasty cereals that are a perfect part of breakfast or snacking. Like Cinnamon Cluster Crunch, Flakes n Fiber and Honey Almond Crisp with Real Blueberries.

So have breakfast on us! Get a coupon for your free box of Weight Watchers® cereal right now. It's easy. Simply fill out the form below and a coupon for a free box will be mailed out right away.

Have Breakfast on Us - Get your coupon for a free box!

Verizon DSL drops new fee after FCC inquiry

Under pressure from the FCC, Verizon has decided to drop the backdoor DSL price increase that I complained about last week (Verizon DSL Sneaks in Another Price Increase):

From the USA Today article, Verizon abandons plans for a high-speed Internet surcharge:

FCC's "truth in billing" rules require companies to be forthcoming about their fees, and the agency could have forced Verizon to clarify its public statements about the DSL surcharge.

Verizon had argued that its DSL fees, which range from $1.20 to $2.70 a month, were necessary because of additional supplier costs. However, since Verizon is its own broadband supplier, the fees would be going from one company pocket to another.

"We're paying ourselves, but our costs are increasing, nonetheless," Rabe said last week. "We have additional costs we're covering with this rate increase, which is essentially what this is."

Score one for the little guys!

Capital One cuts Money Market rate, will others follow?

Capital One just cut the APY for the money market account that I use for my business from 5.00% to 4.80%. Since they were late to the industry-wide rate increases earlier this year, I'm wondering if this is a harbinger of things to come. Will rate leaders like EmigrantDirect and HSBC Direct follow?

I have been of the opinion that the FOMC is not necessarily done raising rates yet, but the market seems to be interpreting the minutes from their August meeting as a sign that no more rate hikes are on the horizon (see Is the Fed really done?).

Moving some cash from my online savings account and locking in current rates for a longer term has been in the back of my mind for a while now. The World Savings 13-month CD @ 5.91% APY is attractive, but I have held off since they have no local presence and require you to fund the CD by check, which kind of defeats the purpose of an internet CD. Still, it might be time to stick $10k in there.

I've also been keeping an eye on U.S. Treasury Notes, but rates on them have been dropping since market sentiment seems to believe that the FOMC will be cutting rates if the economy slows next year. I still don't think that rate cuts are a given, since a hurricane, Mideast tensions, or a cold winter could cause a spike in energy prices (and therefore inflation). I guess that's why bond traders get paid well.

Aug 31 Issue T-Bills: 4 Week Yield (5.32%) Leads the Pack

As I mentioned in an earlier blog entry (T-Bills: An Alternative to CDs), I have been buying 4 week T-Bills in favor of longer term Treasuries until the FOMC meets again on September 20th.

That strategy paid off for me with the auction this week, since the yield for 4 week T-Bills (5.32%) topped both 3 month (5.19%) and 6 month bills (5.24%). Using this handy T-bill tax equivalent yield spreadsheet, I'm happy to see that my tax equivalent yield for this bill will be 5.62%. Hopefully, I will feel the same way when this bill matures in 4 weeks.

Cashing Out Your 401k Plan: Just Say No

I was reading a 401k study from Hewitt Associates which found that 45% of 401k plan participants took a cash distribution when they left their jobs. Apparently this trend is more prevalent for 401k accounts with low balances and for younger plan participants (who are more likely to have a low 401k balance).

It didn't take much effort to find that there are many people considering cashing out their 401k accounts to do things like pay off credit card debt, medical bills, student loans, or to buy real estate. It is alarming to see how many people seem to think of their 401k account as a checkbook. Here are three of the many examples that I came across:

• 401k: Cash out to pay credit card debt?
• ...cash in a 401K ?
• Should I use my IRA to pay off credit cards?

If you find yourself in a situation similar to one of the above links, please be aware that income taxes and a 10% penalty (see IRS 401(k) Resource Guide) will take a nice bite out of that 401k balance. The 10% penalty along with state and federal income taxes could easily cut your 401k balance by a third.

For example, suppose a 25 year old has $7,000 in credit card debt and wants to cash out a 401k (with an $8,000 balance) to pay it off. After penalty and tax, only about $5,000 of that 401k money would remain (leaving $2,000 in credit card debt). It is also important to consider the future 401k growth that would be sacrificed by cashing in early. If the money was left in the 401k until age 65, it would be worth about $200,000 (@8% return) even if another 401k contribution was never made. That is the power of compounding.

Even worse, if the credit card debt continues to pile up after it has been paid down with the 401k cash, then you are right back where you started (minus your 401k account).

Use Less Gasoline: Find a Carpool Online

Even with skyrocketing gasoline costs, American thirst for gasoline continues to increase. Although I see the media hyping efficient hybrid cars and alternative fuel sources, I wanted to find out more about an old-fashioned way to conserve fuel: carpooling.

I remember my father carpooling to work with a couple of co-workers during the oil crisis in the 1970's. His carpool was created when a few people signed a sheet of paper on a bulletin board at work. I was wondering what kind of resources were out there today for someone to find a carpool match.

I found two web sites of interest:

• eRideShare.com
eRideShare.com is a free service for "connecting commuters, or travelers going the same way" for residents of the United States and Canada. It allows potential carpoolers to meet in person via Meetup.com and also shares rideshare listings with Craigslist.
• Carpoolworld.com
Carpoolworld.com is also a free service for finding a carpool in your area. It is a carpool matching site for pretty much any country in the world, but its web site is less polished than eRideShare.com.

Factoid from eRideShare.com:

"A forty mile total daily commute costs about $2600 per year, estimated as of 2003. Ridesharing with one other person can save you $1300. Double the figure for an eighty mile total daily commute."

I've never made an online "carpool connection", but it is an interesting concept. It might be worth looking into when I have a long commute to a client site some day.

My DIY Car Repair = $590.70 Savings

I was driving around in my Nissan a few weeks ago and the "Check Engine" light came on. After I got home, I decided to do some research to try to find out what the problem was.

I found the VBX Maxima web site, which showed me how to read the error codes from my car's Engine Control Unit (ECU). According to the error codes, I had problems with an oxygen sensor and a knock sensor. I reset the ECU error codes, but the knock sensor code came back almost immediately.

I eventually called the local Nissan dealer (or "stealer") to ask what a knock sensor replacement would cost. I was shocked when the service advisor answered "...about six hundred dollars". In a daze, I hung up the phone and decided to do some more research on Nissan knock sensor replacement.

Next I found the motorvate web site, which showed how to replace the knock sensor on a Nissan Maxima. It seemed doable, so when I found a place where I could buy a knock sensor for $60, I decided to try to replace the part myself. While I was at it, I figured that I would also do an oil and filter change and rotate the tires.

Here is a cost comparison between my parts cost, and dealer knock sensor replacement quote and prior dealer maintenance costs:

Item	My Cost	Dealer Cost
Replace Knock Sensor	$60.00	$600.00
Oil & Filter Change	$16.77	$28.97
Tire Rotation	NONE	$38.50
Total	$76.77	$667.47

By doing this work myself, I kept an additional $590.70 in my pocket! I finished everything this weekend, and my ECU knock sensor error code has disappeared. Hopefully nothing else will go wrong before I have to take my car in for its state auto emissions test in a few months.

Sovereign Bank Warns of Data Breach

Bank warns customers personal data may have been breached

Sovereign Bank is the latest bumbler to mishandle personal data for thousands of customers. According to the Boston Globe article, the data was on three laptops stolen from vehicles at two undisclosed Massachusetts locations.

Can someone please explain to me why it is necessary for personal customer information to be carried around on laptop computers and why some governing body doesn't fine a corporation an obscene amount of money for such negligence? It's time to start requiring some accountability for this irresponsible corporate behavior.

A bit of disclosure: we have a checking account with Sovereign Bank in the family. I don't know if our data was compromised yet, but we will find out and take appropriate action. I had to initiate a fraud alert on my credit report and change my credit card account number earlier this year when the Boston Globe leaked my personal information. Here we go again...

DIRECTV $5 Monthly Credit for DSL Users

From the TiVo Community DIRECTV Receiver with TiVo Forum:

"Get a $5 credit on your DIRECTV bill each month for up to 12 months when you complete and mail in this DSL User Credits Redemption Form and a copy of your most recent bill for DSL or ADSL services* dated anytime between February 15, 2006, and December 31, 2006.** Requests must be postmarked by 4/30/07.

QUALIFIED SERVICE PROVIDERS FOR DSL USER CREDITS OFFER:

AT&T Verizon* BellSouth* Qwest* Sprint ALLTEL Citizens Cincinnati Bell CenturyTel SBC Yahoo! Earthlink Covad Speakeasy

* Customers receiving discounted DSL and DIRECTV bundled service from Verizon, BellSouth or Qwest are not eligible."

Qualified DSL Provider List (pdf)
Redemption Form (pdf)

Should You Sell Those Savings Bonds?

You asked:

"I have some I Bonds that I bought in April 2003. How much would they be worth if I cashed them in today and what is the interest rate (and is it fixed or adjustable)?"

The person that asked this question has some I Savings Bonds ("I" is for inflation) that they are considering selling to pay some bills.

To help make an informed decision, let's start by taking a quick look at I Savings Bonds (I Bonds). I Bonds are a savings product issued by the United States Treasury, which are designed to earn you interest and protect you from inflation. Here are some characteristics of I Bonds that are relevant to this discussion:

• The interest rate is made up of two parts:
• A fixed interest rate that is set when the bond is purchased
• A variable interest rate (reset every 6 months) based on Consumer Price Index (CPI-U) data
• Interest is paid on the first day of each month
• Like T-Bills, I Bond interest is exempt from state and local income taxes
• Tax on interest is deferred until the tax year the bond is redeemed
• They must be held for a minimum of 12 months
• If they are sold less than 5 years after the purchase date, the last 3 months of interest are forfeited.

Now, suppose you bought a $1000 I Bond in April 2003. Using a savings bond calculator from TreasuryDirect or Savings Bond Advisor, we can see that as of August 2006 this bond is worth $1,140.80 and currently has an interest rate of 7.35% (1.6% fixed, 5.5% variable).

Since this bond is less than five years old (and 3 months worth of interest would be forfeited upon redemption), you would be giving up interest earned at 7.35% if you redeemed it now. If you wait a few months, you can keep all of that interest earned at 7.35%.

In October, the variable portion of the interest rate for this bond will be readjusted and it will be earning an interest rate of 2.61% (1.6% fixed, 1.01% variable). If you want to cash in this bond, I would wait until at least December 2006 since you would forfeit 3 months of interest at the much lower rate of 2.61%.

Also, since the interest for December will be paid on the first day of the month, I would redeem the bond on December 1st. Since your I Bond is worth the same amount of money if you redeem it on December 1st or December 31st, you can maximize your return by redeeming the bond early in the month and putting the proceeds in some other interest-bearing investment.

For more information on investing in US Savings Bonds, I recommend you check out TreasuryDirect.gov, Tom Adams' (author of Savings Bond Advisor) Savings Bond Advisor site and Mel Lindauer's (co-author of The Bogleheads' Guide to Investing) I Bond Tutorial.

American Children Lack Basic Money Management Skills

If the United States is one of the richest countries in the world, why are there so many reports of people who have mismanaged their personal finances to self-destructive levels (Exhibit A: Big Spender: A Financial Intervention) ?

Many times I read the modest Business section of the Boston Globe and find something that leaves me wondering what the world will be like when my children are adults. Today's installment is in a Globe column by Steve Bailey: Teaching $ and sense.

Bailey is concerned (and rightly so) about what awaits young adults who were not required to take any personal financial management courses during their school years:

"Managing your finances -- your life -- isn't an optional skill today. We've moved into ``the ownership society," which roughly translates to: ``It's your problem, pal." Companies are not walking but running away from the historic pact they had with their employees. The closest most of today's students will come to an old-fashioned pension is to read about it in a history book."

Young adults today will probably not have a company pension or Social Security to provide for them in their old age. There is a strong need for them to learn how to save and invest at a young age so that they will the have some financial resources for the day when they cannot work due to age or illness.

Currently, the brunt of a child's financial education burden is placed with their parents. I can only imagine how many young people are learning poor money management skills by watching inept parents make one financial blunder after another.

I believe that a teenager who takes a personal financial management course along with English, math, and science would gain a lifetime of financial empowerment. Even a basic understanding of the following topics would make the next generation of Americans a financial force to be reckoned with:

• Saving and living within one's means
• Balancing a checkbook
• Purchasing and financing homes and automobiles
• Maintaining a good credit score
• Understanding stocks, bonds, and mutual funds
• Saving for retirement with 401k's and Roth IRA's
• Using credit cards responsibly

How motivated would a 16 year old be to make an annual Roth IRA contribution if you could show them how it would make them a millionaire at retirement?

Hopefully very motivated, since their future financial security depends on it.

Another Painful HMO Premium Increase

Being self-employed, I have the fortune (or misfortune) of knowing exactly what it costs for my family to have a basic HMO health plan. I can verify that the double digit increases in premiums reported by the media are all too real (Healthcare premiums to leap again).

I opened the 2006-2007 renewal notice for my health plan a couple of weeks ago, and was greeted with a 12% price increase. For the second time since 2001, I have decided to downgrade my HMO plan by agreeing to pay larger co pays and deductibles. For the privilege of doing so, I was generously offered a 2% price increase increase.

Since 2001, my health care premiums have increased 51% (including two plan downgrades). This HMO Premium History graph shows the grim details:



It appears that skyrocketing healthcare costs will eventually push me into the waiting arms of a High Deductible Health Plan (HDHP) with Health Savings Account (HSA). I have been resisting the change, but I think that sometime soon this will be the only affordable health care option for many Americans. If I am faced with another double digit increase in premiums one year from now, I will seriously consider replacing my HMO with an HDHP/HSA.

T-Bills: An Alternative to CDs

I am always trying to find new ways to maximize the return on my cash holdings. Early this year, I jumped on board when the high yield savings accounts started offering 5% rates as the FOMC continued raising the discount rate.

In April, I started following the FatWallet discussion on Treasury Bills. Treasury Bills (T-Bills) are a short-term investment vehicle offered by the U.S. Treasury. Individuals can purchase T-Bills at auction directly from the Treasury via their TreasuryDirect web site or through a broker (like Fidelity or Vanguard).

TreasuryDirect allows individuals to purchase 4, 13, and 26 week T-Bills at noncompetitive auction on a weekly basis. The 13 and 26 week bills are auctioned every Monday, while the 4 week bills are auctioned every Tuesday. All bills are issued on the Thursday after the auction. They can be held to maturity or sold on the secondary market (an additional $45 fee at TreasuryDirect).

T-Bills are similar to 1, 3, and 6 month CDs with one major difference: T-Bill interest is exempt from state and local income taxes . This tax exemption is particularly beneficial if you live in a state with a high income tax rate (like 9.3% max in CA).

Unfortunately, comparing the tax-adjusted return of a 3 month T-Bill at 5.04% and a 3 month CD @ 5.50% isn't necessarily as simple as finding the difference between the two numbers. Since state income tax rates vary, one of the helpful contributors to the FatWallet thread has developed a handy T-bill tax equivalent yield spreadsheet.

Using the default data included with this spreadsheet, let's compare yields for states with various income tax rates: high (CA 9.3%), medium (MA 5.3%), and none (TX 0%):

APY Type	CA (9.3%)	MA (5.3%)	TX (0%)
Unadjusted	5.132%	5.132%	5.132%
Non-Itemizers@15%	5.762%	5.473%	5.132%
Non-Itemizers@25%	5.858%	5.522%	5.132%
Non-Itemizers@28%	5.893%	5.540%	5.132%
Non-Itemizers@33%	5.959%	5.573%	5.132%
Non-Itemizers@35%	5.989%	5.588%	5.132%
Itemizers	5.658%	5.419%	5.132%

From this data, we can see that the CD @ 5.5% is always a better deal for Texas residents. Conversely, the T-Bill is always a better deal for California residents. For Massachusetts residents, the best deal varies depending on the individual tax situation.

Looking at the Recent Bill Auction Results at TreasuryDirect, you can see that T-Bill investment rates rise and fall along with market sentiment. Since the FOMC decided to pause discount rate increases "for now" on August 8th, it's not clear to me if now is the time to lock in current rates for the longer term due to future rate cuts.

I will personally be sticking with 4 week bills at least until the FOMC meets again on September 20th. Due to potential inflationary pressures from the volatility of global energy prices, I believe that we're not done with interest rate hikes yet. I wonder if I will feel the same way in six months?

Gift from the RMV: 10% Home Depot Coupon

I received my car registration renewal information in the mail today and found a nice surprise tucked inside the envelope: A Coupon for 10% off a Home Depot purchase. Since this coupon was included with some other junk mail-type inserts, I figure that the RMV is trying to increase revenue by including advertising in their mailings.

Although this coupon would have come in handy last year when we bought a new stove and microwave, I don't have any large home-related purchases to make at the moment. The coupon has an 10/31/06 expiration date and a max discount of $200, so I can afford to wait a while before using it. If I don't end up needing it, I'm sure I won't have any problems swapping it for something else that I can use.

Verizon DSL Sneaks in Another Price Increase

Over the weekend I received the following email from my good friends at Verizon:

Important Information About Your DSL Account Dear Valued Verizon Online Customer, Effective August 14, 2006, Verizon Online will stop charging the FUSF (Federal Universal Service Fund) recovery fee. We will stop being assessed the fee by our DSL network suppliers. Therefore, we will no longer be recovering this fee from our customers. The impact of the FUSF fee is as follows: for customers of Verizon Online with service up to 768Kbps, the fee eliminated is $1.25 a month; for customers of Verizon Online with service up to 1.5 Mbps or 3Mbps, the fee eliminated is $2.83 a month (based on current FUSF surcharge amounts). On your bill that includes charges for August 14, 2006 you will see either a partial FUSF Recovery Fee or no FUSF line item at all, depending on your bill cycle. Starting August 26, 2006, Verizon Online will begin charging a Supplier Surcharge for all new DSL customers, existing customers with a DSL monthly or bundle package, and existing DSL annual plan customers at the time their current annual plan expires. This surcharge is not a government imposed fee or a tax; however, it is intended to help offset costs we incur from our network supplier in providing Verizon Online DSL service. The Supplier Surcharge will initially be set at $1.20 a month for Verizon Online DSL customers with service up to 768Kbps and $2.70 per month for customers with DSL service at higher speeds. On balance your total bill will remain about the same as it has been or slightly lower. For more information, see the Announcement in the Help section of Verizon Central, located at http://central.verizon.net We regret the need to add this Supplier Surcharge, but we thank you for choosing high speed Verizon Online DSL. We appreciate and value your business. Sincerely, Verizon Online Broadband Customer Care Team

So I will no longer be subject to the $2.83 FUSF recovery fee, but instead will be charged an additional $2.73 "Supplier Surcharge". That sounds like a price increase to me, Verizon! While I can use my additional 10 cents per month to pad my retirement savings, Verizon gets to pad its profits by an additional $2.73 per month. Come on FOMC, how can inflation be so tame if suppliers can keep raising prices at will?

Track Wasteful Expenditures

There's an article by Humberto Cruz in today's Boston Globe that hit home with me: To save more for retirement, first track the wasteful expenditures.

This piece was prompted by a reader who apparently wants to work forever and doesn't know how to save:

"I don't plan on retiring. I don't have enough money saved and believe retirement is the path to early death (too much time with nothing to do). We all know we aren't saving enough even though we deny it. We may feel guilty and may wish we could save, but there simply isn't enough income. OK, there is a way to do it but few of us are prepared for the sacrifices. Your columns need to focus on how to save."

I don't know why I'm surprised when I see how naive and unrealistic people can be. What happens if you have no savings and can no longer work due to health problems? What if you're a downsized fifty-something year old worker who can't find a new job? I firmly believe that you have to hope for the best, but plan for the worst. Unfortunately, some people just don't get it.

I track my expenses with Microsoft Money software so I know exactly where my money is going (see Where Does Your Money Go?). I encourage everyone to do the same and cut the fat from their budgets.

"A penny saved is a penny earned."
-- Benjamin Franklin

Finding Magazine Subscription Deals

I just got my last issue of SmartMoney magazine from the free 3 year subscription that I scored a while back. On the attached renewal card they offered me the bargain price of 12 issues for $15.

Obviously, the first thing I did was start to look around for a better deal. Buried on the SmartMoney.com web site, I found that I could get a one year gift subscription (12 issues) for $12: link. I liked that because of the lower price and because gift subscriptions are not automatically renewed by the publisher at their inflated rates.

My next stop was MagazinePriceSearch.com. The best deal that they list is 12 issues for $10 at DeltaMagazines.com, which is an even better deal.

Finally, I checked out possible magazine discounts at Upromise. Upromise is a rewards program that gives you money for college savings when you make a purchase from a Upromise contributing company. I found that Upromise offers a 25% rebate on magazine subscriptions when you click on their link for Magazines.com. Magazines.com sells a 12 issue SmartMoney subscription for $12, which would be $9 after the Upromise rebate.

I decided to buy from Magazines.com and saw the option to pay with Google Checkout. I remembered that Google Checkout offered a $5 bonus if you made your first purchase with a Citibank credit card by September 15th, 2006. I also found a Google Checkout coupon code for $10 off a $30 purchase at Magazines.com (google806). I decided to add a $26 subscription to Consumer Reports to my order take advantage of all of the available discounts:

Item	Cost
12 issue SmartMoney subscription	$12.00
13 issue Consumer Reports subscription	$26.00
$10 of $30 Google Checkout coupon	-$10.00
$5 Google Checkout Citibank bonus	-$5.00
25% Upromise discount	-$9.50
Final Cost	$13.50

My final cost for the 2 magazine subscriptions was $13.50, which is lower than the $15 I would have paid just to renew SmartMoney with the attached renewal card. Hopefully I'll do as well when these subscriptions expire next year.

Free Stuff: Schick Quattro Titanium Razor and Proctor & Gamble Bundle

From the FatWallet Free Stuff Forum:

• Free Schick Quattro Titanium Razor - link
  (My free razor showed up about 2-3 weeks later)

• Free Proctor & Gamble Bundle for "influential moms" - link

Big Spender: A Financial Intervention

I've started watching an entertaining new show on the A&E Television Network called Big Spender.

I must admit that I find shows that document people's financial mismanagement to be a guilty pleasure of mine. How could you not be tempted to watch these financial train wrecks with episode descriptions like this:

"Anna and Frank are shopping away their dreams. Regularly spending more than double what they earn every month and one month behind on their mortgage, the couple has decided to forgo another mortgage payment to take their family on vacation. With the finances chipping away at their marriage and their dream home they just purchased in jeopardy of foreclosure, Anna and Frank are in desperate need of an intervention. Larry Winget hosts."

The show targets people whose personal finances are completely out of control and subjects them to a financial intervention led by the show's host, author and motivational speaker Larry Winget. A dead ringer for Randy Quaid's evil twin brother, Winget bluntly tells these people exactly what they need to hear to get their finances under control. I think it's refreshing to hear someone tell it like it is.

Big Spender is on the A&E Television Network, Sunday at 5:30 EST. Episodes are 30 minutes long, but I wouldn't mind seeing that expanded to one hour so that more financial details could be shared with the viewer. Even so, I recommend setting your TiVo to record this show and give it a shot. I know I will be watching...

Strategy: How to Save Money on Groceries

As I mentioned in an earlier blog entry (Where Does Your Money Go?), I made some changes to my grocery shopping habits in an effort to reduce expenses. My strategy of buying whatever I wanted with little regard for prices obviously wasn't getting the job done.

After a bit of research, common sense, and trial and error, I came up with a grocery shopping strategy that has worked well for me (resulting in a 28% decrease in grocery spending in the first year). The premise is simple:

Determine your "buy price" for items that you buy on a regular basis and stockpile them when they can be bought at or below that price.

Here are my grocery shopping rules:

• Know your prices

  The first step is to educate yourself about prices. If you buy the 31 load box of Tide detergent every month, make sure you know the everyday price for Tide at your local Safeway, Walmart, Walgreens, etc. Now, remember the time you got a really good deal on that box of Tide? That is your buy price. The store makes their money when you buy Tide at the everyday price, but you should wait to buy Tide until you can get it for your price.

  It will take some time to get up to speed on prices. Try keeping a price book until you can identify a good price on demand. After you've been doing this a while, you will have your own set of buy prices like paper towels rolls for 50 cents, canned tomatoes for 16 cents, a box mac & cheese for 33 cents, etc.

• Shop at the right stores

  Did you know that a grocery chain may have different prices for the same item at different stores? I had always bought groceries at the nearest supermarket (6 miles from home). That particular store had no local competition, so there was little incentive for them to have lower prices. One time I happened to be shopping at a different store in that chain (11 miles from home) and was surprised to see that the everyday prices for many of the items that I bought on a regular basis (milk, bread, steak, produce, chips) were lower than what I had been paying at the store closest to home.

  What was the difference? COMPETITION! The store with the lower prices had a competing grocery chain a few hundred yards away. However, things got even better for consumers when a Super Walmart opened down the street. Traditional grocery stores are terrified of Walmart! Once Walmart came to town, the flood of price cuts, coupons, promotions, and generous sales really started to take off.

  I have shopped at these two grocery stores for three years now and take advantage of the deals that each offer every week. I also pick up items at CVS or Walgreens when they have a good deal (which can be often) and even spend some money at Walmart every few weeks.

• Stockpile items when the price is right

  We've established that you should buy in quantity when you find an item at your buy price. This is called stockpiling. The beauty of a stockpile is that when you have a bunch of paper towels that cost you 50 cents per roll, you have a supply to last you until you can buy more at 50 cents per roll. The less informed shoppers can continue pay the regular price of one dollar per roll.

  When building your stockpile, consider that some types of products usually go on sale at certain times of the year. For example, things like soda, ketchup, hot dogs, and chips are on sale quite often during the warmer months when everyone is cooking on the barbeque. Similarly, things like baking ingredients, canned goods, and spaghetti sauce are on sale during the Fall and Winter. Also, don't be alarmed if you grocery spending temporarily increases when you start building your stockpile. Once your stockpile is built, you will see your spending decrease since you've started shopping smarter.

  It is also important to keep in mind that you will need to store all this stuff somewhere. Basically, don't buy 50 multi packs of toilet paper if you have no where to put it. I keep my stockpile in the basement: a stand up freezer and a shelving unit from Home Depot have done the trick for me.

• Identify good deals in the sales circular before shopping

  You need to spend a little time doing your homework before you head out to the store. Look for items that you can buy at your buy price taking into account sales, coupons, and promotions. For a little help, here are a few web sites that can help you identify deals at your local stores:

  • The Coupon Mom
  • The Grocery Game
  • Hot Coupon World (particularly good for CVS Drugstore deals)
  • dealideal.com
• Load up on coupons

  The best deals can be had when you combine a good sale with coupons. Knowing that, I try to get my hands on as many coupons as I can and I keep them until they expire. An important thing to keep in mind when accumulating coupons is to stay organized!. I have seen other couponers who organize their coupons in a large accordion-style folder, but I find it easier to keep the ones that I will use sorted by category in a small coupon wallet. Do whatever works for you.

  There are many ways to obtain coupons locally, although buying the Sunday newspaper for the SmartSource, Valassis, and Proctor & Gamble coupon inserts is the most obvious option. Another good source for coupons is to get the ones that others have discarded in recycling bins. In fact, I have had some of my best finds in the recycling bin at my local Post Office.

  Does your store offer self-checkout? Check them for Catalina coupons (printed out at the register when you buy certain items) that other shoppers have left behind.

  Coupons can also be found in many other places like from friends and family, grocery circulars, magazines, library or foodshare coupon exchange bins, on item packaging, and from in-store blinkies (coupons found in a dispenser with a blinking light).

  Coupons can also be obtained online. There are several web sites out there that give you a preview of coupons that will be in the next Sunday paper, as well as provide an archive of coupons from previous weeks that you can refer to when trying to match coupons to deals in your local store's sales circular. My favorite coupon preview site is the Taylortown Coupon Preview. Please note that since the coupon inserts do vary by region, you may not get all of the coupons listed at this site in your local Sunday paper. However, this site (and many others) do allow you to order multiples of any coupons that you may be interested as long as supplies last.

  Ebay is another great resource for obtaining coupon multiples. If you're looking to stock up on Tide detergent, you can easily see what's available by searching ebay for "Tide coupon". If someone is having an auction for some coupons that you want for a fair price (including shipping), be sure to bid on them before someone else does!

  There are also many regional coupon and deal sharing web sites out there. I get my local coupon fix from the Yahoo group New England Couponing. It's a group of really nice folks who share information on coupons and grocery deals throughout New England. Sign up and I guarantee that some veteran couponers will be able to teach you a thing or two about saving money.

• The rest
  • Shop at stores that offer double coupons.
  • Never go shopping without a list.
  • Shop by price, not by brand.
  • Get a rain check when a sale item is out of stock.
  • Don't forget to take advantage of deals at drug store chains (Walgreens, CVS, etc).
  • Take advantage of mail in rebates.
  • Ask if a store accepts competitor's coupons.

Minor League Baseball: A Family Bargain

We recently headed to Pawtucket, RI to catch a Pawtucket Red Sox game. The "PawSox" are the AAA minor league affiliate of the Boston Red Sox.

PawSox games offer a family-friendly activity at an affordable price. McCoy Stadium (renovated in 1999) is a clean, comfortable, and fun place to take in a ball game. It seats about 10,000 fans and has free parking on a first come, first serve basis ($2 for late comers).

However, the best part about attending a minor league baseball game is the bargain price. The numbers really jump out at you when you compare prices for a family of four to attend both a PawSox game and a Boston Red Sox game. The PawSox prices shown below are based on my actual costs, while the Boston Red Sox prices are based on ticket prices from RedSox.com and food, parking, and souvenir costs from an informative web site called Team Marketing Report:

Item	PawSox	Boston Red Sox
4 Box Seats	$36	(Loge Box) $340
Parking	FREE	$23
4 Hot Dogs & Sodas	(inc. chips) $20	$27
2 Baseball Caps	$20	$30
Total	$76	$420

These numbers are pretty disappointing. A family of four could attend 5 PawSox games and still spend less than the cost of attending one Boston Red Sox game (as well as the aggravation of driving into Boston). That price discrepancy is even worse considering how difficult it is to purchase Boston Red Sox tickets for face value. Unfortunately, Major League Baseball ticket prices will continue to rise as long as fans are willing to pay.

Please do yourself a favor and check out minorleaguebaseball.com to find the minor league baseball bargain in your neck of the woods. I highly recommend it!

MBNA Bill Pay Choice: Pay Your Mortgage With a Credit Card

Did you know that you can pay your monthly mortgage payment with an MBNA credit card?

MBNA offers a bill pay service (MBNA Bill Pay Choice), which allows you to pay bills with your MBNA credit card. MBNA Bill Pay Choice (a rebranded version of CheckFree's Bill Payment service) is free when making payments to Payees funded exclusively with your MBNA credit card.

MBNA's bill pay service allows you to pay bills from a variety of vendors including mortgages from ABN AMRO, Bank of America, Chase Home Mortgage, and Washington Mutual Mortgage as well as credit cards from American Express, Chase, Citibank, and Discover (see Checkfree's Which Bills Can I Pay Here? for a more complete list of participating vendors).

The big advantage to this strategy is that you can float your monthly mortgage or credit card payment for an additional month. Why not keep that money in a high yield savings account for an extra month and make some additional interest on MBNA's dime?

One disappointment is that only "In-Network Payment" bill payments are eligible for credit card points or rewards. Unfortunately, I have yet to find a single payment that is "In-Network".

For those of us that pay our credit card bills in full every month, I have no idea how MBNA makes any money from this bill pay service. Perhaps this is yet another example of how naive consumers subsidize sophisticated ones. As for me, I will keep using this service for my mortgage and credit card payments until MBNA/Bank of America decides otherwise.

Where Does Your Money Go?

A few years ago, I bought a PC that came with Microsoft Money personal finance software installed. This software went unused until I was trying to cut expenses and needed a convenient way to track where my money was going.
So, I downloaded a few months worth of bank and credit card data into MS Money and looked at my "Spending by Category" data. I was surprised to see how much money we were spending on things like groceries (our second largest expense!) and gifts.

Trying to reduce expenses, I started with the largest expense and worked my way down:

• The mortgage had already been addressed via refinance to a lower rate.
• Our grocery spending was a complete shock to me. Groceries were our second largest expense! As the grocery shopper, I simply bought whatever I wanted with little regard for prices. I spent a good amount of time learning how to become a better grocery shopper and ultimately reduced our grocery bill by about 30%. A detailed post on my grocery shopping strategy will follow in the near future.
• The amount of money we were spending on gifts was also surprising. I have a large family, and finding an appropriate gift for everyone is a stressful (and expensive!) proposition. We proposed starting a Christmas gift lottery for all of the adults in the family. That meant choosing one name from a hat for each side of the family and buying that person a really nice gift instead of buying gifts for everyone. We did agree that the adults would continue to buy gifts for all of the children though. My family has been doing this for three years now and it has been a great way to reduce holiday stress and spending.

Here is a snapshot of my 2005 spending data, with most of the smaller categories consolidated into category "Other" to make the pie chart readable:

Our household-related expenses were a bit high in 2005 because we had the house painted and finally broke down and bought a new stove and microwave (the old one had packing tape holding the trim together). The good news is that as long as nothing unexpected happens, household-related spending will be much lower for 2006.

Tax-Free Weekend in Massachusetts

There was a state sales tax holiday in Massachusetts over the weekend, where shoppers didn't have to fork over 5% of the purchase price of items up to $2500 to our friends at the Massachusetts Department of Revenue (DOR).

I didn't participate in the consumer frenzy this weekend though, since I had to provide IT support for a company with a retail presence in Massachusetts. Since the 2004 and 2005 tax-free weekends were the busiest days of the year for this company (including Christmas season!), they had a swat team of IT support personnel on hand to make sure the network, servers, and databases would allow salespeople to enter sales orders all weekend long.

And although Massachusetts consumers were in a shopping frenzy, I think that Massachusetts businesses were the big winner here. It is certainly a no brainer when I compare the $125 I could have saved on a $2500 HDTV to the amount of money I was paid for my services for the weekend (which the DOR will get a cut of).

Tax-free shopping spree: Retailers prep for buying frenzy
Tax-free weekend starts off strong
No-tax lacks luster: ‘Holiday’ weekend passes quietly

Capital One Banking $25 Signup Bonus

I love getting free money. How does a $25 bonus just for opening an online savings account sound?

Here's how it works:

Click on the link below to open an Capital One 360 Savings account (formerly ING Direct Orange Savings) with an initial deposit of at least $250 and you will receive a $25 bonus (and I will get a $10 bonus). You'll get yourself a no-fee FDIC-insured savings account that is currently offering an APY of 0.75% (as of 10/10/2012). To qualify for this bonus, you must use the link below:

Capital One 360 Referral Link


Please note that you will NOT get the $25 bonus if you click on one of these links and see the following message:

We’re sorry, but the referral email offer you received for an account opening bonus has expired and is no longer valid. We recommend that you contact the sender and ask them to re-send the referral email. Or click ‘Continue’ to proceed with the account opening process without the bonus.

If the above link gives you an error, then please post a comment before signing up for an Capital One 360 account so you can get your free $25 bonus.

How Large is Your Neighbor's Mortgage?

Have you ever wondered which of your neighbors is mortgaged up to their eyeballs or how much someone paid for their house?

I stumbled across a web site set up by the Massachusetts Secretary of State that provides a searchable database of the Registry of Deeds: masslandrecords.com. Although all counties aren't currently supported, I was able to search all of the information for the county that I live in.

This site is loaded with great public information on Deeds, Mortgages, Liens, Easements, and more. Kudos to the Secretary of State's office for providing this great resource!

August 2006 Financial Asset Roundup

Let's start with an overview of my current financial assets as of the market close on August 9th, 2006:

Asset	August 2006 Balance
Checking	159.95
Money Market	54,283.22
Savings Bonds	16,761.12
Treasury Bills	26,000.00
Brokerage	80,921.98
401k	84,871.87
Roth IRA	24,605.98
SEP IRA	125,549.46
529 College Savings	26,809.64
Total Assets	$439,963.22

I don't have a concrete savings target at the moment. My main focus is maximizing SEP IRA and Roth IRA contributions as well as contributing to Section 529 college savings plans for the kiddies. I have also been building a cash position in Treasury Bills lately, which have given a nice rate of return with interest that is local and state tax free.