MoneyLife – Help, Hope & Insight

Ways to cut TV, phone costs

Weren't we supposed to be paperless by now? Not only are we still buying paper (maybe more now than ever), we have all these digital costs piling up. How to Cut the Beastly Cost of Digital Services gives some good advice on how to make small but meaningful changes:

• DON'T ASK, DON'T TELL: Cable, satellite and telephone companies can only be overjoyed that millions of their customers take no action to lower their bills, and instead routinely pay much too much for overpriced plans they purchased a decade ago.
• IF THEY SAY NO, THREATEN TO SWITCH: If you're thinking about switching to another satellite, cable or phone provider, call your current one and let 'em know.
• BUNDLE YOUR SERVICES: With traditional landline ownership dwindling as more customers use only cellphones, the major phone and cable companies are chockablock with packages intended to keep you from straying.
• RECONSIDER THIRD-PARTY CARRIERS: Once, third-party long-distance companies offered cheaper long-distance calling than you could get from your local provider, but that might no longer be the case.
• ASK FOR CORPORATE DISCOUNTS, MONITOR WEB SITES FOR DEALS, AND IF ALL ELSE FAILS, DOWNGRADE

Have you tried any of these? Or maybe you know of some better ways that aren't listed?

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This post is used with permission of Sound Mind Investing, America's best-selling Christian financial newsletter. SMI, published by investment advisor Austin Pryor, has been Crown's primary investing resource for nearly 20 years. More than 14,000 families rely monthly on SMI's step-by-step investment advice. Visit Sound Mind Investing to learn more.

And a little child shall lead them

The winner of the 2009 Financial Literacy Poster Contest, sponsored by the National Foundation for Credit Counseling, is fourth-grader Jenna Fink of Sparks Elementary School in Frisco, Texas (near Dallas).

See her winning entry here (PDF).

"At such a young age, Jenna did an incredible job illustrating the importance of saving money, living within your means and sticking to a budget," said Todd Mark, vice president of education for the Consumer Credit Counseling Service of Dallas.

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This post is used with permission of Sound Mind Investing, America's best-selling Christian financial newsletter. SMI, published by investment advisor Austin Pryor, has been Crown's primary investing resource for nearly 20 years. More than 14,000 families rely monthly on SMI's step-by-step investment advice. Visit Sound Mind Investing to learn more.

Refinancing to a fixed-rate mortgage

A huge number of homeowners have been refinancing this year to take advantage of the current historically low interest rates.

Some experts think these low rates will be with us for some time, but if you have an adjustable-rate
mortgage and no plans to move over the next year or two, it's probably better to act now than to wait.

The ability to lock in 15- and 30-year rates around 5% is a no-brainer, especially given the alternative of a variable rate that's highly vulnerable to future inflationary (upward) pressure. Nobody knows when inflationary winds will start blowing in earnest, but some think we may be seeing the first traces already breezing through the bond market.

Normally we'd encourage a 15-year loan for anyone who can swing the higher payment, but given the economic uncertainty and the fact that 15- and 30-year rates are pretty close in many markets, it may be worthwhile to consider sticking with a 30-year loan and simply doubling up your principal payments, rather than being locked into the higher 15-year payment.

In an extremely uncertain economic and job climate, payment flexibility may be more valuable than shaving an extra eighth or quarter off the interest rate. It's easy to turn a 30-year loan into a 15-year with extra principal prepayments; it's difficult to do anything to ease the pressure of a 15-year loan payment if you're unfortunate enough to lose your job at some point.

"Run the numbers" and decide which is the better approach in your situation.

*** This post is used with permission of Sound Mind Investing, America's best-selling Christian financial newsletter. SMI, published by investment advisor Austin Pryor, has been Crown's primary investing resource for nearly 20 years. More than 14,000 families rely monthly on SMI's step-by-step investment advice. Visit Sound Mind Investing to learn more.

Move over Google, there's a more charitable way to search

In an attempt to become the next big search engine, GoodSearch offers a compelling reason to quit Googling. It contributes financially to charities based on your searches: Fifty percent of the revenue generated from advertisers is shared with the charity, school, or nonprofit organization of your choosing.

GoodSearch (powered by Yahoo!) has a simple tag line: "You Search We Give." And with 78,000 non-profits available and 100 new ones being added a day, they really mean it. Don't see your charity or school listed? You can submit one. Want to know how much has been raised? Easy peasy. At the time of this post, $3,858.93 had been given to Compassion International. Not bad.

There are even browser add-ons to make GoodSearch easier to use. So if you're already using Yahoo! as your search engine, switching is a no-brainer. And unless you're just in love with Google, you might consider this way to help out the charities closest to your heart.

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This post is used with permission of Sound Mind Investing, America's best-selling Christian financial newsletter. SMI, published by investment advisor Austin Pryor, has been Crown's primary investing resource for nearly 20 years. More than 14,000 families rely monthly on SMI's step-by-step investment advice. Visit Sound Mind Investingto learn more.

529 plans post unhappy returns

The Wall Street Journal reports that quite a few college-saving 529 plans posted awful returns last year, even for those investors close to college age.

Most 529 plans allow investors to select an age-based investment track that is supposed to automatically get more conservative as the student approaches college age. Sadly, there's significant variation between plans as to how these allocation percentages shift, as well as the underlying funds they are invested in.

Those most at risk would likely have been people enticed by generous matching provisions or other offers by their home state plan (if that plan turned out to be one of the offenders). Beyond that, a focus on the plan asset-allocation options would have been healthy.

The 529 downturn is a good reminder of a crucial investing fact: Nobody cares about your money as much as you do - so make sure you understand what you're investing in.

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This post is used with permission of Sound Mind Investing, America's best-selling Christian financial newsletter. SMI, published by investment advisor Austin Pryor, has been Crown's primary investing resource for nearly 20 years. More than 14,000 families rely monthly on SMI's step-by-step investment advice. Visit Sound Mind Investing

Training inmates to become legitimate entrepreneurs

The Washington Times reports on a woman who quit her Wall Street job to focus on turning prisoners into businessmen. While helping out with a Prison Fellowship outreach at a Texas prison in 2004, it occurred to Catherine Rohr that "the very entrepreneurial skills that landed these drug dealers and thieves in prison might be the very thing that could help them get back on the right track," according to the Times.

[S]he secured permission from the Texas Department of Corrections to launch the Prison Entrepreneurship Program (PEP), where murderers, burglars and drug lords are given the chance to become businessmen.... In five years, the program has graduated more than 400 prisoners. Ninety-eight percent have landed steady jobs within four weeks of release, most making at least $11 per hour. Fifty-eight have started their own businesses, ranging from T-shirt printing to software development.

PEP now has nearly 1,500 volunteers involved in training, including more than 1,000 business executives and 450 MBA students from 24 schools.

Many graduates [from the PEP program] find well-paying jobs, and several become the entrepreneurs they dreamed they would be. While more than half of the nation´s prisoners are rearrested within three years, PEP's recidivism rate is less than 10 percent.

*** This post is used with permission of Sound Mind Investing, America's best-selling Christian financial newsletter. SMI, published by investment advisor Austin Pryor, has been Crown's primary investing resource for nearly 20 years. More than 14,000 families rely monthly on SMI's step-by-step investment advice. Visit Sound Mind Investingto learn more.

Money-saving resources roundup

A few resources for your money-saving pleasure:

Save $50 a Day: This piece in Kiplinger's gives penny pinchers advice on saving money in small, painless ways. The money-saving tips are categorized for your convenience.

Feedflix.com: Get your money's worth out of your Netflix membership. Create a free account and link it to your existing Netflix account and you can see how much you're paying per DVD rental, average rental time, DVD returns by week and more.

CheckingFinder.com: Simply type in your zip code and find bank account interest rates in your area.

Have sites that have been helpful to you? Please share!

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This post is used with permission of Sound Mind Investing, America's best-selling Christian financial newsletter. SMI, published by investment advisor Austin Pryor, has been Crown's primary investing resource for nearly 20 years. More than 14,000 families rely monthly on SMI's step-by-step investment advice. Visit Sound Mind Investing to learn more.

The investor class

Pollster John Zogby has an interesting piece in Forbes about people who consider themselves to be "investors." Here are results from an online poll of 24,000 people:

59% of self-identified investors have household incomes below $100,000 and 44% don't have a college degree. Blue-collar workers make up 15% of the Investor Class, a number that becomes more impressive when you consider that the total percentage of blue collars in this online sample is only 21%. There is no significant difference on matters such as religion, whether they live in urban, suburban or rural areas, union membership, or even how often they shop at Wal-Mart. As for race, African-Americans and Hispanics combined make up 15% of the Investor Class, which isn't so far off their representation in the nation.... [T]he Investor Class is more likely than non-investors to:

• Say they are political conservatives (41% to 26%)
• Have voted for John McCain (57% to 39%)
• Believe they and their families can achieve the American dream (81% to 58%)
• Believe that affirmative action programs reward some at the expense of others (69% to 56%)

On the whole, Zogby found the "investor class" to be "more politically conservative and optimistic" than the general population. He concludes:

[W]hile Democrats may certainly be in the ascendancy after the 2008 election, there may still be an appeal down the road for the "ownership society." There is a significant pocket of Americans who are inclined toward conservative values based on how they see their world and from where they see their world: Namely, their investment portfolios, regardless of how big or small the investments may be.

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This post is used with permission of Sound Mind Investing, America's best-selling Christian financial newsletter. SMI, published by investment advisor Austin Pryor, has been Crown's primary investing resource for nearly 20 years. More than 14,000 families rely monthly on SMI's step-by-step investment advice. Visit Sound Mind Investing to learn more.

Money market funds acting to boost yields

Kiplinger's Personal Finance Magazine notes that with interest rates near record lows, money market funds are employing several techniques to increase yields.

With yields on short-term Treasury bills stuck near 0%,
money-market funds that hold these securities are struggling to keep
their returns positive, after fees.

Some funds are investing in longer-term securities, which extends the
average maturity of the fund and garners a little extra yield without
compromising safety.

[Some have] closed to new investors or limited deposits.... It's easier
to maintain yield without dealing with heavy cash flows in and out of
the fund.

The article also says about 60% of money-market funds are waiving a portion of their fees and that others may soon follow.

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This post is used with permission of Sound Mind Investing, America's best-selling Christian financial newsletter. SMI, published by investment advisor Austin Pryor, has been Crown's primary investing resource for nearly 20 years. More than 14,000 families rely monthly on SMI's step-by-step investment advice. Visit Sound Mind Investing to learn more.

3 Tax Tips

Did you know the U.S. tax code is over 7,000 pages long?  No wonder filling out a return is so difficult.  To help out, here are 3 tax tips that can save you money on your 2008 return, thanks to Bankrate.com.

1. The Rebate Recovery Credit.  Last year, the feds distributed millions of tax rebates that can also be used on your 2008 return by claiming this credit.  This could save up to $600 for single taxpayers, $1,200 for married couples filing jointly if you didn’t receive the rebate last year.
2. The First-time Homebuyer Credit.  Some first-time homebuyers can claim a credit of 10% of the purchase price, up to a maximum of $7,500. You may qualify if you haven’t owned a home in the three years prior to closing.
3. The Standard Property Tax Deduction.  First time homebuyers—who for whatever reason don’t itemize—can add up to $500 for single homeowners, double that for joint filers—to the standard deduction.  It’s only for your primary residence and only if you paid property taxes.

Have you filed your 2008 taxes yet?  Just be glad you're not a major corporate like General Electric.  GE's tax return runs over 24,000 pages, equal to a stack of paer over 8 feet tall!

We'd love to hear about your tax filing experience this year.  Please comment below.