WalletPop

Taco Bell: Recession cuisine?

Bruce Watson — 2008-05-14T15:00:00+00:00

Things have been tough for Taco Bell lately. First there was the whole E. coli scare in 2006, which people are still talking about. Then there was the chain's new grills, which it claimed were "green" because they used less water and electricity than traditional steam tables. One of Taco Bell's execs even went so far as to state that "Whether you take shorter showers, turn off the water while brushing your teeth or purchase a Grill-to-Order menu item at Taco Bell, you can save water and impact the environment without even thinking about it." In point of fact, as CNN pointed out, Taco Bell's heavy reliance on beef makes it far from green. Finally, who can forget about Taco Bell's famous rat infestation video, which featured dozens of the furry little critters taking over a New York restaurant.

Still, even with its bacteriological and environmental shortcomings, Taco Bell is my go-to restaurant when it comes to fast food, for the simple reason that it consistently offers relatively healthy (compared to a Big Mac), surprisingly flavorful food for a very low price. My loyalty to the place dates back to when I was a poor starving college student. There was one semester in which I was particularly broke and could only spend about $50 on food. Throwing variety to the wind, I subsisted on plate after plate of hummus, lentils, tuna macaroni salad, and ramen. Whenever I could, I'd find some change in my couch and wander off to Taco Bell, where I could get a burrito for 59¢. It became a lifesaver. Many were the nights when I'd grab a table, pick up a burrito, load it with hot sauce, and savor the joy of something other than my regular fare. When I had an extra couple of cents to splurge, I'd pick up a bottomless cup of soda and revel in my wealth.

Over time, of course, Taco Bell phased out the super value menu. By that point, I had a little more money, so it didn't hit me too hard, although I remember feeling a pang when I discovered that my favorites were now a little more expensive. However, in addition to its push for green cred, Taco Bell seems to be returning to its roots. On May 15, it is rolling out its new "Why Pay More" menu, featuring items that cost 79¢, 89¢, and 99¢. Given that many customers are currently concerned about their ability to pay for gas, the super-cheap menu is coming out at the perfect time. And, to be honest, I will probably be taking advantage of the new offerings.

And I'll remain a Taco Bell regular as long as the rats remain among the patrons, not the ingredients!

Bruce Watson is a freelance writer, blogger, and all-around cheapskate. A recovering fast food junkie, he still dreams about Wendy's "Big Dave's Deluxe" burger.

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What to do when you get pulled over

Josh Smith — 2008-05-14T11:00:00+00:00

Filed under: Saving, Transportation

Back in February Tom Barlow covered 40 ways to avoid a traffic ticket which provided some great tips relating to preparation, driving, and what to do if you do get stopped. Just this month Car and Driver posted an article which contains some great information to build on Tom's original series. Car and Driver went straight to the ladies and gentlemen in blue to find out the top 5 best things to do if you are busted and the top five worst things to do! Nothing beats hearing this advice from the individuals you have to deal with out on the road and the advice comes with anecdotal experience to back it up.

Even with the best driving you will likely get pulled over at some point in your life and the actions you take may heavily influence the outcome of the traffic stop. Even those done with the best of intentions can result in unease for officers and money out of the pocket for you. When you do get pulled over be sure to put yourself in the officer's shoes and realize that someone going for a cell phone or an insurance card can look a lot like someone going for a gun. At the same time be sure you are aware of your rights when it comes to a traffic stop. Instructables recently released a guide which covers what to do if the police stop you, which is information worth knowing.

As someone who has been pulled over on more than one occasion and received a few tickets over the years I'll be quick to note that sometimes even the best tips and advice from officers won't get you out of a ticket. I am related to a State Trooper and two of my childhood friends are officers as well, which has translated into a large amount of respect for officers as a whole. No matter the outcome I've found that there isn't any substitute for a little respect and a lack of contempt when it comes to interactions with police officers. Unless of course they earn the contempt, in which case spite away my friend ... spite away.

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Naked Truth Investing: Go for the Roth IRA!

Dan Solin — 2008-05-12T15:15:00+00:00

Filed under: Retire, Saving, Wealth

This is the part of a new series of columns called "The Naked Truth," by retirement expert Dan Solin. Please bring him your questions, in the comments box, and he will answer as many as he can.

Question: What is better. Traditional or Roth IRA? I have my Roth IRA invested in the Vanguard Total International Stock Index Fund (VGSTX)? I am 38 years old.

Answer: While this subject is not free of doubt, I prefer the Roth IRA. Both the Roth and traditional IRA's are tax-deferred accounts. But, unlike a traditional IRA, Roth IRA contributions are made with already-taxed income.

Here is a summary of the benefits of the Roth IRA:

No mandatory withdrawals when you reach any age;
No penalty for early withdrawals;
No taxes on withdrawals up to the amount contributed;
No tax on investment earnings within the Roth IRA once you reach age 59 1/2 (or become disabled), provided that the account was in existence for five or more years.

With the Roth IRA, are trading the certainty of tax avoidance for the uncertainty of tax deferral. With a traditional IRA, you are forced to make assumptions about the ordinary income tax many years in the future when you start taking withdrawals. This strikes me as risky bet.

You should not have 100% of your money invested in an international stock index fund. Instead, you should:

First: Determine your asset allocation by taking an asset allocation questionnaire. You will find many on the internet, including one on my web site.

Second: Keep your account with Vanguard. There are other fund families you could consider, like Fidelity and T. Rowe Price. However, Vanguard has historically been the leader in offering an excellent choice of low cost index funds.

Third: Invest 70% of the amount of your funds allocated to stocks in the Vanguard Total Stock Market Index Fund (VTSMX), and the balance of 30% in the Vanguard Total International Stock Index Fund (VGTSX). Invest 100% of the funds allocated to bonds in the Vanguard Total Bond Market Index Fund (VBMFX).

Fourth: Once or twice a year, re-balance your portfolio to be sure that your asset allocation remains intact.

This plan gives you a globally diversified portfolio of stocks and a broadly diversified portfolio of bonds.

Dan Solin is the author of The Smartest Investment Book You'll Ever Read (Perigee Books 2006) and The Smartest 401(k) Book You'll Ever Read (Perigee Books, June 24, 2008). Visit his website at Smartestinvestmentbook.com.

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How much cash should you carry? A lot more than you think

Tom Barlow — 2008-05-12T11:30:00+00:00

Filed under: Saving, Wealth

How much cash do you carry? How often do you hit the ATM? Are your habits the most efficient? If you carry less than $500, the answer is no.

You may be surprised to learn that this question has generated a great deal of debate among economists. One way of approaching the question was by applying the Baumol-Tobin model of cash management, which takes into account several variables.

Professor Greg Mankiw ran the model for a person who spends $10 a day of cash, earns $60 an hour, takes 10 minutes per ATM visit, and makes 5% annual interest on his bank account. For this person, the model shows that this person should take out $1,200 three times a year, carrying an average balance in his wallet of $600. Much of this surprisingly high number is a function of the value of this person's time.

In 1995, Mankiw calculated that even the average American would be better off carrying an average of $551.05, when in fact the average citizen carried around $75.

A new study by Greg Hannsgen of Bard College injects an obvious complication not included in Baumol-Tobin; the potential for a criminal to relieve us of our pocket cash.

Using a plausible set of parameters to represent the impact of crime on our pocket money drops the ideal number, as does the expectation that people who carry large amounts of money attract thieves at a greater rate that those who don't. He also accounts for people's fear that they might experience injury to themselves or their property during the theft.

Even taking these factors into account, though, Hannsgen concludes that the ideal average amount of pocket cash drops only from $750.05 to $516.48. Since in 1995, the average American carried only $75.48, he states that that "Americans spent over 1.4 billion extra hours going to the bank in 1995 because of fear of crime."

This assumes, of course, that I have $500 in the bank, which would be nice.

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Economic Stimulus sales

Tom Barlow — 2008-05-09T08:00:00+00:00

Filed under: Bargains, Saving

Did you receive your economic stimulus check yet? These companies are offering you something extra if you will spend those bonuses with them.

SUPERVALU, nationwide chain of 2,500 grocery stores.
The deal: For every $300 gift card purchase purchased with a stimulus check, Supervalu will add an additional $30.
The catch: Good 5/2/08 thorugh 7/31/08

Staples, nationwide office supply chain.
The deal: $150 off $1,000 of furniture: $40 off purchase of $300 or more (except computers).
The catch: Expires 5/18/08

Sears, KMart and Land's End, retailers of fashion and home goods.
The deal: Convert your check to a Sears, K-Mart, or Land's End gift card and they'll give you another gift card worth 10% of that value. For those receiving a full $600, that's a free $60.
The catch: The offer begins May 14th and expires 7/18/08, and is only good for in-store purchases.

Home Depot, retailer of construction and home supplies.
The deal: discounts on environmentally-friendly items.
The catch: None noted.

Wal-Mart, the world's largest retailer of home, fashion and food products.
The deal: Will cash checks free, no purchase required.
The catch: None noted.

Sam's Club, Wal-Mart's bulk sales membership-required retailer.
The deal: Free membership for non-members or a $40 gift card for existing members with purchase of selected items. Free cashing of the stimulus check.
The catch: May 18-31.

Lowe's, retailer of construction and home supplies.
The deal: Will cash checks for free, no purchase required.
The catch: None noted.

Meijer, retailer of home goods, clothes, and groceries.
The deal: $30 gift coupon for every $300 Meijer gift card purchased with rebate
The catch: Valid 5/2/08 to 5/31/08

RadioShack, nationwide vendor of electronics.
The deal: 10% off purchases over $50, with the balance of the check put on a Mastercard gift card.
The catch: Valid May 4- July 12, 2008.

Kroger, national grocery chain.
The deal: $30 bonus on every $300 purchase of store gift cards.
The catch: May 2 through July 31, 2008.

Shop 'N Save, Cub Foods, Albertsons, Acme, Farm Fresh, Jewel-Osco, groceries owned by SuperValu Co., grocers.
The deal: $30 bonus on every $300 purchase of store gift cards.
The catch: May 2 through July 31, 2008.

CVS/pharmacy, pharmacies.
The deal: For loyalty club members, $5 off a $30 purchase.
The catch: None noted.

Food Lion grocers.
The deal: $30 bonus on every $300 purchase of store gift cards.
The catch: None noted

Safeway grocers.
The deal: shoppers that cash their check at Safeway will receive a coupon good for 10% off groceries purchased within two days.
The catch: Good May 14- July 19th.

Menards, construction and home supplies, in the Midwest.
The deal: 5% bonus tacked onto store credit when you cash your check at Menards.
The catch: None noted.

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Letting prisoners out early to save money is not the answer

Tracy Coenen — 2008-05-07T17:00:00+00:00

Filed under: Ripoffs and Scams, Saving

With budgets stretched thin, several states are considering letting inmates out of prison early to save money. Even though they may be more likely to commit new crimes, politicians are saying the cost of those crimes is far less than the cost to keep the prisoners locked up.

One argument in favor of letting prisoners out early suggests that those in prison for things like "minor drug offenses" aren't a danger to society and should not have been locked up in the first place. That's a nice thing to say, but where's the proof that there are people in prison "only" for "minor" drug offenses?

Where I come from, you have to commit an awful lot of crimes to actually end up in prison. And that minor drug offense? The only way it's going to get you into prison here is if you've already got a double digit rap sheet. As a former probation officer, I can't tell you how many times I've seen judges try everything they could to avoid sentencing a criminal to prison.

Let's not forget that prisons exist for two primary reasons: To punish offenders and to protect society. If it's getting too expensive to house prisoners, then maybe we need to look at ways to reduce the costs with lower cost meals and control of spending on extras for the inmates. And maybe we can put the prisoners to work doing things that will earn some money for the prison system to help pay their own way.

No one likes to admit it, but prisons are a necessary reality for our society. We have violent offenders who don't deserve to be living in society with the rest of us. We have non-violent offenders who also need to be sent a message that their behavior is not tolerated in a civilized society. Crime deterrence and our safety should come first, and governments should look for other cost-saving measures before they start opening the prison doors. Freeing inmates early should be the absolute last resort.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

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Time is money: How bargain hunting can wear a hole in your pocket

Bruce Watson — 2008-05-07T16:00:00+00:00

Filed under: Saving, Shopping, Simplification

Soon after my wife and I decided to move to the big city, I realized that I would have to leave my beloved washer and dryer behind. On the bright side, though, I discovered one of the wonders of urban living: drop-off service.

For a small amount of money (in my neighborhood, it's $0.65 per pound), someone else will wash, dry, and fold your clothes. Given that my wife, daughter, and I generate between 20 and 30 pounds of laundry per week, this ends up being a fairly cheap luxury.

A few months back, however, I switched to a lower-paying job and began looking for ways to cut fat out of the household budged. One of the first things to go was the drop-off service, as I realized that I could wash my family's clothes for roughly half the price that Lula, the Albanian lady at the drop-off service, charges. Feeling self-righteous and fiscally responsible, I began toting my family's clothes to the local laundromat.

While I enjoyed the extra hours of reading and got a kick out of flirting with the Dominican and Puerto Rican ladies, it soon became apparent that, between washing and drying, I was wasting three or four hours a week. With some quick calculations, I realized that laundry, which used to run me roughly $20 a week was now eating up more than $60 a week.

You see, the time that I spent at the laundromat was time away from my computer, where I can earn somewhere around $20 an hour. What's more, I am not a very good launderer, as I have a tendency to melt fuzzy synthetic fabrics. In fact, were I to calculate the value of the slippers, coats, and various other items that I destroyed, my return to laundering probably ran close to $100 bucks a week, at least before I ran out of clothes to melt.

When I realized this, I quickly returned to the wonderful Lula, who seemed to feel that my wife and I had been cheating on her, but nonetheless welcomed us back with open arms.

As I've mentioned a few times before, I'm a little...frugal. I pride myself on my knowledge of the best stores, willingness to endlessly comparison shop, and general ability to sniff out bargains. Sometimes, though, I have to wonder if my desperate attempts to shave nickels and dimes off my household budget come with a pretty heavy price. For example, when I lived in Southwest Virginia, I discovered that one of my local gas stations consistently charged about five cents less per gallon. For months, I would resolutely drive 10 minutes out of my way to buy gas at the Kroger gas plaza, cackling over my wisdom and the fact that I was such a good consumer. Finally, however, I totaled it up and realized that I was only saving between 50 and 75-cents per fill-up. When I factored in the time and stress involved, it was clear that I was probably costing myself money.

Admittedly, I get a serious thrill out of bargain hunting, so it isn't completely honest to weigh all the time that I spend searching for the best deal against any additional profit that I make. Moreover, my wife also enjoys wandering through stores with me, so this can, officially, count as family time. If you add in the joy we get out of making fun of the clothes that other people are wearing, this also counts as entertainment, which increases the profit that we reap from our bargain excursions. In fact, if I were to take this far enough, I could probably convince myself that my wife and I are, effectively, paying ourselves to shop!

Self-delusion aside, though, there are times when I just want to buy something and get it over with. While it's nice to know the best places to pick up various items, I also need to balance the cost against the savings. My new resolution is to take all the time I need in my search for the perfect leather jacket; on the other hand, the next time I need to buy cough syrup, I'm just going to go to Walgreen's and call it a day!

Bruce Watson is a freelance writer, blogger, and all-around cheapskate. He once spent six months drooling over an Ed Wood Box Set that came with a fake-angora case. It was totally worth it.

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Drinking green: Just say no to bottled water

Julie Tilsner — 2008-05-07T14:00:00+00:00

Filed under: Saving, Simplification, Health

Drink this up. Despite what the marketers of bottled water have almost convinced us of, there remains little scientific evidence that drinking eight cups of water a day does anything more for your health than make you pee a lot.

A piece in last week's Health Section of the New York Times cites a new study in the June issue of The Journal of the American Society of Nephrology, which reports that researchers can't even find where the "at least eight cups of water a day" rule came from.

"Under normal circumstances," Dr. Stanley Goldfarb, a co-author and a professor of medicine at the University of Pennsylvania told the Times, "drinking extra water is unnecessary. I want to relieve people of the burden of schlepping water bottles around all day long."
Beverage Digest, which tracks trends in the industry, reports that the amount of liquid consumed by the average American holds steady at an estimated 182.5 gallons per year. Bottled water's share of that amount is growing, while all other drinks, including milk, is declining, according to one report.

So all that water you're supposed to drink to keep you healthy? It will cost you $0.00135, or about 49 cents a year if you drink it from a New York City tap. It goes without saying that cost is probably much less in most other areas of the country.

Or you could continue to spend 2,900 times as much, roughly $1,400 yearly, by drinking bottled water. And with all that extra money you're spending, you're also piling on the karma of contributing to the nation's waste heap and encouraging more of the industrial emissions that are contributing to Global Warming.

In my town near Los Angeles, a water engineer I know laughed derisively when asked what kind of bottled water he drank. "I drink the tap water," he says, looking at us like we were idiots for doing otherwise.

But the trends in American thirst quenching continue to favor the expensive option, as overflowing trash bins suggest. Bottled water is growing at the expense of nearly all other beverages, including coffee and milk, and is closing in on beer. Only the sports drink category is growing faster.

Something to digest next time you reach for that plastic bottle of $1.50 Fiji water. Your tap is just as good, and actually a greener option.

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Penny foolish, pound foolish

Tom Barlow — 2008-05-07T11:00:00+00:00

Filed under: Reduce, Reuse, Recycle, Saving

Here we go again. Congress is investigating the possibility of returning to the steel pennies last seen during WWII as a way of ending the most foolish of circumstances, i.e.; it costs more than a penny to make a penny. 1.26 cents, to be exact.

That's not the end of the idiocy; a nickel costs 7.7 cents to make, according to an AP report. Dimes can be made for 4 cents, a quarter for 10 cents. The millions of oh-so-useful dollar coins (useful as ballast, that is,) cost us 16 cents.

Here's a very cheap solution, Congress; ditch the penny. It's just an annoyance. The reason we need to stamp out so many? People don't want to carry them, since they are so useless. Ditching them would open up a slot in the cash drawer for the $1 coin.

And If you want $1 coins to gain acceptance, quit printing paper ones, and make them easily distinguishable. Some countries have coins with holes in them, others have two-part coins (the English pound, for example), of two different metals. Give that consideration.

If you don't like those ideas, how about this- one day a year, offer to buy back pennies for 1.2 cents apiece. I guarantee you'll be flooded with enough pennies that you can shut down production, and save money.

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Great deal or desparate plea? Buy a Chrysler and get $3 gas for next 3 years

Geoff Williams — 2008-05-06T14:30:00+00:00

Filed under: Entrepreneurship, Saving, Transportation

If you haven't been thinking of buying a Chrysler lately, maybe you should. The Detroit News is reporting that Chrysler LLC is offering customers guaranteed gas prices for the next three years. Our sister blog, the ever-vigilant, AutoBlog, was one of the first to report the news yesterday.

The sales plan is called "Let's Refuel America," and almost every Chrysler, Dodge and Jeep vehicle being sold allows you to also sign up for a gas card that will reduce the price you pay to $2.99 -- for the next three years.

Clearly, it's an interesting deal and possibly a fantastic one, depending how high gas prices go. Currently, The Detroit News reports, someone would save approximately $1,000 per year if you have a 12-mile-per-gallon vehicle. People who are not interested can get a different incentive like a rebate or a cash bonus.

But I don't know what's more depressing -- that Chrysler has to bribe people with cheaper gas to buy its cars... or that $2.99 is now considered a deal at the pump.

Geoff Williams is a business journalist and the author of C.C. Pyle's Amazing Foot Race: The True Story of the 1928 Coast-to-Coast Run Across America (Rodale).

Golden Nest Egg bank: $9.99 at Fred Flare!

Bruce Watson — 2008-05-06T02:00:00+00:00

Filed under: Saving, Daily Deal

The daily deal for Tuesday, May 6th is a golden egg bank. If your savings plan involves hunting through your couch's cushions in search of small change, then this might be the perfect item for you. Forget about IRAs, CDs, savings bonds and t-bills; this little baby will help you transform your nickels and dimes into early retirement and vacation homes. Best of all, your "nest egg" will remind you of exactly where your money is going!

Constructed of gold-painted porcelain in a handy little nest, Fred Flare's Nest Egg will remind you that copper, nickel and silver can add up to make some gold. Best of all, at $9.99, it's almost 60% off its regular price of $24, so the savings start even before you unpack it!

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Forget about your health savings accounts!

Josh Smith — 2008-05-05T09:30:00+00:00

Filed under: Saving, Simplification, Health

Health Savings accounts are a great tool for preparing for medical expenses, both planned and unplanned. After a knee surgery last year tapped out our HSA, we bumped up our monthly contributions to try quickly build up to a useful amount. After putting the increase in place we promptly forgot about it and adjusted to the slight decrease in take home pay. Despite being forced to drop the amount contributed by the yearly caps the balance and the contributions have remained untouched and out of mind for several months.

Last week we got a bill for about $400 from the local hospital prompting me to call up and find out what our HSA balance was. To my surprise the balance was more than double what I expected! I had forgotten that we had bumped our monthly contribution months ago up and that in the meantime our employer had made a contribution which led to a significant balance. I quickly made sure the money was actually mine and faxed in the request form .

That's it, no muss no fuss and we didn't have to put the payment on a credit card or string it out for months at the hospital. As an added bonus our hospital has an incentive to pay early, so we save 5% on the total bill. When it comes to savings of any kind, the best method may be to, "set it and forget it".

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Tricks credit card companies play: Seven to watch out for

Ken and Daria Dolan — 2008-05-02T16:00:00+00:00

Filed under: Borrowing, Cards, Debt, Saving, The Dolans

Folks, we might have a new winner in the contest for the most hated consumer industry. For years, the hands-down winner was car dealers.

But we think that credit card companies are giving them a serious run for their money!

Most credit card companies are downright ingenious when it comes to cooking up sneaky new credit card fees and dirty tricks that take more money out of your pocket. If you've had enough, keep reading because today we are going to reveal seven of the industry's dirtiest tricks. We hope this list will help you protect yourself, slash your costs and be credit card smart.

Dirty Trick #1: Say "Bye-Bye" to Your Grace Period

No grace period means that you'll start accruing interest the moment you charge something. That can cost you a bundle of "extra" interest.

Most credit card issuers have already reduced their grace period from 25 days to 20 days. Many others have eliminated the grace period altogether. Now they are coming up with more and more reasons to take away your grace period. Miss a payment? Stop carrying a balance? Bye-bye grace period!

Dirty Trick #2: Punishing you when you are credit smart.

If you want to see my beautiful wife throw a complete fit, just mention any of these scandalous fees in her presence! These fees are the lowest of the low because they penalize you for being a responsible credit card user.

Some of the biggest offenders include charging you a fee for:

Closing your account
Failing to use a card for a period of time (such as six months or a year)
Not carrying a balance (how DARE you!)
Every transaction each and every time that you use your card

If your card charges you any of these fees, it's time to look for a new card! Click here for our tips on how to find the best card for you.

Dirty Trick #3: Doing you the "favor" of sending you "convenience" checks.

Credit cards often send you "convenience" checks so that you can write checks against your credit card account. Isn't that nice of them? Please!

DON'T do us any "favors"!

What they bury in the fine print is that these checks usually carry very high interest and fees -- even higher than regular credit card charges. Some cards also give you no grace period on convenience checks, so you start paying interest from the day you write the check! Shred these little "gifts" whenever they arrive.

Dirty Trick #4: Psst... Hey, buddy, want to skip a payment?

In their infinite generosity (ha!), some cards will "invite" you to skip making a payment. This "helpful" offer, which sounds great at first blush, often comes after the holidays when your balance is big and your wallet is feeling stretched. DON'T DO IT!

Skipping that payment can lead to a host of trouble -- from a higher interest rate to possibly having to make extra payments in the future.

Are you starting to notice a pattern? You should be skeptical whenever your credit card company does something "nice" for you without you asking for it.

Dirty Trick #5: Lowering your minimum payment due.

Another way some cards try to jack up their profits and lure you deeper into debt is by lowering the minimum payment due on your balance. It used to be cards required a minimum monthly payment of about 4% of your balance, but many now require as little at 2%. Don't fall for it!

Going from a $40 payment to a $25 payment on a $2,500 balance means it will take you an extra 19 months to pay off the debt.

Dirty Trick #6: It's 5 o'clock... Do you know where your payment is?

We all know that our payment is due on a certain date or it's late, right? But a new twist being thrown into the mix is having your payment due by a certain time on the due date. If your payment is due at noon and gets processed at 12:01, you get socked with a late fee AND likely a higher interest rate.

Gimme a break! Carefully check your statement so you avoid this trap.

Dirty Trick #7: "Over the limit" fees

Credit cards charge you a hefty fee for going over your credit limit. Look, we don't have a problem with penalties for that. But now these fees have gotten excessive -- almost $40! Plus, credit card issuers don't exactly discourage you from going over your limit when they approve charges and balance transfers that put you over your max.

Dolan Smart Credit Moves

So there you have it: Seven tricks and traps you now know how to avoid. But credit card companies will keep dreaming up new ones. So here's the bottom line on how to protect yourself:

Don't sign on with a card until you have a list in writing of all fees that the company charges. You can find these in the small-print section of your credit card application. Or, if you apply online, you will have to agree to all of the terms and conditions as part of your sign up process. You can always call the company, too. Whether in print, online or on the phone, read carefully before you agree!

Also be sure to actually read any notices your credit card company sends you about changes to your card agreement. That's your chance to catch any changes before they come back to bite you.

For more tips on being credit smart and successfully managing your debt, visit Dolans.com.

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Cheap eats in danger: Save our taco trucks!

Julie Tilsner — 2008-05-01T13:30:00+00:00

Filed under: Food, Saving

It's May Day, traditionally international worker's day. A perfect day to go out and support the working man's favorite food source: The taco truck.

Ask any Angeleno: Taco trucks are as much a part of the L.A. landscape as pho places and sushi bars. They provide a source of delicious -- and affordable -- food for the working people of this city, Hispanic, Anglo, African American and Asian alike.

But due to complaints from restaurant owners, the L.A. Board of supervisors passed a law two weeks ago that would slap a $1,000 fine on trucks parked in the same spot for more than one hour. That hits below the belt for most of these trucks, which are usually small family businesses. They argue that they serve a different population than restaurants, serving good food at affordable prices that even low-income workers can manage.And taco lovers of Los Angeles are rallying to their sides, surprising city leaders. Our sister blog, Slashfood, has more information here.

Los Angeles is more than 50% Hispanic. The ongoing debate about illegal immigration and its impacts notwithstanding, Hispanic culture is the heartbeat of the city. The crossovers are everywhere: Every little Anglo kid has a pinata at their birthday party. Day of the Dead celebrations have become hip, with young Angelenos flocking to the Hollywood Forever cemetery to feast with their friends over celebrity graves. ABC's hit show Ugly Betty is an Anglo remake of the Mexican smash hit La Fea Mas Bella (The Prettiest Ugly Girl). People of all races line up at farmer's markets for tamales, or Salvadoran pupusas. Families come together for Las Posadas at Christmastime. Salsa music fills the streets.

In a heartening sign of how intertwined the cultures have become, the fight to save the taco trucks is coming from the college-aged Anglo population, who have organized petition drives via social networking sites and blogs. The young people who've grown up in the Hispanic/Anglo mix see racist and classist overtones in the attempts to regulate the taco trucks.

I can see the argument from the restaurant-owners' viewpoint, of course. But I think there's a big enough pie for everyone, so to speak. Surely the Supervisors can come up with a few creative solutions that ensures both venues enough customers to prosper.

Have a favorite taco truck in your neighborhood? Sign the petition here. And if you're anywhere in L.A., get out there today and enjoy a few carne asada tacos tonight. Honor the worker! (and buen provecho...)

Millionaires are investing their money. Are you?

Tracy Coenen — 2008-05-01T11:00:00+00:00

Filed under: Saving, Investing

A recent study of the investing activity of millionaires has found that 27% plan to invest more in individual stocks this year. Only half as many will invest more in real estate, and only a very small percentage say they'll decrease their stock investments.

This is seen as good news for the American economy! Our economy grows when people invest in companies and technologies, which creates new opportunities, new jobs, and new wealth. It can have a snowball effect, much the same way as decreased investment can have a negative snowballing effect on our economy.

You're thinking to yourself, "Who cares! I'm not a millionaire." We might not be millionaires, but there are certainly some lessons we can learn from them, and one is about the value of saving and investing.

Oh sure, it's much easier to save or invest when you have several hundred thousand dollars lying around waiting to be used. But if millionaires were interested in only spending all the money they're making, they may not be millionaires for long.
The moral of this very short story is simple. No matter what your income level is, it's wise to try to set some money aside. When you get a windfall (no matter how big or small), consider saving that money instead of giving in to the urge to run out and spend it. Yes, I am suggesting that you take your tax rebate check and save it! What a perfect excuse to open a savings account or a brokerage account... with money that is seen by many as "found" money.

Think about the satisfaction you will feel when you look at your bank account or your investment account and see that balance growing. Isn't that more fun in the long run that spending your windfall on something you don't really need?

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Still no recession for America!

Tracy Coenen — 2008-04-30T18:00:00+00:00

Filed under: Saving, Shopping, Recession

Despite what you may hear in the media, we are still not in a recession. I've heard reporters suggest that we should ignore the actual definition of "recession" and say we're in one anyway. I suppose that sort of intellectual dishonesty gets more viewers... But the truth is that economic indicators show that the American economy grew at a rate of 0.6% in the first quarter of 2008. That's not stellar by any stretch of the imagination, but our economy is not retracting, plain and simple.

Here's the thing: I'm not suggesting that everything is just peachy with our economy. There are problems with prices and I do see some people losing jobs. But I also know that lots of people are getting new jobs and there are lots of people shopping and eating out. While our economy isn't growing as fast has it had been for a few years, it is still growing!!!!

I know it sells more papers and creates more television viewers if we can spice things up and ignore the real economic indicators. Americans want to believe we're in a recession and even headed for a depression. I don't get that mentality... I don't understand why people are adamant that we should say our economy is tanking when it's really not. And of course, there are those who say we should throw out the economic indicators all together because they're not valid measures. I disagree.

Yes, consumers are having to adjust their spending in many ways. But we're still doing well and we're not in a recession. Plan for the worst, but don't keep talking about it like it's already here. The American economy is growing, and for that we should be thankful.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Wachovia plans a strange, golf-related savings account

Zac Bissonnette — 2008-04-30T17:30:00+00:00

Filed under: Banks, Saving

Savings accounts can be boring, especially in the current interest rate environment, where Uncle Ben is determined to make it impossible for retirees living on fixed incomes to keep up with inflation.

Anyway: if you're looking for more excitement in your your savings, check out this promotion from Wachovia. According to GolfWeek, "Wachovia, the nation's fourth-largest bank, has debuted its "Save Like A Champion" initiative. It will reward customers enrolled in the bank's Way2Save savings program with an interest rate in June, July and August equal to the tournament's winning score in relation to par. In the past five years at Quail Hollow Club in Charlotte, that number has ranged from 10 to 13 under."

For more on the promotion, visit the Wachovia site here.

The action starts tomorrow, so you may want to follow the scores to decide whether to go with Wachovia -- it's a lot more interesting than checking BankRate.

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Naked Truth Investing: 401(k) plans: Making lemonade from lemons.

Dan Solin — 2008-04-29T10:30:00+00:00

Filed under: Extracurriculars, Retire, Saving

This is the part of a new series of columns called "The Naked Truth," by retirement expert Dan Solin. Please bring him your questions, in the comments box, and he will answer as many as he can.

Question: I have quit my job and taken my retirement monies, but I still need to leave my 401K alone for 4 more years. I can leave it there and let it ride, or with your suggestions I could switch it over to one that is doing better than my current one with Safeway Corp.

Answer: Since I don't know the investment options available in your current plan, I cannot evaluate whether you would be better off keeping your funds with that plan or rolling it over into an IRA. However, as a general matter, I can tell you that most 401(k) plans do not offer appropriate low cost index funds for their employees. If this is the case with your current plan, you might be better off rolling it over to an IRA.

If you decide to pursue this option, here is my advice:

First: Determine your asset allocation by taking an asset allocation questionnaire. You will find many on the internet, including one on my web site.

Second: Open an account with Vanguard. There are other excellent fund families you could consider, like Fidelity and T. Rowe Price. However, Vanguard has historically been the leader in offering low cost index funds.

Third: Invest 70% of the amount of your funds allocated to stocks in the Vanguard Total Stock Market Index Fund (VTSMX), and the balance of 30% in the Vanguard Total International Stock Index Fund (VGTSX). Invest 100% of the funds allocated to bonds in the Vanguard Total Bond Market Index Fund (VBMFX).

Fourth: Once or twice a year, rebalance your portfolio to be sure that your asset allocation remains intact.

This simple portfolio has historically outperformed 95% of all professionally managed money over the long term. In your case, if you intend to withdraw the money in four years, it may or may not outperform the investments in your current 401(k) plan.

If you are in a 401(k) that does not offer these options, this is a way to make lemonade from lemons.

Dan Solin is the author of The Smartest Investment Book You'll Ever Read (Perigee Books 2006) and The Smartest 401(k) Book You'll Ever Read (Perigee Books, June 24, 2008). Visit his website at Smartestinvestmentbook.com.

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Planning for $7 a gallon gas

Tracy Coenen — 2008-04-27T13:30:00+00:00

Filed under: Saving, Transportation

It's not out of the realm of possibility that gas could rise to $7 a gallon within the next several years. I'm skeptical about that, but then, I didn't expect us to be at almost $4 a gallon right now, either.

Obviously, gas at that price will put many Americans in a financial pinch, unless they start planning now. Think three or four years down the road, and ask yourself how prepared you want to be for the possibility that gas will become more of a luxury.

What kind of car should you own? If you're in the market for a car now, consider what kind of fuel efficiency you might require in the future. It might make sense to purchase a hybrid or another vehicle that is more fuel efficient than the car you really want today.

How can you cut down on gas used for your commute to work? If you're shopping for a new house or apartment, consider whether it might make sense to find a place that's closer to work. If you think a job change is coming soon, keep the location of potential new jobs in mind when you're house hunting too.Can you reduce your gas consumption in your personal life? Think about where you shop for groceries, where you get your hair cut, where you like to shop, and where you like to socialize. Can you cut down on traveling to and from those activities? Could you find similar services closer to your house? Can you combine trips?

Is public transportation an option for you? In some cities, the public transportation isn't easy to use or desirable for many. But if you're in a city in which it would be feasible to use public transportation, start thinking about how you can work that into your life in the coming years to reduce your gas consumption.

Can you cut back in other areas of your life and save that money for a rainy day? I don't think anyone would argue with my opinion that as a whole, American consumers haven't been good at saving money. Look for areas in which you can cut back, even if it only offers a savings of $25 to $50 a week. That money can add up fast, and you may be thankful to have those emergency funds one day soon.

Let's face it, as a country, we've been spoiled by low gas prices for many years. There are plenty of people around the world who pay much more for gas than we do. The availability of cheap gas has made many of us somewhat irresponsible with our fuel consumption, and we may be forced to make changes in our life to accommodate rising prices. We can be more thrifty in our fuel consumption if we choose to do so. Now's the time to start planning for the possibility of even higher gas prices in the future.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

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Will your tax rebate check be 'found money' to you?

Tracy Coenen — 2008-04-26T11:00:00+00:00

Filed under: Budgets, Debt, Saving

Even those with the smallest amount of money management smarts know that there is a way to be responsible with their "tax rebate" check, and a way to be irresponsible. Our government is hoping you're irresponsible with yours. The whole point of the checks is for everyone to run out and spend it on things they might not otherwise buy, giving a little boost to our economy.

But as prices are rising (and there is no shortage of people complaining about it) and people more are in debt than ever before, the most responsible thing to do with a tax rebate check for most consumers is to save it or use it to strategically pay off some debt. That's what Terri Cullen of the Wall Street Journal is hoping her family does with their checks.

But she knows they probably won't. Why not? Because she says they (and many other consumers) look at these checks as "found money." It's an unexpected windfall that's not likely to happen again, so they feel as if they have somewhat of an obligation to run out and spend this free money.
I understand the mindset, especially if you've been living under a very tight budget for a while. But imagine what good could come out of being a little more thrifty and saving the money for a rainy day. For one, you could generate some interest on that money. (Maybe not a lot, but it's still something!) And I guarantee that a few months down the road when your car breaks down unexpectedly or you have some other surprise expense, you'll be happy you set that money aside.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

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