WalletPop

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.

The circle of outsourcing appears to be coming complete. Ashes to ashes dust to dust, high wages to high real estate values! Several Chinese firms are outsourcing to the U.S. to save money on...wait for it...manufacturing jobs!

Liu Keli, a Chinese businessman from the Shanxi province in China is investing 10 million dollars in South Carolina to open a plate printing factory. The factory will employ approximately 120 American workers who will be paid $12-13 per hour. Liu's reasoning for opening in South Carolina is simple, it is cheaper for his company to operate in the U.S. than it is to operate in China.

One of the areas in which Liu will save the most is in real estate here in the states. The plate making company saved 75% on the cost of land by building in North Carolina. Additionally utility prices in the U.S. are much cheaper than in China and also more reliable in South Carolina than in China. Even though labor costs are higher in the U.S. Liu is taking advantage of a tax credit from South Carolina to make up for some of the increase in labor expenses.

This whole arrangement is interesting to me because it seems to represent the way trade and global business can work out. When there aren't regulations to stop a business from opening a location anywhere on the globe, smart companies will find the areas which make the most business sense to operate in. I'm not a complete optimist when it comes to globalization but stories like these do a lot to re-enforce my opinion that the market can sort out complex issues on its own!

The Real Estate Adviser on Bankrate.com has answered an important question from a reader: Does a registered sex offender living in your neighborhood affect your home's value? The unfortunate answer is "yes."

One study found that a sex offender within one-tenth of a mile of your home makes your house sell for about 17% less than comparable homes without a sex offender in the neighborhood. If a sex offender is within two-tenths or three-tenths of a mile from your home, expect a 9% to 10% lower sales price. A separate study found that homes within one-tenth of a mile of a sex offender only sold for 4% less than comparable homes.

Even though there is a range of numbers presented, it's clear that the presence of a registered sex offender in your neighborhood will have an impact on the sale price of your home. It's no wonder. What parent would buy a house in close proximity to a registered sex offender? For most parents, that's too big a risk to take when you know your child will want to play outside during summer.

This is a good time to remind buyers to check registries to see if a sex offender is living in the neighborhood you're considering. If you can't locate a registry, check with the local police station for guidance on sex offender registration. You want to make an informed choice before you buy a home for your family.

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.

As the class of 2008 graduates from high school, a good chunk will be heading off to college. There they will be bombarded with free t-shirts and bottle-openers: if only they'll just take a quick moment to fill out this credit card application. The average college student will graduate with $3 thousand in credit card debt -- which might not sound so bad until you think about the fact that many graduate with none, meaning that the average student who uses a credit card in college graduates with considerably more than $3 thousand in credit card debt. And don't even get me started on student loans.

Since the vast majority of kids will get credit cards (It can be helpful for building a credit history), your role as a parent is to educate Junior about the process. Here are some tips for helping your first time credit card user get off to a good (or at least not destructive start):

• Pick a card with no annual fee -- There's just no reason to pay a fee on your first credit card. Few college kids spend enough money for any rewards to justify the fee. Generally this will mean paying a higher interest rate -- tell your kid the interest rate doesn't matter because if he ever carries a balance you will disown him.
  
• De-emphasize the whole rewards thing: remember, credit companies offer rewards because they increase their profits. Getting a $50 savings bond for every $2000 you spend might sound wonderfully financially savvy, but it isn't if the joy of saving induces you into overspending.
• Urge them not to place anything other than necessities on the credit card: textbooks, gas, and other costs that aren't likely to increase due to the convenience of plastic. Clothing and especially restaurant meals should be paid for with debit cards or, better yet, cash.

Rather than wait for some snake oil salesman to sign your child up for a credit card when you're hundreds of miles away, take the opportunity to do it together, now. The CreditCards.com Student Credit Cards page has 9 cards for you to choose from, and you can click the links and fill out an application in just a few minutes.

Last week we posted a video that featured Suze Orman giving sage advice about one of her favorite topics: debt.

This weekend, the funny people at Saturday Night Live lampooned the money maven and the results were hysterical. I like Suze as much as just about anyone, but her tendency to overemphasize unimportant words is just too easy to make fun of. Take a look below.

The toy store for anglers, Bass Pro Shops, is offering a 15% discount on a wide selection of fishing and camping gear in trade for old video games on May 21-26th. This clever campaign, with the obvious message "get outside and play", is limited to one video game trade-in for one discount per family.

On May 17-18, BPS, in conjunction with Stearns, is also offering boaters the chance to trade in their old personal flotation devices (PFDs, better known as a lifejacket) for a new Stearns PFD. This is a great idea for any using an old PFD, which could rupture along the seams just when you need it, or still carrying around a 'one size fits all' PFD that could slip off a child faster than Sunday School clothes.

Bad news for beer drinkers: rising fuel costs and a rise of more than 300% in the cost of hops have led to a year over year increase of more than 4% in the cost of beer at retail. Check out the video from MSNBC for more color.

Here's a quick tip: if a 4% increase in the cost of beer is enough to impact your financial situation, the rising cost of beer is probably the least of your worries. Please seek help immediately.

When I was about 10 years old, I went to an abandoned property auction at a local self-storage place with my mother. We thought it would be a fun end to a long day of yard-saling. It was anything but. It was cold and rainy, and it was one of the more depressing experiences I've ever had. An old and sickly auctioneer went from unit to unit, auctioning off the contents by the lot, with no time for any kind of inspection. People bid $10 or $15 for a chance to acquire someone's property because they couldn't pay the $50 a month to keep it. Notably, a large collection of Jackson 5/Michael Jackson memorabilia went to auction after the family failed to pay its storage bill.

With foreclosures hitting record rates around the country, many former homeowners are packing their life's accumulations into storage units. But the financial woes that made it impossible for them to keep their homes are making it tough for them to keep their stuff in storage.

According to a self-storage center manager quoted in a New York Times piece, an increasing number of people are also trying to (illegally) live in their storage units.

A hybrid automobile seems to make more sense than ever with rapidly rising fuel prices. But the increased demand for these vehicles is causing their prices to rise. Many hybrid prices are up about $2,000 to $5,000 over last year's prices.

It takes drviers several years to make up for the increased hybrid price via fuel savings. Is it still worthwhile? Check out this video for more details.


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.

Salary.com has a cute little tool that lets you find out how much your mom's services at home are worth. You enter in the number of children and their age ranges, and you identify whether or not she's has a job outside the home. I did a calculation for a stay-at-home mom with one small child and one school-age child.

Her value? In the range of $64,374 and $174,061 per year. You can even take it a step further by entering your zip code and getting a local estimate. And the highlight of the whole exercise? Printing a fake check to give to your mom to let her know that you appreciate everything she does.

For the most part, this is just a fun post to honor mom's holiday. But I can add one practical tip for readers. When buying life insurance, don't forget the value of the stay-at-home mom. Many families make the mistake of only buying a substantial policy on the dad, if he's the "breadwinner" for the family. They forget that if something happens to mom, a considerable amount of money could be spent on child care and household help. Make sure mom is covered with life insurance too!

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.

One day, as I was flipping through some old pictures of LBJ, I noticed that his wife, Lady Bird, had a discolored front tooth. Rather than be disgusted or repulsed, I was actually kind of impressed. Growing up in a time when image often (always?) trumps depth, it is hard for me to imagine a woman as prominent as Mrs. Johnson refusing to get her tooth capped.

Looking back at pictures from my grandparents' day, I see a similar phenomenon: the images are filled with men and women who are blotchy, overweight, have crooked teeth, or otherwise fail to live up to the beauty ideal of my generation. Part of the reason for this, of course, is the fact that styles have changed; similarly, the beauty industry is constantly developing new technologies for pampering and self-glorification. A few years ago, the idea of injecting a biotoxin into one's skin would have seemed outlandishly repulsive, yet Botox is now a multi-million dollar business.

On the other hand, earlier generations often didn't have the disposable income necessary to support today's massive beauty industry. Expensive plastic surgery was reserved for wealthy people and the victims of disfiguring accidents. For anybody else, it would have been an outrageous extravagance.

Suze Orman knows what she's talking about when it comes to personal finance issues. She's written several books about finance, and she made Time Magazine's top 100 most influential people in the world this year because people are listening to her!

She answered some common questions on The Today Show this week. Watch the video below for some "tough love" answers to questions like:

• Is it bad to have a lot of credit card accounts?
• I have student loans and credit card debt... can I buy a house?
• What's the difference between a Roth IRA and a traditional IRA?
• Should parents co-sign on a car loan for their child?

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.

My extremely generous neighbor whom I've never even met -- his name is Michael -- has given me subscriptions to two of the hottest celebrity gossip magazines. When I go down to my lobby to check the mail, I always give a quick glance into the recycle bin. Every Friday for the past two months, I've found the latest issues of OK Weekly and US Weekly -- at the top of the bin, mailing labels still in-tact.

I can only speculate about why Michael doesn't even bother reading his magazines. Perhaps they were a gift that he didn't want. Perhaps he gets multiple copies because of some clerical error. Or maybe he has a new live-in girlfriend, and admitting that he actually spends money to keep up to date on celebrity news would make him feel like less of a man. Whatever the reason, I get both magazines at 100% off the weekly newsstand price of $7.98 -- plus the fistful of change I'll get for writing this post.

If you live in a big building, it might be worth a quick -- and discrete -- look through the recycling by the mailboxes every once in awhile. And I have a request for the USPS: each post office should include a magazine rack where people can place anything that they receive but don't want.

OK, I'm going back to reading "Britney & Jamie Lynn at Home: OK World Exclusive!"

Before we get any angry emails from concerned citizens: the title of this post was meant in jest and we certainly don't suggest that anyone actually try to perform surgery on himself.

The Associated Press lead says it all: "The 55-year-old Omaha man who performed a tracheotomy on himself with a steak knife says he did the same thing to himself two years ago."

Steve Wilder's throat has shrunken because of radiation treatments for cancer and, when he was having trouble breathing, he headed for the kitchen instead of the hospital. "I didn't feel no pain. I was just trying to survive," Wilder told a reporter. "I got relief right away. There was a big gush of blood, and I was able to start sucking in air."

Wilder's doctor even told him that he'd done a pretty good job.

I was watching the Suze Orman Show last night, and a viewer had emailed in with a question about saving for college. Suze immediately referred him to Savingforcollege.com, saying that it was the site for anyone need information on 529 plans, Coverdell plans, and everything else that makes saving for educational expenses a lot more confusing than it probably needs to be.

She's right: the site is awesome and easy to navigate. If you're in the fortunate position of being able to start saving for college before your child ships off, you owe it to Junior to spend some time looking at the site.

Here are some articles worth a look: Do grandparent contributions to 529 plans hurt financial aid eligibility? Can you use one 529 account for multiple children?

But perhaps more importantly: What is a 529 plan?