Moolanomy Personal Finance

Redbox Movie Rentals versus Netflix and Blockbuster

MLR (Staff Writer) — Fri, 06 Nov 2009 00:00:00 +0000

One area in which I have vigilantly slashed my spending is the “Entertainment” category. I include cable television, movie theaters, concert tickets, bars, sporting events, and a bunch of other things in this category. The easiest expense to cut back on thus far has been the TV/movies area. For television, Hulu has aided me in getting rid of cable completely. This may change with the recent news of them converting to a pay service.

Photo by Greg Bowers via Flickr

This move towards Hulu had an unintended effect of limiting my movie options when I just want an hour and a half plotline to daze off into. So, what does a guy do? You can watch the poor selection of free movies on Hulu, you can spend a small fortune at the movie theatre, or you can rent a movie.

Movie Rentals

When looking at ways to rent a movie, you have a few options.

Blockbuster and Hollywood Video

The brick and mortar rental arena is pretty much dominated by large players like Blockbuster and Hollywood Video. They have the advantage of allowing you to pick up a wide selection of movies on a last minutes notice.

They typically charge $5 or more per rental and tout “No Late Fees” — but take longer than a few weeks to return it, and you will own the movie (for an inflated price, of course)! Ouch.

Netflix and Blockbuster Online

To combat the pricey-ness and late fees, albeit disguised late fees, Netflix and Blockbuster Online offer an e-movie store. You pay a fixed monthly price, have the movies delivered to your door, and can hold on to them as long as you want. All you need to do is mail them back when you’re done (or take them back to the brick & mortar store in the case of Blockbuster online).

However, this requires a monthly subscription cost that may make the cost per DVD more expensive than if you were to rent them individually. This is entirely dependent on your usage. You need to plan ahead; If you want to watch a movie tonight, you needed to order it two days ago at least.

Redbox Kiosk

Then, there’s Redbox. So, how does Redbox compare?

At only $1 per night for a DVD, the pricing is VERY competitive. If you typically get a DVD and watch it in the same night, you could get at least 9 movies per month and still be competitive with the lowest tiers for the mail services.

As far as selection is concerned, Redbox has a very limited capacity. Afterall, all of the movies need to fit in the kiosk unit. Every time I have used Redbox, it has been for a new release. For older movies, I simply go to the local library for them. Libraries are lackluster with their new release selection, which makes for a good complement to Redbox.

Features Comparison

	Netflix	Blockbuster Online	Redbox
Source of Rentals	Mail	Mail and Brick & Mortar	Brick & Mortar
Price	$8.99 (1 DVD at a time), $13.99 (2 DVDs at a time), $16.99 (3 DVDs at a time)	Same as Netflix + option to pay $3 more for the ability to swap up to 5 movies at the B&M	$1/night (Return before 9pm next day to not incur the extra $1 charge)
Selection	100,000+	100,000+	Approx 500
Free Trial?	2 weeks	2 weeks	Free Rental Codes (use once per credit card)
Locations	Web	Web + Approx 3,500 retail stores	15,000 kiosks (McDonalds, Walgreens, etc)

Final Thoughts

In my opinion, Redbox offers the best all-around service.

When it comes to price, I am a fan of paying per use, not for some expected level of use. When I had Netflix and Blockbuster online (at different points), I wound up using them a lot less frequently than I thought I would. This drove the price per rental up to a point where I wasn’t really gaining that much value. At least with Redbox I know that I am paying $1 per rental at all times. There are plenty of free rentals to go around if you click the link for rental codes in the table above.

People often say that brick and mortar businesses cannot compete with e-tailers, but in this case, I disagree. A movie night can be little more than an impulse. A high-cost retail store may not be sustainable, but partnering with stores (like McDonalds and Walgreens) to place kiosks in is low cost, symbiotic to both partners, and much more sustainable. There is a reason that Redbox’s market share has increased to approximately 9% and their owner’s (Coinstar) stock is climbing.

When you have an urge to view an older movie that isn’t available in a Redbox, you could always check it out at the library or go to a more traditional movie store like Blockbuster. A $5 movie every now and then won’t kill your savings.

If you’re still unsure, I would suggest signing up for each of the free trials and seeing if you like them.

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This post was written by MLR (Staff Writer)

Do you have a financial question? Ask it now at Moolanomy Answers!

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Why The First Time Home Buyer Credit Is Terrible For The Economy

Kevin (Staff Writer) — Thu, 05 Nov 2009 00:00:11 +0000

The first-time home buyer tax credit extension cleared a hurdle in the Senate today with a 98-0 vote, and it could be a done deal if approved by the House this week. All over the U.S., there is an increasingly heated argument over the benefits of the First Time Home Buyers Credit and this extension. The program has been touted as one of many remedies for our economic woe, specifically it’s used to prop up the sluggish housing sector. Before, you make up your mind on whether or not this popular program should be extended, I encourage you to read on and consider why I believe this policy is terrible for our economy.

Photo by woodleywonderworks via Flickr

The Net Effect Is Zero

First and foremost, government programs to motivate spending such as Cash For Clunkers or First Time Home Buyer Credit do nothing for the economy for the long-term. They provide short-term boosts in consumption by moving demand around.

In order to stimulate the housing sector and prop it up, we need additional buyers — have more buyers than sellers and prices go up. The combination of buyers and sellers is what moves prices up or down. Therefore, the government decides to find a way to bring more buyers to the market. By offering first time home buyers a tax credit, you accomplish the task.

But, the question becomes: where are these buyers coming from? They’re coming from the future. Individuals that would most likely buy a home for the first time in 2011 or 2012 or beyond are being moved forward to buy a home in 2009. Great, right? Well, what about the housing market in 2011? Won’t we need first time buyers then? Yes, we will if we want the market to continue to move higher. A logical thinker concludes that this is not a sustainable path. But politicians conclude that the future is someone else’s problem — I’m up for re-election in 2010!

You see, no extra demand is created. Instead, it is merely moved around. Now, this isn’t necessarily the worst case scenario, but if you begin to factor in the cost of simply moving demand around, the scenario becomes worse. Borrowing money, raising taxes or printing the money in order to move housing demand forward (which is unsustainable) is a terrible policy that results in higher deficits or inflation. We’re stealing from our future in order to stimulate housing in 2009.

Furthermore, there has been rampant reports of corruption and fraud by people fraudulently claiming the first time home buyers credit. Most government programs come with significant levels of fraud.

Some Key Things To Remember About Government Incentives

First, just because a government policy is popular, it doesn’t mean it is effective. One thing certain is that if a policy is popular, it will be extended for political gain; but let’s get back to the whole effectiveness issue. Let’s say for example, our leaders decided to give everyone some crisp new green backs and give every American a million dollars. Would that be popular? Of course! We’re all rich! But, people who understand economics and monetary policy knows this wouldn’t have the effect that people think. All this would do is raise prices of everything from houses to iPods, the net gain in purchasing power (real wealth) would be nonexistent.

The second key to remember is that government has nothing. In order to give something, it must first take it from elsewhere. So, to give money in the form of a stimulus, government must take it in the form of taxes (or print it which leads to inflation). People assume that government programs come from this vault of money that is “government money”. There is no such thing. It is our money that the government has taken from us via taxation.

Lastly, government programs are created through political motivation. Politically motivated economic policies are terribly inefficient at stimulating the economy or providing real value when compared to letting the actual economy work. Let’s say that the government dished out $100 billion in tax credits for first time home buyers. This $100 billion was taken out of the private market and spent according to political means. Where would the $100 billion have been allocated if government was not in charge of allocating it? It would have naturally flown into areas that are still productive (i.e. technology, factories, small businesses). Instead, we will have a boost to housing which means we are allocating more money and resources into building houses that we don’t need.

Most of all, remember that the government has political interests. They’re focused on polls and elections. They will sacrifice long term prosperity for a short term boost to the economy if it means re-election. Is that really the best path economically? I encourage you to challenge the government incentive programs that are being thrown at you to spend your money. Consider the cost of these programs, and consider the real long-term impact. I think you will see that we don’t need them.

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This post was written by Kevin (Staff Writer)

Do you have a financial question? Ask it now at Moolanomy Answers!

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Should You Purchase a Cheaper Product or Upgrade to a More Expensive Product?

Craig Ford (Staff Writer) — Wed, 04 Nov 2009 00:00:56 +0000

In general, people want to make financially responsible decisions when they go shopping. Often times, I look at two apparently identical items that priced differently. On some occasions, the difference between two products is as obvious as the price. The question is: should you buy the cheaper item or the more expensive one? Do you purchase entry level items or upgraded ones?

Photo by jpockele via Flickr

In the long run I believe you will be better off purchasing the entry level item until you prove to yourself that you will (1) use the product and (2) take advantage of the additional features of the upgraded product. While this approach means that you may spend more for some products, it also means you will spend less overall in the long run.

Here are a few examples

EXAMPLE #1: The Treadmill

Let’s say you are on the market for a new piece of exercise equipment. Before you start thinking about dropping $1,500 on a treadmill, may I suggest an alternative. First, make a commitment to walking for 10 minutes every day. If weather is an issue, visit your local consignment store and see if they have an indoor exercise machine available. It’s likely that the machine will not look anything like the one you had your eyes on, but buy it and use the following plan:

Set an exercise goal — for example, exercise for 20 minutes, five days a week.
Plan to keep your routine on the used machine for three months.
If you use the machine consistently then you can consider upgrading to a new one because you have proven you will get full use out of the upgrade.

Implications: You may have used a less than ideal machine for three months, and in the long run you may spend an extra $100. But, you have proven you will use a new machine. Moreover, there is a possibility that you will be content just using the original used machine.

Do you have any idea how many thousands of dollars of unused exercise equipment are rusting away in peoples homes? Don’t be the next victim. Start at the entry level, then upgrade later.

EXAMPLE #2: Groceries

Standing in the grocery store you see a store brand of Macaroni and Cheese. Your family has always purchased Kraft, but there is a reasonable difference in price. What should you do? Buy the cheaper product. If your family does not like it, then simply go back to your brand of choice. If, however, your family likes the cheaper product, you have now found a way to indefinitely save on your groceries.

Don’t ignore a certain item just because it is not a brand you recognize. Try it and be the judge for yourself. There will be some brands you like much better, and some you equally like with the cheaper product. In the long run this will result in cost savings. Perhaps you could set up an at home blind taste test to get started, and here are some more tips for saving money on your groceries.

EXAMPLE #3: Electronics

A few years ago I was hunting for my first MP3 player. There was a substantial price difference between an iPod and an MP3 player I was considering. I decided to buy the non-iPod one for $20. Why? I wanted to be sure I would actually use it when I went jogging. It turned out that I was perfectly content with a simpler (cheaper?) brand, and did not have to pay $100+ for an iPod.

This same principle can be applied to any kind of electronic items (with the possible exception of big ticket items). Try a more basic entry level product first and upgrade if you need the features or encounter problems.

EXAMPLE #4: Clothing

I live in a climate and environment where I get a lot of use out of high performance active wear. I spend a lot of time in rustic conditions so I get use out of dry fit clothing and high quality outdoor gear. Nevertheless, when I first came to Papua New Guinea I only bought one pair of Columbia GRT pants. I found that they held up well under the conditions and the features were awesome for my trips to the outside villages. The subsequent trip to North America, I purchased more of this expensive clothing. What if, on the other hand, I had bought a whole wardrobe to start with and did not like the clothing? I would have wasted a ton of money.

When shopping for most products I recommend that you start with an entry level product and upgrade once you have proven to yourself that you will use the products, and you know the additional features are worth the added expense. While some might think the approach is “cheap, not frugal,” I believe you will save money in the long run if you use this approach (with some common sense).

Special Note

This approach does not apply to everything. For example, you might want to pay more for a vehicle or high priced electronic item otherwise you might just be wasting your initial purchase.

Do you ever purchase products this way – buying entry level first? Has it saved you money?

What types of items do you think are always worth the upgrade?

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This post was written by Craig Ford (Staff Writer)

Do you have a financial question? Ask it now at Moolanomy Answers!

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Make Money Online: Cash Crate Review

Miranda Marquit (Staff Writer) — Tue, 03 Nov 2009 00:00:39 +0000

When you are looking to make money online, it is common to come across a variety of web sites offering to pay you for doing a number of seemingly easy things. One of the most popular types of online money maker is the paid survey site. There are also a number of web sites out there that will pay you to fill out offers. Cash Crate is among the faster growing sites devoted to paying participants to take surveys and fill out offers. The web site is also one of the most reputable and easy to use sites of its kind. On top of this, Cash Crate also allows you to make money on referrals who sign up through your good offices — plus, you can make money your your referrals’ referrals.)

Getting Started

I signed up for Cash Crate myself, just to take it for a test drive. Cash Crate is a free program. You sign up for free, and you do not have to give any sort of payment information to register. Just for signing up and filling in some account information, you will get a $1 bonus. That’s actual cash money.

Offers and surveys you can fill out are divided into three categories: Cash Offers, Points Offers and Research Surveys. You receive actual cash for Cash Offers and Research Surveys. I was able to add up $5 in about an hour, by taking a few surveys and filling out some offers. Points Offers provide you with Cash Crate points that you can redeem for prizes and gift cards.

Some of the offers do require that you pay money, and some require you to enter payment information, sign up for a free trial, or sign up for an account that you agree not to cancel for a set period of time. These offers are easy to recognize, since Cash Crate is kind enough to put a credit card symbol next to offers that could end up costing you money. Some offers provide their own prizes. For instance, you can fill out a form and receive $0.50, and be entered to win a gift card or a cruise.

You can draw referrals by placing ads on your blog or web site. Cash Crate generates HTML code for ads that will register as your referrals. This makes it relatively easy to put a professional looking badge or banner on your site, and earn referrals from visitors.

Getting Paid

Every time you click on an offer or survey, a new window opens. You fill it in with honest information. Then you go back to Cash Crate window (which remains open) and click on “submit”. Cash Crate only credits you when it confirms with the third party that you have fulfilled the requirements of the offer. In the case of credit card offers, you will not see your account credited until you are approved for that credit card. (If you aren’t approved, then your credit score just took a small hit, and you didn’t earn anything.)

Referrals are structured according to direct referrals and secondary referrals. You earn a smaller commission on secondary referrals (these are people referred by your referrals), though. Cash Crate has a tiered system of referral earnings. Once you have so many referrals, for example, you start earning 25% on your direct referrals, rather than 20%. You can see how the referral program could easily become more profitable than actually filling out surveys.

When your earnings in a month reach $20, you are issued a check. This check is mailed to you sometime around the middle of the month after your account reaches $20. I can’t personally attest to actually receiving payment, since I haven’t been a member for more than a month. But Peter at Bible Money Matters has been making money from Cash Crate for more than a year, and he’s someone I trust.

Is It Worth It?

Like all web sites of this sort, how much you make depends on what you put in and what you are willing to do. This is going to sound snobby, but for me, spending an hour to bank $5 is not worth the trouble. If I were willing to sign up for some of the higher paying offers, such as two-week trials, credit cards and the like, I could probably push my hourly earnings to something in the $30 to $40 range. But those offers, as you might guess, are few and far between. Besides, if you forget to cancel your free trial, it could end up costing you more than you make.

If you have a few extra minutes to take a quick survey, it could provide you with a little extra cash. But watch out! Some surveys get quite long, and you might not feel that getting $0.75 to spend 10 minutes on a four-page survey is worth your time. It’s the referral program that really makes Cash Crate worth it. If you draw enough people to your web site, you can get a substantial amount of referrals.

Bottom line: Cash Crate is probably the best paid offer/paid survey site out there. It is reputable and the site is easy to use and understand. However, it can translate into a lot of time spent for a small amount of money. But it’s worth it to sign up, if only to get a little residual income from referrals.

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This post was written by Miranda Marquit (Staff Writer)

Do you have a financial question? Ask it now at Moolanomy Answers!

Please visit Moolanomy Personal Finance Blog, Moolanomy Finance Directory, and Moolanomy Answers for more great content.

What To Do With A Financial Windfall

Jill (Staff Writer) — Mon, 02 Nov 2009 00:00:44 +0000

We’ve all heard the stories of lotto winners who win millions, think they’re set for life, and then go broke within a decade. Or people who inherit large sums of money and end up in financial ruin, family feuds, or both. The word “windfall” can mean different things to different people — if you’re young and drowning in debt, even $10,000 can do wonders for your quality of life. If you’re older with no debt and decent retirement savings, it will probably take a lot more to really change your life. Whatever the amount is, here are 12 things you should consider if you receive a large financial windfall.

Photo by borman818 via Flickr

1. Say/do nothing

When you first receive the news, keep it to yourself for at least a few days. Tell a spouse, but that’s it. Don’t quit your job, don’t shout from the rooftops, don’t give $1,000 to everybody you know. Just take a deep breath and think about how you might want to use the money. This is especially key if your windfall is the result of an inheritance or life insurance policy — take the time to grieve your loved one, and put the money in a savings account until you can deal with it with a clear head.

2. Take offers to help, or “great business ideas” with a grain of salt

If word of your windfall gets out, “financial experts” will turn up out of nowhere. Ditto for friends, acquaintances, or even perfect strangers just dying for investors in their new business. Say no to everything the first time around. If any of the offers to help are legitimate, the person will keep trying. And if any of the business ideas were that good, they probably would have been done already. Don’t part with any of your money until you have a chance to evaluate your options.

3. Set aside as much as necessary for taxes

Depending on where the windfall came from, it may be taxable. Lottery, (legal) gambling, or other prize winnings are taxed as ordinary income. Life insurance proceeds are generally not taxable, while other inheritances may be subject to income and/or estate tax. If necessary, hire a tax advisor to help determine how much tax you will owe. Set aside that amount immediately so that you have it when the time comes to pay.

4. Use a small portion to do some good

If there’s a charitable cause you really believe in, it would be great to donate a portion of your windfall to that cause. You might even want to donate to your church. If you truly want to and can help individual family members or friends, do so. But beware that helping one might mean others asking for handouts. Limit your assistance to those who truly need it and can keep it to themselves. And don’t feel the need to give more than a small portion of your money away, unless you really want to and are otherwise in a position to do so. Your own needs and those of your immediate family must come first!

5. Use a little for fun

When you receive a financial windfall, it’s ok to use a small portion for fun (say, no more than 10%, though it depends on the total amount). Take a nice vacation. Treat your wife to the spa day she’s been asking for, or yourself to some new golf clubs. If we’re looking at a windfall of $5,000 and you’re a grad student on a shoestring budget, this might just mean treating yourself and a date to dinner and a movie! Whatever your mini-splurge is, plan for it, and make it a one-time deal. No fancy steak dinners every other night, with lobster on the nights in between!

6. Maximize your emergency fund

If you don’t yet have at least six months of expenses saved, put at least that much aside now in a high-interest savings account, short-term CD ladder, or money market fund.

7. Don’t plan to live off of the money unless you can truly afford it

Depending on how old you are, and unless we are talking about a really hefty sum of money, it is doubtful that your windfall can replace your income for the rest of your life. Don’t quit your job or substantially increase your standard of living unless you are really certain that the money will last. In order to be really certain, it’s probably best to hire a professional to run the numbers, which brings us to the next tip.

8. Hire a trusted financial advisor and create a plan

At some point after you received your windfall, it is probably a good idea to get a professional involved to help you evaluate your options for future, spending, savings and investments. If you have a financial planner already, ask him if he is comfortable advising you on such a large sum of money, and if he can provide references from current or former clients.

If not, ask for a referral to another planner. You want a financial planner who specializes in lump-sum management or high net worth clients. If you don’t have a current advisor and you’re not sure where to start, discreetly ask a trusted (financially comfortable) friend or colleague for a referral. You can also turn to the Garret Planning Network for a list of fee-based advisors in your area.

When dealing with a large sum of money I would definitely recommend a planner with an hourly rate rather than one that charges a percentage of your assets or a commission on investments. Your financial planner will help you create a plan for the rest of your money — I discuss some possible options in the final four tips below.

9. Pay off debt and other obligations

Pay off as much debt as you can, including credit cards, student loans, auto loans, and even your mortgage if you can afford it. Especially if your windfall comes from a life insurance policy on your spouse, make sure that you set aside enough to cover all the expenses that your spouse would have paid for, such as mortgage, tuition, childcare, etc.

Additionally, make a commitment to stay out of debt — if you can truly afford to buy a fancy new car IN CASH with your newfound wealth, that’s one thing. Financing your dream car because you have a lot of money to pay it off with “later” is quite another.

10. Use a portion to fund short-term goals

If you were already saving for multiple short-term goals such as a new house, a large vacation, a wedding, car, or continuing education, you may want to fund some or all of those goals with your windfall. A financial planner can help determine what you can afford and on what schedule.

11. Allocate portions to long-term goals

If you have longer-term goals like early retirement, paying for school for your kids or grandkids, making large charitable contributions, or moving to a different state or country, begin planning for the payment of those items now. A professional can help you determine a time horizon and appropriate saving/investing strategy for each one.

12. Invest the rest wisely and use only the income until retirement or later

When all your goals are planned for, and the rest is truly yours to spend as you wish, consider investing the remainder conservatively (say in a bond fund or treasury bills) and living off the income. Once you reach retirement, you can begin drawing down the principle as needed. This strategy will help you make the money last over your life expectancy, and maybe even leave some as a windfall for your own beneficiaries.

I’ve listed 12 things here that you might do with a windfall — I’m sure there are more. The bottom line is that you should be as careful with this newfound “free” money as you would with money you worked hard to earn. Used correctly, a windfall can push you dramatically forward on your path to financial freedom. But if you get caught up in buying lots of things or helping too many people, you could end up worse off than before. Regardless of the specific course you take, remember to make well-thought-out decisions and involve your immediate family and a professional where appropriate.

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Reader’s Question: Financial Priorities And A Windfall

This post was written by Jill (Staff Writer)

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Best Online High Interest Rate Savings Accounts, November 2009

Pinyo — Sun, 01 Nov 2009 23:00:52 +0000

For November 2009, the average interest rate on high yield savings accounts remained unchanged — the only exception is Ally Bank whose rate dropped slightly. Although the rates are not as high as they once were, high yield savings account (or online savings account) is still a good place for short-term savings, such as an emergency fund. This article contains a list of nationally available highest yields savings and money market accounts. All of these accounts are FDIC insured up to $250,000. Your principal is protected and you’re guarantee a positive nominal return on investment.

Savings Banks With Highest Interest Rate

As of 11/6/2009 the highest yield savings accounts are:

Bank	Interest Rate (APY)	Min. Deposit	Details
EverBank Yield Pledge Money Market Account	1.77%	$1,500	For new customers 2.51% 3-Month Bonus Rate. Low $1,500 initial-deposit requirement. No-fee Online and Mobile Banking. Up to six withdrawals per month.
Amercan Express High Yield Savings	1.70%	$0	No minimum balance, and fee-free electronic transfers.
Ally Bank High Yield Savings	1.55%	$0	Open with $0, no minimum balance. No monthly fees. Daily compounded interest for maximum earnings. Six withdrawals or transfers per statement cycle.
WT Direct Savings Account	1.51%	$10,000	No minimum deposit required to open the account. The account earns maximum APY for the first 60 days regardless of the account balance. After the first 60 days, the APY drops to 0.15% APY if the if the balance drops below $10,000.
HSBC Direct Online Savings Account	1.35%	$1	No monthly fees. No matter how much you use our ATMs or how many times you transfer your money, there are no fees. No minimum balance requirement.
ING Orange Savings Account	1.30%	$1	No fees. No minimums. Your Orange Savings Account will be automatically linked to your current checking account. Access your account around the clock via ingdirect.com. Open your account online in under 5 minutes.
Citibank Ultimate Savings	1.20%	$100	No monthly fee. $100 minimum opening deposit. Apply online or by phone.

If you are looking for more savings options, I recommend that you try MoneyAisle to help you find the best online savings account rates.

Alternative Savings And Investment Options

In addition to high yield savings accounts, there are other alternatives that may work for you.

Lending Club (average 9.67% APY*)

Lending Club is a social lending network where you can invest in individual loans with as little as $25. The specific interest rate depends on the quality of loan you are investing in. Currently, the average return on investment is 9.67% APY. To learn more about peer lending, please read Introduction to Peer-to-Peer Lending.

* IMPORTANT: Please note that there are special risks associated with social lending.

Save Yourself Account at TD Ameritrade ($100 + 0.50% APY)

Open a new (non-retirement) Save Yourself Account at TD AMERITRADE, make 12 consecutive monthly deposits of $100 or more, and TD AMERITRADE will give you $100. Also, you will receive free online access to Women & Money—the book that launched Suze’s Save Yourself movement.

SmartyPig (2.01% APY)

SmartyPig is an online piggy bank where you could set up savings goals, and invite family and friends to contribute to your account. While your savings is accumulating, it’s earning a competitive interest rate of 2.01% APY — currently the bast savings rate. Additionally, you could opt for special incentive from participating retailers to get even more from your savings.

Here’s a review of SmartyPig I did in 2008, please note that several things may have changed since.

High Yield Checking Accounts (up to 1.55% APY)

Generally, there are more restriction around high yield checking to be eligible for the best rate. However, it may be worth while if you can meet the requirements. Currently, ING Electric Orange offers a high yield checking account that pays up to 1.55%.

Please visit Best High Yield Online Checking Account Rates for more checking options

Bank Rates Search Tool

Additionally, you can use the following tool from MoneyRates.com to find more high interest rate savings account and other banking products for your need.

Please review information associated with each offer before you sign up. Rates and conditions change constantly and I have reported what I believe to be the most accurate information at the time the article was updated.

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This post was written by Pinyo

Do you have a financial question? Ask it now at Moolanomy Answers!

Please visit Moolanomy Personal Finance Blog, Moolanomy Finance Directory, and Moolanomy Answers for more great content.

Best CD Rates (Certificate of Deposit Rates), November 2009

Pinyo — Sun, 01 Nov 2009 13:30:28 +0000

The following is a list of the nationally available highest yields 12-month CD rates. In general, certificates of deposit (CDs) are great investments because your principal is protected by FDIC insurance and your interest rates are guaranteed. Moreover, you can use CD Ladder to make your CD savings more flexible and effective. You can open certificates of deposit at your local bank, but with a little more effort you can secure the best rates through online banks.

1-Year CD With Highest Interest Rate

As of 11/6/2009, the highest yield CDs are:

Bank	Rate (APY)	Min Deposit	Details
Ally Bank High-Yield CDs	1.95%	$0	Open with $0, No monthly fees, Daily compounded interest for maximum earnings, Automatic renewal at maturity, Ability to withdraw and receive earned interest as income — just let us know before the CD maturity date or by ten days after. Ten-Day Best Rate Guarantee to new and renewing CDs.
EverBank Yield Pledge Certificates of Deposit	1.75%	$1,500	Choose terms from 3 months (0.95% APY) to 5 years (3.04% APY), Low minimum of $1,500 to open your CD

Bank Rates Search Tool

Additionally, you can use the following tool from MoneyRates.com to find the right banking product for your need.

If you are looking for different length CD and more banks, I recommend that you try MoneyAisle to help you find the best CD rates for your desired term.

Alternative Savings And Investment Options

In addition to high yield savings accounts, there are other alternatives that may work for you.

Lending Club (average 9.65% APY*)

Lending Club is a social lending network where you can invest in individual loans with as little as $25. The specific interest rate depends on the quality of loan you are investing in. Currently, the average return on investment is 9.65% APY. To learn more about peer lending, please read Introduction to Peer-to-Peer Lending.

* IMPORTANT: Please note that there are special risks associated with social lending.

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This post was written by Pinyo

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Open Enrollment Time: A Guide to Your Benefits Package

Kelly Whalen (Staff Writer) — Fri, 30 Oct 2009 00:00:30 +0000

It’s Open Enrollment time at most employers, the time when you get to choose your benefits coverage for next year. You will review your chosen options, and make changes to them as needed. It’s important to be familiar with last year’s benefits. You may get a summary, but can use your paystub to see what your current costs are. The window of time to change your benefits is often small, be sure you know when your open enrollment period begins and ends.

Photo by mag3737 via Flickr

This year has seen an increase in “healthy living” programs at companies nationwide. In an effort to decrease healthcare costs, companies are charging higher premiums to employees who do not participate in a health care screening. The health care screening is confidential, but many employers use it as a way to identify workers who need help making healthier habits. Some employers are offering weight loss incentives, smoking cessation programs, and other programs based on the results of the screening.

Employees may see an increase in out of paycheck or out of pocket costs. Companies are still struggling after the recession as well as dealing with higher insurance costs. For a detailed article about the changes that many employees are seeing read more at CNN Money.

The following are a list of options that are common among companies with more than 50 employees. It is not comprehensive but covers the basic options most employers offer.

Health Care

Most companies offer several kinds of health insurance. You will typically find:

HMO

Pros: Higher coverage rates. Lower co-pays. May be lower or near in cost to other options.
Cons: Have to choose a primary care physician. Must get referrals for specialists. Out of network coverage is expensive.

PPO

Pros: Covers out of network providers. No need for referrals. Do not need to choose Primary Care Physician.
Cons: Percentage of coverage may vary. Co-pays are often high. Out of pocket deductibles may be high.

HSA with a high deductible plan

Pros: Money is kept in a tax-deffered until you need it (meaning it can grow tax-free), great for people who are healthy, and have few medical issues. Low monthly payment.
Cons: High co-pays. No coverage in some cases.

Dental

Choose the best plan you can, dental care is expensive.

Vision

You can opt out if you have no issue with your vision, and are under 35. Choose a good plan if you or anyone in your family wears glasses, or you are older (chances are you may need glasses as you age).

Other Insurances

Life Insurance

If you get life insurance for free, take it. Group life insurance plans is generally not good coverage and should NOT be your only coverage. Price compare by using sites like NetQuote or Accuquote. For more on life insurance, read 11 tips on how to get the right life insurance.

Accidental Death and Dismemberment Insurance

Generally not recommended, unless you work in a physical field like construction. If you have extra money to spend on this, choose more life insurance.

Spouse/Child Insurance

Generally not worth the extra money, as you can find the same policies cheaper and for higher amounts.

Short and Long-term Disability

Choose at least minimal coverage. Your employer may offer some for free, it’s up to you if you feel it is worth putting the money into insurance or using it to further buffer your emergency fund.

Health Care and Dependent Care Flexible Expense Accounts

Take full advantage of these options if you can. It can be tricky to decide the amount if your costs are unknown (like with health care spending accounts), but choose on the higher end. At the end of the year you can use up your funds so you don’t lose them on pre-paying for next year’s daycare expenses, or purchasing over the counter medicines, first aid kits or an extra pair of glasses.

Other

You may have options such as discounted health club memberships, smoke cessation program reimbursements, or any number of perks. Take advantage of them if you can.

Many companies offer a hotline, or a website dedicated answering common questions, so be sure to check for a FAQ or similar before contacting a person. If you have questions or concerns about your enrollment forms, talk to someone in your human resources department. At most companies you can only change your enrollment options when you have a change in family status such as a birth, death, or adoption.

Whatever options you choose, make sure you fully read your package or information before making any final decisions.

Have your healthcare premiums increased? How are you planning to make your selections this year?

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This post was written by Kelly Whalen (Staff Writer)

Do you have a financial question? Ask it now at Moolanomy Answers!

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5 Reasons You Need a Tax Professional

Sally Acquire — Thu, 29 Oct 2009 00:00:30 +0000

If you’re responsible for dealing with your own taxes, it can be beneficial to hire an accountant to make sure that you’re deducting everything that you’re entitled to. In most cases, whether you need to use a tax professional depends on your situation. If you are a regular employee who fills in W-2 forms and doesn’t make many deductions, it won’t usually be necessary to use the services of a tax professional. However, if your tax situation is more complex, it makes much more sense to enlist a professional who knows what he or she is doing.

Photo by blmurch via Flickr

Why You Should Hire A Tax Professional

1. They know their stuff.

As accountants are used to filling in tax returns and are well aware of current tax rules, they can offer advice for reducing your tax bill (legally, of course!) through deductions. The average individual is often oblivious to the type of deductions that are possible. This can be very relevant if you are self-employed or operate a small business as either your main job or a sideline.

2. It can save time and effort.

Filling in your tax return can be a time-consuming activity even if you know exactly what you’re doing. If you’re at all unsure about things, preparing your tax return can quickly become a minefield. For those of you who are completing ‘complex’ tax returns (for example, if you’re self-employed, own a small business or have investments or dividends), it can easily take up anything from five to forty hours of your time. Most of us don’t have the time or patience to dedicate to this. If finances allow, hiring a tax professional can remove all of the stress that usually comes with preparing a tax return.

3. Mistakes can be avoided.

Unless you’re very familiar with tax laws, it’s likely that you will make some errors when completing your tax return. In some cases, these mistakes can turn out to be costly. As tax professionals are well versed in all things tax, they can avoid these situations.

4. You can call on them later.

Tax problems can crop up at any point in the year, and it’s useful to be able to seek the advice of a tax professional to deal with them. By hiring a tax professional to handle your tax return, you’ve already established a working relationship that you can use to your advantage if problems do occur.

5. They can help with audits.

Being audited is an unpleasant business, and it helps to have a tax professional in your corner to call upon if the situation ever arises.

Alternative Options

On the other hand, hiring a tax professional can cost more than you’re willing or able to spend. An alternative solution is to use free tax software such as TaxCut and TurboTax to help you fill in your tax return by yourself. This can be useful if your tax return is relatively simple to complete (for example, if you’re an employee who doesn’t make many deductions beyond the standard ones), but they may be more problematic for individuals with more complex tax situations as their guidelines may not be fully up-to-date.

For example, TurboTax searches for deductions that can save you money, but a tax professional would be able to advise on whether these deductions are the most relevant to your situation. If you’re willing to part with more money, you can purchase ‘upgraded’ versions of TurboTax (such as Premier or Business packages), which are designed for tax situations that go beyond ’simple’ tax return completion.

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This post was written by Sally Acquire

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The Importance of Personal Money Management

J. Scott — Wed, 28 Oct 2009 00:00:27 +0000

Many of us were not taught the importance of personal money management when we were young. We did not learn to save, invest, allocate, or how to make our money work for us. Many of us are in debt, have no idea how we got here and do not know how to start digging ourselves out. Well, today you can break the vicious cycle by teaching your young ones to better manage their finances, starting with their allowance and birthday money.

Photo by Digital Sextant via Flickr

Our parents didn’t know so we don’t know.

The fact that your parents never taught you money management only shows that they did not learn it themselves. Once you learn the benefits of financial management, not passing it on to your children would be a crime. As a parent you want your kids to be successful in life. It does not matter how much they end up earning for a living, if they know how to manage it, they can live very comfortably and avoid the number one pitfall in America…DEBT! Just think of all the times you said to yourself “If I only knew”. Well, now you do and have a chance to break the cycle.

We all depend on money in one way or another, some of us use it to better our lives and some of us get used by it. Some of us work hard for it and some of us put it to work for us. By social standards the ones that use it to better their lives and put it to work for them are the successful ones.

It isn’t hard to make money work for you if you understand how money works. If at age 20 you knew the basics of saving and planning for retirement it is most likely that you would have started saving for it. Worst case scenario, when it was time to retire you would have enough to live off the interest. Best case scenario you would have an island next to Angelina Jolie with a private jet to swoop you anywhere you want to go.

Everything is for sale.

The second reason we do not manage money well, is that there are so many companies trying to get it out of our pockets. These companies have the best advertising minds and years of research working to get us to spend. I have nothing against buying what you want and need, but there are ways to get everything we want and not end up in debt.

The problems is, we do not want to wait or save for these things. Children’s minds are copy machines, they usually end up doing what they see us do and continue that pattern all their lives. Their financial future depends on what they learn from a young age. I was taught by my mother how to manage my money since I was young, and because of this I have always been good at saving and spending wisely. If she did not take the time to teach me, it is a good chance I would not have the skills and patience that I have today.

One of my rules in life is to save for everything over $10, and before I had a handle on it, I had what I called a $10 sub-savings account. I would keep it at $100, and when I used any of it I would replace it $10 at a time. It is little things like these that I will teach my child when I am lucky enough to have one. If you do not have good habits start developing some now and teach them to your young ones as you learn them. There are many books you can read such as Personal Finance For Dummies, Rich Dad Poor Dad, I Will Teach You To Be Rich and many more to get you started. Getting them in the habit of putting away a small percentage of the money they receive will benefit them throughout their lives. Taking them to the bank to setup their own bank accounts and make their own deposits will give them a sense of ownership. Give them an early start so they never have to say “If I only knew.”

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This post was written by J. Scott

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