Avoid Credit Cards to Control Spending

In the current difficult economic climate, it has become more important than ever to keep a close track on spending. While credit cards are a convenient option, they often make it seem like we have more money than we do, and in the long run can cause more problems than they solve as interest charges mount up.

One solution is to pay for everything with cash, but that can be inconvenient, and it isn't always a good idea to carry large quantities of cash on shopping trips.

Checks or debit cards tied to checking accounts help limit spending, but also carry the risk of overdraft fees. With banks fighting for every penny of profit they can manage, many have increased overdraft fees, hoping to profit off or your overspending. With a debit card in particular, it is all too easy to forget to subtract purchases from the checking account, or to overestimate available funds.

A relatively easy way to avoid all of these issues is to use a prepaid Green Dot Credit Card. These cards work just like a credit card, and are accepted in nearly all retail outlets.

Rather than drawing funds directly from a checking account, as most traditional debit cards do, the prepaid debit card is funded ahead of time with a certain amount of money. So if you want to spend no more than two hundred dollars on holiday shopping, for example, fund the card with that amount of money. When the limit is reached, the card is no longer usable until more funds are added to.

A good choice for a prepaid debit card is My Green Dot.

Prepaid cards are also popular options for teens, providing a young adult with the experience of budgeting along with the independence to spend money without checking with mom or dad. Parents maintain control though, by limiting the amount of money for which the card is funded.

A prepaid debit card helps you stay within your chosen budget, and eliminates the danger of overdraft fees or high interest rates charged to a credit card. With a prepaid debit card, you can have the ease and convenience of a credit card or regular debit card without risk of overspending.

Art of the Down Sale

A few years ago, Money Ning had a good post about how restaurants and businesses try to up sell us - for example, by a waitress suggesting wine with our meal.

Back in 2008, I experienced the opposite - one of those rare cases of a down-sell!

It made me feel good!

We had domestic service with Dish Network, and my wife wanted to add an international channel.

I called up to add it, and the guy told me I had to get a second satellite dish for $56.

Somehow we got disconnected (turned out to be lucky for me) and I called back and spoke to a woman.

She told me that, instead of paying $56 for a second dish, they now have a “super dish” that can take the place of both the international and domestic dishes. I could get my domestic dish swapped for this one for free.

So, now, instead of having to pay $56 and having 2 dishes wired up together on the side of my house, I’ll pay nothing, and have only one dish to worry about!

See how powerful the down sell (suggesting ways to save your customer money) can be! Here, I now had a good experience with Dish Network and I'm telling everybody about it.

Walmart and Green Dot Cards

Recently, I wrote about the new re-loadable prepaid Green Dot Cards. I just found out that one place to buy and reload them is at your nearest Walmart.

They have embraced this new refillable debit card, and carry their own branded version. I think they realized that it is a good financial tool for lower income or frugal people, who make up a large segment of their customers.

The Green Dot Card fills a void between cash, regular debit cards, and credit cards:

1. Unlike a credit card, you are paying with your own money - like regular debit cards and cash.

2. Unlike traditional debit cards, it's not linked to your checking account, s nobody can steal all your money.

3. It is safer than cash. If your card is lost or stolen, you can report it and get your balance moved to a new card.

Don't Underestimate Small Flows of Passive Income

Monevator is a motivational blog for armchair investors.

It has a good article on Why a little passive income from a side project is worth a lot more than you think.

If your project "only" makes you $5 a day, that is $1,865 per year. But, at an
interest rate of 3%, this is like having more than $60,000 in the bank!

If you create a "set it and forget it" project, and it only trickles in a little bit of money, don't be discouraged. Just work on setting up more of them.

Bad Credit? How To Rebuild Your Credit History

Did you know that, even if you have bad credit, it may be possible for you to rebuild your credit history and reputation?

There are companies, such as My Green Dot, that issue prepaid, re-loadable credit cards. These prepaid cards will allow you to build discipline, and get used to using cards like cash - only buying what you can afford now.

After building your confidence with My Green Dot, the next step would be a cash advance line of credit. The issuer would probably require you to deposit a certain percentage of the credit line.

The key would be to use some of the advance every month for necessary expenses, and promptly pay off your balances. As you build a history of successful repayments with the issuer, they should slowly wean you towards an unsecured credit line. Your credit report and score will also start to look better.

San Francisco Bridge and Outsourcing: Is 6% Worth it?

California is replacing the San Francisco - Oakland Bay Bridge. It sounds like the type of large public works project that will provide needed jobs to Americans.

However, it is keeping hundreds of Chinese workers employed. To save money, California outsourced the construction of the bridge to China. The bridge pieces will be shipped to the U.S., and assembled by Americans.

California is risking criticism in three ways:

1. They outsourced jobs.

2. If there are any problems - especially fatal accidents - they will be accused of overlooking China's reputation for poor quality and cutting corners. Not to mention the possibility of damage from overseas shipping and the need to meet strong earthquake standards.

3. According to this New York Times article, in order to not buy American, they gave up federal funds.

Were these risks worth taking? Well, according to this article, the project will cost $7.2 billion, and they expect to save $400 million from having the Chinese do so much work.

That means that the total cost to get the bridge built completely by Americans would have cost $7.6 billion. Thus, California saved about 5.5%

To me, saving only about 6% is not enough compensation for risking quality, safety, earthquake standards, and not employing Americans.

Safer Alternative To Cash

Carrying around a lot of cash can be dangerous. You may attract a thief or robber, or you could simply lose the money. What if your wallet fell out of your purse or pocket?

One alternative would be to use a regular credit card. But, people with debt or bad credit may not be able to get a credit card. Also, some people avoid credit cards because they don't want to carry a balance and pay high interest rates.

But there is another option: you can use a Green Dot Credit Card - a prepaid, re-loadable card that can be used anywhere a regular Visa/Mastercard is used.

A Green Dot Credit Card has an advantage over regular debit cards that are tied to a bank account because you can control the amount on the card. This way, you can't spend all the money in your account. Your account also can't be emptied if someone gets hold of your card number. This means that the card can give you peace of mind when making online purchases.

This type of prepaid card can help people repair bad credit histories or bankruptcy because, after you use it for a period of time, it can demonstrate to banks that you can budget your money. It might lead to them issuing you a secured credit card, which can start to rebuild your credit history and move you closer to getting a regular credit card.

Platinum Coins and Covered Call Writing: Two Interesting Ideas For Side Stepping the Debt Ceiling

Today, in his "New York Times" blog, Nobel Prize - winning economist Paul Krugman had a post entitled Lawyers, Coins, and Money, which mentions 2 interesting ideas that the Obama administration could use to avoid a default:

1. There is a statutory limit to the amount of printed dollars that can be in circulation at any one time, but a little known loophole lets the treasury mint platinum coins of any denomination. So, the treasury could create two $1 trillion dollar coins, deposit them in its federal reserve account, and write checks against it.

2. The government could write a call option that allows the purchaser the right (but not obligation) to buy federal government property. This option could be set to expire in 90 days and sold to the Federal Reserve for $2 trillion.

Frugal Cell Phone Solutions

This is a Sponsored post written by me on behalf of Straight Talk for SocialSpark. All opinions are 100% mine.

Ben Franklin said that "a penny saved is a penny earned", but it is actually more than that.  Because of taxes, you need to earn more than a penny to net a penny - so saving as much as you can (without feeling deprived) can help your bottom line for years to come.

Being frugal is defensive - it will help you survive layoffs, bad economies, and retirement.

One area that people can painlessly save money in is cell phone use.  There is absolutely no reason to get locked into an expensive long term plan from a cell phone carrier.  These carriers keep you from jumping to a cheaper plan by charging expensive early termination fees.  They also have hidden costs such as activation.

Hook, line and sinker

As an alternative, you could look into Straight Talk.  They offer pay-as-you-go monthly plans that don't tie you down with contracts and hidden fees - such as activation or termination.

real Straight Talk customer

For only $45 per month, you can enjoy unlimited voice, text, and web browsing.  Also, you won't skimp out when it comes to the phone and it's features: You can get a fully functioning smartphone (GPS, mp3 player, camera, etc) from a leading manufacturer such as Kyocera or LG.

everything you need

<iframe width="425" height="349" src="http://www.youtube.com/embed/RKPihLfELWo" frameborder="0" allowfullscreen></iframe>

L-1 Identity Solutions (ID) - Another Real Life "Stock Trading Riches" Trade

On April 23, 2007 (my birthday by coincidence), I bought 101 shares of L-1 Identity Solutions (ID) at $19.61. L-1 makes biometric security products (retinal scanners, etc.) for government agencies, border control, courts, corporations, etc.

On July 25, ID was acquired in an all cash deal for $12/share. Thus, buy and hold yielded -39% for the last 4 years.

However, I managed the position with the Stock Trading Riches system. The formula had me do the following additional transactions:

12/29/2008 buy 230 shares at $6.04

6/4/2009 sell 107 shares at $8.91

12/22/2009 buy 89 shares at $6.40

12/28/2010 sell 145 shares at $11.90

I ended up with a +$18.6% return for 4 years. This is an annualized return of 4.4% - not bad considering that, in hindsight, I bought the stock too high.

This was another example of how my Stock Trading Riches system self-corrects your positions over time.

Frugal Cell Phone Solutions

This is a Sponsored post written by me on behalf of Straight Talk for SocialSpark. All opinions are 100% mine.

Ben Franklin said that "a penny saved is a penny earned", but it is actually more than that.  Because of taxes, you need to earn more than a penny to net a penny - so saving as much as you can (without feeling deprived) can help your bottom line for years to come.

Being frugal is defensive - it will help you survive layoffs, bad economies, and retirement.

One area that people can painlessly save money in is cell phone use.  There is absolutely no reason to get locked into an expensive long term plan from a cell phone carrier.  These carriers keep you from jumping to a cheaper plan by charging expensive early termination fees.  They also have hidden costs such as activation.

Hook, line and sinker

As an alternative, you could look into Straight Talk.  They offer pay-as-you-go monthly plans that don't tie you down with contracts and hidden fees - such as activation or termination.

real Straight Talk customer

For only $45 per month, you can enjoy unlimited voice, text, and web browsing.  Also, you won't skimp out when it comes to the phone and it's features: You can get a fully functioning smartphone (GPS, mp3 player, camera, etc) from a leading manufacturer such as Kyocera or LG.

everything you need

<iframe width="425" height="349" src="http://www.youtube.com/embed/RKPihLfELWo" frameborder="0" allowfullscreen></iframe>

Using Debit Cards To Control Spending

In the current difficult economic climate, it has become more important than ever to keep a close track on spending. While credit cards are a convenient option, they often make it seem like we have more money than we do, and in the long run can cause more problems than they solve as interest charges mount up.

One solution is to pay for everything with cash, but that can be inconvenient, and it isn't always a good idea to carry large quantities of cash on shopping trips.

Checks or debit cards tied to checking accounts help limit spending, but also carry the risk of overdraft fees. With banks fighting for every penny of profit they can manage, many have increased overdraft fees, hoping to profit off or your overspending. With a debit card in particular, it is all too easy to forget to subtract purchases from the checking account, or to overestimate available funds.

A relatively easy way to avoid all of these issues is to use a prepaid debit card. These cards work just like a credit card, and are accepted in nearly all retail outlets.

Rather than drawing funds directly from a checking account, as most traditional debit cards do, the prepaid debit card is funded ahead of time with a certain amount of money. So if you want to spend no more than two hundred dollars on holiday shopping, for example, fund the card with that amount of money. When the limit is reached, the card is no longer usable until more funds are added to.

A good choice for a prepaid debit card is My Green Dot, from MoneyPak.com

Prepaid cards are also popular options for teens, providing a young adult with the experience of budgeting along with the independence to spend money without checking with mom or dad. Parents maintain control though, by limiting the amount of money for which the card is funded.

A prepaid debit card helps you stay within your chosen budget, and eliminates the danger of overdraft fees or high interest rates charged to a credit card. With a prepaid debit card, you can have the ease and convenience of a credit card or regular debit card without risk of overspending.

How The Debt Ceiling Debate Could Affect Interest Rates

At the end of the day, after they make points with their followers, I believe democrats and republicans will compromise and raise the debt ceiling.

However, all the current arguments, posturing, and waiting until the last minute has not given confidence to either consumers or the debt rating agencies.

The ratings agencies are quick to downgrade these days, because they are on the defensive about their role in the financial crisis. Critics said that they turned a blind eye to risk.

There is a chance that, even with an agreement to avoid default, at least one ratings agency may downgrade U.S. debt.

How would a downgrade affect ordinary people like you or me?

First, the interest rates that the U.S. must pay would go up. This would make interest on the national debt an even higher component of government spending. Secondly, the treasury rates are used to set all other interest rates. If the treasury rate increases, so would all mortgages, car loans, etc.

Advertising in the Age of Social Media

The qualities I admire (like simplicity and focus) are now actually crucial for advertising and marketing on the internet. I read about an Advertising Agency that practices this with their clients.

They market themselves as an agency that was created in the digital age - so they are not tied to traditional ways of doing advertising. Even their website is designed around focused simplicity, rather than using fancy graphics.

In the old days, there were only a few TV channels. TV, radio, and newspapers did not have to compete with internet surfing, podcasts, or interactive online games. People had longer attention spans. You could advertise in the mass media and reach a lot of people. You wanted general campaigns that used a lot of flash.

Now, audiences are fragmented because specialized cable channels and websites cannibalize each other. Instead of trying to reach a lot of people with a mainstream commercial, the best way to reach people is to create targeted commercials and run them in these different niche media outlets - including social media.

Also digital media is now interactive, and gives advertisers the tools to track the effectiveness of campaigns.

In this new environment, if you use a standard Advertising Agency that uses the old techniques, your advertising won't be as effective as it could be. For example, you would not want your agency to create bland, generic advertisements that are not targeted to anyone in particular, and then try to run them on different channels.

Instead, this ad agency would probably create an ad that appeals, for example, to fans of cooking shows and run that on the cooking channels. They could create another commercial for home and garden channels, etc.

The ads would be designed to go viral through social media.

This particular agency would also use online tools to track traffic and conversions for online advertising.

How Can Two Unrelated Businesses Cross Promote Each Other?

Internet Marketing expert James Brausch "retired" to South and Central America, but he consulted with some brick and mortar businesses there and he advised two of them - a taco restaurant and a spa - to cross promote each other.

He had the taco restaurant give out, with each purchase, a coupon good for a free 10 minute back massage. He had the spa give out to each paid customer a coupon for a free burrito.

These coupons were not announced before hand, so customers did not know that they would receive them until after purchase. By only giving out coupons to paid customers, he increased the chance that, when the customer used the free coupon, he would be more inclined to purchase from the other business.

Another Sign The U.S. Tax Code is So Complex - Continuing Education Exams For Tax Preparers

The tax code is so complex that CPAs and lawyers can build a career just specializing in taxation.

In fact I recently found a website that is dedicated to providing enrolled continuing education to help pass certification tests. I like small internet businesses that succeed by finding a simple need, and then filling it.

In this case, the website (FastForwardAcademy.com) found a need for tax professionals who want to continue their education and become certified in tax preparation.

They provide study guides, practice tests, and other study material for passing the enrolled agent examination to become IRS certified.

Accountants and other tax professionals are willing to study for and pass the ea exam
because the enrolled agent certification will let them stand out from the competition.

I'm On Fox Business

I was interviewed for a personal finance article on FoxBusiness.com which featured Five Smart Money Lessons From Reality TV. They even mentioned my book "Stock Trading Riches".

They wanted financial experts to describe financial lessons that one can learn from reality TV shows. They used my example of "The Biggest Loser" - where people can learn that, like losing weight, controlling debt and making wise financial choices are skills that improve slowly and steadily. Don't get discouraged if you find it hard to make instant progress.

Securing Virtual Data For Financial Transactions

I'm always interested in specialized niche businesses that are successful by doing one thing really well - something that the general public probably doesn't even realize is a genuine need.

Recently, I came across a specialized business which is related to trading and Wall Street.

The business is called Merril DataSite, and they provide online data rooms for capital market / financing functions such as mergers and acquisitions (M&A) activities, business ownership transfers, bankruptcies, restructurings, licensing activities, etc.

Basically, their data sites are useful for any firms that are involved in complex business, financial, and/or legal processes that involve sharing highly confidential documents (such as acquisition due diligence) between groups of financial analysts, lawyers, and / or accountants.

A secure data site process can insure that the documents stay protected from outsiders by limiting access to only authorized individuals, and keeping track of checkouts and revisions.

In an interesting, and natural, extension of their business, a division of Merril provides document localization services for international clients.