Welcome to Best Money Saving Blog. Here we like to write articles about all ways in which normal people like me and you can save or make money. Covering a range of subjects from discounts and voucher codes, how to make money, general saving ideas and the occasional rant from myself. If you're a blogger out there with something to say or a company with a money saving product you'd like to write about - please get in touch with us. We're happy to help out and offer guest posts for anyone who's interested.


Planning for Retirement

Published on July 10, 2014, by in Retirement.

There are many different definitions of the “American Dream”, some say it’s a great job and nice house, others say it’s comfortably raising a family, yet my definition varies a bit from those. To me, the American Dream is about affording a comfortable retirement after hitting all of those milestones above. Owning a home is nice, and raising a family is paramount, but it’s your financial health after those achievements that truly matters most. Nobody wants to work forever, I know I certainly don’t, so saving and spending wisely from a young age is very important. Regardless of your income bracket it is clear that today’s generation is severely unprepared for retirement. In order to properly prepare for retirement please heed my suggestions below.

Take advantage of every retirement account you can! This means that if your employer offers a 401k plan with matching funds, then you better contribute enough to receive the full match. If you are able to max out your 401k that is even better. I’ve seen people that fail to contribute to their 401k plan and lose out on the employer match, this is like throwing away free money. If your employer offered you a raise today would you say no? If do you contribute to a 401k then don’t stop there. There are plenty of other IRA accounts (SEP, Traditional, Roth) that you may qualify for as well. The best part about these accounts is that each one offers some sort of tax advantage. Remember, the earlier you start the better off you will be. The power of compound interest can take a little bit of money and turn it into a lot.

While tax advantaged accounts are the next best thing to sliced bread, they aren’t the end all be all of retirement savings. After maxing out my 401k and IRA options, I opened up an online brokerage account that I fund with after-tax dollars. This allows me to aggressively save and invest for my medium term plans, rather than just for my long term retirement savings. Here you can engage in blue chip stocks or even index funds. My theory on these accounts is that they can be liquidated much easier than a retirement account, and they offer more aggressive savings options of a typical bank account. Don’t forget, you don’t want inflation eating up your savings either.


Retiring soon? Do these things in the 5 years leading up to it and you’ll be much better off

Published on May 29, 2014, by in Retirement.

It used to be that retirement was a fixed age point but, in the last couple of decades, that has changed and many people now retire over a longer period of time and many don’t retire completely.

Analysts these days have coined a new phrase, the “retirement red zone”, which is the five years before someone’s full retirement starts. In these five years leading up to quitting your job completely, there are certain things that you can do to get ready and make preparations so that, once that weekly paycheck isn’t coming in anymore, you’ll be sent to handle it.

The first thing that should be done, and as soon as possible, is to create a financial plan and learn how to budget as well. The value of learning how to budget and having a plan is enormous and will help you to see where you are financially as well as give you an idea of where you need to be.  This will obviously help you to see if you’re on the right track to getting there in the next five years. It will also answer the all-important question “can I afford to retire?”

Next is lining up a number of different retirement income sources. One of them will be your Social Security checks but you’d be very wise to not rely on them entirely. Anything you can do to monetize your skills and set up residual income streams now is an excellent idea and will help to pad your income during retirement.

Another is simply to maximize your 401(k), if you have one through your employer, and take full advantage of any matching program that they might have. Keep in mind that there are “catch-up” provisions that you can take advantage of as well and don’t leave any valuable retirement money on the table. In most cases you can contribution up to $5500 more using this one provision if you are 50 years old or older.

If you plan on retiring before you hit 65 you need to keep in mind that you won’t be eligible for Medicare and thus make sure that your health insurance is paid in full and any health care plan that you have through your work will continue to cover you during retirement. After 65 Medicare will be your primary insurer if you had an employer plan and your company might pick up some of the costs, but not always, so definitely check to be sure.

Remember also that Medicare, unfortunately, does not cover long-term care costs and be sure to have a strategy to take care of those if necessary. Considering that one out of two people will need some type of long-term care costs in their lifetime, having long-term care insurance is a very good idea. The fact is, healthcare costs usually increase towards the end of your retirement, which also happens to coincide with the end of your life, and you really need to be prepared for this as much as possible in order to not burden your family with the stress of huge health care bills.

Finally and most importantly you should do your best to pay off your debt before you retire. The unfortunate fact is that over half of all American workers are now going into retirement with debt, including mortgage debt on their homes. Credit cards and auto loans are also high on the list and, if you have an overly large amount of debt, paying it down now is vitally important.

Do these things in the years before you retire and you’ll find that you have a lot less stress, and fewer financial problems, once you get there.


Financial Aid Tips for the Uninitiated

Published on April 30, 2014, by in Personal Finance.

If you’re the parent of a child in high school that is rapidly approaching college age, chances are that you’ve just been introduced to the “numbers game” that is financial aid.

Colleges across the country issue their financial aid awards just after acceptance letters are sent out and, while the numbers might look rather impressive, the award letters can sometimes be confusing. Even worse, if interpreted the wrong way you might make a  mistake that could  cost you thousands of dollars.

For example, from the look of some financial aid letters some colleges mix up their loans and grants in what looks to be quite a random fashion. Others fail to clearly identify the student loans as actual loans or make it look as if they are giving away “free money”. Some colleges forget to mention the cost of expensive college extras like textbooks, which can be obviously problematic.

“Fundamentally, award letters aren’t really a counseling tool. They are marketing documents,” said Mark Kantrowitz, senior vice president and publisher of Edvisors Network. “Their goal is to show you how you can afford the school, even if you really can’t.”  Kantrowitz added that, even though 2000 colleges around the country have adopted a common format when it comes to financial aid award letters, the majority of colleges in the United States have not.

“There is no standardization because if you could easily compare, you could realize which school is more affordable,” Kantrowitz said.

In 2007/2008, the last year that figures are available, over 50% of all students received some type of financial aid, averaging approximately $4900, no small amount of money. That’s according to the National Center for Education Statistics and, for students at private four-year colleges, the average was over $10,000. Additionally, almost 40% of students received an average loan of $7100 and, at four-year colleges, $9100.

Keeping these numbers in mind, below are a number of steps that you can use when comparing financial aid so that you know exactly what you’re getting into and can make an accurate comparison.

The first and most important is to not make the mistake of seeing these financial aid loans as “free money”. Many colleges subtract both loans and grants from their total cost and present that as their net cost, but Kantrowitz says to include these loans in what you will eventually have to pay back.

“Only in the parlance of financial aid is a loan characterized as reducing your costs,” he said. “Imagine going to a car dealer and having them say ‘that car is free because you have zero down.”

When it comes to grants however, that’s another story completely. “There is no better price than free,” said Martha Holler, a senior vice president at Sallie Mae.

She’s correct of course but cautions that, when calculating the four-year cost of college, a parent make sure to know whether the grant their child is receiving will be available for 1 or 2 years as well as whether the grant itself is based on things like grade-point averages, sports participation or the choice of their child’s major.

Holler went on to say that  “you may see a one-year grant for $2,500, but a four-year grant for $1,000 annually”, and noted that this would be a better deal (obviously) that might be overlooked when comparing student loan forms and figures.

If you’d like to compare average grants to beginning students as well as to students at a particular college, you can go to collegenavigator.gov for help.

Finally, be sure not to let the “sticker price” throw you off. While some private four-year colleges will indeed have much higher stated costs, they may also have a lot more aid to grant and, according to Holler, “Sometimes it’s that more expensive school that costs you less out of pocket.”


Does Fracking cause Earthquakes?

Published on April 23, 2014, by in Personal Finance.

Instead of the usual financial blog today were going to get a little bit crazy with some breaking news about fracking, the relatively new approach to mining natural gas, and its possible link to earthquakes.  (When we’re done you may be wishing that we‘d given you a financial blog instead.)

In Ohio, geologists have for the first time linked fracking in the Appalachian Mountains to earthquakes, something that is at once terrifying and unsurprising that the same time. It’s also led to new, stricter conditions for companies to get permits in one of the areas of the country where the laws are already quite strict.

In March an investigation by the state that concluded that five small tremors in the Youngstown area of Ohio, which lies in the Appalachian foothills, were caused by the increased pressure due to the high pressure injection of sand and water that accompanies something called “hydraulic fracturing” or “fracking” for short.

Rick Simmers, the state oil – chief for Ohio, called the link between this newish form of drilling and the small tremors “probable”.

This is the first time that fracking has been directly linked to earthquake tremors and, even though they couldn’t be felt by people living in the area, it was concluded that the five seismic events that happened in March of this year were all part of a single, larger event.

This this was confirmed by the Glenda Ostman, a seismologist with the US Department of the Interior, and makes it the first time that a connection between the extraction of oil and gas (as opposed to wastewater disposal) and earthquakes has been made. At the same time it was found that a series of quakes in the same region back in 2012 were likely caused by a deep injection well involved in the same type of natural gas extraction activities.

James Zehringer, director of Ohio’s natural resources department, said that “While we can never be 100 percent sure that drilling activities are connected to a seismic event, caution dictates that we take these new steps to protect human health, safety and the environment.”

The scarier factor behind all of this is that, over the last several years, energy companies have been drilling literally thousands of what they call “unconventional” gas wells in and around Pennsylvania, West Virginia and Ohio, an area of the country with an abundance of Marcellus Shale.

The fact that Marcellus shale is one of the richest natural gas reserves in the entire world, and that drillers of only recently begun to tap deeper into it, has many people in the Northeast concerned that one day fracking won’t just lead to tremors but to an actual, full-blown earthquake.

And now we  return your back to your regularly scheduled personal finance blogs.



Are you an Identity Theft Victim? Here’s how you’ll know

Published on April 19, 2014, by in Personal Finance.

A report from the US Justice Department shows that nearly 17 million people were the victims of identity theft last year. They estimate that the cost was nearly $24 billion in direct as well as indirect losses from the two most common types of theft, credit card theft, which equaled  40%, and bank account hacking at 37%.

Ironically, the majority of consumers don’t actually find out that they’ve been victimized until their financial institution contacts them about a problem. Fraud experts, on the other hand, say that consumers must start doing more to protect themselves rather than relying on their financial institutions and credit card companies to do it for them.

“The longer ID theft goes on, the more damage is done and the longer it takes the victim to recover from it,” said Eva Velasquez, president and CEO of the nonprofit Identity Theft Resource Center.

Velasquez’ statement shows how important it is to always be vigilant and keep an eye out for any warning signs that your personal information has been stolen and is being used by a criminal.

“Surveys show nine out of 10 people don’t check their financial statements,” Siciliano said. “That’s irresponsible. You shouldn’t be waiting for a retailer to tell you there’s been a breach. You should be checking your financial statements more than you check your Facebook page, but people’s priorities are skewed.”

In order to help you avoid identity theft, below are a number of tell-tale signs that you’ve been victimized.

  1. Charges, some of them relatively small, start appearing on your credit or debit card statements. The fact is, many identity thieves will start using your credit little by little in order to “test” your stolen account.
  2. If statements for unknown credit card accounts start showing up at your door,  an identity thief has more than likely gotten a hold of your Social Security number and opened up accounts in your name. Closing down those accounts as quickly as possible is imperative.
  3. The same thing has probably happened if a credit card or department store card shows up in your mail.
  4. If you start receiving collection notices or calls for debts that you don’t know, it can be due to the fact that an identity thief is using your personal information to make purchases and, of course, not paying for them.
  5. If errors or false information start showing up on your credit report it’s possible that an identity thief has stolen your ID. You have the right to a free report from the big three credit bureaus, Trans Union, Equifax and Experian, once a year or so make sure you take advantage of that.
  6. If you have “good” credit but you’re turned down for more, it’s possible that an identity thief has made a mess of your credit and your credit score has dropped.
  7. If you notice that you haven’t gotten a specific bill from a credit card company or financial institution, it’s possible that a thief is either stealing them or has changed your address so that the statements will come to their address and not yours

“If you take five minutes to follow up on something that’s out of the ordinary, weird or just doesn’t make sense, you could save yourself a lot of headaches later on,” Velasquez said.

If you surf to the Identity Theft Resource Center online you’ll find that they have a complete list of Identity Theft Red Flags that will help you to be more vigilant and deter these nasty criminals before they get a chance to ruin your credit.


Obama’s New Budget Proposal Bad News for Consumers Unprepared for Retirement

Published on March 30, 2014, by in Retirement.

Experts are saying that the budget for 2015 proposed by Pres. Obama will be an absolute disaster for millions of Americans who are not fully prepared for retirement because it would reduce the tax incentives employers now get for offering 401(k) retirement plans to their employees.

The fact is, the retirement situation in United States is an ugly mess. Neither political party has come up with a solution to a grossly underfunded Social Security which, as it stands right now, is headed for insolvency. Most corporations got rid of their pension plans years ago because they simply couldn’t afford them anymore, and pension plans of most state governments are so broke that many cities and municipalities across the country are in complete disarray.

Right now the 401(k) is the largest retirement savings vehicle in the country, a plan that allows employees to have a portion of their paycheck automatically deducted and put into a retirement plan. The amount they put into their 401(k) is not taxed until it’s withdrawn during their retirement years.

While it is difficult for many American consumers to save, the beauty of the 401(k) is that the money put into it is taken out of a person’s paycheck automatically, before they see it and have a chance to spend it.

While the new budget proposal probably won’t affect you nearly as badly if you work for a Fortune 500 company and have a decent 401(k) plan already in place, if you are one of the millions of Americans who work for a smaller company it may well be a huge blow to your retirement plans and future financial independence.

The reason is simply that the new budget would reduce tax incentives for small business owners to first establish and then maintain a 401(k) plan. Even worse, higher income earners would be limited to 28% when it comes to tax deduction time, even if the bracket that their current income puts them in is much higher.  So, for a person who is in the highest marginal tax bracket (39.6%) their tax deduction would only go as high as someone who is in the 28% tax bracket. When they withdraw the money during retirement, they would also be fully taxed at their current rate even though they were only able to receive a partial deduction right now.

This amounts to double taxation because they would not be able to contribute as much today and thus be taxed on that money as well as being fully taxed when they withdraw it in the future.

Since most high income taxpayers are business owners themselves, the question must be asked about whether they will want to start a retirement plan that can potentially hurt them both personally and professionally.

The simple, unavoidable fact is this; more Americans are now working for small businesses than for larger corporations. These people deserve the same retirement incentives as the people who work for a Fortune 500 company. The shame is that, under Obama’s new budget, they’re going to be deprived of a very valuable tool to do so.


Court steps in to stop ‘robocalls’ aimed at seniors

Published on March 23, 2014, by in Stories.

Unfortunately elderly members of society seem to get victimized much more often than others and, when it comes to “phone scams” the numbers are startling. Recently the federal government stepped in to “pull the plug” on a nationwide telemarketing scheme that was using illegal “robo-calls”  and targeting seniors in the United States and Canada.

The calls were tricking them into purchasing medical alert devices that they had actually never ordered, and signing up for monthly charges to their credit cards for “monitoring”. The phone message that folks were receiving was so well made and so convincing that it didn’t sound like a typical scam recording but legitimate instead.

In the Federal Trade Commission lawsuit it was noted that when seniors received these fraudulent robocalls  they were told that a “free” alert system was ready to be shipped to them and had been purchased by another family member or friend of the family. It wasn’t just any system either, it was for the Life Alert system, one of the most popular and most famous systems around because of the long-standing television advertisement that so many people know so well. (“I’ve fallen and I can’t get up!”)

In fact, Life Alert has nothing at all to do with this scam and is suing as well to have these calls stopped and clear their name and reputation..

Since it began, 60,000 complaints have been received by the FTC about this one   fraudulent telemarketing campaign in particular.

“These telemarketers used illegal robocalls to make a sales pitch that was 100 percent false,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection in a statement. “Their M.O. was to take advantage of older people’s concerns about their health.”

Seniors who answer the calls, listened to the “pitch” and then pressed the number 1 on their phones were immediately connected to a “salesperson” who then (allegedly) continued the fraudulent call by providing even more for deceitful information about the device and the monthly monitoring charge that came with it.

Seniors, according to the FTC lawsuit, were informed that a monthly monitoring charge of $34.99 would be charged them only after the system was installed and then activated. In fact, as soon as they agreed to receive the system the charges started, whether the device had been activated or not.

It’s believed that  $13 million in commissions was made by the companies that ran this fraudulent marketing campaign since it started in March 2012. Prosecutors on the case said that many of the seniors who responded to the fraudulent offer were suffering from dementia.

Florida Atty. Gen. Pam Bondi, working alongside the FTC on this case, has frozen the assets of the fraudulent companies and said that her office is going to do everything possible to compensate the thousands of people who were duped by them and lost money.

“We will not tolerate unscrupulous individuals targeting the elderly,” Bondi said.


Beware of the ‘one ring’ phone scam

Published on March 16, 2014, by in Stories.

There’s a new phone scam sweeping the United States and the worst part about it is that the thieves perpetrating it don’t even need any of your credit card information to start stealing your money, all they need is for you to call them back.

Maybe it’s happened to you already? The phone rings and, before you can get to it, it stops after just one ring. Out of curiosity, you take a look, see the number and decide to call back.

Con-artists rely on your curiosity and, when you call back, they quickly use it against you and charge your phone with unauthorized charges, usually long distance and very costly.

Called the “one ring scam”, the Better Business Bureau recently issued a fraud alert about it after being contacted by hundreds of people across the country. It works when scammers using auto dialers to randomly call phone numbers all over the US. After the first ring, the auto dialer disconnects and the thieves hope that you’ll pick up your phone, see the missed number and be curious enough to dial it and return the call.

Once you do, they’ve got you in their claws.

What happens next is that you’ll be connected to an extremely expensive international hotline, in most cases an adult entertainment service, that charges as much as $19.95 as soon as you’re connected. Normally there is a very high per-minute fee as well and, when your bill comes in at the end of the month, you’ll notice that you’ve been charged for “premium services”

Katherine Hutt, director of communications at the Council of Better Business Bureaus, said this “ring and run” scam is highly effective because it’s so simple.  “No one would ever imagine they’d be charged as much as $20 to make a phone call,” Hutt said. There’s no warning message about the charges, and there’s nothing that indicates that the area code you’re dialing is for the Caribbean Islands.”

The area codes, including 264 Antigua, 284 for the British Virgin Islands, 809 for the Dominican Republic, 473 in Grenada, 876 for Jamaica and 649 for Turks and Caicos Islands, are all high-priced long-distance calls.

If you’ve got a mobile phone (and who doesn’t these days) you’re a prime target for these dirtbags because every smart phone and cell phone has a missed call log and caller ID. Since most of us have a plan that includes long-distance calls for free, we don’t think twice about making a call to what we consider a “safe” area code within the United States. Indeed, with most smart phones these days you don’t even need to dial a 1 first.

In order to defeat these scumbags, before your return any call where the number isn’t known to you, you should Google the area code and make sure there aren’t any scam reports that have been filed about it. Even better, just ignore the number. If you don’t recognize it, simply don’t call back.

If you’ve unfortunately become a victim of this scam already, you should contact your cell phone service provider right away and also keep an eye on your future phone bills to make sure that there aren’t any unauthorized charges on it. Filing a complaint with the FTC is also a good idea and, if you surf to their website, you’ll find a tip sheet entitled “How to Beat a Mobile Cramming Scam”.


Prepaid Cards Get New System, Less Surprises

Published on March 5, 2014, by in Personal Finance.

While scrutiny is still required, if you’re a consumer that loves prepaid cards you’ll soon have a better way to tell how much it’s actually costing you to use them.

New rules are expected to be issued by the Consumer Financial Section Bureau sometime in the spring of 2014, including new legislation introduced by Sen. Mark Warner (D-Va) that would require improved disclosures. Ahead of those changes however a number of consumer advocates as well as banks are doing their best to get a jump on the new regulations.

For example, The Pew Charitable Trusts disclosed on Wednesday what their fee for prepaid cards would be and Chase followed suit by announcing it would voluntarily adopt the new format.

Susan Weinstock, director of Pew’s safety checking research, had this to say in their news release; “Pew’s research shows that inconsistent disclosures make it difficult to understand the fees associated with each prepaid card.” She added that “Terms should be plainly stated so that consumers can make fully informed financial decisions.”  Released in 2012, their new disclosure model has already been adopted by 26 banks and credit unions gone terribly and now covers over 50% of domestic deposits.

Over the last few years prepaid cards have become much more popular even though they were originally marketed to consumers who, for whatever reason, couldn’t or didn’t have a checking account. This included “tween’s” as well as college students.

Using these types of cards a person can have their earnings directly deposited onto their card, withdraw cash at most ATM machines and also avoid charges like overdraft fees.  Even more portly, they can afford going into debt because once the use of any cash that’s on the card their limit is met and they can’t go any further.

In 2012, the last year with hard data, $71.6 billion was loaded onto prepaid cards, a huge increase from the $28.6 billion that was loaded onto them in 2008.

The complaints that consumer advocates have had about prepaid cards in the past include the fact that they aren’t subject to a lot of the same protections on unauthorized transactions as credit cards are, and the fact that their fee structures can not only be confusing but expensive. For example, prepaid cards usually come with a purchase price that averages $9.95 as well as a $5.95 monthly maintenance fee and a transaction fee of $1. Out-of-network ATM fees are usually $2 while live customer service calls can cost $1.95.

It’s important to note that, in comparison to traditional checking fees, prepaid card fees still pale in comparison. A recent study done by CardHub.com found that the average checking account has between 20 and 40 different fees versus 10 fees for the average prepaid card.


What to Consider Before You Buy a Home

The American dream of home ownership simply won’t go away. You would think that there never was a credit crisis even though it wasn’t that long ago that we were bombarded on a daily basis with stories about underwater mortgages, foreclosures and crashing prices. If anything, it was an American nightmare, not a dream.

The reasons, both emotionally and economically, that most people want to purchase a home rather than rent are not so hard to understand however. If you ask most financial advisors, they’ll tell you that first-time home buyers usually want to buy a home for the following reasons;

  • They don’t want to pay a landlord when they could be building equity in their own home
  • They feel like paying rent is akin to “throwing money away”
  • They don’t want to put their trust in stocks or bonds but rather in real estate
  • They believe that renting is temporary and instead want to “put down roots”
  • They want to be able to  “do what they want” with their home, something that they can’t do when they rent

These are relatively good reasons, to be sure,  but what really needs to be done before any decision is made to buy new home is an analysis of the key financial components  that must be in place, including what a person is earning and what money they have saved.

Comprehending the costs of the new home

There are a number of questions that simply must be asked before purchasing a home, including how much the person has saved for a down payment, the closing costs are and what type of cash reserves that they have on hand. Most experts will tell you that it’s best to put at least 20% down so that the borrower can receive gifts of up to 100% of the down payment and not need private mortgage insurance (PMI). This is vital as PMI can often add several hundred dollars to a monthly mortgage payment.

Many first-time homebuyers are very restricted due to cash flow however and some will probably request a Federal Housing Administration (FHA) loan, something that allows them to put down only 3.5%. Many opt to put down 10% however, which allows them to pay only 5%, put the rest of the down payment as a gift and get PMI.

Another thing to consider are closing costs, which normally are about 2% of the purchase price and include costs like title insurance, appraisal fees and escrow fees. On some home purchases there may also be a local transfer tax, a cost that can oftentimes be quite substantial.

There is also the fact that up to 12 months’ worth of cash reserves are required by lenders, money that will cover the monthly mortgage costs, insurance, property taxes and other debts. Some of that can be cash reserves held in retirement accounts but, unless a person is over 59 ½ years of age, only 65% can be in those accounts.

An example

Let’s say that Joan and Richard want to buy a home for $400,000. Let’s also say that, together, they bring in $90,000 a year and opt to put down 10% as a down payment. Their lender requires them to have a cash reserve of 5 months and their closing costs will be 2% of the total price. Richard and Joan will also split a $15. per-$1000. city transfer tax with the seller and they have approximately $500 a month in other debts that they need to pay.

With all of these things taken into consideration, Joan and Richard would need to have just under $66,000 saved in order to purchase a $400,000 home. There might also be a considerable cost for moving from their rented home into the new one.

If all of these numbers look feasible (for your particular situation, of course) that you should probably talk to lender and get prequalified for a loan. If you have a credit score above 700 you shouldn’t have any problems but, below that, you should speak to a mortgage professional and get advice on how to improve your score. Finally an excellent real estate agent and being extremely patient are also two things that will help you greatly in your quest to become a homeowner.

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