Archive for March, 2009

There has been talk since 2002 of creating Universal Savings Accounts, or USAs, as they’re called. What do you need to know about them?

Currently, Roth IRAs are the most popular tax-free savings account, but they have limitations that can be addressed with a USA. You can only contribute to a Roth IRA if you’re making less than $160,000 as a married couple or $110,000 if you’re single. Your annual contributions are limited to $5,000 if you’re under age 50. If you take distributions before your Roth IRA is five years old or before you turn 59½, you’ll pay a 10% tax penalty (with some exceptions). Read more »

Ever wonder what your car really costs you during its lifetime? It’s much more than the purchase price.

Last fall, I read a Kiplinger’s article that set out to calculate whether hybrids are worth the higher price you pay for the better gas mileage. The article mentioned that the Toyota Prius and the Honda Civic Hybrid are tied for lowest total ownership costs over five years, at $39,780.

Since I already knew that Honda hadn’t improved much on the fuel efficiency of its lineup in the 10 years since I bought my 1999 Honda Civic HX (EPA-rated 34 city/38 highway, based on the old estimate formula, or 29/35, based on the new formula), I was curious to see if I beat Kiplinger’s total ownership cost estimates based on my own real-world driving habits and oil-changing proclivities. Read more »

Supermarket shoppers who pride themselves on savvy shopping by using coupons, cyclical sales and other tricks now have a new venue for buying dirt-cheap groceries – their local auction house.

Grocery auctions are now being held in at least nine states. They’ve grown increasingly popular as families seek to save a few bucks by bidding on steeply discounted meats, dairy products, frozen foods, canned goods and other items that might be just a few days past their “sell by” date. Discounts of as much as 50% can be found. Many of the items, which could be somewhat damaged, come from supermarkets, distribution centers and restaurant suppliers. And many formerly brand-loyal shoppers have been persuaded by recessionary times to overlook dinged cans or expired dates to get more for their money. Read more »

Grocery store baggers, gas station attendants, store clerks and latte servers – service jobs like these don’t pay well, but in a stagnant economy, an unexpected contest is now brewing between two generations vying for the few jobs that remain available.

Typically, service sector jobs attract young applicants in their teens and twenties, but after watching their retirement savings dry up, many retirees are headed back to work, competing with Gen-Xers for whatever entry-level jobs they can find. Read more »

Have you noticed the ads lately on television and other media that offer you the opportunity to make lots of money by selling your gold jewelry? They seem to be everywhere right now, and the reason is because these companies are attempting to take advantage of current market conditions to sway people to sell their unwanted jewelry for cash.

The whole concept is based on this premise: gold is always in demand + gold prices are high now and a lot of people have gold jewelry = a chance to make lots of money.

Is it really a good deal for those who sell? Only if it meets your expectations. But be sure not to sell important family heirlooms without consulting other family members.

What are the pitfalls to watch out for in this area? Be on the lookout for those buyers who offer a lot less than market value. The price of gold is based on the troy ounce of 24-karat pure gold, which is 31.1 grams. You can find current market prices at www.goldprice.org.

Where can you find a reputable buyer? Stay away from pawnshops and mail-based gold buyers. They offer the lowest prices for your gold, while jewelry stores tend to offer the most, mainly because jewelry is more valuable in that form than it is as scrap.

It’s been said that in a recession, the price of everything is negotiable. That includes medical bills, but many patients feel squeamish talking money with their doctor.

A New York Times story assures readers that doctors, hospital and labs are used to negotiating, since they do it constantly with insurers. A single procedure may have a dozen different price tags, depending on whether the patient, a private insurer or Medicare is picking up the tab. And neither party wants to deal with bill collectors, which costs time and money. Read more »

Talk to any parent or school administrator, and you’ll realize that most wouldn’t advocate high school graduates deferring college for a year and doing something else. That’s because, once kids start working, it can be hard to give up a regular paycheck to become a poor student again. Plus, long-term goals of a chosen career have a way of fading from view when kids have a chance to put their work and money toward a shiny new car or other more immediate short-term goals.

President Obama has proposed huge changes in federal college aid programs that will increase grants to poor students and provide more fixed rate student loans; if Congress approves them, they’ll take effect ⎯ in July 2010. Read more »

Tent cities are cropping up in southern California, one of the regions hardest hit by the sub-prime mortgage and foreclosure crisis. Various news reports estimate anywhere from 300 to over 1,200 people, many of them whole families, living in tents in Sacramento. With homeless shelters full, many of the homeless are victims of job losses or foreclosures and have nowhere else to go.

The makeshift tent city, which lies within sight of Sacramento’s skyscrapers, has no electricity or plumbing.

Residents include a husband and wife who worked for the same company and who were both laid off on the same day¹, as well as a Vietnam veteran whose leg operation allowed him to walk after years in a wheelchair, but which also caused his disability payments to stop. Once the payments dried up, he could no longer afford to pay his rent.² Other residents said they were there because they could no longer afford their mortgage payments. Many of the homeless include those who worked in construction. Read more »

Scammers are at it again, this time targeting taxpayers who fall for bogus websites or emails claiming they can get an economic stimulus refund by simply providing their bank account number for direct deposit, or by paying a small fee. Duped victims end up with a drained bank account.

The Federal Trade Commission warns that in other cases, victims are asked to provide personal information, which is then used to commit identity theft. In yet another version of this insidious stimulus scam, victims receive an email containing a link to a website for more information; when consumers click on the link, they unknowingly download malicious software that collects their personal information, enabling identity thieves to rip them off. Read more »

State government leaders are coping with widespread budget shortfalls triggered by rising foreclosures and falling home values — both of which erode property tax revenue and reduce state revenue — in a variety of ways.

But balanced budgets — which are legally mandated in most, if not all, states — are never easy to accomplish; they usually consist of some combination of higher taxes and controversial cuts in social services. Read more »