PAY YOUR BILLS ONLINE AND SAVE

Nearly one-third of U.S. consumers pay their bills online, says Judy Wicks of CheckFree, the leading provider of electronic-billing and payment services. Probably the easiest way to pay your bills online is to use a safe, encrypted service—offered by banks, credit unions, brokers and companies such as AOL, MSN, Quicken or Yahoo! Arrange for an e-mail reminder that a bill is due.

The service can handle payments entirely electronically or it can generate a paper check, if necessary—to pay the guy who mows your lawn, for example. If a payment is late, many bill-paying services will reimburse you for late fees up to a certain amount (sometimes as much as $50), as long as you have scheduled the payment within their guidelines.

To shed yet more paperwork, arrange to receive bills and statements electronically. Sign up with e-billers on many services or at MyCheckFree.com.

Online bill paying also helps you to keep your finances organized. You have your records right there—what you owe, past payments—and all on one site.

Wells Fargo goes a step further: Its online-banking customers have access to My Spending Report, which they can use as a de facto budget. My Spending Report tracks online bill payments and Wells Fargo debit- and credit-card charges, and plugs them into one of 20 categories so that you can see how much you’ve spent on, say, movies and restaurant meals.

In addition, of course, you can track your spending using Microsoft Money or Quicken. With Quicken 2006, once you pay a bill there’s no need to print and file it. Instead, you can attach the bill electronically to the account from which you made your payment, so it’s always at your fingertips.

REWARD YOURSELF

Are you trying to figure out which credit card offers the best rebate? Simple solution: Take the cash and run.

It couldn’t be easier than this. With a cash rebate, you get either a check in the mail or a credit on your statement, so you don’t have to weigh the relative benefits of airline miles versus a new set of luggage. To find the best deals, we simplified the process by assuming that you spend $33 on gas each week, $100 a week on groceries and $1,000 per month on other purchases.

Tops is the Citi Dividend Platinum Select card (at www.citibank.com). It charges 11.74% and offers rebates of 5% on purchases at supermarkets, drugstores and gas stations and 1% on everything else. However, Citi caps its annual rebate at $300, which you would reach in about eight months under our scenario (at that point you could switch to another card). Exempt from the cap are goods bought through Citi’s Dividend Merchant Network, which includes more than 200 retailers, catalogs and Internet sites. Those purchases earn rebates between 5% and 7%.

Next up is the National City Everyday Rewards Elite Visa card (at www.nationalcity.com), on which our yearlong spending spree would earn a rebate of $270. National City is unique in bundling restaurants with grocery stores in a single category, with rebates of 2%. With an interest rate of 10.49%, the card rebates 4% on gas, 3% on movies and up to 1% on everything else. There are spending caps in some categories.

The American Express Blue Cash card (at www.americanexpress.com) carries an interest rate of 11.24%. It gives you up to 5% on groceries, gas and drugstore purchases, and up to 1.5% on the rest of your charges, up to a maximum expenditure of $50,000. Total rebate in our example: $266.

The Capital One No Hassle Cash card (at www.capitalone.com) offers a rebate of up to 3% on gas and groceries and 1% on everything else you buy, with no dollar limit and a relatively modest 9.9% interest rate. You would earn an annual reward of $237 in our scenario.

The Chase Free Cash Rewards Platinum Visa card (at www.bankone.com), which carries an interest rate of 11.99%, gives you one point for every dollar spent on purchases (with a $60,000 spending cap). In addition, it has an interesting twist: a one-point bonus for every dollar you pay in interest. Each time you accrue 2,500 points, you receive a check for $25. Without the interest bonus, you’d be eligible for a rebate of $189, so the card is more attractive for card users who often carry a balance.

When saving for an emergency fund – you just can’t go wrong with cash!

Multiple Ways to make the most of a Year-end Bonus

If you have a nice chunk of extra cash to look forward to each year, think now about the best ways to put it to work for you.

Maybe this year you’ll get lucky. You’ve applied for that great, higher-paying promotion and this will boost your monthly pay by $500. You want to make sure the money goes toward building a better future rather than being squandered on items, you just don’t need.

That’s the beauty of getting a year-end raise or bonus—it’s one of the rare opportunities to make a big difference in your finances without having to make sacrifices. You’ve been living without the money previously, so you can take any financial medicine you need even without altering your present lifestyle.

Financial triage

Consider first that all extra cash should first be used to solidify your base.
Next, pay off all credit-card debt.

This can have a gigantic ripple effect on the rest of your finances. As soon as you stop paying higher interest charges each month, you’ll have more money to devote to any other goals.

Pad your emergency fund, if you don’t already have three to six months’ worth of living expenses in a safe and liquid account. That way you won’t have to go into debt or raid long-term savings for unexpected bills when the bigger emergencies do arrive.

Add contributions to your 401(k), if you haven’t hit the limit. You’ll avoid paying more taxes on the extra cash, and you may earn free money if you get an employer match. You can also invest part of your bonus in your IRA if you haven’t contributed $3,000 for 2004 ($3,500 if you’re 50 or older). If you’ve already reached that limit, use your bonus to make your 2005 IRA contribution in January (the limit rises to $4,000 next year, $4,500 if you’re 50 or older) or earmark a bigger chunk of your raise each month.

Take a look at that long-term debt

Now that you have boosted your financial foundation, you have more flexibility. Watson is already in great shape—she’s maxing out her 401(k) and Roth IRA contributions—but she still has about $17,000 in student loans hanging over her head. The loans carry a low, 3.5% rate, so she’s trying to choose between adding the $500 a month to her loan payments or investing the extra money.

With interest rates that low, paying off the loan doesn’t need to be a priority. “If you can earn at least 3.5% in the marketplace, and I believe that you can, then investing is the better way to go,” says Brian Jones, a certified financial planner in Fairfax, Va. Investing becomes even more important if you need to save for a short-term goal, such as buying a house.

However, it’s okay if you’d rather pay off a student loan to get it out of the way. “Psychologically, it’s important to get these debts behind you before you start to move ahead,” says Mari Adam, a certified financial planner in Boca Raton, Fla. “I know people in their 30’s who still have big loans, and that debt becomes like a ball and chain around their leg.”

The same is true if you’re thinking of devoting part of your raise to making extra mortgage payments. Chris Crocket, a doctor in Tupelo, Miss., is getting a big bonus this year that could be enough to pay off his mortgage that has 10 years remaining at 4.75%. As long as he’s covered his other bases, paying off the loan could give him the equivalent of a guaranteed 4.75% return.

Eliminating your mortgage payment can also help if you’ll be retiring soon or worry that you may lose your job, says Evelyn D’Amico, a financial planner in Paoli, Pa. However, you don’t want to tie up too much money in a single investment. For better diversification, you could devote part of your raise or bonus to your mortgage and then invest the rest.

Don’t forget to treat yourself

It is time to have some fun and you deserve it! You worked hard for your bonus or raise, so, go out there and have some fun.
You can set up a vacation fund.

Use part of your extra cash today to pay for the trip you have always wanted. You only need to set aside $310 per month in a savings account paying 2% to end up with $5,000 for springtime in Italy in 2006. Imagine spending the spring in Italy! Now that would be some kind of vacation.

Spend some money on your home.

Many home improvements can save you big money over the long haul. For example, think about the value of storm-resistant windows and shutters. Spending an extra few thousand dollars now, not only helps protects your home, but also can increase its value and lower the premiums on your homeowner’s policy. This is smart planning!

One final idea is to start up a charitable fund. With $10,000, you can set up a donor-advised fund at many mutual fund companies and brokerage firms. You can then deduct the contributions on your tax return straight away and decide later which charities that you wish to support.

A Few Useful Savings Strategies

1. Don’t pay a dime for anything that you can make or fix for yourself.

2. Prolong the life of whatever you own.

3. Use less of what you need.

4. Think creatively. The answer doesn’t have to be “buy a new one.”

5. Don’t toss anything if it can be reused or recycled somehow.

You could do these tried-and-true, pioneer values now.

If you really want to save money, you can’t just look at ways to save now. You have to look at your life, today.

Simple Ways to Bring both Calm AND Savings into your Life

Saving is far more than just an action – it is a way of living, day-by-day.

Start to be calm by first slowing. Whatever it is that you are working on now, stop. Spend the next 30 minutes a day in silence and solitude. You need to teach your mind how to relax, so you can shift from the work-and-spend treadmill and then focus on what’s most important to you.

A calm heart is a tidy heart. It is time to clean up your act. Start today by spending 15 minutes every day going through a closet, a shelf, a drawer, and getting rid of anything you don’t use or cherish. Once you start on these surface areas, weeding that out, the skills and mindset carry over to more complex areas like your work, money and relationships.

It is now time to learn what is enough. Being calm and saving is really about transforming your life in a conscious and deliberate manner. It is determining what is enough in your life, so that you can do more with even less.

Finally, seek out some good support—whether you’re trying to save money or simplify your life.

Don’t go this alone. With Americans $2 trillion deep in debt, you’re certainly not alone in your desire to save money. Find a friend who can help you to get started and then get busy. You will be glad that you did.

Slash your electric bill in 6 easy steps

Spending lots to save pennies makes very little sense, but if you’re already in the market for a new appliance, consider the Web as your first line of defense in energy-savings.

Perhaps you weren’t so Eco-conscious until that glaring electric bill landed in your mailbox. It’s time to become mindful of the green in your wallet and save energy at the same time.

Start by simply unplugging unused appliances, lowering the temperature on your electric water heater to 120 degrees F, and washing only full loads of dishes and air drying them.

At the same time take a look at the free online calculators to get customized tips for improving your home’s energy efficiency at Home Energy Saver, a Web site sponsored by the U.S. Environmental Protection Agency (EPA) and the Department of Energy (DOE).

Spending hundreds to save pennies generally doesn’t make sense, but if you’re already in the market for a new appliance, or even light bulbs, consider the Web your first energy-savings tool.

Think Climate Control

A typical household uses the bulk of its energy for heating and cooling—up to 44% of your utility bill, according to the DOE’s Energy Efficiency and Renewable Energy Network (EREN).

Install a programmable thermostat. This can reduce energy wasted while heating or cooling a house when no one is home or everyone’s asleep.

According to the Home Energy Saver site, Energy Star programmable thermostats can save as much as 20% to 30% on your heating or cooling costs by allowing for multiple daily settings and automatically adjusting when the outside temperature changes. Participating manufacturers include Honeywell, Hunter Fan and Smart Systems International. Unfortunately, it’s not easy to search for programmable thermostats by Energy Star status. Instead, keep an eye out for those with features typical of the Energy Star thermostats: temperature recovery systems, two programs and four temperature settings.

Think Ceiling fans

When you move the air, you tend to feel cooler. This allows for higher summertime thermostat settings. According to EREN, the effect is equivalent to lowering the air temperature by about 4° F (2° C), and using less energy than air conditioners in doing so.

Think Lighting, Cooking and other Appliances

The next-biggest household energy use after climate control is for lighting, cooking and other appliances. Not counting the fridge, these make up about 33% of a typical utility bill.

Think Compact Fluorescent Lamps (CFL’s)

CFL’s will use up to 75% less energy than standard incandescent bulbs and will last up to 10 times longer, according to Home Energy Saver. This is very good, because they’re also more expensive to start with.

Check your local utility for ideas. Look for a free “Conservation Kit”, containing among other things, two CFL’s. This, of course, is a terrific deal!

Think Energy-efficient Appliances

Use the Energy Star site as a starting point to search for Maytag washing machines. Look for the Atlantis MAV9600 high-efficiency model for $689 at Best Maytag.

Among household appliances, the refrigerator is likely your biggest energy consumer, especially if it’s more than 15 years old. It can account for up to 9% of your energy costs alone. Again, look to the Energy Star site for a list of energy-efficient models if you’re looking to replace yours.

Hot Water Heating

Heating water is the third-biggest home-energy cost and typically accounts for 14%-20% of your total energy bill.

Think Hot Water Jackets

Hot water jackets usually sell for $10 to $20, and shipping charges for buying them online can easily increase their cost by 50% or more. Use the Web to find offline deals in this case.

Think Aerating, Low-flow Faucets and Showerheads

Both Niagara and AM Conservation models popped up on a variety of environmental sites, including EnergyGuide, which also had the best price for the four-way adjustable Niagara showerhead at $6.75. The nice thing about ordering from EnergyGuide is that it automatically searches for any rebates based on the ZIP code you enter.

When you’re considering buying a new home, you can plan for energy savings from the ground up with an energy-efficient homebuilding project. Check the DOE’s Building America and the EPA sites to find projects near you.