Should You Get a Safe Deposit Box?

Personally, I think that everyone needs a safe deposit box. If your home ever gets broken into, you won't have to worry about items like your social security card, birth certificate, or passport getting stolen. You can also keep personal items, like photo negatives, in your safe deposit box so that you won't lose all of your mementos in the event of a disaster like a fire or flood. A safe deposit box is also a great place to keep a copy of your home inventory so that you can prove the value of your possessions if you ever need to file a homeowners or renter's insurance claim.

There are some definite drawbacks to having a safe deposit box, though. If you need something that's in the box, you can only access it during bank hours. Then you have to leave home, wait in line, and sign in to be able to access it.
If you're the only person authorized to access the box but you need something from it and have no way to get to the box, you'll have to deal with some paperwork in order to add someone else to the box. Once you've done that, you'll have to worry about whether you can trust that person both with the contents of the box and the ability to not lose the key (there's always a charge for losing a key, usually $25 or so). Also, safe deposit boxes aren't free, of course. Depending on where you live, which bank you use, and the size of box you choose, the fee can vary quite a bit. Where I live and bank, I pay $50 a year for the smallest box, which is something like 16" x 5" x 3".

Of course, even putting your valuables in a safe deposit box at the bank won't make them completely safe--just ask the folks in New Orleans.

Reducing the time, expense, and hassle of working out

The only time in my life that I ever found it both easy and inexpensive to exercise is when I was studying abroad during my last semester of college. My minimal course load left me with plenty of time to do everything I wanted, including working out. I also had someone else covering most of my expenses, so I purchased a more expensive gym membership than I might have been willing to finance had it been my own hard-earned money.

Now that I work full-time and need to save lots of money for real-life adult expenses, I've had to find ways to minimize the time, expense, and hassle involved in working out. If you've found yourself with the same dilemma, here is an analysis of different exercise options to help you figure out which will be the most convenient and cost-effective for you.

1. Exercising outside is great for people who live in areas with moderate climates (or people who don't mind jogging in 40 degree rain). You always have something different to look at as you're walking around and you tend to notice lots of interesting things you never see from a car window. It's usually possible to change your route often, too, so you don't get bored. Getting your exercise outside for free certainly seems like the simplest option, but it actually has quite a few barriers. Your schedule may keep you away from home during daylight hours. You may live in an unsafe area, or simply not live in an area that is conducive to going walking, jogging, or hiking outdoors. You may have certain injuries that making exercising outside unfeasible (for example, bad knees and jogging on the sidewalk are a painful combination). If you don't have anyone to work out with, this method can also be lonely for some people and potentially unsafe.

2. If walking or jogging around your neighborhood isn't an option, look for community recreation facilities in or near your neighborhood. Community parks and pools are generally either free or very inexpensive as long as you are a resident of the city or neighborhood that owns the facility (sometimes you'll need proof of residency, like an ID or library card). For example, I live near a large, well-maintained lap swimming pool that I can attend for free seven days a week just for showing my library card. Without a card, it's still only $1.50 per visit. Community parks often offer tennis and basketball courts and sometimes a path for jogging. Some area schools leave their field gates unlocked during the evenings and weekends so that neighborhood residents can take advantage of the track and basketball court.

3. The next thing (or sometimes the first thing) most people think of is joining a gym. When joining a gym, it's best to join during a promotion of some sort--if you join in January when they're recruiting the new year's resolution crowd, it will be easy to get a low rate and possibly avoid the dreaded $100+ initiation fee. If you do decide to go this route, make sure to check out Jeffrey's article on how to bargain down the price of your gym membership, even if you are an existing member. If you do decide to spend the money on a gym, make sure to pick a gym that you like enough and that is convenient enough that you will go regularly, even if it isn't the cheapest gym available. A more expensive gym membership that you actually use is a better use of money than a cheap membership that you don't use.

Ideally, look for a gym that doesn't require you to sign a contract. Sometimes you can find small, neighborhood gyms that don't require a contract or have lower fees. Also, be sure to check the YMCA in your area. Sometimes you can purchase a day pass to their exercise facilities, which means that if you know you'll only go to the gym once a week, you can save a significant amount of money over the cost of a traditional monthly gym membership. Gyms can be wonderful because they offer a wide variety of cardio and weight equipment as well as group classes like spinning, kickboxing, and step aerobics which can help keep you motivated and prevent boredom. However, if you are a nine-to-fiver, the gym can be painfully crowded after work and on weekends, making it difficult to use the equipment you like. Class schedules don't always coincide with your schedule and some classes fill up so fast that if you can't arrive early, you'll never get a spot. Also, there's always someone who doesn't seem to understand the concept of only wearing your gym clothes once before washing them and someone who can't smell his own overpowering body odor.

4. If the gym isn't for you but you'd still like to have a variety of activities to choose from and/or potential interaction with other people, sign up for individual dance or exercise classes at a local dance studio or community college. Martial arts, boxing, and other team sports can be another option (yes, even for adults). By choosing one of these options, instead of being locked into the recurring monthly expense of a gym membership, you can sign up for classes as you come across ones that interest you and fit into your schedule rather than trying to force yourself to make it to a step aerobics class that you have to rush over to straight after work. When you're not locked into a gym membership, you'll potentially have a wider variety of classes to choose from.

5. Buy your own equipment if you can make space for it. It may seem expensive, but it can pay for itself in as little as a few months to a year depending on the price of the equipment and the price of the gym membership you would have been paying for. I bought a $300 spinning bike and some inexpensive dumbbells and exercise bands to use at home. I can use them 24 hours a day and I don't even have to leave home to work out. Before that, I was spending $45 a month on a gym membership, so after only 7 months I had already come out ahead by buying my own equipment. I find that recurring monthly expenses really drain my wallet, so I try to avoid them whenever possible. As far as space goes, my bike takes up very little space against a wall, and there are home treadmills that fold up and can be stored in a closet or a corner when they're not in use (make sure you're motivated enough to get them out and use them, though). Dumbbells can be pushed under a chair or table when you aren't using them. Exercise bands won't provide a strenuous workout, but they weigh almost nothing, take up very little space, and can come with you when you travel.

Exercising is an important part of a healthy lifestyle, and it shouldn't be marginalized simply for frugality's sake. Whether you're a gym rat or just a casual exerciser, there are ways for you to get your heart rate up while keeping your expenses down. Good health should always come before saving money, but I believe that these tips will enable you to do both.

Ten Tips for Entrepreneurial Success

Last week, I wrote about self-employment myths. Now that you know the potential downside, if you still want to take the plunge, here are ten tips for making your new business successful.

1. Set work hours and stick to them. When you're self-employed, any time spent not working is time you aren't making money. Don't let this fact turn you into a workaholic. Make sure to schedule time for your other priorities, like relationships, hobbies, exercise, and sleep. In my experience, workaholics often think they're getting more work done, but at a certain point they burn out and the additional hours spent working aren't very productive. You need a certain amount of rest time to recharge your batteries -- this will allow you to be highly productive during your scheduled work time and still have plenty of time off to relax and enjoy the fruits of your labor.

2. Hire help if you can afford it.
Running a small business brings with it both the work that your business does for others, such as designing websites, and the work of running the business itself, like bookkeeping, filling out tax forms, and shopping for office supplies. Hiring someone to either help out with the simpler work tasks or help with the business-running side of things will allow you to focus on what you love. Employees don't have to be expensive -- take a chance on an intelligent high school or college student, pay them more than they would make flipping burgers or folding t-shirts, and give them the learning experience of a lifetime. You'll both be grateful.

3. Minimize expenses. This point may sound obvious, but the truth is that it's all too easy to justify getting a brand new computer, a Blackberry (complete with expensive monthly service plan), a spacious new desk, fancy pens, stacks of business cards that you spent hours designing, or even a new car custom-painted with your company's logo, with the idea that these items will make you more productive or successful and get you excited about starting work each morning. You don't really need any of these things to jump start your business -- you need passion, hard work, and a good business plan. Once your business starts to be successful, don't jump the gun and develop elaborate plans to borrow money from your uncle so you can have designer offices. It's important to reward yourself for your hard work, but keep your rewards realistic. Startup businesses tend to have very narrow profit margins, if they're making a profit at all. When you're first starting out, keep in mind what you really need versus what you just want, and forgo the luxury items unless you can get them cheaply and easily.

4. Even when you really need the money, don't take just any assignment. There are times when you may feel that your hands are tied because you really need the cash, but you shouldn't always take a job just because it's a job. To stick with the website design business model, if you aren't even remotely interested in farm implements and someone wants you to design a website for their tractor business, suck it up and do the job. Taking a job that is somewhat unpleasant is one thing. However, if a client approaches you to design a website for something that you don't support or wouldn't be proud to associate yourself with (say, a website for a local chapter of the NRA), refuse the job even if you need the money. The universe will take cues from your behavior and provide for you accordingly. If your actions say that it's okay to do work that repulses you, more of it is likely to come your way. If you refuse it, you'll be available for the next great project that comes along. You'll also gain the respect of others who share your convictions and gain credibility as a business with a conscience, which can only improve your business.

5. Make sure to teach people how to treat you. There are certainly situations in life where we have no control over the way people treat us -- if you get shot because you happened to be in a bank at the time of a robbery, you haven't done anything to provoke that attack. But much of the time, the way people treat you is a reflection of what kind of behavior you allow from them and what kind of behavior you don't allow. Decide at the beginning what kind of business you want to be and what your policies are. During what hours will you accept calls from clients? How quickly will you return emails? Do you work on weekends? What constitutes a client emergency? How much time do customers have to pay you?

6. Make sure you get paid in full and on time. There's no excuse for any client to take longer than 30 days to get a check into your hands. Make sure that payment terms are established in writing at the onset of any project and that they are printed on the invoice as well. Establish penalties for clients who pay late, and enforce those additional charges. Keep in mind that if you want your clients to do you the courtesy of paying you in full and on time, you need to do them the courtesy of completing your work on time, submitting invoices promptly, and, for hourly work, keeping them posted on how many hours you've worked as you go along unless they've told you at the onset that money is no object.

Anyone who has ever done any freelancing work can probably tell you about at least one client who only partially paid or didn't pay at all. Have policies in place that will prevent people from taking advantage of you and prevent you from getting ripped off. For some jobs, one way to accomplish this can be to require partial payment up front. Also, keep in mind that even the most prudent or assertive person can still get conned. Try not to beat yourself up over it, think about what you can do differently next time to avoid a similar situation, and make sure to use the loss as a tax writeoff when March comes around (business taxes are filed in March, not April). Also, listen to your instincts from the beginning: if you get a sleazy vibe from someone, don't work for them.

7. Communicate with clients to keep them happy, even when you mess up. Clients are more apt to like you if you're honest with them. This doesn't mean telling them about every little misstep -- in fact, it's best if you keep those things to yourself if you can fix them in a reasonable amount of time so you don't alarm your clients or give them the impression that you don't know what you're doing. However, when you make a mistake that they need to know about, don't try to hide it. Not only will a client that gets lied to never be a repeat customer, but when both parties know about a problem, it can be easier and faster to come up with a solution. Even if things are going well, keep your clients in the loop--give them status reports at appropriate intervals so they know where their money is going and when their work is likely to be completed.

8. Keep in touch with former clients to remind them that you exist and get repeat business as well as new business. Even if a previous client doesn't have any new work for you to do when you call, they may know someone else who could use your services.

9. Advertise. This one may sound obvious, but no matter how wonderful your service is, people aren't going to hire you if they don't know you exist. One way to establish a client base when you're new is by offering free samples, coupons, or gift certificates. For example, if your mom has a friend that needs a website designed, create a gift certificate for an hour of free web design services that your mom can give to her friend. The friend will think your mom has given her a generous gift and that your business is already well-established. You'll take a slight pay cut on the job, but you'll get paid for everything after the first hour of work, and if you do it well you'll have a happy client who will spread word of your business to others.

10. Don't grow before you're ready. Expanding your business can make you feel great about yourself and bring in more money, but there's more to it than that. If you engage in a major advertising campaign to bring in more work, make sure your company has the capacity to take on that work if your campaign is successful, particularly if your company is small and you're already working near capacity. If the additional business causes you or your employees to become overworked, the added stress can cause things to quickly spiral downward. By the same token, don't overprepare for what you hope will be a pending expansion, because if things don't work out you'll be dealing with both the emotional distress from the setback and the financial loss from overpreparing. Growing a business successfully requires both careful planning and a little bit of luck.

Nobody said that starting your own business was easy, but while there are plenty of misconceptions and pitfalls, people still manage to do it successfully every day. With these ten tips, you'll already be ahead of the game.

Photo by atconc

Comparison Shopping for Car Repairs

Last week, the dreaded check engine light came on while I was ten trafficky miles away from home. I think we all hate this light, because unlike the battery light or the oil light, we have no idea what it means. Is the car going to be damaged if I keep driving it, I wondered? I decided to take my chances and finished my drive home since the car wasn't making any odd noises or behaving strangely. That night, I ordered the an OBD-II code reader from Amazon for $65 so that the next time my engine light came on I would be able to at least partially diagnose the problem myself before dealing with the hassle and expense of visiting a mechanic. (By the way, OBD stands for on-board diagnostics, in case you were wondering.) But for the time being, I was stuck taking my car to the shop. For $50 I learned that I would need a new catalytic converter at a cost of $800 to $1000.

I'm not terribly knowledgeable about the cost of car parts and repairs, but for a repair that expensive, I wasn't just going to hand over my hard-earned money. I took the car to another mechanic for a second opinion. He confirmed the diagnosis, but gave me an estimate of only $700 for parts, labor, and taxes. Much better, but still no fun.

A friend mentioned that Hondas are notorious for having problems with catalytic converters (something mechanic #2 had also noted) and said that there might be an extended warranty for the part as a result. I called two dealerships who looked up my VIN and reported that there was an extended warranty, but my car was too old and had too many miles to qualify for it. I also called two other mechanics that had been recommended by friends and got price quotes of $700 and, finally, $660. In addition, I researched the price of a catalytic converter online and asked mechanics about options for getting a less expensive one (there are no good options for my situation, unfortunately).

I've also done some research on the problem, and I'm not convinced that the problem is actually the catalytic converter--I think it could be the second oxygen sensor. I'm going to take the car to the least expensive mechanic and tell him that I don't want a new cat unless it's absolutely necessary and to check the oxygen sensors first.

Moral of story? When dealing with expensive auto repairs, don't take the first mechanic's word for it. It never hurts to inquire about a manufacturer's extended warranty on the repair you need (if it's not routine), do a little internet research, and get a second, third, fourth, and fifth opinion.

Photo by salendron

Insurance Matters When Buying a New Car

If you're buying a new car, you may wonder how to handle insuring the new vehicle. After all, you can't insure a car you haven't bought yet, but as soon as you buy the car, you have to drive it home, and you probably can't call your insurance company right then and there to get coverage. That isn't very realistic, especially if you buy the vehicle after business hours from a private seller.

Fortunately, car insurance companies are aware of this issue and have provided for it. Different companies will have slightly different policies, but what you can probably expect is that you will automatically be fully covered for a period of a few days after which time you must call your insurance company with your new car information or you will essentially be driving around uninsured, which you don't want to do ever but especially with a new (or new to you) car. Don't think that you'll get a few days' worth of free insurance though if you wait until the last day of the grace period to update your information. The insurance company just post-dates the policy to the date you purchased the vehicle.

If you still have your old vehicle, you'll want to keep it insured, too, even if you're planning to sell it as soon as possible. If you are selling it, you can downgrade your coverage to a low annual mileage and to pleasure use, which will significantly lower your premium. Then just cancel it as soon as the car has sold. If you're keeping your old car, you'll probably be able to get a discount for having multiple cars insured under the same policy.

Photo by Dale Gillard

Socially Responsible Investing, Part 1

I have been researching lots of socially responsible funds using a list I found at Social Investment Forum and Morningstar's free fund data. As much as I want to find one or more socially responsible funds that I would be happy to invest in and recommend to my friends, I'm coming up short.

Here are the funds I've looked at along with their ticker symbols, in case you'd like to look them up yourself. I started compiling the list from funds that had 9% or higher returns over a 10 year period. I aim for this return myself whenever choosing a fund since the S&P 500 historically returns this amount and my retirement calculations are therefore based on it. Then I expanded my list to funds that returned 7% - 9% since there were so few in the first category. I also added other funds that sounded like they might have potential. You'll notice a heavy emphasis on Bridgeway funds--this is because their expense ratios are much lower then other socially responsible funds, and because I considered investing in one of their funds several years ago. The Calvert funds say "confused" instead of a ticker symbol because there were so many share classes that I couldn't figure out which one the average investor would want to choose. Sure, I could rule out the ones with $1,000,000 minimums, but after that I was lost.

Fund Name Symbol Expense ratio Load Style 10 yr. Initial
Domini Social Equity Fund DSEFX 1.15 None Large blend n/a
Bridgeway Ultra Small Company Market BRSIX 0.67 None Micro growth 14.83 2000
Calvert Large Cap Growth Confused

New Alternatives NALFX 1.25 4.75 Front Mid growth 9.3 2500
Parnassus Equity Income PRBLX 0.99 None Large growth 10.6 2000
Winslow Green Growth Fund WGGFX 1.49 None Small growth n/a 5000
Vanguard FTSE Social Index VFTSX 0.25 None Large growth n/a 3000
Bridgeway Blue Chip 35 Index BRLIX 0.15 None Large blend 7.17 2000
Calvert Social Investment Equity Confused

Citizens Emerging Growth A WAEGX 1.88 None Mid growth 7.96 2500
Neuberger Berman Socially Reponsible Index NBSTX 1.13 None Large growth 7.43 1000
Pax World Balanced PAXWX 0.94 None Large growth 8.57 250
TIAA-CREF Instl Social Choice Eq Retail TICRX 0.4 None Large blend n/a 2500
Bridgeway Aggressive Investors 2 BRAIX 1.22 None Mid growth n/a 2000
Bridgeway Balanced BRBPX 0.94 None Large growth n/a 2000
Bridgeway Small Cap Growth N BRSGX 0.92 None Small growth n/a 2000
Bridgeway Large Cap Value BRLVX 0.79 None Large value n/a 2000

This chart does a pretty good job of illustrating the common problems with socially responsible funds.

1. High expenses. With a few exceptions, these funds have such high expense ratios that I wouldn't give them a second look normally. Some folks say that any expense ratio under 1% is good for domestic funds. I say, why spend 1% when you can spend .2% or .1%? The funds I own actually have expense ratios in the .4 to .6 range, but I'm okay with that because they've been outperforming their lower cost cousins. For now. When things change, I might pick up some different funds. They say that in the long run, funds with higher expenses tend to underperform. Supposedly, the higher expense ratios commonly seen in SRI funds are due to the extra research that must be performed to create them. I guess I shouldn't be bothered by that, but I am, since the higher fees don't come with higher returns.

2. Loads. As if high expenses weren't enough, some of these funds have the audacity to charge loads. Just say no. If you want to give your money away, donate to charity, not to fund managers.

3. Overemphasis on growth stocks. Personally, I prefer value stocks or a blend of large value and large growth stocks because I don't like my investments to be too volatile. This is largely a matter of individual risk tolerance, though.

4. Unexciting long-term returns. The only fund that has impressive long-term returns only got them because it had a ridiculous year in 2003. If not for that one year, whose performance will probably never be repeated, the fund would be lackluster. I want a fund that is a consistent high-performer.

5. Too new. I don't like to invest in funds that haven't been around for at least ten years. Again, this is a matter of individual risk tolerance. If you look at any stock fund, you'll see that it has some good years, some bad years, and some just okay years. It's all too easy to look at a new fund and think that it is good, bad, or just okay when it only has a couple years' worth of results to report. Drawing the wrong conclusion can mean bad things for your returns.

6. Not responsible enough. I can be moderate about some things, but on most subjects, my beliefs are quite liberal, if not radical. If I'm going to sacrifice returns, I need to be giving up more than just Halliburton and Wal-Mart. I need to be giving up all the companies I hate. The better performing SRI's still own stock in companies I find questionable (Microsoft), if not downright offensive (Wells Fargo).

Let's pretend for a moment that I have to choose from these funds. Which ones do I think are the best, or rather, the least bad options?

Parnassus Equity Income. I hate to choose this one because of #6, but I figure if I can still earn 10.6% while being slightly more responsible, that's pretty acceptable. Also, it hasn't been too volatile thanks in part to holding 15% of its assets as cash.

Pax World Balanced. I don't love this fund either, but it has a respectable 8.57% record over ten years and a sort of acceptable .94% expense ratio. It also hasn't been too volatile.

I might follow the advice of one socially responsible investing website and just put 1% to 5% of my assets in one of these funds. I might sacrifice a bit of return, but if more investors would just chip in a little bit to more responsible investing efforts, the effects could be quite positive.

Photo by hagengraf

Self-Employment Myths

Who hasn't fantasized about quitting their job and striking out on their own? The desire is perhaps especially strong for Americans, since doing it yourself and creating your own successes are so ingrained in our value system.

As someone who has worked for many small business owners, I've witnessed the drawbacks of running your own business firsthand. The information that follows isn't meant to discourage you if entrepreneurship is a dream of yours. Rather, it's designed to serve as a reality check for both those who are thinking of starting their own businesses and those who often feel disillusioned by being someone else's employee.

Myth #1: I'll earn more money if I start my own business.
Are you tired of seeing your company bill your work out to clients at $175 an hour and then pay you a mere $30 an hour? It's depressing, isn't it? But if you started your own business, you would no longer have an established, reputable company behind your name. Without that, you might not have access to clients who are willing to pay $175 an hour for your skills. Even if you do, you might not be able to sign on enough clients or get enough hours of work from them to match or exceed your current salary, or you might have to charge less, especially at first. You can only charge as much as clients are willing to pay, after all. Your income also won't be steady--it will depend on how much work you find and complete in a given month, and clients don't always pay on time.

Myth #2: I'll get to keep more of the company's income if I start my own business. Does your current company frustrate you with money wasting practices--money that could be better spent giving you a higher paycheck? If you had your own business, all that wasted money could be yours instead, right? But when you run your own business, all of the things your employer provides you with to get your work done will become your expense. You'll have higher phone bills to pay and office supplies to purchase, and depending on your line of work you may need the services of a lawyer from time to time. You'll also have to pay for your own health insurance and any other benefits you're currently receiving from your employer.

Myth #3: I'll save money on taxes by starting my own business and incorporating. Unless you're planning to cheat on your taxes (which I don't recommend), any money that you save through the tax benefits of incorporating can easily be eaten up by the additional taxes you become responsible for as a business owner. You will be responsible for the employer matching portion of Social Security and Medicare taxes (about 7% of your salary), federal unemployment tax, and additional state taxes, not to mention the fees for legally required business insurance, business licenses, and franchise fees (these items will vary depending on the type of business you establish and your location). If you have employees, you'll have to pay worker's compensation (you must pay this every year regardless of whether one of your employees is injured on the job). You'll also probably need to hire an accountant to prepare your business tax returns, which can be significantly more complicated than personal income tax returns.

Myth #4: I'll have more vacation time and get to set my own schedule.
Vacation? What vacation? Small business owners often take fewer vacation days, work longer hours on weekdays, and even work on weekends. If you're working on a project for a client, you probably won't be able to take a vacation in the middle of the assignment. If you have multiple clients, you might not be able to find a time when you've wrapped things up with all of them and can go on a vacation. The result is that you don't take vacations at all or end up working from your getaway spot. Also, you'll no longer have paid time off--any time you aren't working is time you aren't earning money.

Myth #5: I'll get to be my own boss--I won't have anyone breathing down my neck.
Even when you're self-employed, you still aren't quite your own boss. Sure, no one technically tells you what time you have to be at the office each day, when to take your lunch break, and when you can go home, but clients' demands will often end up determining your schedule. Your clients become your new bosses. You can always quit working with one of them, but you'll lose that income, and you won't always be in a position to take that risk.

Myth #6: Being self-employed will make my life easier.
You may not have to wake up at 6:45 and endure rush hour traffic any more, but the truth is that when you're in charge, you take on a great deal of additional responsibility. You can't afford to be lazy, because your income depends entirely on your own initiative. Also, keeping up with IRS requirements when you run your own business is no walk in the park. You can choose between lots of initial training and frustration while you try to decipher tax forms and figure out what you have to pay and when (and why), or paying an accountant to handle it for you (which will add quite a bit to your expenses). Mistakes on tax forms can cost you hundreds of dollars in interest and penalties.

When it comes down to it, if you're motivated, hardworking, have lots of connections, and know how to sell yourself, it's quite possible that you'll make more money and enjoy your work more when you're running your own show. But if you really just want to collect a steady paycheck and keep the rest of your time free from worry and available to pursue other interests, you'll be better off both mentally and financially as someone else's employee.

Photo by TheLizardQueen

Amazon Coinstar Bonus

If you've been looking for an excuse to empty your change jar, now you have one. You've probably seen those big green Coinstar machines near the entrances of grocery stores. It used to be that they would turn your change into cash for a 7% fee, but now you can get the full value of your change by exchanging it for a gift certificate to popular stores like Amazon, Starbucks, iTunes, or Old Navy (all of which are as good as cash to me). Currently, you can get a 33% bonus on your money by trading in $30 worth of change for an Amazon gift certifiate. All you have to do is send in a claim form to get your bonus $10 Amazon certificate in the mail. Read the fine print here.

Socially Responsible Investing

In the past, whenever I've researched socially responsible funds, they've all seemed to come up short, with sub-par returns and/or overpriced expense ratios. It's been a few years since I last researched the subject, though, and I've been hearing about it more lately through various channels. My favorite podcast, Marketplace Money, even did a segment on it recently which claimed that it was possible to invest in a way that was responsible to your own financial future while simultaneously being socially and environmentally responsible. I'm hoping that this round of research will lead to a positive conclusion for me, either because better funds are available now or because I didn't know where to look before. Also, I think I could get a lot more people excited about saving and investing if I could tell them how to save the world at the same time.

I have both friends and friendly strangers helping me with my research, and I am really enjoying exploring the websites they've sent me to already. Over the next few weeks, I will post regular updates on what I learn as I attempt to answer the question, "Is it possible to invest wisely in your future without selling out on your values?" Please feel free to send me your opinions and your favorite resources on this topic.

Save Money on Hair Care by Dispelling Product Myths

Being an informed shopper can go a long way towards saving money. With that in mind, I'd like to dispel some little-known facts about hair care products that I learned from reading Don't Go Shopping for Hair-Care Products Without Me by self-proclaimed "Cosmetics Cop" Paula Begoun. Begoun is well-known for her extensive, ongoing research and testing of hair and beauty products. She publishes her findings every couple of years in her series of books, Don't Go to the Cosmetics Counter Without Me and Don't Go Shopping for Hair-Care Products Without Me, where her primary goal is to provide honest, unbiased information so that consumers can find out what really works and avoid everything else. Here are ten things I learned from her that will help you save money on your next shopping trip and for years to come.

1. There is no difference in the quality of the hair dye that you buy in a box at the drugstore for $10 and the hair dye used in salons. This means that if you're making a subtle change (like going from medium brown to dark brown) or you're rather skilled with hair dye, there's no reason not to do it yourself at home, especially if you're dyeing your hair every few weeks. Doing it yourself can save you $50 a month or more. If you're making a drastic change, however, the extra knowledge and experience of a professional can help you get better results and be worth the extra cash. Personally, I've had just as many hair dying successes as I have disasters, but the successes were with minor changes and the disasters with major changes. Professionals can mess up your hair too, of course, but they'll probably fix it for free if they do.

2. Now that you've found that perfect new shade, be aware that shampoos and conditioners can't preserve your hair color -- so don't waste your money on products that make this claim. Dandruff shampoos can strip hair color, however, so if you're having dandruff problems, hold off on that dye job until you've cured the problem.

3. Many hairstylists' product knowledge comes from straight from the product manufacturers, making stylists a less reliable source of advice than most people assume. This doesn't mean that they can't do a better job with cutting, styling, dyeing, and highlighting than you can. It means that when you're looking for a product recommendation, you should take a stylist's advice with a grain of salt before spending extra money on expensive salon products.

4. Your hair can't tell how much your shampoo costs -- expensive hair care products are no more effective than inexpensive ones. In fact, many expensive products are actually produced by the same companies that make the inexpensive ones and contain virtually the same ingredients. You might be pleasantly surprised with the results of a 99 cent shampoo if you're willing to give it a shot. I have to admit that even though I know this, I'm a sucker for the scents of expensive shampoos -- so I compromise and buy the $4 stuff.

5. There aren't really as many kinds of shampoo and conditioner as their labels suggest. Remember when there used to only be three kinds of shampoo? One for fine/oily hair, one for normal hair, and one for dry, damaged, or color treated hair? Nowadays, it seems like most brands have anywhere from six to sixteen different varieties promising to do everything from getting your hair really clean to enhancing curls. The truth is that these products, despite their differing claims, tend to have nearly identical formulas that will provide nearly identical results. Strategic labeling does get people to buy more products, though, by promising to solve different hair dilemmas (the same person often has multiple hair issues, after all) and by taking up more shelf space (thus doing a better job of in-store advertising for a particular line).

Hair product ingredients must be accurately labeled according to FDA standards, but there are no regulations on the accuracy of product claims. Hair product companies can say that a product does whatever they want. This includes claims such as "hypoallergenic" or "all natural." Don't spend more money on a hair product that makes amazing claims, because with no one regulating these claims, it's quite possible that they aren't true at all.

6. There is no such thing as an oily hair type. It is the scalp that is oily. When oil makes its way down the hair shaft (which it does particularly well on straight hair), the hair appears oily. Unfortunately, no product can decrease your scalp's oil production. There really isn't a lot that can be done to remedy this problem aside from washing hair frequently and keeping conditioner away from the scalp (or avoiding conditioner altogether if you can). Don't waste your money on expensive products that claim they can fix your oily hair -- hormones control oil production, not shampoos.

7. Damaged hair cannot be repaired because hair is dead, so don't spend money on expensive products that claim to repair your hair. Begoun likens trying to repair damaged hair to trying to mend a dry, cracked leaf. It won't happen! Conditioners can give hair the appearance and feel of being repaired, but this will only last for as long as the product is in the hair (until the next shampoo). If you're using the same deep conditioner every day, you may feel like your hair has been repaired. But if you buy expensive, one-time deep conditioning treatments, the results will only last until your next shampoo -- and that's money down the drain, literally.

8. Used regularly, volumizing shampoos will eventually weigh down your hair and make it even more limp than it was to start with. The same ingredients in these products that coat each hair strand to make it appear thicker also build up on the hair over time, so if you use a volumizing shampoo, make sure to alternate it with a regular shampoo. If you're trying to save money, you may just want to skip the volumizing shampoo altogether. Personally, I don't think volumizing shampoos help at all.

9. All-natural or organic shampoos may be better for the environment, but they are not necessarily better for your hair. Natural products often contain irritating ingredients like citrus or peppermint. (If these ingredients don't give you any trouble, then by all means, use them, but they can be irritating for some people). If your primary goal is to find a product that is gentler on your hair or scalp, don't waste your money on these products.

10. While hair loss is more prevalent in men than in women, hair regrowth products are, unfortunately, significantly more effective on women. If you're following the directions and you're not getting results, you can stop spending $50 a box because these products won't work on everyone, regardless of gender, and may be especially less likely to work if you're male.

The baffling variety of haircare products available these days can make trying to pick the right bottle a dizzying experience. Hopefully these facts will help guide you in your hair care shopping, prevent you from needlessly wasting money, and eliminate frustration. For more hair care product advice for every hair type and hair problem, be sure to check out Paula Begoun's Don't Go Shopping for Hair-Care Products Without Me.

Photo by genewolf

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Welcome to my personal finance website, Two Pennies Earned, where you'll get loads of simple, practical tips for making life more affordable. Don't miss highlights such as How I Saved $120 at CVS, How I Made $1250 in Free Money in One Year, and Just Ask: The Three Keys to Getting What You Want. I'll also be using this site as a place to expand upon some of the ideas in my Investopedia articles and give you a chance to discuss the articles.

Thanks for visiting, and please feel free to leave a comment or send me an email at twopenniesearned [at] gmail.

Investopedia Followup: Americorps, Peace Corps, and Personal Finance

I wanted to add a few thoughts to my recent Investopedia article on Americorps, Peace Corps, and personal finance.

Choosing a school that doubles your $4,725 AmeriCorps education reward can make grad school very affordable. Some of the schools that offer to match AmeriCorps' education award are state schools, where $10,000 can buy you a year's worth of tuition once you are a resident of that state. If paying for grad school is an issue, completing one or two terms of service with AmeriCorps can really ease the burden, probably moreso than any traditional job you might get. After all, most people, particularly recent grads working for entry-level wages, cannot save almost $10,000 for school in a single year.

On the other hand, if you are considering a very expensive form of grad school like an MBA program, you would be better off financially if you got a job that offered the benefit of paying for your MBA.

If grad school isn't in your future, keep in mind that the award money can also be used for paying off existing loans or for other forms of educational training—not just grad school.

If you're on the fence about attending grad school, spending a year or two doing AmeriCorps or Peace Corps can give you some time to weigh this major decision before making an additional investment of time and money in your education. You'll also continue to live on student wages, which will prevent you from having to make the difficult adjustment from salaried worker to unpaid or barely paid student if you do choose to go back to school.

The decision to serve in one of these programs can certainly fall into a gray zone between emotion and reason in more ways than one. One thing you may not have already considered is that if all of your existing friends will have highly paid jobs while you’re volunteering, you might find it difficult both emotionally and socially to not be able to enjoy the same luxuries that they will be able to afford. In Americorps, you will probably make friends with other participants who have to live on the same income you do, so if you enjoy their company, your social life shouldn’t suffer too much. Your real friends will stick around regardless of whether you can afford to go out for sushi. In PeaceCorps, you won’t be interacting with people who have more money than you do, so you won’t have to worry about missing out on things for financial reasons. You will miss out on many things, though, because you’ll be on the other side of the world for two years.

Americorp’s website does not give specific amounts for the living allowance (I’m guessing because payment varies by job and because they don’t want to scare people off). I found over 100 current AmeriCorps job postings on Here are a few of the listings which contained pay rate information. A search of current job postings for AmeriCorps positions shows that the average monthly wage tends to be in the $900 - $1000 range. Some pay closer to $800 a month, some pay closer to $1100 a month. Pay does not seem to reflect the actual cost of living in the job location. One of the highest pay rates was found in Harris County, Texas, which has one of the lowest costs of living in the country.

Photo by chchang

For more information, follow the links below.

Information on Peace Corps living allowance, payment, health insurance, and student loan assistance:


Peace Corps and future employment:

Peace Corps length of service

Peace Corps FAQ

Information on AmeriCorps living stipend and student loan assistance:

Information on AmeriCorps pay and taxes

Information on AmeriCorps VISTA and federal jobs after completion of service

Related Posts:

My First Win With Priceline

It's been years since I attempted to purchase anything through Priceline. I tried using it to buy a plane ticket a few times in college, but my bids were always too low to win. These days, I don't have the schedule flexibility or the physical stamina to deal with inconvenience of not being able to choose my flight time or layovers, so I just use a combination of Farecast, Sidestep, and Yapta to get the best possible price on my plane tickets at times and with flight durations that work for me.

Last weekend, as I was preparing for a trip, I suddenly realized that my rental car reservation had vanished into thin air. A car that I was planning to rent for $90 was suddenly going to cost me $155 and there was no way around it because my trip was in less than 24 hours. I spent about three hours racking my brain and suddenly remembered Priceline. Some careful strategizing was in order because I didn't want to bid so low that I would get stuck paying full price. On the other hand, if I originally had a reservation for $90, couldn't I get that same price again? Or, would it be best to take the conservative route and aim for a price of $120? And what about those last-minute deals that travel websites are always advertising?

Well, I turned to my faithful friend Google which lead me to a message board about how to be successful on Priceline and Hotwire. Hotwire? That was all the information I needed. I had completely forgotten about Hotwire! So I visited Hotwire, which, at least for renting a car, appears to offer a sort of Travelocity/Priceline hybrid. They tell you what the price of the car will be, but they don't tell you exactly what company you'll be renting it from. They showed a rate of $17.95 a day, which came to around $90. Sweet! Now I knew that I could get my $90 rate from somewhere, so I knew I could bargain for less on Priceline. I ended up winning an economy car for $14, which came to about $75 after plenty of taxes and airport fees. My car ended up coming from National, and they were out of economy cars, so I got a slightly nicer car to boot.

There are several lessons to take away from this story. First, when you take charge of a tricky situation, sometimes you can make it go your way with a little time and effort. Second, using a combination of Hotwire and Priceline is a great way to get a discount on a rental car, and unlike with plane flights, there are really no downsides to renting a car through Priceline unless you're terribly attached to one rental car company (and why should you be? They're basically all the same). Third, you might as well sign up for the cheapest car class, because if they're sold out, you'll get a free upgrade, and if they're not sold out and you hate the car, you can always pay a little extra at the counter to upgrade.

In the future, I plan to get the best price on all of my rental cars by making a fully cancelable booking as far in advance as possible, and then bargaining for a lower price at the last minute.

Photo by shyb

Another Way to Get a Free Credit Report

You probably already know that you can get a free copy of your credit report (notice that I said report, not score) if you have been turned down within the last 60 days for credit, employment, insurance, or a rental dwelling because of information in your credit report. You probably also already know that you are entitled to one free report per year from each of the three credit agencies by going to

I also have a couple of additional ways to get a free credit report that I don't see other people writing about. The first is to write to the major credit bureaus and request to be removed from their promotional lists (a truly great way to reduce the amount of junk mail and credit card offers you receive). I have no idea why this gets you a free credit report, but it does. I've also found that if I write with any other sort of inquiry about my report, like whether my new address is showing up in my credit report after a recent move, they will also send me a free copy of my report.

Here are the addresses (and phone numbers, if calling is more your style):


PO Box 740256
Atlanta, GA 30348

TransUnion Name Removal Option
P.O. Box 505
Woodlyn, PA 19094

PO Box 2002
Allen, TX 75013

In the age of identity theft, you really can't check your credit report too often. Though I think it's beyond ridiculous that I have to pay money to monitor my credit because the credit bureaus are so incompetent at their jobs, I'm going to be signing up for a credit monitoring service after reading about an experience that fellow personal finance writer Teri Newton had recently which goes to show that even the most careful among us can still become victims.

Photo by fedewild