Her husband remembered that their American Express Blue offered Purchase Protection and decided to give them a call. Why not right? As it turns out, they’re protected by a consumer protection most people forget about – American Express Purchase Protection.

How does it work? Use your AMEX card when you pay and you get 90 days of protection against accidental damage or theft. You file a claim and the protection replaces the item or reimburses you up to the amount of the purchase price. There’s a limit of $1,000 per occurrence and up to $50,000 per cardmember account per year. You can file an American Express claim online or call 1-800-322-1277 and you’ll be asked to provide proof of theft, accidental damage, or vandalism.

They were sent a claim form to fill out and needed to provide additional documentation such as receipt of purchase, AMEX statement with the purchase, and description of the damage. Had the jacket been stolen, instead of damaged, they would’ve had to include a police report as well.

American Express has a reputation, among merchants, of having the highest processing fees out of any of the issues. Not coincidentally, they offer some of the best consumer protections like return protection and purchase protection.

Her husband told me that they make most of their major purchases using their American Express card because of these types of protections. Between the 90 day product insurance and the doubling of the manufacturer’s warranty up to a year (which many issuers offer), there are two excellent reasons why I can see an AMEX beating out a comparable cash back card.

Every American Express card I looked at on their site included this Purchase Protection insurance policy and I totally forgot it existed. Have you ever used it? Heard of a friend who used it?

American Express Purchase Protection Perk from personal finance blog Bargaineering.com.

So, like zombie attacks, the key to surviving a tax audit is to be prepared.

Keep Accurate Records

When you file your return, assume that you will be audited. Keep receipts of absolutely everything and keep them with your return. If you can’t produce proof of something you claimed and you’re audited, the deduction will be disallowed and you’ll be penalized for it. While the chances of you being audited are low, you need to retrieve the receipt now while it’s still fresh in your mind. If you get audited in four years, it’ll be hard to track it down.

Read the Notice

Read the notice carefully and respond as quickly as you can, though you generally have thirty days. Being proactive and helpful can turn the auditor into your ally. The audit will tell you what items on your return are being reviewed, prepare a copy of that documentation and bring it to the meeting (don’t give them originals, they might lose them and originals aren’t necessary). Bring only what they ask for! If they ask about certain charitable deductions, bring documentation of those deductions and nothing else. You don’t want them digging around and asking other questions. That’s not because you have anything to hide but because more questions mean more time and this is time consuming enough.

Also, you might have only received a CP2000 clarification letter, which is commonly known as a correspondence audit, which is the simplest type of audit. They call it a mail-order audit because a face to face meeting isn’t necessary, you only need to send in the documents they request.

Treat It Like A Trial

You should be cordial with the auditor but don’t treat them like your friend. At the end of the day their job is to find tax cheats and they’ve identified you as a potential cheater. It’s important that you review this IRS document that outlines your rights as a taxpayer under examinations and ensure that your rights aren’t violated.

The document also outlines the auditing process, or examination process, including a reference to Publication 556, which as details on appeals. If they disallow a deduction that you feel is rightfully yours, pursue it. Don’t let the IRS intimidate you, flex your muscles and arm yourself with the knowledge you need to prevail.

Consider a Tax Professional

If you have a particularly difficult situation that isn’t solved by offering up a forgotten 1099 or some other form, you may want to hire a tax professional who has experience dealing with audits. Audits can be very time consuming so you’ll have to select the tax professional very carefully but their expertise in dealing with numerous audits should aid you in getting as favorable an outcome as possible. It also helps that they aren’t emotionally invested in the process so they can make smart decisions.

In the end, getting audited sucks even if you don’t end up paying an additional cent in taxes. They are time consuming, stressful, and prevent you from doing something else (that you enjoy!). If you are well prepared and know how to respond, you can minimize both the cost and the time.

(Photo: wiredwitch)

How to Survive a Tax Audit from personal finance blog Bargaineering.com.

I’m honored and happy to share that Bargaineering was included in several categories and is up against very stiff competition. Many thanks to those of you who may have nominated Bargaineering but know that this site is as much a product of your contributions as it is my own. Without your comments, this place would be nothing more than my ramblings and would not be a place I’ve come to treasure. This recognition is as much a tribute to you as it is to me, so thank you.

If you have a few moments, please cast your vote for your favorites.

Thank you!

2010 Plutus Awards from personal finance blog Bargaineering.com.

Instead of throwing up our hands in frustration, I believe in the power of getting educated and making small changes with big impact on or health and environment. Here are three small changes that can improve the quality of life in your home sweet home.

Cleaning

To maintain a healthy eco-friendly kitchen the first place to start is to get replace any products that contain ammonia and bleach. Both of these ingredients are clearly labeled as toxic and do not belong in the same room where you prepare food. While small exposures to these toxins may simply irritate your breathing, skin and eyes, it can be very harmful to young children and anyone with a compromised immune system. There is a reason the labels say “poison”. There are better, safer ways to clean up in green style.

Another very important reason to skip the commercial brand in your kitchen is that they wreak havoc on our environment. Just think of the runoff into our drains, water supply and eventually our local water systems, lakes, rivers and oceans.

Here are some safer alternatives that I use in my very own kitchen. Not only will you turn your kitchen green, but you will save some ‘green’ along the way.

• Borax – aka sodium borate, is a naturally occurring compound that disinfects when used as a cleaning agent– Simply use anywhere you would use commercial brand abrasive. You can make a pretty fabulous cleaning paste by mixing together a paste of borax and natural liquid soap.
• Distilled White Vinegar
• Baking Soda
• Plant-based liquid soap (with no fragrance)
• Lemons
• Olive Oil

Eating

The food choices you make every day can help to create a greener kitchen for you and your loved ones. One of the most profound changes you can make is to begin to educate yourself about what you are REALLY eating on a daily basis. The best tool you have to create a green healthy eating life is to read the labels on everything you buy and to choose more things that don’t even have labels, other than those cute little stickers, i.e. fruits and veggies.

When it comes to buying produce, there is a coding system that is universally used in the industry to indicate whether an item has been grown organically, conventionally (read: with pesticides), or in a lab. Here are the codes you will find in all stores:

• Organically grown food has five digits and starts with #9
• Conventionally grown food always has four digits
• Genetically grown food has five numbers and will start with the #8 or #3

To keep it simple, I always remember to look for the nine! And whether you choose organic or not, always remember to thoroughly wash your fruits and vegetables with either a store bought natural produce wash or simply use a bit of plant based soap and wash any residue or dirt away before eating.

Storing

When it comes to storing food in our fridge or pantry, we have been taught over the years that plastic is the way to go. We’ve learned that the “burp” of the trusty Tupperware is what we need to watch for to keep foods fresh and healthy. Today, we know about some of the dangers of plastic when it comes to food storage. The two main words that have come to light are Phthalates and BPA.

Phthalates are a type of additive that is used to make plastic softer and more flexible. They are also found in a wide variety of other places like cosmetics and cleaning materials. They are even found in some foods like milk, meat and butter! There has been much controversy as to the safety of phthalates and its effect as an endocrine disruptor, especially in younger children.

Personally, I understand that we are exposed to so many toxins in our environment, and you may ask “does this REALLY make a difference”. Well, as the mother of a young child I am always looking for ways to reduce the toxic burden in my home and in our lives. Choosing to eliminate plastics is a simple way to create a cleaner, greener kitchen in my home.

BPA – Bisphenol A – is used to make plastics such as water bottles, food can lining and sports equipment. BPA, another endocrine disrupter has been linked to obesity, neurological issues, and because of its levels of estrogen levels, has even been linked to breast cancer, among other conditions.

Yes, this seems like a pretty bad situation. However there is good news. Choosing alternative storage is healthier and actually less expensive. Here are some great ways to eliminate Phthalates and BPA in your kitchen.

• Choose stainless steel and glass containers – I like to keep glass jars from food products such as olive and pickle containers. These make wonderful storage containers for grains, nuts and anything else you can think of. I even use an apple sauce jar for my daily green smoothie on the go.
• Mason jars make great cups and storage jars.
• There are non-leaching PBA free plastic alternatives showing up at markets around the country due to high demand. If your store doesn’t carry one, make sure to let the manager know you are interested.

What are some ways you are “greening” your kitchen?

(Photo: elanaspantry)

3 Easy Steps to a Greener Kitchen from personal finance blog Bargaineering.com.

I do this today with my auto insurance. For my Acura Integra, I didn’t carry comprehensive insurance and was able to saving hundreds of dollars a year. When it was totaled, through no fault of my own, I rolled the savings over to do the same thing with my current car, a Toyota Celica. As I’ve gotten older and the premium on excluding comprehensive insurance decreases, I’m tempted to add comprehensive again and pay for it with the fund. I’m able to because of good driving and good fortune, but I think that self-insurance is something everyone should consider.

The General Idea

The general idea behind self-insuring is that you want to reduce your level of coverage and put the difference in savings. The obvious benefit of this is that by having the difference in savings, you earn interest. The not so obvious benefit is that when the more dangerous accumulation period is over, that is the time it takes for your savings to grow large enough to cover potential problems, the benefits accelerate.

It’s like buying a car (self-insuring) and leasing a car (not self-insuring). The first few years of ownership or leasing are pretty much a wash, which is why leasing is appealing to businesses. However, there comes a point several years down the road where the car is basically “free,” excluding some maintenance, after you pay off the car loan. I see self-insurance in the same way, as long as you can avoid calamities for the dangerous accumulation period, you can get ahead by self-insuring where it makes sense.

Where this makes most sense is where the potential catastrophes are relatively small, to whatever benchmark you feel comfortable with (net worth, savings, etc.), and the savings you could get by downgrading coverage is great. There aren’t many cases where this is possible but there are a few notable ones.

Auto Insurance

This example is cleanest with auto insurance because it’s easy to see the savings. If you’re able to save $50 a month by raising your deductible from $500 to $1000, then after ten months you’ll have saved enough to cover the difference in the event of an accident. In this case, by raising your deductible you are exposing yourself to $500 of risk. If you can save $50 a month, then the accumulation period is 10 months… so avoid accidents for 10 months.

On auto insurance, like with many insurances, you have a lot of options:

• Comprehensive insurance
• Rental car coverage
• Deductibles

Homeowners Insurance

With homeowners you may be required by your mortgage lender to keep a certain level of insurance coverage but you may have options picking the deductible you want. Again, like auto insurance, compare the prices to see if it makes sense for you to increase the deductible and put the savings away to cover potential problems.

I’m hesitant to offer up removing flood insurance and guesstimating how much it would cost to repair “typical” flood damage, though those riders are certainly worth considering.

Life Insurance

Is this possible with life insurance? This is really the scenario that prompted this post in the first place. When I started thinking about it, what are we really insuring against? Ultimately I settled on the idea that life insurance exists to do one of two things:

• Insure against a future income stream – this risk is most obvious for a single income family where the death of the breadwinner really puts the family in a bind. If the spouse hasn’t worked in a long time, it’ll be difficult, especially now, it won’t be easy restarting.
• Insure against current debts – this is the risk that probably affects more families and it’s because of the mortgage. If either spouse dies, the survivor is still responsible for the debt. If it’s the breadwinner who dies, that makes the situation even worse because you have both the loss of income and the demands of a loan.

I ran some numbers and it doesn’t seem feasible to self-insure for this sort of thing. If you assume 8% APY on your savings, which puts it into investing terrible (rather than savings account territory), you need to save $71 a month to reach $100,000 in thirty years. $213 a month if you want to reach $300,000. If those issues are concerns for you, I don’t think self-insuring makes financial sense.

Final Thoughts

Remember that you’re up against actuaries, with years of training and tons of statistical data, so self-insurance can be a risky proposition. Even if you’ve had a lifetime of safe driving, you never know when you’ll run into a string of bad luck that saps your self-insurance fund of all its money. It takes a certain time of person, who isn’t afraid of assuming this level of risk, and careful financial calculation.

Do you self-insure? If so, what do you self-insure?

(Photo: ej_imageries)

Consider Self-Insurance Against Calamities from personal finance blog Bargaineering.com.

If you’re submitting resumes and calling companies, there are only so many resumes you can submit, calls you can make, before you start burning out. If you start burning out, you reduce the chances you’ll ace the interview because your brain is being beaten into submission by monotony.

That’s why it’s important for you to sprinkle in other activities throughout the day. It’s hard to do this because when you don’t have a job, you feel like you have to get one. To get one you have to submit resumes, call companies, and do all the things involved in “job hunting.” Then you fall into a vicious cycle… no job, want job, must search, keep searching, burn out… you get it. So how do you introduce activities that aren’t directly related to looking for a job but improve your prospects?

Volunteering

You have skills and volunteer organizations need skills. Whether you have trade skills or office skills or you’re just a fast and hard worker, local volunteer organizations can use you. By working as a volunteer, you don’t lose unemployment benefit eligibility and you can flex some of your skills and keep them sharp.

Also, this gives you a great answer to a common interview question: “what have you been doing since your last job?” Being able to say that you help an organization solve a problem is a fantastic answer.

Freelance Consulting

If you’ve exhausted your unemployment benefits and are still having difficulty, consider freelance consulting. A lot of companies need talent but can’t afford to add someone to their payroll, so offering your services as a consultant can bring in some much needed income while keeping your industry knowledge and skills fresh. If you think you might be able to do this, consider going to some local business events like chamber meetings to meet other business owners or search online sites like Craigslist for freelance gigs.

The freelance road isn’t for everyone and it’s not easy but if you’re able to leverage your skills this way you could accidentally start your own business or find your next job.

Pick Up a Complementary Hobby

Want to teach yourself something useful by accident? Pick a hobby that builds on a skill you might find useful in your main career. Let’s say you’ve been doing web design for the last five years and you’ve become pretty good, why not take up a little reading on graphic design or search engine optimization? Start a blog tracking everything you learn and you never know, that might blow up and become a nice side income for you. If nothing else you pick up some new skills that complement your career skills and you become a better hire down the road.

Do Something Fun

Do something you’ve always wanted to do but never had a chance to. This won’t really keep your skills fresh while your unemployed but it will keep you fresh. It’ll break up the monotony and make you a more appealing candidate when your job prospect improve and you get called into interviews. You want to go into interviews with a lot of energy and excitement, which are very difficult to fake especially after months of searching.

And when you do something fun… it’s fun!

Do you have any good suggestions for what a job seeker should do, outside of direct job hunting activities, that can help him or her become a better candidate or a better person?

How to Keep Your Skills Fresh When Unemployed from personal finance blog Bargaineering.com.

I totally get it because everyone does the same thing. There are a lot of things in our lives that we probably do the exact same way because “that’s the way we’ve always done it.” It’s familiar. It’s comfortable. It has worked… but it could be better. And, just like at work, we’ve done it that way because while it may not be the best way, it worked and you have a million other things competing for your time and energy.

However, today I want to work with you to try to find some ways we may be leaking money. It’s hard to know where you might be losing your hard earned cash bit by bit because it’s hard to know what you don’t know, right? So, to help get our mindgrapes flowing, I listed a few common money leaks in the hopes that you could kick in a few leaks you may have found recently.

Not Using Billpayment Services

It’s the year 2010 and if you’re still putting a stamp on an envelope to pay your bills, you’re wasting your money. The stamp is going to cost you 44 cents and the envelope will run you a penny or two, making each bill cost you about forty five cents each. Pay five bills a month, twelve months a year, and you have $27 you could spend on a case of good beer (or something else you enjoy). That doesn’t consider how much you’d pay in fees if the payment gets lost in the mail, which happens infrequently but is more likely to happen with the mail than with the photos of the Internet. Finally, think about all the time you’re wasting on making out the check, writing the address of the company on the envelope, and walking to your mailbox. With a few clicks, online billpay takes seconds.

Don’t Review Your Fixed Monthly Expenses

You don’t go to the gym as often as you think you do. You don’t use Netflix as often as you think you do. You don’t watch as much TV as you think you do. If you think I’m wrong, that’s fine, there’s a pretty good chance that even if you do use one of those things often enough to justify the monthly cost, you don’t do all of them enough to justify each of their monthly fees.

Keep a log of how often you use certain services and calculate how much you’re paying per use. Pay $90 a month for a gym membership? Even if you go every single day, that’s $3 a day. Once you do the math, you might be better off paying per visit if they offer it. This applies to almost everything and you’ll be surprised how much you don’t use your monthly memberships.

Don’t Optimize Your Savings

How much money do you have in your checking account? How much do you actually need in that account? This is one leak I know we are currently suffering from and it’s such an easy fix, if we take the time to do it. Money in our checking account earns nothing, whereas money we transfer into our high yield savings account has the opportunity to earn at least a percent or two. We keep a bit of a buffer in our checking account but everything else goes into a savings account where we get a little something while we’re waiting.

Drive Fast, Brake Hard

If your morning commute is 20 miles, it’ll take you about 21 minutes and 49 seconds if you go 55 miles per hour. If you drive 65 miles per hour, you get there in 18 minutes and 28 seconds – or three and a half minutes faster. The difference? You can get pulled over for speeding if you are going 65 in a 55 and while it will probably not happen, it will suck really bad the one time it does. Plan your trips better and stop speeding. You avoid tickets, you improve gas mileage and tire lifespan, and you don’t sacrifice much. (if you drive 80 MPH, you still takes 15 minutes to get there…)

While you’re at it, use Google Maps and map out your daily commute. You can drag your path around to see if you’re really minimizing your total mileage or the number of red lights you hit.

Don’t Review Your Insurance Coverages

When was the last time you took a look at your insurance needs and adjusted your coverage? Here’s a scenario that probably happens all too often – you increase your deductible to lower your premiums (great move) but over the years your car has gone down in value and now it’s worth less than your deductible. It sounds obvious right but do you know the blue book value of your car? Ask your insurer what they think the value of the car is (chances are it’s less than blue book)… you’ll be surprised. Anyway, it’s not an intelligence test, sometimes we just keep doing what we’ve been doing because it made sense once and I’m telling you that you should review them. If things have changed in your life and you need less coverage or a different type of coverage, tell your insurer and get your policies adjusted to fit your current needs.

Don’t Find Ways to Trim Electricity

Finding ways to conserve electricity around your home is a nice way to plug a leak because you often only need to do something once and you reap the savings for months. I personally like CFLs, despite their up front costs, but there are plenty of ways to trim your electricity bill without much up front cost. For winter savings ideas, here a post on ten quick tips to winterizing your home. If you do a quick search on Google on how to conservation, you’re sure to find a lot of tips you can implement to start saving on electricity.

Don’t Review Your Mutual Funds

How has your mutual fund been performing? Are you happy with it? How much are you paying? Do you own the world’s most expensive index fund? (it’s the Rydex S&P 500 and it charges a 2.28% expense ratio!)

My point is that you should review your investments, especially your mutual funds, to see if your investments make sense. Index funds are easy to review because it’s as close to an apples to apples comparison as you’ll ever get and it really makes little sense to pay more for one fund over another (there are some differences, mostly dealing with the speed at which they match index changes, but they’re fairly nominal). You wouldn’t pay $20 for a gallon of milk, right?

I tried to run the gamut from leaks in your home to hard money leaks, like overpaying for an index fund, but I don’t know what I don’t know so I need your help. What money leaks do you see every day that most people don’t seem to catch? What about a leak you may have plugged lately?

(Photo: johnx62)

Find and Plug Your Money Leaks from personal finance blog Bargaineering.com.

Unemployment insurance “doesn’t create new jobs. In fact, if anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work,”

The title of the article is a little misleading. In quotes, Kyl said that benefits dissuade people from job hunting, not that they “make people not want to get a job,” as the title states. While I didn’t hear or read about the debate, it seems like a stretch to take the quotes and twist them to match the title.

However, unemployment benefits do act as a disincentive. You get unemployment benefits when you are unemployed, you don’t get them when you are employed. If you remain unemployed, you get paid for not working… so in that respect Kyl is right. Given that base unemployment benefits lasts 26 weeks (not including the extensions from the stimulus package), I’m inclined to think that it’s not unfair for Bunning, or others, to ask how we are going to pay for these things especially if we’re extending benefits again.

While the initial 26 weeks are funded by my employer and myself, through past payments, the extensions, in theory, aren’t. They’re funded by current workers and are taken from their future benefits, should they ever need them. I’m not well versed in how it all works but that’s just my layman’s understanding of it.

If I lost my job and was on unemployment, my initial sense of urgency at finding another job would be much lower than if I didn’t have unemployment benefits (once I got over the sting of being fired). If I just need to meet the job hunting requirements to receive unemployment benefits, I’ll do that while I search for the “right” job and not the “right now” job. I would rethink my career, a la Lemonade, and not rush to find income. Without unemployment benefits, I would be less likely to do it… so in a sense the benefits act as a disincentive.

What are your thoughts on unemployment benefits and whether they reward laziness? Did you think Bunning blocking the bill because he wanted the Senate to follow its own PAYGO rules were justified?

(Photo: notionscapital)

Your Take: Does Unemployment Insurance Reward Laziness? from personal finance blog Bargaineering.com.

What’s the logic behind credit checks? I’ve read everything from “a higher credit score means someone is more trustworthy” to “someone who has a higher credit score is more reliable,” but I doubt any company can substantiate that with hard data.

If someone wants to hire you because they believe you are the best candidate for the job, they will. If they are iffy about it, then they might use the result of a credit check to help them make a decision even though job performance and credit score are not related. I also agree with Reznik’s quote that “People lose their jobs, that naturally precipitates them getting behind on bills, their credit scores go down, they are trying to find a job to pay off the bills, and employers won’t hire them because of their credit score.” It’s a vicious catch-22.

As an aside, I also like the idea of banning credit checks for job applications because credit scores have become a bit of a joke. Credit scores lose some of their predictive value when they become known because people can game the system. They start behaving differently because they know how things will affect their score so the predictive value of that score goes down.

But, until they pass a law, it’s another reason why you need to review your credit report annually and if you’re itching to know your score, I use Credit Karma (it’s a free TransUnion score, no trial BS, 100% free).

(Photo: dcvision2006)

Ban Credit Checks for Job Applications from personal finance blog Bargaineering.com.

So when my insurance company sent me a package detailing one of their newest offers, a “return of premium life insurance” policy, I was intrigued. The basics of the policy are simple – you pay premiums for term life insurance and if you outlive your policy, your premiums are returned to you. If you outlive your policy, you haven’t wasted your premiums. If you don’t, then the premiums were “worth” it.

What’s the catch?

So where’s the catch? Nothing in life is free, right?

In return for the return of premium piece, you pay higher premiums than you would on a life insurance policy without a return of premium option. The insurance company can take the difference and invest it, thus helping it generate a profit regardless of whether you outlive the policy.

There isn’t a catch but does that mean it’s worth it?

Are Return of Premium Life Insurance Plans Worth It?

I believe it comes down to your approach towards insurance. When you buy non-required insurance, you’re buying peace of mind. For auto and homeowners, you are required to purchase it because of state law or because your lender requires it. For other insurances, like umbrella, accidental death & dismemberment, disability, or life insurance, it’s about being able to sleep at night and not worrying what would happy should something bad happen.

Life insurance is tough because as I said at the onset of this post, if you outlive your policy you feel like you’ve wasted money. You bought insurance but you never needed it. You’re happy about not needing it but you kind of wish you knew you didn’t need it and could’ve saved that money. The return of premium plan gives you the ability to pay for not having to worry about outliving your policy.

No amount of financial comparisons or breakdowns will really help you come to grips with whether you want to do a return of premium life insurance plan or a regular term life insurance plan. If it doesn’t bother you to outlive your policy, then you will probably want a regular vanilla term life plan and invest the difference in premiums. If you think outliving your plan will bother you, a return of premium plan may be for you if it gets you past that mental block and onto a policy you need (of course, if you need it, though I don’t necessarily agree everyone needs it).

If you’ve looked at life insurance, have you considered this option? We haven’t purchased life insurance yet and while this option is intriguing, I think I’d pass on it when the time comes. I’m curious to hear your thoughts on it.

(Photo: buttepubliclibrary)

What is Return of Premium Life Insurance? from personal finance blog Bargaineering.com.

That’s when I noticed that it sold twenty dollar scratch off tickets. (that’s one of them to the right) Twenty bucks… one card. The card probably had a bunch of games on it but the idea that there would be not one but three different $20 scratch off tickets was absolutely mind boggling. I was amazed. (as you can see, the letter “r” on my phone doesn’t work that great anymore)

What makes it even more remarkable is that it’s generally accepted that scratch off games offer the worst odds. The appeal is in the immediacy of the payoff. You scratch, you win, you walk into a store and get some cash. You don’t have to wait for a drawing, you have a little fun in scratching things off, and the ticket itself can be cheap ($1). The problem is that you probably won’t win anything.

A lot of other bloggers have done the $100 scratch off lottery game, where they buy a hundred $1 scratch off tickets and share their results. My favorite, and most entertaining, version of this was the $100 scratch off game by J Money. In his edition, he spent 90 minutes of his life and turned $100 into $38. If you want a way to turn $100 into $38 in less than 90 minutes, send me the crisp Franklin and I’ll send you back a Jackson, a Hamilton, a Lincoln, and three Washingtons. I’ll even cover postage.

Finally, if you are deadset on buying tickets… here are my secrets to how to win the lottery.

$20 Lottery Scratch Off Tickets from personal finance blog Bargaineering.com.

These programs promise to help you pay off your loans in half the time. Half! They remind me of those ads where someone with $150,000 in IRS tax debt gets it renegotiated down to $50 (you know those ads right?) or how $10,000 in credit card debt was settled for $150 and a high five. They smell like scams but if we just left it at that, we wouldn’t really know the real answer right? (this is how debt settlement works, it’s not necessarily a scam but it’s very very dangerous)

So let’s find out what mortgage accelerator programs are and whether they’re scams.

Mortgage Accelerator Programs

After a little bit of research on the web, it’s pretty clear that most mortgage accelerator programs are not necessarily scams, they’re just overpriced programs designed to automate something you can do yourself. The idea behind a mortgage accelerator program is that you should make mortgage payments every two weeks, instead of once a month. This accomplishes two things:

• With 52 weeks, you make 26 half-mortgage payments… which adds up to 13 actual mortgage payments. That’s one additional mortgage payment per year.
• By making biweekly payments means interest accrues a little slower. It’s a small difference, much smaller than the extra mortgage payment each year, but a factor.

So you won’t pay your 30 year fixed mortgage in 2 years, but it certainly will be finished earlier than 30 years. The rub with mortgage accelerator programs is that you will have to pay them a fee to set this up for you. That fee will not be a small one and when you look at the do-it-yourself alternatives, I think you’ll agree it’s better to put that fee towards your mortgage.

If you want to read more about it, check out Dan Melson’s great writeup of mortgage accelerator programs. Dan knows his stuff so if you want the dirty details, that’s where I’d go to read more.

DIY Mortgage Accelerator Program

So you want to roll your own mortgage accelerator program but think paying someone a few hundred bucks sounds absurd? Excellent, fortunately it’s very easy. Just try one of the following:

• Ask your bank or loan servicer if you can go onto a bi-weekly plan. They may do it for free or they may charge you for this service. Either way, it’ll probably be cheaper than some third party mortgage accelerator plan.
• Pay more than the minimum to help pay down principal. We add around $200 to our mortgage payment each month to help pay down the principal just a little bit faster. It’s an amount that we’ve increased each year to reflect pay increases and inflation. It actually works out to more than one extra mortgage payment a year (our is around $1300 a month) so it’s in a way better than the biweekly strategy.
• Send in a payment. The bank won’t turn away money, I guarantee you that, so why not send in a payment and tell them you want to put it towards the principal. Your monthly payments won’t decrease but the length of your loan will.

Two things to be aware of if you go this route – double check that there are no prepayment penalties on your mortgage and, if you do send in an extra payment, indicate that you want it to apply towards the principal. Loan companies, most by default, will apply it to the next payment because that’ll earn them more interest.

I’m a big fan of doing things yourself where it makes sense and this is one where it makes perfect sense.

(Photo: revdancatt)

What are Mortgage Accelerator Programs? from personal finance blog Bargaineering.com.

The main title is a bit misleading because it seems to imply that we’re going to do something that “gets back” at the investment bankers and mortgage lenders that got us to where we are today. However, the subtitle is really what the book is about – “Making big money is the best revenge,” which is exactly what Town seeks to teach with his book.

A few years back, when he released Rule #1, I had a very entertaining interview with Phil Town.

The book delves deeper into value investing by talking a little about technical indicators (chapter 6 is good), like supports and ceilings. It’s a great chapter on the subject if you’ve never read about them before but my favorite part is this insight about technical indicators – “It’s just a sophisticated form of guessing, but if enough Big Guys are guessing the same way, the guesses turn out right over and over again.” (As an side, I thought it was interesting that one of the examples, Burlington Northern (BNI), was recently acquired by Buffett)

If you want to learn more about investing in a way that is very approachable, I think Town’s book is a good start.

Payback Time by Phil Town from personal finance blog Bargaineering.com.

That led me to wonder where the best places to hide you rmoney at home was and fortunately the web did not disappoint.

First, there’s is no limit to human ingenuity. Just spend a few minutes looking through the slideshow WalletPop put together on the craziest places people hide their money and you’ll see things like inside a fake i-beam, the cookie jar, their attic, a fake roll of toilet paper, under the litter box, mason jar buried in the garden, and my favorite, an empty can hidden in the pantry. Hopefully all those people can get to their cash when the zombies start rolling in.

Now that you have a list of potential places, you need a strategy. Putting all of your cash in one secret spot works as long as the thief doesn’t find it. If they find it, then they have all of your money. Why not spread your loot over several secret hiding spots? If a thief is short on time and starts flipping over everything, they may quit after finding one stash. Thieves don’t have a ton of time so giving them a little offering like that may stop them from finding all the pieces.

Next, remember why you’re keeping the money at home and be smart about how much. We want to avoid the ATM so we keep less than $100 at home. We could keep $1,000 but that would be way more than we need, plus it’s interest we’re not earning by not having it in a savings account. So keep the amount logical, how much cash do you really need at home? Probably not as much as you think. Remember that in the event of a fire, you don’t want to feel compelled to save your money.

I feel obligated to point out this story of a woman throwing away a mattress that, unknown to her, held a million dollars of her mother’s savings. Saving money is good, saving a million dollars is great, but saving it in your mattress is a horrible idea.

Lastly, don’t be so creative that you forget where you hid it.

(Photo: alancleaver)

Best Places to Hide Money At Home from personal finance blog Bargaineering.com.

When you go to review your credit report, you may notice that the note on your recently closed account might say “closed by grantor” or “account closed at credit grantor’s request.” At first glance it looks pretty bad compared to the alternative (“closed at account holder’s request,” or something similar) but in reality it doesn’t matter. A closed account is a closed account, regardless of who initiated it. The FICO score formula doesn’t take into consideration who did the closing.

Your score will likely suffer a little bit as your credit utilization will go up but otherwise you should be fine. If you are concerned about how it “looks” or if you requested closure and it was miscoded, you can always dispute the record with the credit bureau. If you can prove you request closure, or if the creditor doesn’t respond, then it will be changed. It won’t, however, affect your score.

(Photo: 434pics)

Accounts Closed by Grantor Don’t Hurt Credit Score More from personal finance blog Bargaineering.com.