Every tool needs differentiator, a way they solve a problem that beats the competition, and it takes only a few seconds to realize what that is for PocketSmith. PocketSmith’s claim to fame, embodied by their slogan “Forecasting Made Simple,” is that they help you manage your personal finances by helping you forecast your financial future. By accurately planning and forecasting your future spending, will remove some of the mystery and anxiety and replace it with a plan you can work towards.

PocketSmith Is Free

Before I get into the various features, PocketSmith has three levels of service and the lowest one is absolutely free. You can see all of the features I write about for yourself without paying a dime. The Free service lets you track two calendars and six events, which is enough to let you play with the system and see if it’s right for you. I like it when tools let you try them for free without a trial period, albeit on a limited basis, because then I won’t have to worry about canceling before the trial.

PocketSmith Forecasting Calendars

The first thing that jumps out at you about PocketSmith is that they focus very heavily on forecasting. The tool works off a series of calendars. You can structure the calendars however you want but the idea is that each one represents a different category in your finances. If you use envelope budgeting, each calendar could represent an envelope.

At the top of every screen is this chart:

The chart to the left shows your forecasted and actual budget. Each dot represents a week and in this particular chart, the actual and forecasted figures are exactly on the dot. The idea of showing you the whole year is so that you can see how your finances today will affect your finances in a few months. A major expense today will change your actuals for the next twelve months and this chart will show you that immediately.

Underneath the chart is the calendar (click to enlarge):

This is where you can schedule all of your transactions the forecasting tool will use to predict your balances.

Goal Tracking

You can set goals for yourself and PocketSmith will give you an indication of how long it will take to reach that goal, given your budgeting. For each goal, you simply set a title, the dollar value of that goal, a buffer, and which calendar is applies to. What PocketSmith does is tell you how many days until you have enough of an excess in your budget to pay for your goal, plus the buffer, on the specified calendar.

Pricing

They have three tiers of service – Free, Premium ($5/mo), and Super ($12/mo). The only difference between the three tiers is how many things you can track in your budgeting calendars and how far into the future you can see. The Free plan lets you track six events and 2 calendars, Premium lets you track unlimited events across five calendars, and the Super plan lets you track unlimited events over 12 calendars. There are other differences but those are the largest quantitative ones (Premium and Super let you export to CSV and PDF, whereas free does not).

The strength of PocketSmith is in it’s ability to predict and plan for the future through the use of calendars. In addition to the calendars, there’s a rich set of reporting tools that I only briefly played with. Finally, there aren’t any security issues to deal with because you never give PocketSmith your credentials when uploading transaction data.

If you use PocketSmith, I’ve love to hear your opinions of the tool in the comments. I only played with it briefly so I defer to seasoned veterans for their thoughts.

PocketSmith Calendar Budgeting Tool from personal finance blog Bargaineering.com.

Right now, you can convert a traditional IRA to a Roth IRA as long as your adjusted gross income is under $100,000. The $100,000 limit applies whether you are single or married, tax filing classification wise, which makes it one of the few limits that is the same for both. So if your AGI is under $100,000, then you can convert today and you don’t have to wait for 2010.

Do You Want To Do This?

Before we get into the mechanics and the rules, you have to ask yourself whether you want to do this. The benefit of converting is that your assets can now grow tax free. With a typical Roth IRA, you don’t deduct the contributions from your taxes so you gain no immediate tax benefit. The tax benefit comes on the tail end when distributions from that Roth IRA are tax free. With a traditional IRA, you gain an immediate tax benefit because you can deduct your contributions but distributions are taxed as ordinary income.

We have two major decisions during the conversion process:

1. Tax diversification: Since we won’t know the tax rates, or how tax will be collected (more income taxes? more sales taxes? VAT?), it’s difficult to say which type of account is better. The basic decision is that if you think your tax bracket will be higher when you draw from the account, then you want a Roth IRA. I’m of the belief that you should diversify between tax benefits today and tax benefits tomorrow, so I want to convert a few of my accounts over so I get a more even mix.
2. Paying the tax today: When you convert a Traditional to a Roth, you have to pay taxes on that conversion. I’ll go into greater detail on this but the gist is that you will need to claim the conversion amount as ordinary income and pay taxes on it. There are opportunities to defer on a limited basis but you still have to come up with the funds somehow.

Now that we have a good idea of the big decision points, let’s get into the mechanics.

$100,000 AGI Rule Removed

2010 is such a big deal because the $100,000 AGI rule is lifted, making a conversion possible for many dual-income families. According to the Journal of Financial Planning, it’s believed that more that 13 million people will become eligible for a Roth conversion when the limit is lifted.

Conversion Tax Rules & Implications

When you claim the ordinary income and pay taxes: Normally, when you make a conversion, you must claim the conversion amount as income the following year. If you convert in 2009, it is considered ordinary income for 2010. However, there’s a special rule for conversions made in 2010, you can opt to recognize half the conversion amount as ordinary income in 2011 and the other half in 2012. This special rule is only for conversions in 2010. If you convert in 2011 and beyond, the normal rules apply.

Experts advise that you should only convert if you can pay the taxes with other funds.. You also have the option of paying for the taxes from the account itself but every expert I’ve read recommends against that. If you want your money to grow tax-free, it’s best to maximize how much it can grow. If you’re planning on making a conversion, start saving for the taxes today.

Recognizing the conversion amount as ordinary income can cause problems. This is an issue many people overlook. When you convert, you have to recognize the conversion amount as ordinary income. This can have a significant effect on your finances. You may become ineligible for certain deductions or credits because of their income phase-out requirements so be sure to take this into account.

Non-Deductible Traditional IRA Loophole

One big consequence of lifting the AGI limit is that it creates a loophole for high income earners shut out of the Roth IRA. In general, if your employer offers a 401(k) or other defined contribution plan, you can’t deduct your contributions to a Traditional IRA. If you also earn too much, then you can’t contribute to a Roth IRA – leaving you with one useless option: a nondeductible Traditional IRA. It’s useless because not only are you taxed on contributions, you get taxed when you take withdrawals because it’s a Traditional IRA.

In 2010, with the $100,000 AGI limit removed, you will be able to convert a nondeductible Traditional IRA into a Roth IRA without paying a penny. Since you’ve already paid the taxes, you won’t have to pay them again to convert it into a Roth. This loophole lets high earners “contribute” to a Roth IRA.

The one thing you have to look out for, which my accountant warned, was that you need to segregate your nondeductible Traditional IRA from your other IRAs. If you make a nondeductible contribution into a regular Traditional IRA, where you’ve taken deductions, then it muddies the water and causes issues. So if you want to use this tactic, make sure it’s segregated into its own account. It just makes everything easier for you down the road.

How to Convert

While it’s called a conversion, you’re actually rolling it over from a traditional IRA to a Roth IRA. The process will be similar to when you rollover any type of account, such as a 401(k) to a Rollover IRA. Since you would usually roll the assets over without changing brokers, the process may be as simple as filling out a form. Your best option is to contact your broker and find out what you need to do.

I believe I covered all of the rules and tried to give you a little insight into how I’m making the decision. The hardest part about all this is that the future is unclear. If there’s something I’m missing, let me know and I’ll add it to the post.

(Photo: doug88888)

2010 Roth IRA Conversion Rules from personal finance blog Bargaineering.com.

Scary huh?

So you might be surprised to learn that not a single one of those failures was an online bank. In fact, the last time an online bank failed was back in 2007 when NetBank of Alpharetta, GA was closed. It was acquired by another online bank, ING Direct. Many people would have you think that your money is safer earning 0% at your local bank than 2% at an online bank.

So let’s change the pace of the discussion a little more, let’s talk about some good news. Everbank, one of the online banks I follow, recently announced that they acquired Tygris Commercial Finance Group, a commercial finance and leasing company. It will give them hundreds of millions of dollars of capital to grow their bank. They offer high interest rates on their savings accounts not because they need deposits to stave off failure, they offer high interest rates because they run a lean operation and can pass along those savings to customers. All online banks do this.

As an aside, Everbank is one of the most interesting of the online banks because they offer so many products other banks don’t. One prime example? MarketSafe FOREX Certificate of Deposits. No other bank I know of offers something like that. Does that make it a good investment? Not necessarily, but the option is there.

All of the online banks I ever write about on Bargaineering are FDIC insured up to $250,000. The FDIC insurance program protects your money so that even if the banks were to fail, you’re protected. If it’s protected by the government, why not go with the best interest rates available?

Other banks, especially brick and mortar ones who can’t compete, and mainstream media, who rely on fear to sell news, would have you believe that online banks are dangerous. They point to the 5% APY CDs once offered by Washington Mutual, saying high yields are a sign that a bank is going under.

It’s false. The reality is that online banks are stronger than ever, expanding and growing, and perfectly safe. Don’t believe the hype.

(Photo: corrieb)

Online Banks Are Healthy, Growing, & 100% Safe from personal finance blog Bargaineering.com.

You sue them.

Nothing gets a company’s attention like slapping them with a lawsuit. As the saying goes, it’s all fun and games until someone gets sued.

From here, you have two choices and both will take you to the courthouse:

• You can retain a lawyer to represent you, or,
• Do it yourself.

I’ll explain both.

Retaining A Lawyer

If you retain a lawyer, the standard agreement is for the lawyer to take the case on contingency. That means they only get paid if you win or settle. If they are unwilling to work on contingency, at worst you would have an agreement that you pay the $350 filing fee and then the attorney takes the rest of the case on contingency. The typical settlement is around $3,500, so you can expect to pocket an easy $1k with the lawyer taking the balance. Usually, you’ll file the case in Federal court, which means the case will get resolved in 2-3 months.

When selecting a lawyer, you can’t just go with any lawyer, you will want a lawyer experienced in consumer law. They could be great at drafting wills and personal injury cases, but they likely have never seen a consumer law case in their career. In fact, the better the lawyer is, the less likely they are to have any clue about consumer law. There are a few good lawyers out there who do have consumer law experience, and you just have to shop around and find them. Check out the National Association of Consumer Advocates (NACA) for a lawyer in your area.

Why Suing Works

Debt collectors are terrified of lawsuits because a single lawsuit can cost tens of thousands of dollars in legal fees. If they lose the case, not only do they lose their own costs for defending against the lawsuit, they have to pay the attorney’s fees for both the defense and plaintiff as well as the judgment. Many of the smart companies would rather pay you $5,000 once as a settlement and be done with it. Collectors are in a high volume, low margin business and will have to collect on a lot of accounts to recover a $3500 average cost of settlement. (Getting sued a lot tends to drive up a collector’s insurance premiums too!)

Consider the response to a Forbes article by a Joel Lackey, President of National Credit systems who wrote regarding FDCPA lawsuits:

“The number of these suits has increased dramatically over the past few years, and the merit of these suits are typically laughable with absolutely no damage suffered by the debtor. The primary reason for this is that attorneys have become aware of the fact that a third-party debt collector cannot win when sued. It is simply a matter of how bad you are going to lose. Even if you win in court, you have lost big-time in that it will likely cost you tens of thousands of dollars to prove your case.

Let’s see, settle for $4,000 even though you did nothing wrong and the charges against you were completely unreasonable or fabricated, or roll the dice to prove your innocence and spend $30,000 in the process. That is, $30,000 if you win, and by the way, you will have no meaningful chance of recovering any of your costs.”

You Must Have A Case

I am not suggesting you fabricate a lawsuit because, quite frankly, you won’t have to. If a collector is going to violate the FDCPA, they will do it early and often. If you have documented violations, particularly recorded phone calls, you have a very solid case and I wouldn’t be shy about running with it.

This is also defensive strategy. If you are sued by a debt collector who has violated the law, counter-sue and watch them offer to pay you to drop the entire matter.

Debt collectors are so scared of being sued that they are creating databases to track people who counter-sue and actively avoiding them. Take a look at WebRecon.com and National FDCPA Litigation Tracking Resource.

Do It Yourself Lawyering

If you can’t find a suitable lawyer or you don’t want to split the potential winnings, you may need to take the case on your own. I recommend Federal court vs. state or small claims, because the judges in the lower courts are generally not familiar with the laws and court rulings in question. Plus, you don’t want it to be a first time for both of you.

Each federal court has a free pro-se litigant manual that includes sample forms, flowcharts, and explanations of the legal terms you may hear. If you have the time to invest in it, give it a shot, you may find it is worth your time in the endeavor. It will be a time investment to become familiar with everything so take that into account. Also, many of the lawyers representing the debt collectors do not respect pro-se litigants and may try to talk down to you. Take advantage of forums like Debtorboards for advice, that’s where other litigious consumers hang out and are more than willing to provide some assistance.

In reality, going without representation can be a blessing and advantage, since you don’t have to worry about legal bills, caseloads, and you don’t have to settle for a quick settlement. You can wait for a bigger payday, as the side faces a growing mountain of legal bills. Lawyers tend to want to go for the quick buck and the low hanging fruit and tend to overlook suing the individual employees and such.

Do you have any experience with or read stories about people successfully suing debt collectors?

(Photo: umjanedoan)

How to Sue Debt Collectors from personal finance blog Bargaineering.com.

Fortunately, there are a lot of alternatives in the online budgeting tool chest. After a recent Personal Finance Hour show all about budgeting, I took a look at several software tools. This post will cover all of them briefly to help you decide which might be right for you (and they are not ranked in any predefined order).

You will notice the absence of larger money management tools like Mint, Quicken Online, and a few others. The reason is because I wanted to focus just on tools that handled budgeting. If you need help budgeting, you don’t want to have to deal with a whole bunch of other bells and whistles distracting you.

Take Advantage of Free Budgeting Software Trials

I list several budgeting and planning software tools below and each one has a trial (or it has a free version), I recommend that you take advantage of the trial to see if the budgeting package is right for you. Each one also operates off a slightly different budgeting methodology. Some work off envelope budgeting, others rely in forecasting and planning, while others are a simple replication of what Excel brings, plus a few pretty graphs and reports along the way. If you have a budgeting method, you’ll want a tool that mimics it. If you don’t, find one that you believe you can stick with and use for the long haul.

Microsoft Excel: Old Reliable

No discussion of budgeting tools, online or offline, can be completely with a tip of the hat to the old trusty spreadsheet. When I track our monthly financial “state of the household,” I track it in Excel (using Quicken to pull the data for my accounts) because it’s quick, it’s secure, and it’s easy once I had it all setup. The weakness of Excel is that you don’t get any statistical or analytical tools right out of the gate. You have to set it up by hand, which can be both educational and frustrating. That being said, once you have it all set up, there may be little motivation for you to switch to an online or desktop budgeting tool, free or otherwise.

You Need A Budget: Desktop Budgeting Tool

You Need A Budget, also known as YNAB, is a desktop budgeting software application that offers both a budgeting methodology and a tracking and planning tool. YNAB works off a four rule system that moves you away from the paycheck-to-paycheck mentality and onto the right path, proactively planning your finances. The tool is a desktop application so you don’t have to worry about transmitting your financial data and it offers a rich set of reporting charts that can help you see your spending.

• Application Type: Desktop
• Cost: $49.95 (YNAB 10% off promo code bargaineering)
• Trial Period: 7 days
• Review: YNAB Review

Mvelopes: Online Envelope Budgeting

Mvelopes is the envelope budgeting system packaged up into an online tool. Envelope budgeting is the idea that you set up your spending categories, put your budgeted amount into an envelope representing that category, and only spend what you have inside. Mvelopes isn’t free but there is a trial offer so you can test it out.

• Application Type: Online
• Cost: $10.80/month (annual subscription)
• Trial Period: 14 days

PearBudget: Really Simple Budgeting

PearBudget is a “really simple budgeting” tool that does exactly that. It’s a very simple online budgeting tool that helps you plan and track your spending on a monthly and yearly basis. I think it’s a great tool for someone just starting to budget who doesn’t want a lot of up front work. It’s an online tool so your data is being saved elsewhere with 128-bit encryption (but it contains little sensitive information).

• Application Type: Online
• Cost: $3/month
• Trial Period: 30 days
• Review: PearBudget Review

PocketSmith: Budget Forecasting & Planning

PocketSmith is a budget forecasting tool that uses calendars to help you plan and project your finances. Rather than working off a month by month system, though it supports that approach, PocketSmith helps you plan out your finances across a whole year. Calendars are used to track your spending and project how you are performing against your goals.

• Application Type: Online
• Cost: FREE to $12/month
• Trial Period: None
• Review: PocketSmith Review

BudgetPulse: Free Online Budgeting

BudgetPulse is a free online budgeting application that is simple to use and secure. In addition to the standard tracking features you expect from any tool, free or otherwise, there is a rich set of reports you can use to get a better handle on your finances.

• Application Type: Online
• Cost: FREE
• Trial Period: None

Have I missed a tool that brings something new to the table? I wanted to avoid listing a million tools all doing the same thing, so I chose ones that offered something different to the conversation. There’s a mix of online and desktop tools, some that charge a fee and others that are free, hopefully I captured a nice mix of what’s available. If there is one that you absolutely love, please share it in the comments.

Free Online Budgeting & Planning Software Tools from personal finance blog Bargaineering.com.

Just this last week, a representative from Crest asked if I’d be interested in getting a box of their new Crest Whitestrips Advanced SEal and five boxes to giveaway to readers. Any time a good company is willing to send me something I can give away to readers, I take it.

Crest Facebook Contest

They’re doing a big contest on Facebook (Crest Whitestrips fan page) where fans are get a daily chance to win a box of Crest Whitestrips Advanced Seal and a pair of webcams. They want you to share a story about a “connection wish,” someone you want to visit, and you are entered to win an all-expenses-paid trip, to be announced in December. With only 12,500 fans, your chances of winning are pretty good.

How to Win a Box of Crest Whitestrips

To participate, you have to be a registered on Bargaineering.com (it’s free) and leave a comment on this post telling us why you want to win the whitestrips. Around noon on November 15th, I’ll select three commenters below to win some whitestrips.

Why do you have to be a registered user? I want to thank readers, not one-time visitors from other sites that announce these types of giveaways. If you’re not a registered user, you should consider it because there are some great benefits – like earning Bargaineering Bucks.

If you don’t want to rely on luck, two boxes are up in the Bargaineering Bucks Store and you can bid on them with your Bargaineering bucks. (listing for box 1, listing for box 2)

Good luck!

Crest Whitestrips Advance Seals Giveaway from personal finance blog Bargaineering.com.

I hope you enjoy this week’s picks:

It’s been a while since someone has taken business analysis to personal finances but Wojciech at Fiscal Fizzle does a great job in his post send the SWOT on your finances. SWOT stands for strengths, weaknesses, opportunities and threats. It’s a great way to analyze a project or venture. The strengths and weaknesses piece analyzes yourself or the venture while the opportunities and threats is an assessment of the environment you or the venture will operate in. Solid post, well worth reading because it gives you another way to analyze your finances. [Fiscal Fizzle]

Do you remember the first time you tried to stand up? I do. I pressed up with all my might, tried to put my little feetsies under me and promptly fell on my butt. But did I let that stop me from standing up? From walking? Heck no! I stand up all the time now! Failure is a good thing and I thought Financial Samurai wrote a great post on how to use failure as motivation. [Financial Samurai]

I wanted to talk about Thrift and the Art of Pet Maintenance not because it has tips for pet care but because those tips apply to the maintenance of anything. Preventative maintenance and regular care keeps repairs down, whether it’s your car, your dog, or yourself. [TIME: It's Your Money]

Finally, I wanted to highlight this uber-useful post by Squawkfox on how to buy a slow cooker. It’s getting to be pretty cold nowadays and, as I wrote about earlier, we’re cooking more in the recession, so finding a good slow cooker is a must. Fortunately, we already have one from our wedding so we won’t be shopping but you might – so I hope you find this useful. (in fact, we made a stew yesterday… and it was delicious).

Have a great weekend!

pfPicks: We’re Almost to 2010! from personal finance blog Bargaineering.com.

Well, it turns out both are going to become a reality as the Senate passed H.R.3548 – Worker, Homeownership, and Business Assistance Act of 2009 two days ago. The House passed their version in late September and just yesterday agreed to the Senate amendment to the bill (this is the “marrying” up part). The bill is on its way to the White House, if it hasn’t been signed already.

Homeownership Credits

The last homeownership stimulus bill created an $8,000 tax credit for first time homebuyers. In addition to adding a $6,500 tax credit, the income limits have been raised to $125,000 for individuals and $225,000 for couples. The current limits are $75,000 and $150,000. Finally, if you sell the home or it is no longer your primary residence within three years of purchase then you must repay the credit.

The homebuyer tax credits:

• $8,000 tax credit: If you are a first time homebuyer, you can get an $8,000 tax credit for purchasing a home. The claim deadline will be extended to April 30th, 2010, from the existing deadline of November 30th.
• $6,500 tax credit: If you already own a home and have lived in it for at least five of the last eight years, you can get a $6,500 tax credit for purchasing a home.

Unemployment Benefits

Unemployment benefits will be extended an extra 14 weeks for individuals who have already exhausted their benefits or will exhaust them before the end of the year. If you live in a state where the unemployment rate is above 8.5%, then you will receive an additional 20 weeks of benefits. According to the Bureau of Labor and Statistics, the following states have unemployment rates above 8.5%:

• MAINE – 8.5%
• IDAHO – 8.8%
• PENNSYLVANIA – 8.8%
• NEW YORK – 8.9%
• WEST VIRGINIA – 8.9%
• ARIZONA – 9.1%
• MISSISSIPPI – 9.2%
• MASSACHUSETTS – 9.3%
• WASHINGTON – 9.3%
• MISSOURI – 9.5%
• INDIANA – 9.6%
• NEW JERSEY – 9.8%
• GEORGIA – 10.1%
• OHIO – 10.1%
• ILLINOIS – 10.5%
• TENNESSEE – 10.5%
• ALABAMA – 10.7%
• NORTH CAROLINA – 10.8%
• KENTUCKY – 10.9%
• FLORIDA – 11.0%
• DISTRICT OF COLUMBIA – 11.4%
• OREGON – 11.5%
• SOUTH CAROLINA – 11.6%
• CALIFORNIA – 12.2%
• RHODE ISLAND – 13.0%
• NEVADA – 13.3%
• MICHIGAN – 15.3%

Business Assistance

If you’re wondering what the business assistance part of the Worker, Homeownership, and Business Assistance Act of 2009 is, even though it probably won’t affect you, you’ll be happy to learn that your local mom and pop store can deduct losses for 2008 and 2009 from profits in the five previous profitable years, increased from the last two years. Actually, any business can do this, not just “small” businesses.

How We’re Paying For This

For the fiscally conservative, you might be wondering how we’re going to pay for this. Extension of the homebuyer’s credit is going to cost around $11 billion and the business assistance will cost around $10.4 billion, according to the New York Times. Congress will pay for that portion of the bill by delaying a tax break for multinational corporations (it involves their worldwide interest expense), which will save around $20.1 billion. As for unemployment, otherwise known as jobless benefits, it will cost $2.4 billion and be paid by extending a $14/worker surcharge on employers into 2011 (which, by the way was created 30 years ago as a temporary measure… funny huh?).

(Photo: brapps)

Homebuyer Credit & Jobless Benefits Extended (H.R.3548) from personal finance blog Bargaineering.com.

A side benefit of cooking more at home is that we’ve experimented more with some fun recipes. Some highlights include our Homemade Provençal Rack of Lamb earlier this year and the occasional homemade dumpling (by the way, I’m getting hungry writing this… so don’t click through unless you’ve eaten!), but more importantly we’ve added a lot of recipes to our “list of dishes we liked that we can make from memory.” I think it’s crucial for you to build up that portfolio of dishes because you’re less likely to go to a restaurant if you have a few things you can make yourself.

Finally, we found that cooking together is fun. We get to experiment, make mistakes, substitute ingredients we think we’d like more, and otherwise just have a great time spending time together working towards a fairly simple goal. We made the Provençal Rack of Lamb on a whim and lucked out that we didn’t mess it up on the first try. But had we screwed it up, no worries, we can always try again! (if you love eating out, you can always try to make it at home using what are known as “copy cat recipes,” just do a Google search)

Because of all those reasons, I’m pretty sure we’ll continue to cook more and eat out less even after the recession ends. It’s morphed from a “save money, save calories” decision to a “wow this is a lot of fun.”

Has something like that happened with you? Maybe you cut off cable television service for financial reasons and found a plethora of alternatives you liked better? Or maybe you went from two cars to one and found you liked that arrangement better? I’d love to hear it because then we could all give it a try.

(Photo: avlxyz)

Your Take: Will Your Recession Changes Stick? from personal finance blog Bargaineering.com.

This year, the offer is for a 2009 Food & Wine Annual Cookbook that has a retail value of $29.95 (you can buy it from Amazon for $19.77 plus shipping). For the cost of shipping and handling, $2.99, we can get this book for free just because we’re a specially selected Cardmember. There is a money back guarantee on the shipping and handling costs too. If I don’t like the book, I can return it within 90 days of the billing date and get a full refund.

If you’re wondering how a Food & Wine cookbook fits with American Express, it turns out that Food & Wine is owned by American Express Publishing. American Express Publishing is a subsidiary of American Express, as you probably would’ve guessed by the name.

What’s the catch? The “catch” is that you are enrolled in their “Cookbook Series” where you will be given advance notice of future cookbooks that you can buy. If you want to buy them, you do nothing and the books are sent to you and your American Express card is billed. If you don’t want the book, you return the advance notice card within 14 days.

This is known as negative option billing. If you’ve ever had a Columbia House membership, then you’re familiar with how this works. The negative in negative option billing doesn’t mean it’s a bad program or that it is dishonest. Negative simply means you must decline an offer or it is automatically sent to you.

Is this a good offer? If you want the Food & Wine Annual Cookbook and don’t mind the added effort of declining offers or canceling the series, then it is a good offer. If you never cook or feel like online recipe websites are good enough, then it’s not a good offer.

As for us, I’ll take the Food & Wine cookbook for $2.99 please.

American Express Cardmember Gift Offers from personal finance blog Bargaineering.com.

I also want to thank the fine folks at Intuit and TurboTax for supporting Bargaineering and sponsoring this video. With the end of the year coming, you’re bound to see a lot of tax related articles everywhere as people give advice on what you should do before the end of the year, so it’s fitting that TurboTax is the inaugural sponsor of these videos. If you’re on Twitter, I invite you to follow @TurboTax for more information on tax and product news straight from the experts.

And before you go, one thing I want to emphasize was that the point of this video wasn’t to convince you to avoid making small purchases like coffee and cigarettes. You should spend your money on whatever makes you happy, but I believe understanding the full impact of those decisions is important in making that decision.

What are you thoughts on the video? If you like it, I would love it if you could leave a comment or tell Vimeo you liked it!

BVC #22: Big Impact of Small Everyday Spending from personal finance blog Bargaineering.com.

It made me wonder whether these types of loyalty credit cards are worth it. The ones that most immediately come to mind are the gas station credit cards where you get higher cash back or reward points when you use it at their gas station.

Brand Loyalty Cards

Let’s use the BP Visa Card as an example, here is the cash back schedule:

• 5% rebates on all BP location purchases
• 2% rebates on all eligible travel and dining purchases
• 1% rebates on all other eligible purchases

Except for the 2% on eligible travel and dining, the schedule matches what you would expect from a gas station reward card. You get 5% at their gas stations and 1% everywhere else. This is a good deal if you always buy gas from BP, it’s a less good deal if you don’t.

There’s a reason why they’re called loyalty cards – they reward brand loyalty. In the case of gasoline, where you have a commodity good, where the differences between each brand’s product is very small, loyalty cards aren’t as good because you may end up paying more than you should for something. Gasoline is the best example of this because if you see one gas station, chances are another will be right across the street.

Brand-Agnostic Affinity Cards

Then you have the case of my friend who has his Penn State branded card where he’s rewarded points based strictly on how much he spends, not where he spends. With brand-agnostic affinity cards, you have to review the catalog to see whether it’s financially prudent.

When I reviewed the Citi Thank You Network reward catalog, American Express Membership Rewards catalog, and Discover Cashback reward catalog, I found that the three were very different. You need to review the catalog yourself to find out the cash-equivalent value of the points to see what makes the most sense.

Do you use a brand affinity card or brand-agnostic card? If so, what card and why? Do you find it’s worth it or too much hassle? Has it affected your buying behavior?

Are Loyalty Affinity Credit Cards Worth It? from personal finance blog Bargaineering.com.

With the start of classes comes the need for college textbooks. As I remembered years ago, college textbooks are not cheap. In fact, the prices seems exorbitant to me but that’s what happens when there’s a small market forced into buying a product. Fortunately, there are some techniques you can use to defray the costs.

Buy from Previous Students

The easiest way to get a textbook is to buy it from a previous student who took the class. This works best for “foundation” type classes where every student in the program is required to attend because it means the supply of books will be high. Be sure to check that the textbook and that edition will be used again your semester (check with the professor).

The best place to find willing sellers is bulletin boards, either online or physically in the department building. Once you find a willing seller, negotiate a little to see if you can knock a few dollars off the price. Review the prices you can find online so you don’t overpay. The benefit of buying in person is that you can get the book immediately and not worry about shipping costs or delays.

Buy Online

Just put your book’s ISBN or title into Google and see what pops up. There are hundreds of vendors selling textbooks from big names like Half.com and Amazon to smaller bookstores (too numerous to name). When buying, you want to buy used and in relatively good condition. Check the seller’s feedback to see if they can be trusted. If they have hundreds of thousands of results and good feedback, chances are they will be a store or textbook distributor and can be trusted.

I took a quick peek at the results for one of the books my wife bought, Biochemical Engineering by Harvey Blanch. Brand new, the book sells for $65.77 and resellers are offering it for as low as $63.45. In this case, I’d buy it new rather than used because of shipping costs.

Rent Textbooks

I’ve never tried this but there are services where you can rent a textbook for a semester. One site I found, but have never used, was Chegg.com. You can rent a book for 60 days, a quarter, or a semester. If their semester period ends before yours, they extend it for free.

Is it worth it? Not sure, because I checked the prices for renting Biochemical Engineering and it wasn’t that much cheaper than the $65.77 price at Amazon. For a semester, it was $56.99. You could probably buy the book new and resell it for more than $8.78 (purchase price minus the rental price). It’s an option worth considering if it makes sense for the books you might need.

Buy In Bookstore

This is the most expensive option for buying used textbooks and I’m always amazed that people will sell the books back to the bookstore, given how much they gauge you (or used to gauge you, I haven’t looked at bookstore book prices in a while). One strategy I used to use was buy the book new in the store, order it online, and then return the book when it appeared. In response, many college bookstores have now rejected returns unless you bring confirmation you dropped the class.

I believe I’ve covered all the good used textbook buying options available to the frugal minded college student. With the spring semester coming up, the used sections of these sites and in bookstores is likely to swell as people try to recoup their expenses.

Do you have any used textbook tricks up your sleeve? Tactics you used to defray the costs?

(Photo: psychobabble)

Tips for Buying Used College Textbooks from personal finance blog Bargaineering.com.

The Bargaineering Bucks system rewards you for doing things on the site such as visiting daily and commenting on posts. Over seven hundred readers have signed up and earned over 26,733 “Bargaineering Bucks” that you’ve spent in the Bargaineering Store for wonderful prizes such as ING Direct promotional referrals, popular personal finance books, USB thumb drives, copies of Quicken, and so many more wonderfully awesome prizes.

Earning a buck for logging in is a new way to earn points, made live earlier today. If you thought you were missing out before, don’t worry! We’ve been testing the feature and wanted to make sure we got it right before rolling out.

You can earn bucks just by registering for the site and doing what you do already. Right now the two easiest ways to earn points require no extra effort. For every day you visit, you earn a buck. For every comment you leave, you earn a buck. You just have to make sure you’re logged in or the systems won’t know who to award the buck to.

Is this worth the extra hassle? Yes!

Reader daemondust only recently discovered the site and has been commenting furiously, racking up 157 ββ that he’s put towards about ten ING Direct referrals in the Bargaineering Store. If you have an ING Direct account with some referrals left, then you know each referral is worth $10 to you. Daemondust has already made $100 by participating in the site and doing nothing extra, he just makes sure he’s logged in before he comments!

So the question I ask you is … are you earning your Bargaineering Bucks?

(Photo: sokwanele)

Are You Earning Your Bargaineering Bucks? from personal finance blog Bargaineering.com.

The electricity supply agreement sets a flat annual kWh price on electricity supply of 10.8¢. In pricing electricity, usually there is a summer price and a winter price, with the summer price being higher in our area. With this agreement, it would be a flat rate throughout the year. To give you an idea of energy use, we typically use more energy in the winter than we do in the summer (about 1,000 kWh per month in the winter, 600 in the summer).

Supply & Delivery

Electricity and natural gas supply have been deregulated in a lot of states, including Maryland, so you have plenty of options when it comes to the supply and delivery of power. When it comes to supplying electricity to your home, you often have to make decisions on two parts. The first is the company that will be supplying the electricity. The second is the company that will be delivering the electricity. Very often, the two companies are the same and it’s usually the company delivering the electricity.

At our home, and I believe this is common, we have no choice on the company delivering the electricity – it has to BG&E. They own the wires and the pipes, so they will deliver the power. For the supplier, there are plenty of options and the only requirement is that they must be licensed by the Maryland Public Service Commission (PSC) and registered with BG&E.

Shopping for Electricity

Right now, our electricity supplier is Washington Gas Energy Services. They recently sent me an electricity supply agreement that would renew our plan at 10.8¢ per kWh. We have the option of renewing for one year or two years at that same 10.8¢ rate. Is that a good deal?

It is if BG&E would charge us more. On our electric bill, BG&E lists the “Price to Compare” at 11.97¢ per kWh. That is BG&E’s estimate of how much an average BG&E residential customer would pay on our schedule per kWh. In other words, working with Washington Gas Energy Services would save us over a cent per kWh, or nearly 10% off. We use around 6-700 kWh’s a month, so it’s a savings of $6-7 a month.

I would’ve expected WGES to have a price in between BG&E’s summer and winter rates, but it’s not. It’s lower than both. WGES is a better choice even with our uneven seasonal use of electricity.

Sign a Long Term Contract?

The next question is whether we should sign up for a one year renewal, which is the minimum requirement, or a two year agreement. Whenever I’m presented with this decision, I try to avoid over thinking and over analyzing it. I’m expected to save $6-7 a month based on BG&E’s estimates, which I have to believe are on the low end of their range because they want me to buy their electricity. I also expect energy prices to go up, that’s just the direction they naturally move in, so locking in long term makes sense.

What’s the risk? Electricity prices plummet, but I can’t believe they will plummet so far that I’ll feel burned by taking a two year 10.8¢ offer when BG&E’s projections are 10% higher. Last winter, the price was 11.75¢ per kWh. This past summer, it was 12.66¢ a kWh. Now, it’s 11.97¢ per kWh… prices aren’t going to drop so far that 10.8¢ looks like a bad deal.

We’ll be locking in the price for two years. There’s an added benefit of 5% of the electricity will be coming from wind power, that’s icing on the cake.

What do you think? Am I missing a big piece to the puzzle somewhere? This seems like such an easy decision that I feel like I’m missing something. I’d love to hear your thoughts!

(Photo: mpeterke)

Reviewing Our Electricity Utility Supplier from personal finance blog Bargaineering.com.