Smart Money and CNN have both reported cases of employers trying to help out employees with the high cost of fuel.  My wife informed me of a very personal case where an employer is not only not helping, the employer is passing along the high cost of gasoline to its employees.

I think gasoline subsidies are a bad idea, but costs incurred in performing your job should be reimbursed. My wife works in outside business-to-business sales, so she drives nearly 5,000 miles per month. The majority of her work time cannot be spent in the office or at home, so a four-day work week is impossible. I have never felt that she was fully reimbursed for the “wear and tear” on her car with the car allowance that the company provides, but they a least paid for her gasoline.

Well, until a few weeks ago they paid for her gasoline.

Her boss informed the team that the company policy was changing and that they were changing the scale of fuel reimbursement.The company has a policy that I agree with — the lower your car’s gas mileage, the less they reimburse. In fact, they will pay you a slight premium if you have a hybrid car. If you drive a Hummer, you should not expect to have your gasoline bill fully paid.

A few weeks ago, my wife’s car had a reimbursement rate of 20% higher than the same car does today. Do the math: 5,000 miles at 20 miles per gallon at $4 per gallon is $1,000 per month in gasoline. Now, the company is not paying $200 of that gasoline per month.

That is a A $2,400 Pay Cut!

Essentially, this is a $2,400 per year pay cut which is more than 5% of her salary. The company has cut its fuel bill by more than 20% with the stroke of a pen, but at a high cost to employee morale. HRwebcafe reported on a study indicating that high gasoline prices cause employee productivity to go down, so imagine what high gas prices combined with a reimbursement cut of 20% does:

People concerned with the effects of gas prices were significantly less attentive on the job, less excited about going to work, less passionate and conscientious and more tense,” Hochwarter said. “These people also reported more ‘blues’ on the job. Employees were simply unable to detach themselves from the stress caused by escalating gas prices as they walked through the doors at work.

One of my wife’s co-workers just bought a new car based upon the old reimbursement tables two weeks before the change. He would have purchased a different car had he known earlier about the change.

Imagine your boss telling you that you must fly across the country to do some work, but you must also pay for 20% of the plane ticket because the tickets are too expensive. It is insane.

Advice for Employees:

Don’t count on any employer subsidy to last in this environment. When your employer does something this bone-headed in the current economy, resist the urge to tell your employer exactly how stupid they are. Quietly look for another job and then don’t burn bridges when you leave.

Advice for Employers

You cannot solve your fuel cost problems by passing them along to employees — especially the ones who hit the roads every day to earn sales for you. If you must make a policy change like this, I recommend you make it effective with the next car the employee buys and with all new employees. Try other alternatives first such as route scheduling software to encourage more efficient driving. Consider enforcing policies of driving the speed limit by using “black box” reporting devices. This will increase fuel economy and may also reduce insurance rates.

Only one thing is certain: We have not seen the last of the effects of high gasoline on the economy.

Technorati Tags: gasoline, inflation, work, policy, gas prices, economy, employee

Increasing your 401K contribution up to 17% of your salary not difficult if you follow a few simple steps. These same steps could also be applied to paying off debt or other savings plans.

My wife and I both save 17% of of our pay to our 401K plans not including the employer match. Additionally, that does not include Roth IRA contributions or any other savings. You don’t have to eat Ramen noodles to make save this percentage of your salary.

My goal is 20% and I will achieve that within a few years. We both started saving 5% of our salary and slowly increased it at every opportunity. However, we did lower the percentage at one point along the way as explained below.

How we increased or 401K savings without breaking our budget:

1. As soon as you are eligible for contributing to a 401K at work, contribute 5%. If you are not eligible to contribute to a 401K plan at work after first starting a new job, save 5% in another fund.
2. Raise the 401K savings percentage by at least 1% at every annual compensation increase. Most people receive an annual raise and that is a perfect time to adjust your withholding by an additional 1%. If your workplace uses Vanguard for the 401K plan, Vanguard has an automated service to increase your 401K withholding by a particular percentage at a certain month each year to automate the process.
3. Raise your 401K percentage every time you receive a promotion or have another pay or income increase. This prevents you from becoming accustomed to the additional income and allows you to slowly absorb the additional 401k contributions. If you receive an exceptionally large pay increase or a spouse goes to work, add more than one percent to what you save.
4. Don’t let temporary setbacks derail the overall goal.  We had to lower our 401K contribution at one point because my wife quit her job to take care of our child.  However, I still kept raising my annual percentage contribution from the new lower point.

My 401K Investment Plan in Practice: When I first started working, I made the mistake of not immediately investing in the 401K plan. I lost several months after eligibility due to inertia. As soon as you start a job, put a reminder in your calendar for your 401K eligibility date. Personally, I simply let the date come and go by a few months…

If you hit a bump in the retirement road, don’t worry about it. Bumps are normal, so what is important is a plan to work the percentage back upwards. By 2006, I had worked my way up to 14% of pay and my wife 15%. However, my wife quit her job to stay home with our daughter. I had to reduce my contributions slightly and of course her 401K contributions dropped to zero. I continued my plan of increasing my salary by 1% per year despite having to decrease the percentage.

By January 2007, I was only contributing only 10% of my pay to my 401K. I had accepted this level of contribution when my wife decided to quit work. As soon as she decided to return to work in late 2007, I adjusted my 401K savings percentage upwards by 3% and my wife started her new job contributing 15% to her 401K. We were not accustomed to her income, so this was a great time to prevent become accustomed to new income.

My wife received her first promotion and she adjusted her 401K savings percentage upwards by 2% to a total of 17%. When I received a promotion in 2007, I adjusted my savings percentage upwards by 1%. At my annual review, I received a larger than expected raise so I manually adjusted my 401K contribution by 1%. Additionally, I had the automatic contribution increase set at 1%, so that added another percentage point.

Today, we both save 17% of our pay for retirement in a 401K. It is nearly painless to your budget if you add an additional percentage of savings each time you receive a raise or a pay increase.  If you add an additional 1% to your 401K, that 1% difference will be easily absorbed into your budget. Again, this same plan can be applied to any financial goal such as paying off debt or paying off a mortgage.

Technorati Tags: 401K, savings, retirement, investing

I was speaking with my coworker about general financial topics and the discussion came up of selling a car. He immediately became animated and started discussing CarFax.

Personally, I know CarFax as a service that helps prevent me from being scammed by a fraudulent car title or an unscrupulous seller. Maybe the car was wrecked, retitled in another state, or the mileage was changed. It is nearly impossible to know without CarFax, but there are warning signs to look for such as overspray from a repair job, uneven tire wear, rust around the edges, or a mildew smell from the air conditioning system.

My coworker changed my thoughts somewhat on CarFax because the information is a two way street. What if you are a seller and the information in CarFax is wrong? There is federal legislation confirming your rights in a credit report, but there is no legal recourse or even official course of action if you find an error in your car’s CarFax report.

A CarFax report can have a significant financial impact. If you were ready to purchase a car and CarFax said there was likely odometer fraud, it would certainly negatively impact the price you were willing to pay. Most people probably would not purchase the car.

My coworker decided to sell his car, so he bought a monthly CarFax license since he was also planning to buy a car at the same time. CarFax also encourages you to check your CarFax report before you sell your car since they know that their report is important in the buying process. Carfax uses this to work a sale on both sides of a transaction.

This is much like previous years when credit agencies would force you to purchase a credit report before you applied for a loan to find out what your credit report indicated. Then the bank would purchase your credit score to see if they should give you the loan. Fortunately for us,Congress acted and credit reports are now free. Based on my coworker’s experience, I think that you should also be able to pull one free CarFax report selling your car. They have the title data, so they could likely authenticate the owner similar ways as credit agencies.

So what exactly happened in my co-worker’s case…When my coworker checked his car VIN number on CarFax, it indicated possible odometer fraud. He knew immediately where the problem was. Several years ago, my coworker’s car was involved in a small accident. His wife asked the insurance adjuster to appraise the damage. The insurance company sent a third-party adjuster who stopped by to look at the car while she was at work.

She called to confirm if the adjuster had checked the car because she had not heard from the adjuster. The company confirmed that the damage had ben appraised. She specifically asked how the adjuster had captured the mileage since she was not available when the car was inspected and the car had a digital dashboard. She was told that the information had been captured correctly. Obviously the adjuster had not captured the information correctly. It was impossible without the keys. Additionally, the mileage was listed as 60,000 exactly when the car was around 40,000 miles.

Although, in many ways CarFax has assisted buyers by preventing them purchasing problem cars, there are also real, honest people who are trying to sell their car that need fair treatment. There are several problems with the CarFax system, including:

1. No free CarFax report before you sell your car to confirm that the information is correct
2. The only way to contact CarFax is via email if there is a problem with the report.
3. The person who reported the bad data has no liability or responsibility — the car owner must prove innocence.

The good news is that my coworker was able to clear up the issue. However, he was required to show both insurance forms and body shop receipts showing the millage at the time of the accident.According to this blogger, you are better off asking a good mechanic to check out a car before purchasing a used car.

The moral of the story is to keep good records on your car. It can potentially increase the sales price, by assuring potential buyers that you maintained your car. Those records might also be able to save you from a bad car fax report.

Technorati Tags: carfax, used car, automobile, for sale, data integrity, credit report, credit history, car history, errors

That is right… I am proposing raiding your emergency savings to fund your 2007 Roth IRA if you have not fully funded last year’s contribution. The deadline to fund your 2007 Roth IRA is approaching — April 15th 2008. If you miss that deadline you can never fund your Roth IRA for 2007. The limit is $4,000 for 2007 and of course you must be within the income limits.

Reduce your risk

Withdraw some of your emergency savings if you must to fully fund your Roth. However, I strongly advise investing the money in a low volatility option until the emergency savings are replaced. Low volatility options would include the left-hand side of this scale of investments at Vanguard (VMMXX, VFSTX, VBMFX). Low volatility investments will ensure that you keep more of your money in a downward trending market in case you must withdraw the money in case of an emergency.

Why it works

This is an acceptable strategy because you can withdraw your Roth IRA funds without penalty up to the amount you invested and so the account can be used for emergencies. If you mis the deadline, you will miss your chance to invest in the 2007 Roth IRA forever. After you have replaced your emergency funds in your traditional savings account, move your Roth IRA money into a long-term investment such as a low-cost total stock market index fund.

I have personally used this strategy to fund my Roth IRA before the deadline. I still had enough savings outside of my Roth IRA (more than six months salary), so I invested the money pulled from my emergency fund directly into the total stock market index (VTSMX) rather than a less volatile option.

Technorati Tags: roth ira, emergency fund, vanguard, retirement

Although not specifically listed as one of my 2008 financial goals, I plan to keep a full budget and track expenses versus income. My cash or envelope budget covers part of the budget but not all of it. Many expenses are not worth controlling with a cash budget because some expenses remain relatively stable and you have little control over them.

I have been great about investing — I started my first IRA account at age 17 — but I have rarely been able to stay with a budget for long. I decided that I needed to change that to better control costs in order to meet other financial goals.

Link to budget with January results. The income lines are after taxes, benefits, and 401K deductions. Also, there are three tabs — budget, actuals, and the difference. Several of the fields have notes to help explain the values.

You will notice that there is no medical category. This is left out since medical expenses can be paid out of pre-tax dollars using my flexible spending account. Essentially, I budgeted $1,800 for medical expenses using the flexible spending account so this category will only appear if I start to run over that $1,800 this year. Considering that we had two emergency room visits in January, running over $1,800 is possible. I am also missing travel — that is a mistake. I had to put some travel expenses and a few books under “Other.”

Obvious Mistakes in My Budget

I have already found several mistakes in the budget, but I am going to keep it for now. This already shows me that I spend more than I realize.

• I already mentioned no travel/vacation budget. Stupid me — that is one of my 2008 goals!
• Home repairs and car repairs should have been split.
• Home repairs should have included more items. Typically you should budget 2-4% of the value of your home each year for repairs. I know this and thought that I could somehow spend less. Spending less though might cause you to skip necessary repairs.
• I need to budget what to do with all the left over money. It needs a purpose or else I might blow it on a vacation or electronics.

Large Budget Variances in January

I invested $5630 in the stock market in January when I only intended to invest about$2,000. Due to the large drop in the stock market, I invested earlier than intended in my Roth IRA to take advantage of the drop. I pulled money out of savings which will be replaced over the year. As I reviewed the results, I noticed that I was wrong when I said that I might not be able to fully fund my 2008 Roth IRA in 2008. It is looking very possible on the spreadsheet.

I have not confirmed the tuition expenses versus the budget so the final January numbers might change slightly with my February update.

Despite the numbers being negative for the month, I consider the January budget results very positive. Most of the overage was on tuition which is periodic and investing which came out of savings, so I did not take on any credit card debt that will not be immediately paid off. Plus, my net worth did not decline due to the posted negative cash flow.

I’ll post an update in February.

As a part of my 2008 financial goals, I plan to fully fund two Roth IRAs - both mine and my wife’s. The Roth IRA is one of the best investment options available. You can pay taxes now and owe zero taxes when you withdraw funds in retirement. Plus, there is no penalty to withdraw the funds in case of emergency up to the amount that you have invested. I also invest 12% of my pay (my wife invests 15%) not including matches in my 401K plan. The 401K has the opposite tax features — pay no tax now and taxes are deferred until you withdraw the money.

There are two catches to my Roth IRA goal — we have not funded my wife’s 2007 Roth IRA. That is $4,000 that we must catch up. Plus the limit for 2008 contribution increased to $5,000 each, so we need to invest $14,000 for this year. The good news is that there are two deadlines — The 2007 Roth IRA can be funded until April 15th, 2008 and the 2008 Roth IRA until the same day in 2009.

Beating the 2007 Roth IRA Deadline

The plan to catch up the 2007 Roth IRA is to use my bonus which will come in February. I am expecting somewhere between $4,000 and $5,000 after taxes.

And now the 2008 Roth goal…

How are we going to fund the $10,000 in 2008 Roth IRAs? For the most part, regular automated monthly investments. Vanguard has easy-to-use automatic withdrawal plans. The majority of the payments to fund the accounts over the year will be scheduled. No thinking or further planning is required beyond a ten-minute set up.

Tips for Funding your Roth IRA

1. Set a budget and include Roth IRA contributions.
2. Use Vanguard’s low cost funds and automate the investment dates to immediately follow your paychecks.
3. If your income is too high to contribute to the Roth, ask yourself (or a tax adviser) if there is any way that you can reduce your modified adjusted gross income (MAGI). See the IRS website.
4. $50 per month is better than $0, so put something in your Roth account. Remember, after April 15th, next year you can never fund this year again. I started funding my account several years ago with only $100 per month.
5. Consider raiding your emergency fund to fund your Roth IRA — select an appropriate investment (lower volatility) if you may need to withdraw the money for an emergency.

For two people to fund a Roth IRA now requires a monthly payment of $833 — not including the 2007 amount. I don’t think we can achieve that monthly payment considering the my other 2008 financial goals. There will probably be some small amount left to fund at the end of the year, but I will fill that gap with my 2009 bonus. The bonus is a big assumption, but that is what will need to occur to fully fund all our 2007 and 2008 Roth IRAs.

We relocated to be closer to my work about two years ago. I should post the details of that decision some time, but in the mean time I need to finish relocating. This is one of my 2008 financial goals.

I reduced my commute by 40 miles each way, but the calculation is not as simple as stating that I now save 400 miles per week. This is because my original commute was always only five days per week. I now drive back to the area where I used to live approximately three times per month for various reasons. So I have only cut about 340 miles per week from my commute.

My haircut is a great example. I regularly drive back to have my haircut by a lady who does a great job and includes a great neck massage which is always appreciated. I decided to see how much my last haircut actually cost. My results:

• Haircut with tip: $20
• Gasoline: $12.45
• Lunch: $6.50
• Total of $38.95 — nearly $40 for a $20 haircut

You can debate the merits of tipping all you want, but I always tip for a great haircut that includes a neck massage. Also, the trip took so long that I ended up needing to buy lunch which added to the cost. The $40 price tag also does not include the value of my time or car maintenance.

My next haircut is already scheduled for a few days from now and it is only 3 miles away from home rather than 45 miles.

Tips for Completing Relocating

• Calculate how much traveling to the old location is really costing you.
• Ask people in the new location for referrals for businesses.
• Pick up a copy of the local phone book as quickly as possible. It is full of advertisements and coupons.
• Be willing to let go of the old relationships. You have moved and it is time to move on.
• Check your insurance to see if a local doctor/dentist accepts your insurance. If your relocation was less than 50 miles, you may need to wait until the next insurance enrollment period to change insurance at work.

The haircut is not my only unnecessary expense left over from my move, so there are a few other things to clean up. This year I will work to finally finish completely reallocating. It should be a simple fix that will save me a few hundred dollars per year and save time.

In my 2008 Financial Goals, my first item listed is creating a cash budget. Sometimes people call this envelope budgeting. Although cash budgeting is often considered budgeting for those without spending control or budgeting for people in debt. I disagree. My wife disagrees even stronger. We earn a reasonable income. We have never been out of control in our family spending. Although we would occasionally run up a credit card balance, it has never been unmanageable.

2008 Financial Goals: Envelope Budgeting
We are not in need of money, but we are in need of a budget — an easy budget. For us, cash budgeting seems like the right path. We sat down and budgeted approximately what we think that we will spend each month in several categories:

• Gasoline = $500 - That is a large sum of money, but my wife has a long commute for her work so it is not unreasonable.
• Clothes - $250 per month
• Home and Car repair = $100 per month
• Groceries = $600 per month
• Entertainment and Lunches = $450 - lunches and Entertainment may seem odd to budget together, but we see it as if we spend less on lunches there is more to spend on entertainment.

You probably notice many regular expenses are missing from the cash budget. Well, in reality, I we decided on what is a hybrid cash budget. The idea is to use cash for the items that we tend to spend without thinking and where many small purchases add up significantly. Plus, the home and car repair envelope is an attempt to accrue some money for irregular expenses. I think that we may have under budgeted that category, so it may require some readjustment during the year. Other expenses are useless to budget in cash such as cable or the cell phone. They are the same every month, so I am paying certain bills directly from my checking account with online bill pay. Medical expenses are not included because they are accrued through a flexible spending account.

Why Cash Budgeting?
We are using an envelope system to track expenses for each month and control unnecessary spending. We previously did not keep a budget, but decided to do so because we believed that we had some unnecessary spending leaks. We had tried electronic budgeting (using Quicken / Microsoft Money) but it failed several times for various reasons, but I might have done better if I had seen these instructions. The problems I saw with typical Quicken tracking were:

• Quicken was time consuming to set up when you have a more than basic situation. We have a small LLC, several accounts, a few loans, and credit cards.
• Quicken was time consuming to maintain. It had a difficult time learning several categories of spending. I found myself constantly telling it what to classify expenses from the same merchant that I had already classified. (I tried multiple versions including 2007. Maybe the problem is my bank, but the software should be smarter.
• Quicken encourages tracking net worth is not as important as most people believe. Tracking income versus expense versus saving is most important.
• Tracking cash in Quicken is still manual.
• My wife hated using a software program and not having some money in cash.

Why is tracking your net worth not all that important? Net Worth takes into account many factors that you have no control over such as the stock market. You have much more control over your income, spending, and savings. An occasional net worth check is good, but only to know if you need to adjust your savings. I only do a net worth check on my various accounts and a rough home value. I can calculate it anytime in five minutes, but why bother checking more than quarterly?

The last point about my wife is important. You must find a solution that you can agree upon with any others with a stake in the budgeting process. My wife hated the detailed tracking. There were a few reasons, but one was that we ruined a few surprise gifts by putting everything on the checking card. For example, once she purchased me a gift during the day several days before my birthday. She planned to give it to me after work so that I would not find the expense in online banking first ruining the surprise. Well, surprise! I checked online banking at lunch and called her to ensure that our checking card had not been stolen because it was an unusual purchase. Now that she can shave a bit of money off the entertainment cash for something like this, there is no chance of a spoiled surprise. There was probably another possible compromise options available, but this is where we landed.

Good things about Cash Budgeting

• Provides control for spending.
• Easy to understand.
• Does not require tracking of taxes, investments, etc. to spend less.

Cash Budgeting still requires:

• Discipline and self control.
• A plan and a budget by category.
• Detailed tracking if you must take from one category to pay for another. For example, we paid more than budgeted for car expenses

Problems with Cash Budgeting

• You must trust each other (and your kids) because cash is difficult to track if you are not careful.
• Cash is easy for some people to spend, so you may overrun your budget quickly.
• If you use it for variable expenses, such as home/car repairs you must have the discipline to allow an envelope to accumulate cash.

There is one finance post I found in the past few months agreeing with cash budgeting, but was implemented as result of spending $1,400 per month on food! Wow!

Late January Progress Check
To check my progress, I opened up the envelopes and we have quite a bit of money left over for the month, but not in the categories that I would expect to roll over each month such as clothes and house repairs. I am waiting to post the full annual budget (including the categories paid out of checking) because January has not been kind to my family. I feel almost like it is bad luck to publish with several days left in the month, but we have already experienced two emergency room visits and one car wreck. Plus, my car suffered a failure that could not be ignored — the oil pressure gauge quit working. The budget is in a wreck so thank goodness for the emergency fund.

Subscribe to the feed to see how we handle it and if we can stick with cash budgeting.

I’ll would like to share with you a personal story of finding the best price on Money Magazine and give specific tips on how to save money on magazine subscriptions. You’ll miss out on a few details, but you may want to skip ahead to the saving tips.

My quick recommendation for cheaper magazine subscriptions is Magazine Price Search.

My Money Magazine Subscription Story

I was a loyal subscriber to Money Magazine until recently. Their expiration mailers and cover notifications said the renewal was $40 per year. I decided to let my subscription expire at that price.

By chance, I followed Nickel’s link to Amazon in the post about the Consumer Reports Finance newsletter. I was surprised to see in the related suggested items, Money Magazine was available for $20. It is also available for $30 for two years. So a loyal reader of seven years is asked to pay double (or more) the price available on Amazon.

I tried to find my old Money magazines to scan in proof of the $40 per year offer, but my wife runs a clean house and they have already landed in file 13. I did find a copy of Money Magazine that my parents gave me recently. I was shocked to see that Money Magazine was offering my parents a subscription for $10 per year for up to three years. Below is the insert. As it says, that is 79% off the cover price. The phone number is 800-762-6614.

I called and they offered two years for $20 and after you give some personal information, you can sign up for three years for $30. If you sign up with a credit card (and maybe otherwise), you will be offered three free three-month subscription to Golf, Maxim, Time, Consumer Reports, Men’s Health, This Old House and a few other magazines. Those will bill your credit card automatically, unless you cancel, but they will send you advanced notice.

I took a subscription to Men’s Health and Consumer Reports, but I will cancel before they auto-bill based upon my below research on finding the cheapest magazine subscription prices. The default for Money Magazine is to auto-bill at the end of your subscription, but you can request to turn off the auto-bill. Remember to take action if you want to cancel the subscription for the three free magazines if you do not want to keep them at approximately 50% off the cover price.

General Advice for Cheaper Magazine Subscriptions

There are various ways to save on magazine subscriptions. Some of my tips range from frugal (free) to who to search out the best deal.

1. Is the magazine subscription is available free on-line? Money Magazine is actually available for free, but there are a few magazines that I prefer in paper format and this is one of them.
2. Read the magazine at your local public library for free. Your local library likely has many magazines and newspapers for free. My public library is two blocks from work, so I really should use this option more. Since I don’t follow my own advice on this one, I understand if you do not either.
3. Is the magazine available for a reduced price on-line? Some magazines are not free on-line, but they are offered at a reduced price to the print version. For example, Consumer Reports is available for $20 per year which is about 30% less than a subscription to the paper version. In my opinion, the on-line version is worth more in the case of Consumer Reports because I use it to search product recommendations and reviews.
4. Swap subscriptions with friends. Does a friend subscribe to Fortune and you to Money? Trade them when you have finished reading them. You might miss an issue or two per year, but is that really going to hurt? I could do this with my parents since they also subscribe to Money Magazine. Actually, that was my plan until I found it available for $10 per year.
5. Write down when you renew and what the length of the renewal period is. Magazines are constantly attempting to encourage you to extend your subscription. If you do not pay attention, you will soon be paid ahead 10 years for your favorite magazine.
6. Sign up for multiple years if you know you like the magazine.Often you can save an additional 50% by signing up for multiple years. And if you find a really good deal like I did for Money Magazine, you might want to sign up for the maximum allowed time period.
7. Shop around for the best subscription price. I have already checked and the deal offered when I subscribed to Money magazine. It is not the best for either Men’s Health or Consumer Reports. I found Men’s Health for two years for $35 vs one year for $25. I searched over 20 on-line stores for the best price search based upon Google search results and the advertisements. The best site for cheap magazine subscriptions that I found was Magazine Price Search. Another good Site for cheap magazines is Best Deal Magazines. These two sites found the cheapest subscription to both Consumer Reports and Men’s Health. And that is advice you will probably never read in Consumer Reports.
   

   Bonus Advice: Search the web for “coupons for Best Deal Magazines“. I found some that had recently expired that would have sweetened the best price.

8. Do not be so attached to a magazine that you cannot let is expire. If I had followed the inserts and the cover notices warning me of the expiration, I might now be paying $40 per year for Money Magazine rather than $30 for three years.
9. Evaluate if the information in your subscriptions is actionable. In your spreadsheet where you list when your renewals (tip #5), you may also want to note each time you take a specific action based upon the information in the magazine. If the magazine is providing little actionable information, cancel it. There is likely more actionable information in financial blogs, but take those (along with magazines) with a grain of salt.
10. Call and ask if they are running specials or if you can get a reduced price. If you are not happy with the renewal rate, call and ask for a better price. They may be running a special or offer you a cut rate to not cancel. Remember magazines love readers because a magazine is an advertising delivery device. Your subscription adds to the number of subscribers which helps the magazine charge higher advertising rates.
11. My final recommendation, is to not subscribe to a magazine at all. Many of them sell their readership on The-Sky-Is-Falling information which rarely turns out to be true. You may take actions based upon their scary predictions that could actually cost you money.

I tried to think of all the reasons that you might not want to go with free magazine subscriptions. The first reason to not take the free subscription is if the information is immediately actionable and waiting to receive it until it is available free is detrimental to you. For example, if the information is published earlier in print and timing is important in cases such as trading a stock, free might not be a good idea. Money Magazine posts the articles on-line several weeks after they have come out in print. However, this is of no consequence to me since I do not (and would not recommend) trading stocks based on a magazine tip.

The second reason to subscribe to the paper version despite a free versions on-line, is if you find the paper version more useful or valuable for some other reason. I like to read some magazines off-line due to the length of the articles. There is nothing wrong with preferring the paper version, but ensure that you are receiving the cheapest subscription price.

To summarize, do not subscribe or extend a magazine subscription without research and evaluation. It could save you $30-40 per year on one magazine alone.

I have several 2008 financial goals to share. Some are easy, measurable, and necessary. Others are more difficult to achieve and track. I will make each line item a link to the detailed posting about that financial goal as I write up my plans, thoughts, and progress around each specific goal:

1. Financial Goal #1: Use Cash/Envelope Budgeting - Many say that this is the is poor man’s form of budgeting or for those without control. I have other reasons. I’ll let you know how it works for me and then make recommendations.
2. Financial Goal #2: Finish relocating: No more $40 Haircuts
3. Financial Goal #3: Fully fund the Roth IRAs - My wife and I plan to fully fund our 2008 Roth IRAs.
4. Financial Goal #4: Save 20% of Gross Pay in 401K (including company match) - self explanatory.
   
5. Financial Goal #5: Reduce Sodas Consumed - Too many sodas are both bad for your health and your pocketbook.
6. Financial Goal #6: Save enough Money to Pay for my Next Vacation - Vacations cost my family about $6,000 each and it is impossible to cut them out. We have to find a way to better plan for the expense.
7. Financial Goal #7: Adjust my Tax Withholding - I have received a tax refund the last two years. I over-adjusted the withholding several years ago because I had to pay a large penalty.
8. Financial Goal #8: Reduce Monthly/Annual Reoccurring Charges - This goal is already in progress and is looking like a great cost saver.
9. Financial Goal #9: Increase Independent Income - More alternative income is always a good idea. I hope to be making $200 per month by the end of the year.
10. Financial Goal #10: Sell some stuff on eBay or Craig’s List - I hope to earn $500 to $1,000 this year by selling some items. This should also assist with goal number 11.
11. Financial Goal #11: Organize the garage to reduce the clutter - I am purchasing items twice because I can’t find something when I need to do a project which only further increases clutter.
12. Financial Goal #12: Follow the 31 Days to Fix Your Finances guide at The Simple Dollar AND post my thoughts on each step as I work through the 31 days. I am not certain what each step will bring and some of them may not be necessary, but it will be an interesting review.
13. Financial Goal #13: Launch a New Website that can earn some additional money.

Please subscribe to keep track of my progress.