PT Money

The One Fund I Use to Invest for Retirement – VFORX

Philip Taylor — Thu, 09 Feb 2012 21:24:03 +0000

Could one fund take care of your retirement needs?

We’re so boring when it comes to investing and retirement.

But I think boring is good.

We do the vast majority of our retirement investing through one single fund: Vanguard Target Retirement 2040 Fund (VFORX).

We invest in this fund within my Rollover IRA (my old 401K), our Roth IRAs, and in my new Solo 401K.

Our goal every year will be to max out those last two accounts using this one fund.

Vanguard’s Target Retirement 2040 Fund is what’s known as a target-date retirement fund, which is a type of mutual fund. Meaning, it is a collection of multiple stock funds, bond funds, and cash funds.

Specifically, this target fund contains these three funds:

Vanguard Total Stock Market Index Fund Investor Shares
Vanguard Total International Stock Index Fund Investor Shares
Vanguard Total Bond Market II Index Fund Investor Shares

What makes target-date funds different from other mutual funds is that they automatically adjusts their asset allocation between those fund types as the fund ages. For example, a target fund might be invested in 90% stocks / 10% bonds right now, but by the time you retire, it might be invested in 40% stocks / 40% bonds / 20% cash.

Which makes sense, because as you age, your acceptable risk (% in stocks) should go down because you are getting closer to actually needing those funds. Vanguard has more target funds than just this one. Here is there complete list:

Vanguard’s Target Retirement 2010 Fund
Vanguard’s Target Retirement 2015 Fund
Vanguard’s Target Retirement 2020 Fund
Vanguard’s Target Retirement 2025 Fund
Vanguard’s Target Retirement 2030 Fund
Vanguard’s Target Retirement 2035 Fund
Vanguard’s Target Retirement 2040 Fund
Vanguard’s Target Retirement 2045 Fund
Vanguard’s Target Retirement 2050 Fund
Vanguard’s Target Retirement 2055 Fund
Vanguard’s Target Retirement 2060 Fund

I chose this particular fund from Vanguard for several reasons. Here are a few:

1. My Age – The Vanguard Target Retirement 2040 Fund is built for someone who is retiring on or with a few years of the year 2040. My guess is that I won’t be able to work (or at least won’t want to work) when I’m 65. I turn 65 in the year 2040. Mrs. PT will turn 60 (I married young, I know).

As a reminder, I don’t invest for retirement to get rich necessarily. I invest in retirement to take care of my self (food, shelter, care) when I can no longer get up and go to a job or business.

2. My Risk Tolerance – Again, the Vanguard Target Retirement 2040 Fund is supposedly built for someone who is retiring on or with a few years of the year 2040. I’ve looked at the asset allocation of the fund, and I am comfortable with that based on my own risk tolerance.

Age and risk tolerance go hand-in-hand. The number on the fund (i.e. my age) isn’t the only thing that guides me in my choice of asset allocation. I also consider my own tolerance for risk, something I discovered recently by meeting with a financial planner.

Vanguard Target Retirement 2040 Fund Allocation at Retirement

3. Expenses – Unlike some other target-date funds, which were often criticized for their expenses, this particular fund (as with most Vanguard funds), is inexpensive. It currently has an expense ratio of 0.19%. That’s actually low for any mutual fund, period.

I like to keep my investing expenses low, because unlike performance, it’s something I can completely control. How much you pay to invest in retirement matters.

4. Convenience – If there were no target-date funds, I would have to create this type of investment product by investing in multiple mutual funds to get to the right level of asset allocation and diversity. I would also have to re-balance them myself each year to maintain the proper allocation. I see no reason to fool with this type of work.

5. Performance – I have no reason to believe that this fund won’t perform the same or better than any other retirement investment over the next 28 years. It’s anyone’s guess what will happen. History is not a guarantee of future performance, but we can look to history as a guide.

This fund is investing in stocks and bonds, the two most historically common asset classes for retirement investing. Why are they the most common? Because they performed the best historically. Good enough for me for now.

A word of caution if you are going to invest for retirement and are considering a target-date fund, remember that they are not all created equal. Study expense ratios and be sure to understand the underlying asset allocation, so that you can be sure you agree with it. Don’t just default to your retirement date.

While you may be retiring around 2040 like me, you don’t necessarily have the same risk tolerance as me. For example, in 2038, you might not like that 50% of your money is tied up in stocks and could be subject to market turmoil like we saw in 2008.

Additionally, there are other factors (like the type of account you are using, the size of your portfolio, etc.) that might prevent target-date funds from being the best choice for you.

One last point…As I was studying this today, I started wondering about risk, and the risk that might be present in these types of funds because (1) you are keeping your funds with one mutual fund company, and (2) you are allowing just a few (in this fund’s case, three) fund managers to decide your fate. I’m not sure how big of a concern this is and I couldn’t find any commentary on the subject. If you have an opinion, I’d love to hear from you in the comments.

Speaking of comments, I’d love to hear your thoughts on this target fund from Vanguard and your general thoughts on target-date retirement funds.

As always, the above wasn’t investing advice. I’m not an investing professional. Seek professional investing advice before making decisions about your own retirement. I’m simply sharing with you my own investing choices and philosophies.

Image by Daquella manera

The One Fund I Use to Invest for Retirement – VFORX is a post from: PT Money: Personal Finance by PT.
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30 Ridiculously Cheap (and Creative) Valentine’s Day Ideas

Emily Guy Birken — Wed, 08 Feb 2012 17:45:56 +0000

As a longtime cheapskate, and a new cheapskate mom, I have often been bemused by the amount of money people spend to prove to their spouses and children just how much they love them.

No time is this more true than on February 14 of each year, when love advertising goes into overdrive to convince consumers that true love is measured by wallet thickness.

For a family on a budget, the prospect of children’s parties at school, gifts or mementos from parents to kids, and the all-important Valentine’s gift between spouses can make you wish that the calendar could just skip from January to March.

Fortunately, making this year the most memorable Valentine’s Day yet for your family can cost next to nothing. Here are some cheap Valentine’s Day ideas that will leave your wallet untouched and your family delighted:

Ideas For Kids’ Valentine’s Day Parties

The yearly Valentine exchange in the primary school classroom is an important part of American childhood. In many classrooms, students are asked to give a Valentine to everyone in class, which means your child is on the hook for anywhere from 20 to 30 cards.

1. The obvious money-saving answer is to make the cards. But what if you’re missing the crafty gene, or are fresh out of red and pink construction paper, or your child insists that everyone is giving Valentines with their favorite licensed character on it?

One option is to purchase the cards at the dollar store. Some offer cards for as low as fifty cents each. They will mean just as much as an expensive card. Or, if you save your cards from year to year, recycle the ones from last year by cutting off the cover.

2. Make cookies and cupcakes at home rather than stopping by the bakery for baked goods.

3. You can print out licensed character Valentines from www.dltk-holidays.com/valentines/cards.htm. These can be printed in color or black and white, so your child can decorate them himself, or if you’re short on time you can put these together the night before.

Something Special for the Kids at Home

4. If you desire to shower your child with balloons and stuffed animals, consider a dollar bag of balloons over the dollar a pop mylar ones and blow up the entire bag of colored latex balloons. Some stores will blow up balloons with helium for a low fee.

5. A small stuffed animal from the dollar store works just as well as the high priced toy from gift shops or toy stores.

6. Children need your time more than material goods any day. A day with you means more that store bought gifts. Spend the day playing games and having fun making Valentines cookies will mean more than expensive gifts.

If you walk down the aisles of any major department store after Christmas, it seems like Valentine’s Day has become another major decorating and gift-giving holiday for children. But you really don’t need to spend money to let your kids know you love them.

7. Instead of buying Valentine candy, bake heart-shaped cookies or pink-frosted cupcakes with your children. They’ll remember the time with you long after the sugar high has worn off.

8. Instead of a heart-themed gift, play a game with your kids. AmazingMoms.com has a great list of creative and easy Valentines games to help your little cupids have a great day.

Valentine’s Day Gifts for Your Sweetheart

Despite what the diamond, chocolate and rose industries might advertise, it is possible to have a romantic Valentine’s Day without spending money on your sweetheart. Though the word “budget” does not necessarily call romance to mind, “creative” certainly does.

Valentines Day has become so commercial that we have been sold a bill of good telling us we must spend to win the hearts of our loved ones. Reality is, that is simply not the case. Valentines Day is a day to share time and feelings of love with others, and that, can be done on a budget without sacrificing the day.

9. Knowing your boyfriend, husband (or girlfriend or wife) is the key to providing a romantic, memorable, and cheap Valentines gift. Take over a hated chore; cook her favorite meal for dinner; make a date to look at the stars. The gift you give is only limited by your imagination, and it will likely be much more romantic than anything store bought.

Here’s a few more ideas:

10. Make a mix tape. You know, a collection of your favorite songs or songs with a specific theme. Mix “tapes” are made easier these days because of iTunes.

11. Plan a movie night, at home. Get free movies with Redbox using their codes, or just pay a $1.

12. Write a special, hand-written note. Nothings says I love you, like the words “I Love You” handwritten on a note. Well, maybe saying “I Love You” says it better…but you get my point.

13. Cook a nice meal from scratch. If you never do any cooking, make a special effort sometime this weekend to cook up something nice. Or, if you both like to cook, why not make a date to cook up something new and extra special. For dessert, make your own chocolate covered strawberries.

14. Plan a picnic if the weather is nice. You supply the food and drink and a nice blanket. Find your favorite place and just hang out. I know you Yanks are laughing at me right now. But it’s warm enough here.

15. Go for a walk. How long has it been since you and your loved on just walked together? Pick out a park you’ve never visited, or go to your old favorite. Couple it with the picnic idea and you’re set.

16. Give Valentines cards while you’re at the store. Some people like to go to the card store together and pick out cards, then read them to each other. Pick a funny card and a sweet card. Then, when you’re done, just put the cards back. A fun outing and doesn’t cost a thing.

17. Go out to eat. You can still do this and be frugal if you learn the tricks to save money when dining out.

18. Valentine’s Day does not have to put your budget into a tailspin. Keeping the spirit of fun will help you give your family the holiday they dream of, without spending a dime.

Adults often scramble to spend money on expensive flowers and dinners. There are countless ways to share the day without going broke. Look at local specials advertised in your area.

19. White Castle has the classic dinner for two, great for a date night; just pretend you are a couple of teenagers and go.

20. Need a more expensive and grown up meal deal, try going to lunch rather than dinner.

21. Most restaurants offer a lower price lunch special than the price of dinner. Use coupons and buy one get one offers for entrees and desserts.

22. Go out for coffee and dessert at a very up scale place and skip the expensive meal.

23. Go to the grocery store and buy the supplies for a dinner. Use your coupons, shop specials and cook a special dinner at home. Add a few candles, dim the lights and enjoy.

24. Discover your city. Spend the day visiting local landmarks and museums. Depending on where you live and the weather in your area, plan a day outside. Go ice skating and carry a thermos of hot chocolate.

25. Pack a dinner and go to the lake, build a fire, and star gaze. Check out a book about astronomy from the library and take with you as you study the heavens.

26. It seems like we cannot have Valentine’s Day without flowers. Consider a potted plant, one that can be kept. Some stores offer potted miniature rose plants, or other flowering plants. These last long after the flowers fad, but if you need cut flowers, consider buying them from a discount or grocery store.

27. Shop thrift stores, Salvation Army or Good Will for a special container to use as a vase for the flowers.

28. Thrift stores often have Valentines Day themed coffee mugs, red and white or pink dinner plates and other decorations. Buy them there and recycle buy filling with candy, or other treats. Wrap with colored cellophane from the dollar store and you have a Valentines happy for less than half the cost from a gift store.

29. Go to the library and check out romantic movies.

30. While you’re at it, check out books about Valentine’s Day and read with your children.

It really is what is in your heart that counts. Count your dollars saved as part of helping keep your budget in line while making the day special. The values you teach your children about sharing without over spending is an act of love.

Couples are a lot happier when not in debt. That counts when you make Valentine’s Day special without making each other over spend. Have a happy and cheap Valentine’s Day.

List your cheap Valentine’s Day ideas in the comments below…

30 Ridiculously Cheap (and Creative) Valentine’s Day Ideas is a post from: PT Money: Personal Finance by PT.
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Finding a Valet Parking Job or Starting a Valet Parking Business of Your Own

Philip Taylor — Tue, 07 Feb 2012 19:17:15 +0000

If you are looking for a good part-time job or business to start, you should definitely consider the valet parking industry.

You’ve no doubt seen valets at nice restaurants and hotels. But did you know there are third-party valet service companies geared towards the private party (e.g. weddings) industry?

When people throw a big wedding or party, one of the things they don’t want their nicely-dressed guests dealing with is finding a place to park and then walking a long distance. A third-party valet service is a nice way to impress your guest and show them you appreciate their attendance. It’s also a good way to ensure your party doesn’t cause a riff with city parking ordinances.

My Valet Parking Job

I worked for a valet parking service company in college and it was one of my favorite part-time job experiences. It offered flexible hours and I could make a good amount of money (tips only) with little work.

The company I worked for did mostly private parties, so I worked a lot of weekend nights where I easily brought home over $50 for two hours of work. Each person would tip around two bucks.

It was good, quick money (in cash) and it fit my already busy schedule which had me at classes during the week and waiting tables most nights.

Who says you have to wait till you're rich to drive nice cars?

If you are interested in finding a valet parking job, I suggest you start with the phone book and/or craigslist. Find the local companies in your area and solicit your services.

If you aren’t having luck with making direct calls to companies, I suggest you pound the pavement (of the nice neighborhoods) on Friday and Saturday nights to meet the companies where they are at. Other places to inquire are local country clubs and nice restaurants.

Get to know the other valets and they can tell you about any opportunities.

Along with a smile and friendly disposition, you’ll need to be at least 18, have a drivers license, and you’ll most likely be subject to a drug and background check. You’ll also need to be able to drive a standard transmission.

Starting a Valet Parking Company

I could see how owning a valet parking company would be very appealing to many entrepreneurs looking for a lean operation to run. I reached out to Tulsa Valet Parking business owner, Joel Reyes for the inside scoop on starting your on valet parking company.

Mr. Reyes started his parking business back in 2005 while balancing a full-time career in marketing. He decided to start the business after discovering the poor service from other valet parking businesses in town.

I asked Mr. Reyes what his three biggest concerns would be in staring a valet parking business.

Insurance – As I suspected, insurance was most important. Insurance companies view the parking industry as very high risk and rates are as high at $20,000 in your first year. Your first step in establishing this business will need to be to reach out to an insurance agency and find the rates in your area. Along with insurance, be sure to inquire with your local and state governments about any permits or licenses required to operate.
Quality Staff – Finding quality valets is critical to your success. Start with people you know and trust and then hire only based on referrals from current staff members. At the valet company I used to work at, only one or two trusted valets were allowed to recruit others. Always check driving records and get a copy of their current license. Mr. Reyes says he pays his valets minimum wage and ensures the staff do a “tip share” at each event.
Client Contacts – As with most things in life, it’s all about who you know. Reach out to your connections to build your initial client base. Then expand your business with cold calls and professional face-to-face networking. This is a high-end client business, and your customers expect (and will respond to) a very professional approach to marketing material, website, phone calls and face time.

Have you ever worked as a valet or considered owning your own valet business?

Image by Damian Morys Foto

Finding a Valet Parking Job or Starting a Valet Parking Business of Your Own is a post from: PT Money: Personal Finance by PT.
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Slate from Chase 15 Month Balance Transfer with NO FEE

Michael — Tue, 07 Feb 2012 19:15:18 +0000

Balance transfer credit cards often provide the greatest savings for consumers even though they don’t have big up front bonuses or rewards programs. But even with the savings, one of the obvious drawbacks of applying for a balance transfer card is the balance transfer fee you’ll immediately be charged. Generally, this fee is 3% which only adds to the amount of debt a new cardholder has but for a limited time only, the Slate® from Chase is offering a 0% intro APR on balance transfers for 15 months, with NO balance transfer fee for 30 days.

The 0% intro APR offered on the Slate® from Chase also includes purchases made so for 15 months, this card will not charge any fee of any kind (as long as you pay on time and stay within your limit!). Since this card doesn’t charge a balance transfer fee, every cardholder will receive the maximum amount of savings within the twelve month interest free period.

Once the intro rate expires, the purchase and balance transfer APR becomes 11.99% – 21.99% variable depending on your credit history. Remember to make your balance transfer within the FIRST 30 days, otherwise you will be charged a 3% balance transfer fee.

The bummer about owning the Slate from Chase is that it does not have a rewards program so once you’ve exhausted the intro rate, the card has very little everyday use. This card doesn’t have an annual fee, so there’s no harm in keeping it in your wallet but try to avoid building up debt with this card … there are many other better credit cards available for everyday spending.

There’s no denying that if you have credit card debt and would like a year of interest free payments, the Slate® from Chase card and the limited time offer of no balance transfer fee is perfect for you. The no balance transfer fee offer is available on a select number of sites only until the end of the year, so to apply, use any link you find in this post.

Slate from Chase 15 Month Balance Transfer with NO FEE is a post from: PT Money: Personal Finance by PT.
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2011 Tax Law Changes

Philip Taylor — Tue, 07 Feb 2012 06:19:04 +0000

I wanted to take a quick moment to review some of the basic tax law changes that will be relevant for those filing a 2011 return.

In the coming weeks, I might be presenting posts that break some of these important changes down even further.

But for now, I’ll just give the highlights of each change affecting the 2011 tax filing season.

The Bush tax cuts were essentially extended, leaving many things unchanged from last year to this year. Federal income tax brackets will remain unchanged, but the standard deduction will go up, while the child tax credit also remains unchanged.

This year’s biggest change came in the form of the payroll tax break to your withholding, essentially continuing the “making work pay” credit.

2011 Tax Law Changes

Here are some of the tax law changes we saw which will affect the 2011 filing year.

Payroll Tax Break – For 2011 one half (the employee half) of the Social Security portion of the payroll tax has been reduced to 4.2% That’s down 2% from the normal 6.2%. Don’t ask me how they are making up the difference. Anyway, you should have seen this change reflected in your paycheck all throughout 2011.

Of course, for any self-employed folks out there, you get the 2% break only on the employee half of your payroll tax. Accordingly, if you normally take the deduction for 50% of the self-employment tax on your 1040, then you will need to reconfigure based on the new percentages.

AGI for Saver’s Credit Increased – If you’ve previously been unable to participate in the Saver’s Credit, look again. The adjusted gross income (AGI) limits are now $56,500 (married filing jointly), $42,375 (head of households), and $28,250 (single).

Report 50% of Roth IRA Conversion – If you did a Roth IRA conversion in 2010 you had the option to report the conversion and pay the appropriate taxes in 2009, or spread your reporting out 50/50 over the 2011 and 2012 tax years. Now that returns for 2011 are due, you need to report 50% of the conversion as ordinary income on Form 1040 under Line 15a.

Standard Deduction Increased – For 2011, the standard deduction for married people filing jointly is $11,600, $5,800 for single, and $8,500 for head of household. Tax rates did not change as the government extended the Bush tax cuts.

Note that the last day to file taxes (federal personal income taxes) is April 17th, 2012.

I know there are other changes to consider when filing your 2011 tax return. If you know of any, please leave them in the comments below.

Previous year changes are on the next page.

2011 Tax Law Changes is a post from: PT Money: Personal Finance by PT.
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Guest Post: How I Got My Personal Finance Education and Its Role in My Life

Guest — Mon, 06 Feb 2012 17:28:34 +0000

This is a guest post from Sunil of ExtraMoneyBlog.com

How did you get your financial education?

There is no doubt personal finance is a critical component of our lives.

But because the education of this topic is not required in schools, most of us grow up on our own in terms of how we view and manage our finances.

For many, personal finance habits are derived directly from their parents, while others catch it from a variety of experiences and exposures in life.

One thing is for certain that no two clouds are alike. This is my story about how I obtained my personal finance education and its importance in my life.

When I reflect on my current financial situation in life, I attribute most of my financial success to my investment in the education of personal finance. No one is born with this knowledge, and I for sure don’t have it in my DNA.

My parents certainly didn’t have a good understanding of personal finance. As a result, I experienced a wild roller coaster ride growing up, from rags to riches and then right back to rags. When I reflect back at this experience, I feel that my strong interest in personal finance is partly attributed to such unpleasant experiences earlier in life. I am sure many can relate, or at least agree that similar “trigger” events motivate us to avoid repeating history.

As a first generation high school, college and post graduate in my family’s history, I never imagined I’d be as financially successful as I am today in my early thirties, and that’s mainly because I took the initiative to learn and apply basic, and later more advanced personal finance principles in my own life.

My Personal Finance Development

As I have learned from developing my own financial understanding and discipline over the years, investing in this knowledge doesn’t necessarily require one to spend a lot of money. Rather, one needs the motivation and willingness to make an effort to learn about a topic that is not required as formal learning, at least in terms of our education system.

When I was starting out, I read some of the best personal finance books written by commercial personal finance experts. These books are widely available for free in libraries or bookstores for purchase. I attended seminars and even took classes such as “Money and Banking” to gain in depth knowledge about certain sub topics within personal finance.

I am not saying everyone needs to go this route, but the point is that resources are available and abundant for anyone who wants to learn. This is especially true today with the advent of personal finance blogs and tablet devices that enables us to access all sorts of quality information on demand. But just as years ago, because this information is not “required learning”, one has to have just as much interest and initiative today than what I needed years ago when I was getting started.

Impact of Sound Financial Education in My Life

A solid understanding of personal finance has enabled me to develop into a financially savvy individual who is successful in several entrepreneurial endeavors, as well as in growing, maintaining and protecting a healthy personal balance sheet.

Because of my investment in financial education, I am able to insure my assets and my family’s interest and ensure that they will be taken care of adequately if something was to happen to me.
Financial education has allowed me to save and invest prudently with solid results for me and my family’s future.
Financial education has also enabled me to understand and apply to principles of leverage, whether in real estate or small business, thus allowing me to take advantage of certain opportunities and further progress financially.

What’s interesting to me is how simple succeeding financially becomes after one has invested in their education. What’s even more interesting is that the most basic personal finance principles, when talked about in casual conversation go over some people’s heads so easily. This often makes me wonder why such easy to understand concepts are beyond the understanding of many.

It is these kinds of instances that make me step back and reflect on the possibilities why many don’t understand what I consider simple principles, almost common sense in fact. But no matter how much we think some things are just common sense, these very same concepts make no sense to someone who hasn’t been exposed to that kind of material before when you come to think of it.

There are folks in my family and friend circles that sometimes cannot comprehend even the simplest concepts that I talk about. I don’t think this is because I am extra ordinarily smart, or make more money than all of them, but rather their lack of interest and investment in their own financial education. As a result, I often find these individuals asking me for advice ranging from investments, to buying a house, investment properties, starting a business and other similar topics.

A Different Perspective in Life

When we are equipped with adequate information about personal finance, it is easy to overlook the fact that most people are not nearly as educated about the topic as they should be, or as we are. Therefore, it’s not uncommon to feel as if even the simplest concepts which we may deem common sense are either not known or understood by those we communicate with sometimes.

In my opinion, this education is critical for one to be able to live a financially sound and disciplined life, and ensure that those who we are responsible for enjoy the best life we can reasonably provide for them without worrying much about what the future has in store for us.

It’s quite surprising that educational institutions still do not formally provide this information, but that’s ok. There are many “teachers” of personal finance. Pick one whose advice resonates most with you and apply it in your own life. Personal finance education doesn’t have to cost money, but one must have the interest and motivation to self-educate and apply the principles in their lives.

Personal finance education is such that sometimes it may start after one graduates from school. Unfortunately this is where learning ends for most people. I still actively indulge in personal finance material. There is always more to learn, and the more I learn, the more I apply and the more financial success I see in my own life.

And if our schools continue not to teach this subject in the future, by educating yourself as much as possible, you can pass on a healthy financial foundation to your children, both tangible and intangible, ensuring they too enjoy a financially abundant and satisfied life. I know I will.

How did you get your personal finance education?

About the author: Sunil owns over two dozen profitable niche websites, over 20 successfully selling eBooks, and is the author of “How to Go from $0 to $1,000 a month in Passive and Residual Income in Under 180 Days All in Your Spare Time”, a FREE report you can download instantly from his blog, where he discusses expedited wealth creation through solid personal finance, entrepreneurship and internet marketing. In 2007, he sold his ecommerce website for $250,000 to a top Ebay Power Seller and since then has sold several niche sites for five figures each. You can read more about him and his work on his blog.

Image by alamosbasement

Guest Post: How I Got My Personal Finance Education and Its Role in My Life is a post from: PT Money: Personal Finance by PT.
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American Express Prepaid Card – Swing and a Miss

Michael — Fri, 03 Feb 2012 20:00:53 +0000

The American Express Prepaid Card was launched in June of 2011 and when it came out, I thought it was just a great prepaid card for unbanked consumers. I mean, just look at the fee structure for the card and the only thing you’ll find is a $2 ATM fee if you withdraw cash more than once a month (the first withdrawal is free).

No monthly fee, no account minimums, no usage fees or direct deposit hoops to jump through; the American Express Prepaid Card appears to have solved the problem of fee ridden prepaid cards that take advantage of consumers.

The Catch

But the problem with the American Express Prepaid Card, even though it charges nothing in fees, is that owners who want to load the card with cash must pay $4.95 each and every time. Loading the card with your checking account or AMEX credit card is free, but cash requires a Green Dot MoneyPak, which costs $4.95.

Many Americans may think:

“Well jeez Michael that’s not so bad, I’ll just load the card with my American Express credit card or checking account and avoid the fees. Still beats all of the other prepaid cards on the market today.”

In that respect, the American Express Prepaid Card is awesome. But I would question why consumers that own checking accounts and credit cards are screwing around with a prepaid card. I mean, what’s the purpose of owning an American Express prepaid card if you are already banked? Anyone that chooses to make purchases with a prepaid card rather than their rewards earning credit card or checking account should contact me immediately … I have a bridge to sell.

Kudos to Tim Chen over at NerdWallet who first reported this sneaky fee when the card was launched. Because the Green Dot MoneyPak isn’t a fee you pay on your card, American Express can claim they promote a no free prepaid card. True to a certain extent, false where it matters most. American Express does not advertise this fee but does show it on their FAQ page.

American Express Prepaid Card Value

Even though I hate the way American Express conceptualized this prepaid card, it still holds value for some.

Parents looking to provide their teens a prepaid card would benefit from owning this particular prepaid card as it’s virtually fee free and can track their child’s spending
Consumers with less than stellar credit that do have non-interest bearing checking accounts who can transfer money for free should use this prepaid card exclusively.
People who own a prepaid debit card that are charged more fees than it costs to load your money when you need it. For some, $500 on a prepaid card can last months and if the only fee is $4.95, it may be worth it.

American Express has always been regarded as the most liked and trusted credit card issuer by consumers. Customer service and perks continue to exceed expectations but it’s my opinion that the American Express Prepaid Card misses the mark here. For unbanked consumers in need of a prepaid debit card … look elsewhere.

American Express Prepaid Card – Swing and a Miss is a post from: PT Money: Personal Finance by PT.
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3 Ways To File Your Taxes For FREE

Philip Taylor — Fri, 03 Feb 2012 19:00:03 +0000

File your taxes for free this year!

It’s tax time! You should have received your W2s by now so you should be ready to file your taxes. April 17th, the last day to file taxes this year, will be here before you know it. So get going. Luckily, if you meet certain criteria, you may just be able to file your federal taxes for free online, even e-file.

Here are three ways you might be able to file taxes online free. Two of which I’ve used in the past:

1. TaxACT Free Federal Edition (TaxACT.com)

With TaxACT you can a e-file a 1040, 1040A, and 1040EZ for free. No income or age restrictions apply. Your state return, however, will be $14.95. Hopefully you’re like me and live in a State with no income tax. Otherwise, you’ll need to pay that fee. But it’s not very expensive compared to other sites.

I began using TaxACT back in tax year 2001. That was the first year I did my taxes by myself (my Father is a CPA with a tax practice) and so I wanted to do them as cheap as possible.

Back then you couldn’t e-file for free like you can today, so I would use the online software (from a library computer) and complete the 1040, print it out, and mail it in. I did this for 6 years, up until I got married. I even did my wife’s while we were dating using this service.

2. Free File (IRS.gov)

Free File is a free federal income tax preparation and electronic filing program developed through a partnership between the IRS and the Free File Alliance LLC. The Free File Alliance is a group of tax software companies you can choose from when filing through Free File.

Your adjusted gross income (AGI) must be $57,000 or less to use this service. According to the IRS, 70% of all tax payers are eligible based on AGI.

I believe this is actually how I discovered TaxACT back in the day. At the time they were involved with this program.

Now it looks like several other companies are involved: Tax Simple, H&R Block’s Free File, Free1040TaxReturn, 1040.com Free File Edition, TurboTax® Freedom Edition, FileYourTaxes.com, FreeTaxUSA® IRS Free File Edition, 1040NOW.NET, yesicanefile.org, OnlineTaxPros.com, TaxSlayer, Online Taxes at OLT.com, eSmartTax By Liberty Tax Service, ezTaxReturn.com.

The IRS has a nice tool to help you sort through this list to find a company that’s right for you based on your criteria. The IRS site says that some of these companies may even offer state return filing for free as well.

3. TurboTax® Federal Free Edition (TurboTax.com)

With TurboTax® Federal Free Edition you can file a 1040EZ and other “simple” returns. Your state will cost you $27.95. Yikes! I looked up the other “simple” returns and found that they cover the following:

Form 1040 Schedule A – Itemized Deductions
Form 1040A – Individual Income Tax Return
Schedule B – Interest & Dividend Income
Schedule EIC – Earned Income Credit
Schedule SE – Self-Employment Tax

The good thing about this version is that you can e-file for free and there is no income threshold. So if you live in a state with no income tax, have income higher than $57k, and don’t have any business income, then this is the service for you.

Additional Tips on Filing for Free

The IRS has an extensive list of other available e-filers on the web.
If you don’t qualify for the 3 above or you’re not comfortable using online services, try this method: go in for half with a friend on TurboTax in the box. Each piece of software is good for two computers. This is actually what I did one year. The box of software cost us $20 ($10 a piece).

Do you plan on filing your taxes for free this year?

Image by SeniorLiving.org

3 Ways To File Your Taxes For FREE is a post from: PT Money: Personal Finance by PT.
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What is a Right to Work State and How Does This Affect Your Finances?

Philip Taylor — Thu, 02 Feb 2012 20:51:18 +0000

You may be hearing the term “right to work” in the news a lot lately. That’s because Indiana just became a right to work state.

All this means is that Indiana labor unions are now prevented from making union membership fees a prerequisite to getting (and keeping) a job with Indiana employers. As you can imagine, this will have a big effect on the fees unions are able to collect to use towards their causes.

Union members in Indiana and other opponents of this type of law, who you will be seeing leading protests in the news, say that because of a decrease in union fees, harm (in the form of lower wages and health risks) will come to Indiana employees.
Proponents of the right to work laws say that people should have a right to choose whether they want to join a union or not, and the law is needed so businesses will be enticed to open up shop in Indiana vs right to work states.

I’m not personally affected by the changes in Indiana. However, my opinion is that unions serve a good purpose, but that maybe the need for unions has decreased over time. Thus, some retraction of union power is appropriate to let free enterprise do it’s thing, especially when jobs are in such demand.

List of 23 States that are Right to Work States

Do you live in a right to work state? There are currently 23 states that are considered right to work states.

Right to Work States in Blue

Alabama, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Mississippi, Nebraska, Nevada, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wyoming

The Affect of Right to Work on Finances

This is all speculation on my part. Each side in this debate has their own set of stats and anecdotal evidence that they bring to the table. So I’m just going to make some assumptions about the law’s affects and let you give your opinion in the comments below.

Let’s start with this: union fees average a little less than $400 a year according to this report. If you live in a right to work state, there is one expense you don’t have to factor into your budget. But this might mean you have a lower wage, fewer benefits, and less job security compared to those with the same type of job in states without right to work laws. This is primarily true if your job is in manufacturing or some type of service industry.

The trade-off of course, is thought to be job growth and job availability. If you live in a right to work state, potential employers have less of a financial burden to consider when deciding to create a job in your state or not. Thus, in a general sense, even though you aren’t paid as much, you have more jobs available to choose from.

As a small business owner, one encounter I’ve had with this issue recently is when looking at cities to host FinCon. The search consultant actually pointed out hotel labor costs due to unions in her expense analysis comparing different cities across the U.S.. While it didn’t ultimately affect my choice (we’ve had FinCon in Illinois and Colorado, two non right to work states), it’s interesting to note that it was an expense worth considering.

Have you been affected by right to work laws?

Image Credit

What is a Right to Work State and How Does This Affect Your Finances? is a post from: PT Money: Personal Finance by PT.
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The 16 Best Part-Time Jobs With Benefits – Updated for 2012

Emily Guy Birken — Wed, 01 Feb 2012 18:00:44 +0000

Working part-time can really improve your work/life balance, and can provide you with the time you need to write that novel, spend time with your kids, or explore your passion for making artisan cheese.

But what will you do without the insurance you receive through your employer?

It’s possible to get individual health insurance, but that is usually limited or comes with a huge price tag.

We’ve all heard the horror stories of families and individuals bankrupted by medical bills. And the only way to keep your employer health coverage is to remain employed full-time, right?

Not necessarily. While not all companies are willing to extend their benefits packages to employees who work less than 25 hours per week, many forward-thinking businesses recognize the value of providing insurance to part-timers. The following sixteen employers offer benefits to part-time employees, leaving you free to think about making Gruyere, rather than worrying about health care costs.

1. Aerotek–This national temp agency offers generous medical benefits to its contracted workers who put in at least 20 hours per week. Medical benefits include dental and vision coverage, and spouses and dependent children are also eligible for the insurance. For a part-timer who needs health coverage for other family members, this would be an excellent employer to join. Check out Aerotek’s benefits page.

2. Barnes & Noble–The ubiquitous bookseller offers ~~medical and dental coverage for part-time workers, in addition to a Flexible Spending Account, disability and 401(k)~~ life insurance and paid vacation, sick days, and holidays to part time workers who put in at least 20 hours per week. The retailer has recently decided to end its medical and dental coverage for part-timers. However, the chain still provides a 30% discount on books for its employees. Read more about Barnes & Noble benefits.

3. JCPenney–This department store considers anyone who works less than 35 hours a week to be part-time. These workers are eligible for medical, dental, vision, life and disability insurance. See the JCPenny careers page.

4. JP Morgan Chase–This enormous multinational bank is remarkably generous with its part-time employees, starting with the easy-to-meet eligibility requirements: part-time employees for JP Morgan Chase only need to work between 20 and 40 hours per week in order to qualify for benefits, and those benefits are available starting 90 days after the date of hire. The benefits include medical, dental, and vision, use of flexible spending accounts, disability and life insurance, and a 401(k). In addition, after one year of service, all employees may take part in the JP Morgan Chase retirement plan, becoming 100% vested after three years of service. This is truly a bank that wants to take care of its employees. See Chase careers.

5. Kaplan–This educational company was once only known for test preparation, but it offers many different career opportunities for a part-timer–from teaching and tutoring to customer service and marketing, from publishing and academic administration to technology and management. While Kaplan’s part-timers are not offered the same benefits as its full-time employees, you are still eligible for a limited medical and dental plan, as well as paid time off, commuter benefits and access to a flexible spending account. Check out Kaplan benefits and perks.

6. Lands’ End–This socially responsible retailer provides part-time employees with dental, vision, and life insurance, as well as retirement plans. Though it does not offer medical insurance to part-timers, those who work at the Wisconsin headquarters have access to the medical clinic on site. Also, a generous discount at both Lands’ End and Sears is a major perk for employees. See Lands’ End job benefits page.

7. Lowes–The home improvement giant gives its part-time employees access to health, vision, dental, disability and life insurance plans. The health plan is a limited care plan, so it may not cover all the medical needs you may have. However, Lowes also provides vacation accrual for part-timers, as well as 401(k). See Lowes career site.

8. Nordstrom–The department store that has made its name by going above-and-beyond for its customers also takes care of its employees. The company offers medical/dental/vision coverage for any employee who works at least 129 hours per month-which works out to about 33 hours per week. In addition, Nordstrom workers are eligible for a 20%-33% discount, depending upon your role in the company and where you are shopping with that discount. View the Nordstom benefits page.

9. REI–A truly worker-friendly company, the outdoor gear retailer provides benefits for employees who work less than 20 hours a week. These benefits include a part-time health plan, as well as dental, life and disability plans, in addition to incentive pay and a retirement and profit sharing plan. Being a weekend warrior at this store can really pay off. See REI jobs.

10. Starbucks–Becoming a part-time barista at one of the over 16,000 Starbucks locations in the world will not only score you a free pound of coffee per week, but it will also provide you with medical, dental, life and disability insurance. Employees only need to work 240 hours quarterly (just about 20 hours per week) to be eligible. See more about Starbucks “assets”.

11. Target–If a red tee shirt is in your part-time future, you will also benefit from a health and dental plan from this chain. An added bonus: your employee discount is good toward your out-of-pocket cost for prescriptions if you fill them in the store. Finally, the company provides a life resources hotline for all employees with access to confidential counseling and support. See Target’s corporate careers site.

12. Trader Joe’s–This quirky grocery chain offers medical, dental and vision to part-time employees, as well as paid time off and retirement. One caveat: according to the Trader Joe’s website, part-time is “up to 40 hours per week.” See Trader Joe’s careers page.

13. U-Haul–The moving and storage company offers several benefits to part-timers, including a limited-care medical plan, dental insurance, travel insurance, U-Haul discounts, and a 401(k). In addition, the fine print states that (discretionary) Thanksgiving turkeys may be available to employees-although it does not specify if that particular perk is available to part-timers. See U-Haul’s benefits page.

14. UPS–In many ways, the United Parcel Service is the ultimate part-time opportunity. Not only does the company regularly hire for seasonal and part-time work, it also offers full benefits to those employees, which in addition to medical and dental coverage also includes tuition assistance. This could be an ideal job for a college student. See the UPS benefits page.

15. Wegmans–This grocery chain is only located in the northeast, but it is a great place to work part-time. The medical insurance for part-time employees includes a prescription plan, and as an employee you are eligible for discounts at health clubs, as well. Holiday pay and 401(k) round out a nice benefits package for part-time employees. See Wegmans job site.

16. Whole Foods Market–The go-to supermarket for natural and organic foods is regularly listed among the 100 best companies to work for, and the benefits package is part of this ranking. Whole Foods offers all employees medical, dental and vision coverage after 400 hours of service-about five months of work at 20 hours per week. In addition, that 400-hour threshold also makes you eligible for life and disability insurance, as well as access to a flexible spending account. One caveat, however: apparently the deductible for the health insurance offered through Whole Foods is over $1500. See Whole Foods’ benefits page.

Do you work a part-time job just to get the benefits? Know of any others to add to the list?

We sourced this content using AOL’s article, “Companies That Give Benefits to Part-Timers.” Additionally, for this 2012 iteration, we also used this post from Free Money Wisdom to find additional employers. In some cases (i.e. Nordstrom and Barnes & Noble) we were in touch with their PR departments to get the specific information that was not listed online. Also, we got the information about Whole Foods’ deductible at from this employee review at Glass Door. Finally, we never heard back from these PR departments: FedEx, WalMart and Macy’s. The information we were able to find on those three employers was not clear enough for us to feel comfortable including them without getting the skinny from the company itself.

The 16 Best Part-Time Jobs With Benefits – Updated for 2012 is a post from: PT Money: Personal Finance by PT.
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