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8 ways to make a million bucks Don't just dream about striking it rich. Learn from those who did.


Article Tools E-mail to a friend Tools Index Print-friendl !ersion "ite #a$ Article Index Discuss in a #essage %oard Digg This By Kiplinger's Personal Finance Magazine Twel!e ears ago& 'ulie Aigner-(lark was looking for a wa to ex$ose As$en& her )*-month-old daughter& to music and the arts. "o she and her husband& %ill& shot a !ideo in the basement of their home. +,e borrowed e-ui$ment from a friend& $ut u$ a black !el!et background and used the to s m daughter liked&+ she sa s. The star of the !ideo is a dragon $u$$et that As$en used as a washcloth. .ther scenes feature 'ulie's hand slowl turning the crank on a jack-in-the-box. It's all !er low-budget but also -uite soothing. (an ou imagine the $ath to becoming a millionaire starting with such a mundane $roject/ 0ere at 1i$linger& we're old-fashioned. ,e think it's a lot more fun becoming rich than being born that wa . .ur culture and econom encourage risk-taking& $ursuing good ideas and dogged determination. Luck $la s a $art& too. There's no den ing it. %ut ou can also make our own luck through $erse!erance. Talk back2 (ould ou become a millionaire/ To ins$ire ou& we looked for $eo$le who ha!e become rich. 'ust how did the do it/ 3or some& like 'ulie and %ill& e!er thing flowed -uickl from one good idea. .thers s$ent a working lifetime $atientl building wealth. #ore from #"4 #one and 1i$linger To get rich& start sa!ing in our 56s Turn 789) a month into a million bucks :etting rich is sim$ler than ou think 0ow ; entre$reneurs made millions < wa s to get rich b relaxing 0ow to sa!e a million at e!er age ,e also asked what the '!e done with their wealth -- and what ad!ice the ha!e for others. ,e demonstrate how to find the cash to in!est our wa to millionaire status. Look& we know it ma not ha$$en. %ut a growing number of Americans are achie!ing millionaire status. And in these eight stories& ou'll find information to make our life richer& whether ou become a millionaire or not. * millionaire $rofiles The !ideo that took on a life of its own2 'ulie Aigner-(lark and husband %ill learned about the $ower of word of mouth as their %ab =instein em$ire took off. 1now when to make the call2 #ark ,ilson took the lea$ from managing a cor$orate call center to starting his own& > la Teleser!ices& $ro!iding a much-needed alternati!e to offshore outsourcing. Pounce when the time is right2 >eal estate is an accessible $ath for inde$endent in!estors to make mone . >obert 4orton& a former entertainment law er& shares his method. It started o!er cocktails2 The Internet has made man millionaires& but don't ex$ect an o!ernight success stor . #ediabistro's Laurel Toub re!eals what it takes to make it big on the 4et. A ?6- ear $lan to make a mil2 "o ou'll ne!er lea$ to start our own business and do not trust the real-estate market/ @ou can still build a million the old-fashioned wa -- just ask :ar :ardelli. %reaking with famil tradition2 .ne of the first to $roduce eggs from cage-free hens& ( d "A manski can tell ou it $a s to go against con!ention when ou belie!e in what ou are doing. Accumulating a fortune on 7)) a hour2 There's more than a mone lesson behind Paul 4a!one's stor of accumulated wealth from a wage-$a ing job. "uddenl & it clicks2 @ou don't ha!e to go it alone. :urtej "andhu has earned his wealth creating $atents at #icron Technolog . #illionaire lesson 4o. ) %uild a strong brand& and don't be afraid to $romote our $roduct with $assion. 'ulie Aigner-(lark and husband %ill's amateur !ideo was such a hit with their daughter that 'ulie& 8)& became determined to market what the called %ab =instein to $arents e!er where. The cou$le in!ested about 7)9&666 of their own mone in $roduction and $ackaging and targeted >ight "tart& a small chain of bab -$roduct stores& to be their distributor. 'ulie went to a to trade show in 4ew @ork (it to tr to find a bu er from the com$an . Bideo on #"4 #one

Pa ing for retirement @our retirement could last for decades. 0ere are ti$s for li!ing well during those ears. +I couldn't afford a booth&+ she sa s. +.n the second da & I found a grou$ of women from >ight "tart& and I attacked them because I was so excited.+ The chain agreed to sell the !ideo on a trial basis. +Parents would take it home& babies lo!ed it& and there was amaAing word of mouth&+ sa s 'ulie. C"ome researchers -uestion the effecti!eness of such !ideos.D "he and %ill made more !ideos set to classical music and started raking in the mone . "ales& which to$$ed 7)66&666 in the first ear& snowballed to 7) million in the second ear& 78.9 million in the third& 7)5 million in the fourth and more than 756 million in ear fi!e. Their $roduction costs remained !er low. +Du$licating !ideos is not !er ex$ensi!e&+ 'ulie sa s. %ill& whose background is in $h sics& e!entuall -uit his job and became the firm's chief financial officer.

'ulie Aigner-(lark In 566)& the enter$rise started to get bigger than the cou$le could handle b themsel!es. +It was taking a lot of time awa from famil &+ sa s 'ulie. "o the contacted Disne & which bought %ab =instein for more than 755 million. 4ow 'ulie's back& $artnering with 'ohn ,alsh& the host of +America's #ost ,anted&+ to $roduce +The "afe "ide&+ a series of !ideos to teach kids about safet . And once again& she's cracked the kid code2 ,hat ma look like a sill !ideo to grown-u$s is a big hit with the elementar -school set. #eanwhile& the (lark famil s$ends more time together at their (entennial& (olo.& home. And in a few months& the 'll lea!e for a earlong tri$ around the world with As$en& now )?& and little sister "ierra& )6. #illionaire Lesson 4o. 5 Don't be afraid to go out on our own if ou $ossess the com$etence and know $eo$le who can hel$ ou reach our goal. #ark ,ilson had been managing Dun E %radstreet's call centers for )9 ears when the com$an decided to outsource the business in 566). "ensing an o$$ortunit & ,ilson immediatel asked to be considered. There was onl one catch2 ,ilson didn't actuall own a call-center business at the time. +I didn't think I had that good a shot&+ he sa s. +%ut I did ha!e m re$utation.+ ,ilson won the contract. Continued: Up and running 1 F 5 F ? F 8 F next G

(ontinued from $age )


Article Tools E-mail to a friend Tools Index Print-friendl !ersion "ite #a$ Article Index Discuss in a #essage %oard Digg This To get u$ and running -uickl & he $artnered with an established call center in 0ouston. At the same time& #ark and his wife& "hell & worked on a business $lan and recruited two former DE% colleagues& a technolog ex$ert and a training ex$ert& to hel$ launch the business. Then ,ilson knocked on doors to get hel$ with funding. +=!er bod was conser!ati!e about in!esting in a com$an with little or no re!enue et&+ he sa s. %ut he did attract the attention of a communit -de!elo$ment !enture-ca$ital fund& which in!ested 7<66&666.

> la Teleser!ices o$ened in 'une 5665 and ra$idl accumulated big-mone contracts. >e!enues to$$ed 7? million in the first full ear of business& more than doubled the next and were u$ to 7)< million in 566<. After another round of financing& the com$an is going through another growth s$urt and $rojects more than 7?6 million in re!enue this ear. ,h is > la so successful/ As a domestic call center based in 1ennesaw& :a.& the com$an attracts clients that ha!e had bad ex$eriences with call centers offshore. And some go!ernment clients& such as the Beterans Affairs and "tate de$artments& can't send their call centers out of the H.". Plus& being an earl ado$ter of !oice-o!er-Internet-$rotocol& or BoIP& technolog has hel$ed > la lower costs. %ut the biggest edge& sa s ,ilson& comes from the com$an 's workers. +,e want this to be the best job the '!e e!er had&+ he sa s.

#ark ,ilson Turno!er in the call-center industr generall runs from ;6I to <6I $er ear. %ut > la's turno!er is just ?6I& and man of the com$an 's original em$lo ees remain. > la $a s at least ;6I of the cost of health insurance for the com$an 's 866 regular em$lo ees& and it s$onsors budgeting and $ersonal-de!elo$ment seminars. ,ilson kee$s morale high with his regular +huddles&+ where he stands in the middle of a circle of workers and gi!es them an u$date on the state of the com$an . +The ke asset of an business is its $eo$le& and we'!e ne!er lost sight of that&+ he sa s. #illionaire Lesson 4o. ? Identif trends and be $atient& e!en if it means waiting a decade to make an in!estment. #ake a million in real estate/ Toda / @ou must be kidding. %ut where others see a housing bust& >obert 4orton sees o$$ortunit . 0e sold his home for a $rofit of nearl 75 million last ear& and he sees man similarities between toda 's Los Angeles housing market& where $rices ha!e dro$$ed b about 56I o!er the $ast ear& and the market when he bought that house in )JJ<. #ore from #"4 #one and 1i$linger To get rich& start sa!ing in our 56s Turn 789) a month into a million bucks :etting rich is sim$ler than ou think 0ow ; entre$reneurs made millions < wa s to get rich b relaxing 0ow to sa!e a million at e!er age 4orton& 95& s$ent 59 ears as an entertainment law er& working first for 'im 0enson's com$an Cof +#u$$et+ fameD and then #attel. %ut real estate was his $assion. 0e'd been bu ing and selling inex$ensi!e $ro$erties since the earl )J*6s& and watching the housing market carefull for a big in!estment. 0e $ounced when he saw the $rice for a six-bedroom house in fashionable %el Air dro$ from 7).) million to well under 7) million. "o he offered e!en less C7<96&666D& closed the deal in three da s and mo!ed in. Then he waited& knowing that real-estate c cles in the area tend to last se!en to )6 ears. ,hen he sensed a downturn coming in 566<& he sold the house for more than 75.* million. "a s 4orton& +It's a matter of sitting and waiting and ha!ing the flexibilit to be $atient.+ Bideo on #"4 #one

Pa ing for retirement @our retirement could last for decades. 0ere are ti$s for li!ing well during those ears. 4orton -uit his job and now focuses full time on real estate. 0e didn't in!est all his $rofits right awa & he sa s& +because $rices can still come down.+ 4ow he owns a smaller home for himself in Long %each& (alif.& a !acation home in Palm "$rings and three houses that he rents out while he $rowls the market for attracti!e $ro$erties at good $rices.

>obert 4orton Aware that toda 's downturn ma last a long time& 4orton is careful to run the numbers before bu ing a rental $ro$ert . +I won't bu a rental $ro$ert that does not ha!e a $ositi!e cash flow& and that includes accounting for taxes& insurance and maintenance as well as the mortgage&+ he sa s. +It has to generate as good a return on m mone as other t $es of in!estments. Then an future a$$reciation is gra! .+ 4orton generall $uts down 56I to a!oid $ri!ate mortgage insurance and to -ualif for the best loan rate. %ut he doesn't $ut down an more. That wa & he le!erages his mone . 4orton is also careful to di!ersif his in!estments. 3or instance& the retirement accounts he built u$ while he was a law er remain untouched. 4orton's ad!ice to real-estate in!estors2 +The house should a$$eal to a broad s$ectrum of future bu ers& and not just be something ou like because it's uni-uel our taste. And in a down market& the old adage 'Location& location& location' is more im$ortant than e!er.+ #illionaire Lesson 4o. 8 "uccess on the Internet isn't serendi$itous. Don't court in!estors until ou ha!e ade-uate traffic and initial re!enue. Laurel Toub 's 75? million Internet bonanAa started with a time-honored tradition of social networking2 the cocktail $art . Toub was a freelance writer working out of her 4ew @ork (it a$artment in )JJ8& and she was eager to connect with other creati!e $rofessionals who s$ent their da s tra$$ed in cubicles& studios and home offices.

Laurel Toub "o she began s$onsoring midweek cocktail $arties at a bar in the =ast Billage& where guests bought their own drinks and swa$$ed business cards Cand where Toub donned her trademark feather boa as a wa of identif ing herself to new arri!alsD. The media mixers were an instant hit& and b )JJ; she had built a database that included thousands of names. Toub took the growing communit online the following ear and dubbed it "oon& $eo$le from all o!er the countr were $osting job listings and clamoring for local $arties& and she was ha$$ to oblige. Continued: Growing revenues K $re!ious F ) F 2 F ? F 8 F next G

(ontinued from $age 5


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At that $oint& #ediabistro was still a hobb & and Toub was su$$orting herself b freelance writing. In mid)JJJ& she began asking $eo$le who $osted job ads on her site to send 7)66 $er listing to a $ost office box. "he recei!ed 75&566 the first month -- not bad& she told herself. Two months later& she collected more than 7?&*66. % the end of )JJJ she had taken in more than 7;9&666 -nearl twice her earnings as a writer. +That's when I realiAed that I'd better in!est in this bab &+ sa s Toub & 89. "o she ta$$ed contacts to hel$ her write a business $lan and find in!estors. % 5666& she had lined u$ 7) million commitments from two in!estors in exchange for an ownershi$ share. #ediabistro managed to weather the bursting of the dot-com bubble& the stock market's nose di!e and the JL)) terrorist attacks. 3rugal with her in!estors' mone & Toub created a new re!enue source b offering online classes and seminars for a fee. Last ear& 'u$itermedia bought #ediabistro -- and its robust online traffic of < million $age !iews a month -- for 75? million. Toub 's $ersonal share is 7)5 million before taxes -- and more if future financial goals are met. "he and her husband& journalist 'on 3ine& continue to li!e in their %rookl n a$artment while searching for a loft in #anhattan. +After getting this huge amount of mone &+ she sa s& +we want to be careful not to lose it.+ #illionaire Lesson 4o. 9 Plan for the !er long term. :ar :ardelli waited two ears to get the job he wanted and more than ?6 ears for the $a off. :ar :ardelli chose his career $ath at age 8. +I had a little red fire engine with $ush $edals and a bell&+ sa s :ardelli& now 99& +and that's $rett much when I decided what I wanted to do.+ In junior high school& he realiAed an added benefit to being a firefighter2 the $ension. And then there's the job securit . =conomies boom and wane& but $rotection from fires is a basic& uni!ersal need.

:ar and (ind :ardelli At age 56& :ardelli studied fire de$artments in the Den!er area& including their benefits and retirement $lans. 0e $icked suburban %ancroft& (olo.& as a $lace to li!e and work and attended college for two ears while waiting to be acce$ted for training. Then he sta ed $ut for ?) ears and se!en months. +It was better than I e!er thought it could be&+ sa s :ardelli& who turned down managerial $romotions so he could kee$ fighting fires. +I liked being one of the gu s in the trenches. I made lieutenant& and that's where I sta ed.+ 3or most of his working ears& :ardelli knew exactl when he would retire --4o!ember 566; -- because that's when a lum$-sum $ension $a out would amount to 7) million. 0e decided to take the lum$ sum because the lifetime-$a ment o$tion offered skim$ sur!i!or benefits to his wife& (ind & in the e!ent that he died first. +This wa &+ he sa s& +it's all hers.+ #anaging 7) million is a big res$onsibilit & es$eciall when ou retire at age 98 and want the mone to last for $erha$s 86 ears. :ardelli alread had ex$erience in!esting (ind 's retirement-$lan rollo!er when she left firefighting eight ears ago. Plus& he amassed about 7)66&666 in his em$lo er-matched 86)CaD $lan& a taxdeferred $lan for $ublic-sector em$lo ees. #ore from #"4 #one and 1i$linger To get rich& start sa!ing in our 56s Turn 789) a month into a million bucks :etting rich is sim$ler than ou think 0ow ; entre$reneurs made millions < wa s to get rich b relaxing 0ow to sa!e a million at e!er age :ardelli worked with a financial $lanner to in!est the mone & graduall $utting it in a di!ersified $ortfolio& com$osed mostl of stock funds& and kee$ing some in a guaranteed account that earns about 9I. +I'm taking it slow and eas &+ he sa s. =!en as millionaires& he and (ind still look for wa s to sa!e mone . +,e $la lots of golf& ride the motorc cle& goof off&+ sa s :ar & who sa!es about 79&666 in annual golf-course fees b working six hours a week as a golf-course marshal. (ind works two da s a week in a !eterinar clinic& which $ro!ides them with free care for their three fox terriers and (hihuahua. "a s :ar & +,e're ha!ing so much fun.+

#illionaire Lesson 4o. ; (ombining an old wa of doing things with a $o$ular new trend will resonate with customers and clients. ( d "A manski knows how to hurl an egg& a skill she $erfected as a farm kid in southwestern #issouri. CAim for the barn $ost& she sa s& the better to s$latter the guts& and ho$e the hit our brother.D "he also knows how to score a breakthrough in the tradition-bound egg industr .

( d "A manski "A manski turned a foundering startu$ called 4est 3resh into a com$an with sales of more than 79 million. In the $rocess& she showed her com$etitors -- and members of her own famil -- that cage-free chicken eggs could be $rofitable. +I wasn't the first& but I was darned close&+ "A manski sa s. +"oon& all the big gu s jum$ed on the bandwagon.+ ,hen "A manski& 9)& was growing u$& most egg farmers considered caged chickens to be +the modern wa & the good and $ositi!e wa &+ she sa s. That included her grandfather and uncle& who then owned one of the biggest egg $roducers in the H.". % )JJ)& howe!er& her father and brother had hatched a $lan to $roduce cage-free eggs in (olorado. "A manski left her job as a hos$ital marketing director and mo!ed to Den!er to join them. Their distributor reneged& lea!ing the business 7;6&666 in debt. 0er father and brother walked awa from the enter$rise. Bideo on #"4 #one

Pa ing for retirement @our retirement could last for decades. 0ere are ti$s for li!ing well during those ears. Continued: Packed the eggs herself K $re!ious F ) F 5 F 3 F 8 F next G

(ontinued from $age ?


Article Tools E-mail to a friend Tools Index Print-friendl !ersion "ite #a$ Article Index Discuss in a #essage %oard Digg This %ut "A manski hung on. "he $rocessed and $acked the eggs herself and deli!ered them to small grocers. +I would dri!e an hour to the farm& work& dri!e back into town& deli!er the eggs& go to m a$artment& tr to figure out where all the mone had gone and what I was going to do& go back out to farm& do some more work& come home about )) at night and do the books. It was a scar existence&+ she sa s. 0er big break came when 1ing "oo$ers& the leading grocer chain in (olorado& agreed to carr the eggs& and a local news$a$er wrote about 4est 3resh. (ustomers liked the look& taste and idea of the cage-free eggs enough to bu them at 75.<J a doAen& more than three times the $rice of regular eggs. .nce 4est 3resh took off& "A manski's relati!es jum$ed into the business& and so did other big grocer chains. +3armers are not known for forward thinking&+ she sa s. +The market had to be booming.+ As for "A manski& in 566; she sold the 4est 3resh brand to 0idden Billa >anch of 3ullerton& (alif.& for a sum that $ut her s-uarel in the millionaire column. +I wanted to change the wa eggs are $roduced in the H.".&+ she sa s. +I accom$lished that.+ #ore from #"4 #one and 1i$linger To get rich& start sa!ing in our 56s Turn 789) a month into a million bucks :etting rich is sim$ler than ou think 0ow ; entre$reneurs made millions

< wa s to get rich b relaxing 0ow to sa!e a million at e!er age 4ow "A manski and her husband& "te!e& enjo a cush life that includes neither eggs nor chickens& both of which "A manski dislikes. The in!est in real estate and take horseback-riding !acations with their *- ear-old daughter& Anna%elle. "a s "A manski of her wealth& +I ha!e 'eggsistential' guilt.+ #illionaire Lesson 4o. < It doesn't take a fortune to build one. "a!ing a little at a time is an established $ath to accumulating wealth. @ou don't need to earn much to make millions. Paul 4a!one& <*& ne!er made more than 7)) an hour as a -ualit -control ins$ector in a glass-container factor . %ut last ear he ga!e 75 million to two 4ew 'erse schools. 0e has about 7) million more sa!ed for his retirement. 4a!one& who li!es in #ill!ille& 4.'.& was hired b ,heaton :lass when he was );. After taking a break for Arm ser!ice& he returned and mo!ed in with his older sister C$a ing her for his room and boardD until he scra$ed together 7;&966 to bu his own du$lex at age 5?. 0e li!ed in one half and rented the other. =!entuall & he bought two other $ro$erties in #ill!ille and two in Atlantic (it .

Paul 4a!one Income from his rentals $aid 4a!one's li!ing ex$enses. +I ne!er s$ent an of m wages&+ he sa s. 0e owns no $hone or TB. 0e collects 0ummel figurines -- doAens of the ceramic $ieces decorate his home. %ut for the most $art& he s-uirreled his mone awa in sa!ings and in!estments& and he gi!es credit to +four !er good brokers.+ 4a!one in!ested in +a little bit of e!er thing+ and stuck with a bu -and-hold strateg . 0e is $artial to utilit stocks& with their stead earnings and di!idends Cwhich he alwa s rein!estsD. ,hen he retired two ears ago& 4a!one couldn't hel$ wondering +what all this accumulation was going to amount to.+ 0e decided to gi!e $art of his fortune to "t. Augustine (ollege Pre$arator "chool in >ichland& 4.'. 0is current broker& Douglas "mithson of ,acho!ia "ecurities& suggested that he also s$eak to (umberland (ount (ollege in Bineland& 4.'. Last ear& 4a!one donated 7) million to the college for its nursing-education $rogram and 7) million to the high school for a swimming $ool. +I ne!er had the $leasure of a swimming $ool&+ he sa s. +I used to go to the swimming hole at the gra!el $it.+ #illionaire Lesson 4o. * 3orgo the safe route and find an em$lo er who will hel$ ou li!e u$ to our $otential. % the numbers& :urtej "andhu is one of the most $rolific in!entors in the H.". ,hat's more& he has $arla ed his education and ingenuit into millionaire status. "andhu holds more than <66 $atents& which $uts him among the to$ )6 $atent holders in the nation. 0e works for #icron Technolog & which makes memor microchi$s that are used in most digital de!ices& from cell $hones to #P? $la ers. The semiconductor business faces cutthroat com$etition& and all of "andhu's $atents focus on making microchi$s more efficient.

:urtej "andhu The son of two chemists& "andhu& 8<& was alwa s attracted to math and science. +I liked engineering better than medicine because I didn't ha!e to deal with blood&+ he sa s. 0e earned a degree in electrical engineering from the elite Indian Institute of Technolog in 4ew Delhi and recei!ed a doctorate in $h sics from the Hni!ersit of 4orth (arolina at (ha$el 0ill in )JJ6. Turning down a job offer from a bigger ri!al& "andhu joined #icron& which at the time ranked );th among makers of memor chi$s. 0is $h sics $rofessor and mentor& ,.1. (hu& $ersuaded "andhu to take the #icron job because it would gi!e him an o$$ortunit to learn man as$ects of the chi$-making business rather than being locked in to a s$ecialiAed job at a larger com$an . Ins$iration comes -uickl & sa s "andhu -- +"uddenl it clicks& and there's a flash+ -- but it takes dedication to de!elo$ an idea from creation to a $atent. And sometimes& ou don't e!en com$rehend the magnitude of what ou'!e disco!ered. 3or exam$le& "andhu de!elo$ed a method of coating microchi$s with titanium without ex$osing the metal to ox gen& which would ruin the chi$s. Initiall & he didn't think his idea was a big deal& but now most memor -chi$ makers use the $rocess.

Bideo on #"4 #one

Pa ing for retirement @our retirement could last for decades. 0ere are ti$s for li!ing well during those ears. #icron is based in Idaho& and "andhu enjo s bike riding and s$ending time with his wife and two teenage sons in and around %oise. +The isolation works for me&+ he sa s. +I'm more o$en to new ideas here.+ Published July 9, 2 8 K $re!ious F ) F 5 F ? F ! F

"ow to sa#e $2

in % months

The ,omen in >ed "a!ers find that tucking awa cash is a lot easier -- and more interesting -- with an audience.
Latest #arket H$date 'ul )8& 566* -- 6J2)9 =T M%>I=3I4:.(.#N "EP futures !s fair !alue2 O)5.?. 4asda- futures !s fair !alue2 O5).*.... #ore

Article Tools E-mail to a friend Tools Index Print-friendl !ersion "ite #a$ Article Index Discuss in a #essage %oard Digg This By MP Dunleavey #an ears ago& when I was breaking u$ with m then-fiancP& I needed to find m own a$artment. %ut I had no idea how I would be able to afford it. The $roblem& $lain and sim$le& was that I didn't ha!e a dime in sa!ings. .1& ma be a dime& in a dust tra on m desk& but that was it. I hadn't e!en signed u$ for the 86)CkD $lan at m job. Then one da & as if the #one 3air had heard me cr ing& a credit card a$$eared in the mailQ The credit limit was 7;&666. I felt as if someone had handed me a bag of gold. 0ere was m mo!ing-out mone Q 0ere was m freedomQ And there went m financial sanit . (aught in the debt s$iral ,e ha!e all heard about rising consumer debt& but the fli$ side of that sad stor is the $lunge in the national sa!ings rate in recent ears. In a 566; re$ort& onl about )*I of middle-class families said the had three months' ex$enses sa!ed& according to the (enter for American Progress& a liberal think tank in ,ashington& D.(. ,orse& nearl ;6I of $eo$le 88 and under didn't e!en ha!e 7966 set aside for an emergenc & according to the 3ederal >eser!e %oard's 5668 "ur!e of (onsumer 3inances. "mall wonder that man $eo$le feel the ha!e no o$tion but to use $lastic in a crisis. @ou can trace the downward s$iral from there2 @ou start with no sa!ings cushion& ou stumble into debt& and our $a check has to stretch to make ends meet and $a off the debt& so how can ou sa!e/ "a!e our sanit Lindse :ar!er& a graduate student in microbiolog who li!es near ,ashington& was concerned that some of the ,omen in >ed members were so focused on $a ing off debt that the were o!erlooking the $rotecti!e $ower of sa!ings. In 'anuar & she hel$ed to launch the ,omen in >ed "a!ers thread& a message-board su$$ort and discussion grou$ for an one who wants to sa!e for an reason& including those who don't think the can. #ore from #"4 #one

"a!e our 'emergenc fund' for the real thing 0aircuts& car re$airs on the chea$ The 76 emergenc fund ,h ou need 7966 in the bank Too broke to sa!e mone / 4e!er

#an $eo$le start at Aero& :ar!er sa s& and some add onl 7)6 or 756 a week or e!en each month. +"ome go slower& and some go faster&+ she sa s& admitting she falls into the tortoise categor . +The main $ur$ose of the thread is to get $eo$le excited about $osting e!en a small amount&+ :ar!er sa s. Andrea 0older& who joined in 3ebruar & agrees2 +,ith the "a!ers& ou can sa & 'I just sa!ed 75<.;?Q' and $eo$le will gi!e ou thumbs u$. @ou can't e!en do that with our best friend.+ "ome $eo$le join with a finite goal2 a wedding& dental work or a down $a ment. "ome want to increase their retirement nest eggs. %ut man women& :ar!er sa s& set u$ multi$le sa!ings accounts to co!er a host of life's ex$enses& from holida gifts to car insurance to $ro$ert taxes to an unex$ected home re$air. To sa!e is to gi!e ourself a margin of sanit & :ar!er sa s. +.n a grander scale& it's not about being able to $a our $ro$ert taxes -- it's about the securit it brings. @ou're not worr ing because ou'!e got things co!ered.+ 3ocused on the future Andrea 0older is building that $eace of mind at stee$ odds. 0older& a waitress and hostess at two restaurants in "helb & #ich.& sa s she works ;6 hours a week and her husband 86 hours& not just to $a off 796&666 in credit card and car debt but to sa!e for their futures& too. After their son was born earl last ear& +I had an e$i$han &+ she sa s. +,ow& we're adults nowR we're $arentsR we better get this together.+ 4either her $arents nor her husband's ha!e sa!ed enough for retirement& 0older sa s. +I don't want to end u$ like that.+ Bideo on #"4 #one

Bud&et your way to smarter s'endin& The +%+ word isn't a straitjacket on fun. 0ere's how to start a budget and find the leaks in our wallet. 0older sa s that if she and her husband focused onl on aggressi!el $a ing down what the owe& the could be debt-free in about three and a half ears. %ut she didn't want to do that. "he knew the 'd need a cushion to kee$ them afloat while the $aid off their debts. +And if we're sa!ing for those three ears& the mone is earning mone & and b the time we retire& that adds u$.+ 0older set u$ sa!ings accounts for a home down $a ment& an emergenc fund& a holida gift fund& a sa!ings $lan for their son and a !acation stash. "he also o$ened a >oth indi!idual retirement account and intends to sa!e more in her com$an 's 86)CkD now that she is eligible. "ince joining the "a!ers& 0older sa s& she has $aid off about 7J&666 in debt and sa!ed 75&666. "ometimes she's discouraged that she hasn't sa!ed more. %ut mainl she is amaAed b the wa sa!ing has changed their li!es. Continued: The secrets of savers 1 F 5 F next G
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Latest #arket H$date 'ul )8& 566* -- 6J2)9 =T M%>I=3I4:.(.#N "EP futures !s fair !alue2 O)5.?. 4asda- futures !s fair !alue2 O5).*.... #ore

Article Tools E-mail to a friend Tools Index Print-friendl !ersion "ite #a$ Article Index Discuss in a #essage %oard Digg This %efore& 0older sa s& she and her husband would ha!e $ut man ex$enses on a credit card. +4ow& if we need new tires& we discuss how we're going to a$$roach it2 '.1& if we $ut awa 756 a week& we can get them b the end of summer&' + she sa s. +Instead of owing more& we can just sa!e for it.+ The secrets of sa!ers According to :ar!er& about ;6 women ha!e joined the "a!ers since 'anuar & and altogether the ha!e sa!ed 7566&666 and counting. As with the ,omen in >ed >acers& who are +racing+ to $a down their debts& the "a!ers sa communit su$$ort is a big reason the kee$ sa!ing. Amanda %ellam & an a!id sa!er who works for the cit of #ission Biejo& (alif.& sa s she had ne!er told an one about all of her sa!ings strategies and goals. +It's not the kind of thing ou talk about.+ The "a!ers do. %ut it's not just a cheerleading s-uad. "a!ers ins$ire each other b swa$$ing all sorts of tricks and ti$s2 )D Di!ide and con-uer. #an "a!ers swear b the $ower of multi$le sa!ings accounts. ,hen funds are earmarked for& sa & house re$airs& ou're less likel to ta$ them for our cell-$hone bill& :ar!er sa s.

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"a!e our 'emergenc fund' for the real thing 0aircuts& car re$airs on the chea$ The 76 emergenc fund ,h ou need 7966 in the bank Too broke to sa!e mone / 4e!er 5D Let ourself +find+ mone . :ar!er sa s that one big sur$rise for women when the join the grou$ is that +there's a lot of 'found mone ' out there -- mone that would otherwise trickle awa &+ she sa s& referring to the bits of cash that float through our li!es Ca refund from the tele$hone com$an & for exam$le& or 7)6 ou find at the bottom of our $urseD. >ather than ignore a mini-windfall& she sa s& +4ow the 're excited to hang on to it.+ ?D Do what works. In the six months she has been monitoring the grou$& :ar!er sa s& she has seen $eo$le em$lo man different successful sa!ing methods. There's no +right+ wa & she em$hasiAes. "ome strategies2 "et aside a fixed amount or $ercentage each week or each month. "tart with a goal of sa!ing 75&666& for exam$le& and break that down to an amount ou can manage each month. "a!e onl the extras2 refunds& o!ertime $a & interest earned& gift mone & bonuses. "ome "a!ers tr to li!e on one biweekl $a check and sa!e all or most of the next one. 8D Don't succumb to sa!ings blues. The trouble with sa!ing& :ar!er sa s& is that most of the time ou end u$ s$ending the sa!ings on a designated goal. +A lot of $eo$le go through some disa$$ointment when the see that mone go&+ she sa s. +It can be a downer.+ To sta on track& :ar!er ad!ises& it's im$ortant to acknowledge that the mone ou s$ent was s$ent wisel -and then to kee$ on sa!ing. Bideo on #"4 #one

Bud&et your way to smarter s'endin& The +%+ word isn't a straitjacket on fun. 0ere's how to start a budget and find the leaks in our wallet. 9D Pla games. The "a!ers I talked to em$hasiAed that sa!ing& es$eciall in a grou$& can and should be fun. %ellam $uts aside 79 e!er time her bo friend does something sweet& such as taking her out to dinner. # husband and I sa!e all our 79 bills. That's our mad mone . 0older se$arates her s$are change in different buckets& to make it easier to roll. +I think I ha!e 7)66 that we can $ut toward our house fund.+ %ellam gets 5; $a checks a ear but has learned to li!e on two $er month& so the +extra+ two checks each ear go toward her car loan or other goals. Thus far& she has $aid down a 7)?&966 loan to just 7)&966. +It will be $aid off in August&+ she sa s. And last but not least2 ;D Put our mone on automatic $ilot. The oldest new trick in this high-tech era is still one that most "a!ers swear b Cincluding ours trul D2 Hse automatic transfers to sa!e. That's because& as we all know& mone left in our checking account is magneticall drawn to the inside of our wallet. Put it out of immediate reach. 0older has $eace of mind in the $resent& and she looks forward to the future2 bu ing a home& sending their son to college and one da retiring in comfort. +@ou ha!e to be able to li!e life&+ she sa s. Published July 11, 2 ( K $re!ious F ) F 2 F

) lessons the rich can teach you The donSt just ha!e more mone . The s$end it& borrow it and sa!e it in wa s that might benefit ou& too.

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By Liz Pulliam Weston Personall & I'm not sure how much the a!erage $erson can learn from the Donald Trum$s or :eorge "oroses of the world. ,e might en! their lifest les or their bank accounts& but !er & !er few of us will e!er a$$roximate their wealth. #ost of us& though& ha!e a shot at being millionaires. In 5668& the number of households worth 7) million& not counting their $rimar residence& grew 5)I to <.9 million& according to (hicago-based research firm "$ectrem :rou$. "tud ing the habits of this relati!el large and growing grou$ of affluent folks can teach us a lot. These $eo$le don't just have mone R the treat it differentl than $eo$le farther down the economic ladder. +he rich are indeed different At least& so sa !arious sur!e s of the affluent. Among the most notable differences2 +hey &i#e away more, (haritable gi!ing dro$$ed shar$l among the wealth after the 5666-566) bear market& according to "$ectrem :rou$. "till& households with 7966&666 or more in in!estible assets ga!e awa ;I of their incomes in 5668& and those with net worth of 79 million& excluding $rimar residences& contributed ;.)I of their incomes. That com$ares to an a!erage of about 5I for all American households and 8I for households with incomes under 759&666& according to American Demogra$hics. +.ur clients a$$reciate the success that the '!e had and the want to $a it forward in some wa &+ said financial $lanner >oss Le!in of =dina& #innesota. +,e ha!e one client& a de!elo$er and his wife& who gi!e awa 96I of their income.+ +hey are much more likely to own businesses, .!erall& about )5I of American families own all or $art of a $ri!atel held business& according to the 3ederal >eser!e& com$ared to 8)I of those whose net worth $uts them in the to$ )6I of households. %usiness assets com$rise 5)I of the total net worth of households who ha!e 7966&666 or more in in!estible assets& "$ectrem said.

(losel held and famil owned businesses are a major source of wealth for man of financial $lanner Bictoria (ollins' clients& but these holdings $resent major challenges. It's risk ha!ing so much of one's net worth tied u$ in a single in!estment that could be tough to sell. That's wh (ollins and other $lanners encourage their business-owning clients to di!ersif their other in!estments. +An time ou ha!e a su$er-concentrated $osition -- whether it's an indi!idual stock or a business -- ou ha!e to be concerned&+ said (ollins& who's based in Ir!ine& (alif. +hey borrow strate&ically, The wealth are onl slightl less likel to owe mone than a!erage folks& according to the 3ed& but how the borrow is -uite different. The richest )6I of Americans are half as likel to ha!e credit card debts C55.8I !s. 88.8I o!erallD& although the median balances for those who carr balances are about the same for both grou$s Caround 75&666D. The wealthier folks are also much less likel to ha!e installment debt& such as auto loans C59.;I& com$ared to 89.5I o!erallD. 1 F 5 F next G

) lessons the rich can teach you (ontinued from $age )


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,hat the wealth often do ha!e is mortgages. #ore than half -- 99.9I -- ha!e a $rimar mortgage& com$ared to 88.;I of households o!erall. Another )9I carr loans on other real estate& com$ared to 8.<I of the general $o$ulation. #ortgage mone is $rett chea$ debt at current low rates. Although man wealthier folks can do and own their homes outright& financial $lanners sa & man $refer to $ut their mone to work for them in in!estments that can earn higher returns. +hey don-t blow a lot of money on cars, 'a Leno& with his fleet of exotic cars& is the exce$tion rather than the rule. The a!erage millionaire does tend to s$end more mone on his wheels& but !ehicles re$resent a much smaller $ro$ortion of his net worth. Bideo2 ,eston on 'Lessons the rich can teach us'

The 3ed sur!e showed the median !alue of all !ehicles owned b the wealthiest )6I of households was 759&866& com$ared to 7))&*66 for households o!erall. %ut !ehicles re$resented just 5.8I of the wealthiest households' median net worth& com$ared with *.*I of net worth o!erall. +# wealthier clients are much more likel to own an American-made "HB than a >ange >o!er or a C#ercedesD "966&+ said #ark Lamkin& a financial $lanner in Louis!ille& 1entuck . +#ost of them li!e a !er unassuming lifest le& but the 're able to do an thing the want& whene!er the want.+ +hey-re almost always homeowners, and many own in#estment 'ro'erty, too, 0omeownershi$ is almost uni!ersal among those in the to$ )6I of net worth2 J9.*I& according to the 3ed& com$ared to ;<.<I o!erall. About 86I of the highest-net-worth grou$ own some kind of real estate such as rental $ro$ert or a second home& com$ared to ))I o!erall. %ut real estate isn't their major source of wealth. .n a!erage& $rinci$al residences account for )6I of the net worth of folks with more than 7966&666 in in!estible assets& "$ectrem said& while other real estate accounts for <I. .n#estments are kin& #ost of their wealth is in!estments2

8;I in stocks and bonds& managed accounts& I>As& mutual funds& de$osits and alternati!e in!estments )6I in $ensions and defined-contribution $lans like 86)CkDs ;I in insurance and annuities

There are also some indications that wealthier Americans are cutting back their ex$osure to real estate. The $ercentage of $eo$le with net worth o!er 7) million who own in!estment $ro$ert shrank to 88I in 5669& down from 96I in 5668& according to T4" 3inancial "er!ices& a market-research com$an . 3inancial $lanner Deena 1atA belie!es her clients and other wealth folks will continue to bu second or !acation homes but ma be less likel to bu rental or commercial $ro$erties. /et the latest from 0i1 Pulliam 2eston, 3i&n u' to recei#e her free weekly newsletter, Preferred format2


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+The 're starting to re-e!aluate their real-estate holdings&+ said 1atA of (oral :ables& 3lorida. +>eal estate is o!er$riced& and $eo$le are recogniAing that.+ The lessons here aren't re!olutionar & but the 're well worth learning2 Don't be a miser& take strategic risks& li!e within our means& di!ersif . @ou ma ne!er make the 3orbes 866 list of the wealthiest $eo$le& but ou can create a richer life. Liz Pulliam Weston's column appears every Monday and Thursday, e clusively on M!" Money# !he also ans$ers reader %uestions in the @our #one message board#

K $re!ious F ) F 2 F 0uge debts& $aid off fast A 7)96&666 mortgage erased in fi!e ears. About 78J&666 in credit cards& almost gone in just a ear. These debt-$a off cham$ions share their secrets.

Article Tools E-mail to a friend Tools Index Print-friendl !ersion "ite #a$ Article Index Discuss in a #essage %oard Digg This By Liz Pulliam Weston :reg (ards of 4ewark& Del.& was saddled with 7)98&666 in debt after his di!orce. ,anda ,ilkinson of "anta 3e& 4.#.& had 78J&666 in credit card bills& a daughter in college and a husband facing a $otential la off. %ethan and "te$han :ordon of Tacoma& ,ash.& were fresh out of college and carr ing a mortgage nearl three times their income. 'o Thom$son of Pullman& ,ash.& and #ar 1lein of #idland& Texas& had relati!el low incomes -- and big debts. ,hat do these folks ha!e in common/ The 're debt-$a off cham$ions. The :ordons& for exam$le& retired a 7)96&666 mortgage in just fi!e ears. ,ilkinson eliminated half of her debt in a ear. Thom$son $aid off 7*&666 in just nine months. 0ow did the do it/ Among other things2

The made debt $a off a $riorit & although most continued to sa!e for retirement as well. The ke$t their basic li!ing ex$enses as low as $ossible. The looked for creati!e wa s to s$eed u$ their debt re$a ment& and some took extra work. C(ards& for exam$le& !olunteered for o!ertime and took a second job. ,ilkinson& a law er& moonlighted as a $ackage loader on a 3ed=x loading dock.D
@our situation might be different from theirs in the details. %ut if ou're facing a big debt hole& ou might find their stories offer ins$iration and ideas ou can use. #ore from #"4 #one

The best financial ad!ice e!er Insider's guide to debt consolidation "a!e big with the flashback budget %ig night out& small $rice tag Talk back2 0a!e a black belt in frugalit / Tell our stor Li!ing like college students .ne wa the :ordons were able to $a off their mortgage in fi!e ears -- starting with an income of 799&666 a ear -- was that the continued to li!e like broke college students after the graduated. +It was ears before we had li!ing-room and dining-room furniture&+ %ethan :ordon said. +,e ke$t our older cars. ,e were diligent cou$on cli$$ers and onl went out to eat occasionall .+ The :ordons& who ha!e alwa s contributed at least )6I to their 86)CkD accounts& initiall $aid an additional 7866 on their 7)&666 monthl mortgage. As their incomes rose& the increased that $a ment until it reached 75&966 a month. +,hen the balance was less than 756&666& we searched under the couch cushions& em$tied our sa!ings accounts and $aid it off com$letel &+ she said. "te$han and %ethan & now in their earl ?6s& are delighted with their decision. +It has been great to be so oung and li!e in a $aid-off house&+ %ethan said. +,e can be more flexible with our li!es since onl one $a check can easil $a for our necessities. ,e can choose to sta at home when we ha!e kids and aren't chained to our jobs if& for exam$le& lower-$a ing but more rewarding career o$tions o$en u$ for us.+ 0a!ing a dream 'o Thom$son was a conference $lanner who made about 7?5&666 annuall & until she figured out what she reall wanted to do2 work $art time so that she could s$end more hours mentoring girls at her church. To do that& she knew she needed to be able to li!e on less mone & which meant $a ing off her debts2 credit cards& a car loan and student loans.

+It started with a clothing fast. I said for a $eriod of time I would not bu an clothing&+ Thom$son said. +It was a sim$le choice at first& and it was amaAing how much less mone I s$ent when I said that I was done for a time $eriod.+ Thom$son also decided to li!e on a cash s stem rather than tr to +budget e!er dollar -- that would dri!e me craA .+ C3or another sim$le s stem& tr the ;6I solution.D "he is $aid twice a month and allots herself 7)96 in cash to co!er +gas& groceries and an thing else I want that is not a bill. T ,hen the mone is gone& it's gone.+ Thom$son said she still goes out with her friends but t $icall uses cou$ons or dollar menus when she eats out. "he still gi!es 7?66 a month to her church. In nine months& Thom$son $aid off 7*&666 of her debt. "he sta ed moti!ated b remembering her goal. +It's focus. This is what I reall want to do&+ Thom$son said. +I ask m self& 'Do I want this cheeseburger or m dream/' I alwa s $ick m dream.+ Bideo on #"4 #one

+he -B- word %udgeting doesn't ha!e to be a straitjacket on fun. 3ind out how to budget our wa to smarter s$ending. Doing what it takes ,anda ,ilkinson's life looked $rett good from the outside2 "he and her husband made 7)86&666 a ear and had just 756&666 left to $a on their mortgage. "he e!en em$lo ed that e$itome of u$$ie luxur 2 a $ersonal trainer. Then& at 9J& her husband %ruce was threatened with a la off from his 7*6&666-a- ear job just as their daughter was about to start college. +It would Cha!e beenD disastrous for us because of the extreme debt we were in -- 78J&666 on credit cards&+ said ,ilkinson. Continued: Getting ahead by will power 1 F 5 F next G 0uge debts& $aid off fast (ontinued from $age )

Article Tools E-mail to a friend Tools Index Print-friendl !ersion "ite #a$ Article Index Discuss in a #essage %oard Digg This To find areas where the could cut s$ending& ,ilkinson ke$t a record of their ex$enses& +sometimes down to the indi!idual grocer items.+ The $ersonal trainer was cut& along with g m membershi$s. %ut ,ilkinson found a wa to get her workouts while making extra mone 2 After a full da as an attorne for the state of 4ew #exico& she went to work as a $ackage loader from ;2?6 to *2?6 fi!e nights a week. +I met some nice $eo$le& and the work was great&+ ,ilkinson said. +And I got extreme exercise e!er single da .+ ,ilkinson said she sometimes clashed with her husband and daughter o!er the need to cut s$ending. %ut she found ins$iration in debt guru Da!e >amse 's book +The Total #one #akeo!er&+ which she read +e!er da for a ear.+ +I thought& if these $eo$le are doing it C$a ing off debtD on 786&666 a ear& I can do this&+ ,ilkinson said. In )? months& the cou$le eliminated 759&666 in credit card debt while $a ing about 7?6&666 a ear for their daughter's schooling. C%oth ,ilkinson and her husband -ualif for traditional defined-benefit $ensions& which reduced their need to sa!e for retirement.D The la off threat turned out to be a false alarm& but after a brief celebrator !acation& the ,ilkinsons resumed their debt $a off schedule. #ore from #"4 #one

The best financial ad!ice e!er Insider's guide to debt consolidation "a!e big with the flashback budget

%ig night out& small $rice tag Talk back2 0a!e a black belt in frugalit / Tell our stor :etting ahead b will $ower #ar 1lein is determined. 1lein is a single mother making 7)5.86 an hour& or just under 75;&666 a ear& as an administrati!e assistant for an oil- and gas-$roducing com$an in #idland& Texas. "he's also a full-time business-administration student at #idland (ollege& attending most of her classes online and doing her homework after her daughter is in bed. C"tate grants $a her tuition.D .n to$ of that& she's $a ing off 79&666 in debt from a hos$ital !isit last ear -- her $re!ious job didn't ha!e benefits -- and from a trade-school education that didn't $an out. "he $lanned to $a the remaining 7?&666 within fi!e months. Like Thom$son& she's $aid twice a month. =!er $a da & she $a s the bills for the next two weeks -- rent& utilities& child care& etc. -- then li!es on what's left. The ke for her& 1lein said& is not using credit cards. +I ha!en't charged an thing in about six months& which is a good feeling&+ 1lein said. 1lein o$ted not to $ursue her daughter's father for child su$$ort. "he belie!es she can $a off her debt without it& $lus $ursue her next goal2 to be a homeowner. +I $lan on bu ing a home in the next fi!e ears&+ 1lein said. +I think I can do it.+ Although man $arents com$lain about how ex$ensi!e children are& 1lein said she hasn't found that to be the case so far. +I think the real secret to children is that the onl need food& clothes and lo!e&+ 1lein said. +I bu food chea$& and I take secondhand clothes from an where.+ C"ee #"4 #one 's 1ids& ,ork and 3amil Decision (enter for more ideas.D Bideo on #"4 #one

+he -B- word %udgeting doesn't ha!e to be a straitjacket on fun. 3ind out how to budget our wa to smarter s$ending. Hsing e!er angle :reg (ards got the house in his di!orce -- along with a 7))J&666 mortgage& 79&966 in credit card bills and a 75J&966 debt to his ex-wife for her half of the home. 0e initiall took out a second mortgage at *.9I to bu out his ex and $a off the credit cards. "hortl after that& he transferred the balance from the second mortgage to a 6I credit card& then made 78&666-a-month credit card $a ments to retire the 7?9&666 debt in under a ear. .nce that debt was gone& he started directing extra $a ments toward his first mortgage. In 566?& (ards $aid off his first mortgage C;.<I interest rateD with a !ariable-rate home-e-uit line of credit that started at ?.<9I. In 4o!ember 5669& when the line of credit had inched u$ to 9.8JI& he transferred the debt to a fixed-rate home-e-uit loan at 9.8I. 0e's done this on a base salar of 7;6&666 b !olunteering for o!ertime& $icking u$ a second job Csee +56 wa s to make 7)66 more a month+ and +4eed an odd job/+ for ideasD and trimming ex$enses where!er $ossible. To kee$ his li!ing costs down& (ards2

.$ts for basic TB ser!ice -- no $remium channels. (hooses a dial-u$ Internet connection C7J.J9 a monthD o!er high-s$eed ser!ice. %u s food in bulk to last for months. C>ead +"ecrets of su$erstar grocer sho$$ers.+D Takes his lunch to work. #akes a budget for the holida s& birthda s& etc.& and sticks to it. A$$lies +extra+ $a checks to debt Ca biweekl $a schedule had $ro!ided a third check two months a earD. A$$lies an bonuses toward his debt. "ets the thermostat in winter to ;? degrees. "ets the air conditioner to <J. %u s com$act fluorescent light bulbs to reduce electric bills. Takes out 759 in +walking around+ cash each week. ,hen it's gone& he doesn't s$end more. 1ee$s the credit cards at home. "ho$s with a list and bu s onl what's on the list -- and a!oids looking at an thing else& including sale items. 1ee$s his car tuned u$ to a!oid bigger ex$enses. Doesn't kee$ u$ with the 'oneses. 0e sa s he doesn't care what the dri!e& where the !acation or what the wear. A!oids bu ing coffee or food +on the go+ but instead eats at home whene!er $ossible. "ta s awa from !ending machines at work. Doesn't $la the lotter . %u s broken bags of mulch and fertiliAer at dee$ discounts. ,hen sho$$ing for a$$liances& bu s last ear's model.

%udgets !acations and looks for cou$ons where!er $ossible.

(ards also initiall sus$ended contributions to his 86)CkD -- not something I recommend -- but he was determined to funnel e!er a!ailable dollar to his debt. ,hen he $icked u$ the second job& howe!er& he was eligible for a 86)CkD with a great match2 7).96 for e!er dollar he contributed u$ to ?I of his salar & $lus 96 cents for e!er dollar contributed after that u$ to 9I of his salar .

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+I had to take ad!antage of that&+ (ards said. 0e kee$s track of his $rogress in writing and kee$s the information near his com$uter& where he sees it e!er da . +I kee$ looking at the $rogress I made& and it's a great feeling. This feeling hel$s me fight tem$tation of bu ing stuff that would kee$ u$ with the 'oneses&+ (ards said. +I ride b the %#, dealershi$ without blinking an e e because I kee$ thinking of the $rogress& the hard work that I had $ut into getting debt slammed down.+ LiA Pulliam ,eston's new book& +=as #one 2 0ow to "im$lif @our 3inances and :et ,hat @ou ,ant .ut of Life&+ is now a!ailable. (olumns b ,eston& the ,eb's most-read $ersonal-finance writer and winner of the 566< (larion Award for online journalism& a$$ear e!er #onda and Thursda & exclusi!el on #"4 #one . "he also answers reader -uestions on the @our #one message board. &pdated 'an# (), (**+ K $re!ious F ) F 2 F

The ? worst mone mo!es ou can make "ome of toda Ss most common $ersonal-finance decisions also ha$$en to be some of the most destructi!e. 0ere are the $rimar $itfalls -- and how to a!oid them.

Article Tools E-mail to a friend Tools Index Print-friendl !ersion "ite #a$ Article Index Discuss in a #essage %oard Digg This By Liz Pulliam Weston "ound financial ad!ice doesn't change much from ear to ear. %ad mone management ideas& howe!er& seem to mutate and flourish with each $assing season. %orrowing against our home e-uit and retirement funds& for exam$le& was once tough to do -- and generall understood as a bad idea. Toda & financial ser!ices com$anies encourage us to do both. Lenders also urge us to stretch farther and farther to bu our homes& often to our $eril. Hltimatel & it's u$ to ou to resist bad ad!ice and $rotect our own financial futures. 0ere's what ou need to know about three of the most $o$ular $ieces of bad ad!ice toda 2 Hse a home e-uit loan to $a off credit-card debt Lenders lo!e to tout home e-uit loans and lines of credit as a wa to $a off our $lastic. @ou'll e!en see some $ersonal finance journalists $arroting the com$an line that such loans make sense& because home e-uit rates are t $icall lower than the interest rates ou'd $a on our cards -- and the interest is usuall tax deductible. Americans ha!e been taking this ad!ice with a !engeance& cashing out more than 75 trillion of the e-uit in their homes between 5665 and 5669& according to "#> >esearch and 3reddie #ac. (om$arati!el low home-e-uit rates& and stubbornl high credit-card rates& ha!e con!inced millions that this is the wa to go. The onl wa this maneu!er reall hel$s ou& howe!er& is if ou sto$ using our credit cards to run u$ debt. .therwise& ou're just digging ourself a dee$er hole. Hnfortunatel & the abilit to li!e within their means is be ond man $eo$le. 4earl two-thirds of the $eo$le who borrowed against their home e-uit to $a off credit cards had run u$ more card debt within two ears& according to a stud b Atlanta research firm %rittain Associates. .h& sure& ou can borrow more against our home to $a off the new debt -- thus whittling awa the amount of e-uit that's a!ailable to ou in an emergenc & and ensuring that ou continue to $a hundreds or thousands

of dollars a ear in interest to our lender. The credit-card balances ou should be $a ing off e!er month instead get stretched out for ears& ultimatel costing ou more in interest -- e!en with the tax sa!ings. #ore from #"4 #one 0uge debts& $aid off fast )6 mone mo!es that can turn sour @our #one message board2 "mart and stu$id mone mo!es )6 bad habits that lead to debt disaster 9 ste$s for im$ro!ing our credit score :et off the s$ending treadmill 3inancial $lanner >oss Le!in of #innea$olis sa s home e-uit lending has its $lace -- as an emergenc source of cash. 0e encourages clients to set u$ home e-uit lines of credit& which are re!ol!ing accounts that work much like credit cards with !ariable interest rates& in case the lose their jobs or need -uick cash to meet some other dire need. #an lenders will set u$ home e-uit lines for ou at no cost& and the annual fees are usuall minimal. %ut Le!in& like other $lanners& is adamant about not ta$$ing home e-uit to $a off credit cards or an thing else that won't last as long as the debt. +The $eo$le who need to do a debt consolidation Cusing home e-uit loansD tend to need to do it again and again and again&+ Le!in said. These folks ne!er learn to manage their mone & and the $ut their homes at risk in the bargain. ,hile un$aid credit-card debt can be erased in bankru$tc & the $enalt for not making our home e-uit $a ments is losing our house. If ou'!e alread borrowed against our home e-uit & $a off the debt as -uickl as ou can. If ou ha!en't and think ou need to& cut u$ our credit cards first. Don't use our home e-uit to $a for luxuries or for an thing else that won't last as long as the loan. %orrow from our 86)CkD (om$anies don't ha!e to offer a loan feature with their 86)CkD retirement $lans& but according to the =m$lo ee %enefit >esearch Institute& most of them do. =ight -three $ercent of American workers co!ered b 86)CkD $lans can borrow against their accounts& and about one in fi!e $artici$ants had an outstanding loan in 5669. The a!erage balance was 7;&J8;& said the In!estment (om$an Institute. 3inancial ser!ices com$anies ha!e encouraged em$lo ers to make loans a!ailable& sa ing the abilit to ta$ retirement funds will increase worker $artici$ation in the $lans. The idea is that workers are more likel to contribute if the don't feel their mone is being locked awa . Bideo on #"4 #one 2 :et more from our I>A 0ere's a sim$le& no-cost wa to boost the earning $ower of our Indi!idual >etirement Account. (lick here to $la the !ideo. Peo$le who borrow from their work$lace retirement funds& meanwhile& lo!e to think it's a smart mo!e& since when the re$a the loan the 're essentiall $a ing interest to themsel!es rather than to a credit-card com$an or other lender. This is true& but 86)CkD borrowers also could be $utting their retirements at risk. If the lose their jobs or get fired& the loan must be re$aid& t $icall within weeks. If that's not $ossible -- and often it's not& since $eo$le who lose their jobs don't tend to ha!e a lot of cash sitting around -- the outstanding loan balance is taxed and $enaliAed as a $remature distribution. "o in addition to the 7;&*66 ou borrowed to s$end on whate!er& ou'll be coughing u$ thousands more for taxes and $enalties. It gets worse& since ou can't $ut that mone back. ,hate!er the 7;&*66 might ha!e earned in future ears is gone fore!er. Assuming an *I return that could cost ou more than 7<9&666 in future retirement funds. Like home e-uit & retirement funds are best left alone to grow -- and to be there for ou in case of real emergenc . "tretch to bu a house %eware& homebu ers. =!er one around ou is cons$iring against our financial best interests. @our real estate agent ma be $ushing ou to bu the most ex$ensi!e house ou can2 the higher the $rice tag& the bigger her commission. @our lender is in cahoots& as well. 4ot onl will a larger loan rack u$ more fees and interest& but also the lender knows ou'll mo!e hea!en and earth to $a our mortgage e!en when ou're falling behind on other bills. @our friends and famil also ma get into the act& telling ou it's oka to stretch to $a that mortgage& since our income will e!entuall rise and make the $a ments more comfortable. #a be& ma be not. %ut an one who's been house-$oor knows the emotional& $s chological and financial stress of stretching too far. +@ou ne!er want to bu as much house as lenders are willing to lend ou&+ declares Delia 3ernandeA& a Long %each& (alif. financial $lanner who s$ecialiAes in middle-income clients. +"ome $eo$le think the 're willing to sacrifice to li!e in their dream home& but the should think long and hard about what that reall means.+ %u ing too much house could mean gi!ing u$ other things ou want2 !acations& eating out& a college fund for our kids& a sufficient retirement kitt . .r it could mean e!er more debt& as ou borrow to tr to maintain our lifest le. 3ernandeA has had clients who o!erextended to bu a house& ran u$ 796&666 in debt on a home e-uit line of credit and then had trouble making e!en the minimum $a ments on their loans. 4ow an new $urchase is a struggle. +"ometimes the can't sta in the house& or the let maintenance and re$airs go& which doesn't do them an good+ since the !alue of their house declines with deferred maintenance& 3ernandeA said.

Traditionall & lenders limited the amount ou could borrow so that our housing costs --$rinci$al& interest& taxes and insurance& or PITI -- e-ualed 5;I to 5*I of our total $retax income. Lenders toda & howe!er& are often willing to go to ??I or e!en higher& said mortgage broker Allen %ond. %ond& $resident of the (alifornia Association of #ortgage Lender's "outhern (alifornia cha$ter& has seen lenders a$$ro!e mortgages that eat u$ 96I to ;6I of the borrower's income.

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#ortgage $a ments& of course& are just $art of the costs of owning a house. 0omeowners should $lan on s$ending at least )I of their homes' !alue each ear on maintenance and re$airs& according to =ric T son& author of +0ome %u ing for Dummies.+ Include other costs& such as bigger utilit bills& homeowners' association dues and decorating& and the t $ical homeowner could s$end an amount e-ual to the monthl mortgage $a ment on such u$kee$. That's wh 3ernandeA recommends her clients limit their PITI to 59I of their total income. +That's the most comfortable le!el for most $eo$le&+ she sa s. If ou're set on bu ing our dream house& figure out how much more ou'll be $a ing each month for our new home -- and start li!ing now as if ou were alread shelling out that amount. If ou can $ull this off comfortabl for six months or more& then ou can $roceed with some confidence. In the meantime& 3ernandeA said& ou can sa!e the difference between what ou're s$ending now and what ou'll be s$ending in the future -- thus bolstering our emergenc fund and gi!ing ourself an e!en larger comfort Aone. LiA Pulliam ,eston's column a$$ears e!er #onda and Thursda & exclusi!el on #"4 #one . "he also answers reader -uestions in the @our #one message board.

The best time to bu . . . an thing Did ou know that airlines change their fare schedule three times a da / .r that cars are more likel to be a bargain at the end of the month/

Article Tools E-mail to a friend Tools Index Print-friendl !ersion "ite #a$ Article Index Discuss in a #essage %oard Digg This By Ban,rate#com If ou're waiting until our refrigerator gas$s out its last breath of cold air to sho$ for a new one& ou could be missing out on a chance for big sa!ings. Timing our $urchases to coincide with manufacturer discounts& clearance sales and off-season discounts will take out the stress of finding a good $rice on almost an thing. ,e s$oke with a few ex$erts to get the inside scoo$ on the best times of the ear to sho$. Airline tickets %est time2 It de$ends There reall is no best time of the ear to bu $lane tickets. %ut if ou ex$ect to tra!el around the holida s& alwa s $lan ahead because deals are hard to come b . +If ou can get a good deal for Thanksgi!ing and (hristmas at an time& bu it. That is their $eak $eriod& and airlines ha!e a limited in!entor &+ sa s 4eil %ainton& the chief o$erating officer of 3arecom$are& a tra!el$lanning ,eb site that tracks airline ticket $rices. 3or non-holida domestic tra!el& %ainton recommends that tra!elers ne!er bu tickets more than J6 da s awa from their de$arture date. +@ou want to watch the 5)-da mark because some carriers will file their lowest fares as a 5)-da ad!ance $urchase. And then the next window is at )8 da s& which ou reall don't want to go b unless ou're feeling luck &+ %ainton sa s. :etting a good ticket $rice de$ends on the com$etition in the markets ou're fl ing to and from and the su$$l of seats !ersus the demand. #ore from #"4 #one and

3inding smart bargains online 3ind exotic deals at big-box retailers Ad!ice from the ,eb's best sho$$ers )6 things ou shouldn't bu new (om$ulsi!e sho$$ing disorder2 It's no joke The !alue of com$arison sho$$ing Airlines file u$dates to their fares three times a da 2 )6 a.m.& )52?6 $.m. and * $.m. weekda s& with one filing U- at 9 $.m. -- on "aturda and "unda . CAll times are =T.D +#ost of the lowest fares are filed Tuesda s& ,ednesda s and sometimes "aturda s. It de$ends on the carrier and the market&+ %ainton sa s. Air conditioners %est time2 winter (ommon sense $re!ails in the air-conditioner market& according to Diane >itche & editor of 0ome A$$liance #agaAine. +Think about when the 're most in use2 #a through "e$tember. Peo$le feel the heat and the start to bu . The stock gets de$leted& the demand is higher and so is the $rice. ,hen cool weather comes around& most $eo$le just aren't into air conditioner $urchasing& so the demand dro$s& as does the $rice&+ she sa s. %ig a$$liances %est time2 "e$tember and .ctober 'ust like the fall clothing influx& new models of major a$$liance models such as ranges and washing machines hit showroom floors in "e$tember and .ctober& sa s 0ome A$$liance #agaAine's >itche . About the same time& last ear's models go on sale to make room. +(ritical timing and seeing the $atterns of the retail world can make a huge difference in a$$liance sho$$ing&+ >itche sa s. %ic cles and outdoor gear %est time2 'anuar +If ou want the newest stuff& the time to look is in 3ebruar and #arch& when the season's models come out. The stores start re$lacing fall and winter stuff with s$ring and summer models& and that's true for most all outdoor gear from shoes to bikes& hiking gear& e!er thing&+ sa s Dennis Lewon& senior editor for .utside magaAine. "ome com$anies will send out s$ecial holida items that will land in the discount section after the season. +In general& most of the new $roducts come to stores in 3ebruar &+ Lewon sa s. +'anuar is good for looking for the old models in the classic $ost-holida sho$$ing $eriod.+ %oats %est time2 'anuar & 3ebruar and #arch According to Thom Dammrich& the $resident of the 4ational #arine #anufacturers Association& the winter boat-show season is the time to get a good $rice on a new boat. +The $rimar winter boat show season is 'anuar & 3ebruar and #arch. :oing to a boat show is the easiest wa to see the latest model of boats for man manufacturers& and com$are features&+ Dammrich sa s. +Also& dealers t $icall offer their best $ricing during boat shows.+ (ars %est time2 "e$tember 4ew model ears begin a$$earing at dealershi$s in the fall& making "e$tember an ideal time to snatch u$ the $re!ious ear's model at a discount. % the end of the ear& in!entor dwindles& so acting earlier assures a determined bu er of the best selection. Bideo on #"4 #one

4ideo5 3mart ha&&lin& If ou'd like to $a less than retail when sho$$ing& tr these bargaining ti$s. Another ti$ for bu ing a new car2 +#onitor the number of da s that a truck or car sits on a lot. An time a car or truck isn't selling well& ou can get a good deal&+ sa s Philli$ >eed& consumer ad!ice editor for and a co-author of +"trategies for "mart (ar %u ers.+ "ho$ on a weekda to get the undi!ided attention of the sales staff and go at the end of the month when the 're tr ing to make -uotas. %e sure to go earl in the morning or earl in the afternoon and show u$ wellrested and with a full bell . +@ou don't want to be hungr or tired&+ sa s >eed& who also recommends using the Internet de$artment to broker the deal. @ou'll sa!e mone and ski$ the high-$ressure negotiations in the finance and insurance office.

+.ften the $erson who deli!ers the car to ou isn't e!en a salesman but a $orter. @ou just sign the $a$ers& and it's done&+ >eed sa s. (ell $hones %est time2 an time A new cell $hone comes out a$$roximatel e!er fi!e minutes. .b!iousl & that's h $erbole& but 'ohn #orris& the editor of home and entertainment co!erage for ( sa s the team re!iewing cell $hones can barel kee$ u$ with the stead stream of new models being offered. +The market for cell $hones doesn't follow an seasonal trend or technological ad!ances. Also& their release schedule is dictated b carriers as well as manufacturer& which makes it a little more com$licated&+ #orris sa s. (om$uters %est time2 'ul and August If ou're sho$$ing for a low $rice on a com$uter& bu ing slightl older technolog can sa!e ou some mone . 3ollowing the release schedule of chi$ makers Ad!anced #icro De!ices and Intel will offer some clues as to when com$uter manufacturers will offer u$dates and redesigns& sa s (4=T's #orris. (hi$ manufacturers turn out u$grades -uickl & about e!er three months& with major com$uter manufacturers following suit. 1 F 5 F next G The best time to bu . . . an thing (ontinued from $age )

Article Tools E-mail to a friend Tools Index Print-friendl !ersion "ite #a$ Article Index Discuss in a #essage %oard Digg This .therwise& a good rule of thumb to follow is to bu in the middle of the summer to take ad!antage of the backto-school sales or the winter holida markdowns. (ookware %est times2 A$ril and #a R .ctober and 4o!ember +There are two big seasons for cookware and cookware $romotions&+ sa s 0ugh >ushing& executi!e !ice $resident of the (ookware #anufacturers Association. is in the s$ring& in A$ril and #a & coinciding with the graduation and wedding season. The other is in .ctober and 4o!ember& with $romotions in regard to the holida s.+ 3urniture %est times2 'anuar and 'ul 4ew furniture hits the showrooms after the holida s& in 3ebruar & and again in August. 'ackie 0irschhaut& the !ice $resident of $ublic relations and marketing for American 0ome 3urnishing Alliance& sa s there are two times of the ear for guaranteed low $rices. +After the holida s& in 'anuar & stores ha!e clearance sales to make room for new in!entor coming in 3ebruar &+ she sa s. +And in 'ul & the same thing ha$$ens with fall in!entor . 3or instance& it ma be the same wooden frame for sofas with different u$holster in new colors for fall.+ :as grills %est time2 winter >itche sa s that& when it comes to gas barbe-ue grills& timing for the best deal is the same as sho$$ing for air conditioners. +#ost $eo$le bu in #a & 'une and 'ul for back ard barbecues&+ >itche sa s. +%ut wait until winter comes to bu & when demand is low.+ 'ewelr %est time2 A!oid the holida s& Balentine's Da and #other's Da 3or jewelr & it's more a matter of when not to bu if ou're focused on getting the best deal $ossible. #ore from #"4 #one and

3inding smart bargains online 3ind exotic deals at big-box retailers Ad!ice from the ,eb's best sho$$ers )6 things ou shouldn't bu new (om$ulsi!e sho$$ing disorder2 It's no joke

The !alue of com$arison sho$$ing +@ou're going to $a closer to full $rice around the holida s because most jewelers generate one-third of their annual re!enues and almost )66I of their annual $rofits in those two months&+ sa s 1en :assman& the founder and $resident of the 'ewelr Industr >esearch Institute. +@ou're going to get great !alue the other eight months of the ear.+ In general& a!oid the fourth -uarter& that's when most of jeweler's earl $rofits are made. Linens and bedding %est time2 'anuar The white sale was a marketing strateg originall de!ised b 'ohn ,annamaker in )*<* and it was so successful that retailers still follow his lead toda . +'anuar is kind of an industr standard&+ sa s Deb D er& of u$scale bedding cataloger (uddletown. +That is the time of the ear when ou are going to see a lot of white sales b e!er one -- retailers& cataloguers& e!er thing. Linens do come out seasonall & so ou'll see new colors in stores for s$ring and summer and then fall and winter.+ 'ust as with clothing& bargains can be found on the $re!ious season's st les. #attresses %est time2 alwa s Is it alwa s a good time to bu a mattress/ It is if ou ask 4anc "hark& the executi!e director of the %etter "lee$ (ouncil& a consumer education $roject su$$orted b the mattress industr . Bideo on #"4 #one

4ideo5 3mart ha&&lin& If ou'd like to $a less than retail when sho$$ing& tr these bargaining ti$s. +There reall isn't one best time to bu a mattress. >etailers alwa s ha!e sales and are alwa s doing their own thing&+ she sa s. +The em$hasis should be on looking for the best le!el of comfort and su$$ort within our budget. A mattress is a reall $ersonal choice based entirel on indi!idual $reference. In terms of sho$$ing& look for store ser!ices& deli!er and remo!al of old bedding and be sure to test out the mattress before bu ing.+ >eal estate %est time2 s$ring %u ing and selling season starts in #arch and goes through the summer. "$ring in!igorates the real estate market& meaning there are more homes to choose from. +In the s$ring market& homes look the best& grasses are green& flowers and trees are in bloom. There's a whole new energ out there after the beginning of the ear&+ sa s Tom "te!ens& $resident of the 4ational Association of >ealtors. %ecause s$ring is historicall the time of the ear when in!entories are highest& com$etition is at its $eak as well. (ontrarian sho$$ers ma find negotiating more to their liking in the fall and winter. >ecreational !ehicles %est time2 fall and winter The market for recreational !ehicles works somewhat like that of autos. +The model ears change o!er like cars& so there is some s$ecial a!ailabilit of the $re!ious ears $roduct during the fall&+ sa s Phil Ingrassia& !ice $resident of communications for the >ecreational Behicle Dealers of America. Throughout the winter there ma be some show s$ecials that dealers offer or other incenti!es to entice $eo$le to bu . To s %est time2 .ctober and 4o!ember >etailers o$en u$ the to chest in .ctober and 4o!ember to kick-start their mone making season& sa s >e ne >ice& a to trend s$ecialist of the To Industr Association. +This is the time of ear for games and $uAAles&+ she sa s. +>etailers will usuall do a bu -one& get-one-free $romotion.+ If ou're bu ing a gift for someone& the im$ortant thing to consider is whether it's a$$ro$riate for the reci$ient rather than its status as the hottest new item. +It's more im$ortant to bu something that the 'll lo!e&+ >ice sa s. TBs and home theaters %est time2 winter holida sales and 'anuar 3or home theater items& in general& the holida s are a good time& sa s (4=T's #orris. 4ew TB models that were announced earlier in the ear at the consumer-electronics show in 'anuar arri!e in stores in August and "e$tember. The dro$ in $rice a few months after their debut as well as knocking down the $rice on the older models. Bacuum cleaners %est time2 A$ril and #a #ost new !acuum models come out in 'une& >itche sa s. The $rices on the older models start winding down as winter comes to an end& just in time for s$ring cleaning. ,edding %est time2 winter :etting married during the off-season can net big sa!ings. Demand for wedding ser!ices wanes during the !er cold months -- or if ou ha$$en to be in a tro$ical climate& the !er hot months -- and that can work to our ad!antage. >ead +< wa s to sa!e on an off-season wedding+ for ti$s on a winter wonderland wedding& or sweltering summer nu$tials& as the case ma be.

This article was re$orted and written b "he na "teiner for K $re!ious F ) F 2 F

)6 times ou can't afford to skim$ #one isn't e!er thing& es$eciall when it comes to our safet & our comfort or our time . . . and es$eciall our life.

Article Tools E-mail to a friend Tools Index Print-friendl !ersion "ite #a$ Article Index Discuss in a #essage %oard Digg This By Liz Pulliam Weston There's $lent of stuff where -ualit doesn't de$end on $rice. :eneric as$irin is as good as the hea!il marketed stuff& for exam$le& and man store-brand $roducts are turned out b the same factories that make their name-brand counter$arts. There are other areas where ou're not obligated to s$end at all. 4obod needs an Internet-surfing cell $hone& a luxur car or a flat-screen tele!ision. There are e!en $eo$le who get b without cell $hones& cars and TBs. %ut there also are some $laces where ou shouldn't e!en think about skim$ing -- areas where the $otential drawbacks outweigh an sa!ings. =!en when our budget is reall tight& ou should tr to make room for the following2 (ar maintenance. @ou'!e heard the sa ing +$enn -wise& $ound-foolish+/ This old =nglish $hrase means that scrim$ing on a small ex$ense often leads to a much bigger one. That's exactl what will ha$$en if ou wait too long to change our oil& swa$ our filters or in!estigate that weird grinding noise. If ou ha!e a !ehicle& ou should in!est some effort in finding a good& reliable mechanic -- es& the do exist -and then make sure our budget includes mone for regular maintenance and re$airs. If ou're not sure how much to set aside& re!iew last ear's bills and inflate the number b at least )6I. #ore from #"4 #one

)6 eas wa s to stash awa thousands :et off the s$ending treadmill 0uge debts& $aid off fast )6 habits that lead to debt disaster 0ow to -uit the g m Cor an thingD (lassic clothes. @ou'!e got to wear them e!er da & so ou might as well make sure the hold u$ o!er time. This doesn't gi!e ou lea!e to bu designer togs if ou'!e got a Target budget. %ut if ou're choosing between a chea$ knockoff that will fall a$art after three wearings and something classic that costs more but that will still look great -- and that ou'll likel want to wear -- in 56)6& then our choice should be ob!ious. Vualit is es$eciall im$ortant for footwear. 4ot onl do $oorl made shoes tend to fall a$art& but the can cause all kinds of foot $roblems that can be ex$ensi!e to fix. @ou can find dee$ discounts on -ualit footwear b bu ing during sales& at the end of the season and b scouring $laces like D",& a warehouse shoe store. I'm assuming& b the wa & that ou either $a cash for our a$$arel or that ou $a off the credit card bill in full when it arri!es. (lothes& no matter the -ualit & are not in!estments and should not be financed. If ou can't $a cash& then make do with what ou'!e got until ou can. (om$uter memor . @ou alwa s need more than ou think -- unless ou're some kind of com$uter monk who ne!er adds new software& downloads a tune or $la s a game. "a!e ourself headaches and tech-su$$ort calls b loading u$ when ou bu a new machineR if ou're adding memor to an older machine& consider maxing out the a!ailable slots. In a com$uter bu ing guide& The ,all "treet 'ournal's ,alter #ossberg recommends a minimum of 5 gigab tes of random-access memor C>A#D& the kind of memor that determines how -uickl our machine loads and runs $rograms. 0e recommends as much as 566 gigab tes of hard-dri!e s$ace to store music& !ideo and $hotos. Again& com$uters are not an a$$reciating asset& so $a cash. Bideo on #"4 #one

3afety first ,hich $roducts are the best to ha!e on hand in case of an emergenc / Thriftiness !ersus health 3amil safet . "afet ex$erts sa ou should ha!e a smoke detector outside e!er bedroom and a carbonmonoxide detector on e!er floor& $lus esca$e ladders for e!er bedroom abo!e the first floor. C@ou can find basic detectors for less than 7)6 eachR ladders can be had for less than 786.D "olid door and window locks are a smart securit measure& but remo!e or re$lace an window bars that can't be o$ened from the inside. 0ealth. .ne of m childhood friends woke u$ a widow because her husband& in his 86s& $ut off getting his heart checkedR the didn't ha!e health insurance. If ou're one of the 8; million Americans who are in the same boat& ou understand the dilemma. %ut our famil won't thank ou for our thriftiness if ou wind u$ disabled or dead. There are wa s to take care of our health that don't re-uire insurance or cost a fortuneR read +A sur!i!al guide for the uninsured+ for ti$s on getting care for less. If ou do ha!e insurance& make sure ou budget enough cash for co-$a s and other out-of-$ocket ex$enses. If our em$lo er offers a flexible s$ending $lan& which allows ou to $ut aside $retax mone to $a for medical ex$enses& take ad!antage of it. Continued: Cough up for a home inspection 1 F 5 F next G

)6 times ou can't afford to skim$ (ontinued from $age )


Article Tools E-mail to a friend Tools Index Print-friendl !ersion "ite #a$ Article Index Discuss in a #essage %oard Digg This Internet access. In most areas& the $rice for high-s$eed Internet access has dro$$ed significantl as com$etition between cable and D"L $ro!iders heats u$. In some cities& ou can get basic broadband for less than 756 a month. "ure& dial-u$ is chea$er still -- ou can get it for 7)6 or less -- but our time has a !alue& too& and ou're going to face increasingl length waits as ,eb sites cater to the fast-access crowd. If there's still a huge ga$ in our area between the $rice of dial-u$ and broadband& ou ma decide to wait& for thriftiness' sake& until it shrinks. %ut otherwise& in!estigate our o$tions and u$grade now. #ost $eo$le who ha!e broadband wouldn't go back. 0ome ins$ections. It's rather stunning that $eo$le will s$end hundreds of thousands of dollars on a house but refuse to cough u$ 7866 or so on an ins$ector who could warn them that the 're throwing their mone awa . Talk to an grou$ of smart real-estate in!estors and ou'll hear hair-curling stories of $ro$erties the fell in lo!e with& onl to ha!e ins$ectors disco!er the house was about to fall down or needed tens of thousands of dollars in re$airs. 0a!ing this knowledge hel$ed them $ass on bad deals or at least negotiate lower $rices. During the real-estate boom& there were some bu ers who made the CweakD argument that insisting on an ins$ection would cause the sellers to choose another bidder& but in toda 's slower markets& there's reall no excuse not to hire an ex$ert to ins$ect a home before ou bu . (heck the American "ociet of 0ome Ins$ectors for details. #ore from #"4 #one

)6 eas wa s to stash awa thousands :et off the s$ending treadmill 0uge debts& $aid off fast )6 habits that lead to debt disaster 0ow to -uit the g m Cor an thingD

A good night's slee$2 Priceless #attresses. @ou don't ha!e to dro$ a cou$le of thousand dollars on a s$ecialt mattress to get a good night's slee$& but ou should steer clear of used mattresses Cwho knows how much life the '!e got left/D and reall chea$ ones. (onsumer >e$orts sa s that an name-brand -ueen siAe mattress with a list $rice of 7*66 or more should $ro!ide ou a decade's worth of ser!ice. %ut ou don't ha!e to shell out that much for a good mattress -- the list $rice in a mattress store is about as meaningful as the sticker $rice on a car. If ou're $atient and wait for a sale& or are a good negotiator& ou should be able to get that mattress for ?6I to 96I less. And when it comes to comfort& ex$ensi!e isn't necessaril better. "ome of (onsumer >e$orts' testers hated the $riciest mattresses. ,hat matters is what feels good to ou& so lie on the bed for at least )9 minutes before making u$ our mind. Bideo on #"4 #one

3ho''in& for a mattress 0ow do ou find the right mattress for ou/ @ou can't do it online. 0ere are some ti$s to follow when ou go out in search of a new mattress. Teenagers' cars. A !ehicle is not a birthright& as I wrote in +"hould ou bu our kid a car/+ %ut if ou're going to bu our kid wheels& or allow her to bu her own& the car should ha!e good safet ratings from the 4ational 0ighwa Traffic "afet Administration and the Insurance Institute for 0ighwa "afet . C#ost auto sites& including #"4 Autos& include safet ratings from both organiAations.D "afet ma be e!en more im$ortant in our kid's car than in the famil !ehicle. ,h / %ecause teen dri!ers are& on a!erage& $rett terrible. Their crash and fatalit rate is much higher than an other age grou$& o!erall and $er mile dri!en. "o the 're more likel to need airbags& restraint s stems& roll bars and crum$le Aones than their doddering old $arents. The exterior doesn't need to look like much. After a few fender benders& it won't look like much an wa . %ut the interior should do its best to kee$ our $rogen ali!e.

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,hen our ethics are at stake. A recent $oster to the @our #one message board suggested a mone -sa!ing strateg 2 taking $a$er towels from a work$lace bathroom for home use. .ther $osters $rom$tl called that +frugalit + for what it is2 stealing. If our efforts to trim our s$ending wander into the unethical Cor the sting -meaning someone else is $a ing for our frugalit D& then our scrim$ing has gone too far. LiA Pulliam ,eston's new book& +=as #one 2 0ow to "im$lif @our 3inances and :et ,hat @ou ,ant .ut of Life&+ is now a!ailable. (olumns b ,eston& the ,eb's most-read $ersonal-finance writer and winner of the 566< (larion Award for online journalism& a$$ear e!er #onda and Thursda & exclusi!el on #"4 #one . "he also answers reader -uestions on the @our #one message board. 6'dated 7arch 21, 2 8