A great way to connect children to their roots

If you have read this blog for any length of time then you know I am big on teaching children to save, invest and understand money from an early age. What I have observed in talking with people from many generations is that there is a direct correlation between how a person views both money and debt and what generation they come from.

My Grandfather’s generation saw debt as a prison and felt that you should scrape and save every penny you could. My father was a lot like his grandfather and passed much of that wisdom to me but yet his generation was more open to some debt and some more free spending. In my generation people live in debt (I am a Gen X’r) and the Y generation is graduating college with enough debt to fund most first home mortgages. With each succeeding generation comes more spending, less savings and more debt.

I really feel it was my firm connection to immigrant grandparents that went through hell to get here, then dealt with the great depression and then served in World War 2 that cemented my firm conviction in the principles of saving, keeping debt low and always planning for a “rainy day” that I discuss on this blog.

One thing I think parents can do with children to ground them in these sound principles is to make sure they are connected to their roots. So when I was asked to look at a website where you could build a family tree for free I was happy to do it.   The site is called Tribal Pages and it is very cool and at a cost of free it is a great low cost activity for you to do with your kids and involve the rest of the family.

As you build out your tree you have you are able to do it on your own free web page, other family members can view it online and help you fill in missing spots. (Don’t worry if you are not technical it is a very easy system to use.) I firmly believe that a child that knows their past and how hard their ancestors worked to ensure they could have the opportunities we do today will be more likely to value money and opportunity. When I interview and hire people from Gen X and Gen Y, I see a ton of “entitlement attitude” and it really bothers me. Most people today seem very disconnected from the reality of just 50 years ago.

So if you want your kids to value what they have and in fact if you want to value it more yourself I encourage you to research your past, build a family tree and understand why we have so much opportunity today. Research the values of your family a generation or three ago and build that connection. Tribal Pages definitely makes my list of recommended sites for providing a great service at no cost that helps families understand and preserve their identities.

Ask your employer to consider a Roth 401K

Many people are familiar with the concept of a Roth IRA. For those that are not I will give a quick summary of the difference between Conventional and Roth IRAs and why I believe that a Roth is ALWAYS better for new contributions. Both offer significant tax advantages but one provides more advantages today while the other provides more advantages tomorrow. Given they are retirement investing vehicles clearly we should think more about the impact when we are 65 then when we are 30, 40, etc. Here is the basics of each…

• Conventional IRA - You put money in up to a set maximum per year. You then deduct your contributions from your income for that tax year. So if you owe taxes on 50,000 dollars for a tax year, contribute 10,000 to your conventional IRA you will then pay taxes only on 40,000. However, the tax is not avoided only differed until the time of withdrawal. When you then withdraw this money in retirement you pay taxes on 100% of the money you withdraw as 100% earned income. Oh and should social security survive till your retirement since a Conventional IRAs distributions are considered “income” it will effect what portion of your Social Security is taxed.

• Roth IRA - With a Roth we change the time of the tax advantage to the future vs. the present. So this year you owe taxes on 50,000 dollars and put 10,000 into your Roth IRA and you still pay taxes on the full 50K. However you will now never pay tax on that 10K you contributed or the interest earned on it EVER AGAIN. So if you are 30 in that year you will earn interest for 30 years or more tax free and you will NEVER pay a thin dime of tax on the earned interest. Also when you do withdraw the money it is already your money, it will never be considered “income”, you won’t pay any tax EVER.

Now some advisers point out that if you will have lower tax bracket in retirement and believe in “fuzzy math” that a conventional can win out. However, we should live in the world of practice vs. theory. What I have seen actually happen is that be it Roth or conventional people always contribute the same amount. What this means is while you will pay taxes on a Roth contribution today you will end up with the same amount of money at age 60, 65 or whenever you start to take the money out. In other words your tomorrow will be better with a Roth.

Now what many people do not even know is that a 401K which an employer provides can also now be set up with a Roth Option. With a 401K your employer takes a percentage of your check and deposits it for you. While 401’s have some restrictions that IRAs don’t they work quite similar in how they defer or eliminate taxes. The beauty is when you quit working you can roll your 401K into an equivalent IRA and that means if you have a Roth 401k you can roll to a Roth IRA and have money you can take as needed, keep inside the account as long as you like and never pay taxes on it or ever have it count as income.

Again though while the option of a Roth IRA is well known today most people are not aware of a Roth 401K so ask your employer to check into the option for you. To me they are better for all workers but for the youngest workers the advantages are even bigger. There is a good chance that your employer may not even be aware that they can offer a Roth 401k and as we said all the time in the Army “the squeaky wheel gets the grease”.

So you’re getting 300 to 600 dollars in a tax rebate check

A few days ago I posted my thoughts about the proposed “economic stimulus” where the government will be giving back about 300 dollars per tax payer in a retroactive tax cut from 2007’s tax year. You can read my thoughts about this tax rebate here. In short though I believe income tax is theft and I am for any and all cutting of income tax for anyone from the poorest to the most wealthy. On the other side though I think this rebate is bad for the country because there will be NO SPENDING CUTS on anything to fund it. All we are doing is going deeper in debt. Again read my full post on this to understand this better.

What I wanted to ask though today is what will you do with your 300-600 dollars in rebates?

Since I posted that orginal post I have been getting many visitors each day finding my blog from Google, they are all searching for things like

• “when do we get our tax rebates”
• “government giving out rebate checks”
• “will we get stimulate the economy checks?”
• “when will we get our government rebate checks”
• “800 dollar rebate checks government”
• and you have to love this one “government giving 300 dollars to everyone“

Now I am not here to criticize anyone but my guess is most of the people doing these searches are just itching to get that “free money” and blow it. Indeed that is “the plan”, yes indeed Uncle Scam (not a misspelling) wants you to spend every dime on consumer goods to “stimulate the economy”. The theory is more spending is good because more money is in circulation.

So please comment below after you read this post and tell me what you plan to do with your money. As many may suspect mine will be invested and many in the government want to not give the money to people like me that will save it. No they want “good Americans” to spend the money and “put it to work”.

So what are you doing with your refund?

• Taking a vacation
• Just blowing it
• Saving it
• Paying on debt
• Investing it
• Not sure yet?

Let us know because it is interesting what happens when you really ask yourself what you will do with extra money. Perhaps just perhaps thinking about this may make a few more of us think about saving this refund for a really rainy day. Trust me if you remember 1978 times are really not that bad right now.

Keep in mind this is not some government “entitlement” this is indeed your money, your tax dollars that you paid being returned to you. To do so your government has grow our debt by BILLIONS more. Again I am 100% for any rebate, any tax cut, any tax abolishment. Just realize that our elected officials did not think about how to fund this thing, they are just buying your votes from you with your own money and charging it along with interest to your children.

So knowing that how will you be spending your money, remember it is indeed yours it is not a gift from our exalted officials.

Managing the expense of moving your vehicle

I remember when I moved my family across many states and 1400 plus miles.    It was an experience to say the least and of course we were a two car family.    So I hired ABF Freight to move our furniture.    They dropped off the trailer and I and friends loaded it, they picked it up and dropped it off at our new home and then took it away after we emptied it.    One thing I really didn’t think about doing back then though was having someone else take care of getting one of our cars from the old house to the new one.

So when I was asked to take a look at a website that provides auto shipping services I thought right away that I may be able to save my readers some money and some headaches as well.    The company is called National Auto Shipping and they offer a variey of services to ship vehicles in a very painless and cost effective manner.

Think about how this went for me. I drove one vehicle down to the new place a week before the actual move with a few things packed inside it.    I then got on a plane, flew back to my family, loaded up with them and made that long 1400 mile drive all over again, this time with a kid, a wife, two dogs and two cats!    It would have more then paid for itself to use someone like National Auto Shipping and today with gas at 3 dollars a gallon it would make even more sense.

Instead I spent 26 hours driving, put lots of miles on my vehicle, had to pay for a plane ticket and had to pay for transportation to the airport.     Worse I spent 52 hours behind the wheel in total and that was a mental strain. I also burned up 3 days of lost income!    So if you have any reason to move a vehicle across the country or perhaps even across a state take a look at National Auto Shipping’s Website.     They offer free quotes so you have nothing to loose by getting pricing for a coming move.

Why cutting interest rates is bad for the economy

Today I installed the contact form plugin for the WordPress blog platform. This is a great plugin that I recommend for anyone using WordPress; any way in just a few moments after adding my contact page, I got my first question. Here it is along with my answer,

“CostCutter, I have seen you do two posts recently stating how great low interest rates are and how anyone looking to refinance or buy is really lucky that rates are so low. I have also seen a lot of people on the T.V. saying that these rate cuts are actually bad. So which is it and why do these guys say low rates are so bad and you say they are so good.”

That is a great question but it assumes that I disagree with the folks saying these rate cuts are bad, actually I agree with them. My posts about low interest rates from today and the coming interest rate cut yesterday do seem to be positive on the rate cuts and they are but only on one dimension. What I am saying is if you need to refinance are are looking to buy a home then the low rates are very good for you as an individual. Therefore you should take advantage of them.

On the other side I actually think that long term these artificial rate cuts are just bad news for the economy. The reality is we have real problems in this nation that sooner or later have to come out. Things like rate cuts and tax cuts with no corresponding spending cuts only delay the eventual recession and every time we delay it we are just making the eventual market correction worse. No one in the government believes they can stop the recession, they just want to soften the landing but my belief and the belief of most economists is they are actually going to make it a much harder landing.

What you have to understand is why cutting interest rates “works” in the first place. The US economy is driven by spending, when spending slows then everything goes down. There are less jobs, less money in the system, less everything. When interest rates are low spending increases because it costs less money to borrow money so you can buy a bigger house, a bigger car, get a better rate on your credit card etc. These cuts cuts in “the prime rate” or how much the government charges your bank to borrow money. The bank of course is not in business for fun they add to the rate and loan money to you so lower prime rate equals lower rates for everyone and in theory more spending.

The problem is this theory only works long term if people are responsible with debt and it won’t help people who are already in the hole. If you are four payments behind on your home you can’t get a refinance loan no matter how low rates go. If you are paying 29% on your credit card your credit sucks and no one is going to give you a low interest one. Our country is in trouble because to many people spent money they can’t pay back and our government has done the same. When we artificially cut rates we simply put more people into more debt. In other words the country goes deeper into the hole and when at some point we are required to crawl out it will be more not less painful.

If this explanation seems oversimplified it isn’t.   In fact I will make it more simple. If your family is in debt and about to go broke and you take your debt of say 200,000 dollars and refinance it to a lower interest rate to reduce your payments it makes the situation better at first. If however, you then grow your debt back to the original payments you could not make then you are in more not less trouble. When our government puts out these low rates and increases personal and business debt in an economy where people are already in the hole it is the same exact thing.

In short I am glad for the responsible consumer that rates are low, I certainly did not want rates risen to higher levels but the reason behind this cut is nothing but a delay that is going to make what is bad already, worse.

Cut costs on international calling

Right now if you are paying very much for domestic long distance in the United States I just don’t think I can help you. There are so many cheap options for domestic calling you kind of have to be stubborn to pay more then a few cents a minute. Or perhaps like many you tossed out your home phone all together and just use your cell phone, many have and there are good reasons to do so.

Now for international calling I generally recommend VoIP service but for some it just doesn’t work and others just don’t call often enough to bother. Additionally if you have gone the cell phone only route and don’t have a cable modem it isn’t an option. So what is the solution?

Try using discount international phone cards for saving money on all your international calling. GetMeCallingCards.com is a great source to shop for many different calling cards for many different needs. For instance I often call Russia to talk to one of my outsource programmers, I found a card for Russian long distance that costs only 1.2 cents a minute, that is a huge savings over even my VoIP rate.

Use this site to shop around they have a great card search tool where you can put in your country you call from and to and get the best rates and more importantly the best terms. Each card they recommend you can view all the details, charges and fine print beyond just the surface rate. Many times the lowest rate is not the best price over all so be smart read and pick the one best for where, how and how often you call.

GetMeCallingCards.com breaks all that down to easy and clear English so it definitely makes my list of recommended sites.

Cut your cost of heating with style

One of our chief goals here at CutThatBill is to help you find creative and cool ways to cut costs so when I was asked to look at a new website about heating and saving money on your costs I was happy to do it. The site is called DESA Online Outlet and they offer great prices on a variety of room heaters. A small room heater is often viewed as something that raises rather then lowers bills but that is not the case when used properly. Match the right heater with the right sized room and you can take the chill out of the room you are in most often and keep your overall thermostat setting lower.

Another cool option is using either ventless gas logs or vented gas logs into your fireplace. I prefer ventless because they provide far more efficient heating and still give you a lot of the feeling of a traditional wood fire. If you really want the look and feel of wood though vented logs will give you more of that. Either of them are more efficient and less costly then wood, (unless you cut your own). One more thing I really liked about DESA Online Outlet is they show you exactly how to cut your winter expenses by 15% rather then just claiming it to be the case.

So if you have a fire place that you don’t like dragging wood in for, would like to cut the cost of your heating or if you just have one room that is always to cold give these guys a visit and see if they have a deal on what you are looking for they certainly make my recommended sites list.

Four things I would start doing online to make money as a newbie

It seems like forever ago when I first built my first website. In fact it was more then 10 years ago and at times it is easy to loose touch with how overwhelming it is for a brand new potential internet entrepreneur who wants to get started today. So I though I would share four ways a new person can begin to get started. None are all that hard but none can be complete with out learning more, these are just starting points.

1. Get a blog and do some blogging for dollars. I suggest you try not to be to obvious about this because Google has begun to give the smack down to bloggers that do this. I recommend you never use the name of the companies that you go through to find business on your blog as you are just asking for problems. What I can simply say is go to google and search for “get paid to blog” and you will find many options.

Now you are going to have to blog for about 90 days and do so at least 4 times a month to qualify for these types of services. Once you do however, you can and will make money. I won’t go deeper right now but will make some specific how to details available in the future. Let me just say that anyone that wants to can put an extra 500-1500 a month into their income column can just by doing this.

2. Learn the very basics of website design and publishing, even a tiny bit of say PHP programming can go a long way. Today if you can slap together a website you can make some money. Spend the money for a good design software and take a course on it at a community college or a CEU class at a university. Total investment may be about 1,000 dollars and it may make you a lot more then any degree will. You don’t have to be a great designer but at least be able to build simple sites, you can out source the actual “graphics” work.

Most sites are nothing but a header, a footer and some pictures. Outsource your graphics and build a site. Make your first site about something you just love to talk about and don’t worry if you make a dime on it. All you need at first is the “ability” to build and design sites. Learn how to do it and do not rely on site builders they are to limiting. Today if you can publish content there are countless ways to make money. Oh and you can pay your tuition with one months worth of blogging with suggestion number one above.

3. Start with affiliate marketing and take your skills from item two to build unique websites that provide information, build email lists and sell a few products around a niche. Later you may and honestly should create your own products and keep all your profits but in the beginning you are learning how to market and sell online so dedicate all your efforts to doing so.

A great source of items that others have made that you can sell for about a 50% commission can be found at Click Bank. Odd are there is a product about any subject you can think of. Most sell in the 50 dollar range and pay about 25 dollars in commission. You don’t have to make anything, deal with customers, etc. This is not a long term way to get rich but it is a great way to learn and earn at the same time.

4. Become an adSense Affiliate and a Yahoo Publisher, neither pay the big money they used to but they are both very passive ways to earn some extra money. In time with enough sites anyone can pull in a hundred dollars a month at least. Remember invest 100 dollars a month from age 18-65 in quality funds in a tax deferred or sheltered account and you are a multi millionaire.

The key with adSense and Publisher is make your ads blend into your sites. The inexpensive wine site I reviewed a few days ago does a good job at this. Use back ground colors that match, make the links the same color as links on your site and above all no borders for the ads. Then be sure to put the ads in prominent spots on your site, don’t hide them remember you want people to click on them.

So there you go 4 places to get started with making money online. Each has its on benifits and challenges yet if you commited to learning how to at least do all four in the next 6 months you are well on your way to truly building a solid and passive online income. In time you out source more and more and you don’t do all the work yourself. Yet in the beginning it is important to be sure you understand things, learn what you want and what you don’t want.

More then that learn to make some money asap and again bloggin for dollars is a 100% guaranteed way to start the income flow. From there you can branch out, learn more and keep building.

One more important thing. Don’t buy over priced crap, info courses and other bullshit. There are countless gurus out there, well countless self appointed internet marketing gurus that claim to have the secret to making money. They are mostly full of crap and even the ones with good info unless you learn the fundamentals first it won’t do you any good.

Start with free advice and perhaps use some of the online video courses that don’t cost to much. Learn basics, learn “how to” and then you can develop “what to” on your own terms. I promise you one of the surest ways to kill of your future in making money online is buying one to many 297 or 997 dollar how to courses.

Don’t buy that crap, start with a blog, learn to make sites, practice with affiliate products and sell ad space along the way with Google and Yahoo. Look for solid how to advice and instruction and limit your spending on “education” to 50 dollars or less a month (other then stuff like the college course I mentioned) and you will in time work things out. Gurus exist not to make you rich, they exist to enrich themselves with your dollars.