Be sure to check out the development of my free eBook, "Stock Investing Basics."

Want to learn how to sell anything online? Here's how.

Updating My BlogRoll

Posted by billspaced | 6:14 AM

As you can see, if you've been here before, there are a ton of changes to the look and feel of the site (I hope you like them). One of the fallouts of my redesign was my BlogRoll. It's grown quite unwieldy.

I want to include links to all my peers' sites, but I'm having a problem integrating it into my new design.

Does anybody have any suggestions on how to do this in a clean manner?

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Credit Card Tricks

Posted by billspaced | 6:01 AM

Credit card tricksCredit cards can be good or bad, it all depends on how you use them. If you let them use you, you're doomed. Make them work for you. Pay off your balance every month and on time and never get close to your limit. If you follow these simple rules, you'll never be subjected to tactics like these:

For example, many banks calculate finance charges using what's called double-cycle billing, a confusing practice that averages out the balance from your previous two bills. So if you carry a balance and pay a finance charge one month, you'll get hit with a finance charge on your next bill as well, even if you've paid off the balance.
Yes, credit card companies want to squeeze every fee from you. But they've clearly, if not in BIG BOLD RED LETTERS, detailed all of the fees and charges they may levy against you in the Terms & Conditions (Ts & Cs, in credit card lingo) that you agreed to when you opened the account. It's in the fine print, of course.

Get familiar with the Ts & Cs. Or obey the rules above and never be concerned with them.

I do agree that some of the tactics credit card companies use are ridiculous. It's true that you don't necessarily know the Ts & Cs until after you open the account. This is completely ridiculous.

BUT KNOW THIS: The credit card companies all employ similar tactics; take the worst offenders and apply their tactics to your particular account and you will never be hit with these fees.

If you're concerned about late charges, and the domino fees and charges that accrue thereafter, put your finances on autopilot.

Drowning in debt: Deceptive credit card practices: Financial News - Yahoo! Finance

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Earn Cash Back Using Microsoft Live Search

Posted by billspaced | 2:04 PM |

Microsoft Live SearchHey all you cash back fiends. If you don't use Microsoft's Live Search, you may be leaving cash on the table. You see, Microsoft really, really, REALLY! wants your search business, so they're paying you to use their search engine; no doubt, they're paying the merchants some cash, too.

Here's what you need to know:

Where: Live Search
How to use it: How This Works
FAQs: Frequently Asked Questions
Terms: Microsoft Service Agreement
Sign Up: Sign Up for Windows Live

Just look for the logo in the picture above and you'll earn cash back from Microsoft, provided you sign up.

Live Search cashback - Live Search

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How Economists Allocate Their Assets

Posted by billspaced | 6:01 AM |

Economists aren't known for their alacrity in the investment world of stock, bonds, and mutual funds. However, as this article illustrates, they aren't too shabby at picking not only the right investments but the right allocation, too.

The American Economic Association had a gain of over 10 percent with their allocation versus the S&P 500 of just a little over 5 percent in 2007. Here's how the economists allocated their investment funds:

Before April 2007 After April 2007
Total bond-market index fund 20% 0%
Long-term investment-grade bond fund 10% 15%
High-yield corporate-bond fund 5% 0%
S&P 500 index fund 45% 45%
Mid-cap index fund 5% 5%
Small-cap index fund 5% 5%
European stock fund 5% 0%
Pacific stock fund 5% 0%
International equities ex-U.S. fund 0% 25%
Emerging markets equity fund 0% 5%

Note the 25 percent increase in International equities.

When Economists Play the Market -

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Real Estate: Does Having an Agent Help?

Posted by billspaced | 6:01 AM | , ,

Real EstateLet me start off by saying that I am a neophyte when it comes to real estate; besides buying my own home a few years back, I have no practical experience with real estate. I know that there seem to be real bargains out there due to the Mortgage Meltdown and subsequent Credit Crunch. We are no doubt in an economic pickle (official economist term) but it's unclear whether we're in a recession. We'll know many months after it's over.

Nevertheless, I think it's important to discuss whether having a real estate agent is beneficial when buying or selling a home.

For a buyer, it seems as though having an agent is free. After all, there is no out-of-pocket money that a buyer has to come up with when buying a house with the assistance of an agent. Agents can also be very helpful in getting data on existing inventory (real estate lingo for "houses for sale"). Real estate agents, because they play both sides of the transaction (though generally not at the same time), often do not show homes that are for sale by owner (more terminology that means that the seller of the house is doing so without an agent).

So, when buying a home, you'll have a wider variety of choices if you use an agent and do some looking on your own through the FSBO (For Sale By Owner) network; you get the best of both worlds.

Getting back for a moment on the idea that a buyer's agent is free. This is a foolish way to look at things; of course, somebody is paying for two agents to be involved in a sale. Typically, when there is an agent on both sides of the transaction (on the buying and selling sides), the agents split the commission, which is usually around 6 percent. Think about that.

A house that sells for $500,000 will have a commission of $30,000. Your agent will get $15,000 and the seller's agent will get the same (usually the split is 50/50, but not always). So the seller's net after paying the agents is $470,000. If the seller used no agent, you could conceivably buy the house for $470,000. Viewed from this perspective, the buyer paid 6 percent and the seller paid nothing.

This is how commissions, fees, and taxes are always paid. The seller may be responsible for paying the tab, but he gets the funds from the buyer.

On the other hand, if an FSBO seller uses no agent, he may think he can get $500,000 for his house. You were willing to pay that before, with an agent, so why not without an agent? It's the same house, after all, whether agents are involved or not.

At the end of the day, an FSBO seller will get somewhere between $470,000 and $500,000. This difference represents the implied value of an agent.

Also consider this: When buying a car, you don't bring an agent along to help you buy it. And when selling a car, you don't hire an agent.

Where agents can make a difference, it seems, is not necessarily in the selling price, but in the length of time a house is on the market. According to Stanford economist B. Douglas Bernheim and Stanford grad student Jonathan Meer (How Much Value Do Real Estate Brokers Add? A Case Study):

Sales commissions for residential real estate brokers historically average nearly six percent of a home’s closing price. Do brokers add sufficient value to justify those commissions? We address this question using a unique data set pertaining to sales of faculty and staff homes on the Stanford University campus. We find no evidence that the use of a broker leads to higher average selling prices, or that it significantly alters average initial asking prices. However, those who use brokers sell their houses more quickly.
Here's where I think a seller's agent proves his or her worth: Right now. When the real estate market was hot, anybody could have sold a home (and they did -- everybody got a real estate license). Yet, all these real estate agents got fat with commissions that I argue they didn't deserve.

Now, in a poor real estate market, people are finding it very difficult to sell a home, even though interest rates are very low (they've come down quite a bit and just might be lower than they were at the peak of the boom).

An agent can help in this situation. Using his expertise in staging a house (getting it ready to sell), his connections, his knowledge of comparable sales, etc., a real estate agent worthy of a seller's commission can get a house sold in this market quicker than an average agent (read: just got into the business because it was easy money).

A successful real estate agent in this market uses all the tools available. An also-ran goes about things like in the "good old days" where selling a house meant putting up a sign and collecting a fat check.

According to a US News report, Is For Sale by Owner Right for You? - US News and World Report,
But while the potential savings are large, so is the task of selling one's home in today's downtrodden market. "It's much more complicated than just putting an ad in the paper and showing your house and having someone buy it," says Judy Moore of Re/Max Landmark Realtors in Lexington, Mass. "The value that a Realtor brings to the transaction is that they are able to provide services on so many different levels—things that sellers can't even anticipate in many cases—because they have that kind of professional experience."
So there you have it. Transacting real estate is a scary proposition for a lot of people; after all, buying a house is most likely the biggest financial transaction you will ever make. Until, that is, you sell that same house for a profit several years down the road. Using an agent as a buyer seems free, but it's not, for you'll pay more for the house than if no agents were involved. Using an agent as a seller would seem to get you more for your house in a down market and sell it faster, but less in an upmarket.

The choice is yours. I know which one you'll most likely take: You will get an agent. Why? Because it's the established, safe way. It's also the most expensive way. If you do use an agent, on either the buying or selling side, make sure that the agent earns his money. If your house isn't selling fast enough for you, fire your agent and get another one.

The only way the real estate market will become more efficient is to squeeze as much of the extraneous costs out of the model while extracting as much value out of all the players involved.

More Bad News for Real Estate Agents
Real Estate Agents, Revisited
Is For Sale by Owner Right for You? - US News and World Report

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Two For Tuesdays: The Shopping Edition

Posted by billspaced | 6:01 AM | ,

Two For Tuesdays: The Shopping EditionLast week we learned how to save money on phone calls. This week, we'll learn two methods for saving money on groceries and other regular goods like shampoo and soap.


In a previous post, I joked about how my family of four eats on $1,000 a month because I had read a number of stories about how families larger than mine ate on as little as $60 a month (and here's one on a family of five eating on $250 per month). It's astounding to me how these folks do it. In short, it takes a methodology that I'm quite sure nobody in my family will ever master. But the families profiled in these stories have a plan, they stick to it, and they're extremely serious about their shopping. They use coupons and store "bonus bucks."

I strongly suggest you read both of the stories above. They offer numerous tips on how to save money on groceries and other necessities. One of the stories even goes into detail about Tip #2: The Drugstore Game.


The Drugstore Game. It sounds like something a meth addict might do, but it's not. It is a serious use of in-store incentives, manufacturer's coupons, and shopping skills. I'm not even going to try to explain it, but I think I might try it.

Here's one example from a shopping outing at CVS:

Adidas deodorant was $4.99 and if you bought it, you'd get back $4.99 in Extra Bucks. They also had some toothbrushes that were $3.99 and you would receive $3.99 back in Extra Bucks. "By splitting it up into several transactions, I can take the extra care bucks I get and use it to pay for the next (items)."

Don't forget, Crissy also had coupons for most of these products. "That's the best when they have anything that's free after the Extra Care Bucks because when you have a coupon you're basically getting paid to buy the product."
She rolls the savings of one transaction to the next, to the next, and so on. Amazing. This is ingenuity at its best.

Here are a few posts on how the "game" is played.

Creative strategies for coping with rising costs - Part Two: The Drugstore Game
New to The Drugstore Game? You're in luck!
Super Savings Saturday at MSM
Play "The Drugstore Game" to Cut Monthly Bills (read the commnets)

So, try your hand at the Drugstore Game. It looks very promising, if not fun.

That's it until next week. I hope your shopping improves after you implement some or all of these tools.

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Best Ways to Begin Stock Investing

Posted by billspaced | 6:01 PM | , | 7 comments »

My blogging friend, AJC over at How to Make 7 Million in 7 Years talked about how a newcomer to stock investing should get started in this post -- What is the best way for a newcomer to get started in investing in stocks?

In the post, he suggests to use the 2 methods that Warren Buffett uses: Index funds or carefully-picked individual stocks.

There are many ways to answer this. For those of us with little time, index funds are the way to go. But for the savings you get in time, you may well pay for it (and then some!) in terms of lower returns. After all, if you picked 5-10 stocks, over a 10-year period, you might get a 20 percent return, whereas an index fund, like the S&P 500, might return 8-10 percent. With $10,000, that return differential means you left some serious money on the table (about $36,000).

If you spend an hour or two researching some really good stocks (start here), you can assemble a portfolio of stocks that most likely will beat the market (i.e., the S&P 500) over a ten-year period or longer.

But if you don't have the stomach or the inclination for it, invest in the market. At least you'll be average, rather than at 0-3 percent, depending on where you put your "savings."

I don't know the foreign markets like I should, but I've done very well investing in foreign mutual funds. In fact, I've had more than 50 percent of my 401k invested in foreign mutual funds for quite some time now. I simply think that the U.S. is only going to grow at a slow rate, if any at all. Surely, our economy won't grow as rapidly as the BRICs (Brazil, Russia, India, and China) in the long-term, probably not even in the short-term.

But because I don't know the individual companies that make up those markets, I simply buy their "market." It's somewhat akin to how we play sectors like telecomm and banking in our own market, but I've extended that strategy to the global market. If I were to take one step further, I might invest in the auto industry, for example, in India, or the waste management sector in China. Both industries are sure to grow by leaps and bounds.

So, the "best way" to begin stock investing is to begin by asking yourself these questions:

  • How much am I willing to risk (don't invest anything in stocks outside a retirement account that you're not willing to lose)?
  • How much homework do I want to do?
  • What is my tolerance for volatility?
If you're like most, you'll do well by investing in the S&P 500 and its global equivalents. You'll do better if you pick a few select stocks yourself (more on this in a future post). Even better still, if you have a really strong stomach and spare time or are contemplating a career change, you can invest in the business of YOU. Start your own business in a niche that others won't touch, like in Dirty Jobs.

Clearly, some of us don't have the stomach to invest in stocks or stock mutual funds. But it all comes down to how much risk are you willing to take for a given return? Answer that question with a long time horizon and stocks look better and better. Over the past 80 years or so, stocks have averaged far more than alternative investments; in fact, they've averaged above-inflation returns whereas bonds and savings accounts woefully underperformed and lost money when inflation was taken into account.

My opinion: Not investing in stocks is riskier than investing in them.

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May 23 Kids & Money Blog Carnival Announcement

Posted by billspaced | 9:20 PM |

I've extended the May 23rd carnival out a week simply because I ran out of time. So to reward you all for waiting, I will take the 7 best posts that were submitted to this carnival and post 1 each day for a week; and, I will also include the other great posts exclusive of the top 7 in their own post as well at the beginning of the week.

7 Best PostsIf you don't see your post, come back each day until you do. Not seeing your submitted post means 1 of 3 things: I rejected the post (unlikely, using past experience as a guide); I missed it (due to getting so many posts and having too many coals in the fire); or, your post was one of the 7 best.

You'll be able to stand out from the crowd.

I think that's a fair deal. So keep on submitting pertinent Kids & Money posts!

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Another Resource for Sharing Money Hacks

Posted by billspaced | 9:52 AM |

Hi all, I've been remiss in mentioning that I have a lens on Squidoo. I'm going to be spending some time freshening the site and adding new tools, resources, links, etc. If you have any suggestions for improving the lens -- or this site, for that matter -- please let me know.

Part of being a member of the blogging community, especially the Personal Finance community, is giving and taking feedback. Most of the time, I'm writing articles that I think you'll be interested in. But I'd like to hear more from you about what you like, dislike, any suggestions you may have, and your feedback and criticism.

I'm pretty thick-skinned, so I'll (most likely) be able to handle it. :)

This site and my Squidoo lens are works in progress. I'm always seeking out ways to improve them.

So, again, please, I urge you to comment on ways you think I could make these sites more valuable to you.

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Quick Post: What's So Special About the Mortgage Meltdown?

Posted by billspaced | 6:01 AM | , , | 0 comments »

Mortgage MeltdownHere's s a great story from one of my favorite web sites, Freakonomics. It describes how the Mortgage Meltdown is really no different from other bursting bubbles. There's nothing to fear here, as long as you're not one of the holders of one of these mortgages. And if you could afford the mortgage before the fallout, you most certainly should be able to now, since rates have actually declined the past few months, thanks to the Fed.

If you cannot afford your mortgage now, you most likely have lost your job. In that case, your mortgage isn't the problem. It's your unemployment. Time to find ways to earn an income other than "working for the man."

What's So Special About the Subprime Mess? - Freakonomics - Opinion - New York Times Blog

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Warning: Chinese Earthquake Scam Reported

Posted by billspaced | 11:41 AM

Warning: Chinese Earthquake Scam Reported - The Collar (

From the story --

The FBI provided a number of tips to help consumers protect themselves from such scams:
  • Do not respond to unsolicited (spam) e-mail.
  • Be skeptical of individuals representing themselves as officials solicitChinese earthquake charity scaming via e-mail for donations.
  • Do not click on links contained within an unsolicited e-mail.
  • Be cautious of e-mail claiming to contain pictures in attached files, as the files may contain viruses. Only open attachments from known senders.
  • To ensure contributions are received and used for intended purposes, make contributions directly to recognized organizations rather than relying on others to make the donation on your behalf.
  • Validate the legitimacy of the organization by directly accessing the recognized charity or aid organization's website rather than following an alleged link to the site.
  • Attempt to verify the legitimacy of the nonprofit status of the organization by using various Internet-based resources, which also may assist in confirming the actual existence of the organization.
  • Do not provide personal or financial information to anyone who solicits contributions: providing such information may compromise your identity and expose you to identity theft.
These suggestions go hand-in-hand with my previous posts on ID Theft here and here.

Bottom line is that you should contact whatever charity or fund-raising entity you want to give money to. Don't ever accept unsolicited communications, whether through email, phone, mail, or in-person. If you take the initiative and call or go down to the local chapter, you'll be much more assured (but nothing ever is or will be 100% assured) that your money will reach its intended recipient.

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Diets: A Random Thought

Posted by billspaced | 11:07 AM

Diets don't workDid you ever notice that only overweight people are on diets? Might this suggest that diets don't work? Just a random thought.

I've found it's best to gain muscle and/or lose fat by going on the same eating plan and adjusting my exercise program accordingly (Want to gain muscle? Weight train, but sparingly, with high intensity. Lose fat? Train more frequently, lighter weights, and do aerobics.).

One day, I'll share with you my revolutionary Color Diet.

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Do You Backup Your Data?

Posted by billspaced | 6:01 AM

If you don't back up your data, one day your data will be lost. Maybe not all of it...but some of it will become unrecoverable. I know. It's happened to me. And I'm a computer geek. I "never got around to it." Just like I never got around to getting a car alarm on my truck quite a few years back -- UNTIL it got broken into.

Don't wait around like I did, waiting for the inevitable data disaster. There are a host of really great backup programs out there. Some are "traditional" in the sense that you go to the store (or download it) and buy it. Some are "freeware." Some are online, like Mozy and Carbonite.

I've used both of these online solutions, and, while limited, they offer some compelling advantages.

I've chosen to back up my stuff on a separate physical hard drive and my most critical gotta have it stuff online. Online is great, too, for the data you need access to at any time but didn't have the foresight to bring with you.Hard drive disaster?

If you wait until your hard drive freezes or fizzles out on you, you can still get your data back. It just may cost you hundreds, if not thousands, of dollars.

It's like the old FRAM commercial: "You can pay me now, or you can pay me later."

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How We Eat on $1000 a Month

Posted by billspaced | 12:21 PM | ,

Okay, so the title of this post is hyperbole. My family of 4 (plus one cat on a gourmet veterinary diet) shops almost exclusively at Whole Foods. Once in a while, we supplement our food stock with items from Trader Joes and Safeway (get 10 cents per gallon off gas if you spend $50, which really is pretty easy to do). In the spring and summer, we buy fruits and veggies at our local farmer's market.

Whole Foods has been nicknamed "Whole Paycheck" because they are expensive. But we shop there anyway. So there.

Inspiration for this post? How We Eat on $250 a Month. This story is about a family of 5 (2 adults, 3 children) who make their household income stretch R-E-A-L-L-Y far. I applaud them.

We find it hard to buy food from the supermarket. As times change, incomes don't stretch as far, and energy costs keep us guessing, we may change our tune. We like Whole Foods. They buy local. So do we. They have a huge variety of organic food. Safeway and others don't. And, since we're going to buy organic (I know, it's not frugal to buy organic), we've done the comparison shopping: Whole Foods is substantially cheaper on the products we're going to buy compared to anywhere else.

I certainly give it up to those who can spend only $10 a week on groceries (or $62.50). I have read that those folks spend 1/2 a day or more shopping and driving around town. I'd rather spend that time with my family. You always pay one way or another.

For us, it's a moral choice, a healthy choice, and a prudent choice.

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Two for Tuesdays: Saving Money on Phone Calls

Posted by billspaced | 6:01 AM | ,

Directory Assistance 411Last week in Two For Tuesdays: Summertime Prep Edition we talked about saving money on home energy use, particularly by keeping out the heat from the summer sun. This week, we're going to show you some novel ways to save money on your phone bill.


Everybody knows by now that I like free better than I like pay-for, especially if the service is equal. Well, in the case I'm about to bring up, you get FREE and BETTER service. The telephone companies make a ton of money on "Directory Assistance" or 411 calls; they're pure profit for the telcos.

Google, in their quest for world domination, has come up with a free version of 411 that involves no human interaction. Hence, better service than the drones at the phone companies can deliver. I've used GOOG-411 for a year or so now and I love it. It's saved me countless dollars in fees (compared to the telco's charge of $1.50 to $2 or more a pop), time, and frustration ("I said, 'Sweet and Savory'"). Something that will always boggle my mind is how Google's voice recognition technology is better than a human at understanding me.

Sure, there are other free directory service companies, but I don't have any experience with them. I've found something that works, that's free, and that's super-easy to use. What more could I want?


I've grown sick and tired of paying $100 a month for a family cell phone plan. My wife, her mother, and I rarely (okay, have never) use the full complement of minutes we get with our Verizon Wireless plan; there isn't even a plan that would suit our minimal cell phone usage. None of the main players in the cell phone arena (Verizon, AT&T, T-Mobile, Sprint) offer plans that suit us.

For those of you who use only about 200 minutes a month, a pay-as-you-go, or prepaid, plan is the way to go. There are a few players in this area (all the major cell phone companies listed above haveVirgin Mobile prepaid calling plans their own prepaid plans), but the one that is most intriguing is Virgin Mobile.

First of all, 200 minutes costs $20. Yes, that's 10 cents a minute, which sounds kind of high. But when you compare that to the 200 minutes a month I use and pay $40 to get (that's 20 cents used minute), it seems downright cheap.

Often, Virgin Mobile has promos or coupon codes that you can use to get minutes at a lower unit cost. You can also "top up" (is that a British term?) at any time, and if you don't use your minutes in a given month, they roll over to the next month (of course, there are limits and stipulations to this, buyer beware.

The one shortcoming is the lack of choices for phones (and, unlike the non-prepaid plans, these phones are rarely free). But I use a phone for calling people. I don't need a camera (I have one) and I don't need an mp3 player (I have one of those, too). Bluetooth is mandatory (I live in Moscow, I mean, California, where hands-free calling is the law). But what else is necessary?

Call quality, ease of use, battery life, and price, in that order. You will find a phone that meets those requirements.

There's a few really good posts by The Happy Rock about how he ditched Verizon in favor of Virgin Mobile, where he talks about the great deals he's found. Here are two of his posts:

Setting Up a Prepaid Virgin Mobile Cell Phone Account
Virgin Mobile Deal: $60 For One Year Of Prepaid Virgin Mobile Service

That's it for now. Until next week...

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Worry? Me Worry? (The Sky Is Falling)

Posted by billspaced | 2:03 PM

We all take life too seriously. Especially those of us in the PF world. Let's lighten up and enjoy the fruits of our labor while we can. And then,

Settle down, move all sharp objects out of reach, relax, breathe deep, and...

Read this.

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Beware the Latest Credit Card Scam - Alpha Consumer (

Posted by billspaced | 6:01 AM

credit card scamsIncreased credit card scams always come about when the economy tanks. I guess it's easier money...

This one is about the "fraud department" calling you about suspicious activity on your account. Once you reveal some small --yet critical -- details, your card is used by the thief to max out your card and buy a bunch of crap that you never get to enjoy.

More in the link below.

Beware the Latest Credit Card Scam - Alpha Consumer (

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Quick Post: Coupon Codes Mall All Coupons, Discounts and Promo Codes |

Posted by billspaced | 8:26 PM |

Some fantastic deals here --

Coupon Codes Mall All Coupons, Discounts and Promo Codes |

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Top Ten States: By Foreclosure Rate

Posted by billspaced | 6:00 AM | ,

10 Worst Foreclosure States

  1. Nevada 1 in 146 HH (households)
  2. California 1 in 204 HH
  3. Arizona 1 in 224 HH
  4. Florida 1 in 242 HH
  5. Colorado 1 in 349 HH
  6. Maryland 1 in 380 HH
  7. Georgia 1 in 422 HH
  8. Ohio 1 in 432 HH
  9. Michigan 1 in 440 HH
  10. Massachusetts 1 in 539 HH

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Farm Bill: Skewed Perspectives?

Posted by billspaced | 6:00 AM | , , ,

farm bill
You gotta wonder what the folks in Congress are up to, besides up to their eyeballs in special interest money! I'm a regular reader of Greg Mankiw's Blog. Greg used to be the top Bush econ dog, but he quit a few years ago and went back to teach at Harvard. (It's a terrible life!) He regularly posts emails and other correspondence he gets from Bush advisers. This is one of those:

A few of us have been debating the question “Which is the most important reason for the President’s veto of this bill?” Candidates include:

Too much spending: The bill increases spending by almost $20 billion over the next ten years, at a time when net farm income is at an all-time high. Much of this additional spending is disguised by budget gimmicks that take advantage of formal scoring rules to hide real spending increases.

New sugar program: The bill would make the government buy sugar for 2X the world price, store it, then resell it at about an 80% loss to the taxpayer. Sugar sells for about 11¢/lb on the world market. The US government would have to buy sugar for about 22¢/lb, store it, and then auction off the excess to ethanol plants. We estimate that such an auction would net the government about 4¢/lb. In addition, this new provision would require the government to guarantee that domestic sugar producers get 85 percent of the domestic sugar market.

Subsidies for rich farmers: Farmers would be eligible for government subsidy payments if their incomes were as high as $1.5 million if married, and up to $750,000 if single. We had a big fight with Congress last year over whether families with income of 3 times the poverty level should receive taxpayer-subsidized health insurance. This bill would subsidize amarried farming couple with income more than 107 times the poverty level (which is $14,000 for a couple). Put another way, such a couple would be in the top 0.2% of the income distribution. You would be subsidizing their business with your income taxes.

Getting the best of both worlds: “Beneficial interest” is a provision of current law which allows you to lock in a government subsidy payment when the market price for your good is low, and then hold the actual good and sell it when the market price is high. You thus get the best of both worlds – subsidy payments as if crop prices were low, but profits from selling your good at a higher price. The President proposed a “pick-your-price” reform, in which you lock in the subsidy at the same time that you lock in the sale price, so you can’t play timing games. The conference report does not include this reform, and continues the practice of current law.

Using food aid $ inefficiently: Under current law, US food assistance for hungry people around the world must be spent purchasing US crops. The President proposed to allow up to 25 percent of US global food assistance to be spent purchasing food from local farmers (in the country where the people are starving). This allows US dollars to be spent purchasing food, rather than paying transportation costs. It also encourages the development of farming infrastructure in these countries. Congress failed to include this forward-looking policy that will help save lives overseas. This means fewer starving people will get food, and these countries’ farming infrastructures will be less well developed.
It's amazing to me, from a purely economic standpoint, that we still have farm subsidies. There aren't many "small" farmers left, mostly huge conglomerates who set the prices and get subsidies all at the same time. Farm subsidies have been outmoded. They're no longer necessary. In fact, they're counterproductive.

One more thing: Ethanol from corn and sugar, as a viable alternative to oil as an energy source, is the biggest hoax on the planet. Government mandates to increase ethanol production from crops has caused, and will cause more, food shortages and sharply increased food costs, while at the same time has not, and will not, provided any energy benefits.

Greg Mankiw's Blog: Farm Bill Veto

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Saving Money on Home Energy

Posted by billspaced | 9:43 AM | , ,

It's getting hotter outside, so it must be time to adjust my power utility bill payments upwards! My wife and I and our two boys live in an old (built in 1951), small (1,034 square feet) house with 3 bedrooms, 1 bath, and 1 car garage in the flatlands of the Easy Bay Area, where temperatures can reach 100 plus during the dog days of summer (and even into the 110+ range for a few horrific weeks).

I just looked at our energy bill for the past year and noted something very alarming: We consume more energy than most of the similar homes in our area! We try to be very conscious about our energy use. We turn off lights when we're not using them, open windows when it's cooler outside than inside, we've put CFLs in all the sockets where we can, etc.

But we do run the A/C in the summer and the furnace in the winter, quite liberally. I grew up in a house where we had to wear layers of clothes because my grandparents didn't (couldn't?) pay huge power bills. $60 used to be a LOT of money to pay PG&E (our local energy utility company) when I was a kid. I pay WAY more than that now. But that's to be expected. So imagine my horror when I saw this:

energy use graphYikes! I use darned near the most power in my neighborhood. Now, I can attribute some of that to the fact that I have 2 small children. We wash and dry a TON of clothes, every day, multiple times per day.

My sons also run hot, so we keep the house relatively cool (or at least we try -- see a future post tentatively entitled "Not Burning Down the House"), around 74 to 76 degrees F in the summer.

We do this by opening windows when it's cool outside in the early morning, and sealing up the house when it's hot outside. We're researching the purchase of either an attic fan or a whole-house fan; right now, we're weighing the costs versus the benefits.

Nevertheless, our house must leak like a sieve. I'm at my wits' end trying to figure out how to conserve dollars by conserving energy. Is there a huge bang for the buck that I'm missing? Need I unplug everything to save $20 a year?

We do everything that I've suggested in my weekly Two for Tuesdays posts with respect to saving energy. We wash our dishes after we go to bed and we let them air dry.

Next on our list, after the attic ventilation project, is to tint the West-facing windows and perhaps put up awnings or build a patio on the West side of our house. Insulation is out of the question, as our house, as I've said before, is old and it's made of stucco. We've consulted with a few experts about insulating the walls, and there are only two ways to do it: Re-do the drywall on the inside of the house and insulate while we're at it (this will NOT happen) or blow it in from the outside. This is not a good option either, due to the way houses were built in the '50s -- many, many, many holes would have to be drilled for the blown-in insulation installation, then a repaint. It would be rather costly.

Since we'll only be in the house the next year or two, how much should we invest? With the housing market the way it is, I don't really want to invest anything in it.

But we've got to find a better way to keep the house cool and save some money on the energy bills.

Any suggestions?

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20 Free Ways to Save Money

Posted by billspaced | 6:01 AM | , | 0 comments »

Save Money
Consumer Reports is one of the best magazines around to help you save money. The link below will take you to a list of 20 ways to save money right away. It's a very good list.

  1. Wash clothes in cold water.
  2. Hang it up.
  3. Don't overdry your laundry.
  4. Let the dishwasher do the work.
  5. Put your PC to sleep.
  6. Turn down the heat in the winter, and turn down the cool in the summer.
  7. A cold hearth for a warmer house.
  8. Lower the shades and raise the windows.
  9. Put a spin on home cooling.
  10. Take care of your air conditioner, and it will take care of you.
  11. Spend less for hot water.
  12. Think twice before turning on the oven.
  13. Use the right pan.
  14. Read the label.
  15. Dust off the Crock-Pot.
  16. Clean the coils on your refrigerator using a tapered appliance brush.
  17. Drive steadily--and a bit slower.
  18. Roof racks are a drag.
  19. Stick with regular.
  20. No loitering.
  1. A tighter home is a toastier home.
  2. Try do-it-yourself low-E windows.
  3. Use a programmable thermostat.
  4. Switch to those funny-looking fluorescents.

By the way, Consumer Reports is one of the few magazines where I'd say that the subscription is worth the cost -- and then some! - 20 free ways to save energy

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Quick Tip: Packing a Consumable? Forget Dry Ice

Posted by billspaced | 10:16 AM

Got something you need to ship and keep cold? Dry ice is normally used for such a thing, but it's kind of difficult to get and it is not as good as this:

Frozen peas.

Really, any frozen veggie. I got this tip from my brother-in-law, who works at a UPS Store. They do it all the time. It's cheap, easy to get, and lasts a really long time.

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What You Don't Know About Your Credit Score

Posted by billspaced | 6:07 AM | , | 0 comments »

FICO credit scoreThis post was written by Debbie Dragon (see note below).

It wasn't that long ago when the majority of people didn't realize they had a “credit score”. It was generally understood that there was a credit history saved on each individual who had borrowed money at some point in time- but the fact that there was a credit score wasn't as widely known.

Most everyone is aware of the credit score now, specifically, the FICO credit score that's used by the majority of credit lenders to determine an individual's creditworthiness. Now that we all know we have a credit score, you may be surprised to find that there are several things you don't know about your credit score:

  • Your credit score is taken into consideration by most automobile insurance companies when calculating your auto insurance premiums.
  • Your credit score can be the reason you are denied employment at certain companies (or the reason you land the job over someone else who may even be more qualified according to previous work experience or education, but who happens to have a lower credit score!)
  • The calculation of your credit score does not take into consideration your debt to income ratio. In fact, the credit score doesn't even consider how much money you earn, where you work, how long you've worked there, or whether you're working at all.
  • Your credit score doesn't consider how much credit you have available to you. Most people are under the assumption that having tens of thousands of dollars available to them will lower their credit score, when in fact- it's the amount of credit you are using in relation to the amount you have available that is used in the calculation of your credit score. If you have $5,000 of credit available to you and are only using $250, you're in good shape and will have a higher score than someone who has $5,000 and is using $4,500 of it.
  • Your age, gender, race, nationality, marriage status and where you live don't make any difference when it comes to credit scores.
  • If you owe a percentage of your pay in child support obligations, the credit score doesn't care (or even know about it- it's not reflected in your score at all!) This is true whether you pay 19% of your pay in child support payments or 80%.
  • If you find yourself having difficulty managing your debt effectively, you can join a credit counseling program without fear that it will be reflected in your credit score. The score doesn't take into consideration whether you are receiving counseling for credit reasons or not.

Debbie Dragon is a writer for, where she writes about credit cards, rewards programs and personal finance issues.

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Two For Tuesdays: Summertime Prep Edition

Posted by billspaced | 5:43 AM | , ,

Last week's Two For Tuesdays: The Food-Poisoned Wife Edition was about how to save money by buying local and by buying an Entertainment book (by the way, the wife is doing well and I suffered no ill effects from the dropped steak sandwich. I guess the five-second rule applies). This week, we talk about how to save money by preparing our homes for the summer.

Where I live, in Northern California, the weather is pretty moderate most of the year. There are a few weeks of the year where it's unbelievably hot (over 110 degrees Farenheit) and cooling the house becomes almost impossible. No matter what you do, the A/C alone cannot cool the house down to less than about 20 degrees less than the outside air temp, so the trick is to help the A/C by keeping the house as cool as possible in the first place.


The first trick is to get the heat out of your attic by installing an attic, or whole house, fan. Doing so will work wonders for keeping your house cool and keeping down your energy bills. Your A/C will thank you, too, in terms of running more efficiently (a unit that runs all the time doesn't work very well) and lasting longer.

According to Popular Mechanics,

These inexpensive fans are thermostatically controlled so they run only when they're needed. When you consider that attics can reach 150 degrees F, and that attic heat accounts for 20 percent of the average cooling bill, these fans are a good investment. Most can be installed for around $100.
Sure, you have to spend a little to save a lot. Home Depot and Lowes sell a few varieties of these types of fans. The most interesting one is the solar-powered fan. They're more expensive but they use 0 electricity; all the power the unit uses comes from the solar-collector panel that comes with the unit. A good hybrid is a unit that uses both the sun's energy and your home's energy: In the evening the fan will work too. Oftentimes, in my house as an example, the heat inside the house and the attic rises as the outside temp falls. Think of your house as a sponge: It takes a while for the sun's energy to sink into your house.

So while the temp is falling outside, the temp is rising in your house, but the sun has set already (thus not producing any power for your attic fan). So, if your attic fan runs on both solar and electricity, you get the best of both worlds. One day, when all homes are solar-powered (or at least solar-enhanced), this hybrid solution will be rendered moot (in a truly solar-powered house, batteries are used to store the excess power that the solar panels take in).


Windows are a huge heat-exchanger, but not in a good way. First of all, if you're running an A/C, you'll most definitely want to close all of your windows; no need trying to cool down the entire neighborhood. But south- and west-facing windows let in a huge amount of heat. It may be too late now to plant some trees, but you can try to keep the heat out in other ways. Various physical barriers are the way to go.

First off, install some UV film on your offending windows. This will trap a little heat. Install awnings, too. This is one of the most effective ways of keeping south- and west-facing rooms cool. My bathroom window allows a ton of heat to come into the house. Last year, I "installed" a towel over the window (I tacked it up on the outside of the house) and it helped a great deal in keeping the bathroom, as well as the rest of the house, cool.

This year, I'm installing an attic fan, UV film on the windows, and awnings on my west-facing windows. I hope that it helps us keep our electricity bills within reason. But my greater aim is that it keeps the house cool. We have two small boys who tend to run hot anyway. Doing what we can to keep them cool will keep us all more comfortable.

That concludes this week's edition of Two For Tuesdays.

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Blog Carnival Roundup

Posted by billspaced | 8:07 PM

Nest EggMoney Hacks had a couple of blog posts featured in Blog Carnivals last week!

Two for Tuesdays: The Food-Poisoned Wife Edition was featured in the Carnival of Personal Finance #152 at Money Under 30.

Some notable posts from the carnival were

Getting Out of Debt, Part 3 was in the 139th Carnival of Debt Reduction: Debtors Prison at DebtFREE-Revolution.

Some notable posts from the carnival were
So there you have it. Plenty of reading for the next few days! These carnivals are well-presented and the hosts have done excellent jobs at creating readable, interesting, and informative carnivals and are to be commended for their creativity and diligence.

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Michael Jackson Avoids Foreclosure

Posted by billspaced | 4:02 PM | ,

Even rock and sports stars have fallen prey to the Mortgage Meltdown. First Jose Canseco, now Michael Jackson. Wait!

He said Beat It! And he did. At least for now. A private equity firm bought Neverland Ranch from the bank holding the mortgage, so at least for the time being, Jackson still "owns" the hell hole.

The picture on the left (right below us) is how Jackson looked before the Meltdown. The picture to the right is how he looks now that his net worth is negative. I joke, but the Mortgage Meltdown isn't nearly as bad as everyone in the media wants you to believe. It's as if they want to accelerate everyone's demise. It's dreadful.

Not that it won't get worse (it will). But it will come back sooner than a lot of "experts" think. You know why? Land is the only thing "they're not making more of" that us ordinary folks can buy (we can't buy crude oil or platinum).

Here's an interactive map from the Wall Street Journal that lends some credence to the axiom that real estate is not a national market like stocks or bonds, but many local markets that are affected by macroeconomic change but not nearly so much as the microeconomic forces at work like supply and demand. Look at San Francisco (up from the "peak"). Same for Seattle.

Will they follow? Doubtful. They are such small geographic areas and people want to live there.

Michael Jackson Dodges Foreclosure - The Home Front (

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Stock Market Performs Better Under Democrats

Posted by billspaced | 6:01 AM | 0 comments »

stock market returns
Two studies published in the last few years have shown that the US Stock market performs better under a Democratic president than a Republican. This is a little surprising to me. What does it mean?

I don't know. But if I had some money invested (I do), I might want to consider this (I will).

One of the studies shows that the market performs significantly better under a Dem. The other study shows that the market is less volatile.

Better performance and reduced volatility? Sign me up!!!

Seriously, is it because Republicans "set the table" with lower taxes, reduction or elimination of stifling regulation, are pro-growth, and claim to be supply siders,


Is it because the Democrats know more about the economy?

I think it's some of both, and then some. But to an outsider with the only facts of less volatile and better performing markets when a Democrat is in office might just pick a Democrat.

I don't like to talk politics here (if you want my views on that, and then some, go here.), just personal finance and economics. Take these two research reports under advisement. It's fun to think about all the causes and effects and coincidences. But I think that's all we can do here.

Stock markets historically do better under Dems than Reps. - Jan. 22, 2004

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How the Government Increases Its Share of Your Money

Posted by billspaced | 10:32 AM |

Below is an article that shows how our federal government increases its take of our money without raising taxes or monkeying around with the tax code.

And we all go along with it.

The Coming Tax Hike
Wall Street Journal

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Kids & Money -- May 9, 2008: The Found Edition

Posted by billspaced | 6:01 AM | , , , | 2 comments »

Kids and MoneyWelcome to the May 9, 2008 edition of Kids & Money. Last week's edition, The Lost Edition, is followed by The Found Edition (get it? Lost and Found); but the Finds here are great. All of the posts below have something very important to say and you can learn a lot from each and every one of them.

My Pick of the Week

My favorite post this week comes from a blogging friend, Tim, from the The Money Kings, who wrote the post, 10 Big Time Family Money Mistakes, saying, "Believe it or not, plenty of people need to be thinking of the following when dealing with money, relationships and family. Some of you people just don’t get it. Here are 10 Big Time Family Money Mistakes." Here are a few:

  • Not saving enough money for college
  • Having too many pets
  • Owning a huge SUV
  • Tanning (this one is really funny)
More here.

Learning About Personal Finance

Larry Ferlazzo presents The Best Sites For Learning Economics & Practical Money Skills posted at Larry Ferlazzo's Websites Of The Day For Teaching ELL, ESL, & EFL, saying, "The best online sites for students to learn financial literacy." While the sites listed in the post are geared towards ESL students, all are worthy of our children's attention. Starting kids out right on the path to financial responsibility is key to their growth into adulthood.

Uncle Leo presents Uncle Leo Rumbles: How to Teach a Child to Manage Money and Save posted at Uncle Leo Rumbles. More sound advice on how to teach our children about personal finance.


Silicon Valley Blogger submitted Hooked On Credit! 5 Ways The Credit Card Companies Get Our Kids To Sign Up » Money and Personal Finance Blog In Silicon Valley posted at The Digerati Life, saying, "A look at kids and credit." There are some truly genius marketing ploys aimed right at our children. The best advice: "Just say NO."

Matthew presents Credit Card Companies posted at Conservatives and Normals . Com - The Blog, saying, "Thank you." Yeah, credit card companies kill us with fees: Late fees, Returned payment fees, Overlimit fees. Best teach our kids to pay our bills on time and not go over limit.


Steve Faber gives us Investing for Kids posted at DebtBlog. There is some really good information here about the Uniform Gift to Minors Act, or UGMA.


KCLau presents Don’t be stupid! Keep paying. posted at KCLau's Money Tips, saying, "About why paying for premiums for existing policies can be the best savings that you have." This is true: If you already have a policy, by all means, keep paying it. Otherwise, buy term life insurance and invest the difference.

Student Loans presents What Effect Does It Have On The Economy When Companies Stop Offering Student Loans? posted at My Investing Blog, saying, "no student loans might make it tough for our kids!" Yes, the Credit Crunch (read more here, here, and here) is taking its toll on all sectors and facets of the economy and society. Time will tell when the tide turns, but for now, better learn to tread water.


Mark Montgomery presents College Applications: They Can Make You Sick posted at Great College Advice, saying, "The college application process can be very stressful--so stressful, in fact, that kids become physically ill. To say nothing of the parents!" Yeah, it was a long time ago for me, but just reading this post made me feel ill.

That concludes this edition. Submit your blog article to the next edition of Kids & Money using our carnival submission form.

Past posts and future hosts can be found on our blog carnival index page.

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Buyers Flocking to Compact Cars

Posted by billspaced | 6:01 AM | 0 comments »


From the New York Times story:

"But with oil prices expected to remain high for years, auto industry executives are seeing a turning point."
They said this in the 70s, too. And the 80s. The 90s? Not so much (everybody's stomach was full and bank accounts were dripping with IPO riches). Now? They are saying it again. One day they may be right.


Originally from Greg Mankiw's Blog.

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Need a Financial Calculator?

Posted by billspaced | 6:01 AM | , , | 0 comments »

financial calculatorIf you're like me, you often need to perform a calculation for something, but the mind (mine, at least!) being what it is, I often forget how to do it.

That's why I love online financial calculators. They not only save time, but they're fun to use to play "What If" games. As in, what if I quit smoking? How much money will I have saved (it's more than you think)? Or, how much will that $2,000 I invested in an IRA when I got my first job grow to when I'm 70 (again, it's more than you think)?

I've used quite a few online calculators in my day. One I came across recently is It not only has the garden-variety Savings Calculator, Mortgage Calculator, and Car Loan Calculator, but it also has the afore-mentioned Cigarette Quitting Calculator, the Pack a Lunch Calculator, and the Millionaire Calculator (try it here).

Here are some more useful online calculators:
Washington Mutual Mortgage Calculator

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Quick Post: Check Out My Free Magazines!

Posted by billspaced | 9:40 PM | 0 comments »

Quick Post: I have a new link up there called Free Magazines! There are literally dozens of free magazines to choose from. I've subscribed to a lot of these over the years, both the free way and the paid way.

Let me tell you, free is better!

Some of the best:

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Two for Tuesdays: The Food-Poisoned Wife Edition

Posted by billspaced | 12:01 AM | , , | 0 comments »

Two for TuesdaysUPDATE: This post was featured in the Carnival of Personal Finance #152

Last week's Two for Tuesdays edition was called the "Vice Edition" because it was about quitting bad habits. This week's edition is called "The Food-Poisoned Wife Edition" because, well, my wife was sick today with bad stomach monkeys and I stayed home to care for her and our 2 boys (a two-and-a-half and a 7 month-old). Wow. What she, and any mother goes through on a daily basis is more than I do in a week! High praise to all the people who are able and willing to raise children while the spouse goes off and "works."

We took an early-morning walk downtown, which was having an arts and wine festival. We walked around quite a bit and worked up a really big hunger. I hate paying for generally poor quality food at extremely high prices. Saving money is NOT something you do when you go to one of these things.

But we decided to take the plunge anyway. I got a ribeye sandwich, something I had never had before. My wife got a teriyaki bowl with rice and chicken. We found a place to sit down. Everything is going smoothly. My 7 month-old was asleep, his brother was hungry and we were ready. Except I forgot something. I went to go get it and then...

It happened.

My son took my sandwich out of its wrapper and dropped it meat-side down on the bus stop bench we were using for a picnic table.


$8 down the drain. But me, being a frugal guy and all, decided to eat it anyway. And, boy, that was the best steak sandwich I'd ever had! So, in a sense I saved money by not buying a "clean" sandwich.

Now, on to the tips.


Buy local. Not only is doing so supporting your local merchant, but it's also saving you gas. At nearly $4 (and already over in some places), you cannot afford to drive 20 miles to your favorite mall or super grocery store. Buy your staple goods once a month (or less) at Costco, Sam's or some other discount store, but buy your fresh veggies and fruit from a local merchant.

There is a third benefit. You're not only supporting your local farmers and other merchants, you're not just saving gas. You're doing more. By selling much of his inventory at the local grocer, your farmer is not having to ship his goods to farther-away locations. This is saving the planet.

Find a local farmers' market here. And if you shop carefully, you can also save money versus a big-box supermarket like Safeway or Albertsons.


Buy an Entertainment Book. These things are terrific! You'll save the cost of the book the first or second time you use it. Seriously. They have coupons for everything from dining to shopping to travel plus movies and events. We buy one of these each year and save a TON of money above and beyond the cost of the book.

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