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These days, it’s not about who has the flashier designer clothes or the faster car – it’s about who has the higher credit score! That’s because the better your score, the better position you’re in to manage your financial future.

Why? Believe it or not, have a strong credit score is one of best ways to save money, says financial lifestyle expert Denise Winston, founder of Money Start Here, which produces financial seminars and DVDs. “Your credit score can determine if you get your dream job, your auto insurance rates, the cost of future loans, if a landlord will rent you an apartment, and much more,” she says.

In order to become a “first class” credit user, start by adopting the strategies of these top-tier score holders.

Credit is No Laughing Matter: Jim Dailakis
Credit Score: 760

New York City-based actor/comedian Jim Dailakis may be a clown on stage, but when it comes to his financial status, he’s straight as an arrow. The Australian-born performer owns two homes and pays his bills on time without fail.

His strategy: “I see when the due date is and then put it on my electronic calendar on my computer,” Dailakis explains. Then, he says, he makes sure he has enough to pay the total amount, to the penny, every time.

Why you should try it: “It’s very liberating not to feel the ‘wolf’ pounding at my door,” says Dailakis. “I’ve definitely acquired financial discipline.”

Lesson learned: Keeping up with your credit can be a challenge, says credit consultant Wayne Sanford of YourCreditSpecialist.com. He suggests setting up an online auto-pay. “This way, you can have the amount you need transfer directly to your creditor and not pay any extra fees.”

Extra Credit: Anna del C. Dye
Credit Score: 804

Anna del C. Dye, a new-fantasy author from Salt Lake City, UT, is proud of her long-lasting marriage as well as her financial acumen over the years.

Her strategy: “When my husband got a raise 10 years ago, we opted to add it to the principal in our mortgage rather than our monthly expenses,” says Dye. “We lived on the same income as before and paid our house faster.”

Why you should try it: “Our house is ours and so is everything in it,” says Dye. “Now we can eat out more often, help others, go to the movies more often, and travel around the world. We get to play and have fun when we are still young.”

Lesson learned: “Our culture’s lenient attitude toward debt is harmful,” says Peter Dunn, personal finance expert and author of 60 Days to Change. “If you want great credit, you must develop an urgency to become debt-free.”

Divorced from Bad Credit: Tammie Aaron-Barrada
Credit Score: 789

Tammie Aaron-Barrada’s first husband essentially ruined her credit just by having his name on her cards, and running her into debt. After they broke it off, she was left to claim bankruptcy. The entrepreneur and inventor from Ruffs Dale, PA, has since made rebuilding her credit top priority.

Her strategy: Aaron-Barrada had to made wise decisions to reestablish her credit standing. She took out 90-day same-as-credit accounts to buy new furniture that she could afford, as well as made sure she put utilities in her name and paid those bills on time.

Why you should try it: Aaron-Barrada says having great credit gives her peace of mind, should an emergency ever arise. Building back up to a high credit limit means she won’t be left high and dry ever again, and has a better credit score to show for it.

Lesson learned: “When you make someone a joint-account holder or you co-sign a loan, you become fully responsible,” warns Denise Winston. She recommends checking your potential spouse’s credit report and finding out if he or she owes back taxes.

“Your credit score has the potential to determine the quality of your life,” says Winston. “It can potentially cost you thousands, if not hundreds of thousands, of dollars over your lifetime.”

Are You a Credit Score Wannabe is provided by Experian.com

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When Jeannine Pesce, a 37-year-old mom from Manahawkin, New Jersey, decided to quit her job and go back to school to become a nurse, she was sure it was a smart move toward a more secure future. But she’s planning to buy a home in 2010 and is worried her lack of income will drag down her credit score.

“This is a common myth I think a lot of folks assume is true,” says Curtis Arnold, founder of CardRatings.com and co-author of The Complete Idiot’s Guide to Person-to-Person Lending. “Income might affect your ability to get a loan (depending on the creditor), but it legally should never affect your credit score, either positively or negatively.” When computing your credit score, credit bureaus only look at items such as your payment history and how much debt you owe; personal information like your gender, age, and location can’t legally be considered. And while residing in a famous zip code like 90210 may be fun, says Arnold, it won’t improve your credit.

These days, many of us are doing some serious head scratching when it comes to credit scores, partly because there is a lot of false information swirling around. How can you move forward with your financial life if you’re muddled with misconceptions? Read on as seven more myths are debunked, leaving you with the “real deal” credit information you need when purchasing a home or taking out an auto loan.

Myth 1: Checking your credit will lower your score.

Checking your credit report will never affect your score, says Arnold. Thanks to the Fair Credit Reporting Act, you’re entitled to one copy of your credit report a year from each of the three major credit bureaus. Arnold says you can order them as many times as you want (by paying for subsequent reports) and it still won’t adversely affect your score. If you do apply for credit by filling out an application, though, your score might be slightly pinged.

Myth 2: Shopping around for a loan will hurt your credit score.

Not anymore. In 1999, the scoring model was changed so that consumers wouldn’t be penalized for comparing rates within a 30-day window, says Heather Wagenhals, author of the Unlock Your Wealth crisis management and financial wellness series. However, if you shop for a credit card one day, a boat loan the next, and a mortgage the day after that, the underwriter may wonder whether you were denied or if the loan hasn’t hit your report yet.

Myth 3: If you don’t use your credit card account, you’ll lose your credit line.

As a credit fraud measure, your lender may stop reporting your trade line for lack of activity, says Wagenhals. “Your scoring is based in part by open and active trade lines,” she says. “Thirty percent of your score is based on timely payments. If there is no payment due, you may be missing out on a possible one-third of your credit score.” According to Wagenhals, it’s much better to charge your credit cards up to the amount you can comfortably pay off each month and rotate cards to keep them all open and active.

Myth 4: If you co-sign on a loan, your credit score is not affected.

According to Patrick Ritchie, author of The Credit Road Map, when you co-sign on a loan, you are equally liable (along with the primary borrower) to repay it. This debt will appear on your credit report and will have the same ramifications as if it were your debt exclusively. “Consider the payment ramifications,” says Ritchie. “If you have co-signed for someone and he or she is 30 days late on the payment, it will hurt both of your credit scores. In the case of co-signing on credit card, they may pay on time, but if the card is maxed out, the impact on both credit scores can be dramatic.”

Myth 5: It’s impossible (and takes forever) to dispute information on my credit file.

By law, the credit bureaus have only 30 days to complete an investigation on your credit file – all you have to do is request it, says Gregory B. Meyer, community relations manager at Meriwest Credit Union in San Jose, California. “If they cannot determine the validity or accuracy of an item or if it was determined to be out-of-date/expired, it is supposed to be removed from your credit report,” he says. When you mail your investigation request to the credit bureau, Meyer adds, you must mail copies of the request to the creditor as well.

Myth 6: After saying “I do,” your credit scores are married, too.

It’s a common misconception that credit scores are united in marriage, says Ken Lin, CEO of Credit Karma, a credit-score management service based in San Francisco. While you may share financial obligations in marriage, your credit scores will remain separate.

However, your spouse’s credit habits can affect your credit score, specifically activities like paying bills on time. “If your spouse has had credit problems in the past, make sure he or she is committed to a healthy credit future before you agree to co-signing or opening a joint credit account.”

Myth 7: Turning to a credit-counseling service will hurt your score.

“Credit counseling by itself most definitely does not hurt your credit score,” says Ken Clark, certified financial planner and author of The Complete Idiot’s Guide to Getting Out of Debt. “There is no place to report such a thing on the actual credit report, which is the basis for your credit score.”

According to Clark, this myth surfaces because of people who end up working with for-profit debt settlement agencies that deceptively market themselves as “credit counseling.” When these organizations negotiate a repayment plan or debt settlement on your behalf, says Clark, this can cause a drop in your credit score, since it is a further demonstration that you were unable to handle your use of debt wisely.

Credit-Score Urban Legends – Busted! is provided by Experian.com

The World Is Yours… If You Don’t Get Cocky

“Say hello to my little friend.” ~ “Scarface”

Like the submachine gun Tony Montana wielded in “Scarface,” your credit cards are powerful. They can open doors, but they don’t make you invincible.

Denise Winston, money expert for Money Start Here, says, “Just because you own a gun doesn’t mean you know how to use it.” The same principle applies to credit cards. “Respect it, practice using it, clean it, and keep it in a safe place… maybe even under lock and key.”

Having credit cards can lure you into a false sense of security. The best financial protection is a good credit score, which can “dictate the quality of your life – where you live, what job you have, and what you drive,” says Winston.. “Managing and protecting your credit score can make deals happen and command respect.”

Be Wary of Favors

“I’ll make him an offer he can’t refuse.” ~ “The Godfather”

Unless you have a gun to your head, think twice before signing up for a rewards credit card. Real-estate lender Todd Huettner, president of Huettner Capital, says, “Card promotions can lower credit score more than other cards.” Plus, every new card requires a credit inquiry and disturbs the average age of your file, both of which ding your score, says credit education expert Solomon Algazi of Credit Servicez.

Most interest-free periods are costly, with rates over 20 percent if the balance isn’t paid in full by the end of the promotion, says Huettner. “They offer these discounts to make money on finance charges.”

No doubt “The Don” will collect on his favor, so “Only use the promotional card that saves you money if you have money to pay off the purchase immediately,” says Huettner. Miss the drop-dead payoff date – it’ll cost you an arm and a leg.

If It Looks Like a Rat, It Probably Is

“If you had any idea of what we do, we would not be good at what we do, now would we?” ~ “The Departed”

“This quote sounds like the guys who created credit score algorithms,” says Huettner, who acknowledges that the ways to improve your score are often opposite of what you might think:

• Do open a new account. If you don’t have much credit, add some. You need breadth and depth – at least three cards open for at least two years. Boost your score further – get approved for a limit that’s double or triple what you plan to charge on the card.
• Do close accounts. You don’t need a charge card for every store at the mall. Open accounts will show you can manage credit, but too many cards (more than 10 or 15) are suspect.
• Do use a credit card. Make a charge to one or two cards twice a year. Pay them immediately. Demonstrate that you can manage your credit.
• Don’t use a credit card. Having unused cards helps your utilization rate, showing you can have access to credit and not use it.

“It’s never the amount of money you owe that tanks your credit score,” says Algazi. “It’s always your debt utilization ratio – the amount of your overall available credit you’ve used up. The higher your ratio, the lower your score.” For example, a $10,000 combined credit limit on three cards and $7,000 in credit card debt means your utilization ratio is a high 70 percent. “The ratio gives a general idea of the leverage of the individual along with the potential risks the individual faces in terms of their debt load,” says Algazi.

Unlike gangsters, credit cards don’t honor a “code of silence.” Misuse them and they’ll go straight to the credit bureaus to ruin your financial reputation.

You’re on Your Own

“Everybody had their hands out. Everything was for the taking. And now it’s all over.” ~ “Goodfellas”

“Until recently, money was easy to come by,” says Gail Cunningham, vice president for the National Foundation for Credit Counseling. “Now interest rates have gone up, credit lines have been lowered, annual fees have been added on, and accounts have been closed.”

As “Goodfellas’” Henry Hill says, “Your murderers come with smiles… as your friends… and they always seem to come at a time that you’re at your weakest and most in need of their help.” Says Cunningham, “The credit scoring model is similar to the Mob – pay on time or you’ll suffer immense pain!” But it’ll be a lower credit score – not the muscle – that comes knocking.

When you’re strapped, you might be tempted to utilize payday loans and non-traditional forms of credit that are willing to do business with you… for a price. Instead, create a budget, track spending, and try to save. “Lack of savings often delivers the financial knock-out punch, causing people to make decisions that aren’t in their best interest,” says Cunningham.

Don’t Gamble with Credit

“The longer they play, the more they lose, and in the end, we get it all.” ~ “Casino”

Credit card companies are out to make dough. Don’t gamble with your score. Play by the rules. Aaron Patzer, vice president of personal finance at Intuit, offers tips to stay alert for anyone who might try to blow up your credit score… or your car:

• Hire informants to watch your back. Set up bill reminders with lenders to prevent late payments, which have the biggest impact (up to 35 percent) on your credit score.
• Steal your credit report. It’s free, so there’s no crime. Check carefully for errors – they can be like brass knuckles to your score.
• Diversify your operations. A good mob boss diversifies. About 15 percent of your score depends on your credit mix – credit cards, auto loans, and mortgages.

Whatever your credit situation, don’t be afraid to go to the mattresses to win the financial war. Keep a close eye on what’s yours and never underestimate the other guy’s greed.

5 Things You Can Learn About Credit from Gangster Flicks is provided by Experian.com

A friend asked me how he should save for his daughter’s college education. (His daughter was born in 2009, which means probably I should be asking him the personal finance questions, but whatever.) “A 529 college savings plan,” I said.

529s are great, I explained: you put in after-tax money and it grows tax-free. You can put a lot of money into them; the money can be used for tuition, room, board, textbooks, and other fees; there are no age or income limits; and you can change the beneficiary if your kid decides to attend the school of hard knocks instead of college. (Although, heck, these things are so flexible, the School of Hard Knocks is probably a qualified educational expense.) If you have a child, you should have a 529.

“Okay, but which 529?” asked my friend, who lives in Vermont. “The Vermont one?”

“Uhhh,” I replied. Not only did I not have a good answer to this question, but I realized that I didn’t know whether my own six-year-old daughter’s 529 was any good. Answering my friend’s question turned out to be pretty easy. As for my own child’s future, well, I’ll tell you what I’ve figured out so far.

A messy system

You’re familiar with the Roth IRA, right? Maybe even have one of your own? Part of what makes the Roth such a handy investment vehicle is that it’s just a generic tax-advantaged box for putting your savings in. You can open a Roth with any financial institution and put any kind of investment or deposit account in it. Easy.

Now, imagine if the Roth IRA system were administered by the state governments, and each state could implement its Roth in an entirely different way. Imagine further that you didn’t have to invest with your own state’s fund, that you could choose nearly any of the 50 state Roths. Fifty states, 50 different (sometimes wildly different) plans.

Given this absurd situation, I’m guessing you’d do one of two things: go with your state’s Roth, regardless of whether it was a good investment, or throw up your hands and vow to choose a good plan someday, but not today.

Roth IRAs aren’t like that, but 529s are. The morass exists because 529s were invented by the states about 20 years ago and eventually blessed by the Internal Revenue Code in their current form in 2001.

“It does create a messy system,” says Joe Hurley, CPA and founder of savingforcollege.com.

It sure does. Choosing a 529 is harder than getting a group of friends to agree on a restaurant. So let me help narrow it down for you.

Choosing a 529: the basics

• If you pay state income tax, check whether you can get a tax credit for contributing to your own state’s plan. A list of those states can be found on FinAid.org. If you qualify, it’s like having the state drop a sack of doubloons onto your porch. “In Oregon, for example, we have a 9% state income tax rate, and so if you put $10000 into a plan, you’re going to get $900 back,” says Eric Lochner, a certified financial planner at McDonald Franceschi in Portland, Ore. “You can think of that as an immediate 9% return on your investment.” My Vermont friend gets a $250 tax credit every year for socking at least $2500 into the Vermont 529. It’s a no-brainer. Bonus: Some states, such as Pennsylvania, give you a tax deduction for contributing to any 529 plan. Check the Finaid.org page linked above.

• Otherwise, look for a plan with low fees. Some 529s have such a high expense ratio, they should be called the Cash Under the Mattress Fund. Lochner recommends the Utah or Nevada plans, which offer low-cost Vanguard funds.

• Conservative investors should consider the Montana 529, which lets you invest in a CD whose interest rate is pegged to the tuition and fees inflation rate at private colleges. You can’t lose principal, and if average tuition skyrockets, so do your earnings.

Prepaid tuition plans

This is the plan that resembles a pension, and it’s the plan my family is in right now. My wife and I both graduated from University of Washington. We would like our daughter to go there, too. It’s a good school and it’s near our home, so she could visit us anytime.

Washington’s 529 plan, which is called Guaranteed Education Tuition (GET), lets us buy credits at UW now. For every 100 GET units we buy, our daughter gets a full year at UW, guaranteed. You’re not buying the credits at today’s rate, however. Right now, a year at UW costs $7700; a year’s worth of GET units is $10,100. You can use the money to attend other schools, but it always pays out at the current UW tuition rate.

What do the experts think of prepaid plans? “In theory, they should work great, because they satisfy a need that many families have simply to put the money away now and not have to worry about tuition inflation,” says Hurley. “But they come with a lot of rules. It’s very difficult to understand exactly what you’re paying for and how much it’s costing.”

Lochner is even more skeptical. “Every time I read about them, it sounds like they’re riddled with problems,” he says. “They can run into underfunding problems and unfunded deficits in the future.”

A prepaid plan is a good idea if you want to buy exactly what it’s selling: tuition at the colleges listed on the back of the box. If my parents had expected me to attend a specific college, though, I would have told them to bite me. Since Washington has no state income tax and I have no interest in biting anyone, I’m going to invest with either the Nevada or Montana 529 in the future.

Matthew Amster-Burton, author of the book Hungry Monkey, writes on food and finance from his home in Seattle.

You’ve resolved, yet again, to pay down some debt this year. Want to increase your odds of success? Then make sure your plan includes all three of these key ingredients: motivation, money and method.

Here are the Cliff notes.

Motivation

Losing weight, losing debt, spending more time with your family: If you want to change your life, you’ll have to change your habits. And changing habits is no picnic; it requires strong motivation.

So, find something compelling to motivate you. I’ve lived debt-free for many years now, and here’s what motivates me: the realization that for every hour of my life that I swap for money (i.e., working) I’ve forever lost an hour of my life. Time is our only nonrenewable asset, so my goal is to spend as much of it as possible doing what I want to do and as little as possible doing what I have to do.

What does that have to do with debt? Everything. Because paying interest is a double-edged sword; it not only wastes money, it carries a high opportunity cost. Opportunity cost is accounting jargon for what money you spend today costs you in terms of the opportunity to have more money tomorrow. Let’s bring the point home with a simple example.

Say you borrow $100,000 with a 9.4%, 30-year loan and make minimum payments. You’ll make 360 payments of $833, for a total of about $300,000: $100,000 in principal and $200,000 in interest. If you earn $30 an hour, that means the interest bill alone totals about 6,700 hours of work: more than three year’s worth.

The real killer is opportunity cost. If you saved $833 a month for 30 years instead of spending it, and earned 9.4% instead of paying it, you’d have ended up with about $1,600,000. Translated into work hours, at $30 an hour, that’s 53,000 hours or about 26 years.

Of course, we can’t know the true opportunity cost in our example until we know what you did with the $100,000 you borrowed. Maybe you invested it into a business that’s going to be worth billions. However, one thing’s for sure, debt incurred to pay for things that go down in value (such as virtually anything that you can buy with a credit card) means huge opportunity cost, which in turn steals from you the most valuable thing you have: your life.

This is my motivator: what keeps me out of debt. However, if that’s not motivation enough for you, find something that is because without strong motivation you’re probably doomed to failure. Of course, motivation alone won’t do the job. You’re also going to need…

Money

The more extra money you can find in your budget, the faster you can be debt-free. Step one in finding it is to use a spending plan (i.e., budget) to track where your money is going now. Then, see where you can save. When you do, don’t launch into a “dollar diet” and deprive yourself of the things you love. Deprivation doesn’t work. Instead, decide what really makes you happy, then try to spend less doing those things. Impossible? Not at all. Eating an appetizer at home, then splitting an entree at the restaurant is still eating out. The books at the library are no different than the books at Barnes & Noble. I drive an $85,000 Mercedes, but I bought it “pre-owned” for $20,000.

I could go on. Suffice it to say, no matter where your money’s going now, there are ways you can save without sacrificing quality of life. I know because I don’t just write about this stuff, I live it. With the exception of a small mortgage, I’ve been debt-free for nearly 20 years and have accumulated more than a million dollars in savings as a result. And nearly all of it has come from saving small amounts where I can and investing those savings sensibly.

So, if you’re looking for savings, here are the ABCs: A) Ignore what society and commercials are telling you. Make a list of what you really want or need; B) Stop spending on things that aren’t on it; C) Explore ways to save on things that are.

And once you’ve found some extra cash, all you need is…

Method

Pick a system for destroying your debt and stick with it. When it comes to ranking debts for pay off, the method I advocate is called snowballing.

Snowballing means ranking your debts for payoff, then focusing every spare dollar on the first debt on your list till it’s dust. Then, using that old debt payment to help pay off the next debt on the list — and both those old payments to pay off the third debt on the list, and so on. You continue snowballing old payments until you’re debt-free. Then you invest the total of all your old debt payments every month and watch your wealth snowball as compound interest starts working for you rather than against you.

The bottom line? Destroying your debts is doable and it will absolutely change your life. Work it and it will work for you.

The 3 Ms To Paying Down Debt Provided by AskMen.

Our country’s history is rife with examples of unscrupulous individuals and financial institutions that have preyed on the unfortunate. Con artists seemed practically as common as bankers in the industrial age (some even consider them to be one and the same thing). From Charles Ponzi, so infamous he had a “Get Rich Quick” scheme named after him, to the former chairman of NASDAQ, Bernie Maddof who plead guilty in March 2009, to 11 federal crimes built on Ponzi’s example, those in a position to offer loans do so in a manner guaranteed to get the maximum amount back. Here’s a look at a few schemes (not all strictly illegal but certainly of questionable ethics) that deliberately prey on people who are poor and unsophisticated about money.

For more personal finance visualizations see: WallStats.com

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During the construction of his new home, Braun Mincher pulled out the plastic for every new expense. “The contractor didn’t accept plastic, but we had a ‘cost plus’ contract. I was free to directly buy all of the materials. So I used the credit card for appliances, lumber, fixtures, carpet, etc.,” says Mincher, an author, filmmaker, and founder of Braun Media in Fort Collins, Colorado. He then paid off his cards monthly with his own funds or with an advance from the construction loan. The motivation? The consumer protections credit cards offer under federal law and convenience. “I got travel rewards and an easy-to-reconcile bill.”

Mincher generally pays his credit card balances in full every month which makes him feel comfortable using plastic to buy just about everything including a new engine for his small plane, diamonds, office furniture, a home theater, cars, and Lasik eye surgery. He even used credit cards in the early days of his business to make payroll when times were tight.

While Mincher may have the luxury of giving his credit card more of a workout than most cardholders, the perks of some credit cards are prompting people to develop creative ways to use their own plastic beyond the mall and gas station. Here are some other unusual or surprising places where you can pay with plastic.

Construction Site

While your contractor may not accept plastic, you can use a credit card to pay for building materials like lumber, cement, and bricks. In many places, you can charge building permits and other construction-related fees.

Maternity Ward

Charge everything from the delivery room to obstetrician bills (and even those celebratory cigars). Later, use the reward points to spring for a well-deserved getaway.

Adoption Agency

Bundle of joy arriving via adoption? Use a credit card to cover the agency/attorney fees involved. “Typical adoption fees paid to an agency would be between $15,000 and $30,000,” says Nicole Witt, executive director of The Adoption Consultancy. While birth mother expense normally go into an escrow account and are paid to the provider as needed, “legal finalizations costs could be charged, as could any medical expenses such as co-pays and lab tests for the birth mother. And you can use a credit card to cover things like travel.”

Sex Therapist’s Office

Like other types of therapists, most sex therapists accept plastic as payment for appointments and related care. Expanding on the adult theme, credit cards are also welcome at many massage parlors, adult toy stores, and gentlemen’s clubs.

Tuition Office

Virtually all colleges accept plastic for tuition payments. Suggestion: Choose a card that earns frequent flyer miles and you can get free tickets for junior to jet home for the weekend. Got a younger child? Credit is accepted at many daycares, pre-schools, and private elementary/secondary schools, too.

Jail

Thanks to services like Government Payment Service, Inc., more than 1,200 government agencies in over 33 states are now accepting payments from credit or debit cards. Residents in many areas can avoid a night in the slammer by using plastic to pay bail 24 hours a day, seven days a week – even when the banks are closed and the clerk has gone home for the night.

Funeral Home

Whether pre-paying expenses for yourself or covering the costs for a loved one’s arrangements, you can pay for virtually the entire funeral process on plastic, from will preparation to cremation to funeral home fees. If you haven’t made prior arrangements and don’t have sufficient life/funeral insurance coverage, your only option may be a credit card or applying for a loan through the funeral home.

IRS

When you owe the government money, they want it paid yesterday. The Internal Revenue Service offers installment payment plans, but they come with interest and penalties until you pay in full. If you have a credit card with an introductory no- or low-interest period, using that card to pay Uncle Sam would be a money-saving alternative (assuming you can pay the card off before incurring any interest). Many local and state tax departments also accept payment in the form of plastic.

Car Loan or Home Mortgage

Ken Clark, a certified financial planner and author of “The Complete Idiot’s Guide to Getting Out of Debt,” has seen many people pull out the plastic for the down payment on a new car or house. “The charges don’t hit your credit score until after the loan is completed,” he says.

Church Collections Plate

Want to support your church, but short on cold, hard cash? Some churches will accept plastic, either directly at the house of worship or through processing services like MyChurchDonations.com or HolyProcessing.com.

But, Buyer Beware

Your choices of places to use plastic might seem limitless, but that doesn’t mean you should just spontaneously yell, “Charge it!” anytime the mood strikes. “Remember, most people use credit cards to pay for something when they’re tight on money,” Clark says. “But then again, if you’re tight on money, you should probably ask yourself if you can truly afford it in the first place. Consider ‘sleeping on it’ until your next paycheck and reevaluating the purchase when you actually have funds in your account.”

10 Odd Places to Pull Out the Plastic is provided by Experian.com

envisionGood

With the holiday gift giving season behind us and the annual consumer electronics show a few days away, the thoughts of gadget lovers everywhere are turning to ways to make room for the latest and greatest.

New devices appear faster than we can keep up with them. But that also implies rapid extinction and devices become obsolete almost as soon as we unwrap them. As a result, our lives—and our landfills—become encrusted with the sediments of consumer choice.

Omar Shahine likes to stay up-to-date. For example, he recently upgraded his Canon camera by replacing the model he purchased less than a year ago. But Shahine helped to pay for the new camera by selling the old one for about 65% of the original price.

Reuse, it has been said, is the best form of recycling. Between 100 and 125 million cell phones are replaced or discarded in the United States every year. Extrapolating from a 2007 study by iSuppli, we are approaching something like a billion used cell phones in the USA, with about 10% being dumped in landfills and about 37% being dumped in bottom drawers.

Unlike Shahine, many of us hang on too long to gadgets we no longer use. We may intend to turn them over in one way or another, but we hesitate, unsure of what to do. Essentially we have three choices: sell, donate or recycle.

Cashing In

The obvious outlets for used electronics are auction or classified sites like eBay and Craigslist. If you have the time, you’ll probably negotiate a higher price for your old items, in part depending on how many other sellers are offering the same items at the same time.

Sites like Gazelle trade some of the profit for a lot of the hassle. Gazelle claims to be the nation’s largest “recommerce” company and to have found new homes for 20,000 used mobile phones, digital cameras, MP3 players, gaming consoles and other devices. To use the site, you search to see if your device is accepted, then answer a few questions before the site approximates its value. If you accept, Gazelle will send you a postage paid box to send in the item for approval and payment.

As with many things in life, timing is everything. Gazelle is what Shahine used to get $264 for his Canon G10 (original price $408). “The key is to sell something while it is still considered pretty up-to-date, and stay current on the technology curve. I can usually recoup about 50-75% of the original cost that way. If you wait too long the thing you are trying to sell isn’t worth anything (and you spent too much time using old technology),” Shahine explains. “A lot of people I know buy new gadgets and just keep the old one lying around until it is of no use to anyone and they have to give it away or recycle it.” Likewise, when the iPhone 3GS came out, he was able to sell his 3G to finance most of the new purchase.

Donate and Deduct

Selling used electronics generally involves proving the that devices still work. Another option is to donate your old electronics to charity and take the deduction on your income taxes. Generally, electronics such as cell phones, PDAs and digital cameras depreciate at about 20-30% annually, so it doesn’t pay to procrastinate. (Check with your accountant before you do this.)

Organizations such as Recycling for Charities (RFC) accept mobile phones, PDAs, Mobile Pocket PCs, iPods, digital cameras, etc. regardless of their working condition. RFC will refurbish and sell the device if possible and recycle if not, then donate to charity about half of their return of the item’s fair market value at the time. Values ranging from $1 to $100 for a phone, camera or digital player. Be sure to deactivate the service associated with the phone and erase the address book. RFC promises to further electronically wipe the phone’s memory.

Save the Planet

Even if it’s not worth selling or donating, recycling your devices has two benefits (not counting making more room in your drawer). The first benefit is keeping toxic substances—especially from batteries—out of landfills and seeping into groundwater. Mobile handsets and other devices can also be mined for renewable materials from plastics and glass to gold, silver and coltan. Coltan is an extremely rare mineral found primarily in the Congo and demand for it is linked to both fueling bloody conflicts and decimation of the mountain gorilla population in the region.

More and more manufacturers and retailers are accepting eWaste to earn your business. Depending on which state you are in, manufacturers include Apple, Canon, Gateway, HP LG, Motorola, Nokia, Panasonic, Samsung and Sony Ericsson. Retailers including Best Buy, Costco, WalMart and Radio Shack. AT&T, T-Mobile, Sprint and Verizon all have recycling programs, as well. Recycling may even be worth a credit towards your next purchase.

Keep a Spare

Finally, while this is supposed to be about getting rid of old phones and other gadgets, I’d recommend keeping at least one lying around. Especially if you use a GSM-based service like T-Mobile or AT&T, it’s easy enough to swap your SIM card if your current phone ever goes bad—or to drop in a local SIM card to use while traveling overseas. And even if you don’t use it, I guarantee you’ll get a call from a friend or relative asking, “Hey do you have an old phone I can borrow?” And then they’ll owe you one. That’s value.

Steve Barth blogs about work, play, society and politics at Reflexions.

Photo: Daniel Y. Go

Everyone knows by now that long-term retirement planning is important, right? And you probably have some sort of budget or other system for planning daily, weekly, and monthly expenses.

Great. Glad to hear it. But what about those medium-term, medium-size expenses like vacation, car repair, furniture, and holiday spending? You know, the expenses that always seem to bite you in the ass?
Here’s my strategy: every time I get bitten, I open a new savings or checking account to collect money for a particular type of budget-busting expense. I’m now up to sixteen of them.

That’s just checking and savings accounts—it doesn’t include CDs or brokerage accounts. But bear with me, because I’m not insane: I really do have that many bank accounts, and it actually does make my life simpler.

In order to explain why I have so many accounts and why I think you should also have a bunch, let’s look into the past. (Cue dissolve and piano glissandos.)

The bad old days

I’m old enough, barely, to remember a time when most people had only two cash accounts: a checking account and a savings account. They were basically the same, except that the checking account let you transfer money to another person by writing on a little rectangular sheet of paper. This was so long ago that I can’t even remember what they called those things.

Schmecks, was it?
Back then, if you wanted to open a new account, you had to walk into the branch and sit down at a desk. If you wanted to set up an automatic monthly transfer between accounts—if your bank even offered such a service—you had to fill out paperwork. If you wanted to transfer money between accounts at different banks, you had to write yourself a schmeck or pay a wire fee. And if you had accounts at different banks and wanted to see them all at once in a single interface? Here, pal, take your free thermos and get out of my bank.

Yes, the good old days really sucked. Luckily, we don’t live there anymore, and we shouldn’t bank as if we do.

I have an emergency fund. A vacation account. A medical account. A short-term savings account. A home improvement account. An account to save for quarterly self-employment taxes. Each of these gets an automatic monthly transfer from my checking account.

To be clear, I do not have an account for groceries, entertainment, or rent. That really would be insane. This is only for unexpected expenses and things that take a few months to save up for.

A word from Chase

“Wait, wait, wait, you have 10 or 20 different accounts?” asked Tom Kelly, media relations staffer for JPMorgan Chase.

“Sure,” I said.

“To have all those multiple accounts, it’s complicated…you spend a lot of time on this?” He also speculated that I must be paying a bundle in monthly fees for maintaining low balances. (Chase charges $4 or $5 a month for savings accounts under $300.)

Well, he was right about the low balances, but I spend a few minutes—and not a dime in fees—on banking every month. Two of my accounts are with Chase. The rest are split between BECU (a Washington state credit union) and EmigrantDirect, a bank which offers online high-interest savings accounts.
Opening a new account at BECU or EmigrantDirect takes about one minute online, and it’s free. I can set up automatic monthly transfers between accounts and change them anytime. I can manually or automatically transfer money between banks for free. (This is called an ACH transfer, and some banks charge for it; be sure to ask yours.) And I can see all of my accounts together in Mint.com. If you’re wondering, having 16 cash accounts puts me in the top 0.6 percent of all Mint.com users. Where do I pick up my tiara?
Most of my accounts are savings accounts, and they earn a little interest. When I need to spend out of, say, the furniture account, I transfer money into my checking account (time invested: one minute) and head to Crate and Barrel.

What’s the point, though? Why maintain sixteen accounts when I could split all the money between one checking account and one high-interest savings account? Then I could use pencil and paper or Excel to keep track of how much of the savings account is dedicated to vacation, clothing, or medical. After talking to the guy from Chase, I started to wonder if I was a few pennies short in the mental account.

Join the Christmas Club

Then I spoke to BECU’s PR guy, Todd Pietzsch. Not only am I not crazy, said Pietzsch, but I’m not as cutting-edge as I think I am. “We used to have what was called the Christmas account, which is essentially exactly what you’re talking about,” he said. “But with today’s web-based technology, you can still have your Christmas account, you just name it ‘Christmas Account,’ right?”
Indeed I do. “So I’m not doing something you discourage?” I asked.

“Absolutely not,” said Pietzsch. “We identify the long-term goals that we have, and hopefully you do that through your retirement planning. But for your short- to mid-term goals, I think that’s a great tool to do that.”

Many credit unions, in fact, still have a Christmas account, usually called the Christmas Club. Typically, it’s like a hybrid of a savings account and a CD: you open it in January, set up an automatic weekly or monthly transfer, and pay a penalty if you withdraw before November 1.
There’s a penalty for withdrawal in my homebrewed system, too: Once the money is in a (virtual) box marked “vacation,” it’s like somebody stamped “vacation” on my benjamins. I feel dirty just thinking about taking money out of there and spending it on something else.
What I’m coming around to is a very old idea. Ever had someone recommend putting cash into envelopes marked with spending categories? This is great advice if you want to make a burglar happy, but it has never worked for those occasional major purchases, unless you own a kickass safe and hate earning interest.

Do it yourself

If you want to go down the many-accounts road, two caveats:
1. Choose a bank or credit union with an excellent web interface and unlimited no-fee deposit accounts. ING Direct, HSBC Direct, and many credit unions fit the bill. If you have to fill out paperwork to add an account or an automatic transfer, go somewhere else.

2. You can only make six withdrawals (of any type—transfer, ACH transfer, wire, ATM) per month from a savings account, or you’ll be socked with a big fee and possibly have your account terminated. So if you have a high-traffic spending category and want to use a separate account for it, make it a checking account.

Other than that, my system works great, no matter what Chase might say. Okay, here’s the downside: it makes saving so automatic and spending so guilt-free, you might sit all day refreshing Mint, like Scrooge McDuck with a computer.

Matthew Amster-Burton, author of the book Hungry Monkey, writes on food and finance from his home in Seattle.

Cuenca, Ecuador

(Rinaldo W.)

Named the best place in the world to retire by International Living, Cuenca, Ecuador has it all for the modern retiree. For starters, the cost of living is quite low. MSN Money offers a useful chart that sketches out an average monthly living expense of $1,415.00. This figure includes rent on a luxury, two-bedroom apartment, maid service, food, auto maintenance and fuel, clothing, entertainment and health care for two. The aesthetics of Cuenca include Renaissance style architecture, terracotta roof tiles, and cathedral-like archways everywhere you look. With its high elevation, (about 8,000 feet) Cuenca retirees rave about its near perfect 60 degree year round temperature, according to EcuadorExplorer.com. The scenery consists of lush greens, luminous flowers and babbling rivers. Cuenca embodies countryside living at its best. Residents even even enjoy half-priced airfare.

Coronado, Panama

(Dreamcious)

Panama offers a quaint retirement haven for your golden years. Most Panama retirees choose the town of Coronado for its gorgeous climate, peaceful neighborhoods and elder-friendly culture. What Coronado lacks in urbanization it makes up for in small-town clubs and organizations such as mahjong clubs, karaoke bars, art classes, yoga classes, golf tournaments and country clubs, miles of pristine beach, and more. The cost of living is very low according to MSN Money, which describes Panama as a paradise for retirees due to affordable real estate. For example, the average cost of a house in a quiet neighborhood is around $185,000, while consultation with English-speaking doctors is priced at around $35.00. MSN also notes that “…residents pay no taxes on foreign-earned income.” With the retiree population on the rise, demand for entertainment, services and restaurants here is at an all-time high. This means anyone with dreams of opening their own business will find opportunity in Panama.

San José, Costa Rica

(Armando Mayez)

RetireInCostaRica.net ranks Costa Rica as one of the top five emerging real estate markets in the world, meaning that housing can be had at a big discount, and the government offers substantial tax breaks to all new home owners. And the place to be, is San José. Costa Rica utilizes a rare type of retirement structure that does not tax retirement income. As mentioned earlier, many retirees choose to go into business for themselves; if this sounds like you, Costa Rica makes an ideal spot to set up shop due to its famous “Free Zones.” Free Zone is quite literally a zoned area in Costa Rica that allows certain kinds of businesses (especially import/export focused companies) to operate with 100% tax exemption, according to WestNet. Aside from the financial benefits, Costa Rica offers a sunny, tropical climate with gorgeous scenery. In addition, quality of life is superb, and many people can afford to live on $1,500 a month (excluding rent payments).

Koh Samui, Thailand

(Chi King)

Looking to retire like a king and live lavishly on your average means? Look no further than Koh Samui, a wonderful island in Southwest Thailand. Here, the exchange rate allows anyone with a decent retirement fund to enjoy high-class luxuries. One Thai Baht is equal to roughly three cents USD, according to BKKPages. Rental properties in Thailand can readily be found for between 3,000 to 10,000 Baht per month, which equals about $90.00 to $300.00 USD. Temperatures generally range from around 80-90 degrees in the winter and from 90-100 during the summer months. Thailand is home to beaches with crystal water, which in Koh Samui, would likely be within walking distance of your property. Golf is also big in Thailand, and numerous rolling courses complete with palm tree decor can be found in the countryside.

Vienna, Austria

(VRoig)

Vienna, Austria, home to 1.7 million, is ideal for those who enjoy the changing of the seasons and looks forward to snow-covered winter months. Known ’round the world for its winter charm, Austria is a popular place to retire, attracting those who wish to get out of the urbanized west and live amongst pristine wilderness. Residents enjoy walking the endless trails of Alps, fishing the countless lakes and river, and skiing the various mountainsides. Most retirees fall in love with the slower and more traditional Austrian culture. Hardly anyone is in much of a hurry to get rich or climb any corporate ladders. Instead, they spend their enjoying the pleasures of nature, raising animals and relaxing with friends among the scenery. Austria remains the cheapest European country to live in according to Best Places to Retire, making it an obvious choice for many retirees looking to get the most bang for their buck. The country also remains a tax haven, as the Austria Times noted in March of 2009 that the EU’s demands to stop offering secret accounts to foreigners fell flat on the nation’s finance ministry.

Capetown, South Africa

(Moron Noodle)

Over the past decade, South Africa has grown in popularity as an exotic place to retire. Specifically, the historic city of Cape Town has received a five star rating on eOpinions.com. More than most countries in the area, the climate in South Africa is varied. In the summer months, temperatures can reach 90 to 100 degrees during the day, and can fall close to freezing by night. South Africa is another place where the exchange rate allows those with average savings to live large. One South African Rand (ZAD) is worth about $0.13 USD according to Exchange-Rates.org. Real estate is entirely open to foreign buyers, and the market is currently expanding at blistering rates, opening up opportunities and discounts for most buyers. Generally speaking, rent in South Africa should ran between $300 – $700 USD, allowing for a very low cost of living. If you have more than a few thousand a month to spare, this country is a viable option.

Merida, Mexico

(Gerriet)

Merida, Mexico offers some of the best of what International Living calls, the 4 C’s: comfort, convenience, cost and culture. Though the summers may get hot, almost all residential areas are within walking or very brief driving distance of sun soaked beaches. During the rest of the year, the climate is said to be “paradise.” Concerning convenience, Merida is almost entirely flat. This lay of the land makes long walks or bike rides very enjoyable, allowing you to stay in-shape all throughout retirement. In addition, flying to and from Merida to the US is quite reasonable, and a number of direct flights are available via major cities. Nicely accommodated apartments can be had for around $500.00 USD per month. Health care is also very inexpensive thanks to generous government subsidies. As far as culture goes, Merida is a hot bed of activity, and much of it is free of cost. Free dances, free concerts, free plays and stage shows, for example. And, for the explorer, some breath-taking Mayan ruins lie only 90 minutes outside of the city.

Montevideo, Uruguay

(Vince Alongi)

Billed by EscapeArtist as having, “…one of the lowest costs of living in the world”, Uruguay has something to accommodate any retiree. Many are taken by the friendly locals and the seductive scenery. Uruguay is one of the few countries where you can have your quiet retirement retreat without giving up the conveniences of the modern world. Look no further than Montevideo, said to be an, “…old-world European style city with fine restaurants, colorful markets, sycamore-lined streets and a cultural scene second to none.” Communication services are excellent and shopping centers are plentiful. In addition, the highways are fresh and safe, so if you must travel far you can do so with ease. Uruguay is less urbanized than much of the western world and features some of the best natural beauty your eyes can take in. Prospective entrepreneurs will be pleased to know that Uruguay offers some of the, “…highest rental returns in Latin America.”

Calitri, Italy

(gnuckx cc0)

For many, Calitri is the place to retire. Calitri is unspoiled Italy at its finest – overflowing with classic building designs, fine wines and delicious food. The cost of living in Calitri is amazingly affordable. For only $15,000 USD, you can purchase a small, unrestored apartment complete with kitchen and bathroom accommodations according to International Living. Unrestored, classic homes in Calitri can be purchased for as little as $42,000 USD. Those looking to live modern in classic Italy can opt for the restored “luxury” models for around $64,000. The town of Calitri is surrounded by lush green fields and forests along rolling hillsides, offering great opportunities to wander off and take in the untouched scenery. What’s more, you can also receive free health care if you become a European citizen as part of your move to Calitri – although this may take some strategic marrying.