Simple Truths That Help You Save — and Make — Money

Beginning this weekend, the Wallet is going on hiatus. We’ll soon launch an investing-focused blog that will cover the news and its impact on your money and your portfolio. In the meantime, stay current with daily coverage on everything from taxes to 401(k) to college savings at the Journal’s Personal Finance page.

Below is an edited excerpt from his new book, “The Little Book of Main Street Money: 21 Simple Truths that Help Real People Make Real Money.”

It may be a shotgun wedding. But trust me, you and Wall Street could learn to love each other.
In 2008 and early 2009, we were hit with what was arguably the worst financial debacle since the Great Depression of the 1930s—a devastating mix of plunging share prices, crippling consumer debts, slumping home prices and rising unemployment. More recently, we’ve had an astonishing stock-market rally, with the Standard & Poor’s 500-stock index soaring 50% since early March.

All this market and economic turmoil comes amid an era of increasing financial uncertainty. Over the past few decades, traditional company pensions have been disappearing. Retirements have grown longer and hence more expensive. Financial choices have become more befuddling. Job security has faded. College costs have soared.

What to do? We don’t have much choice: We need to seize control of our financial lives, embrace the markets, and be smarter about money than ever before. For most of us, this is a daunting proposition. Wall Street is tough to love. Markets skyrocket one moment, plunge the next. The lingo is baffling. The complexity can be mind-boggling. And the stakes are huge. Feeling nervous? Fret not. If we can keep some simple truths in mind, we could make this marriage work.

College Costs Add Up — Before You’re Even Accepted

Shopping for college gear is expensive, but shopping for a college itself can cost nearly as much.

Guide books, application fees, charges for taking standardized tests, charges for sending said test scores to schools and actually visiting the schools in question can easily cost the families of college-bound students a few thousand dollars. While some of those costs are unavoidable, there are ways to trim expenses without hurting Junior’s chances of getting into Favorite State University. Here’s how:

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Using college guide books from the library or hand-me-downs from older siblings can save an easy $100. Don’t rush to buy this year’s guide to the top 300 schools — little has changed from last year, other than the price.

One inevitable expense families incur when on the college hunt comes from exams, as most colleges require a score from at least one standardized test. Registration for the SAT and ACT costs $45 and $32, respectively. Students are allowed to send SAT scores to up to four schools for free but must shell out an additional $9.50 for each school after that (plus $27 for rush reporting); the ACT charges $9-$13.

The Frugal Joys of Shoulder-Season Travel

Summer may be waning, but you might want to hold off on packing up that beach umbrella.

The months of September and October are loosely defined as the “shoulder season”, that mellow time between the expensive and busy summer travel season and the full-blown holiday mode. If you have the time, it’s a great time to travel. After the jump, some pointers on scoring deals.

Loose Change: 9/4/09

Personal Finance:
-Borrowing money from friends is a recipe for disaster. How to navigate the situation, if you must. [WiseBread]
-Cut costs without being miserable. [Simple Dollar]
-Even in the current economy, it’s possible to ask for a raise. Some tips on making it happen. [FiveCentNickel]

Investing:
-A list of low-cost, high-grade stocks. [CNNMoney]
-Is it time to put more emphasis on bonds instead of stocks? [MarketWatch]
-Evaluate how healthy your network is with these eight questions. [Yahoo Hot Jobs via Free Money Finance]

Other Lint:
-Surprise: affluent consumers are the heaviest coupon users. [Reuters via Consumerist]
-Is that membership to Costco worth it? Why you don’t need to shop at warehouses. [WiseBread]
-A roundup of the iPhone apps for making your school year easier. [Gizmodo]

Still Confusing Times for Renters, Homeowners

Another ripple effect of the sour housing market: a slew of reluctant landlords, my colleague M.P. McQueen writes in today’s Journal.

Becoming a landlord isn’t an easy proposition, and some homeowners may be better off with a short sale. She writes:

Landlords have to pony up money each year for property taxes, insurance, maintenance and repairs. Meanwhile, demand for rentals in many parts of the U.S. isn’t strong: Apartment vacancy rates nationally are the highest in more than two decades and rents are falling in some areas, compounding the difficulty of finding a good, steady tenant.

For those considering renting out their homes, M.P. has a sidebar with some great tips.

Is Brand Loyalty A Thing of the Past?

Nearly a year on, the financial crisis has changed the way companies and consumers view the brand names in their wallets.

But is this a temporary change, or will it stick?

Some consumers, including those who have had their credit cards canceled, limits lowered or mortgages left in standstill, all say the same thing: “I’m never doing business with company X ever again.”

But some consultants and financial institutions say they aren’t worried about consumer ire toward brands today. They say that consumers have short-term memories and are fickle. And when the economy turns around, people will drift back to brands that they once dismissed.

Robert Passikoff, founder of Brand Keys, a research consulting firm, disagrees. He says that in the past it was easier for companies to win back consumers, but thanks to the Web, it’s easier for more consumers to get more information about brands before they buy.

“This is not going to be a forget-and-forgive society,” he says.

Loose Change: 9/3/09

Personal Finance:
-Getting the most from your retirement money. [Get Rich Slowly]
-It takes money to make money, right? How are you spending during your job hunt, and is it tax-deductible? [WSJ]
-Whether student loans or a mortgage, many people shoulder debt, but here are 11 stupid reasons to take on debt. [Financial Highway]

Investing:
-What it means to sell a stock short and how to do it. [SmartMoney]
-Trader Joe’s has a cult following. Here’s how you can build a cult following of your own. [ABDPBT]
-Five worry-free and safe investments, according to one blogger. [Out of Debt Christian]

Other Lint:
-A great infographic showing the state of U.S. automakers. [MintLife]
-The psychological impact of unemployment. [BusinessWeek]
-Student debt is at its peak, affecting futures after college. [WSJ]

Should College Resemble A Low-Cost Airline? Schools Tout Value Over Amenities

When I visited colleges during my senior year of high school, the tour guides all raved about their luxury dorms with dimmer light switches and private study rooms, fancy dining halls with visiting top chefs and state-of-the-art athletic facilities. These days, tour guides are more likely to talk up their three-year graduation rates and financial aid offerings. (Well, except for this extraordinary exception.)

The value push makes sense, considering that 55% of teens have altered their college plans because of the economy, according to a spring Junior Achievement/Allstate Foundation survey. Since investment accounts haven’t quite recovered from last year’s tumble and parents are still losing jobs at an alarming rate, an increasing number of colleges and universities are marketing themselves as the best bang-for-your-buck option rather than the best place to lounge in a lazy river or perfect the art of late-night pizza orders for four or five years.

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More than a half-dozen schools, including Hartwick College in Oneonta, N.Y., and Lipscomb University in Nashville, have launched new three-year degree options to help families lessen the inevitable debt load.

How Much Should You Spend on a Job Hunt?

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The “latte effect” meets the laid-off budget.

Most career counselors advise unemployed job-seekers to get out there and make contacts — as the conventional wisdom goes, you’re more likely to find a new gig from a personal connection rather than an online job application.

But the cumulative costs of all the coffees, lunches, drinks and events can quickly add up, stressing already-tight budgets. It’s remarkably easy to spend hundreds, if not thousands of dollars on a job hunt, so job seekers should be clear on what makes a good investment in their future, and what’s really just discretionary spending in the guise of career-building.

Most of us want to put our best feet forward: nice restaurant, good outfit, travel across town if need be. The hopeful result of such networking is a job, permanent or even temporary. Job hunting has created a whole industry of high-price career fairs, networking events and web sites. And with the slow rate of hiring, the spending can go for months with no job offer.

So how much is appropriate to spend?

Loose Change: 9/2/09

Personal Finance:
-Fifteen Web sites that pay you to recycle. [WiseBread]
-Need a new wardrobe but don’t want to spend a ton? Four sites to help you find deals. [SmartMoney]
-Yes, the market sank yesterday, but hey, don’t let fear guide your financial decisions. [Frugal Dad]

Investing:
-What to look for when reviewing your 401k. [Financial Methods]
-Five industrial and tech giants that are surprisingly green. [MarketWatch]
-Reviewing the pros and cons of a Roth IRA. [Bargaineering]

Other Lint:
-Ever order a short cup of coffee at Starbucks? A roundup of 10 secret menu items at chain restaurants. [mental_floss via Lifehacker]
-Love getting DVDs in the mail? What about books? With Web sites, such as paperspine.com, you could. [WSJ]
-Ten effects of the recession on colleges. [Accelerated Online Colleges]