The 50 Smartest Things to Do with Your Money
by David Futrelle, George Mannes and Cybele Weisser

July 2005

[Continued, page 2]

Don't make excuses
These simple steps can pay dividends right away

24. Fix your arms Replace an adjustable-rate mortgage with a 30-year fixed-rate version. Short-term rates are already heading up, but long-term mortgages are still historically cheap (recently 5.8%). Lock in now and never worry again about your housing costs spiraling out of control.

25. Know the score Order your credit score from all three major credit bureaus for $45 from Myfico.com. True, you're entitled to free copies of your credit reports this year, but one detail will be missing: the magic number that lenders and insurers use to judge your credit-worthiness. Pay for that.

26. Steal intellectual property Subscribe to a publication--a business magazine, a trade newsletter, a learned journal--that no one else in your office reads. Collect ideas, share said ideas with your boss, reap the rewards.

27. Set yourself back Pick up a setback thermostat for less than $100 at your local hardware store or Home Depot. When you're sleeping or at work, it will automatically adjust the heat (or the AC). A 10° drop can knock as much as 15% off your utility bills.

28. Back yourself up Buy an external hard drive and regularly copy all the precious data on your PC. How devastating would it be to lose your family photos, financial records and music files? Don't wait until your computer dies to find out. The easy-to-use Maxtor OneTouch II external hard drive is $160 to $300 (depending on capacity) at compusa.com.

29. Don't tell the kids Pass on money to your children now rather than bequeathing it. Gifts of up to $11,000 a year are tax-free. Your kids and grandkids will thank you--which they can't do if you wait until you're dead.

30. Do tell the kids Have your child open an IRA. Kids who earn money from an afterschool or summer job can put as much as $4,000 a year into a Roth IRA. After five years of tax-free growth, he or she can make penalty-free withdrawals for college expenses.

31. Shred (so it's not read) Buy a paper shredder. When it comes to identity theft, real-world thieves eyeing your trash cans like hungry raccoons are a bigger threat than Internet hackers. Invest in a crosscut shredder, and turn your financial documents into confetti. Personal shredders can go for as much as $90; Amazon.com sells the Fellowes Shredmate Cross Cut Shredder for just $50. Plus: Free confetti!

32. Bundle up Consolidate your communication bills. If you spend more than $50 a month on local and long-distance phone service from two different companies--or more than $110 a month on phone, cable and high-speed Internet from three different ones--you may be able to save by ordering a bundled service from one provider.

33. Accept cash only Switch your airline-miles or other merchandise credit card to one with rewards you'll actually use--like cash back. Search for a no-fee card that suits you at cardweb.com or bankrate.com.

34. Stay well lubricated Change your oil. You'll improve your chances of the odometer setting records by draining oil on the automaker's suggested schedule. Don't sabotage your diligence with cut-rate oil. Look for the American Petroleum Institute's seal of approval on the bottle.

35. Get a fat pipe Upgrade to a broadband Internet connection. Imagine the time you'd waste if whenever you turned the page of a magazine you had to wait 17 seconds to read it. (Just think: You'd still be on tip No. 16.) That about sums up dial-up Internet access. A high-speed connection via cable or DSL costs more--expect to pay about $30 to $40 a month compared with monthly dial-up rates of $10 to $24--but you'll save time and money banking online, researching your investments and booking a vacation.

36. Think curb appeal Before you put your home on the market, plant a daisy or two. Simple landscaping should cost less than $500 but will increase your sale price by a couple grand. Other high-return/low-expense projects: Put a coat of fresh paint on the front door, turn up the wattage in your lamps, and hire a pro to deep clean.

Change your life
Take the time--and money--to turn your finances around

37. Digitize the drudgery Buy either Quicken or Microsoft Money, software that will help you track your spending, view your portfolio allocations, estimate next year's tax bill--all the tedious tasks you know you ought to do but never would unless someone made it very easy. Pick up the premium edition of either program for $70 and change at Amazon.com. You'll spend a couple of hours on initial setup, but from then on, you'll be amazed at what you can do with your money, once you know what you're doing with your money.

38. Monetize the spare bedroom Start a business from your home, however small, and magically, expenses ranging from Internet access to plumbing repairs can become at least partly deductible. There are rules, of course: You have to use your home workspace exclusively for work, among other things. Print out Publication 587 from irs.gov for details. Just don't read it when you're tired.

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