Making small daily decisions to save money can help you afford for bigger, more important purchases and investments.

By Trent Hamm, Guest blogger / August 13, 2010

Textbook rental services are on the rise as college students look for ways to save money when buying textbooks.

By Alissa Figueroa, Correspondent / August 9, 2010

Textbook rental is becoming an increasingly popular choice for college students, who’ve seen book prices surge in recent years.

Students can cut their upfront costs in half by renting, rather than buying a textbook, according to the National Association of College Stores, a a trade group for textbook vendors.

And retailers across the country are responding, with local college bookstores opening their own rental services to compete with online book rental sites, like bookrenter.com, which offers free shipping and access to some 3 million titles through a partnership with Amazon.

The National Association of College Stores says about half of its 3,000 member stores will offer book rentals this year. That's some 1,500 independent college bookstores, up from only 200 to 300 last fall.

Barnes & Noble announced on Monday that it, too, would expand its pilot textbook rental program, started in January, to include all of its 637 college bookstores. Students can also rent textbooks from the company’s website.

But aren't paper textbooks (whose cost has increase at twice the rate of inflation over the last two decades, according to the Government Accountability Office) a bit, well, last semester?

For students looking for digitized alternatives, their options are growing as well. Last week, Barnes & Noble announced its new NOOKstudy software package, which students can download for free to access the bookseller’s digital textbooks.

The service allows students to tag, highlight, search, and take notes on their e-textbooks, and offers the option to rent a digital book for the semester at a reduced price.

Contrary to what its name suggests, NOOKstudy is not accessible from Barnes & Noble’s e-reader, the nook, or another mobile device – it can only be downloaded onto a PC or a Mac. Smaller devices are not suitable for viewing textbooks’ graphic-heavy pages, says the booksellers’ website.

The makers of Amazon’s Kindle e-reader thought they’d solved that problem with the Kindle DX, a wider version of the original e-reader designed to make reading academic texts easier.

Last year, the company gave students at seven universities access to the devices with their class materials preloaded onto them.

But as the Village Voice reported last month, the experiment didn’t go very well – several students given Kindles bought the physical textbooks for their classes instead, citing difficulty in taking notes, navigating the books, and reading the color graphics that were shown in black and white.

Of course, there is also the cost of e-readers themselves, which, at around $150 to $200 are a steep investment for any student on a budget.

Another option could be open-source textbooks, as are available on curriki.org, a nonprofit that seeks to provide "universal access to free curricula and instructional materials for grades K-12," according to its website. For college professors, though, who are generally very specific about which textbook their students work from, it could be a long time before open-source curricula are adopted widely.

For most people, a house is the biggest purchase they will make in their lives, one they will pay off for years, even decades, to come. But spending too much on a house could leave you with little money for other goals in life, such as retirement, college funds and vacation.

Before beginning a house hunt, you must first decide whether renting or buying makes the most sense.

If you’re a renter, keep in mind that your rent will go up over time. Renters usually rent if they know or like the idea that they can move when and if they like. Also, renters usually do not have to pay for the maintenance, lawn care or home repairs. They also don’t have to put sweat equity into the rental.

If you buy, know that you’re committed to years of fixing anything that breaks in the house, manicuring the lawn, and paying for any major repairs. Renting makes sense if you plan to live somewhere for a relatively short period of time, as the costs associated with buying a home — such as escrow fees, taxes and closing costs — take some time to amortize. If you’re planning to remain in a place for a longer period of time, buying a house is usually the way to go (however, this equation changes with home values in your area, employment trends and several other factors). Even though the market may fluctuate, over a long stretch you’re likely to make money. And as the real estate market has shown us in 2007 and 2008, it can be a bumpy ride.

If you’ve decided that home ownership is right for you, the next step is deciding how much home you can afford. Typically, most lenders suggest that you spend no more than 28% of your monthly income on a mortgage. Try calculators from dinkytown.com or Bankrate.com to find out how much you can afford. Keep in mind, in addition to the mortgage costs, you’ll have to pay the closing costs and legal fees, which are usually 2% to 3% of the house price. Also, don’t forget moving fees and labor, and any fixes that you might have to make to the house upon moving in, plus monthly maintenance fees if you’re moving into a condo or planned community.

When you’ve figured out your price range, take a look at the market and the issues that matter to you. Research school districts, crime statistics, impending construction or anything that could decrease or increase the value of a home. Look at the surrounding area to see if it’s a place in which you see yourself and family. You can research at greatschools.net or Zillow.com.

When you’ve chosen a home to bid on, don’t assume that the selling cost is the actual cost of the house. While real estate agents use comparable houses, or “comps” as way to price a house, consider what it might cost to buy and build a home on piece of land in that area. For a thorough assessment, hire an appraiser. You can even search zip codes online at AppraisalInstitute.org.

If you have the cash to buy and upkeep, go ahead and buy a home. It’s an investment that will grow over time.

For Wall Street Journal Article Click Here

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And even though parts of the economy are starting to look stronger, the unemployment rate remains at 9.7%, many families are absorbing weeks of unpaid furloughs and others are simply trying to rebuild what they have lost.

Don't compound your problems by making these eight major money missteps:

1. Raiding your 401(k)

Don't think of retirement savings as "now" money. It's money you've really got to save for later, says Mackey McNeill, a CPA who serves on the American Institute of Certified Public Accountants' Financial Literacy Commission.

"Our parents' generation generally worked for someone who gave them a pension check for the rest of their lives," she says. "Today, we actually control our pensions. People think, 'I can see those dollars there. They have my name on the account. I'm going to use that money.' "

It's particularly foolhardy to dip into your 401(k) if you're in danger of bankruptcy, McNeill says, because retirement accounts are protected under bankruptcy laws in most states. You don't have to surrender your retirement to get a fresh start.

"Some people use their IRAs, and then they wind up in bankruptcy, anyway," she says. "So now, they're bankrupt and they don't have any retirement."

2. Walking out on a mortgage

If you owe more than your house is worth, walking away is not your only option, providing that you still have some income to pay a mortgage. McNeill says the first step is to look honestly at your finances and determine whether you face a short-term issue or a long-term one.

Short-term means you just got laid off and have no savings or small savings, but the job market in your town is such that you can probably get some part-time or full-time work to keep money coming in. Long-term means you've been unemployed, you've depleted your savings, and you don't see a way back into the job market.

"If it's long term, then you can't afford your home anymore," McNeill says. "The faster you recognize it and make plans to let it go, the better it will be. Put your best foot forward to sell your home. Move into a smaller, less-expensive place and preserve your capital for when times are better for you.

"If it is a short-term situation, talk with your mortgage lenders and see if they will suspend or lower your payments over the next three to six months," McNeill says.

For information about modifying your mortgage, go to MakingHomeAffordable.gov, a website sponsored by the federal government with the goal of helping the 12 million American families whose homes are now worth less than they owe. The site lists HUD-approved counselors who will work with you for free. If you do not use the Internet, you can contact the program toll-free at 888-995-4673.

3. Ignoring the card balance

Although credit card usage dipped more than 13% in February, almost 15% of American families still owe more than 40% of their income, according to the Federal Reserve.

A credit card should be used strictly as a convenience, not as a means to spend more than you can afford, says Ken McDonnell of the American Savings Education Council.

"Ask yourself the question, 'Do I really need that?' Or, more important, 'Can I afford it?' These aren't radically new concepts."

McDonnell recommends reading the new government-mandated box on your credit card bill that shows how long it will take to pay off your balance if you pay only the minimum and how much interest you pay to carry a balance.

"You won't get out of debt overnight. It's going to take time," he says. "Behavior modification just doesn't happen overnight."

4. Debt-wipeout scams

Be careful when talking with debt-consolidation firms.

"Most of the ones I've seen are shams," says McNeill. "I would be very, very cautious. Pretty much, stay away."

An alternative: Seek help through a local United Way chapter, which provides referrals to non-profit counselors, or through the non-profit National Foundation for Credit Counseling.

5. Co-signing a loan

If a friend or relative asks you to co-sign a loan, it means his credit is so shaky no lender will give him money on his own merits. Why should you?

"Co-signing is a business transaction, but people don't think of it as a business transaction. They think, 'I'm helping my friend out,' " McDonnell says.

"But what you're really doing is co-signing for a loan," McDonnell says, "and you could be on the hook for that."

Nessa Feddis of the American Bankers Association says you should always assume you will have to repay the loan you're co-signing.

"I would be more cautious about co-signing for a romantic relationship than in a parent-child relationship," Feddis says. "Relationships can end up badly. There can be a lot of acrimony, and that could change someone's interest in repaying that loan."

6. Payday loans

About 19 million Americans have resorted to these high-interest loans, although the number has dropped in the past year.

They are marketed as short-term cash advances to meet emergency expenses between paychecks.

But consumers often become trapped in repeat borrowing, says Jean Ann Fox of the Consumer Federation of America.

For the average two-week payday loan, the annualized interest rate ranges from 391% to 521%, says Kathleen Day of the Center for Responsible Lending.

7. Reverse mortgages

Older actors pop up on television marketing these mortgages as an easy income stream for seniors who are house-rich and cash-poor. But the fees and other costs associated with reverse mortgages can sometimes be considerably higher than on other loans.

David Certner of AARP says a reverse mortgage may be a reasonable choice for some homeowners, especially the nearly one-third of retirees who have almost no income other than their Social Security checks, but the high fees associated with it make it a last resort, not a first resort.

Other options: Take out a home equity loan. Sell your home and move to a smaller, less-expensive one. Or sell your home to your kids and create a multigenerational family under one roof. When you die, they can use their inheritance to pay down the mortgage.

8. Trying to stiff Uncle Sam

"If you look at the small print when you sign your tax return," says Gerald Feffer, a Washington, D.C., tax attorney, "you'll see that basically you're affirming that everything in it is accurate and true."

What happens if you are audited and everything is not accurate?

"If it's a small amount, and it's accidental and not intentional, it will be resolved," Feffer says. "If it's a large amount, and they can be sure it's intentional, then they could charge you with fraud, and there could be penalties involved."

Josh from WalletPop.com here with an entry for the GetRichSlowly.org video contest.  He compressed an hour's worth of knowledge he shares with graduating seniors in under 2 minutes! Surprising what a mass of useful information can be told in just two minutes.

Click Here to See Video

By JEFF D. OPDYKE

It's a simple calculus, kids and money: From birth until college graduation, children consume dollars like they're chicken nuggets.

For those of us who aren't independently wealthy, that puts unrelenting pressure on the family pocketbook. The financial demands of raising a child require that money you otherwise might use to prepare for retirement, or to save for a nicer house, a sportier car or a swankier vacation, must, out of necessity, be earmarked for Lego sets and pediatrician visits and school uniforms and Christmas toys and a college savings account and a minivan and a trip to Disneyland ... and lots of, well, chicken nuggets.

I'm not saying this to disparage kids. I have two of my own, and money is nothing in comparison to the happiness they bring me and my wife. Yet happiness does not negate the fact that the moment a child arrives -- and, actually, months before the arrival -- your role as an adult changes in dramatic, profound ways.

And so, too, does your family's financial life.

Ryan Snook

Not only are you now on the hook for tens of thousands of dollars in costs over the next two decades, you also have a new obligation to teach your children about money so that they grow into adults who are at home in the financial world and who have a healthy relationship with money. You, the parent, are the first and most crucial link in that learning process.

A Lot to Teach

I know that money seems a simple technology and one that wouldn't seem to require much handholding. After all, you've been spending it yourself since you were a kid, and you've been earning it at least a few years. What more is there to know about it, really? And what more do you really need to teach your kids that you don't already know yourself? Well, if statistics are any indicator, a lot.

In measuring how well 12th graders understand the basics of personal finance, the nonprofit Jump$tart Coalition for Personal Financial Literacy found that a measly 10% could satisfactorily answer questions about personal finance. Many had no clue how to balance a checkbook. Over all, about half the students failed a test on basic personal-finance literacy.

Yet life as an adult clearly requires knowledge of personal finance. That doesn't mean your child needs an M.B.A. in security analysis or that you need to hire a financial adviser to tutor your preschooler. But kids obviously need better information to more effectively manage their own financial resources one day.

Kids have an infinite ability to hear what parents say, even in those moments we're convinced they haven't heard a word we uttered. Moreover, the concept you're pushing might not sink in the first time. Or the third time. Or the eighth time. But there will come a moment when you say what you need to say for the umpteenth time, and the way you phrase it or the mood of the moment or the experience your child just had will cause your lesson, almost miraculously, to suddenly resonate.

Of course, you might not know it at that moment. You will know it, though, when you see or hear your lessons in action.

Driving back from one of my son's soccer games a year or so ago, a flashy Italian sports car pulled up alongside of us on the freeway and the teammate riding home with us said, "Wow, that guy's rich."

My son, engrossed in a handheld videogame, looked up to glance at the roadster and reflexively replied, "It's not how much money you spend that makes you rich. You don't know; that guy might have spent all his money just to buy that car and he has nothing else. So he might not be rich at all."

Here he was casually correcting a teammate about what is and isn't the definition of wealth, barely having to think about what he was saying. The words were coming out effortlessly. Mom and Dad, he proved, really can make a difference when they set out to instill a bit of financial wisdom in their children.

But my son's commentary was not based on a one-off lecture I'd given him. The lessons had begun early and his mom and I reiterated them time and again.

Make a First Impression

Kids are far more impressionable when they're younger and much less likely to have any sort of experiences outside the family cocoon that could shape their thinking before you do. That's not to say you can't erase the habits or beliefs they pick up, but by the time they're hardened teenagers, your messages won't resonate nearly as strongly.

Ultimately, the aim isn't to mold children who only care about financial riches.. It's to raise children who grow into adults who are financially aware and who are comfortable managing the various aspects of money -- whether spending, saving, investing or giving back.

Maybe your child does accumulate financial riches. Maybe not. But the true measure of your success in this endeavor is that your child, as an adult, never struggles to understand the basics of personal finance.

That will prove a far greater legacy than any inheritance you might one day leave behind.

Write to Jeff D. Opdyke at jeff.opdyke@wsj.com