Earning Residual Income: Affiliate vs Pyramid Program

There is sometimes confusion about what exactly an affiliate program is and how a person can actually make money online and earn a residual income through one. Is a Pyramid program similar to an affiliate program?

The truth about Affiliate program:

1. Affiliate is an internet marketing model in which participating webmasters (affiliates) promote a merchant’s products and/or services on their web sites to earn a commission for generating clicks, leads, or sales from a graphic or text link to the merchant’s site.
You can participate as a direct affiliate through merchants, or as part of an affiliate network.

2. Affiliate programs offer a great way to build residual income. A person can be quite successful with an affiliate program if they work hard. They are not a scam and are a true way to make money online.

3. Affiliate programs is made to sell a product for a commission. Companies set up affiliate programs so they can get their product marketed by their affiliates. The company usually gives the affiliate a website where they send customers. The website is coded with the affiliates ID so that every sale made on that website is credited to them and they earn a commission off them.

4. Some affiliate program also allows affiliate to recruit new affiliates. Besides selling products, the website also gives people the chance to become an affiliate themselves. When people sign up on an affiliates website the affiliate then gets a commission on anything that affiliate sells.

Affiliate program is not a pyramid program

A pyramid scheme is a fraud based on recruiting an increasing number of investors. Typically, new recruits pay a sum of money to join the “program” and become a distributor of a product or service, and are told that they’ll make money based on the number of new recruits they in turn bring in. The basic idea is that the higher up on the pyramid you are, the more money you’ll make. In reality, what happens is that only the originators of the pyramid scheme make money and the rest lose theirs when the pyramid scheme collapses. Eventually all pyramid schemes collapse, as the recruiters on the lower levels fail to bring in enough new participants to support those above them.

People think that affiliate is a close resemblance to a pyramid scheme.

I am sure you had heard of a pyramid scheme. A pyramid scheme does involve recruiting people to sign up and making money off recruits, but the main difference, and the reason affiliate programs succeed where pyramid schemes fail, is that affiliate programs have an actual product to sell. There is value added to the consumers. If a program has a product to sell that is useful then they are affiliate programs not a pyramid scheme.

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Tips to Help you Build a Residual Income Business

Everyone wants to make money without doing much. “Work smart, not hard“, as they say. This is possible if you build a business that will give you residual income. There are different ways that you can build up a good residual business, and here are a few ideas to get you started.
When you are looking for an opportunity, know that there are a lot of different options out here and you should be able to find something that will fit in with what you would like to do. You can find all sorts of opportunities by searching the Internet or finding forums where people are discussing these types of businesses. When you find something that you think would be a good fit, do a bit of research to make sure it isn’t a scam. Google its name, and see what type of information comes up about it.
How To Build A Residual Income Business

One thing to consider when you are looking for your residual business is if it something that people will continually need to buy, or is it a luxury that people may give up if they fall on hard times. For instance, a company that sells food is something that people will always need, although, they may change their purchasing habits over time. But something such as jewelry is an item that is a luxury and one that might quickly go to the wayside if things get tough.
Just because a business is going to end up giving you residual income does not mean that it is not going to take time and effort to get it going. Some people select their business based on how easy it is to market. If this is something that is important to you, then you may want to look for such an opportunity as well.
Look for an opportunity that gives you commission upfront on your sales. Chances are you are looking for this income to help you out, and you don’t want to be waiting for months to receive payment. Make sure you are reading the fine print on any opportunity to see what their terms for payment are.
A great method of receiving residual income is to find a product that people will want to sign up for a monthly auto ship of the product. This way you will be making sales each month with a lack of effort on your part. This is one of the best ways to make residual income, as it happens every month with no extra effort on your part.
Another great option is if you are an expert in something is to create an e-book and then sell it on the Internet. You can either sell it yourself of set up an affiliate program and pay others to sell it for you. You can get the best of both worlds this way, as you do not have to do the marketing yourself, and you will still make money on your product.
Wrap Up

Residual income is great as it will continually come to you as long as people are subscribed or return to buy from you. A minimal amount of work is required, beyond keeping your website and products current and up to date. When your business grows from time to time, then you may need to have a email security software to protect your email address to decrease spam and avoid hacker. Other than email protection, you need a dedicated server instead of a shared hosting to host all your websites, it’s more secure and it could bring your business to the next level!

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Starting a Business in an Economic Downturn

In the current economic climate, it seems all we hear about is the bad news; people losing their jobs, companies going out of business, and banks failing. Oftentimes the overload of negative news makes us forget about the power of the entrepreneurial market in the US economy. However, entrepreneurs can be the answer to elevate this economy out of a crisis if we recognize and support their growth.
We are certainly not the only ones to recognize this. A new study from the Kauffman Foundation’s Index of Entrepreneurial Activity shows that in 2008, new business formation increased, specifically entrepreneurship rates increased for the lowest-income-potential and middle-income-potential types of businesses from 2007 to 2008. An average of .32 percent of the adult population created a new business each month in 2008, up slightly from 2007. For women in particular, entrepreneurial activity increased from .20 percent in 2007 to .24 percent in 2008.
Helen McNeece, President of HERS Higher Education Relocation Specialists, began her business in 2008. At the time, corporate relocation management firms had been around for decades but no one in the industry really addressed the diverse needs or understood the decentralized nature of doing business in the higher education market. Helen explains, “I love the higher education market because it is rewarding to work with folks who really appreciate your help and have a higher calling than the almighty dollar but it is not without challenges in the current market. Hiring freezes and slow downs have slowed our anticipated growth by about half.” Yet, she is looking to the future with positivity, “The up side is that there will be a hiring frenzy as things turn around and HERS will be here to make that process a lot smoother.”
Ann Mullen, Founder of Ann Mullen Consulting LLC, recently retired as the Director of the Johnson & Johnson Supplier Diversity Program, but was not ready to leave behind the world of women-owned/minority-owned business development. “I loved my work! I strongly believe that these kinds of businesses play and will continue to play a big role in building a healthy economy in the United States,” said Ann. “So, I decided not to ‘retire,’ instead, I founded a consulting business concentrated on helping corporations build or strengthen their supplier diversity and small business programs. And, even though the economy is facing a lot of challenges right now, I do think that if women-owned businesses concentrate on identifying and then focusing on their target market, there are opportunities available, either right now, or in the near future.” Ann’s new business has kept her busy over the past year, and looking ahead, she expects this trend to continue!
Sarah-Leah Gootnick, started her business, Secretary in Israel in January 2008 “by accident,” she says. Sarah had studied and lived abroad in Jerusalem when an entrepreneurial friend of hers was complaining that he was overwhelmed, so she suggested he get an assistant. He told her he couldn’t find one locally, and Sarah encouraged him to work with her friend who had just moved to Israel. Using new technology, the two were able to work together from different countries, and Sarah’s friend said it was the best assistant he has had! Sarah is excited for the future and motivated to help provide business owners and entrepreneurs in the United States with the best executive assistants they could find anywhere in the world, as well as providing American women in Israel the ability to earn livable wages and have a flexible schedule.
Although news about the economy is glum, entrepreneurs see the potential to thrive. Women are starting businesses in hard times, and surviving with perseverance and confidence in their companies. Helen, Ann, and Sarah are just three examples of how the entrepreneurial market will help to revive the economy and bounce back from this downturn. I recognize that some small and woman-owned businesses are struggling at this time, but hope that the power of entrepreneurial businesses will overcome these difficult times.

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15 Home Business Ideas that Thrive During Recession

Many people are fearful of starting a business during a recession. Times are tough, and people are curbing their spending, which makes the idea of starting a business in a downturn economy even more daunting. Here are some types of home-based businesses that thrive during an economic downturns and present opportunities for home-based entrepreneurs.


Many people are fearful of starting a business during a recession. Times are tough, and people are curbing their spending, which makes the idea of starting a business in a downturn economy even more daunting.
However, for many families and individuals affected by the recession (whether they lost their homes or their jobs), finding more ways to make a living or supplement income streams is a crucial need right now. Even for those still employed, many are thinking of putting in place a backup plan in case they are laid off from their jobs. Then there are those who have recently graduated from college or about to graduate and are finding it to be quite a challenge to find a job.

As such, starting a home business is a viable option for many. Home-based businesses are great during recession because of little to no overhead costs.

Even during these tough economic times, there are great income opportunities for those who are willing to take the risk. After all, the right time to start a business is when you have a great idea where your product or service benefits customers, recession or not. The right business idea can help you beat the odds and succeed even in a recession.

Here are some types of home-based businesses that thrive during an economic downturns and present opportunities for home-based entrepreneurs:

1. Food business. Food is one business that remains strong during a recession. People still need to eat and drink no matter how bad the economy, though many are cutting on dining out and instead are staying at home and cook! People still line up in groceries to get their fresh bread supplies. Brides still need their wedding cakes, and so do children celebrating birthdays. The key is to customize your products to fit in your buyers’ shrinking budget. Sales of chocolates are also up as consumers treat themselves to smaller (and cheaper) indulgences that they can do from the comforts of their homes.

However, do check out your county’s laws regarding cooking and preparing food for commercial purposes from your home kitchen.

2. Financial advisor home business. In times of confusion and fear -- shrinking retirement funds, increasing debt, downhill investments, etc -- there's a huge number of people who need guidance on the steps they need to take. Small business owners are looking for advice on how to deal with unexpected financial constraints. Families and individuals may be looking for advice on how to manage their finances given their new budget reality. Investors, particularly retirees, need help in protecting their nest eggs and finding any opportunities in a down market.

3. Home staging. With the real estate hardest hit by the recession, home sellers need all the help they can get to increase the appeal of their properties and find buyers. The real estate market has increasingly turned to home staging experts, who prepares the property for showing from furniture arrangement, landscaping, even removing funky smells in the house. Banks handling foreclosures and real estate agents are in need of home stagers to get their properties sold more quickly. This is one recession resistant home business that interior-decorating aficionados and those with a keen eye for design can seriously consider.

4. Auto Repair and Maintenance. People tend to forego buying new cars when money becomes hard to come by and cheap credit is not as easy to get. Instead, they're more likely to keep their cars, which entail spending money on car maintenance. As such, there is a big opportunity for this business when the market goes down. An auto repair business has a lot of opportunities in a recession. You can opt to go with an automobile franchise, or find a troubled shop with potential to buy at a bargain price.

5. “Green” Home Businesses. Every industry is turning green, from manufacturing to fashion designing. Helping the environment is starting to seep into the mindset of the consumers, as more and more are turning to products and services that protect the environment. There are huge opportunities in a “green” home business, such as business opportunities offering environment-friendly gardening practices through organic products. Business waste consulting is also a growing field where home based entrepreneurs can advice businesses on how to efficiently deal with waste disposal, trim down their waste disposal costs and realize extraordinary savings.

6. Virtual Assistant. The virtual assistant industry is growing as businesses reduce their costs and outsource some basic functions. A virtual assistant, or VA, is a highly skilled professional who in more ways than one, serve as administrative assistant except the communication and work are all done online or via email. VAs provides administrative support and other specialized services to businesses, entrepreneurs, executives, and others who are unable to hire a full-time employee but need support. This can be a low-cost and recession resistant home business.

7. Eldercare. One reality we all face is that whether the economy is going up or down, we are all going to go old. Services such as adult daycare facilities are still going to be needed. However, if you are targeting the baby boomers market, most of which relies only their retirement funds (that may be shrinking) as their main source of income, this may be the group that will be tightening their belts even more. So niche travel for the active boomers may be hard hit during tough economic times.

8. Online video production. Watching videos on the Web have become much more commonplace. As household budgets shrink, online videos are an excellent source of entertainment for the family, without the cost of going to the movies and eating out. As a result, more Internet users are going to video sharing sites to watch videos of their favorite shows or videos shared by other users. The popularity of online videos is not only good for those who likes to have a good laugh or be informed. Videos now offer moneymaking opportunities to those who love to create them. There are a number of ad-based programs offered by video websites such as Youtube where the video producer can either be paid per view or per click on the ads. There are also sites that pay for the download of the videos. There are also opportunities to get paid to create videos on a commission basis. Read 8 Ways to Earn Money from Online Videos

9. Cosmetics and little indulgences. Guess what, demand for cosmetics remain strong even when times are tough! Demand for cosmetics seem recession proof as women continue to indulge themselves by buying lipsticks and powders. Ask any woman on the street if they will forego wearing a lipstick and you might get dagger stares everywhere. There's even an economic indicator for it: the lipstick index.

10. Trading Assistant. In a recession, more and more people are looking to sell some of their unused and unwanted items at home to get some extra cash to pay bills. While many have heard of online auctions such as eBay and classified ad sites as Craigslist, there are those who do not have the time or the knowledge to sell their things online. eBay has a program called eBay Trading Assistant that allows other users to sell items of other people on eBay. Trading assistants photograph the items, write the descriptions, and create the listing on eBay or Craigslist as well as handle all aspects of the sale. They earn a commission based on the sale price of the items they sell.

11. Bargain hunting and coupon websites and blogs. These are businesses that are most needed during a recession, yet will still generate strong demand even when times get better. An example of this type of business is bargain hunting, helping people find deals, coupons and discounts. Whether good times or bad, people want to save and get the best deals, but more so when everything is tight. These sites are typically monetized through advertising.

12. Blogs monetized by ads. One low-cost way of earning money from home is by starting a blog and monetizing it via advertising. Blogs, or web blogs, are commentaries, opinions or information that uses a dated log format. The key to a successful blog is to write about topics where advertisers abound, and those are usually topics that bring in visitors looking for ways to spend money. Instead of writing about personal musings, the commercially successful blogs are those that are able to generate a wide audience, and depending on the advertising programs implemented, with users that are responsive to ads. Read How to Make Money from Blogs

13. Buy into a home-based franchise. There are a number of franchises that are recession resistant and can be started at home. It is significantly riskier to start an unproven business from scratch as compared to starting a well-known franchise. As the economy tightens, more and more families require a dual income, which means there’s a greater need for childcare and education services. Environmentally friendly franchises are also big businesses. Check out our Directory of Home-Based Franchises

14. Direct sales. The direct-sales businesses have seen their sales force increase as recession depends and unemployment soars. Direct selling have become a great money making alternative for those who have lost their jobs, found their nest eggs dwindle and who want the opportunity to work from home. Home-based representatives are much in-demand to sell anything from vitamins to cosmetics from Mary Kay or Avon. Other independent contractors sell goods or services primarily through parties, demonstrations in someone's home and one-on-one interactions

15. Home-Based Tutoring Business. Even with a recession, education and learning are still high on the priorities of parents everywhere. Regardless of their financial situation, parents want their children to learn and succeed in school and will be willing to hire a tutor if necessary. There is also huge demand for learning other skills as well targeting the adult market. As the job market tightens and unemployment rises, more and more are going back to school, whether taking online classes or seeking specialized training in various fields. There are opportunities for education-based businesses. Read Starting a Tutoring Business from Home

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6 habits that will make you broke

It's still a week until payday, but your checking account is almost empty already. Where did all your money go? We all have our black holes, those money pits that seem to magically make our cash disappear.

Here are six bad habits that will make you broke, and how to break them:

1. Window shopping
It can be fun to browse the aisles and see what's out there. We all have our weak spots, like home goods, electronics or clothes -- even if you don't like to go to the mall. You don't even have to leave the house to window shop anymore; those catalogs, the Internet and commercials advertising the latest sale can be just as tempting.



Window shopping is a bad financial habit that takes some discipline to break. Staying away from your favorite retailers and not requesting catalogs or e-mail updates from your favorite stores is a good place to start. Before buying that latest item you pine for, ask yourself two questions: Do I need it, and can I pay cash for it? If your answer to either or both is no, walk away.

2. Carrying lots of cash
You know that paying with plastic is bad, but carrying lots of cash can be a bad habit too. Cash can give you the feeling of having extra -- fun money that's just sitting there.
Online holiday shopping: 5 pitfalls





Carry only enough cash for what you need, and leave the rest at home. Avoiding plastic is great, but budgeting is just as important when choosing to pay cash.
If you like the green, try budgeting your cash with envelopes: one for groceries, one for entertainment, etc.

3. Saving your info with vendors
Those online shopping sites are so considerate to save your address and credit card information -- some even have one-click ordering buttons, so you can buy something in just a second. It's very easy and very dangerous. Not only does this easy shopping make you broke if you're prone to impulse shopping, it also eliminates the feeling of spending money, because all you do is click.
Don't allow vendors to store your credit card information. Avoid signing up for e-mails and catalogs if those tempt you to shop when you really shouldn't. It can be great to know about a sale, but if you didn't need anything, it's just another temptation.

4. Clipping coupons you don't need
We all feel the pinch in this tougher economy, especially when buying groceries. Clipping coupons is downright trendy today -- but is it really a good habit? Sure, getting 50 cents off that package of cookies or that brand-name detergent is a discount, but you may be surprised to find that your grocery bill isn't going down despite all your clipping.
The truth is that buying generic brands that are just as tasty is often cheaper; coupons can make us buy things we didn't plan for.

Start with a grocery list for the week, and then look at your clipped coupons. If you can use one, great, but try supermarket brands too for the best bottom line.

5. Shopping with your emotions
It was a rough week, or a good one, or you want to reward yourself for losing a few pounds, so you go shopping. You earned that new dress, that new gadget, that big pie -- it was on sale, too. Letting your mood dictate your buying decisions is the quickest way to go broke.
Sober up before shopping. Do you need these items, and can you afford them? Be honest with yourself. Reward yourself by doing something that doesn't cost, like taking a nice bath, or spending time with loved ones.

6. Not planning ahead
It's Tuesday, you're tired, and you have no idea what you'll make for dinner. A great night for takeout, right? Using data from the Bureau of Labor Statistics, it's estimated that the average family of four spends more than $4,000 per year on eating out -- a very expensive habit that will make you broke in a hurry.

When you make your grocery list, make a menu for the week at the same time, so you always have ingredients for a meal. If your week is hectic, try cooking on Sunday and freezing meals for the week. Plan for lunches the same way; not only will you save money, you'll eat healthier by avoiding fatty restaurant food.

The bottom line
It takes some discipline to break these bad habits. With some planning, restraint, and avoiding tempting situations, you can break these habits -- and maybe even find you have a little extra cash at the end of the month.

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12 money mistakes you're probably making

Miscalculating your budget
Research suggests that creating an annual budget instead of a monthly one works better, largely because we feel less confident in our annual estimates, so we tend to add more cushioning for unexpected expenses. In one study, college students underestimated their monthly expenses by 40% while overestimating their annual expenses by 3%.

The best holiday deals and steals
Overspending on housing
It's almost impossible to get ahead financially unless you save a significant chunk of your income -- ideally, $1 of every $3 you earn. But many people get tripped up by their housing costs. Traditionally, financial advisers have encouraged buyers to spend about one-third of their income on housing. But for many people, especially anyone with student loan debt, child care payments or other hefty expenses, that's too big a chunk.

Skimping on career investments
Expect to pay more for your holiday meal

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Investing in a career coach or development course can help you snag a promotion, get "unstuck" from a career rut or transition into your dream job. The price of one-on-one coaching typically starts at around $200 an hour, but less-formal advice can come from meeting with more-experienced colleagues over lunch or coffee.

Falling into spending traps
Rewards credit cards sound good in theory, but in reality they encourage you to spend more than you would otherwise. Economists dub this phenomenon "purchase acceleration," because you ramp up your spending when that reward is in sight. Rewards cards also carry a higher interest rate -- two percentage points, on average -- than cards that don't offer rewards.

Failing to negotiate prices
Even department stores often offer some wiggle room on their posted prices, and big-box stores usually match competitors' prices. This negotiating trend has become so prevalent that the advertising firm Cramer-Krasselt came up with a name for such pushy customers: "neo-hagglers." But many consumers fail to realize that prices are flexible and don't bother asking for a better deal.

Earning from one income
The average worker now holds 10 different jobs before age 36. While some of those job changes are voluntary, many also result from layoffs. By earning income from a variety of sources, workers can increase their financial stability. Options for new sources of income include freelance work, a teaching gig at a local community college, or a potentially money-making blog.
Taking on too much -- or too little -- debt

Not all debt is bad. It can enable you to return to school, buy much-needed professional outfits before receiving your first paycheck or even cover your rent during a tough month. Being so afraid of debt that you avoid it altogether can force you to miss out on opportunities, while taking on too much can lead to financial ruin.

Trying to beat the market
Timing the market would require a "Back to the Future"-style time machine. That's why investing a little bit at a time, regardless of the market's behavior, is the safest way to go. Retirement accounts such as 401k's, which invest money from your paycheck each month, make it easy to invest this way.

Paying too much attention to the Dow
Focusing too much on the ups and downs of the stock market just causes stress. When the market's plunging, concentrate instead on your hobbies, family and outdoor activities. Avoid cable television news, which often treats every dip in the market like a major crash. If your investments are well-diversified, then you've done all you can.

Counting on Social Security
As they think about retirement, today's thirtysomethings should be aware that the Social Security trust fund is scheduled to run out in 2037. That means, if nothing changes, benefits will shrink to about three-quarters of what they are now, because only money that is being paid into the system will be paid out. Young professionals need to plan on funding the bulk of their retirement with their own savings.

Overspending on gifts
Pollster John Zogby has found that the amount of money people say they intend to spend on Christmas gifts has been steadily declining since 2001. Consider joining that movement by making your gifts more meaningful and less expensive. Instead of pricey jewelry and electronics, consider cookbooks and museum dates. You can also consult websites such as craftster.org to find unique do-it-yourself gift ideas.

Underestimating tax bills
People who earn money beyond their usual paycheck, from freelance work or a side business, are most at risk for owing a lot of money in April. And poor tax planning can also trigger additional fees. Married couples who earn similar high salaries are also at risk, because of the so-called marriage penalty. Check to see if you've been paying roughly the correct amount of taxes by reviewing your payroll stubs or other documentation.

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4 ways we keep wasting money

The prepaid debit card promoted by the surgically enhanced coven of Kim, Khloe and Kourtney Kardashian will no longer occupy tweener wallets. Recently the reality show trio yanked the MasterCard-branded plastic that bore their images following consumer group outrage and a threatened investigation by Connecticut's attorney general.


Among the laundry list of fees attached to the card (which, a statement from the issuer showed, had only about 250 takers) were $99.95 for the initial card purchase and 12 months of fees, a $7.95 monthly fee after the initial purchase period, $1.50 for ATM withdrawals, $2 for bill pay (each item) and $9.95 for a card replacement.
Even canceling the card would set you back $6.


1. Credit cards
Any conversation about wasted money will inevitably turn to credit cards and the hefty price paid for their convenience.
There are approximately 610 million credit cards held in the United States, and the average credit card debt per household that has such debt is $15,788, according to the Federal Reserve Bank of Boston and CreditCards.com, part of the Bankrate Online Network.



The site crunched out that the average APR on a credit card with a balance is just shy of 15%. Total U.S. revolving debt (98% of which is made up of credit card debt) was $852.6 billion as of March.

All of these factoids add up to megabucks being handed over to credit card companies each year. Even with regulations imposed by federal reforms this year, it is unlikely Americans will stop carrying balances, and paying the price for doing so, any time soon.

2. Overdraft fees
Once considered a devastating and embarrassing faux pas, consumers these days actually seem to relish the opportunity to kite checks. As many as 75% of bank customers have opted to keep overdraft "protection" and the fees incurred, according to The Wall Street Journal.

Illinois-based Moebs Services, a banking analyst, estimates banks will collect upward of $38 billion in overdraft fees next year, up from this year's estimated $35.4 billion. Last year, $37.1 billion was collected from overdrawn consumers, and the median overdraft price increased to $28 per check this year from $26 in 2009.

Economist Mike Moebs points out that overdraft fees are so high that consumers hit by them the most frequently could save money by instead taking out one of those much-maligned payday loans.
"The average amount overdrawn on checking accounts by about 70% of consumers, according to the General Accounting Office and the FDIC, is less than $100," Moebs says. "Consumers who use a payday advance loan for $100 or less will pay an average of $17.97, which is 33% less than the $27 it costs for an overdraft of that same amount from a checking account."

3. Unused memberships, gift cards and rebates
According to the International Health, Racquet & Sportsclub Association, there were 45.3 million gym and health club members last year, and health club attendance averaged 102 days.
That means on average, up to 263 days of each annual membership go unused. Assuming that a monthly membership, on the low range of things, is about $30 a month, that's $258 a year being paid by the average customer for unused days. One way to cut the waste is to increase gym attendance.

One more day of gym attendance would reduce the per-visit cost of a membership from $3.53 to $2.38. But if you really don't plan to use the gym much, or you feel it's not worth the per-visit price, you may be wasting money.
Massachusetts-based research firm TowerGroup, a subsidiary of Corporate Executive Board, issued its annual overview this week of the gift card industry.
Spending on gift cards for this year's holiday shopping season will increase for the first time in three years, reaching $91 billion in sales, it estimated, and could hit $100 billion by 2012.
The good news: In addition to the increase in spending on gift cards, "breakage" -- industry jargon for the value left unused on gift cards -- is expected to decrease by almost 50% since 2008, to 3.1%. The change is owed to new federal regulations.

The bad news: That's still $2.5 billion consumers will never collect on.
How about rebates? Those deals on electronics and cell phones sound great -- $50 off if you just clip the UPC symbol and mail it in. Blame procrastination, forgetfulness and tricky fine print for the fact that up to 60% of rebates are never filed and billions of dollars will never be collected.

Though numbers aren't readily available, consider other services you pay for but don't use -- unused cell phone minutes and data allowances, lingering over one Netflix movie all month, paying for premium cable channels that go ignored until the next season of "Entourage" starts and all those impulse buys from Amazon that you'll only glance at on your Kindle.

4. Airline fees
Ever-multiplying airline-imposed fees are another costly modern convenience. A typical bag of checked luggage will set you back at least $25 to $35 each way on many airlines.
Baggage fees charged by airlines totaled a mere $464 million in 2007. For the first half of this year, nearly $1.7 billion has already been collected in these fees, according to the federal Bureau of Transportation Statistics.

Delta Air Lines led the pack with nearly $474 million in fees. Rounding out the top five were American Airlines ($280.5 million), US Airways ($256.3 million), Continental Airlines ($167.6 million) and United Airlines ($155.9 million).

It's not just extra baggage that has us paying through the nose. Fees related to canceling and changing reservations earned airlines more than $1.1 billion in the first half of this year.
To fight the fees, however, you must first know what they are.
A survey earlier this year by the National Business Travel Association found that 61% of those who responded said it was "very important to know the total cost of the trip," but 58% said they were "unable to track the total amount spent on ancillary fees."

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Will your pet bankrupt you?

We have one really nice rug in our house: a Turkish wool number that my husband inherited from an aunt.


That is, of course, the rug our new dog decided to eat. The pooch didn't complete his task, but repairing the damage set us back $500.


That sum paled compared with what a relative could have faced in vet bills when her dog developed a series of serious but treatable ailments. The bills topped $16,000. Luckily, she had bought pet insurance right before the first diagnosis, and most of the bills were covered.
Do pets make good gifts?





Readers had similar stories, and not everyone has pet insurance to cover the costs. Diane Jarvis Powers of Thousand Oaks, Calif., looked into coverage after her dog's first surgery to remove strings from a rope toy that blocked his intestines, but decided the insurance was too expensive and had too many exclusions. Little did she know the dog, a purebred Sheltie adopted from a friend, wasn't done: He then scarfed down T-shirt strips her son had thrown in the trash, requiring another surgery.

"That 'free' dog has cost us $10,000 so far," Powers wrote on my Facebook fan page.
Dogs aren't the only animals that cost their owners money. Readers described surgeries to treat horses with colic, cats that required diabetes medication and dental treatments, and even a lizard that received two months of expensive care before it died.

The point is: Pet ownership can be expensive, above and beyond the costs of acquiring, accommodating, feeding and grooming the animal. Bad luck or poor preparation could leave you facing catastrophic bills.
What Americans spend on their pets
Share of total
Food
$18.28 billion
38%
Vet care
$12.79 billion
27%
Supplies/OTC medicine
$11.01 billion
23%
Grooming, boarding, other services
$3.45 billion
7%
Live animal purchases
$2.21 billion
5%
Total
$47.74 billion
Source: American Pet Products Association, 2010

And that's assuming your pet never hurts anyone. As I wrote in "Your dog's bite could bankrupt you," a single act of aggression could cost you $25,000 or more. Even owning certain breeds of dogs with a reputation for aggression can mean losing your homeowners insurance.

If owning a pet is important to you -- and believe me, our dog has brought immense joy into our lives, in addition to minor property damage -- then here are some suggestions for how to cope:
Do your research. Before you seek out or agree to adopt a pet, make sure you understand the setup and continuing costs in both money and time. This chart from the American Society for the Prevention of Cruelty to Animals outlines the first-year expenses you can expect for various types of animals, ranging from $235 for a fish to more than $1,800 for a large dog. Rescue groups and discussions with other owners of your type of pet can help you understand the time commitment involved. Also, check with your homeowners insurance company to find out if it blacklists any dog breeds. If so, consider other breeds or shop around, since insurers differ considerably in what they will and won't cover.

Pet-proof your house. Just as you'd take safety measures before bringing a baby into your home, you'll need to consider hazards to your new pet. That means removing or securing toxic plants, electrical cords, small objects and even clothing (especially underwear, which both dogs and cats will eat). If you have both a dog and a cat, you'll need to figure out a way to prevent the canine from treating the litter box as a candy dish. (Yuck, I know, but what's called coprophagia isn't uncommon with dogs.) Daily vigilance in keeping hazards away is essential.

Invest in training -- and diversions. Our dog trainer Paul Owens, a co-author of "The Puppy Whisperer," notes that if you don't keep your dog occupied it will become "self-employed" in positions such as gardener (digging in the yard) or interior decorator (chewing up the furniture). Proper training and appropriate toys can help. Ask friends for referrals to trainers or check with a pet store. Chain pet stores often offer affordable group classes.

Consider pet insurance. Experts are still divided about whether pet insurance is worth the money. Consumer Reports advises setting up a savings account to pay for vet care, but if you're the type of person who would do anything to save your animal, pet insurance can make more sense.

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5 ways to trim your grocery bills

To help you get a grip on this tasty but often expensive cost of living, here are five ways to cut the fat from your grocery bill:

1. Make a grocery list and check it twice
Going through your kitchen before hitting the supermarket is free, and a little planning can fatten your wallet by preventing expensive impulse buys. You might even save on gas by being organized, because you won't need to make a second shopping trip to buy those forgotten items.

Use this free printable grocery shopping list to help you plan your next trip to the market.

2. Watch the price scanner
Mistakes on price scans are common at the grocery store and can cost you additional dollars. A recent Consumer Reports survey found that 6% of respondents were overcharged at the grocery checkout, and no particular chain stood out as more or less accurate than the others. Watching while your grocery prices scan and verifying their accuracy at checkout can save you money and may even score you free food -- many grocery chains will give you the item for free if it scans at the wrong price, but it's up to you to spot the error.

3. Buy generic items over big brand names
Save a huge 10% to 50% on every shopping trip by switching your brand-name buys for generic items. It costs big bucks to market brand-name products, and you're paying for that expense when you buy a food item with a recognizable label. Compare many generic items to the brand-name equivalent and you'll find that the brands are not necessarily better than their less-advertised alternatives.

4. Stop clipping the wrong coupons
Take a good look at the grocery coupons you're clipping before getting excited about the deal. Many coupons offer deals on highly packaged foods low in nutrition and high in unpronounceable ingredients. Skipping the coupons for bad buys and opting to pay a little bit more for whole foods may be a better deal for your health in the long run.

5. Skip the cans, buy dried beans in bulk
Why are you buying beans canned in captivity? Buying dried beans in bulk and soaking them overnight is a frugal way to add protein to your diet without paying for the high cost of meat. Besides, dried beans are extremely cheap and expand when soaked, so your family gets more meal for every dining dollar spent by forgoing the canned variety.


Does it pay to buy organic

Finding simple ways to cut your everyday food expenses takes a bit of practice, but the payoff can be huge. Keeping track of your budget using this free household budget spreadsheet can also help you save money on all your other living expenses.

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How cheapskates do dinner

A $26 ribeye tastes that much juicier at $13, at least to me.
So while some people shy away from dining-out discounts, fearing perhaps the scorn of their teenage servers, others like me won't leave home without one.

"I try to go out only if I have a deal," says Tonya Ward, a stay-at-home mother from Winston-Salem, N.C., who clips newspaper coupons, surfs the Web for discounts and goes to kids-eat-free nights at local restaurants.

One night, Ward even dressed her whole family up as cows, with black and white spotted t-shirts, to get a free meal at her local Chick-Fil-A restaurant.
"I am never one to pass up a free meal," Ward says.

But it doesn't take a costume to get discounts, provided you are willing to plan ahead, be flexible and use coupons and gift certificates unabashedly. And some of them are so discreet your date will never know you went cheap.

Discount blogger Anjie Henley, for instance, doesn't think twice about combining coupons and gift certificates to get her meals for a fraction of the price.

"I try to never pay full price for anything, especially food," says the operator of FreelanceByU.com. "You can eat out for pennies on the dollar" if you know where to look for discounts, she says.

Henley once bought a $50 T.G.I. Friday's gift card for $20 on eBay and then used it at a restaurant with a $7 coupon she received by e-mail. That's $37 in free food.
More from MSN Money


Stiff competition in the restaurant business and a down overall economy are prompting more restaurants -- even white-tablecloth eateries -- to offer deals to bring in new customers and reward return patrons.

That makes it easier for diners find good meals at even better prices -- often discreetly.
The cash-back program Rewards Network, for example, gives its customers up to 20% back from their final tab, including tip and taxes. Rewards Network's members pay a membership fee or are referred by their airline's miles program in exchange for a rebate on each meal.

Customers register their credit cards. When they dine, they simply use that credit card to get savings. The server and your date don't have to know you are getting a discount. The rebate is refunded to the credit card a few days later, and the diner is notified by e-mail.

The savings "add up pretty quickly," claims Chris Curtis, a spokesman for Rewards Network.
However, prospective members should peruse Reward Network's site first to see if the restaurants you like are affiliates.

For someone like me who dines out only occasionally and doesn't drop a ton of money on a meal, the program is barely worth the $49 annual membership fee (deducted from your initial savings, not paid up front). If you join the program through an airline frequent-flier program, the membership is free, but you get your money back in miles.
Of course, even these miles can be turned into free dinners, if you know how.

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20 ways to save on a shoestring

Savings.

When you hear that word, do you feel a clutching sense of guilt and inadequacy? If you're like most Americans, you must. According to a study of saving behavior by economists Steven Venti of Dartmouth and David Wise of Harvard, more than 75% of respondents said they knew that their savings, specifically for retirement, were insufficient.

That's shocking, but not as remarkable as their discovery that how much you save has very little to do with how rich you are. Venti and Wise divided the 7,700 households they studied into 10 income groups. The top 10% of the lowest income group nonetheless had saved more than $150,000 per household. Meanwhile, middle-income folks, on average, had only $45,000 in assets.

That's annoying and embarrassing, and it means I have no excuse for my inadequate savings. And neither do you. Because what Venti and Wise found to be the most significant savings factor was no more jaw-dropping than this: Ya just gotta save it.

But hooooow, you whine? How can you save a red cent when you just barely live on what you earn? Well, since you asked: Saving is a two-step process. First you retrain your brain, and then you find all kinds of clever ways to live on less (many of which are conveniently located below).

Step 1: Retrain your brain
Saving money is a state of mind. Before you can start, you have to renounce the spending -- and stop believing you actually need all the stuff you've been spending money on. Just don't. Spend, that is. Sure you want it, but that's no excuse for buying it. The next time you want to buy something, take the $50 or $100 out of your wallet, and stash it somewhere. See? That's called saving. You don't end up with stuff; you end up with MONEY. A few other tips for the brainwashing you're about to do:

Accept frugality as your savior. Become a closet cheapskate and emulate your frugal friends. Note that they fix the shower curtain instead of buying a new one. Sit down with Depression-era relatives and ask about economizing. That's what I did. And, yea, did the spirit of saving take hold of me!

Seek inspiration. Get thee onto MSN Search and type in "living cheaply," "frugal living" and "voluntary simplicity." You'll find a gazillion Web sites devoted to living on less, including The Frugal Shopper and The Simple Living Network.



Cry poverty -- with style. Learn handy phrases like, "Let's eat somewhere cheap." And "Shopping? Blech. Let's go for a bike ride." It's less embarrassing than you'd think, because more people are in your shoes than you think -- and they'll be grateful you spoke up.

Step 2: Now save it!
There are a thousand ways to live on less. But you don't want to make your life a misery. Here are some of the most painless ways you can economize without losing out on quality of life.
Don't even think about it. Direct deposit is a saver's best friend because the money is whisked away into your IRA, 401(k) or money market account -- and you don't have to do a thing. Except drop by your payroll department and/or your bank and fill out the damn forms. Today.

Go veggie. If you can do three meatless days a week (without substituting pricey fish), you could save $25 a week, which equals $100 a month, which equals $1,200 a year! Beans: Ya gotta love 'em.

Play money games. Whenever you get a $5 bill, put it aside. Or do it with ones, with quarters or all your spare change. You'll have a nest egg before you miss a nickel.
Never spend a windfall. Take your income-tax refund, that holiday money from your folks, the $16.35 overpayment check from the telephone company and any other extras and save 'em.
Haggle. You'd be amazed at who will drop their prices, fees and interest rates: airlines, hotels, credit card companies, computer/appliance/rug salespeople. (For more on how to haggle, read Liz Weston's column here.)

Re-evaluate. Re-evaluate. Re-evaluate. That dinner out cost more than you spend on groceries in a week. That pair of shoes is worth half a commuter pass. Learn what your money is worth, and you won't be so quick to dispose of it. Use some of the tools here at MSN Money to analyze your spending.

Don't overpay your taxes. Sure you love to get a fat refund from the IRS every spring. The fact is, however, you're effectively lending money to the government interest-free. Go through your tax return and see if you can plan your withholding so you get to Dec. 31 maybe getting a $100 refund. That way you can use your money NOW. (And bank the refund when you get it.)
Raise your insurance deductibles. Reassess the deductibles for various kinds of insurance. If you can raise them, your premiums drop.

Get your mortgage costs down. First, look at whether the rate is too high. If it is, look at refinancing -- if you'll save money. Next, let's look at the private mortgage insurance (PMI) you've been paying because you didn't have enough money to make a 20% down payment. You're protecting the lender, not you. If the equity in your home is greater than 22%, demand that your lender cancel it. It's the law. Lastly, pay ahead on your mortgage. If you can swing an extra $100 per month, you will save thousands in interest costs over the long haul.

Toss the catalogs. The most insidious form of spending temptation known to man or woman. Chuck them straight in the trash. Yes, including Victoria's Secret. Sorry, guys.
Don't pay unnecessary fees. Like the $1.50 you pay just because the ATM is right there, right now as opposed to walking two blocks to your bank, where you don't get charged every time you use your cash card. Or the late fees for returning videos. I know a woman who paid $60 in late fees to a video store last year. (It wasn't me.) (OK, it was.) Or those fat charges banks hit you with when you write a check that, well, bounces.

Clean it yourself. I've discovered a nifty trick: When a clothing label says, "Dry Clean Only," I wash it. Or I dab out that little coffee stain with an old-fashioned cleaning device known as a sponge.

Never pay a pro. If you can fix the neighbor's car, and she can paint the bathroom: Do it.
Bank your raise. You may find that measly 3% to 5% boost in the paycheck irritatingly tiny. So add that to your direct deposit and live on your previous salary.
Pay less for long-distance. Evaluate your phone bill and see how much you're paying per minute. Some dial-around codes or cheap calling cards (one without a surcharge per call) may give you a better rate. Not only do you save, but you may find you won't need to speak to Al in Schenectady so often.


No pet pampering. Does your dog need those pricey snacks? Does your cat need acupuncture? We didn't think so.

Never pay full price. If you must shop, for Pete's sake, discover the online world of discount Web sites. Ebay is still OK, but half.com and craigslist.org are excellent sources of "lightly used" goods -- everything from books to jewelry to office furniture -- to the entire first season of "Star Trek" on video.

I could go on an on, but let's stop here. If you follow even a few of these tips (as I have) you'll end up with a substantial chunk of extra cash every month. Just stay in the savings state of mind, and don't blow it on those post-holiday sales, OK?

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