Shopping: Naughty vs Nice Companies

Surely, no company would brag about squeezing every last nickel out of the American consumer by larding on questionable fees and hefty shipping costs, shortening return periods, and imposing obscene penalties for canceling contracts for everyday services.

Now that the holidays are here, we thought this would be the perfect time for our first ever naughty and nice list, a collection of customer-service policies we like or loathe because they strike us as particularly consumer friendly or not so friendly.

Consider it a pat on the back or a kick in the pants. We feel so strongly about the issue that we’re making the list the centerpiece of a holiday educational campaign, following in the footsteps of previous campaigns alerting shoppers to the tricks and traps of extended warranties, gift cards, and credit-card debt.

A couple of points for the record. The list is not derived from any exhaustive Consumer Reports study or survey. Rather, it’s based on input from our in-house reporters and editors, who cover shopping, travel, hospitality, telecommunications, and other franchise areas. While we’ve identified specific companies by name, we acknowledge that there are, of course, other large companies we haven’t singled out that have similar policies. And just because we mention a particular policy doesn’t mean we endorse—or dislike—everything else about that company or the way it does business.

That said, here’s our list, in no particular order. What policies do you think should be added to the list—for better or worse?

Nice:

1. Southwest. Two pieces of checked luggage, no charge. And that includes bulky freight such as golf clubs and skis.

2. L.L.Bean. 100 percent product satisfaction guarantee. Return anything at any time for any reason.

3. Zappos.com. Free shipping and free returns, including prepaid return label.

4. Costco. Open-ended return policy for virtually everything the warehouse retailer sells minus some home electronics, which come with a still-generous 90-day return period.

5. U.S. Cellular. While the FCC is proposing that cell carriers alert consumers who are about to exceed their plans’ monthly minutes allotment, which could lead to significant overage charges, this company is already practicing due diligence and giving its customers a heads up.

6. Orvis. For customer service the old-fashioned way, shoppers can call a toll-free number and speak to a human being without wading through an arcane automated menu system. Alternatively, Orvis offers live-chat with support staff, e-mail queries, and a guaranteed response time of two hours or less.

7 Hotels.com. The travel website never charges a fee to cancel or change a room booking. But it’s still imperative to check the hotel’s specific reservation policy to avoid any penalty imposed by the chain.

8. J&R. The electronics superstore and e-retailer has a straightforward price-match policy without the many caveats and fine-print exclusions of some other merchants: Find it at a lower price at an authorized seller (the exception being a warehouse membership club) and “we will do everything possible to meet or beat that price” via a special telephone hotline. J&R also gives customers 30 days to ask for a price adjustment on existing orders if they unearth a lower price.

9. Walmart. No receipt, no problem. Customers can return most items to a Walmart store for a cash refund (for purchases under $25), a gift card (for purchases over $25), or even exchange. There’s one catch: More than three such returns within 45 days requires a manager’s approval.

10. Publix. It’s no fun being sick, but if you need an antibiotic, the Florida-based supermarket chain will have its pharmacies dispense up to a 14-day supply for some of the most common generic ones free. All you need is a proper prescription.

Naughty:

1. Buy.com. No returns for “oversize” TV sets, defined as any model 27 inches or larger. If you fail to inspect set upon delivery and sign shipper’s release, Buy.com says it’s your problem and go deal with the manufacturer. Its website also lacks a phone number for customer contact.

2. CompUSA. For imposing unusually punitive restocking fees of “up to 25 percent” of the purchase price on any product the retailer decides doesn’t meet its return criteria. Nowhere is it spelled out which specific products are subject to such a fee.

3. Best Buy. Offers a 14-day grace period to return computers, monitors, camcorders, and digital cameras.

4. Spirit Airlines. The carrier, which pioneered “ancillary” fees among domestic airlines, charges for carry-on bags: $30 in advance, $45 at the gate.

5 Verizon Wireless. Doubled to $350 the Early Termination Fee imposed on consumers who cancel their smart-phone contract after the 30-day grace period. Mercifully, Verizon kept the penalty at $175 for consumers with conventional cell phones.

6. Dollar car rental. It’s bad enough that companies force you to pay for gas you never use if you choose not to refuel the vehicle yourself. But Dollar is even more penny pinching by demanding customers present a receipt to prove that they filled up the tank within 10 miles of the drop-off location or face a fee to top off the tank and the labor required to do so.

7. SanDisk. If mail-in rebates weren’t enough of a headache, SanDisk, which frequently dangles promotional offers for its memory cards, is a big fan of mail-in rebates which are issued in the form of a gift card. What’s wrong with an instant rebate at the register, a practice that the rival company Lexar began based on customer feedback?

8. Macy’s. Proving that high shipping fees are not necessarily a thing of the past, the department store chain calculates its freight charges on the dollar amount of the order, not the size and weight of the package. The base fee is $5.95 for orders under $25, to as much as $23.95 for those $300 or more. And that’s standard delivery.

9. United Airlines. No one wants to overpay on airfare, but you never really know whether you’re getting a rock-bottom price. As peace of mind, United offers customers a low-price guarantee. Find a lower fare on the company’s website for the same itinerary you already booked and not only will United give you the lower fare, but also a voucher good for 20 percent off your next purchase. But hold on. If you have a nonrefundable ticket—the type most people buy—and find a cheaper flight, United imposes a $150 “administrative” fee to make the change.

10. DirecTV. The California-based satellite TV firm, which has more than 18.7 million subscribers, has a policy that automatically extends a customer’s contract for another 24 months if any new equipment is added. If that policy rubs you the wrong way and you want to cancel your service, the penalty is an early termination fee.

By: Tod Marks | Yahoo.com

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So if you’re looking for ways to accelerate your retirement, here’s how you can move the date of your retirement party up a few years:

1. Add cash.
Yes, it takes money to make money. So the first step in starting and growing your retirement nest egg is finding ways to get more cash into your retirement accounts.

When times are tight, saving more can be a tall order. But you may get some help. If your employer offers a matching contribution to your 401(k) plan, you might double those extra savings. Similarly, Uncle Sam offers benefits in the form of deductions for contributions to 401(k) plans and traditional IRAs, as well as tax credits for low- and middle-income taxpayers who contribute to IRAs.

It takes a little more than $550 per month in savings, earning a 7% return, to get to $1 million over the course of a 35-year career. But if you can add just $100 per month to that — including what your employer puts in and your tax savings — you can cut more than two years off your wait.

2. Embrace stocks.
Saving more is great, but there’s only so much you’ll be able to put aside. You have to make the most of what you have.

People are often too conservative in their retirement investments. Despite the sometimes violent ups and downs of the stock market, the long-term return on stocks far exceeds that of less risky investments like bonds and bank savings accounts. If you have all your money in cash, you won’t lose a penny — but you’re lucky to make 1%-2% right now. Even target funds and other balanced retirement options have sizable portions of their assets in bonds.

A 7% return is a reasonable average for a portfolio that has slightly more in bonds than in stocks. But throughout most of your career, you can afford to take more risk. Owning more stock could raise that return to 9%, lopping off almost five more years from your target.

3. Hit for the fences.
If you only want to match the S&P 500, buying index funds is easy. To get higher returns, however, you’ll have to find stocks that will outperform the index. Here are some examples from the past 20 years:

Those stocks have done particularly well, especially given how badly stocks have done since 2000. But you don’t have to belt all your picks out of the park to retire sooner. If you can eke out just another couple of percentage points on your average return — boosting it to 11% — then that’ll cut another 3 1/2 years off your target.

4. Become a cheapskate.
So far, we’ve only looked at half of the story. How much you spend plays just as important a role in retirement as how much you save. And while many expenses go away when you stop working, new ones quickly take their place — things like travel, entertainment, hobbies, and medical care.

But you have a lot of control over many of these expenses. If it’s worth it to you to spend less in retirement, you won’t have to save as much before you retire. Cutting 10% off your spending means you’ll get to your smaller goal a year earlier.

All in all, combining these four simple tips can let you retire as much as a decade or more sooner than you otherwise would. That thought just might be enough to make even a bad day at work seem brighter.

Source: Fool.com

1. Cash in those bank rewards travel points
Citibank, Chase and Capital One have been hit hard with the financial crisis, and they’re watering down the value of credit card rewards points as a result. If you have 20,000 or fewer points (or miles) in any of the major credit-cards rewards programs, consider cashing then in before they’re devalued further.

2. Save money on fancy restaurants
Go to Restaurant.com and buy a $25 gift certificate for a fine restaurant near you (or at your destination) for only $10. Hundreds of eateries are willing to sell $25 gift certificates for only $10 because it helps encourage customers to dine at their establishments.

3. Packages can offer the best savings but a new Web site helps verify the quality of any given deal,
To fill rooms and seats, hotels and airlines will resort to rock-bottom prices, but they don’t want to publicize these discounts. So they sell a certain number of rooms or seats to companies that bundle them in packages. How good of a deal are these packages? Dealbase.com trawls the Internet for package deals. Its computers then figure out how much it would cost to book the component parts of the package (such as the hotel room and spa credit) separately, estimating for you how much you will (or won’t) save by booking the package.

4. Use envelopes for easy budgeting during a trip
If you have trouble sticking to your budget or keeping track of numbers, try putting cash into different envelopes marked for each day. Only spend the cash in your envelope. Use your debit card for emergencies only.

5. Try a ‘supermarket souvenir’
Instead of loading up on $20 T-shirts nobody likes, seek out local supermarket staples that may seem exotic back home. Examples include chocolate-covered macadamia nuts from a Safeway in Hawaii or a nicely-packaged box of tea from a Tesco supermarket in Britain. Check out our gallery of inspiring supermarket souvenirs from our staff and our readers.

Source: msnbc.msn.com

The Obama effect on Canada

While Canucks are eager to see someone new take over for many of the same reasons Americans are, one issue in particular that Canadians want to see the incoming administration take early action on is the economy.

So, when Obama takes over will our economy finally pick up?

“The whole economic picture is so complex, but when the American economy starts to recover Canada’s economy will quickly follow suit,” says Doug Owram, deputy vice-chancellor of The University of British Columbia Okanagan and author of History of the Canadian Economy.

While many people are optimistic that Obama will bring some meaningful change to the White House and America’s economy, most know the country’s – and therefore Canada’s – financial fortunes won’t improve overnight. Richard Kelly, an economist at TD Bank, says the incoming president “won’t be able to snap his fingers and make the problems go away. It’s going to take some time.” But, he adds, “the sooner the U.S. economy can get moving, the better it will be for Canada.”

The new administration has been making moves aimed at helping the economy in the weeks leading up to the handover of power. On Jan. 15 the Democrats revealed an $825 billion stimulus bill that they hope Obama will be able to sign soon after he becomes president. While it’s expensive, it’s something that Owram believes the country needs. “He’ll want to put money into the economy and fast,” he says.

However, the overall U.S. economic picture is still worsening – consumer spending is down, the housing market keeps contracting, problems remain securing business loans – but if Obama acts right away, Kelly says, things should start looking better sooner than later. “There’s nothing Obama can do in the first half of this year, but he wants to ensure that there will be improvements in the second half so by 2010 the economy can start growing again.”

A major plus for the Canadian government in all this is that it will finally be able to see how America’s economic policy will look in the coming months. With Bush on his way out, and the incoming president trying to be proactive without stepping on his predecessors toes, until now, no one’s been able to say with certainty what Obama’s fiscal plans are. “For the last three months we’ve been waiting to see where America’s policy will be going forward,” says Kelly.

One priority the new government already has on their to-do list is to develop infrastructure on a level not seen in the U.S. since the 1950s. Canadian companies can hope that they will be enlisted to assist with some of these massive programs. “The U.S. buys a lot of Canadian goods, so if there’s additional spending in the States, it could trickle over to Canada,” says Renan Levine, an assistant professor of political science at the University of Toronto.

But it’s not just spending and stimulus packages that America’s offering the North American economy; it’s an attitude adjustment. It’s no secret that Bush’s popularity on the international stage was tepid at best, so a more inclusive president could help Canada’s economy simply by being open to new ideas. “Obama might be willing to listen to Canadian concerns around things like softwood lumber or the auto industry,” says Owram.

On the flipside, though, is Democrats’ history of being more protectionist than Republicans. During the primary campaign, Obama came under fire for saying he would renegotiate the North America Free Trade Agreement. And whether that’s true or was mere political posturing, it’s still an issue of which Owram believes the Canadian government needs to stay aware. “There are strong sentiments to put up tariff barriers, and put restrictions on outsourcing jobs,” says Owram. “Canada’s not a primary focus of that, but nonetheless the mood in Congress might not be as friendly to international trade.”

Another potential obstacle for economic progress between the two countries is Obama and Stephen Harper’s ideological differences. Owram points out that Harper’s views are more in line with Bush. “I don’t know if that will mean anything, but Conservatives will have to listen very carefully to a much more liberal administration,” he says. “In fact, Obama will be more liberal in instinct than he let on in the campaign.”

Hopefully, personality differences won’t be an issue, because it’s vital that the two countries work together to help turn North America’s fiscal outlook around. “Whatever happens, the trade relationship will be vital for Canada to manvouer through the recession,” says Owram. “We have to watch the American economy and Obama’s policies very closely.”

We feel your pain. So let us reassure you. Despite what you may think, there is a lot of good news about retirement. We’ve talked to a wide-ranging selection of financial experts and we’ve come away with one conclusion — you’re doing far better than you think you are. Join us as we reveal 10 things that most people don’t know about retirement, but should.

1. You’re not behind at all
The ads make it sound as if 55 is a reasonable retirement age. In fact, for most of us it’s not. The median retirement age in Canada is 62 for men and 61 for women, according to Statistics Canada. Who does retire early? By and large, federal government employees, who ditch work at a median age of 58. You can credit their early departures to generous pensions that are indexed for inflation. But even public-sector employees aren’t hanging up their work clothes at 55.

If you look at the math behind retirement, you can see why most of us stick around the office a bit longer than we might like. For every year early that you retire, you pay three penalties: you lose a year of potential savings, you lose a year of growth for your retirement savings, and you gain one more year of retirement expenses.

Consider a woman who hits 55 in good financial shape, with a paid-off condo and $100,000 in savings. She can count on her savings to produce $4,000 or $5,000 a year in returns, but she’s too young to start collecting Old Age Security or Canada Pension Plan. Unless she resorts to desperate measures, such as selling her condo or burning through her savings, retirement is impractical.

But look at what a difference five years can make. If she buckles down and contributes $10,000 a year to her retirement fund during that period, and achieves a 7% annual average return, her savings double to $200,000. That bankroll can generate $8,000 to $10,000 a year in income as long as she lives. At 60, she can also start collecting Canada Pension Plan. If she combines those sources of income with part-time work, a phased-in retirement becomes quite practical.

2. You’ll live longer than you expect
When we’re doing our retirement planning, many of us figure that we’ll live to 80, the average lifespan in Canada. But that average is misleading. It reflects what a newborn baby can expect in the way of lifespan and is dragged down by all the unfortunate people who die relatively young.

If you’ve managed to reach 65 without suffering a terminal illness, you’ll probably live considerably beyond 80. According to StatsCan, a 65-year-old man can expect to live to 83; a 65-year-old woman can look forward to blowing out the candles on her 86th birthday.

And remember — those are averages. Half of retirees live longer, some much longer. Moshe Milevsky, an associate professor of finance at Toronto’s Schulich School of Business at York University, says there is a 41% chance that at least one member of a 65-year-old couple will live to 90. So even if you don’t quit work until 65, there’s a good chance that your retirement could still wind up spanning a quarter or more of your life.

3. You’ll see more of your partner — a lot more
Sure, you love your spouse, but let’s do a little math here. Chances are, for most of your married life at least one of you has worked outside the home. Subtract sleep, travel time and other away time and you’ve seen your beloved for — at most — six hours a day.

In retirement, that figure can easily double. And continued exposure can cause even happy couples to bicker. Fred and Janet Barnes (not their real names) retired to Dickey Lake, Ont., to renovate a cottage after living in and around Toronto for most of their lives. “His perfectionism drove me a little crazy,” says Janet. “My slapdash methods were hard for Fred to take.” The Barneses eventually figured out ways to divide the work so they wouldn’t get on each other’s nerves.

Other retired couples strike different bargains — maybe the kitchen becomes her territory, while the garage becomes his — but whatever the specifics of the deal may be, the important point is to realize that retirement is not just a financial journey. It’s also an emotional odyssey and you should plan ahead to make the most of it.

Beginning in your 50s, you should start thinking about the activities that will fill your day in retirement. “You’re going to need to stay connected,” says Dr. Randy Swedburg, chair of the applied human sciences department at Concordia University in Montreal. Your many options include going back to school, giving your time to charity, or starting your own business.

4. A part-time job is worth $400,000 in the bank
If your retirement savings are a bit smaller than you had hoped, take heart — a part-time job in retirement can go a long way toward making up for an undersized portfolio.

Let’s say that you can make $20,000 a year from your part-time job. That is about what you could reasonably expect a $400,000 investment portfolio to generate in retirement, says Terry Greene, a fee-only planner with MSC Financial Services Ltd. in North Vancouver. So your part-time job is the financial equal of a $400,000 portfolio. Especially if your part-time job consists of doing work you enjoy, you may find that you never want to fully retire.

5. Your employer really does love you
The first wave of baby boomers has already hit 60. Millions more will soon hit retirement age. And there are not that many people coming up behind them. “The demographic trends are suggesting that over the next 10 to 15 years, we’re not going to replace the workforce that currently exists,” says Ted Emond, a senior consultant with Hewitt Associates, a human resources consulting firm in Toronto.

The likely result of Canada’s aging society is a potential labor shortage that will make skilled help more and more valuable with each passing year. HSBC Bank Canada, is already attempting to keep older employees in the workforce by letting them work part-time while collecting pensions. Wal-Mart Canada allows its retirees to come back as consultants or to mentor current employees. Count on more employers to do the same as demographics makes skilled employees tougher to find.

6. Government is more generous than you think
The financial planning industry likes to cast doubt on the future of Canada Pension Plan. In fact, CPP is on solid financial ground after the reforms of a decade ago, according to the federal government’s chief actuary. CPP (or Quebec Pension Plan in the case of Quebecers), combined with Old Age Security, will provide you with an average of $11,500 a year if you’ve worked in Canada your entire life and retire at 65. The maximum you could qualify for is about $16,600 a year.

Don’t forget, too, that you’re eligible for a Guaranteed Income Supplement if you’re a low-income retiree. “For low-income [earners], government programs are going to provide you withthe standard of living you’ve always been used to,” says Malcolm Hamilton, a consulting actuary with Mercer, a benefits consulting firm in Toronto.

7. You may be missing free money
A Sun Life Financial survey found nearly 40% of us have access to savings programs in which our employer kicks in money to supplement what we contribute. But one in five of us who are eligible for such plans doesn’t participate. As a result, we lose guaranteed returns of 25% or more.

You should inquire with your human resources department to make sure you’re not missing out. Many publicly traded companies offer employee stock ownership plans with an employer match. If you buy $80 of your company’s stock each month through such a plan, your employer kicks in an additional $20 a month — an instant investment return of 25%. Other companies offer retirement plans in which the company matches your contribution dollar for dollar — a guaranteed return of 100%. In either case, the money is free and you should grab it.

8. You don’t need a million bucks
Financial planners like to say you’ll need 70% of your current income in retirement. To hit that goal, a middle-class couple will need to amass a million dollars or more in savings. But is the 70% figure truly a good estimate of what you need in retirement?

Probably not. Brian FitzGerald, co-author of The Pension Puzzle and chief executive officer of Capital G Consulting in Toronto, says you have many more costs while you’re working than while you’re retired, so your need for cash in retirement is considerably less than the 70% figure suggests. “There’s a bunch of expenses you don’t have to incur in retirement,” he says. For instance, most retirees no longer have to worry about paying off a house, funding their kids’ education, making RRSP contributions or commuting to work. And they pay substantially less in income tax because they’re earning less.

So how much of your current income do you really need to maintain your standard of living in retirement? “I’m pretty confident that 50% will do the job for most people,” says Hamilton, the actuary. Of course, if you want to live lavishly and travel constantly, you will need more, but if you’re happy to go on living much as you always have, replacing half of your working income should do the job.

9. RRSPs aren’t always the answer
Canada has five seasons: winter, spring, summer, fall, and RRSP time. But while we’re annually bombarded with ads telling us to stuff money into our RRSPs, don’t think of those four-letter contraptions as your only option in retirement planning.

RRSPs are not your best strategy if you have high-interest debt, such as a credit card balance. Given the 18% or more you’re probably paying on your credit card debt, you should first devote every available dollar to paying down that costly debt. RRSPs may also not be your best option if you’re a low-income earner, since the tax savings that result from making an RRSP contribution aren’t worth much if you don’t pay much tax to start with.

If the federal government goes ahead with its proposal to introduce tax-free savings accounts next year, RRSPs will have an additional competitor for your attention. Ottawa’s proposal, as it now stands, would allow each of us to put up to $5,000 a year into a tax-free savings account, or TFSA. You won’t get any tax deduction for doing so, but your money will grow tax-free. And you will be able to withdraw the TFSA money without paying any taxes. While the math gets complicated, “I would think people with below-average incomes are better with TFSAs,” says Hamilton, the actuary.

10. There’s a world of possibilities
One option that can instantly multiply your retirement spending power is to leave Canada behind. Mexico, Costa Rica, Malaysia and Panama all enjoy far better weather than we do, and much lower costs of living. “Overall, there is no question you can live here on one-half to one-third what you could in any Canadian city and have a good lifestyle,” says Tom Dawson, 54, who with his wife, Donna, moved to Panama City nearly two years ago from St. Albert, Alta. The 1,800-sq.-ft. condominium they bought overlooks the Pacific Ocean and the Panama Canal, and cost them less than $200,000. Medical care is excellent, locally grown produce is cheap and foreigners who retire to Panama with a pension can qualify for several tempting tax breaks, including an exemption from property taxes.

The federal government offers primers on retiring abroad (click on www.voyage.gc.ca and search “Retirement Abroad”). Another useful source of information is The Canadian Snowbird Guide by Douglas Gray. But no book or website can fully convey the day-to-day reality of a foreign country. Try out a destination before making any permanent decisions. Rent a home for a year and see what daily life is like. If it matches or exceeds your expectations, you may be able to afford the retirement of your dreams on far less money than you expected.

Source: CanadianBusiness.com

Travel
That $5,000 can give you, your spouse, and your kids a vacation to remember. If it’s just you, perhaps with a significant other, your money could go even further. A one- or two-week trip to Antarctica can cost $4,000 to $5,000 for a berth in a two-person room. (There would be extra costs involved in getting to the boat, though, among other things. And you might need a zoom lens to better capture those cute penguin faces.)

Invest it
Think seriously about investing that money, especially if you’re one of the many millions of Americans whose retirement savings are woefully behind schedule. If that $5,000 is invested in a broad-market index fund, and it earns the market’s historical average (never guaranteed, of course) of about 10% per year, in 30 years it would grow to more than $87,000.

That may not seem like much, but if you withdraw 4% of that amount each year in retirement, you would be getting about $3,500 each year — all from a one-time $5,000 investment. (As my Foolish colleague Rich Greifner has noted, mutual funds are the “Best. Investments. Ever.”)

Some high-quality, low-cost managed mutual funds have proved to be even better than the market’s average. For example, there’s the Bridgeway Aggressive Investors 1 (BRAGX) fund, sporting a 10-year average annual return of 16%, and recent top holdings that include Intuitive Surgical (Nasdaq: ISRG), Petroleo Brasileiro (NYSE: PBR), priceline (Nasdaq: PCLN), and Mosaic (NYSE: MOS). It’s not alone in being a way-above-average mutual fund.

Another strong performer is the (currently closed) Vanguard Capital Opportunity (VHCOX) fund, with a 10-year average annual gain of 15%, and recent top holdings including Monsanto (NYSE: MON), Brocade Communications (Nasdaq: BRCD), and Microsoft (Nasdaq: MSFT).

Lots of terrific funds remain open for business, and even closed ones may reopen one day. Some funds can help you double your money.

If you need help finding some of those winners, take a free trial of our Motley Fool Champion Funds newsletter service, which has helped me find a bunch of solid performers for my portfolio. (A free trial will give you access to all past issues and all recommended funds.)

Give it away
I’m serious. You can do a heck of a lot of good in the world if you strategically donate that $5,000. You can even do a lot by just giving $1,000 and spending the remaining $4,000 other ways.

You might also give to loved ones. Perhaps an aunt, uncle, or parent is missing out on the online revolution. If so, you can buy a solid computer system for that person for less than $1,000. Imagine how you might transform someone’s world.

Earn an instant 25% return
If you’re saddled with credit card debt, you really should pay it off before investing. Although you can hope to earn 10% to 15% per year on your investments, you may be forking over 20% to 30% or more per year in interest on your debt. If your interest rate is 25% (which is not all that unusual), paying off $5,000 in debt at that rate would save you from having to pay $1,250 in interest this year.

Remodel your home
Spending money on your house will often give you not only pleasure, but also extra money when you sell. With most remodeling projects, you’ll recoup a hefty fraction of what you spent by getting a higher price come sale time. With around $5,000, you may be able to buy a bunch of new windows, replace the siding on your home, get your house painted, or put on a new roof.

Remodel yourself
Another option is remodeling yourself. You could go back to school to learn a new skill or even a new profession. At the online University of Phoenix, for example, you can take courses or earn a degree or professional certificate. At many colleges, you can take a course preparing you for human resources management certification for around $1,200. At Kaplan University, you may be able to become a forensic nurse if you have $3,400 to spend and 12 months to study. If so, you can earn $55 or more per hour.

If you’re interested in learning without collecting credits or certificates, here’s a wonderful opportunity that Fool community member Windowseat wrote to me about: “It’s possible to download almost all of the MIT courses and take them at home. … Free knowledge. Free information. … What an incredible gift to the world.” Another friend recently alerted me to free Berkeley courses and lectures. You can go a long way on $5,000 with this route.

You can remodel yourself physically, too. Equipping a home gym with fitness equipment can cost less than $5,000, and even as little as $1,000. And a gym membership will generally cost you considerably less than $5,000 per year. In fact, you might spend just $150 on two pairs of sneakers, start a walking or running routine, and invest the rest!

So the next time you find yourself with $5,000, think carefully about how to spend it. That money could pay you back in all sorts of ways.

Source: fool.com