WOWIO’s free iPod Shuffle offer is now over. We had a good four month run, and I’m always on the lookout for similar giveaways that are easy and reliable. Feel free to subscribe to this site, so you don’t miss any future offers!

Well, I’ve been wondering when it would finally happen, and it seems that day is coming - tomorrow! The iPod Shuffle promotion at WOWIO.com is ending tomorrow, June 22, at 5 PM CT.

This also seems to coincide with my own iPod Shuffle breaking, strangely enough. No, not the one I got through WOWIO (I sold that one), but the first generation Shuffle I got for Christmas in 2005. The headphone jack is starting to become “funky,” and the sound cuts out in one of the headphones when it moves (I tested several sets of headphones and it is, indeed, the iPod that’s doing it).

So if anyone wants to help me replace my dying iPod, go over to WOWIO.com and sign up.

My friend has generously offered to give his free Shuffle to me - but that only works if we can find him four more referrals before the timer runs out tomorrow! Update, Friday, 4:30PM: Got the four referrals! The address above now is my best friend, who only needs two more referrals. Can you guys help her get them before the timer runs out in an hour and a half?

FAQ about WOWIO and the Free iPod Shuffle Offer:

What’s WOWIO?
WOWIO is a website that offers free ebook and comic book downloads (up to five a day). They make money by putting magazine-style advertisements in the ebooks (although lately I’ve also seen some video ads in there, which are embedded in the PDF of the book, and optional to watch). I’ve found the ads very non-intrusive, and it’s a great way to get free ebooks. I’ve downloaded over 100 ebooks since I signed up in September of 2006.

Why give out free iPod Shuffles?
The iPod Shuffle promotion is a way of attracting more users to their site. Since you have to get 10 other people to sign up for the site to get a Shuffle, that means WOWIO gets 10+ new users for each Shuffle they give out. The more users they have on their site, the more advertisers they can attract.

Why is it asking for a “non-anonymous email address,” a credit card number, or a scan of ID?
WOWIO goes to great lengths to make sure the users on its site are real people, not bots downloading and redistributing their books. A non-anonymous email (usually a university or work email address) is the easiest way to go. There are also “friend and family codes” that a current user can send you to confirm your identity. If you go the credit card route, it will not be charged at all, it will just be used to confirm you are a real person.

Will this site send me a lot of spam?
I have only ever gotten two emails from WOWIO. The first one was letting me know about this iPod promotion. The other was a response to a customer service email I sent them.

And you’re sure this iPod thing isn’t a scam?
Absolutely. Not only did I receive one after I got ten referrals (pictures here), but four other people that I referred received their iPods as well! If I can manage these last few referrals, we can bump that number up to five!

Oh man, you don’t even know how excited I have. First of all, I’ve never bought my own computer before. Every computer I’ve ever had before has been a hand-me-down from my mom. Not that I’m complaining - since my mom is an avid online-gamer, her hand-me-down computers usually came with top-of-the-line graphics cards and as much RAM as she could shove in there.

But now I’ve got a computer that’s mine! And unlike my previous computers, it’s not chained to a desk. I am free to roam the world with my sexy new Toshiba. (And when I say “new,” I mean “new to me.”)

Yeah, I know, you’ve got questions.

“Um, Stephanie, can you afford this?”
Er… yes, and no. Technically, I should be throwing every penny I have at either my credit card or my savings. But by taking a small chunk out of both of those, yes, I can afford it. Also, I kinda need it.

“‘Kinda need it?’”
I am, as I’ve mentioned, going back to school in the fall. And I’ll be commuting from home, instead of living on campus. To help me bridge the gap between my living space and college, I wanted a laptop, so that I could work between classes. Ok, yes, I could go to one of the school’s numerous computer labs, but that would require lugging my external hard drive around, which literally weighs as much as this laptop.

Also, having my own computer when I’m in California this summer will help me get more done, and hopefully, earn more money. Yes, I’m hoping this laptop will actually pay for itself!

“Ok, so, wait. How much did you pay for this?”
$20. Seriously! Ok, I’m paying monthly. A friend of mine sold it to me for $280, and I’m paying him what I can each month (which will probably be right around $20 until the fall, when I’m hoping to pay more.

“Yeah… I thought you said loans between friends and family were bad.”
They are, so you’ve got to do it right. I’m hoping that I’ve done it right this time - I’m using an online tool called Buxfer to help. Basically, Buxfer tracks how much friends owe each other, if they split a dinner tab, or if roommates split a grocery bill, or if, say… someone sells someone else a $280 laptop, but that someone else can’t pay all at once.

“Wait! Doesn’t this break that ‘no buying stuff’ promise that you made?”
You mean the Compact? Nope. Compacting means you don’t buy anything new - I bought a used laptop! (Like I’d have the money for a new laptop, anyway.)

“Ok, fine. But you’re still crazy.”
I’m well aware of that. You’ll probably think I’m even more crazy when I get around to naming my laptop. I have a rather odd habit of giving my computers male names, and then referring to them as “she.” (Previous computers: Bob, Fonzie, and Fred - all female.)

JD over at Get Rich Slowly has posted a very special edition of the Carnival of Personal Finance for the carnival’s second anniversary: Greatest Hits Edition. Instead of the best articles from the last two weeks, JD asked everyone to submit their best article from the last two years.

The result is more amazing articles than I can count! I tried to go through and pick out my favorites, but there were simply too many. You’re really going to have to check it out for yourself. (My three-parter offering money advice to college students was included, and picked as a favorite by JD!).

Speaking of interesting happenings in the blogosphere, John Chow is doing another insane give-away. This time he’s giving away a rather drool-worthy 24″ widescreen LCD monitor. Yeah, that would definitely beat my current 15″ LCD out of the water! To enter, you’ve just got to mention the contest on your blog (like this!). This contest is by the man that helps you make money is also sponsored by BlueFur, hosting Canada (and everywhere else).

Don’t have a blog? Or want another chance at winning a sexy (yet just slightly smaller) monitor? BlueFur is also giving away a 22″ widescreen LCD monitor on their blog! All you’ve got to do is vote for them as “best blogging host” at the Blogger’s Choice Awards. You can also get 3 additional entries into the contest by blogging about it.

Ok, I’m just kidding about the loan shark thing. Most of you have surely heard of Prosper before, but in case you haven’t, here’s the quick rundown:

Prosper is peer-to-peer lending, often called “the eBay for loans.” You can go on there as a borrower and apply for a loan, and lenders will bid on interest rates to fund your loan. Or you can go on there as a lender, and bid on people’s personal/small business loans and try to get a nice return on your investment.

So anyway, Prosper unrolled a new feature for their users: referrals. According to their website, you can get paid one of two ways:

Refer a lender
You receive $25, and your friend receives $25 as soon as your friend funds his or her first loan.

Refer a borrower
You receive 0.5% of your friend’s loan amount as soon as your friend’s first monthly payment clears.

I like this, especially for the “refer a lender” option, because both you and your friend win. For the “refer a borrower” option, you win and your friend ends up with a loan, which is only good if they actually need it.

Here’s my question, though. Are the people you refer in any way linked to your account? I mean, say you went and put your referral link up on your blog, like this:

Stephanie’s Prosper Referral Link

And then someone comes along, signs up with your referral link, gets a loan, and then three payments in, decides to default on their loan. Will that reflect badly on you? Alternately, would a good borrower/lender reflect well on you?

From my preliminary sniffing around, I’d say your referrals aren’t linked to your account in any “public” way. There is an endorsement option you can do for people you know on Prosper, but that’s optional. I’m hoping it stays this way, cause I’d hate some Douchey McLoser to come along and stain my reputation.

Well, I’m going to go convince my mom to sign up for Prosper now. Maybe my sister, too. I bet The Boyfriend might be interested… woohoo, $75, here I come!

One of my relatives is incredibly money-savvy. She and I can chat up about credit and retirement accounts all the time, whereas the rest of the family looks at us like we’re nuts. Yesterday she sent me a text message to let me know that her credit score is at 780 - she know I’d appreciate what that meant.

Lambasted as we are day-in and day-out with the idea of credit (”No Credit? No Problem?” “Check your credit score FREE!” “Repair your credit NOW!”), no one is really jumping in our faces about the important part - establishing good credit in the first place. And there’s a reason - no one has any incentive to help you establish good credit except for YOU.

I don’t really have any incentive to help you out, either. But it just so happens that I do things all day long without incentive, so I guess you’re in luck.

How important is good credit, really?
Oh man, do you know how many things they can check your credit for? There’s the obvious: when you apply for a new credit card, car loan, mortgage, or any other type of loan. But it really don’t end there…

• Your credit card company can, and does, check your credit all the time. They can, and probably will, hike up your interest rate if your credit takes a nosedive.
• A landlord can check your credit when you apply for an apartment. If you pay your Visa bill late, they’re going to think you’re pretty likely to pay your rent late, as well.
• An employer can check your credit when you apply for a job. I grabbed an application for Bath and Body Works a couple months ago, and it included a “credit release” form. People who are irresponsible financially also tend to be irresponsible at their jobs.
• Your car insurance premiums can be partially based on your credit score, as well (in some states).

So basically, if you ever want to live anywhere, work anywhere, or drive a car… your credit matters to you.

But don’t some people live without credit?
Yes, they do. And it’s commendable to be able to save up for every purchase, including big ticket items like cars and houses, with cash. But the more ingrained in our society credit becomes, the more difficult life can become for people with no credit history.

The problem is, that when someone looks at your credit history, not having one can look as bad as having a bad credit history. Here’s an analogy: Say you’re going through scholarship applications, looking for a bright high schooler to give a scholarship to. The kid who doesn’t send in a transcript of his grades… how do you feel about him? Apprehensive because you have no data for him? You’re probably not going to give him the scholarship, are you? You want someone with an established history of doing well.

Is it hard to build good credit?
That really depends on you and your level of self-control. In theory, establishing a good credit history is easy as pie. Some people do it by accident! But it’s also easy to mess up and suddenly have a maxed-out credit card dragging down your score (trust me, I know).

FICO, the most common number used to represent your credit score, is all about the percentages. So focus on the following things, in order, and that’s all you have to do. Easy-peasy (in theory).

Payment history: 35% of your score

Make it a priority to never make a late payment, and 35% of your score is in the bag. Don’t freak out if your payment is a couple days late, however - late payments aren’t generally reported to the credit agencies until they’re 30 days late. But since you’ll still get slapped with a late charge if you’re even 10 minutes late with a payment, better stick with Never Make A Late Payment.

Debt ratio: 30% of your score

The percentage of debt you’re carrying, compared to how big your credit line is. This only applies to revolving balances (credit cards and home equity lines of credit). Basic rule of thumb: if you’re using more than 30% of your available credit, then you’re dragging down your score.

Understand that this is calculated across all of your revolving lines of credit. So if you’re using $500 on a credit card that has a $2000 limit, and $1000 on a card that has a $5000 limit, then you’re using $1500 out of your available $7000, or 21%. But if that $2000 card is maxed out, and you still have that $1000 on the other card, then you’re using 43%. Ouch.

This is calculated whether or not you pay off your balances every month. So if you’re going to get a loan/new job/new apartment in the next six months, Don’t Charge A Lot On Your Cards, Even If You Pay The Balance Off Every Month.

Length of credit history: 15% of your score

There’s not much you can do about this if you’re just starting out, except START NOW. Luckily, if you’re a college student and you have taken out student loans, at least you have something on your credit history. But you might want to consider getting a credit card now to help establish a payment history.

Feel like you’d go crazy if you put a credit card in your hand, and get yourself into a heap full of debt? Yeah, been there - done that. Self-control is a difficult thing, and only you know how capable you are with it. You’ll just have to figure this one out for yourself.

Trying to fix a bad credit history? Don’t make the rookie mistake of canceling all your credit cards. Keep the one you’ve had the longest that also has no annual fee. If you cancel your oldest card, you truncate the length of your credit history, and your score could take a nosedive.

Types of credit used: 10% of your score

Variety is the spice of life, and apparently it’s also part of the recipe for a good credit score. Just having a credit card is apparently, not good enough. Ideally, they’d like you to have a credit card, a car loan, student loans, a mortgage, and a home equity line of credit. Which is not to say you should run right out there and get all those things. Since it’s only 10% of your score, don’t worry about this too much, just keep it in mind.

Recent credit inquiries: the final 10%

There are two kinds of credit checks - a “hard pull” and a “soft pull.” A soft pull is when you check your own credit score. Or when a company checks your score to see if they should send you some junk mail. Just about any other kind of credit check is a “hard pull,” and will take a hit out of your credit score. Most of the time, these are unavoidable. Don’t worry about this too much, but understand that it means that if you go out and apply for every credit card on the planet in a two-week time span, your credit will nosedive.

What about piggy-backing?
In the past, a good way to build credit was to have someone with excellent credit list you as an “authorized user” on one of their credit cards. Then, all the good credit history from that card would show up on your report. Sorry, but FICO has decided to stop counting authorized users as of this fall, so this will no longer work. You’ll have to build your own good credit.

So… is it hard or what?
It’s easy to build good credit, but it’s also easy to slip up. Life happens - just ask the $1500 balance sitting on my credit card. The key is to not be discouraged, use your brain, and keep doing the best you can. Nobody’s perfect, but we can aim for great credit scores.

Sources:
Wikipedia - Credit Score
My Money Blog - Future FICO Scores Won’t Consider Authorized Users

This is a response to the plonkee money competition, which asks…

How does donating to charity improve your well-being, financial and otherwise?

I’m going to make a comparision here, and some people aren’t going to like it: putting money into a charity is just like putting money into your retirement. In both cases, you’re taking money away from yourself to help a stranger that you’ve never met. I, sitting here at age 20, have no idea who 50-year-old or 60-year-old Stephanie will be. I have no idea what she’ll be doing, and what she’ll want to do with her retirement funds. But I hope to give her money, anyways.

And it’s the same with a charity. I have no idea who the breast cancer patients are that I donate to, but I donate to them all the same. And for the same reason as I “donate” to my future self: because that person needs that money, and will be greatful for it. I am trying to create happiness for a stranger.

And they say you can’t buy happiness!

So if contributing to my retirement helps my financial well-being, then contributing to charity does, as well.

“Is taking out a student loan and using it to pay off most debts or at least ‘control’ the debts a wise idea in the long run?” - D

First, a technicality: You can’t actually use a student loan for this purpose. Student loans are usually awarded with the stipulation that you use them for school-related expenses only. But, what you can do (and what I assume you’re asking) is get a student loan, and take the out-of-pocket money you were going to use for tuition/books/etc., and pay off/pay down your debts with that.

To know if this is a good idea, you really need to ask yourself some questions first.

How much student debt am I willing to take on?
If it were me, I wouldn’t go this route, because I’m already staring down the barrel of $40,000 in undergraduate debt. But if this loan will still leave you with a “comfortable level” of student debt, you might be alright. The MSN Money article “How much college debt is too much?” can help you calculate how much college debt you can safely take on.

What am I using this money to pay for, exactly?
From your question, I’m guessing you’re looking to pay off credit cards, or possibly a car loan. Either way, some kind of consumer debt. Understand that there’s a difference between these kinds of debts. Namely, a student loan never goes away. Even if you file for bankruptcy. And although a student loan rate may be more favorable, it also has a long repayment term (10-30 years).

Can I stop accumulating debt?
If this is consumer debt, then you will need to stop once you get the loan. Stop carrying a balance on your credit card. Or, if it’s a car loan, then you can’t run out and trade in your car for a new one just because your loan is paid off. If you feel you can exercise the needed amount of restraint, then alright.

How’s my credit?
If you’re getting this student loan through a private institution (a bank rather than the government), and your credit history isn’t very long, you’ll likely need a co-signer on your loan. A co-signer will be on the hook if you don’t pay the loan, so whoever it is needs to know your intentions with this loan.

Alternately, if your credit is good, you have another option. Get a credit card with a 0% intro APR on balance transfers, and move your debt over there. This is really the better option, if your credit is good enough.

Does this seem like a good idea to me?
How you feel about this is actually very important. The fact that you came to me with this question means you’re having doubts. After you think this through, if you’re still doubting it, then it’s probably not a good course of action. After you’ve considered your situation, your gut instinct will help you find your conclusion.

I do, in fact, have a love affair with the Roth IRA. (If you’re unfamiliar with it, J.D. has an excellent explanation of the Roth.) But, it is an unrequited love - the Roth does not love me back. Someday, it will. Someday, I will open my own Roth IRA and my money (and love) will grow inside it. But not yet.

A friend of mine asked me what a Roth IRA is, and whether I should get one. I sent him J.D.’s link, but I also said I didn’t think he should get one. Yet. For the same reason that I don’t have one. Yet.

We’re both carrying around some nasty, high interest credit card debt. Sure, we could start putting money into Roths, and if the Investment Gods shined down upon us, we could earn around 10% on our money each year, and the power of compounding would give us a tasty retirement. But if we’re still carrying around our credit card debt (at 17% or higher!), then we’d just be back-pedaling. We’d be paying more to the credit card companies than we’d earn.

This is where the difference between investing in a 401(k) and an IRA can really be seen. If your employer offers matching funds in your 401(k), then it makes sense to contribute, even if you’re carrying around credit card debt. But there’s probably no one matching your IRA contributions (unless you have a generous relative - in which case, go for it).

So, my friend and I, we’ve got some credit card debt to tackle. Once we’re clear of that… well, I know I’ll be beginning my sordid affair with the Roth!

When I was six years old, I started my first business. My favorite book character, Karen from the Babysitter’s Little Sister series, started her own newspaper in book #40. Things went badly for Karen, but I was determined that I could do it too - and do it better.

And I did. For over six years, I ran my own newspaper. In it’s heyday, the “Kids Gazette” was sold in five stores across my town, and had three writers working under me. In addition to selling the paper in stores for 25 cents, I also sold ads in each issue. And I made $30 and issue, which was pretty much a fortune to me. I paid out 10% of each issue’s profits to each writer that contributed that month. And life was good.

But I didn’t save any of the money. And I haven’t the slightest idea what I spent it on. I didn’t even save up the money for the thing I wanted most at that age, an American Girl doll (although, now that I’m 20 years old, I realize it would have only taken me three months to do so). That money didn’t even seem to last from one issue to the next.

But what if it had? What if I’d saved all that money? Or what if my mother had matched my profits in an account somewhere? Where would I be today?

Ok, so, I wasn’t exactly consistent with my newspaper, so we can say that I probably made $30, six months out of the year, for 1993-1999. So $180 a year, for seven years.

Likely scenario:
I shoved all the money in a shoebox. In 1999, it would have totaled $1260. At that point, I had my own savings account. So let’s say I put it in there when I stopped the newspaper, and then never touched it till today. My savings account earns 0.2%. So I would have $1277.75 today, to do with as I wish.

Err… well that’s great, and I certainly would appreciate having nearly $1300 today, but only earning $17 in interest over 7 years is really kinda awful. So, what if we had done even better?

Less likely scenario:
Each year, the money was deposited in a CD or money market account, earning 5%. Again, after 1999, I contributed nothing else. Today, that would be $2062.19.

Well, now we’re getting somewhere. $800 in interest is nothing to shake a stick at. Now, I could certainly run the numbers at 8% interest, and 10%, but I think you already get my real point here: Any which way, I would have a lot more money now.

The real question, I suppose, is whether I (or my mother) would have put aside this money when I was so young, if someone had just run the numbers. Can a child (or even a parent) be persuaded to save, just by being shown how it really adds up? And why didn’t anyone run the numbers for me 14 years ago? … And what did I buy with all that money, anyway?

Somewhere around the middle of the month, I start to get excited. Is it next month yet? Can I update my net worth? How about now? Now?

Finally, today came. It’s like this every month - I’m pretty obsessed. Huzzah, I can now total up all of my accounts and debts, and see if I came out on top again this month!

I use NetworthIQ to track my net worth every month, so check that out if you want to see my monetary tracking. Here’s a general report and explanation:

Cash: NetworthIQ lumps together all cash, checking, and savings accounts into one “cash” category. I have a checking account and a savings account with a local bank, and also with Bank of America (the only bank that has branches in both Rochester and Los Angeles). I also have three high yield savings accounts now: Emigrant, Etrade, and Citibank. I opened the Citibank account this month to get a $100 bonus, which hasn’t yet been credited to my account.

Stocks: I have one share of Eastman Kodak stock, given to me by my grandmother. We Rochesterians are fiercely protective of Kodak, and I just keep hoping that they’ll hold on through this digital photography revolution. (Fuji is a four letter word to a Rochesterian!)

Cars: I have a 1996 Oldsmobile Delta 88. I don’t check the blue book value of it every month - I figure it will stay about the same throughout the year, so I’ll update it in January. (I’m proud of my car - it has less than 50,000 miles on it!)

Other assets: Usually, there’s something in this category. Checks that I haven’t cashed yet, money that someone owes me, but nothing this month.

Student Loans: Ew, gigantic number. Hopefully, these will go back into deferment soon, and only my unsubsidized one with continue to accrue interest. (All of my loans are federal, I have no private student loans).

Credit card: I’ve been paying about $10 more than the minimum payment every month this year, since that was all I could really afford. Hopefully, I’ll be able to pay a bit more off this month.

Car loans: This is a private loan to my grandmother. She told me about a million times today that she’s going to keep letting me pay her for a few months, and then she won’t let me pay her any more. I’m going to continue to list the full balance of the loan, however, until she actually does that.

Other debts: I owe a bit of money to my university, which I’ve been paying $100 to every month. Only two months left! Also included in this is a check I wrote for my car loan, which my grandmother didn’t take to the bank until today.

I’m still compacting (not buying any “things”), so my spending this month (aside from debt payments) was pretty typical:

Gas for my car: $90.23
Movies: $29.00 (I paid for a couple friends as well, they may or may not pay me back)
Dining Out: $13.00
Tolls: $1.00
Car inspection: $20.00
Website costs: $4.00

I think I did pretty well, considering how much I drove, how many times I went to the movies (3 times - got to love that college student discount!), and how many times I ate out (twice). But here’s hoping I can make more, spend less, and pay off more debt in June!