As a followup to my earlier post about the worst 401(k) plans, here’s a look at Business Week’s list of the best 401(k) plans. Once again, these were rated based on criteria like participation rate, default rate, fees, and employer match. The full list includes fifty plans. I’ve listed below the twenty best 401(k) plans.

Twenty Best 401(k) Plans

1. Saudi Arabian Oil
2. Bank of New York Mellon
3. Greenwich Capital Markets
4. Southwest Airlines
5. Piper Jaffray
6. Nucor
7. FedEx
8. Amgen
9. McDermott Will & Emery
10. Chevron
11. Mosaic
12. Exxon Mobil
13. ConocoPhillips
14. Hercules
15. Latham & Watkins
16. Sun Microsystems
17. Pfizer
18. AstraZeneca Pharmaceuticals
19. MBIA
20. Church & Dwight

Once again, plans were rated on a wide variety of factors, including participation rate, default rate, fees, and employer match. While the inclusion of participation rate might introduce a bias for or against certain types of employers, I’d still rather see my plan on this list as compared to the other one.

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Curious as to how your 401(k) plan compares to others? Business Week just published a list of the worst 401(k) plans based on criteria such as participation rate, default rate, fees, and employer match (see also “The Best 401(k) Plans). The full list includes fifty plans. I’ve listed the twenty worst plans below.

1. Darden Restaurants
2. Big Lots
3. RadioShack
4. Zale
5. Compass Group USA
6. Bob Evans Farms
7. MPS Group
8. O’Reilly Automotive
9. Best Buy
10. Pep Boys
11. CSK Auto
12. Lowe’s
13. Whole Foods Market
14. Bon-Ton Stores
15. Safeway
16. Northrop Grumman
17. AutoNation
18. Penske Automotive Group
19. TCF Financial
20. OfficeMax

The full list is heavily populated with restaurant chains and retailers. Other notable names include Borders, Kohls, Walmart, Burger King, Target, JC Penney, and Home Depot. Is your employer listed?

Oh, and here’s a bit of 401(k) trivia for you… Total 401(k) holdings across the United States stood at $3 trillion at the end of 2007. Fast forward one year to the end of 2008, and… Poof. $2.4 trillion. That’s $600B that just evaporated.

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The good folks at Lending Club have offered to provide FCN readers with a $25 signup bonus* just for opening a Lending Club account. As you might recall, I recently gave away $100 to one lucky Lending Club account holder. This time around, there’s something for everyone!

Here’s how it works…

1. Visit Lending Club using a link in this post
2. Open and activate a lender account
3. The $25 will be automatically deposited in your account shortly

That’s it. You can then lend the money out and start earning interest. Note that there are some eligibility requirements for opening a Lending Club account (must be 18, certain states excluded, etc.), but those should quickly become apparent when you click through.

*Note: The signup page won’t say anything about the bonus, but they’ll be able to track and credit you using the special link in this post.

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Consumer Reports just published their Annual Auto Issue, and guess what?

“The best vehicles are built by Honda, Subaru, and Toyota. They make well-rounded cars that excel across the board…”

That’s not to say that every model made by these companies is highly recommended. In fact, the Honda Element, Toyota Yaris, and Toyota FJ Cruiser scored low enough that they weren’t recommended.

Amongst domestic automakers, Ford came out on top. However, they were only the 12th best carmaker out of the 15 under consideration. Suzuki, General Motors, and Chrysler brought up the rear (in that order).

This is what CR has to say about Chrysler:

“Overall reliability of Chrysler vehicles, which was average last year, dropped to below average this year. No Chrysler, Dodge, or Jeep vehicles are recommended.”

Yes, you read that right… Consumer Reports doesn’t recommend a single Chrysler, Dodge, or Jeep model. Ouch.

What about GM’s claim that they build 19 cars that get at least 30 mpg on the highway? That’s technically true, but those cars are “a relatively low percentage of [their] fleet.” Moreover, CR has found that “even non-SUVs from Detroit tend to have among the worst fuel economy in their class.”

The good news for GM is that their newest models actually performed reasonably well in CR’s testing, though their reliability still lags behind the competition. Similarly, Ford has some models that do quite well, but most fall somewhere in the middle of the pack. And Chrysler? Well…

“Most models… have noisy, inefficient, unrefined powertrains; subpar interiors; and poor visibility.”

It’s hard to believe, but they’ve actually gotten worse since last year, when they tied for last place with Suzuki.

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While I’d love to write some sort of witty introduction to my link roundup, I just don’t have it in me tonight. Instead, let’s just get to the links. What follows is a list of twelve recent articles that caught my eye.

• Carrying Bigger Bills? You’re Less Likely to Spend Them
• Three Investing Lessons Learned the Hard Way
• The End of a Recession Versus Recovery
• How to Invest With Small Amounts Per Month
• Ten Questions to Ask When You’re Tempted to Buy
• Asset Allocation: An Important Part of All Financial Plans
• How to Get Help After Your Car Warranty Has Expired
• March Madness Money Lessons
• Can You Pass My Identity Theft Test?
• Seven Things to Know About a SEP-IRA
• The Buy and Hold Strategy and Your Long-Term Investment Horizon
• Oil is Cheaper, So Why Isn’t Gas?

Finally, I’d be remiss if I failed to mention that two of my fellow bloggers, Jim and JD, have started an internet radio show called The Personal Finance Hour. It’s currently scheduled for Monday evenings at 6PM Eastern, though they’re hoping to get a better time slot if they can build a large enough following.

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Not quite a year ago, FCN readers rated Zecco as the best online broker (here’s my Zecco review). And then it happened… A few weeks back, Zecco made some pretty significant changes to their business model.

I meant to write this up back when it was happening, but it somehow slipped off my radar. In short, they’ve raised the minimum balance requirement for qualifying for free trades. Here’s the scoop:

Our base commission of $4.50 per trade is one of the lowest among any major only brokerage in the industry, and we continue to offer one of the best deals to retail investors. However, we have not been immune to last year’s market difficulties. Retail stock and options trades as well as interest income have all been hit by the economic crisis, and we have found that can simply no longer provide free stock trading to as many people as before.

As a result, I’m writing to tell you that as of March 1st, 2009, we’re increasing the minimum level of assets needed to earn 10 free trades per month to $25,000. [Note: It used to be $2,500.] At the same time, we’re adding a new way to get free trades: customers who make at least 25 total trades per month will also qualify for 10 free stock trades per month.

Here’s a screenshot of their new commission structure:

Well, that certainly changes things… The minimum balance requirement has increased 10x. In other words, an awful lot of customers, including pretty much all beginning investors, will now have to pay for their trades.

The good news is that Zecco charges just $4.50/trade. That being said, TradeKing charges just $4.95/trade, and is widely considered to provide a very high level of customer service.

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Lending money to family and friends is a bit like a walking a tightrope, and it’s very easy for things to go wrong. With the ongoing recession affecting so many people, you might be tempted to lend money to a loved one in hopes of helping them out. While this might sound like a good idea in principle, doing so can be problematic.

The first step in deciding how best to proceed is to find out why your friend or family member is having a difficult time. If they have a history of being responsible with money and are just experiencing a temporary setback, you might consider helping them out. If, on the other hand, they consistently have trouble with money, you should think twice — you could do more harm than good. How?

As hard as it is to admit, some people just aren’t good at handling their finances. They constantly live paycheck-to-paycheck and don’t seem interested in (or able to) change their habits. If you lend them money, you’re jeopardizing your relationship, and you might also wind up enabling their bad spending and non-savings habits.

Thoughts on Lending Money to Family or Friends

1. Do not co-sign for a loan! If you do, you’ll be legally responsible for paying off the debt if they do not or cannot pay. How would you feel if you got stuck with your someone else’s debt? This sort of thing can cause tension and resentment, and might even destroy the relationship.
2. If you don’t have money to lose, then don’t loan them money! We all have responsibilities of our own, so don’t loan out money that you can’t afford to lose. Make sure you have ample emergency fund in case your family has an emergency of its own.
3. Think about giving a small financial gift. If you have the means to give some money, but feel uncomfortable with a loan, then try simply giving a smaller amount. You’ll feel good about having provided some assistance, and you won’t stress about getting your money back.
4. Consider giving something other than money to help. If times are a bit rough, grab some groceries. If you’re afraid of enabling them, offer to help organize a yard sale or something.
5. Offer to help them with budgeting. This can be a tricky one, as most people aren’t willing to share their finances. Even so, you can show them how you budget, and maybe share some helpful tips.
6. If you end up making a loan, put everything in writing. Decide ahead of time when and how the loan will be paid back (e.g., lump sum or monthly payments), and have both parties sign the agreement. Make a copy and keep the original.

What if You Can’t (or Won’t) Lend Them Money?

If you end up having to say ‘no’ to a friend or a family member, keep it brief. Explain to them you just can’t loan them the money, but you can offer your support (or a small gift if you can). Just remember, it’s up to you to weigh the options and come up with the right answer for you.

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Over the weekend, I asked my “Tweeps” (i.e., people that follow me on Twitter) for their single best piece of financial advice. The primary limitation was that Twitter requires that their messages be 140 characters or less. Thus, the advice had to be short and to the point. I got things started with this:

“Don’t spend money that you don’t have.” (@fcn)

Which prompted the following responses:

• @katekashman: “Automatic savings - it really works. Even if you screw up everything else, it might just be enough to get you through.”
• @bargainr: “Like the tortoise and the hare, slow and steady wins the race. It’s about being smart with money, not clever with get rich quick schemes.”
• @zenshinji: “Do the math. Compare like items at the store, super fantastic premium cable vs. basic + NetFlix + online, etc.”
• @JeremyVoh: “For 9 out of 10 people, it takes hard work to make money. The other one is lucky. So, make your own luck and work hard.”
• @countmypennies: “You don’t need that. You can make do. It won’t kill you.”
• @scottneumeyer: “Read Dave Ramsey to get educated on money.”
• @QuickenPRChels: “Don’t use credit cards. When I heard it way back when, I didn’t listen. Should have.”
• @CashMoneyLife: “Spend less than you earn; earn more than you spend. Two different ways at looking at the same thing.”
• @Green_Panda: “Don’t just cut expenses; look to increase your income, too.”
• @glblguy: “Budget your money.”
• @LazyManAndMoney: “Make saving automatic, by siphoning money to an account (like a mutual fund) that you never look at.”
• @Night_runner: “Spend less, earn more.”
• @RevancheGS: “Take care of your money first before you use it to help others, lest you find yourself in trouble as well.”
• @ramit: “Don’t think of personal finance as a game of more willpower (”If I REALLY try to save, I will…”). Automate savings/investments.”
• @FMFblog: “Spend less than you earn.”
• @ericabiz: “Follow the one-in, one-out rule. For every item you buy, one of equal value or purpose must go.”
• @jeffrosecfp: “Don’t invest just because you can. Take your time, research, reevaluate before you make your 1st investment.”
• @ncn: “Understand credit, how it works, and how interest can work for or against you.”
• @moolanomy: “Keep your mind open to learn new things and find creative ways to solve your problems.”
• @mbhunter: “Buy used whenever it makes sense.”
• @FourPillars: “Education - whether you learn about investing or bank accounts or how much debt you have - it all helps.”

There’s a bit of overlap in the responses, but I decided to go ahead and include them all. If nothing else, you can view overlapping responses as additional “votes” for a particular suggestion.

As a side note, my bit of advice prompted @StephTheBlogger to send me a link to the SNL video that I posted on Sunday.

Oh, and in case you weren’t aware, you can get new article notifications via Twitter by following @fcnfeed.

Follow me on Twitter! — Giveaway: freetaxes@fivecentnickel.com

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A few weeks ago, I did a head-to-head comparison of TurboTax vs. TaxCut, and I also noted that TurboTax has been rated the best tax preparation software.

At the time, however, I wasn’t aware that you can use TurboTax for free if you make less than $30k. Note that I’m not talking about the free 1040EZ filing that they offer when you hit their homepage. Rather, I’m talking about their so-called Tax Freedom Edition, which is available as part of the Free File Alliance.

Note that this is a more or less complete version of TurboTax, with access to not only the 1040EZ, but also the 1040A and 1040 forms. In order to qualify, you must meet at least one of the following criteria:

• Earned an Adjusted Gross Income (AGI) for tax year 2008 of $30,000 or less; or
• Qualify for the Earned Income Tax Credit (EITC); or
• Served Active Duty Military with AGI of $56,000 or less

If you don’t qualify, be sure to sign up to win TurboTax for free. You have just under 12 hours left to enter. Good luck!

Hat tip: Poorer Than You

Follow me on Twitter! — Giveaway: freetaxes@fivecentnickel.com

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The recession in full swing and many families have been tightening their belts. With that in mind, I thought I’d spend a bit of time talking about how to save money on what, for many of us, is a major monthly expenditure — groceries! None of this is rocket science, but it does take a bit of discipline. With a bit of discipline, you can save a lot of money each and every month. Oh, and you might end up eating healthier, too. Talk about a win-win!

Tips for Saving Money on Groceries

• Go shopping alone
• Have a budget and stick to it
• Make fewer, larger trips
• Don’t shop hungry
• Plan your meals in advance
• Scan your cupboards, pantry, and fridge before leaving
• Keep a running list of items you need on your fridge
• Break your list down by store and plan your outing accordingly
• Plan your trip through the store to minimize wandering the aisles
• Don’t forget your list when you head to the store, but…
• Be willing to deviate from your list for great deals
• Don’t be afraid of store brands
• Buy the Sunday paper
• Keep an eye on the weekly store circular
• Clip (and use!) coupons for name brand items
• Check the store’s website for printable coupons
• Be on the lookout for “double coupon” days
• Stack manufacturer and store coupons
• Keep a price list/book so you know a deal when you see one
• Learn your store’s sale cycle (sales are often cyclical)
• Stock up (within reason) when things are on sale
• Get rain checks when sale items are out of stock
• Visit multiple stores to get the best deals, or…
• Ask your preferred store to match prices form elsewhere
• Avoid non-grocery items that can be bought for less elsewhere
• Joins the store’s affinity program and flash your card
• Buy a chest freezer
• Buy in bulk, but…
• Be sure to look at unit pricing
• Bring a calculator (unless you’re a math whiz)
• Be on the lookout for “shrinkage” (e.g., 1.5 quarts vs. half gallon)
• Cook large batches and freeze for later
• Don’t waste leftovers
• Eat less - seriously, many people eat way more than necessary
• Cook from scratch, avoid processed foods
• Avoid frozen/prepared entrees
• Eat more fruits/veggies, cut back on meat
• Eat in season fruits/vegetables
• Plant a garden
• Hit the local farmer’s market
• Drink more water, fewer costly beverages
• Be on the lookout for pricing errors at the register
• Be sure they scan instant coupons that are attached to some items
• Always fill out and send your rebates

Finally, consider the value of your time. While minimizing your expenditures is always a good idea, it doesn’t always make sense to spend tons of extra time in hopes of saving a few cents off your grocery bill.

How Do You Save Money on Groceries?

Now it’s your turn. While the list above is a good start, I’ve undoubtedly missed a number of things. So… If you have any suggestions as to how to save money on groceries, please share them in the comments.

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