The August 2009 edition of Money Magazine featured their annual list of 100 best places to live. The copy arrived in my mailbox around the same time my wife and I were discussing the possibility of relocating in the future. In the short-term, we are satisfied with where we live, but often dream of moving to a place that offers more natural beauty, outdoor activities, and a more moderate climate. Actually, I mean a cooler climate – we’d gladly trade a few snow days for 100-degree temperatures in the summer! So take a look at these spots to focus your real estate MLS search.

Beautiful country outside of Ketchum, Idaho

Money’s list provides a pretty good starting place of cities to consider. Since any relocation wouldn’t happen until we reached financial independence, employment is not a top consideration. We are more interested in qualities like a low crime rate, plenty of green space, and relatively low property values and taxes. Here’s a look at Money’s top ten places to live:

1. Louisville, Colorado Money’s description of Louisville includes “dry, clear weather, little crime, good health care, and low taxes.” Add in the Rocky Mountains, 30 miles of local trails and eight world-class ski resorts within a two-hour drive, and there is little not to like about Louisville, Colorado. I traveled to Denver a number of times on business and fell in love with the Rockies, the climate and the outdoor activities.

2. Chanhassen, Minnesota When I think of Minnesota I think of cold winters. However, with cold winters comes a variety of things to do that a family from the south has never experienced. Ice fishing, ice skating, sledding, and hockey all sound pretty fun. And since I love cold weather I’d fit in just fine. Not sure the wife and kids feel the same way, though.

3. Papillion, Nebraska According to Money, the typical single-family home in Papillion starts for about $100k less than the first two cities. Interestingly, the property taxes were significantly higher.

4. Middleton, Wisconsin Another cold weather locale, but one with lots to see and do. Even though the town is only seven miles from Madison, most residents enjoy hanging out in their own community.

5. Milton, Massachusetts Single-family homes go for $460, 000 here, which just about eliminates the town from our list of potential spots to relocate. Add in a close proximity to Boston and it just doesn’t feel like a good fit for us.

6. Warren, New Jersey Ditto on the above comments. To close to New York City for my tastes, and ridiculously high home values (half-million and up).

7. Keller, Texas The knock on Keller was “rapid growth” and “strip malls.” We aren’t interested in a fast-paces lifestyle, so Kelly might not be a good fit, either. Besides, I’m not sure I’d be escaping the heat moving to Texas.

8. Peachtree City, Georgia Of all the cities in the top ten, Peachtree City sounds most like where we currently live. At only 35 miles from Atlanta, I’d worry about the urban sprawl eventually swallowing our tranquil place.

9. Lake St. Louis, Missouri Lake St. Louis has an interesting history. Developed forty years ago as a “resort community,” it has now developed into an attractive spot for permanent residents. Two major problems with Lake St. Louis – ridiculously high annual dues for their Community Association, and proximity to a General Motors plant which plant to layoff nearly 2,000 workers.

10. Mukilteo, Washington First, a confession. I’ve always wanted to live in the Pacific Northwest. I love the idea of being close to both Puget Sound and the Olympic and Cascade mountain ranges. Toss in a great school system and low property taxes, and Mukilteo seems like a top candidate.

Another area of the country we have strongly considered is Idaho. Idaho has a very low crime rate, low property taxes and insurance rates, and they offer more wilderness area than any other state in the lower 48 states. Unfortunately, they do have a relatively high state income tax rate and low average wages, but since we wouldn’t need much income after financial independence neither of these facts are a big detractor.

Speaking of state taxes, Kiplinger.com put together a nice interactive map along with a state-by-state guide to taxes on retirees. You can learn which states impose their own estate taxes, which 7 states have no income tax, and what are the most pension-friendly states?

Again, we won’t be in a position to relocate any time soon, but it is fun to scope out different places. Wherever we do decide to retire, we plan to have a place with acreage to give us a little room to roam. I’d like to have a big garden, and a few rows of fruit trees. When looking for a place to buy, we would gladly put more money towards land than the home itself, and wouldn’t mind adding on to the house or remodeling with cash over time.

Interested in finding a home in one of these locations? Search the MLS for homes!

I made the mistake yesterday of sharing a link with Twitter followers indicating the Cash for Clunker rebate would be treated as taxable income. Astute followers quickly pointed out that the link I shared was from a site spreading a false rumor about the Cash for Clunkers tax implications for buyers.

Instead, I should have checked out the C.A.R.S. government-run site, which provides the following answer to the burning cash for clunker tax rules question:

Is the credit subject to being taxed as income to the consumers that participate in the program?

NO. The CARS Act expressly provides that the credit is not income for the consumer.

While I wasn’t fond of the Cash for Clunkers program from the get-go, I concede that it spurred on many more sales than I expected. In fact, it might be the first program with any real stimulative effect since the passage of over a trillion dollars in bailouts and stimulus packages.

It seems Americans are always up for a $4,500 rebate. However, the suspicious consumer in me wondered if the manufacturers suggested retail price (and dealer price) didn’t go up in advance of the deal. After all, an increase in consumer buying power, especially when generated artificially as in the case of a government rebate, is often followed by higher prices.

I also wondered if consumers would be trading in cars for a rebate when they could have received much more money via a private sale. But that is always a risk when trading in a car at a dealership. The dealer is not going to give you top dollar because he has to leave a little room to make that when he resells the car (not a problem under Cash for Clunkers since they were ordered to be destroyed) he turns a small profit, or at a minimum breaks even.

Debt is also a concern. How many people trade in a paid-for clunker for a shiny new car with a big auto loan? It might be better for the environment, but is it better for your family finances? That remains to be seen. Might be a good time to be in the repo business, though.

All this is water under the bridge now, as the Cash for Clunker program ended Monday night. However, it sure would have been quite the surprise to learn Cash for Clunker tax rules meant the rebate you received was treated as taxable income. From my web research, it sounds like there still may be an issue for dealers, and even buyers may not be completely out of the woods when it comes to state taxes on Cash for Clunkers. At least it appears Cash for Clunkers will not negatively impact buyer’s federal taxes.

Additional Resources:

• Cash For Clunker Payments – Tax Rules
• Cash for Clunkers Tax Rules – The Truth
• (More) Cash for Clunkers Tax Rules
• Does Cash for Clunkers Affect Your Taxes?
• Tax Rules And Consequences Of The Cash For Clunkers Program

The following guest post was submitted by Austin of Foreigner’s Finances.

Many parents question how to bring up the subject of finances with their children. Some don’t want to sound, “uncool” but being worried about how financially ready your child is for the real world is normal. There are many financial lessons a parent can teach a child, but where does one begin?  This concern tends to pop up the most during this time of year, as children are leaving home for the first time and moving into college dorm rooms across the country.

After graduating from college in June, I have narrowed down my college experience to just one tip I wish my parents would have taught me before I left for school four years ago.

Don’t limit yourself to only buying textbooks from the college bookstore.

According to the Washington Post, “students at four-year schools spent, on average, about $900 for books and supplies in 2003-04“. This is not an amount the average 18-year-old can handle without diving into credit cards, and we all know this is a dangerous habit for young people.

Luckily, there are a wide range of options available to students on college campuses for accumulating textbooks at cheap prices. Prices that are repeatedly 50-90% cheaper than the bookstore. During my time in college, I only bought books from the bookstore my first semester of school and whenever it made financial sense. During 4 years, I saved over $2000 by avoiding the bookstore’s outrageous prices and using a variety of alternative methods to get textbooks.

3 steps that must occur for a student to save thousands on textbooks during college

1)  They must use their schedule and visit the campus bookstore’s website before school begins to see which books they will be needing for the semester. Too many students blindly walk into the bookstore on the first day of class and pay whatever price is listed on the book.

2)  Once the student knows which books they need, they can explore the variety of options available to college students for getting textbooks. Utilizing amazon.com, public libraries, and book swaps are just some of the ways students can find textbooks for prices that are often 50% cheaper than the bookstore. See my two favorite tips for getting textbooks below.

3)  Students must sell their textbooks at the end of the semester. Too many students keep their Biology 101 book because they think they might need to reference it at a future date. Chances are they won’t and if they do, the information can be found elsewhere. As soon as the semester is over, have the student sell their books online to maximize their value before a new edition comes out.

The 2 Steps that Saved me Over $1500 in College

In my e-book, Save Thousands on Textbooks, I released the 8 steps I used to save money on textbooks in college. Here are the two steps that made up 75% of my savings.

Interlibrary Loan

Every college belongs to an interlibrary loan system that connects its library to other libraries in the state. Even though I went to college with just 2,500 people, my library had access to over 73 libraries in the state, including huge universities. Every semester, I would check the interlibrary loan to see if they had any of the textbooks I needed for class. Almost every semester I would receive 2-3 textbooks from some random library in my state and this would provide me with hundreds of dollars in savings every time. For more information on how exactly to work the interlibrary loan system at your school, check out Step 3 in my e-book.

Get the Edition Down

Many students cringe at the thought of getting the wrong edition textbook for their class. I did too, until I saw two editions of the same textbook next to one another. Besides a new cover, the 2 differing editions were the exact same book! These textbook companies are pretty lazy and this happens almost every time with new editions of textbooks. Occasionally, a chapter is flipped or an image is different, but nothing significant is ever changed from one edition to another.

Once your student has this knowledge, they can either search for lower editions on interlibrary loan, or purchase them on amazon.com or half.com.

Need to see the savings to believe it?

As of August 15, 2009 the 14th edition of Smith and Robertson’s Business Law cost:

$142 on Amazon.

And how much did the 13th edition cost?

$11.

Getting the edition down will help your child save hundreds of dollars every semester.

By learning these textbook saving tips before entering college, your child should be able to avoid credit card debt and keep the money they’ve work hard for, in their bank accounts. Teach them a lesson that counts; teach them to save.

Editor’s note: I have a couple friends who have had success renting textbooks from Chegg.com.  One even referred to it as the “Netflix of textbooks.“

It sounds like swine flu could make a real comeback this fall. While this doesn’t necessarily pertain to finances, it could certainly affect your personal finances if you have to miss work, or pay costly medical bills. I saw the doctor last week for a nasty case of bronchitis and overheard them telling another patient in the lobby that they have seen a lot of regular, seasonal flu early this season. Swine flu or not, it seems like flu will dominate much of the news cycle in the coming months.

I don’t usually respond to these dire “flu pandemic preparedness” warnings that seem to come around every few years, but it does make sense to stay prepared for any situation. We found a great preparedness guide at one of my new favorite sites, SurvivalBlog.com.

The author runs through a list of things to have on hand, techniques to use to prevent getting the flu, and what to do if you do get it. We have started picking up a few extra medicines (expectorants, ibuprofen, acetaminophen, etc.) to help battle any symptoms, and stocked up on things like hand sanitizers (especially for the kids). If you are a member, check out wholesale clubs like Sams Club for things like this, and look for the store brand medicines to save money. We were able to pick up a 500-count bottle of acetaminophen for a fraction of the cost of the equivalent number of Tylenol.

The Frugal Roundup

How To Survive a Stock Market Crash. Recent stock market declines have really tested my faith in the market. Jeff reminds us why to keep the faith and keep plowing long-term savings in the market to win out. (@Good Financial Cents)

The Valuable Art of Media Swapping. We often share books, movies and games with friends and family as sort of an informal swap. With video games, it’s great to let the kids try it out before deciding whether or not it is worth buying. (@The Simple Dollar)

8 Steps to Achieving Your Financial Resolutions – No Matter What. This post inspired me to look back over my 2009 financial resolutions to make sure I was on track. Guess what? I’m not. Time to put Neal’s advice to work!(@Wealth Pilgrim)

Lifestyle Inflation. Nothing can rob you of progress, financially, faster than lifestyle inflation. I’ve lost track of how many times I received a raise and then ran spending up by the same percentage. Draw a line in the sand, and start saving everything above it. (@Million Dollar Journey)

25 Essentials That Are Better and Cheaper to Make at Home. An excellent resource for saving money around the house by choosing homemade products over their retail counterparts.(@Man vs. Debt)

Budgeting With the Envelope System. When we first started our financial turnaround we used envelopes to manage our budget categories. Over time, we relaxed things a bit and started using a debit card. However, envelopes are still great for those budget categories you tend to spend more on each month than planned – think food, entertainment, etc. (@Lazy Man and Money)

How Much Baby Stuff Do I Need? New parents can burn through a lot of cash those first few months. If you are expecting, or no one someone who is, you may want to run this article by them.(@The Frugal Girl)

Best of the Rest

• We Sold Our House
• Budget Travel Tips
• Lying in the Workplace – Part 1
• Best Financial Advice You Wish You’d Taken
• 8 Ways to Save on Auto Insurance
• Work At Home Mom Shares Tips On Saving Money

Bonus article: The founder of Papa John’s spent $250,000 to buy back the old Camaro he sold back in 1983 to keep his family’s business afloat, and to start a little pizza business. Wonder if that old Chevy Silverado I sold is still around? I wouldn’t pay $250,000 for it, but it would be great to save up and pay cash for it now that I’ve turned things around.

My grandmother was a prodigious coin saver. I remember one summer when I was about ten years old helping her roll dozens of rolls of coins. Sensing I was getting a little bored making my piles of fifty pennies, she took me back to her room where she had hidden shoe boxes of rolled coins under her bed.

She took the tops off those old shoe boxes and I remember peering into them and seeing roll after roll of quarters, nickels and dimes. She had whole boxes dedicated to pennies. There was easily a few hundred dollars in change under her bed.

The Coin Collector’s Christmas Club

“Nana, what are you saving all those coins for?” “For Christmas,” she replied. My grandmother didn’t work outside of the home after my grandfather retired from the Marines. Fortunately for her, my grandfather is a cash-only kind of guy, opting to spend cash over charging on credit cards (these were the days before debit cards were made popular).

He would come home after a trip to the store and empty his pockets on the top of his dresser. That’s when my grandmother swooped in and collected any loose change and was off to add them to her coin bank. She did leave a little pile of change my grandfather referred to as his “walking around money.” He always liked to keep a little change in his pocket.

After that summer of helping my grandmother roll coins I went with her to the bank where she cashed in over $300 in rolled coins. Part of the reason she took me along was to reinforce the habit of savings, but I really think she needed help carrying in those old shoe boxes!

Saving Coins in the 21st Century

Fast forward twenty-plus years. My kids now enjoy saving coins. Both of them have little electronic money jars that keep a running balance – something I’m still not sure about. While it is fun knowing you have $52.00 in change in your coin jar, just knowing that makes you want to cash it in for that $50 game you’ve been eying.

One of the things we struggle with now is finding a more efficient way to cash in that change. Some banks and credit unions have a change counting machine where you can dump in your change and make a deposit to your checking or savings account. Others require the change be rolled, and some even require you write your account number on each roll (have you seen the length of some bank account numbers these days?).

The very act of counting the change is time consuming, and most electronic sorting banks are expensive – the cheap ones never get the count right, or drop dimes in your penny column, etc. Of course, there is always those Coinstar machines. I admit I’ve carried along a jar of money or two to Kroger and dumped it in the Coinstar machine to put towards the grocery budget. Yes, I know it charges me an 8.9% fee, but considering how long it takes to count and roll the money, isn’t this worth it?

Coinstar does offer an option to redeem your change for an gift card or eCard (list of participating merchants) without adding the fee. But then you have to buy something online, pay for shipping and wait. 8.9% doesn’t seem so bad after all.

Are you a coin saver? Where do you keep your coins, and how do you cash them in?

Credit Karma recently released its U.S. Credit Score Climate Report reflecting data for July 2009. It revealed a few interesting trends, the most interesting being the continued decline of consumer debt for those currently holding a credit card. This means that, overall, Americans are paying off more than we are spending.

Of course, this is bad news for retailers, and bad news for the overall debt-driven economy. However, our personal economies seem to be improving (assuming you have avoided a layoff or similar household emergency). I’m encouraged to find out people are paying off debt, particularly credit card debt.

In our own household we have reduced outstanding credit card debt by about 30% since May of this year. We have been 100% sold out, gazelle intense about being credit card debt free, and if it weren’t for a few family emergencies we would have closer to 50% paid off by now. The bright side is we did not accumulate any new debts during these mini-crises.

How are others doing? Here’s a look at the Credit Karma survey results from last month.

Average consumers had:

• $6,818 in credit card debt
• $193,036 in home mortgage loans
• $52,559 in home equity loans
• $14,449 in auto loans
• $26,368 in student loans

$26,000 in student loan debt? Yikes! That figure and the home equity loans stood out to me. Combined, those two categories alone represent nearly $80,000. Wonder how many people took out those loans for the tax deduction on interest, or to pay off other debt, and just ran it back up again. I also can’t help but feel bad for new graduates who racked up thousands in student loans to find one of the worst job markets in recent history. While the outstanding debt balances still seem high, I’m hopeful that the downward trend continues.

Another nugget from the survey is that Midwesterners seem to have the lowest amount of debt. Wonder what lessons from the Midwest we could learn throughout the rest of the country? I know in many Midwestern states there is a thread of self-sufficiency running through many households not felt in other parts of the country. Homes are probably more reasonably priced than in other areas of the country, too.

I’m curious to hear from you on this one. Have you also paid down debts during the recession? Do you think you would have done it otherwise, or was the negative economy a motivating factor?

Why do we have such a hard time being happy for others? It is something I have struggled with over the years, and I recognize much of my resentment towards others’ success has been a result of my own insecurities.

Back when we were really floundering, my wife and I were friends with several couples who made much more money than us. They lived in huge houses in the best neighborhood in town, drove nice cars, and took luxurious vacations. We had little in common, except for the church group the moms were members of – MOPS (Mothers of Preschoolers).

My wife and I often confided to each other that we always felt a little out of place at Christmas parties and other social events hosted by these wealthy couples. My “out of touch” feelings began to fester, and soon I was downright jealous. Why couldn’t I land a great job and earn as much money as them? Why couldn’t we afford a bigger house, and a nicer car?

Fortunately, as part of my financial turnaround, I finally came to terms with what I was feeling. Turns out I wasn’t so much jealous of the “Joneses” as I was unhappy with my own situation. My resentment for others’ success was born from my own lack of success, and I ultimately only had myself to blame.

There was another angle to this I had not considered before this time of reflection. What if those couples were up to their eyeballs in debt? They probably had a huge mortgage payment, two car payments and credit card debt higher than my annual income. After all, outward appearances can be deceiving. Is that really what I was after? Or would I be more content with a modest home, paid-for cars, and the freedom that comes from not carrying any debt. The choice was obvious.

It was at this point that I went through sort of an early mid-life crisis. Up to that point I had been fast-tracking the career ladder, having started literally on the bottom rung and made my way to middle management. Of course, the promotions often meant more headaches, more travel and not much more money. I came to a point in my life where I would gladly give up the late nights, Saturday mornings and two week cross-country trips for more time with my wife and kids.

Sure, we would probably not make as much money as those “rich” friends of ours, but we would be wealthy in other ways. So in March of 2004 we relocated, left the financial industry and found more meaningful work. Now, I make significantly more in a year than I did in those days, thanks to my new career and my side hustles. Aside from a few nice things we enjoy, we still live a modest lifestyle by most standards.

I find it much easier to be happier for others now, if they are truly happy. If I discover they are unhappy with their inflated lifestyles, and are merely working for the trappings of the rich and famous, then I feel a little sorry for them. I hope over time they will break free from the grips of materialism so that they can discover what is really meaningful to them. Maybe it is more time with their family, or more time to volunteer to a cause they believe in, or maybe just more time out on a boat fishing. Whatever it is, I hope they find it so I can truly be happy for them.