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Showing posts from 2009

Standard Tax Deduction Changes Make Carnival Headlines!

The Carnival of Personal Finance blogs are a great place to get a web-wide roundup of free financial advice.  The Real Life Money blog on the changes to the Standard Tax Deduction (hint, you don't have to itemize to get a break for your real estate taxes) is linked below.  But be sure and check out the Carnival of Fun finance tips first! Carnival of Personal Finance Roundup Schedule A udpates here

Jobs and Money for English Majors

Along with studying taxes, I’m taking a Ph.D. level course in Human Resource Education.  The statistics as to the need for college-educated workers is sobering.  The Cliff note's version? Gypsy Rose Lee was right, you’ve gotta’ have a gimmick to get a job, especially if you are an English Major Here are the notes from the Prof that back it all up:    ·          Most jobs in future will require a college degree—WRONG.  Actually only ~20% (% in my state >25 w/degree: 18%) ·          Most high-wage jobs will be in technical fields and these jobs require a college degree ·          Largest/fastest growing segment of technical workforce does not require a degree (labeled as “knowledge workers” by Peter Drucker in 1994) ·          Makeup of this segment o     Technicians: 25% o     Blue collar technical workers: 57% o     Professionals: 18% As # of college grads increase economy will generate equivalent # of jobs requiring college degrees ·          ½ of those looking for work in pro

Bankrate on Facebook

Bankrate on Facebook is a great tool for those of us who think with words instead of numbers.  There's a nifty Net Worth Calculator that's fun to play with, and if you get frustrated with any of their links, or how low your Net Worth score comes out,  you can always post a scathing comment in Latin.  The bankrate folks won't understand it and you'll get to regain a tiny bit of English Major pride. Besides, the tax tips are out -- and Bankrate has a few of those as well.  Okay, they have 7 tax moves to make before year's end.    And if all of this gives the English Major in you a huge headache, you can skip on over to the Bankrate Facebook link on Hidden Bargain Wines

Transferring Roth to TIAA-Cref

If you want to get more bang out of your Roth IRA buck and add to your retirement money investment options, you might want to check out transferring your money to a TIAA-Cref Retirement Fund .  ING Direct was only paying me 1% or so of interest on my Roth IRAs and I didn't have options like Treasury Inflation Protected Funds (TIPS) or Index Funds in my 403 B, so I checked out TIAA-Cref.  Its reputation is stellar and it's a non-profit organization that servers other non-profits like schools and hospitals.  Nice to know their movitation considering what's happening with the greedy-guts on Wall Street. It was a tiny pain to transfer the funds (took about 2 weeks to make sure the paperwork and money changed hands so I wouldn't have to pay taxes or penalities).  But the guys on the phone really helped and I'm happy with my returns already.  Next step is to transfer the funds out of AIG-VALIC.  It's only a few grand, but I don't want anything to do with that comp

Bye Bye Schedule A Itemizing, Hello Bigger Standard Deduction

Confession:  I didn't file Schedule A a few years ago because it was just so darn hard to do.  And I had paid real estate taxes at the time!  Double shame on me. The good news this year is that the IRS has actually smoothed the way for people like me, and maybe you.  The Standard Deductions this year are: $5,450 - single or married filing separately $10,900 - married filing jointly, or qualifying widower $8,000 - head of household AND, if you paid real estate taxes last year, you can enter them into the Standard Deduction Worksheet without having to fill out Schedule A, up to $500 for singles and $1,000 for MFJs. Example, I am head of household, and paid $1100 in real estate taxes last year, then my new HOH standard deduction is $8,500. There are other additions to the Standard Deduction that I might want to take, such as being over 65 years of age, being blind, or having a disaster loss.  I live in a hurricane-prone state, we tend to do a lot of that type of entry. But don't t

A little extra from Uncle Sam

What I learned in tax class last night:  You don't have to itemize on Schedule A this year to be able to deduct your real estate taxes. The IRS has added an option to increase your Standard Deduction by $500 or $1,000 (MFJ), as long as your real estate taxes are higher than those amounts. Example:  Sarah and John own their home and have an adjusted gross income of $50,000.  They paid off their mortgage but still owe real estate taxes every year, which were $2,000 last year.  They file Married Filing Joint, and get a standard deduction of $10,900, which reduces their taxable income to $39,900.   By adding their real estate taxes to their Standard Deduction, it increases by $11,900, which reduces taxable income to $38,900.  The difference in tax between the two income levels is $150 in taxes. The ceiling on the deduction is $1,000.     You can find out more about all of this at or by consulting a tax advisor. Most read blogs that you might also enjoy: Jackson-Hewitt Tax S

Domestic Violence Can End With Financial Empowerment . It took a while to download each first video, but it's a beautiful and empowering video message from real domestic abuse survivors who are doing well now.  Lots of free financial resources for women from AllState -- kudos to this company! I hope they put up the transcripts as well, for those who don't have broadband access.

Jackson Hewitt Tax Lessons

Courses began this week and I'm impressed with the workbooks and other training materials.  I'm usually an A-B student, and I'm getting Cs on their asessments though.  Some of the test wording isn't logical.  But all you have to do is get a 70% to pass.  And you can retake the assessments several times.  Each time I retake an assessment, I do better. Important tip from tonight's class -- You only have to keep your returns for 3 years.  But if you need to correct your income records with Social Security, you will need all of your w-2s, 1099s and any other form that shows money coming into your household.    I shredded all my returns that were more than 10 years old, and the w-2s went with them.  Too bad, wish I had known this before.  Maybe I'll learn where I can get a copy of old w-2s in the next class! (disclaimer -- this isn't tax advice, please just use it as a reference to investigate further via the irs website or other irs sources!)

Jackson-Hewitt Tax School

Scary thing to do -- I signed up for Jackson-Hewitt Tax School yesterday. The personable young lady who administered my registration test asked me "why do you want to come to tax school?" I told her I write a blog. People reading my blog need simple information about taxes and I sure need to understand taxes if I'm going to write a money blog. She smiled at the idea of the blog and took my $99 (it's a free course, but the books cost a pretty penny). You can go to tax school too. The time to enroll is now! H&R Block  has a tax school as well, but the last time I checked, it costs around  $250. If you do well, they will sign you up for part-time work if you are interested. I probably won't do it, since the hourly pay to begin with is pretty low. But it could be a life-saver for someone who lost their job during the recession. This is the season that tax schools do their training. You won't be able to sign up for one of these cours

The Lending Club Wins an Award

I received an email yesterday from Lending Club. They've won an award that's pretty prestigious. But award-giving can be an inside job, I'm old enough to be skeptical. In the meantime, my returns are above 8% on simple loans.* That's a great thing! Here's a clip from the e-mail... "....In addition, if you have not seen it already, I am delighted to share that The Harvard Business Review named Lending Club one of the top 20 Breakthrough Business Ideas of 2009: " It's an interesting turn around since I read on the Lazy Man and Money Personal Finance Blog about how the Lending Club hit a bump or two along the road to fame. But it seems to have righted itself quite well! BTW, I do not receive any kind of monetary reimbursement from The Lending Club besides the interest that I earn! You can, however...if you email me, I'll send you an email link to open an account. Since I

Lending Club Update

My first month as a micro-banker went well, I lent $125 dollars to two different people through the Lending Club website. My weighted average weight of return is 8.33% and I expect to get paid $3.93 per month for the next three years. Besides beating the 1.99% interest rates offered through the banks, I am enjoying cutting out the banking middlemen who continue to raise fees on bank accounts and practice unfair lending through high credit card interest rates (in my opinion, anyway, and at least in the opinion of a couple of Congressmen as well). I'm helping one family upgrade their home and another family buy a new air conditioner. Air conditioners are important, especially in the South! The risk I'm taking on Lending Club is low, because I've only got $125 on the table. As social experiments go, it's a cheap one, and I would give that much or more in a year to my church, so if I lose this, I'm at peace with that risk. If you are interested in Lending Club, go to ht

Uncle Sam Pays You to Save

If you are new to personal finance and retirement savings, then you might not know about the incredible tax savings that you can experience using auto deduction into your 401k, 403b, and IRA accounts at work. I started out deducting $25 a paycheck 18 years ago and couldn't imagine how I would be able to live without that extra $25 every two weeks. Fastforward 18 years and I managed to get by quite well! I own my own car, have more clothes and shoes than I know what to do with, go out to dinner with friends, and have a retirement porfolio - invested mostly in cash and bonds - that is worth $100,000+. And this year I bit the bullet and began putting away the full $20,000 a year. How? Being thrifty, living below my means and most importantly, saving on taxes. The new 2009 tax tables are available on the website and here at a this personal finance blogger site No Credit Needed As a single Mom, head of household, making $73,000 per year, my taxes are figured like this If Taxabl

Keep Your Money - Use Flow to Make it Fun

Goal setting for building your savings cushion can be almost as much fun as quitting your job with a million in the bank. I did say almost. But, managing your money to fund your fabulous life can be a game that consumes your attention so fully that you forget the mundane boring details of life. It's called Flow and it can apply to your personal budgets, household management, savings plans, you name it. Michael Csikszentmihalyi (pronounced chick-sent-me-high) writes about the psychology of Flow in his book "Psychology of Optimal Experience. " It's that moment when time stands still and you forget to check your watch, you don't notice the temperature, you don't care if you are hungry, you are completely immersed in life. Athletes know about flow, it's the sweet spot on the tennis racket and the pure meditation on the golf course when you hit a perfect shot. Flow comes when we have goals -- goals that are attainable. They help you concentate and crowd out pet

Money Tips That Work in Real Life

I'm not the most organized person in the world. Maybe you aren't either? The idea of charting every move I make on a daily to-do list, of watching every penny I spend or make on a chart, oh goodness, it's making me crazy, my head is spinning, jeez here comes the alien anxiety monster! But some folks really dig this, and are excellent at it. A lot of people it seems. Because they are all writing Money Blogs. Top Personal Finance Blogs is a list of over 100 blogs about money, saving, couponing , investing, the philosophy of money, how to be cheap and still chic, definitions of frugal, I am exhausted reading them. And they all have Great Tips! Really. Smart people with wonderful advice. But I can't put all of these tips into place in my life and still stay sane. Not with this personality. I'm sure there are others out there who feel the same way. And that's okay! Just because we shrug ourshoulders at the conversation about .25 off Bertolli sauce doesn't mean

A co-worker intrigued by personal budgeting and software ran into my office this afternoon. "Can you believe it? I heard about on NPR yesterday! And you were just talking about it...isn't that weird?" Maybe. Maybe not. If is an accurate gauge of salaries, then most of us who are employed by others are making between $40,000 and $80,000 a year. Try saving enough to pay for a house, put children through private school, and then into college, fund a retirement plan (again!), pay for a car, pay for school loans...well, you get my drift. A LOT of us are using personal budgeting software and most of us have finite resources, even the Millionaire Next Door has to do some planning. (Okay, so it's mostly around taxes, but that kind of planning counts too...) is an awesome free resource for aggregating all of your accounts into one overview. The first time I really understood my net worth was when I began using the full functionalit

You Need A Budget

Based on recommendations from various money blogs, I downloaded the You Need A Budget software for a two week free trial. New personal household budgeting software is incredibly important to getting the money right, and I'm still looking for the perfect system. YNAB. as it's frequently referred to, is a wonderfully smooth little household budgeting tool. Except, it didn't work for me. And the download was a big mistake on my part. After a couple of weeks of loving You Need A Budget's smooth workings, and getting excited about how the monthly categories move forward every month in a quasi Dave Ramsey esq virtual money envelope system, it all came to naught and I tossed the software in the recycle bin. Why? Three huge drawbacks for me: No way to categorize autodeductions of the paycheck. I do a lot of autodeductions, which is one way I have been building my portfolio into the the very low 6 figures (FINALLY!) I need to track that functionality. The answers o

Personal Financial Planning

All of us could use a little help from time to time, especially in the financial arena. This is a guest post by Edward Clark, of the Lohengrin Group , a financial planning service located in the deep South. He describes how financial planning helped one of his clients save her million dollar nest egg that had been hatched from the poorest of beginnings. "Sonia came into our office with a tale that should be in a book. She wiped her glasses with a beautiful handkerchief with her initials on it and said, “OK, but it’s kind of complicated.” And off she went. Sonia’s story was so captivating that we just listened as she spoke for half-an-hour. She said that she was born in Russia well after the Communist revolution, and was caught in the ongoing chaos that ensued after the Communists took charge, but before the 2nd World War started to creep into the region. Renegade soldiers went through villages in her part of the Ukraine, searching for Jews, literally raping and pillaging peaceful

Personal Budgeting vs. A Spending Plan

The origin of the term "budget" is debatable, but most sources track it back to the french or Latin words for bag or pouch. I don't use a budget. I don't like the idea of having a small bag determine how my financial life flows, it's too restrictive. I prefer to think of my monthly cash flow as a spending plan. It gives a feeling of bounty, when in fact, many of us who feel poor are actually rich in resources. For example, my spending plan includes $200 per month for health insurance. I don't see that as an expense, I see it as something that I purchase in order to protect myself and my family from catastrophic financial burdens. That's a good plan! The most important spending plan that I ever ran across is called The 60% Solution by Richard Jenkins on MSN money. He was wondering if adding all these receipts in personal software was really helping him control his money. Here is an excerpt from the article: "After analyzing our spending patterns over

Why This Blog Exists

I was a widow with a young child just ten years ago and my husband left so little money that I had to borrow to pay his funeral expenses. Learning personal budgeting skills saved my small family and it might save yours. I devoured every financial planning book on the market, many of them are recommended in my blog like Dave Ramsey's Financial Peace and Andrew Tobias' The Only Investment Guide You'll Ever Need. Learning from others lifted me out of financial despair. That information, mixed with a lot of encouragement from friends along and a full-time job with benefits, steadied me along as I rebuilt my life. These books and these tips on the blog allowed me to finance my child's sub-Ivy league college education and build a year of emergency account funding now stashed in very safe investments in ING Direct savings bank accounts. This is not professional advice, just sharing of a journey. Learning to manage money, while still enjoying the wonderful things in life (a

How To Become a Millionaire

The old adage is that if you want to be someone, then act like they do. Dress For Success books are built around the idea that if you want to be the boss, you have to look like bosses look. This is the first post in a series on how I've used good personal finance books to build a six-figure nest egg over the past 9 years . Maybe these steps will work for you! Now I know that the odds of me becoming a Millionaire are pretty slim, considering my age and the big bumps in my history. But I know I can do better than I am doing now because I have a history of success -- and you will too, if you follow at least some of these steps. So I'm working millionaire habits into my life by doing some of the things (not all of the things) that millionaires do as outlined in several books, the first of which is The Millionaire Mind, by Thomas J. Stanley, Ph.D. I've recommended it before, and continue to learn more from it. Here is how you can follow some of the advice from that book and add

How Long to Keep Tax Records?

I found this simple to follow info on the Unclutterer Blog which I linked to from the Almost Frugal blog. I recommend them both. Uncluttered has a wonderfully obsessive group of people who share ideas. The tax retention info is a table format that gives you a template to follow for tax info. Don't let fear of paperwork and taxes keep you from investing and saving! How Long To Keep Records

Earn 7% or more with Lending Club

I'm kinda' scared and feel a bit silly...I took a risk and lent someone some money over the internet in order to take a chance on earning 7% or higher. This isn't like me at all! But INGDirect's 1.5% is just not going to get that new pair of shooz and the -25% on my retirement fund means I'll be of the working and stressed out masses even longer than expected (which is, basically, forever). Several of the frugal bloggers and money bloggers have mentioned the on-line lending companies, where you sort of act like a micro-lender, with the site as the go-between. It's called "Peer Lending." I've read enough about the service to finally give it a shot. I spend $100 on a great night out on the town...why not take a small, calculated risk that might help out a service trying to go fill a need that the financial institutions are missing. It's pretty simple. 1st - I funded my Lending Club account with $100. That took a couple of days to process throu

Louisiana Section 529 Plan is #1

A real life example of how you can send your child to an Ivy League college, even if you are a single, middle class Mom. 529 plans are a huge help. I deposited $10,000 of my house sale proceeds into a 529 plan gauranteed interest only account for my daughter last year. Earnings: $900 - The Louisiana plan matched my $10,000 deposit with a 9% addition to my account in part based on my AGI (under $50,000). $634 - in contribution interest. $126 - state tax credit That's a 16.6% return on the $10,000 investment, 15% if you don't live in the state. And you don't have to live here to take advantage of the Louisiana 529 plan. The money in the 529 plan is going to pay for her apartment rent, food and tuition not covered by scholarships. The tuition not covered by scholarships each year is about $5,000. Whew. She's a Junior! Check out Louisiana's 529 plan here. I don't work at the Louisiana Office of Student Financial Assistance and make no money for promoting it.

Easter Dinner Deal from Wal-Mart - frugal and fabulous

According to the National Retail Federation’s 2009 Easter Consumer and Action Survey, you will be heading out to a discount retailer sometime before the Easter holiday is over. And your average Easter bill of $135.03 for candy, gifts, food and decorations will be down to $116.59. If you run your household and budget like most of us, the researcher’s crystal ball predicts that your biggest expense will be in preparing a meal, with “the average person expected to spend $37.67 on food, down from $41.09 from last year.” When I was deep in Mom Land, my biggest Easter expense was on church shoes and clothes for the family, and we skimped a bit on the meal. Other expenses included cards to far-flung family members and an Easter basket or two. This year I will probably spend the most money on gas dollars to travel to see friends and family during the long Easter week-end. The survey found the majority of people (64.0%) will bargain shop at discounters this year, up from the 58.8 percent w

Personal Care Spending Patterns

The story in Real Simple magazine on what people spend on average in certain categories is intriguing. (see post from April 2nd, 2009). I had no idea I spent more than the average bear on personal care! has a nifty feature where you can analyze trends in your spending by category, comparing it to other cities and the US as a whole. According to my program, the US is spending between $89-$120 per month on personal care...which includes hair cuts. It seems hair cuts/color, etc., is the big swing factor. My highlights run about $120 every six weeks, and a cut is about $35. I've gone an extra week between coloring before, which could save me $120 a year. Shampoo is pretty expensive too, especially if you color your hair -- that investment has to be protected! Real Simple Magazine editors suggest measuring the shampoo used very carefully. A quarter sized dollop is about all you need. Personal Care spending is not an area I want to skimp on too much. It's

Spring Home Spruce Up on a Shoestring Budget

I realized during my quarterly spending audit that I'm woefully underspending in decorating my abode, and it's starting to show. I'm embarrassed to have people over, and having people over for my tutoring/coaching business is crucial to financial success in my side income stream. But how do I spruce things up without spending all my revenues on home furnishings? More ideas from Real Simple Magazine that I'm going to try are below. I'm going to start small, but try to buy great quality items that will last. The bathroom shower curtain comes first, along with some new towels for the guest bath. and, here I come!

First Quarter 2009 Spending Audit

How do you know if you are spending too much in any one category? Or if there is room for you to reasonably spend more on a particular category in your budget? Pinching pennies too hard can cause any reasonable adult to splurge on impulsive buys, which is counter to Real Life Money's purposeful spending that leads to satisfaction (not a credit card hangover) The average person spend $2775 a year on home improvements . The good news here is that I sold my house last year and don't have any home improvements! The bad news is that I need to buy some household furnishings like a bed, shower curtain, new bedding, new furniture. I suppose I can hold off on that for awhile. The average person spends $588 per year on personal care products . I've spent $275 on personal care products and it's only April 1st. May need to tighten the belt here. The average person spends $749 a year on clothing . I've got $960 budgeted to spend each year on clothes, and I've already

Tips from the Millionaire Mind - News You Can Use Today

Millionaires use Costco (or Sam's) They often buy pre-built homes, or foreclosures Have shoes resoled or repaired Have furniture re-upholstered Raise the thermostat setting on the air conditioner during the summer Thomas J. Stanley, Ph.D., author of the Millionaire Next Door, has compiled even more interesting insights into the Millionaire Mind that I believe we can all use to become more financially solvent, even if we never make it to millionare land. In my case, every $250 I add to my net worth is another day that I don't have to work for someone else. (note: Not wanting to be subject to a boss' whims seemed to be a big millionaire motivator, as well). Stanley interviewed 733 millionaires, or those who have a net worth of $1 million or more, and created the Millionaire Mind. The paperback edition is out now, and your local library probably has copies. Amazon's service selling the books used is also good, I've never had a problem getting a good used copy from

Stanford Group Meltdown Lessons and the Price of Tuna

I live in a medium-sized town. So, to hear about a company close to home allegedly bilking billions of dollars out of customers all over the world, -- it's like living in New York next door to the Madoff house. Huh? What happened to the nice people who sponsored the Symphony last week? Confusing. And since I'm not one of the chosen who received 8% gains over the past few years, I get to point fingers and feel a bit smug again. At least one person I know has tried to reclaim their money by running over to the Stanford offices and knocking on the locked door. The lesson that I see we can all take to the bank here? Save more for retirement, we can't expect 8% gains. Frugal living pays off. The Millionaire Next Door is a plumber, and that's okay because it's an honest living. Speaking of frugal living, here is a price comparison spreadsheet sample you can use. I had already created one from scratch when I read a blog on GRS outlining this very process. All my friends wh

New York Times Rent vs. Buy calculator

My personal finance site has also recommend this Rent vs. Buy calculator from the New York Times. I used it and I LOVE IT, LOVE IT, LOVE IT! But I have to be careful not to share it with my friends who just bought a house, because they get a little green around the gills when they realize how much they are really spending on housing. You just go here... Rent vs. Buy Calculator. and enter your rent versus the cost of what it would take to buy a comparable place. I sold my home last year, and am renting. It took a major psychological shift to get there! (Me? A Mom? A Citizen? A board member...A...a...a...renter???!!) But I love my apartment and am saving $2,000 a year by renting. In fact, at my rental rate, I can't buy a condo or another house at $170,000 per year (which is comparable to the quality of my condo) and come out ahead, even after 30 years. Even with a 50% down payment. That's $85,000 folks! One day I'll buy again, just because I believe in owning a plac