Cheer! It’s Tax Time Again!

You don’t cheer when it is time to do your income taxes? You wait until April 15th at 11:59 PM to mail your filing? What if the thought of paying your taxes did not have to make you hyperventilate? Tax season will be here before you know it, here are a few tips that might make tax time a little less stressful:

1. If you are self employed, do not forget to file quarterly. Then, you will not have to worry about insurmountable debt at the end of the year.

2. Make sure you pay enough. If your withholdings or estimated payments aren’t large enough during the year, the IRS can fine you.

3. If you do not want Uncle Sam to earn the interest on your hard earned money, pay less quarterly, but make sure you set enough aside in your savings account to cover the difference at the end of the year. Unfortunately, the standard estimate for a self-employed person is approximately 1/3 of your gross income, since you have to be concerned about Social Security and state taxes as well.

4. Filing electronically is faster and easier. Gather all of your tax forms together and file electronically. Unless you have an extremely complicated tax situation, this will save you the cost of paying a tax preparer, yet ensure that you get all the deductions for which you are entitled.

The program will ask a series of questions, provide all the pertinent forms, and make provision for you to electronically sign. As a result, if you are entitled to a refund, the amount can be directly deposited into your bank account in less than 3 weeks.

Please share your tax advice, so we can all quit dreading April 15th.

Tina

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Are You Ready for Christmas 2008?

Have I lost all sense of reason!  Christmas 2007 is barely history, and I have the audacity to ask if you are ready for Christmas 2008!

We have spent several days talking about the stress and expense of the holiday season.  We have also shared many ideas on how to make Christmas special without having to go into months of debt and more stress.

Now, before we put the warm fuzzy feelings of the holidays and the back burner for the next eleven months, let’s revisit one more way to stretch your finances for Christmas 2008. 

The day after Christmas, the sales start. Savvy shoppers plan ahead-12 months to be exact.

My brother’s first wife started shopping for Christmas in January.  She kept a list of all the friends and family for whom she wanted to purchase gifts.  As soon as the after-Christmas sales hit, she would keep her eyes open for the perfect gift.  If spotted at a reasonable price, the purchase was squirreled away at the top of the closet until time for Christmas wrapping.

While the rest of the family is sweating Christmas purchases and affording the holiday expense, she was already done, and looking forward to the festivities.  In fact, she was usually done before the year was half gone. 

Actually, her approach to Christmas shopping can also apply to buying a different car, saving for a down-payment on a new home, buying new furniture, or affording any major purchase.

So, how do you plan for your major expenditures?

Tina

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Shred Your Credit Card Debt

So, you succumbed to the temptation and used your charge card to get you through the holidays.  Well, you can’t turn back the clock, nor stop the mailman from coming, but you can still exercise a little damage control.

Right now, get out your scissors and cut your way through to financial success. Although it may seem painful now, you will thank yourself tomorrow.  Cut through that magnetic strip or put your charge card through the shredder, either way will work.

If you can’t bring yourself to get rid of your financial security blanket, enlist your kid, nephew, or niece.  For once, they will have permission to destroy something and not get into trouble!

I speak from personal experience. While I was going to college and raising two small children on child support and food stamps, I used my good credit to pay the winter utility bills, buy groceries at the end of the month, purchase school clothes, and more. Well, you can guess what happened.

Suffice it to say, this year I liberated myself. Long before the holidays I took the shredder and a pair of scissors to my credit cards. Now, I am no longer tempted to spend money I do not have in the first place.

As a result, this Christmas was a cash and carry holiday.

Yes, I could still order items through the Internet.  However, I had to use my checking account debit card.  If the money wasn’t in the checkbook, I didn’t need what I wanted to buy after all.

I may still have a mountain of bills to pay off, but I have climbed to the top.  I know the mountain is not going to get any higher in 2008, because my scissors cut to financial success.

How do you plan to reach your financial goals next year?

Tina

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Selling on eBay After the Holidays

As you scurry around trying to finish your last minute gift shopping in the final days before Christmas, keep in mind that the next few days can be a great time to prepare to make some money on eBay.  The following four tips can help you make some extra money to help pay off those holiday bills:

eBay Feedback
If you’ve done any of your Christmas shopping on eBay then you’ve already built up a feedback profile that will make others comfortable doing business with you.  If you haven’t purchased anything there before now is a good time to get some great deals on things you can put away as future Christmas or birthday gifts.  Sellers have flooded the site with auctions to meet the holiday rush and typically the more people selling a product, the lower the price goes, with exceptions such as the Nintendo Wii.

Free Shipping Supplies
You and your family will likely open gifts in the week ahead and with gifts almost always come boxes.  Save the boxes and packaging material as you open presents and you’ll have free shipping supplies!

Big Discounts
As we get closer to the day of Christmas retailers continue to offer sales and once the holiday is over they will offer big discounts on many products.  Take advantage of these low prices as they try and move out inventory.  If you can buy it for a big discount chances are you can re-sell it at some point in the future for a handsome return on investment.

Unwanted Gifts
Another inevitable side effect of the season of gift giving are people who end up with presents they don’t really want.  In some cases there is no gift receipt so they’re stuck with what they got.  In other situations the thought of standing in long return lines prevents people from taking back or exchanging unwanted gifts.

So what does this have to do with you?  Offer to sell your friends, families, neighbors, or co-workers unwanted presents for them on eBay and take a commission.  They get rid of something they don’t want and you make some extra money, win/win.

Of course the best thing about the holiday season is the time you get to spend relaxing with your family but that doesn’t mean you can’t think ahead for some pre-emptive eBay action.  Enjoy!

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Merry Mob Madness Mentality

A few days ago, I was watching a reality television program showing video footage of Black Friday shoppers in action. At first, I thought I was going to have to switch channels or turn off the set. As I watched in shock and disbelief people literally trampled each other to obtain a limited sale item. One lady actually stole a toy out of the hands of a child.

My questions: Why suffer the merry mob madness mentality? Why does Christmas have to be so stressful that people actually lose all their inhibitions and common sense just to get the perceived best gift for Christmas? Why do people spend money they do not have, to buy the hottest gift?

How often have you gone broke to find the perfect gift, only to discover the recipient did not think the gift was so perfect after all?

For example, the year my daughter was 4 or 5, she desperately wanted this kitchen set she had seen advertised on television. She hinted and begged for months. So, when Christmas came around, her dad and I only had one major gift in mind. There was only one problem: he was stationed in a military base overseas at the time. Plus, we did not have Internet access.

For weeks, I spent long-distance money and time, trying to find the specific kitchen set that she wanted. Finally, I found the item in the states. Unfortunately, because of the bulk, they could not affordably ship the toy to the base. Now what!

Finally, her dad found a toy store off base that could get the kitchen set! Yeah! No! I kid you not; traffic is so bad, that it can take 4 hours to go the 40 miles to the toy store. But, being our only child at the time, and being so far away from home, we wanted her to have this much wanted toy.

Guess what? Although she was initially excited, she only played with the toy a handful of times; then, she totally lost interest.

How many times have you busted the budget and bought the perfect Christmas gift, only to find it gathering dust or returned to the store for a refund or different item?

The last few days of the shopping season are upon you. Do not subscribe to the merry mob madness mentality. Do not let Christmas put you in the poorhouse, or cause you to lose all sense of emotional or financial reason.

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Save Money with a Homemade Holiday this Christmas

I doubt anyone would contest the idea that Christmas is becoming more commercialized than in the past. Christmas decorations adorn the stores before Halloween has come and gone.

For many people, the rush to start the holiday season did not bring warm feelings of holiday cheer. Instead, the mental cash register starts ringing and the financial obligations of Christmas become a heavy burden. Thus, many people are often depressed throughout the holidays

For many, 2007 has been a difficult year economically. Keeping food on the table has been the priority; forget having anything extra to spend for Christmas. In fact, a family I know, who have 4 small children, says that Santa is not coming to their house this year.

How sad that Christmas has become a time of financial burden. So, I am going to take an idea from a reader’s recent comment, and suggest a homemade holiday.

First, may I suggest reading Little House on the Prairie by Laura Ingalls Wilder? Once you read how last century’s families had to live during the holidays; most of us will actually feel wealthy. Next, I want to suggest some good Christmas ideas that will not result in a slew of bills come January:

Cookies: Who doesn’t like to eat? Make a plate of Christmas goodies to give to friends and family this holiday season. It is a thoughtful gift that took you time, because you cared, yet cost very little.

Christmas Cards: Make the cards this year. Especially if you have children, make homemade Christmas cards. As a mom, an Aunt, a daughter, and a friend, I love handmade cards. For every card, the giver has shared his/her heart. It is not a present pulled off the shelf out of a sense of obligation.

IOUs: I mentioned this in a previous post. If my daughter gave me an IOU to cook supper one night, do a chore, or something else, I would be touched, and her wallet would not get thinner.

Crafts: One year, I made Christmas tree ornaments. You can make them from family photos and things you probably already have around the house. If you crochet, you can make snowflakes, bells, angels, and more with a little crochet thread and time. You don’t even have to buy the starch to make them stiff and formed. Boiled equal parts of water and sugar will do the trick. (Sticky at first, the dry ornaments will no longer be sugary to the touch.)

Cocoa: Make batches of homemade cocoa mix, put it in a decorate jar. It can make a yummy gift for months to come.

Okay, now I am passing the baton. We already have great ideas from one reader who wants to bring the Joy of Christmas before the financial burden. What are your ideas? How are you making a homemade holiday this year?

Tina

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Budgeting for a Better 2008

Do you make New Year’s resolutions? I used to, until I realized I usually blew it within the first 2-3 weeks. I hate making promises I cannot keep, even if the vows are only to me.

However, I definitely need to do something, if I want to budget for a better 2008. A self-employed divorced mom of two, I am not exactly rolling in dough, and I have a daughter going to college in the next couple of years. Since I went back to college after the divorce, I still haven’t paid off my student loans!

Just this week, I talked to my mom on the phone about her impending retirement. Commiserating with each other, we discuss how to budget for a better 2008. The answer was simple in thought, but it will definitely require a lifestyle change.

Simple: Needs vs. wants

For example, do you stick to the grocery lists, when you are actually in the store? You forgot this, or you want that. According to the plan, if it falls into the want category, or something you can do without, walk away. Even to the last candy bar, if you don’t need it, you can leave it on the shelf.

Now, that is not to say you can never have any treat. But, how much money do you spend on items you can actually live without, and still be happy? I know I would be shocked, if I could total all of my “want” purchases in the last year.

I did not say the plan is easy, but it is a simple and logical idea. Buy what you need, and walk away from what you want.

Another example is a 2nd for half price sale. You need a new pair of shoes. When you go to the shoe store, they are advertising a half price sale. Great! NO!!! Resist the temptation! Get what you NEED and walk away. Even though the second pair is only half price, the price you pay for the 2nd pair is not a need; it is a want. The money could be saved for bills or a rainy day. Walk away!

Today, it may be hard to say “no”; tomorrow, when some of the bills are paid down, or you have some Christmas money in savings, you can justifiably be very proud of yourself. How do you plan on budgeting for a better 2008?

Tina

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Caution! Credit Card Crossing!

If you take a drive up in the mountains, a frequent sign you will see says something like, “Caution. Deer crossing.” Do you ignore the sign? Of course not! You have been warned to keep alert, to avoid an accident. You know that if you hit a deer, it will be very costly and potentially fatal.

Wouldn’t it be nice if you could see an occasional “Caution! Credit Card Crossing,” at the stores, during the holidays? How many times do you let the clerk slide that card, without adding up the damage or checking for potentially fatal finances?

For example: do you know the damage Christmas lights can do to your electric bill? I worked for my city’s utility company for 10 years, in my younger days. Since I was in charge of the billing, I ALWAYS had an unbelievable amount of customer calls when the January bills went out.

“My bill is $200 more than last month! You must have made a mistake! I want them to come out and read my meter again.” After the customer took a deep breath, I had one question: “Did you have Christmas lights?” Nine times out of ten, the consumer had not even considered the cost of lighting up the neighborhood for 30 days. Ouch!

The same goes for Credit cards. It is so easy to swipe the card through the machine, go to the next store and repeat. You have all these wonderful purchases, and Christmas is going to be just perfect. Then, January comes and you hyperventilate when you open the credit card bill. Surely, the bank or financial institution made a mistake!

You frantically go down the list of purchases. Did you really spend that much! Wow! You had no idea Christmas cost that much last year! You sure could have used the sign: Caution! Credit card crossing!

How do you keep track of your credit spending, especially during the holiday?

Tina

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Personal Finance Review – Do It Yourself Edition

If something needs maintenance or repair in your home or apartment do you hire someone to do the work or do it yourself?  A lot of it probably depends on what your skills are and how much time you have.  As Trent observes, if your time is valuable and you’re looking to maximize it then spending money to save time may be a wise choice.

I go back and forth, some things we hire out and others I attempt myself.  Our garbage disposal recently went out so I spent part of this weekend putting in a new one.  I’m not the handiest person so it takes me longer than it would others.  The pro at Home Depot said it was a 20 minute job but I spent several hours on it.  Even at several hours, my time right now is not worth the amount it would have cost it to hire someone to put a new one in. 

Someday my time will be worth enough that it will make more sense to hire things like that out but for now I do my best at Mr. Handyman.  I haven’t had a lot of free time this last week between my crazy job, household stuff, and Christmas shopping but here are some articles I ran across in my “spare” time:

–15 Products that save Time, Money, and Space @ Lazy Man & Money

–Santa Isn’t Coming This Christmas Because There Isn’t Any Home Equity to Tap Into @ Generation X Finance

–Ah Ha! The Value Of An Asset Is Better Appreciated When You Lose It @ Money, Matter, & More

–Zecco Trading Promotion: A FREE Book Plus $20 Bonus @ Suns Financial Diary

–Learning To Invest: The Education of A Long-Term Investor @ The Digerati Life

–Don’t Use Home Equity To Pay Off Unsecured Debt @ Blueprint for Financial Prosperity

–Best 529 Plans Revisited @ Five Cent Nickel

–Four Steps to Long-Term Financial Success @ Free Money Finance

–$10 A Day Equals 3/4 Of A Million Dollars @ No Credit Needed

–Gift Cards are Gifts @ Mighty Bargain Hunter

–What I Like About Scrooge @ Get Rich Slowly

–Get Out Of Your Sprint Cellphone Contract Without A Penalty @ My Money Blog

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Holiday Budgeting Tips from Ebenezer Scrooge

If you have seen/read The Christmas Carol, you already know that Scrooge is the Bad guy. Well, I contend that Scrooge is not all bad, and here is why:

Yes, Scrooge could have put a little extra coal on the fire; he could have allowed Mr. Crachit a little more time off, and been more understanding. But, I think we are too quick to crucify the poor old man.

Remember, at the time Charles Dickens wrote the original manuscript, it was during a depression. Only a select few had two nickels to rub together. But, as an employer, Scrooge is not obligated to give Tiny Tim medical care, supply Christmas dinner, and bring a carriage full of gifts. Despite all of his flaws, Scrooge is not all bad.

Now, I am sure you are wondering what this has to do with you!

Christmas does not have to be a feast, with all sorts of foods you do not normally afford; nor, does Christmas have to be a carload of the best and latest gifts for everyone on your list. However, that does not make you a Scrooge.

Honestly, the people you normal buy gifts for probably already know you are on a tight budget. If they care for you, a simple “thinking of you” gift is great. Small children still expect something under the tree, but it does not have to cost a lot. Some of the best gifts my children have gotten in their stockings came from the dollar store.

If someone expects you to spend more than you can afford, be honest. If your friend or family still does not understand, then you need to get back to the real meaning of Christmas, and know it will have to be their problem, not yours.

Know being careful with your Christmas budget does not make you Scrooge. You do not have the money that Scrooge had stashed away; an affordable gift will not deny friends and family heat or make them work too hard. A true friend or loving family member should not want you to go into debt for what should be a Merry Christmas.

How do you manage your Christmas budget?
Tina

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