Tuesday, December 29, 2009

Another Cell Phone Option

The latest prepaid cell phone developed by Walmart is the Straight Talk phone. The Straight Talk has no 3G coverage and runs the same as EDGE or less. The phone is powered through America Movil's TracFone Wireless and provides nationwide coverage.

The phone does not require a contract, provides 1,000 minutes, 1,000 text messages and 30MB of data starting at $30 per month. The cost of the phones start at $30 and go up to $45 a month for unlimited minutes, text messages and unlimited data. A great feature is that 411 calls are free. The phones run on the Verizon network.

The Straight Talk phone will provide competition for other prepaid phone providers such as MetroPCS that offers unlimited minutes, text messages for $45 per month. Cricket offers the same for $40 a month. PlatinumTel offers unlimited minutes, text messages for $50 per month and includes roaming. Page Plus offers $30 monthly plan with 1200 minutes, 1200 text messages and 50MB of data - for unlimited minutes, unlimited text and 20MB data you pay $39.95, you can roam but have to pay roaming fees. Virgin Mobile offers unlimited minutes for $49.99 per month but charges another $10 for unlimited text messages.

Since prepaid phones are so inexpensive you may not have some of the same luxuries as the traditional cell phones such as loss coverage and insurance, so if you loss or damage your phone you will have to purchase another one. Here are 4 tips to help when you shopping for a prepaid cell phone.

1. Selection. Cell phone selection is limited for prepaid cell phones so if you want a fancy cell phone you will have to go with one of the big cell phone providers.

2. Research. Do your homework before purchasing a prepaid cell phone. All plans are not the same, some plans require you to renew your minutes every month and you lose minutes that are not used.

3. Know what you want. Before you go shopping write down all the features you would like for your phone. Look at your old cell phones bills for the past 2 months to see how many calls you made and/or received, and how much data you used and how many text messages you made and/or received to help you determine which prepaid plan is right for you.

4. Read. Make sure you read the fine print and the cell phone agreement in full before leaving the store.

If you only need basic cell phone service and a phone in case or emergencies a prepaid cell phone is definitely the right option for you.

Saturday, December 26, 2009

IRA Changes in 2010

To plan for retirement you should begin contributing to an IRA when you begin working your first job. However, it is never too early to plan for retirement; you can open an account prior to 18 years old.

You should contribute 10-20% of your total monthly income to savings and retirement to ensure you have enough money to cover your monthly expenses during your retirement years. When you retire you will need at least 60% of your yearly salary to cover your monthly expenses.

An Individual Retirement Account (IRA) or traditional IRA is a personal savings plan which allows you to put money aside for retirement and provides tax benefits. You may eligible to deduct a portion or all of your contributions to your IRA and may be eligible for a tax credit equal to a percentage of your contribution.

Money in your IRA is not taxed until the money is distributed to you. IRA's cannot be owned jointly. To contribute to an IRA you must be under age 70 1/2 at the end of the tax year.

A Roth IRA is personal savings plan that follows the same rules of a traditional IRA but you cannot deduct contributions to a Roth IRA. However, the initial contribution is taxed but future distributions are tax free.

Contributions can be made to your Roth IRA after you reach age 70½ and you can leave money in your Roth IRA as long as you live. There are limits on the amount that can be contributed yearly to a Roth IRA.

Starting in 2010, you can convert a traditional IRA to a Roth IRA. Anyone can convert as much of their qualifying retirement accounts into a Roth IRA as they like. For conversions in 2010, conversion taxes can be spread over two years: 2010 and 2011.

For conversions after 2010, taxpayers will have to pay the full tax due. Married couples filing a separate return can now convert or rollover amounts to a Roth IRA. Contributions can be made to your Roth IRA regardless of your age. Once you're 59 1/2, funds can be withdrawn whenever you like.

Talk to a financial advisor before you make any changes to your IRA to ensure conversion to a Roth IRA is the best decision for you.

Wednesday, December 23, 2009

Bank Closures Continue

I received a letter in the mail on Saturday from the FDIC stating that my bank, Amtrust Bank had been taken over by the FDIC on December 4, 2009 and as of January 1, 2010 my mortgage loan would be serviced by another bank.

Amtrust Bank was founded in 1889 and headquartered in Ohio. AmTrust Bank was the second largest thrift in the U.S., a subsidiary of New York Community Bancorp, Inc (NYCB). AmTrust Bank had 29 branches in northeast Ohio, 25 branches in Southern Florida, and 12 branches in Phoenix Arizona, 124 branches in New York and 53 branches in New Jersey totaling 243 branch offices. AmTrust bank had approximately $42 billion in assets.

As a personal finance expert and coach I assumed I was immune from my mortgage company closing. Amtrust was a bank for boasted of customers with good credit; they provided large loans to investors and other companies. They had a good track record and financial reports, and they had been in business for over 120 years - yet they too fall into the trap of greed and profit and lost their focus. They have been added to the list of FDIC bank closures which totals 140 so far in 2009.

If you are a customer of Amtrust visit their website or contact the FDIC to get more information about your account. Here are 10 tips to help you if your bank has closed or gone bankrupt.

1. Call the FDIC or visit their website to get information about your bank if it was FDIC insured.

2. Check with your bank to get the status of any outstanding checks written to your old bank.

3. Contact the new bank to ask about the status of your account and verify your account balance and standing.

4. Always have at least $100 in cash on hand in the event your bank closes and you are not allowed to access your account.

5. Don't wait until the last minute to pay bills, pay bills at least 7-10 days before the due date.

6. Have multiple bank accounts (checking and savings) so if a problem occurs with one account you can access the other account and still conduct transactions if needed.

7. Do business with FDIC insured banks only.

8. Consider opening an account with a credit union.

9. Look at the bank or mortgage company's financial history for the past five years. If the company revenue has been steadily declining you might want to consider switching banks.

10. Perform bank transactions early in the morning. This ensures your deposit will be applied the same day. Don't wait until the last minute to make transactions; this increases the chance that your transaction may not be applied to your account the same day and may cause a check to bounce.

Sunday, December 20, 2009

Don't Go Shopping When You're Bored

Don't use weather conditions, laziness, an argument, revenge, unemployment, lack of imagination or lack of a plan as a reason to go shopping. If you are bored that last thing you should do is going shopping because you will end up spending money that you may not have and buy things that you probably don't need simply because you don't know what to do with your bored self.

Shopping when you are bored can lead to bad spending habits. It can cause you to go into debt, become an impulse shopper by shopping based on how you feel – happy, sad, depressed, bored, etc., and can cause you to influence your family and friends to follow in your footsteps.

Shopping provides temporary instant gratification that quickly fades away after a few minutes. However, some people feel that shopping makes them feel better. It can provide a temporary feeling of happiness but when you receive the credit card bill the next month the happiness quickly fades away and reality sets in.

When shopping online beware of the websites that provide sales to lure shoppers who are bored. The Ink Wood Books website had an "I'm Bored Sale", www.inkwoodbooks.com/event/24-reasons-holiday-shopping-inkwoodtodays-special-im-bored-sale.

If you feel you absolutely must go shopping when you feel bored take along an unwilling person such as a spouse or boyfriend. This will make the shopping experience unpleasant for you because and will hopefully prevent you from spending money or cause you to spend less money than you anticipated and hopefully get you out of the mall quicker.

Here is a list of twelve things to do when you are bored that will help improve your financial life.

1. Hire a financial advisor
2. Set financial goals for the next 3-5 years
3. Create a weekly or monthly budget or spending plan
4. Setup a debt payoff plan to pay down debt
5. Create an emergency fund to cover bills for 9-12 months
6. Keep track of how often you use your credit card instead of paying with cash
7. Sign up for your employer 401(k) plan if you haven't already done so
8. Contribute 10-20% each month towards savings and investing
9. Read a self-help book on personal finance or investing
10. Watch a personal finance or investing show on tv
11. Subscribe to a personal finance magazine, newsletter or blog
12. Each month do one thing to improve your spending habits

Thursday, December 17, 2009

2009 Tax Tips

It's seems as though 2009 has flown by. It just seemed like New Year's Day now we are approaching 2010. Unfortunately we are also approaching tax season. A lot of the laws from last year have changed so be sure to read the instructions when filing your 2009 taxes.

Many Americans miss out on deductions because they take the easy route and just use the standard deductions. If you do your taxes yourself or hire a tax professional to do your taxes use the standard deduction and itemize to see which method gives you a bigger return. Last year many Americans had refunds they did not receive including some who had an incorrect address on file. The IRS setup a section on their website for unclaimed tax refunds.

Here are 7 Tips to Save Money on Your Taxes.

1. Charity. If you buy food, drinks or supplies for a fundraiser or charitable event you can write-off the money you spent including the mileage costs. You can deduct $.14 per mile.

2. State Sales Tax. If you live in a state that does not charge state taxes you can either deduct state and local sales taxes or state and local income taxes but you cannot deduct both. If you choose sales tax remember to include all items eligible for sales tax. Check the IRS website sales tax tables for your state.

3. Refinance. Don't forget to include your refinance costs in your taxes this year. When you refinance you have to deduct the mortgage points over the life of the loan so it's better to refinance for less time than your original loan. If you previously had a 30 year loan refinance to 20 years or less. This equals to deducting 1/20th of the points a year if it’s a 20-year mortgage. It equals out to $20 a year for each $1,000 of mortgage points you paid.

4. Reinvested Dividends (DRIP). Reinvested dividends cannot be deducted on your taxes but you can subtract the amount from your total taxable income which can save you money because it reduces your taxable capital gains.

5. Property Tax. In 2009 property tax laws changes. Now homeowners who take the standard deduction can include up to $500 for single filers and up to $1,000 for married filers towards property taxes. You have to file a Schedule L to claim the property tax.

6. Casualty Loss. If you claim the standard deduction you can add casualty loss to your standard deduction amount if the loss occurred in an area that was declared as a disaster area by the President. You will have to file a Schedule L with your tax return to include the loss.

7. Estate Tax. If you inherited an Individual Retirement Account (IRA) from an estate that was subject to estate taxes you can get an income tax deduction for the amount of estate tax paid on the IRA you received, i.e. if you inherited a $100,000 IRA, and the money included in the estate added $45,000 to the estate tax bill – you can deduct the $45,000 on your tax returns as you withdraw the money from the IRA. If you withdraw $50,000 in one year, you can claim a $22,500 itemized deduction on Schedule A which saves you money.

Your goal for 2010 should be to get out of debt and improve your financial life. Good luck!

Monday, December 14, 2009

2009 Tax Organizing Tips

There are great tax estimator tools to help you estimate if you will get a refund or owe money on your taxes. Some great tools are on the IRS, H&R Block, Turbo Tax and Quicken websites. The IRS website also has several tools such as the withholding calculator to determine if you are taking too much or too little out of your paycheck.

If you owe money on your taxes you can make payment arrangements via email, by phone or online at the irs.gov website. One of the reasons many Americans end up owing taxes is because they are not organized – they throw away or misplace receipts and miss out on eligible deductions and tax credits. This year start preparing early to file your taxes, don't wait until the last minute. Here are 7 tips to help you get organized to file your taxes.

1. Gather all receipts, monthly and quarterly statements, medical bills, student loans, credit card statements, etc. and store in one easy to find location.

2. Use a software package like Quicken or Quick Books to record all of your deductions. If you don't have this software then you can use an Excel spreadsheet with these basic column headings: Item, Date Purchased or Sold, Cost, Quantity, Total Cost. If you don't have the Excel software program just use a plain old pencil and paper.

3. Identify all items that can be used as itemized deductions and put them in one pile. Determine if the standard deduction for your tax bracket is greater than your itemized deductions. (The list of items you gathered in step 2 and verified against the IRS tax form instruction manual as items that can be itemized). Check to see if the standard deduction is greater than using the itemized deduction, if not (standard deduction is less than itemized deduction), use the worksheet included with your tax booklet to calculate your itemized deductions.

4. To save money file your taxes electronically. You will receive your refund in approximately two weeks from the date of filing.

5. Don't get a tax refund loan (rapid refund) or refund anticipation loan. This is a waste of time and money. You have to pay a fee to get the refund loan which usually has high interest rates and associated fees.

6. If you salary is less than $52,000 or less you can file your taxes electronically for free.

7. Be cautious when purchasing a tax preparation software. Research the credibility of the company and verify if the software provides automatic updates to the IRS tax laws contained in the software. Go to the Better Business Bureau website to check out the company's history and see if anyone has filed a compliant against the company.

Friday, December 11, 2009

Don't Miss Out on the 2009 Tax Credits

The American Economic Recovery and Reinvestment Act (ARRA) of 2009 passed on February 17, 2009 provide tons of tax credits on 2009 and some in 2010 for taxpayers. Don't miss out on these tax credits that can help reduce your taxes and get you a bigger tax refund. Here are 10 Tax Credits for Individuals in 2009.

1. First-Time Homebuyer Credit Expands. Homebuyers who has not owed a home in the past 3 years and purchase in 2009 can get a credit of up to $8,000 with no payback requirement. New legislation extends and expands this credit. If you purchased a home (went to settlement) before 11/7/09 the credit is phased out for those with incomes of $75,000 or above. If you purchased your home after 11/6/09 you can get an additional $6,500 for long who owed a home for at least 5 of 8 years leading up to the purchase. The credit is phased out for those with incomes of $125,000 or more.

2. New Car Purchase. Taxpayers who buy certain new vehicles in 2009 (after 2/16/09 and before 12/31/09) can deduct the state and local sales taxes they paid or other taxes and fees they paid in states that have no sales tax.

3. American Opportunity Credit. The credit modifies the existing Hope Credit for tax years 2009 and is available to taxpayers with higher incomes and those who owe no tax. It adds required course materials as a qualifying expense and allows the credit to be claimed for four post-secondary education years. The credit is phased out for those with incomes above $80,000.

4. Earned Income Tax Credit. Enhanced Credits for Tax Years 2009, 2010. Find details on the earned income tax credit and the additional child tax credit.

5. Child Care Credit. If you pay child care expenses using a Flexible Spending Account or similar feature through your employer and spend more than $5,000 during the year the additional money spent will quality you for the credit up to $1,000.

6. Making Work Pay Credit. Due to changes in the tax withholding tables many Americans took home bigger paychecks this year. The credit is up to $400 for individuals and up to $800 for married couples.

7. Unemployment Benefits. You can claim up to $2,400 in unemployment benefits.

8. Economic Recovery Payment. If you are a recipient of Social Security, Disability, Veterans or Railroad Retirees benefits you may be eligible to receive a one-time payment of $250.

9. Special Credit for Government Retirees. Certain government retirees who receive a pension from work and are not covered by social security may be eligible to receive a one-time payment of $250.

10. Energy Credit. Increases the energy tax credit for homeowners who make energy efficient improvements to their existing homes. The credit rate for 2009 increases to 30% of all qualifying improvements and raises the maximum credit limit to $1,500 for improvements made in 2009.

For more information visit the IRS website.

Tuesday, December 08, 2009

All Free Credit Reports Are Not the Same

Not all free credit report websites are the same and many of the websites are confusing to consumers. Several of the websites use advertising tricks such as similar website names or misspelled websites to catch innocent consumers who end up being charged for a service they did not realize they purchased and these companies have made millions of dollars by doing so.

A search on the internet for the phase "annual credit report" returned 38,400 results. A search on the internet for the phrase "free credit report" returned 8,849,000 results. Some of the most popular free credit reports websites are: www.freetriplescore.com, www.freeannualcreditreports.org, www.FreeCreditReportsInstantly.com, www.creditreport.com and www.creditscorecowboy.com. www.freetriplecreditreport.com; www.freecreditreport.com and www.consumerinfo.com are both owned by Experian.

Many of the free credit report websites offer a free trial but require a credit card. The websites may also offer credit monitoring services for a fee. However these services can be received for free if you have been a victim of identity theft.

With some of the companies, once you sign up for the free trial it is difficult to cancel the service and you may continue to be charged two to three months after cancellation. Not all free credit report websites are the same. Here are 10 tips to help you order your free credit report.

1. Make sure you correctly spell the website name.

2. Don't order credit reports from websites that ask for a credit card.

3. Don't order credit reports from websites that have tons of advertisements.

4. Don't order credit reports from websites that forward you to another website.

5. Don't order credit reports from websites that are not secure, they will have either an https or shttp on the page when you enter your personal information.

6. Don't respond to advertisements in the mail, on television, on the internet or by phone asking you to order a free credit report.

7. Make sure the website has a link to the annualcreditreport.com website.

8. Read the Terms & Conditions and Privacy before ordering your free credit report.

9. Select the box to opt-out of their marketing list or read the Privacy Policy to get instructions on how to opt-out.

10. File a complaint with the Federal Trade Commission against the company if you received a service you feel you did order, if you feel advertising tricks were used when ordering your credit report or are not happy with the services or products you ordered.

Saturday, December 05, 2009

Free Resources to Help Those Unemployed

It can be frustrating trying to find help and resources when you have lost your job. Your main focus is trying to figure out how you will pay your bills, explain the layoff to your family and how to keep your sanity instead of being depressed or resorting to drugs or alcohol.

The key to surviving unemployment is to set goals that can help you gain employment again. Let everyone you met or know that you are looking for a job. Eliminate the negative thoughts and negative people in your life. Don't give up hope. If you believe you will find a job you will. Here are some free resources to help those who are currently unemployed or will become umemployed in the near future.

Career Services
1. Jewish Social Service Agency (JSSA) – mental health services, home health & hospice care, career services, adoption services, etc., 301-816-2683

2. Career Service One Stop, servicelocator.org

Vocational Counseling & Job Placement
Contact your local YMCA at ymca.net/maps/ for services for divorced, separated, widows and disabled including educational & vocational counseling, job aptitude testing, resume writing, job placement assistance, life skills, computer classes, additional programs for women and families

Women's Clothing for Interviews
Dress for success locations in 30 cities in the U.S., dressforsuccess.org (click on locations)

Men's Clothing for Interviews
Career Gear locations in the U.S, careergear.org that provides clothing, career counseling and workshops with offices in NY, DC, Boston, Dallas, Houston, Miami, New Haven, CT

Job Training for the Elderly
1. Senior Community Service Employment Program (SCSEP), Office of Special Targeted Programs, Employment & Training Administration, 202-219-5500 or 877-872-5627 – the program provides training and employment assistance and transition support

2. Job Training Partnership Act (JTPA), 877-872-5627 (877-US2-JOBS) – provides counseling and training and places elderly in part-time and full-time positions

Free Computer Training – check with your local libraries or visit
1. servicelocator.org/, click on Education and Training to find computer training

2. intelligentedu.com/cat1.html (scroll to the middle of the page), intelligentedu.com/blogs/index.html

Free Computers
1. freebyte.com/free_computers/

2. freecycle.org

3. California, Yellow Network Coalition, ync.org

4. Dallas, Texas, Texas Center for the Physically Impaired (TCPI), handicapability.org/computers.html, provides computers, free of charge, (with a $100 donation) to the visually impaired

5. Raymond, Ohio, Student PC's, studentpcsonline.com/ computer repair and used computers for handicapped children

6. St. Louis, Missouri, WITS, witsinc.org/Free%20Computers.html, provides free computers to children and the elderly.

Special Government Projects for Retirees Senior Environment Program (SEE)
1. American Association of Retired Persons, 202-434-6153

2. National Association for Hispanic Elderly, 213-487-1922

3. National Caucus and Center on Black Aging, 202-637-8400

4. National Council of Senior Citizens, 202-347-8800

5. National Council on Aging, 202-479-1200

6. National Pacific and Asian Resource Center on Aging, 206-448-0313

7. U.S. Forest Service, Dept. of Agriculture, Human Resource Programs (SCSEP program), 703-235-8855

Journeyman (Apprenticeship) Jobs
Bureau of Apprenticeship and Training, Dept of Labor, 202-219-5921 or 202-693-2700, with offices in each state, doleta.gov/indvi/apprent.htm

Free Money for Re-training or additional training under the Economic Dislocation and Worker Adjustment Assistance Act (Dislocated Workers), (202) 693-3500 - provides retraining and assistance for employees including those who worked for the Dept of Defense, Dept of Energy and Defense contactors.

Unit Coordinators by State, doleta.gov/layoff/rapid_coord.cfm, doleta.gov/layoff/workers.cfm

Training for Veterans, Veterans' Employment and Training Service (VETS), 202-693-4701

Wednesday, December 02, 2009

7 Quick Holiday Shopping Tips

Americans accumulate the largest amount of debt during the holiday season. If you don't have the cash to buy gifts be honest with yourself. Admitting that you have a problem living above your means is the first step to addressing the problem and overcoming it.

Being in debt is no fun and makes you feel lousy. If you go into debt every year during the holidays – now is the time to stop. Repeating the same mistake over and over again and expecting a different result is defined by Webster's dictionary as "insanity".

Don't let the media, advertisements or other make you feel guilty for not buying a gift or for buying an inexpensive gift. If you are low on cash and can't afford to guy gifts this holiday season here are some 7 quick tips to help you save money.

1. Buy Christmas gifts during store sales.

2. Visit local vendors, you can probably haggle to good a good deal on the same items you find in the department store.

3. If you are good with arts & craft, think of creative gifts to give that you can make yourself.

4. Visit the dollar store to look for children's gifts.

5. If you have to buy gifts for several family members suggest a "Secret Santa" or exchange names so only one person has to buy a gift for one person and set a limit on the amount spent. Don't buy gifts on Christmas Eve or the day before Christmas Eve. Selection is limited and lines at the register are longer.

6. Shop online, some companies waive shipping and handling fees during the holiday season.

7. Don't wait until the last minute. Out of desperation you may make bad choices and spend more spend than you have to.