- Pack your lunch for work every day. Buy drinks from the grocery store and skip the Starbucks.
- Reduce spending by 30-50%.
- Use direct deposit to send your paycheck directly to your bank.
- If you get a raise, save most of the money received from the raise or use a portion of it to pay down debt.
- Buy what you can on sale, use coupons or shop at a wholesale store such as Sam’s Club or Costco.
- Buy whole foods, such as vegetables, grains, beans and fruits, instead of processed foods.
- Check your local health food store or farmer’s market to buy grains, seeds, nuts, spices and legumes, in bulk.
- Carpool or use public transportation.
- Cancel your cable service or cell phone service or get the cheapest plan possible.
- Use your cell phone to make long distance calls.
- Shop around with various banks to find a checking account with no monthly fees.
- Downgrade or downsize, buy a cheaper car or move into a smaller home.
- Buy energy efficient appliances, ceiling fans, programmable thermostats, fluorescent light bulbs and lamps, or hot water insulator jackets.
- Donate items not being used to a charity and write off on your taxes.
- Rent movies instead of going to the movie theater.
- Turn the lights out when you are not in a room for 20 minutes or more.
- Turn the heat and/or air conditioner off when you are not at home or set at a low energy saving temperature.
Wednesday, January 29, 2014
Are you saver? Don’t feel bad. Many Americans today don't have a savings account. I have been a saver for years but it takes practice and discipline. Your savings account is your safety net if case you get sick or lose your job you can use your savings to hold you for a few months until you can find a new job.
You should have enough in your savings account to pay your bills and monthly expenses for at least 9 to 12 months. Money should be readily accessible and stored in a checking or savings account, preferably a high interest savings account such as Emigrant Direct or ING or a money market account where you can make money while saving money.
You can start by contributing small amounts to until you are able to contribute more even if it is just $5 a week. Once you are able to contribute more do so. Make several short-term goals.
Once you have reached your first goal start developing some long-term goals such as planning for retirement or paying for your children’s college education. A great site to learn about saving is americasves.org.
A savings account will ensure that you are on the road to becoming financially secure and will prevent you from going into debt when an unexpected expense arises. You may not know what the future holds but if you prepare your finances now, it will ease the burden of what tomorrow holds. Here are 17 tips to save money.
Saturday, January 25, 2014
This year you've made that all important decision to buy your first home, or maybe sell an existing one. Now comes your second most important decision—who’s going to help you with your real estate needs? There are likely hundreds of Realtors in your area to choose from. Do I choose a large firm or a small one to help me? Do I ask a friend for a referral, or maybe you already have someone in mind.
It is important to note that everyone who has a real estate license is not necessarily a REALTOR®. REALTOR® is a registered trademark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION of REALTORS® and subscribes to its strict Code of Ethics.
The first thing you want to do when choosing a real estate agent is to have some idea of the type of person you work with best. Since we are in the "people" business, it’s fair to say that not every client/agent relationship will be a good match. Good agents are willing to go above and beyond in order to help you reach your goals, however the way any two agents get you there may be very different! Do you require that person to have a more "hands on" or "hands off" approach? Do you hate texting and require return phone calls, or maybe you prefer a quick text response? A good working relationship with your agent will make you more confident in the process, and more satisfied with the result.
Talk to friends who recently purchased or sold a home about their experience with a particular Agent. You may want to ask how the transaction went, their experience may be enlightening. Ask if they found their agent to be knowledgeable enough about the kind of home and neighborhood they were looking for. Was the agent supportive when giving recommendations on ways to get the house ready to put on the market? If it was a particularly difficult transaction, how well did he or she handle the pressure, and also help you to relieve some of the stress surrounding the transaction.
The best thing you can do before deciding who is going to represent you, is to interview recommended agents to make sure your goals and styles align with one another. Your real estate agent has a fiduciary responsibility to you, and should work in your best interest to make sure you achieve your goal. It has been said that buying a home the biggest financial decision you will ever make in your life. So it’s important to make sure that you have a trusted advisor who is going to be there with you every step of the way.
This was a guest Post by Jason Wrenn.
Jason C. Wrenn, Realtor®
Central Properties, LLC
Central Properties, LLC
Tuesday, January 21, 2014
Every year Americans have to file their taxes. Many dread filing their taxes because it can be a tedious and time-consuming process. There are tons of tools available to help prepare your taxes and determine if you will get a refund or owe money. You can file your taxes on your own and hire a CPA to file your taxes.
One of the reasons many Americans end up owing taxes or miss out on claiming deduction is because their they are not organized. Many taxpayers throw away, misplace, destroy or damage receipts or even falsify documents because the original documents cannot be found.
Don't wait until the last minute, this year start early and gather all of your receipts and financial paperwork. You can use an automated tool to track your spending and deductions; use a piece of paper, or word processing software such as Excel or Access. Getting organized will help you to see right away what deductions you are eligible to receive. Organizing your paperwork makes it easier to file your taxes because all your informations easily accessible.
Using a tax preparation tool has all the tax laws imbedded in the tool which makes it easier for you to see what deductions and credits you are eligible to claim. Here are 8 smart ways to help you organize before filing your taxes.
- Duplicate. You can ask for duplicate receipts or financial statements if you have misplaced your copy.
- Gather. Gather all receipts, monthly, quarterly and yearly statements, medical bills, student loans, credit card statements, prescriptions, financial statements, etc. and place in one easy to find location.
- Categorize. Categorize all receipts such as medical, loans, financial statements, purchases, business expenses, debt, charitable donations, income, etc.
- Deductions. Identify all items that can be used as itemized deductions and put them in one folder. Determine if the standard deduction for your tax bracket is greater than your itemized deductions. If not, calculate your itemized deductions.
- Automation. Use a tax software package like Quicken, Turbo Tax or Tax Cuts.
- Go Green. To save money file your taxes electronically. You will receive your refund in approximately two weeks from the date of filing and this will you help save the environment.
- Free Filing. If you salary is less than $58,000 or less you can file your taxes electronically for free.
- Companies. If you use a chain tax preparation company you can bring all of your receipts and they will enter the data for you to prepare your taxes.
Friday, January 17, 2014
Many taxpayers are starting to receive W-2 statements, 1099 and other forms in the mail to report income earned in 2013. Many taxpayers have begun to organize their documentation to prepare to file their taxes as early as this month. There are many options available for taxpayers to file taxes such as: filing by paper and mailing your returns, filing electronically, hiring a tax professional or doing your taxes yourself. There are so many tax preparation software packages and tax professionals it can become overwhelming and confusing trying to decide which one is best for you. According to FranchiseHelp Holdings there are approximately 38,287 tax preparations companies in the U.S. Approximately 144 million taxpayers filed tax returns last year.
They are several types of tax professionals: certified public accounts (CPAs), tax lawyers, enrolled agents (EAs) and people who learned how to prepare taxes on their own with or without appropriate education or training. Prior to preparing your taxes you need to perform an assessment to see what type of tax professional you need or if you can file your taxes on your own using tax preparation software.
Tax preparation software has all the tax laws integrated into the tool and can be helpful if your taxes are complicated such as running your own business or claiming tax credits or deductions. However, there may be some deductions that you are missing out by using a tax preparation software.
Accountant vs CPA
An accountant has to abide by specific rules and regulations, including Generally Accepted Accounting Principles (GAAP). CPA's are accountants who have passed a licensing examination in a state. All CPA's are accountants, but not all accountants are CPA's. An enrolled agent is not a CPA or accountant. They take classes, pass an exam and earn a certification from the IRS.
An accountant or CPA can offer suggestions to minimize your tax liability that a tax preparation software may not be able to anticipate or inform you of. An accountant or CPA can answer any questions you have throughout the year not just during tax time. An accountant or CPA is very familiar with the tax laws and can quickly perform research on a tax issue or question versus spending hours by someone who does not have the same education and training.
If you are self-employed, have tax credits or deductions, have multiple income streams or investments, are itemizing or owed taxes in the past you should hire a CPA. Ask bank employees, lawyers, co-workers, friends or relatives for recommendations.
I recommend using a CPA who specializes in tax preparation. Consider hiring a smaller CPA company that focuses on your particular demographic. Large CPA companies usually focus on corporate taxes, court cases, audits and other complicated tax issues. They charge a higher fee for tax preparation and may not be willing to prepare taxes for an individual.
Tax Preparation Companies
Some tax preparations companies recruit students, stay-at-home moms or retirees to help them during tax season who may not be qualified to prepare taxes. Some may even call them data entry experts. The most popular tax preparation companies are H&R Block and Jackson Hewitt. Not all employees at these types of companies are CPAs or accountants. Due to this you may miss out on deductions and credits. Mistakes may be made and you may be at higher risk for an audit.
Some tax preparations companies use a similar version of tax preparation software that taxpayers use. They ask clients questions regarding standard tax forms and enter the data. These companies in some cases overcharge for their services charging per hour while some charge per form. In some cases hiring an accountant or CPA is cheaper than going to a chain tax preparation company.
If you decide to use a tax preparation company and don’t want to pay their fee, you don't have to pay. You can take your paperwork, leave and look for another company to prepare your taxes.
Some chain tax preparation companies put a protection clause or an arbitration clause in their contracts which prevents taxpayers from suing them in court, and prevents taxpayers from filing a class action lawsuit due to mistakes made.
Avoid chain tax preparation companies that offer to sell you additional productions such as “rapid refunds”, “refund anticipation loans” which comes with a fee. In addition, these methods require approval, are not guaranteed and you are better off using direct deposit to get your tax refund faster. No one can guarantee when you will get your tax return back, not even the IRS.
If a mistake is made by a chain tax preparation company you may be accountable for the mistake and it may cost you money. However, some chain tax preparation companies may sign your tax returns on your behalf or may offer a service to review your taxes to ensure you are not at risk for an audit - however this should be included in your tax preparation instead of an additional fee. If you have not been audited it doesn’t mean you never will. The IRS can take up to 3 years to perform an audit or go back further if major issues are detected.
If a tax preparation company offers a short course on how to prepare taxes run. You cannot learn how to efficiently prepare taxes in one day or by taking one course. CPAs have extensive education, have to pass a test and have to keep their license active by taking continuing education classes.
Be wary of people or companies that brag about getting you large refunds without ever seeing your taxes or knowing anything about you. When looking to hire a tax professional things to consider are: qualifications, licensed in your state (some tax preparers will prepare taxes even if they are not licensed in your state), experience, past references, work hours, professional reputation, trustworthiness, professionalism, professional memberships, your specific tax needs, comfortability and capability.
You should hire a tax lawyer if you have received any notices from the IRS to appear in court, a lien or judgment has been filed against you by a tax authority, you owe a large sum of money to the IRS, you are a business owner with partners or investors, you need to raise capital for your business, or you founded a non-profit company.
Monday, January 13, 2014
Approximately 43 million Americans have at least one account that is 90 days or more late. Some method should be used to pay off old debts to prevent legal action. There are several methods that can be used to pay off a debt such as paying in installments, paying the debt in full or negotiating with the creditor or collection agency to offer a debt settlement. The best use of a debt settlement is if an account is more than 90 days late. Debt settlements are less effective on active accounts however; the strategy may still be used.
Debt settlement is as a payment method that is best used for unsecured debt such as: credit cards, medical bills, department store cards, student loans, personal loans or other small debt that have been reported to a collection agency. Debt settlement generally cannot be used for secured debt (property associated with the debt) such as: car loans and home loans. However some companies may allow a consumer to use debt settlement as a method of payment.
Debt settlement can consist of offering a one-time payment or installment payment that is less than the full amount owed for an account that is 90 days or more past due. The remaining debt owed is forgiven. Many creditors and collection agencies accept debt settlement as a method of payment because they have had difficulty either locating the debtor or getting the debtor to pay the debt. They are more interested in making at least some profit and are willing to hear what the debtor has to offer instead of reporting the account as a loss.
The advantages of a debt settlement are: it eliminates a monthly payment, puts you back in good standing with the company, reduces the total amount of debt you owe, helps boost your credit score and helps you look more favorable to potential creditors and lenders.
The disadvantages of a debt settlement are: it may take months before an actual payment is applied to your debt, you may be subjected to legal action while waiting for a payment to be made on your account(s), if you decide to use a debt settlement company using their service may be reported on your credit report which lowers your credit score and remains on your credit report for up to seven years, you will be required to participate in a payment plan for 3-5 years and will be required to pay a monthly fee plus setup or other fees. Here are 9 effective ways to negotiate a debt settlement.
- Contact information. Prior to negotiating ask for the person’s name, direct number, email address, the mailing address of the company, the name of the company, and the fax number. Never disclose where you work or bank. Avoid providing your home or work phone number.
- Negotiation type. You can negotiate either over the phone or in writing. If you negotiate over the phone negotiation it may last for up to a month or more. Remember the company is trying to get as much money as they can from you. It will also require you to keep accurate notes of everything the person says on the phone and everything you say. If you are not skilled in negotiation and do not know your rights I would recommend negotiating in writing which takes less time.
- Negotiate. Start the process by offering 30% of your outstanding balance. The company will probably counteroffer with a higher balance. Don’t offer to pay more than 50% of the outstanding balance. Make sure the offer is something you know you can afford. Don’t agree to something just because the company is threatening you. Know your rights by using the FCA and FDCPA laws when negotiating. You don’t have to agree to the first offer accepted. If necessary, call back and ask to speak to a supervisor. If that supervisor is unwilling to work with you call back at a different time of day and ask to speak to a different supervisor.
- Documentation. The company may ask for proof of income and assets or other debt owed to determine if you can pay the full amount owed. Block out your bank account numbers, SSN, DOB, phone numbers and any other account numbers or personal information when submitting documentation.
- Proof. If they have informed you they are recording your conversation, you can record the conversation and inform them you are doing so. Get the debt settlement agreement in writing. If the company refuses to send you a letter, send a letter to the company certified mail with a return receipt identifying the terms of the debt settlement (how much you will pay, how you will pay, when payments will be sent, agreement that the remaining balance owed is waived requiring no further payment, who you spoke with to setup the payment arrangement, date/time you spoke to them and how you want the account reported on your credit reports (Equifax, Experian or TransUnion www.annualcreditreport.com).
- Don’t accept no. If your debt settlement offer is rejected consider asking the company to lower your interest rate, lower your monthly payment, waive any late fees or other fees or offer you an alternative payment plan.
- Credit report. Ask the company to report the account as “paid”, “paid in full” or “paid as agreed”. Ask the company to remove any other previous negative wording listed for the account such as “charge-off”, “write-off”, “repossession”, “collection”, etc. Ensure the balance is reported as “zero”.
- Payment. Offer to pay by money order or cashier’s check which is the safest method. You can also make payments over the phone but if someone forgets to process your payment on time you may suffer late charges. Call your bank the next day to ensure your payment was processed on time and for the correct amount. Notify your bank of the payment arrangement to prevent any unauthorized transactions. Avoid paying by personal check.
- Taxable. If you offer a debt settlement for an account that has been charged-off (more than 180 days or six month late) and the company forgives more than $600, that money is taxable according to the IRS. The company must provide you with a 1099-C tax form. However, if a taxpayer is insolvent (the amount of total debt owed is greater than his/her assets) the amount if not taxable.