August 31, 2010 – 1:51 pm by How-To Hannah
TheBrandsClub.com
Welcome to this week’s edition of our Tuesday Top 5, Econ4U’s weekly tips post to help you manage your money in five easy steps.
You’re probably not thinking about tax season right now, but fall is a great time to revisit your tax planning strategies. Here are a few tips to make the most of your money before December 31 creeps up on you.
- Stock up on health supplies. If you participate in a company-sponsored flexible spending account (FSA) for tax-free health expenses, start thinking about ways to avoid leaving money on the table. Stumped about what to get with your dough? Glasses or contacts, cold medicine, first-aid kits, ice packs for treating injuries, and heart-rate monitors all qualify. Drugstore.com even stocks a FSA store full of qualifying goodies. But do it fast: Starting in 2011, you won’t be able to run up a drugstore bill with your FSA dollars. The new health-care law prohibits spending FSA money on anything you don’t have a prescription for (with insulin as the exception).
- Make your home more energy efficient. Holiday weekends (like the one three days from now) are a great time to buy new appliances at a steep discount. And through the end of the year, you can qualify for a 30 percent credit (up to $1,500) on approved doors, windows, and roofs as well as high-efficiency furnaces, water heaters, stoves, and heating and air conditioning units installed in your primary residence.
- Save tax dollars when you refinance your home. If you’ve taken advantage of low mortgage rates this year to refinance your home, don’t forget that you can deduct all unamortized points on an old refinancing as well as points on the new loan.
- Identify charities you want to support. Charitable donations are deductible through December 31 for the current tax year, but pouring money into worthy coffers can be a low priority at year end when you’re busy playing Santa. Make your annual donations now before your wallet starts feeling pinched by the holidays.
- Begin to max out your retirement savings. If you qualify for an IRA or Roth IRA and haven’t begun making contributions for 2010 yet, start by socking away a little right now. The contribution limit is $5,000 if you’re under age 50, and you have until April 15, 2011 to get it all in there. So put away $625 a month for the next eight months to max the fund out — it will hurt a lot less than trying to come up with $5,000 on Tax Day.
Posted in Budgeting, Housing, IRS, Personal Finance, Saving Money, Taxes, Tuesday Top 5
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Tagged Family Budget, IRS, Mortgages, retirement, Saving Money, Taxes, tips
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August 24, 2010 – 11:30 am by How-To Hannah
Jim Franco/RealSimple.com
Welcome to this week’s edition of our Tuesday Top 5, Econ4U’s weekly tips post to help you manage your money in five easy steps.
In a down economy and with so many people looking for work, job seekers should take every precaution to avoid giving employers a reason not to hire them. Make sure your application stands out in a good way by being aware of these pitfalls.
- You don’t have a degree. The Bureau of Labor Statistics has some bad news for people who skipped out on college. According to data from July, the unemployment rate for people with only a high-school degree is 9.9 percent — nearly double that of those with bachelor’s degrees, of whom only 5 percent are unemployed. But it’s never too late to go back to school, so consider how a degree might boost your job search.
- Your résumé is too long. You’re 25 years old and your résumé strains to fit onto two pages? Revisit every bullet point to see if it’s relevant to the position you want. If you’re including your volunteer activities and that summer you spent as a summer-camp instructor when you’re applying for a job at a law firm, it’s time to trim the fat.
- You’re out of state. You’ve heard of buying local, but what about hiring local? Unless you boast a highly specialized set of skills or are seeking a top-of-the-food-chain position, your chances of being recruited by an out-of-state company are pretty slim. The applicant pool is so large, many companies are excluding job seekers who would require time and possibly expense reimbursement before they could come in for an interview. If you’re trying to move, consider setting up a local P.O. box that forwards to your home mail or use the address of a friend on your résumé so you don’t shortchange your application.
- You’re unemployed. It may seem grossly unfair with 9.5 percent of the population out of work, but many employers are putting up “unemployed need not apply” signs. Some hirers report the belief that if you don’t have a job, you must have lost your last one due to performance issues — whether that’s true or not. So if you find yourself laid off, do whatever it takes to keep the income flowing so that joblessness won’t hurt you when the next opportunity comes knocking.
- Your credit score is low. In many industries where you handle money — any job from cashier to accountant — you will be asked to submit to a credit check. And if the company doesn’t like what it sees, you won’t get the job, simple as that. The practice is perfectly legal, so when you give a potential employer permission to pull your credit history, make sure it’s in ship-shape.
August 17, 2010 – 2:21 pm by How-To Hannah
Welcome to this week’s edition of our Tuesday Top 5, Econ4U’s weekly tips post to help you manage your money in five easy steps.
There are 246 million cars owned in the United States, so chances are good you have one of them. But next to a house and an education, a car may well be the most money you ever spend on anything. And the costs don’t end after you leave the dealer’s lot. Want to keep your ride budget friendly? Here are a few things to avoid if you want your car to serve you well for years.
- Don’t bother with maintenance. Skip a brake job here, ignore a “check engine” light there, and you’re risking serious mechanical problems down the road. A $30 oil change at least once a year could save you the trouble and expense of having to replace your whole engine. When it comes to car maintenance, an ounce of prevention is worth far more than a pound of cure.
- Lease a new vehicle every 3 years. There is a very narrow set of circumstances under which leasing makes financial sense (namely, if you absolutely have to drive a new car all the time and you don’t put a lot of mileage on it). But otherwise it’s a bum deal. For example: A lease on a brand-new BMW 328i sedan runs $459 a month for 36 months, which totals $16,524 over the term agreement. But if you were to buy it new, at the end of three years the car would still be worth $27,600, according to the Kelley Blue Book. In other words, you’re spending more than $100 per month for the privilege of not owning your ride.
- Trade in Old Faithful for a hybrid. Fueling up is just about the cheapest part of owning a car. Despite the touted gas-mileage benefits of driving a hybrid, you have to drive more than 200,000 miles before you recoup the extra cost of buying a Honda Civic Hybrid over the less expensive conventional model — and even more when gas is cheap. Instead of the Prius, it should be called the Premium.
- Owe more on your car than it’s worth. A lot of people who carry massive car loans try to roll over their debt for their next car, but it’s a recipe for disaster. This could even be the newest iteration of the subprime mortgage crisis. A rule of thumb: Don’t take on a car loan that you can’t pay off in under five years (or three years, if you really want to be conservative).
- Speed, run red lights, and otherwise draw police attention. Many states are hurting for tax dollars so much right now that they’ve increased traffic fines across the board. In California, not coming to a complete stop at a red light before turning right will now cost you $381. If you get caught once, you’ll never do that again.
August 10, 2010 – 5:15 pm by How-To Hannah
Welcome to this week’s edition of our Tuesday Top 5, Econ4U’s weekly tips post to help you manage your money in five easy steps.
When things get really tight, it’s important to know what your options are to get you through a bumpy ride. This week, we help you make a plan for how to make the best of a tight financial situation.
- Use your car as collateral. Many banks and credit unions will let you refinance a paid-off vehicle with a used car loan (assuming the car is worth enough). With interest rates under 3 percent at a lot of financial institutions, it essentially gives you a personal loan at a discounted rate. This could be your ticket to pulling cash out of a car you own outright without having to sell it.
- Know your best short-term loan options. Bouncing a check can be much more expensive than a short-term option like a payday loan, through which you can get an advance on your next paycheck for a fee as low as $15. Just be sure to pay it back as soon as you can.
- Negotiate your medical bills. According to a 2005 poll, two-thirds of people who asked their doctor or hospital for a discount were able to negotiate a lower medical bill or even get the cost of some services waived. If you don’t have insurance, try to pay for your care up front to save 10 percent or more. And check this website run by the Pharmaceutical Research and Manufacturers of America (PhRMA) for assistance in getting discounted or even free prescriptions.
- Stretch your grocery bills. Foods like lentils, rice, ground beef, and canned goods go a long way for pennies per serving. And waste not, want not by using meat and veggie scraps in making hearty soups and stews. (Between roasting it, shredding the leftovers, and boiling the carcass for stock, a whole chicken can make several meals for less than a dollar per serving.)
- Learn to barter. You don’t always have to spend big to get a service you need if you can make use of the skills in your social circle. Barter with a mechanic friend by swapping babysitting services for an oil change, or save on clothing repair bills by offering to run errands for a friend who’s handy with a needle and thread.
August 3, 2010 – 1:58 pm by How-To Hannah
Welcome to this week’s edition of our Tuesday Top 5, Econ4U’s weekly tips post to help you manage your money in five easy steps.
To lure back-to-school shoppers into the mall, many states are offering a sales-tax holiday this weekend, saving consumers money on big-ticket purchases like computers, software, books, apparel, and footwear. Last year, the practice was called into question by certain lawmakers whose districts couldn’t afford to forego the revenue generated by sales taxes. But in 16 states, the tax holiday is back on for 2010.
Here are the five best deals, perhaps even worth traveling for if you have a lot of shopping to do:
- South Carolina, August 6-8. There is no limit on how much can be spent tax-free on clothing, accessories, shoes, computers, school supplies, software and computer hardware (like printers and scanners), bed linens, and bathroom furnishings.
- Louisiana, August 6-7. All purchases categorized as “tangible personal property” under $2,500 in value are tax exempt. The only exception is the vehicle licensing tax, if you’ve recently bought a new-to-you car.
- North Carolina, August 6-8. Items that are tax exempt include computers up to $3,500, school instructional materials up to $350, computer supplies and software up to $250, apparel and footwear up to $100, school supplies up to $100, and sports equipment up to $50.
- Missouri, August 6-8. Save all sales tax on computers up to $3,500, software up to $350, clothing and footwear up to $100, and school supplies up to $50.
- New Mexico, August 6-8. Computers up to $1,000, computer accessories up to $500, clothing up to $100, and school supplies up to $100 all qualify for the tax holiday.
Your state not on this list? Check Bankrate for the full list of tax holidays this month.
July 27, 2010 – 4:21 pm by How-To Hannah
Welcome to this week’s edition of our Tuesday Top 5, Econ4U’s weekly tips post to help you manage your money in five easy steps.
If you’re unemployed at the moment, we don’t have to tell you that the situation out there is pretty grim. But you’re not alone: The Senate passed a bill last week extending unemployment benefits for people who find themselves jobless for up to 99 weeks. However, with an unemployment rate hovering around 9.5 percent, there simply are not as many jobs as people looking for work.
Whether you’re among the jobless ranks or simply want to take precautions, here are a few tips for ways to stay afloat in troubled waters.
- Keep your credit score high. Now is not the time to limit your lending options with a bad credit score. Make every effort to pay your bills on time, and if you can’t, try to work with lenders to negotiate payment plans before the account goes to collections.
- Sell your clutter. Sentimentality can be a financial thorn in your side if you hold on to your valuables longer than necessary. If you haven’t touched that bass guitar since college or your wedding dress is just going to yellow in the back of your closet, sell your stuff on Craigslist for instant cash.
- Use free services to fine tune your job search. Even if you graduated from college years ago, check with your school’s career-counseling office to see if they offer free resume tweaking for alumni. And tap into the university job network, which will put you in touch with fellow alums.
- Go back to school. If you’ve ever had an interest in continuing your education, now’s the time to pursue that advanced degree. Interest rates are at historic lows, and the new degree could give you an edge in the job market after you graduate. Just make sure you’re not taking on more debt for a degree that won’t ultimately increase your earning potential.
- Keep in touch with your ex-employer. If you were laid off, there’s a chance that your old company could use your services on a contract basis. It may not offer benefits, but it’s still a paycheck. Even if they don’t have work for you, it’s always a good idea to keep up contact for future references.
Posted in Economy, Government Policy, Saving Money, Students, Tuesday Top 5
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Tagged credit score, Family Budget, financial crisis, recession, Saving Money, tips, unemployment
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July 20, 2010 – 1:15 pm by How-To Hannah
Welcome to this week’s edition of our Tuesday Top 5, Econ4U’s weekly tips post to help you manage your money in five easy steps.
When the siren calls and you are tempted to spend big on a purchase, consider that certain used goods can stretch your dollar much farther for the same value. What items should you always buy used? Read on.
- Musical instruments. If your kid shows a sudden interest in taking up music, buying secondhand instruments is always a better deal. You can get gently used drums, violins, pianos, and more on Craigslist for a fraction of the cost of a new model. Wait until Junior shows a true talent in guitar before you splurge on a top-of-the-line Gibson.
- Sports equipment. Do you have an aspiring Landon Donovan or Serena Williams on your hands? Tennis racquets, soccer balls, lacrosse sticks, and hockey gear can all be very expensive new, but they hold up well over time and make great used purchases. (However, there are exceptions, including swimsuits, baseball mitts, shoes, and other items that can absorb bacteria from the original user’s body.)
- Books, CDs, and DVDs. More and more public libraries are expanding their digital media collections, meaning you can find newly released music and movies in the stacks. And some libraries have even begun offering free e-book downloads for your Kindle, Sony Reader, or iPad.
- Jewelry. Everyone knows the mark-up on diamonds is outrageous, so why not let someone else take the bath? Just make sure you go through a reputable dealer (unless you really know your 4 C’s). And of course, if the thought of wearing an unlucky-in-love engagement ring doesn’t sit right with you or your beloved, you can always have the stone reset.
- Home decor. You don’t really need a warranty on a couch or a dining room table. As long as it’s in good shape and goes with your decor, used furniture can help you decorate your home with great quality pieces at Ikea prices.
July 13, 2010 – 4:11 pm by Audrey
Welcome to this week’s edition of our Tuesday Top 5, Econ4U’s weekly tips post to help you manage your money in five easy steps.
As we’ve blogged before, this is a tough summer to be a teenager. There are very few job opportunities for unskilled workers this year, as evidenced by the 26.4 percent national unemployment rate among teens who would like to score a seasonal job. (And it’s even worse for minority youths.) But if you missed out this year, here are a few ideas to make yourself an attractive job applicant by the time next summer rolls around.
- Be willing to do whatever it takes. Your first job is unlikely to be glamorous — that’s why they call it “paying your dues.” Sure, flipping burgers or changing diapers may not rank up there on your list of dream careers, but at least you’re getting a paycheck. And if you do it with a genuine smile on your face, you’ll reap the rewards with stellar references.
- Act fast when opportunities arise. This week in Massachusetts, Gov. Deval Patrick pledged $9 million in taxpayer money to create 4,700 new jobs for teens across the state through the YouthWorks program. Check in your district to see if anything similar exists and take the initiative to get on a waiting list to secure a spot before the word gets out.
- Get experience any way you can. Set yourself apart from the pack by having some background in the job you’re applying for. Even if it doesn’t come with a paycheck, volunteer work can be a great way to gain the skills and knowledge of your field of interest.
- Keep a structured schedule. Don’t take unemployment as an excuse to be glued to the Wii all summer. Use your free time productively and you could collect money for doing chores or offering to run errands for your parents and neighbors. Plus you’ll feel more fulfilled than if you stay inside all day.
- Persist. A dog groomer in Connecticut said she received 60 applications for 8 job openings this year — most of them teens and college students. While the odds are against you, be polite yet persistent and tailor your resume to demonstrate to a potential employer all the reasons why you should be among the select few to get a coveted space on the employee roster.
July 6, 2010 – 2:17 pm by Audrey
Welcome to this week’s edition of our Tuesday Top 5, Econ4U’s weekly tips post to help you manage your money in five easy steps.
If you’re a new college graduate, it’s entirely possible you’ve never interviewed for a job in a formal office environment. (And even if you have a few internships under your belt, it never hurts to brush up on your skills.) Read on for a few of the biggest and most common mistakes.
- Not dressing the part. If you’re on a job interview, you have to wear a suit. (With a tie if you’re a man, and heels if you’re a woman.) This isn’t an area where you want to take a lot of creative risks because there’s no payoff. Even if the office’s other worker bees are in business casual, remember, you’re not an employee yet.
- Getting caught like a deer in the headlights. At the very least, do enough research that you can confidently answer the inevitable “why do you want to work here?” question. Knowing something about the open position will also show that you’re detail-oriented — and it’s better to show this strength than to insist to a potential employer that you have it.
- Fidgeting, sweating, and otherwise looking nervous. Nerves are understandable if this is your first-ever interview — even seasoned pros will get the butterflies. But remember that you’re testing the company waters to see if this is a job you want to have, just as much as the company is determining if you’re a good fit. Find a way to boost your confidence to enter the conference room with your head held high.
- Bashing your old boss. Don’t go there. Even if it’s the real reason you’re leaving your old job, badmouthing a past employer is the reddest of all flags — it spells “high-maintenance employee” like nothing else.
- Neglecting the thank-you note. Cover all bases and send your interviewer a thank-you email (if you have it), then follow up with a handwritten note. Showing respect for the interviewer’s time never backfires, and it gives you one last opportunity to emphasize your interest in the position.
July 2, 2010 – 1:36 pm by Audrey
A new set of Federal Reserve rules went into effect yesterday that now require banks to get your permission before you’re enrolled in overdraft protection. Before, your bank could enroll you without notice in an overdraft plan that would process the transaction but hit you with a fee for every ATM, check, and debit card purchase that exceeds your available balance. That protection often comes at a very high price, with the nationwide average for overdraft fees up to $27.50 per transaction.
As Consumer Reports summarizes:
Overdraft programs are really high-cost, short-term loans with quadruple-digit APRs. Most banks charge flat overdraft fees. So if your balance goes to zero purchasing even a $1 pack of gum with your debit card could trigger a fee of $35 or more. Once you’ve exceeded your balance, every purchase you make could generate another fee. And, some banks still impose long hold times before you can use the money from checks you deposit, which increases the possibility that you will overdraw your account.
To the extent that you can avoid overdrawing, you should take every precaution to maintain a safety cushion of at least $100 in your checking account. But since that isn’t always possible, there are better options out there for short-term loans if you find yourself in a pinch.
