Personal Finance – Tips For Taking Control of Your Money With Budgeting
Taking control over personal finance is one of life's most rewarding experiences. Regardless of how bad your financial situation is, there is always a solution. With a little financial soul searching and thorough review of finances you can slay the financial dragon that is causing you to live paycheck to paycheck.
The easiest way to take control of personal finance is to develop a household budget. The first step of budgeting involves making a list of income and expenses. Start by listing recurring expenses such as rent or home loan payments, car loan payments, utility expenses, insurance premiums, transportation costs such as gasoline, parking, bus or taxi fare, and groceries.
Next, create a list of household income. This can include employment wages, child support, alimony, income earned by a spouse, and other types of income earned on a regular basis. Make certain to tally up after-tax income to obtain a true picture of available funds. If expenses are more than total income it is time to make budget cuts or increase income.
The best thing about budgeting is it doesn't cost additional money. It is easy to create a simple budget with nothing more than a piece of paper and pencil. For most people, the hardest part of budgeting is sticking to the financial plan. One solution is to turn budgeting into a game and challenge yourself to see how much you can slash expenses.
Many people do not realize they can reduce monthly expenses by contacting various service providers. One easy way to reduce utility bills is to enroll in budget plans. Most utility providers offer monthly budget plans which allow customers to pay the same rate each month. Utility budget plans can be especially beneficial during winter and summer months when utilities can soar. Visit utility provider websites or call during business hours to enroll in budget plans.
Reducing the cost of cable TV and internet services might be as simple as picking up the phone or talking to an agent online. Before attempting to negotiate cable costs take time to research competitor pricing. Compare rates for packages similar to what you currently have and make note of each.
Contact your cable provider to let them know you can obtain the same package at a reduced rate through their competitor. Most cable companies offer discounts to new subscribers and those who purchase two or more services, such as phone, digital TV, and internet service. Reduced pricing typically extends for six to twelve months.
Cable providers are often willing to temporarily offer a reduced rate to retain your business. If they are unwilling to discount current services, consider switching to their competitor or reduce the services you purchase from your current provider.
One of the biggest expenses for families is the cost of groceries. If you aren't using manufacturer and in-store coupons, now is a good time to start. Grocery coupons are inserted in Sunday papers and savings can easily recoup the cost of paper delivery services.
Manufacturers oftentimes offer money-saving coupons via their websites. Others utilize Facebook fan pages to provide coupons and rebates. Several websites are dedicated to providing grocery coupons that can be printed from the comfort of home. While clipping coupons might sound dull and boring, they can add up to hundreds of dollars in savings each year.
The only way to gain control over your money is to be hyper-aware of where it is being spent. Start recording daily expenses on a piece of paper so you can easily determine which items are draining your bank account. Most people are unaware of how much money is spent on items they don't really need.
If personal finance is out of control and you rely on credit cards to get you through the month, consider credit counseling. Many credit counseling agencies use a sliding scale and charge fees according to income. Non-profit credit counselors can help people with low-income take control of finances and begin saving for the future.
Tips to Teaching Personal Finance
The current economy has motivated many to begin to provide their children practical financial literacy lessons. Teaching personal finance and raising money smart kids will help keep America strong.
James Truslow Adams, the man that coined the phrase "American Dream" in his book Epic of America, is quoted: "The American Dream is that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement."
Teaching personal finance and raising money smart kids give our children the ability to recognize and capitalize on opportunities which will help them in pursuit of their own personal American Dream. This "Dream" can be achieved with practical financial knowledge and through teaching personal finance our children's future will be much brighter.
Our children face an almost certain future of higher taxes, less services, and the elimination of the current social security & Medicare system. Read the reports from the Government Accountability Office and you will find that the SSI system will be bankrupt in 2037.
Although it is true that our children will face bigger economic challenges than we had to go through; however by teaching personal finance and raising money smart kids they will be able to achieve their own personal American Dream.
What is available for us to begin teaching personal finance to our kids? Schools' With all the requirements placed on testing (No Child Left Behind) and the disturbing fact that most schools aren't given the budget they need - this probably is not where most of our children will receive their financial training.
Parents - Most youth do rely on their parents as the primary source of their money knowledge; however, as the statistics clearly show, most parents do not possess the knowledge necessary to effectively teach their kids about money. They want money smart kids but most were not trained on how to begin teaching personal finance to their children.
There are financial literacy courses that are designed to help you raise money smart kids. Recent home-study financial literacy courses are now on the market and are designed to educate & entertain youth while instilling practical financial lessons. Some even have partnered with sport stars & celebrities to create a powerful draw so your children want check out what their favorite celebrity is doing and picking up money lessons along the way.
There have been several courses that are specifically designed to help parents to begin teaching personal finance. These courses walk parents through the basics of raising money smart kids and often the parents learn as much as the children.
Nonprofits - There are many nonprofits doing great work helping to spread the message of financial literacy and training our youth with practical money skills. Fortunately, financial literacy grant money and corporate sponsorship are empowering many nonprofits with the ability start teaching personal finance so the next generation the pickup the practical financial lessons we "learned the hard way".
Private Companies - There are companies that thrive in every type of economic environment and in an environment where a lot of people are going through tough circumstances, financial education companies stand to profit while helping people improve their financial situation.
Right now the financial literacy movement is expanding faster than ever at the grassroots level. People want to begin teaching personal finance to their children because they want money smart kids. We commend you on reading this article and looking for ways to empower youth with the financial literacy skills they need in the 'real world'
Through collaboration with parents, nonprofits, schools, teachers and business leaders - we can begin teaching personal finance and ensure we are raising money smart kids. Doing so will help these youth get the skills they need to live the American Dream.
Second Homes – Tax Benefits and Potential Tax Pitfalls
Many people are buying a second home. They might do so to have a vacation home with the possibility of selling it at a substantial gain in the future. Another reason people buy a second home is to use it in the future as a primary home, perhaps in retirement. They might prefer to purchase the second home now to avoid the possibility of having to pay considerably more for it in the future.
What are the tax benefits and potential tax pitfalls in purchasing a second home? The first benefit is that the real estate taxes on a second home are deductible as an itemized deduction. However, a potential pitfall exists if the taxpayer is subject to the alternative minimum tax (AMT). Real real estate taxes are not deductible for AMT purposes.
The mortgage interest is also deductible as an itemized deduction on mortgage loans up to a maximum of $1,000,000 on loans used to acquire, construct, or substantially improve the taxpayer's primary home and the taxpayer's second qualified home. A refinancing of acquisition debt is considered acquisition debt to the extent that it does not exceed the balance before refinancing.
Another tax benefit for owning a second home is that the taxpayer may deduct interest on home-equity loans up to a maximum loan amount of $100,000. A home-equity loan is considered as an acquisition debt if the taxpayer uses it to make a substantial improvement to the primary home or second home. The loans may be secured by the primary residence and/or the second home. For tax purposes, a home-equity loan includes the excess of the balance of a refinanced acquisition loan over the balance before the refinancing unless the taxpayer uses the excess to make a substantial improvement to the home.
A tax pitfall is that the interest on a home-equity loan is generally not deductible for AMT purposes. An exception applies if the taxpayer uses the proceeds of the loan of the loan to make a substantial improvement to the property.
If a taxpayer rents a second home to a tenant for 14 or fewer days during the year, the rent income is not taxable. The taxpayer may still deduct the real estate taxes. The taxpayer may deduct the qualified mortgage interest as long as the taxpayer used the second home for personal purposes for a number of days that exceeds the greater of 14 days or 10 percent of the number of days the taxpayer rented the house to a tenant at a fair rental. If the taxpayer does not meet this test, the second home might be considered as rental property.
A potential tax pitfall on a second home is that any gain on the sale of a home that is not the taxpayer's principal residence is taxable. It would be taxable as a capital gain because a personal use asset such as a second home is a capital asset.
The exclusion of gain up to $250,000 ($500,000 on a joint return) on the sale of the taxpayer's home applies only to the sale of a home that that the taxpayer owned and used as the taxpayer's principal residence for at least two of the five years before its sale. A taxpayer may have only one principal residence at a time.
A taxpayer could sell the primary home and exclude the gain up to the limit and then move into the second home and use it as a primary residence for at at least two of the five years before the taxpayer sells it. By doing so, the taxpayer could use the exclusion of gain provision on both homes. The potential to exclude the gain on the sale of both homes up to the limit using this strategy is a major tax benefit.
Another potential tax pitfall on owning a second home is that any loss on the sale of a home used as the taxpayer's residence, whether as a primary home or as a second home, is not deductible because the loss is on the sale of an asset used for personal purposes.
An individual should consider many factors before buying a second home, such as cost, convenience, and potential gain. The tax benefits and potential tax pitfalls are some other key factors to consider before buying a second home.
Free Debt Relief Government Grants – Obama’s Debt Assistance Plan
President Obama has made it clear that he is working to assist many consumers who are in desperate need. Read below to find out how you can take advantage of free debt relief government grants.
In tough economic times it is important for the Federal government to step in and shake things up a little bit to help the economy get back on track. The first thing that needs to happen if the economy is going to stabilize is there needs to be increased consumer spending. This is something that President Obama has made clear that he is going to try to stimulate. Whether it is a tax credit for buying a new house or car, a free $300 stimulus check for all taxpayers, or government grants for people in need he has been trying to help. The federal grants are one thing that has not been highly publicized. One group of people that can really benefit from specific grants are people that are having difficulty repaying student loans.
Not consolidation, just wiping debts clear:
Every year the federal government sets aside billions of dollars for grants to help people in financial trouble. A large portion of this money is specifically for people trying to repay student loan debt. This is NOT debt consolidation or just a lower interest rate. This is a FREE government grant, intended to help people who are defaulting on their student loans to get caught up with their finances.
Who is eligible?:
Not every person who is having a difficult time repaying their loans is eligible for Obama's grants. These are reserved for those that are already in default, or that can show on paper that they are headed towards default. These grants are available for these people because the economy needs them to have more spare money to spend on, well, spending. Defaults on loans mean that these old students are paying hefty fees and are receiving higher than usual interest rates, which will only make it more difficult to get back to paying towards their principle.
Free with no collateral needed:
These grants are completely FREE. Again, this is not a loan. There are no interest rates and no fees to sign up. Even better, there is no need to put down any sort of collateral because there is no fear of default. Your credit score does not come in to play either. Be sure to check out how Obama is looking out for those in student loan default and get your free grant today.
Differentiate Between Legal and Illegal Health Insurance Deals
Though health insurance is very important for every individual, the market has been flooded with so many health insurance policies that it has become difficult to discern the good one from the fraudulent one. Did you know that among small businesses, bogus insurance is the biggest scam? The National Underwriter Magazine has proved this when it did a survey of 37 undercover agencies which found out that there are many so called companies that are selling health insurance that are of illegal and questionable variety.
In the US, insurance scams are predicted to rise and though there are legislation to keep them in check, it is up to the consumer to be discerning about how far they would be able to distinguish a genuine health insurance plan from a dubious one. Be wary about insurance policies that are sold by agents who say that their insurance is exempt from the state law. Such kind of companies pressurizes to pay high premium amounts and take advantage of the lack of knowledge among some consumers. A lot of people are left high and dry, left to their own for the huge medical bills.
There is another type of health insurance scam which goes in the name of pharmacy or medical discount cards. You will come across people who market these products aggressively and reiterating that it is not an insurance product. They collect premiums month after the month and disappear once you file for a claim. These fraudulent insurance plans need the consumer to subscribe to a membership to their so-called organizations. However, please note that not all, discount plans are illegal. To verify, check with the commissioner of insurance of your state to see if the party is a genuine authority and that it is licensed to sell health discount cards.
It is important to check with the commissioner of insurance to know if companies selling insurance are legally authorized to do so or not. Do not buy insurance from unsolicited people who call you or fax information, without verifying proper credentials. How do you know that you are 'actually' talking to a representative of the bank giving you information about a new health insurance product? Secondly, do not go for insurance policies that charge you exceedingly high premium and do not cover preexisting conditions. More than that, do not entertain any company that shies away from giving you contact information.
Fraudulent insurance companies will now allow you to make you payment by check. They will come with a strong sales pitch and coax you to make an immediate decision because they will say that the discount or offer is valid for a limited period of time. So be wary of all these aspects that constitute a fake health insurance policy. When you note something that is suspicious or dubious in your health insurance; report the matter to the Better Business Bureau, Commissioner of Insurance or any such high authority that can look into the matter comprehensively, and take corrective action.
Your Savings and Interest Rates – How Do They Work?
In order to earn interest on an account that has been opened, a deposit must be made. The account earns money from the money that has been deposited, as the bank uses this money and therefore pays the customer a dividend in the form of interest for the use of this money.
There are two methods that are used to calculate interest through a bank account - either through the average balance through the course of the month, or the average daily balance. Depending on which type of interest has been chosen, the consumer is often paid the interest one time per month.
There are certain types of savings accounts that can accrue higher amounts of interest than other accounts. High interest E-savings accounts are available for customers that wish to accrue a higher level of interest as they are based through internet accounts. These allow customers to make use of limited transactions each month and in some cases, minimum balance and deposit amounts through the account, in return for a higher interest rate for the customer.
To maximize the potential that comes with the savings account, many consumers take advantage of compound interest. Compound interest is created when the customer is able to make an initial deposit, and subsequent deposits are made, building up the value of the savings and therefore increasing the amount of interest that can be earned.
Learning how the interest is calculated can be an effective way to determine which account is best and to save you money in the long term.
Categories
- Business News
- Credit
- Debts
- Education
- Finance
- Guest Post
- Investment
- Legal Insurance
- Life Insurance
- Loans
- Savings
- Tax
- Uncategorized
Archives
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- May 2009
- April 2009
- March 2009
- February 2009
- January 2009