July 2011 - Posts - Dollar Stretcher Guest Blogger
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Dollar Stretcher Guest Blogger

July 2011 - Posts

  • My Story: Our Perfect Wedding

    contributed by Mr. & Mrs. A. C.

    The things I learned from planning my wedding can easily carry over into other areas of the budget. For our wedding, we got everything we wanted, but didn't spend a fortune. Instead, we sat down and decided exactly what was important to us? Do our co-workers really care about us? Do our parents' co-workers really even know us? Do all of those far-flung relatives that we haven't seen in 20 years really want to travel across the country for our wedding? In the end, what really mattered, as in most situations in life, was close family. We invited our children, parents, and one or two very close friends (the definition of a very close friend was one we had known since before we could remember). In total, there were 15 people there, including the photographer. Our handful of guests have remarked that this was the most enjoyable wedding they had ever been to. Why? Because it wasn't stressful, and we didn't have to divide our time between 300 people.

    We booked a small wedding package at a bed and breakfast, which included almost everything you'd need for the wedding. For under $2,000, they made a lovely sit-down dinner, made the most delicious wedding cake any of us had ever tasted, provided music, brought in a minister to marry us, and included a beautiful honeymoon suite for the wedding night. We ordered a small package of flowers, which included only bouquets for the bride and maid of honour, boutineires for the groom and best man, and one centerpiece. (This involved the principal of only buying what you need).

    The photographer was a professional, who happened to be a personal friend of the bride, and offered a steep discount. The groom wore a suit from his closet, and the bride chose a tea-length dress. Tea length dresses are generally less expensive, but also don't require special undergarments, so they save even more. The bride's close friend for 25 years is also a professional hair stylist, and did the bride's hair as a gift. Grocery store flowers at a cost of $3 were used to decorate the bride's hair, instead of a veil. By having a gorgeous garden ceremony, a reception on site, and staying at the same place for the wedding night, we saved heaps of money on transportation. No need for limos! The maid of honor's dress reminded everyone of Pippa Middleton, but no one could tell it was purchased on clearance at a consignment shop for $24.

    The staff at the B&B took care of clean up and no one in our family was required to "pitch in" with a job, and instead they could just relax, be happy for us, and enjoy the wedding. All of this was affordable because we kept things small. The people who were truly important to us attended our wedding, and there was no way we could have afforded such a classy wedding had we invited a large number of people. Most people also are very understanding when you say "we're having a family-only wedding." We no longer understand the emotional lure of big weddings. We ended up much happier than the stressed-out, over-whelmed brides who have big weddings.

    Has anyone else ever noticed that no one does huge weddings twice? People who are getting married for the second time, never have big weddings. They're just too expensive and too stressful, and they know from experience that they don't want a repeat of that experience. We chose quality over quantity and wouldn't change a thing! Our wedding was perfect!

    Everyone is smart about something! That's why we have The Dollar Stretcher Guest Blog. If you have a story that could help save time or money, please send it by email to MyStory@Stretcher.com

  • Shopping Online: A Good Way to Save On Engagement Rings

    by Ed from Brilliance.com

    Let’s face it, the words “frugal” and “jewelry” aren’t really best buds. You’ll rarely see them rub elbows or move within the same circles. You might even want to consider the first sentence oxymoronic.

    There are, however, instances where the twain does meet. While the chances of seeing a parsimonious person sporting a gold bracelet are as big as winning the lottery, one can’t exactly frown on an engagement ring. After all, if you’re going to propose without a ring, you might as well invite your soon-to-be fiancée to go to Vegas, get blindly drunk, and have one of those Elvis-themed shotgun weddings.

    Frugality doesn’t entail being cheap or miserly. In fact, it is quite the opposite. A frugal person is a wise spender; he is not afraid to shell out a considerable amount at times, as long as he knows he’s getting a good bargain. A frugal man knows that the happiness of his woman is priceless; it can never be matched materially, and instead of reaching up towards the stars, he must go in the opposite direction and offer his love with just a simple gift but in the sincerest possible manner.

    This means that an engagement ring doesn’t need to have a really large rock on it. It doesn’t even have to be expensive, contrary to what convention dictates. It does, however, need to look beautiful or exactly how she has imagined it. It also has to be worth the amount you’ve paid for or even more, but good deals like this can be pretty difficult to come by.

    One of the best ways to chance upon deals such as these would be to go online. Most online jewelers already have their prices on their site. All you need to do is just browse through their items and find the one which suits your fancy. Open the site of each retailer on a separate tab on your browser and then compare prices. You can carefully evaluate each product at your own pace without having to worry about being cajoled into purchasing a particular item. You won’t even have to leave the comfort of your own home, which automatically saves you the expense of having to visit several jewelers.

    If you are thinking, “But what about the quality of the metal or jewels? Won’t they vary from one jeweler to another?” This is actually another situation where online shopping is more advantageous. Most loose diamonds sold online are already certified, which means that every gem comes with a certificate containing information which indicates its true value as evaluated by a reputable gemological laboratory. Gold and other precious metals are also stamped with numbers and letters indicating its purity. These certificates and markings are measures to ensure consumers of what they are getting, regardless of where they purchase it.

    Some unscrupulous jewelry stores like to pull a scheme on unfortunate customers called “bait and switch” where they “bait” you by advertising a particular item at a greatly discounted price, only to tell you that it has already been sold once you are already in the store. The representative will then pressure you into buying a similar but much more expensive item. This is something that can’t be done online as most retailers will advertise only what is in stock. If you don’t see what you want on their site, you can simply look for it on another retailer’s site or on Google.

    Now if the prospect of choosing jewelry on your own sounds a bit unnerving, why not ask for assistance? If you want their opinion about a certain item, you can talk over the phone, initiate a live chat session, or correspond through email. All for free.

    Bottom line is that you have limited options when shopping at a local jewelry store, as opposed to a virtual smorgasboard of choices online. Let’s face it, the future of shopping is online and there is a good reason why it is booming. More vendors online means more businesses competing in terms of product quality, service and price and this holds true not only for the jewelry industry but for almost any product as well, leaving the consumers as the sole victor.

  • What’s the Difference Between a Direct Rollover and Indirect Rollover?

    by Jason Topp

    Since the downturn in the economy, a lot of folks have lost jobs, been laid off, or have started their retirement journeys early. Perhaps you left on your own terms, or you are looking for a new career path.

    Any way you slice it, thousands of Americans are contemplating a 401k rollover. A rollover can be accomplished in one of two ways: directly or indirectly, and it's extremely important to know the difference between the two.

    Direct Rollover

    A direct rollover simply transfers funds from your former company (or rather the one administering the plan for your company - known as the trustee) to a new trustee. This could be a company that is acting as a custodian for your IRA. It could be a new company you're working for that has a 401k plan.

    The key here is that the funds are never paid to the individual, but rather checks are payable to a company as trustee. Once the funds are rolled over, they become governed by the rules of the new plan.

    Example of a Direct Rollover

    Joe retires from his company after 35 years of service. He has a 401k worth $400,000 and decides he'd like to roll over his money to an IRA.

    Joe calls his former trustee and asks for a direct rollover to a new IRA he established. After a week, Joe receives a check for $400,000. Frantically, Joe calls his IRA custodian because he thought if he received a check he'd have to pay taxes on all that money.

    The custodian asks Joe to whom the check is made payable. Joe responds with, "XYZ Financial as Custodian for the Joe Example IRA."

    The custodian explains that as along as the check is made payable to the trustee, then there is nothing to worry about, even if the check was sent directly to Joe.

    Indirect Rollover

    An indirect rollover is just the opposite. Funds are distributed to an individual who then must deposit those funds with a new trustee.

    At first glance, this sounds like a nice option; however, the trick is that the individual receiving the funds has 60 calendar days to deposit funds into a new plan. If the distribution is not deposited into a new IRA or 401k plan within 60 days, then it will be considered a taxable distribution and taxes plus any applicable penalties will be assessed by the IRS.

    Another catch is that folks who take an indirect rollover need to know that a mandatory 20% will be withheld from the distribution by the current trustee. (The 20% withholding rule only applies to qualifed plan rollovers (think 401k), not rollovers or transfers from IRAs). The withholding will be considered federal tax due, and will be assessed even if the individual plans to deposit money into a new IRA or 401k plan within the 60 day period! Ouch!

    The IRS requires that the full amount of the withdrawal, including the 20%, be deposited into the new IRA or 401k plan. If an individual does not make up that 20% that was withheld, then Uncle Sam considers it a distribution and the applicable taxes and penalties will be assessed. Double ouch!

    Example of a Indirect Rollover

    John left his job and decided to take his $100,000 401k with him. He told his employer to just send him a check. John's former employer withholds $20,000 (mandatory 20%), so John actually received a check $80,000.

    Upset that he received less than the full value of his 401k, he called his former custodian who informed him that if he wanted to roll over the entire $100,000 so as to avoid paying income tax on that distribution, he would need to come up with $20,000 from another source to add to the $80,000 he actually received. If John rolls over only $80,000, he must include the $20,000 that did not get rolled over as reportable income for the year.

    Although there a few exceptions to the 10% penalty rule for 401k or IRA withdrawals, if John is under age 59 1/2, he may also be subject to the 10% premature distribution penalty tax.

    Choose Your Rollover Wisely

    Understanding the difference between a direct and indirect rollover will help you make an informed decision on which is more appropriate for you in your situation. You cannot change your mind once a decision is made, so it's important to choose wisely.

    Jason Topp is a 10-year financial services vet who gets his writing fix at Redeeming Riches, where he loves to talk about saving money and true wealth.

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