June 2010 - Posts - Dollar Stretcher Guest Bloggers
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June 2010 - Posts

  • Financial Tips for Newlyweds

    by Bill Hardekopf

    June is the traditional "wedding season" and many newlyweds are dreaming of a happy life together. Agreement over finances and paying off debt are important preparations for a long-lasting union.

    According to the study "Bank On It: Thrifty Couples are the Happiest," conflict about money predicts divorce better than any other type of disagreement. Couples who disagree about finances once a week were over 30% more likely to divorce over time than couples who only disagree about finances a few times per month.

    The study also says that perception about how well one's spouse handles money is also a factor in shaping family life. If an individual feels the spouse spends money foolishly, they report lower levels of marital happiness. It increased the likelihood of divorce 45% for both men and women. Only alcohol/drug abuse and extramarital affairs were stronger predictors of divorce.

    Conflicts over money and the burdens of debt put a heavy strain on marriage and can spread into other issues. It can erode your relationship and even causes the marriage to collapse. Committing to a family budget and savings plan is making a commitment to your marriage.

    Before you get married, know how your future spouse will treat money. Don't assume that your spouse shares your beliefs about money. Even if your future spouse is kind and respectful to you, he/she may treat money differently. The spending and saving habits may surprise you. A free spender before marriage will probably be a free spender after marriage.

    To avoid surprises, have an honest discussion about money before the wedding day. This talk may be difficult to do, but it is necessary before joining life and finances together. If one partner has large debt or difficulties managing money, address these issues before the marriage. Debt can not only affect your financial future together, it can also severely damage your credit score.

    Here are some financial tips for newlyweds:

    • Before the wedding, show all of your cards. Be honest about your income, debts, and money problems. Bring out your bank statements from the past twelve months to show what you did with your money. Explain how your parents raised you to handle money and your strengths and weaknesses with money. Admit if you are a spender or a saver.

    • Each of you should get a copy of your credit reports from the three credit bureaus. This will give you a clear picture of credit accounts, debts, and how creditors will judge you. Aim to get your scores over 750 to receive the lowest interest rates for your first mortgage and other loans.

    • Have a wedding that you can afford. Do not start a life together by using a credit card to pay for a wedding that is out of your budget.

    • Avoid credit card debt. The best rule of thumb is simply "If you can't pay for something with cash, you can't afford it."

    • Get one or two credit cards and stick with them. Use them for several purchase each month and pay them off immediately. Building a long-term payment history with one or two credit cards is an important factor in your credit score.

    • Each spouse should have a credit card in his or her own name to build an individual credit score.

    • If you have a credit card balance, pay as much as you can over the minimum each month. If you receive gift money, a bonus, a second job or a tax refund, use this to pay off your debt. The faster you pay it off, the quicker you can focus on saving and getting ahead. You can even make micropayments multiple times during the month to pay off your balance faster. Eat a meal at home and immediately apply the money you saved to your credit card balance.

    • Before the first bills come in, make a plan for paying them and who will pay them. If you have separate accounts, know which account pays each bill.

    • Reduce your debt-to-credit limit ratio. This will help improve your credit score. Your monthly debt, including your mortgage, should not exceed 35% of your gross income.

    • Differentiate between your wants and your needs. Then simplify your wants.

    It is easy to get caught in the trap of wanting more than what you have, keeping up with the Joneses, and looking to stuff' for happiness. But this will put you on the fast track to increasing your debt. Savings and assets help build financial security and increase the odds of a strong, happy marriage that lasts.

    Find the study "Bank On It: Thrifty Couples are the Happiest" here.

    Bill Hardekopf is CEO of LowCards.com, a site that simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card. The LowCards.com Complete Credit Card Index is the most objective and comprehensive resource on the Internet which allows consumers to compare rates for over 1000 credit cards offered in this country.

  • How to Save Money Using iPhone Applications

    by David Brown

    You always wanted an iPhone, something like an Android G1. However, you are a frugal person. So you don’t buy what you don’t need. But did it ever cross your mind that even your iPhone can help you to save money? There are a number of iPhone applications that can save you a few bucks. In case you don’t know the facts, read on:

    iXpenselt

    It is an amazing application to manage your money. With iXpenselt, you can very easily track your expenses. You can enter your monthly budget in it and it will graphically display your purchases by putting them in several categories. It is also possible to store digital photos of receipts in iXpenselt. If you can organize your money well, it will certainly make you a bit richer.

    Stanza

    Download Stanza, the premier e-reader. You can have access to over 40,000 books and articles through this application. Stanza charges you much less than the bookstores. If you are a voracious reader and buy a huge number of books, then consider this application. Stanza will definitely save you quite a bit of money.

    Bill Tracker

    Do you feel lost when it comes to managing your bills? Isn’t it confusing that you have to make payments to different people at different places at different time intervals? Don’t worry. Bill Tracker will do the work for you. It manages all your bills in one place. You can be aware of all your payment related things through this nice application. Time to say bye-bye to late fees.

    Cheap Gas

    This is an effective way to search for cheapest gas in your area. All you have to do is enter your zip code and cheap gas will display a list of nearby stations and their prices. This application will surely save you a couple of extra bucks as you will know where to go while looking for cheapest gas stations. The best thing about this application is that it is completely free.

    Debt Tracker Pro

    Ever wished to have more control over your debts? Well, your prayer has been answered in the form of debt tracker pro. This fantastic application will help you to select a payment strategy and then it will tell you the total amount you have to pay monthly. You can even create your own schemes (For instance, you may be planning debt negotiation with your creditors and want to devise your own payment scheme) with debt tracker pro.

    Truphone

    This is a great application, which lets you make free calls over a Wi-Fi  network. Now you can make calls to other connected Truphone, skype, Gtalk users for free no matter where you are in the world. Truphone uses VOIP technologies. It can help you to reduce your monthly telephone bill in a major way.

    BetterDeal

    If you feel lost while comparing various package sizes in a store, then BetterDeal may be the ideal application for you. This 99-cent application lets you compare prices of packages to see which is, well, the better deal.

    If you are a iPhone owner or wish to buy one soon, then make sure that you use the above applications to save some hard-earned money. Enjoy your iPhone frugaloholics!

    David Brown is a content writer with Oak view law group. He writes on a variety of finance related topics with a strong focus on frugal living.

  • Federal Reserve Announces New Credit Card Protections

    by Bill Hardekopf

    The Federal Reserve announced new rules and credit card protections on 6/15. It is the grand finale of the CARD Act, capping late fees and providing possible relief from rate increases. These rules go into effect on August 22.

    Under these new rules:

    • There are limited and conditional protections against interest rate increases. Any increase in your APR must be re-evaluated by your issuer every six months, including any increases that took place after January 1, 2009. If appropriate, the issuer must reduce your rate within 45 days after completing the evaluation. Ideally, lenders will reduce rates if the reasons for the increases no longer exist. Terms such as 'evaluate' and 'reduce if appropriate' leave wiggle room for issuers. Credit card companies need the income from these higher interest rates. That is one reason why many cardholders received significant rate increases before the CARD Act went into effect. It would be surprising if issuers re-evaluate and restore rates to previous levels for a large number of cardholders.

    • Most late payment fees will be capped at $25. However, the fee can be as high as $35 if one of your last six payments was late or if the issuer can prove the costs incurred justify a higher fee.

    • The penalty fees cannot exceed the dollar amount of the consumer's violation. Hence, a credit card company can no longer charge a $39 fee when a consumer is late making a $20 minimum payment. In this example, the fee cannot exceed $20.

    • Issuers can't be charged more than one fee for a single event or transaction.

    • Credit card companies can no longer charge an inactivity fees on cardholders who don't use their card.

    Find the Federal Reserve's website that explains the new rules here 

    Bill Hardekopf is CEO of LowCards.com, a site that simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card. The LowCards.com Complete Credit Card Index is the most objective and comprehensive resource on the Internet which allows consumers to compare rates for over 1000 credit cards offered in this country.

  • Pull-Apart Birthday Cakes

    by Jennifer Daggs

    I try to do a lot to save money and have a great party for my daughter. One of the tricks that I've learned saves us money, is fun, and makes the party easier for me!

    Pull-apart cakes have become rather popular with the younger set lately. I noticed that the grocery store bakery was making them by putting a bunch of cupcakes together and then putting a big slab of frosting on top of them to make them look like one cake. They often put them together to have a specific shape.

    Lucky for me, my daughter loves to have parties with animal themes. I make two batches of cupcakes ahead of time, one chocolate and one yellow (I use store brand cake mixes, as they are cheaper and taste just as great). Then I put them in the freezer after they have cooled to make frosting them easier. Because I freeze them, I can make the cupcakes several days in advance, saving me some time closer to the party. When I'm ready, I arrange the cupcakes on a big plate, usually a big circle with two near the top that stick out like ears. Any cupcakes left over get put back in the freezer for a treat on a rainy day, or if my daughter is having a sleepover, the girls can decorate their own cupcake. Then I put a layer of frosting on top of all the cupcakes on the plate. To save time, I use store bought frosting and just color it as I need. Then I use some candies (the extras get put out on the table at the party) or tube frosting to decorate.

    Animals are easy. You just need eyes, nose, mouth, ears and maybe whiskers. I've also made a giant sunflower with yellow frosting and chocolate chips in the center. Then I put green fruit leather leaves around the edges. It just takes a little imagination. 

    At serving time, all I have to do is pull the cupcakes apart, put them on a plate, and serve! This saves time. You don't need serving utensils, and the kids will gladly eat them without silverware! To save a little more hassle, I purchase inexpensive chocolate/vanilla ice cream cups and hand them out to the kids. Then I don't need to worry about chocolate or vanilla, as they get both. We don't have the mess of serving up ice cream. The portions are small so nothing goes to waste, and any extras get tossed in the freezer to enjoy later. I'm betting you could save a little more money by buying store brand chocolate and vanilla ice cream, scooping it out ahead of time into paper cups, and then refreezing it. We've found that the cupcakes and ice cream cups really make serving time at the party so much easier, less stressful and faster (which keeps the kids happy).

    Jennifer Daggs is the Artist/Owner of Kerensamere Studios. You can reach her by email here.

  • Broke Is My Middle Name

    contributed by Anonymous

    I am a SHOPAHOLIC! I have tried to quit (not really) but it’s no use. I may as well have it tattooed on me like the scarlet letter. “Lord, help me. I cry every time I get the bills."

    Lesson to all you shopaholics: It does not work to cancel your credit cards! I did that and now have a debit card. WRONG! Now I use the debit card like the credit cards and always wind up without funds for rent, food, electric, and any other life necessities. I just can't have a bank account! It’s too tempting to write a check or use the debit card. You can get put in jail for writing rubber checks and get sued by the bank for an “overactive” debit card.

    NO! I cancelled my bank account. Now what do I do? Keeping money around the house is no good because I spend it as fast as I get it. (I must tell you I am on Social Security!) With my excess money gone, I wind up borrowing money from my kids every month! Worse than that…I lie to them and tell them it’s for my rent or electric and it’s really for that beautiful pink cashmere sweater I saw in the paper.

    I am a widow, so that leaves borrowing from a husband defunct! He is now deceased. That didn’t do any good anyway because when we both were working I made more than him, and when I retired, he hadn’t worked in 15 years! Just when we finally got two Social Security checks, he died. Not entirely his fault though. No, I didn’t murder him; he slipped on the tile floor. I told him not to walk in his stocking feet. “Put your slippes on Harry!” But you know men, they never listen! Bless his soul anyway.

    So what happens when your spouse dies? You only get one Social Security check then (the larger of the two), and that cuts the money down considerably. I always spent over my income anyway so it did not matter if I got three Social Security checks. I still would be short at the end of the month. There’s just too much month at the end of my money!

    I’d like to be like Zsa Zsa Gabor. She was quoted as saying “I am a marvelous housekeeper. Every time I leave a man I keep the house!" Black Widows could amass a huge fortune like that and never have to worry about money or running out of stores!

    Okay, so I went to Shoppers Anonymous. The withdrawal symptoms are worse I suspect than drugs or alcohol! All I did was cry every time I saw an ad in the paper or on TV. That was corrected soon because I slipped back into my old habits, shopping and hiding the new items to protect my habit. Ha! I lived alone. Who was I kidding?

    However, slipping back to “shopping mode” cut off my TV and paper because I could not afford to pay for them. Cable companies are not cheap and the paper needs recycling anyway.  The kids were getting wise to my cries of poverty and stopped loaning me money, claiming they were on austerity budgets. (Sure! I said) My friends were wise too. All the crying and dramatic “Greta Garbo” whining did not faze them. Who needs friends anyway? They’re only good to show off my new clothes so they could “Ooh” and “Aah.” I can do that myself in the mirror.

    So I moved to a one room dump with visitors from roach city and finally decided to “go straight” and “detox” myself. I swallowed my yearnings and pride and went back to Shoppers Anonymous. Gee, I’ve been with them for over a year and it has not affected, affected, affected me, me, me, at all. So good, good, good.

    Moral of this story: Best way NOT to be a Shopaholic is to join a convent!  Good luck ladies.

    Note: Although this story is fiction, there is an organization called Shoppers Anonymous, which will help addicted shoppers.

    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.
  • How To Resolve Delinquent Tax Liabilities

    courtesy of Backtaxeshelp.com

    Consumers struggling with debt in the current economy have many choices available to help manage their debt. Major banks and credit card companies have recognized the benefit of assisting cash-strapped consumers, in some cases offering options that can make repaying outstanding balances more manageable.

    When dealing with the Internal Revenue Service (IRS) however, it is important to understand this government agency cannot be compared with traditional lenders. If you owe back taxes, it is in your best interest to face the situation head on to learn what options are available to resolve your tax liability. A common reaction to indebtedness is avoidance or denial. This method of handling debt will never resolve the problem and in almost every situation only serve to compound your problems. The IRS is notorious for their aggressive and efficient collection methods. For this reason, it is recommended that anyone with delinquent tax liabilities take immediate action to remedy this situation.

    Take the following steps to resolve delinquent tax liabilities today.

    Step 1: Contact a tax professional - A trained professional with past experience dealing with the IRS and various tax laws can prove invaluable for the average consumer who may not be as well versed in the ever changing tax laws. A word of caution is that it is a good idea to research any individual or company with which you plan on doing business. This is especially true when it comes to choosing someone who you will entrust with your financial matters.

    Step 2: File any back tax returns - If you are going to address the situation, you might as well cover all your bases. When you file your back tax returns, you can then look at the situation for what it is, versus what you think it might be. Armed with this information, both you and your tax specialist can sit down and work on a plan to resolve back tax issues.

    Step 3: Examine all options - When the IRS is owed money, the only thing they are worried about is collecting taxes due. Your specific financial situation is of no great concern to the IRS. However, they do understand they cannot get money from a stone. For this reason, there are options available where you can make installment payments to satisfy your tax liability, or in qualifying cases, the IRS may accept a settlement for less than the amount owed.

    Step 4: Contact the IRS - Once you have reviewed all of your options and determined which payment arrangements are available in your situation, it is time to contact the IRS to get the ball rolling. If you are working with a tax professional, they will likely make the call and confirm payment arrangements. Once an agreement has been reached, make every effort possible to hold up your end of the bargain. If for any reason your financial situation were to change and you could no longer make scheduled payments, notify the IRS immediately with this information.

    Dealing with back taxes and the IRS can be a nightmare, one that can be less terrifying if you are pro-active and take the necessary steps to resolve the problem. Tax liabilities will not go away on their own and the IRS will not "forget" you owe them money. Take control of the situation before the IRS takes control of your life.

    This article is provided from Backtaxeshelp.com, a site designed to help you pay back taxes. Owing back taxes to the IRS is stressful, and negligence will only worsen the situation. Learn how to get back tax relief.

  • 5 Steps for Summer Savings

    by Mike Tennant

    Everyone knows how costs can add up quickly when you’re out having fun in the sun. Since we’re all a bit strapped for cash these days, it’s more important than ever this summer to be frugal and make some money-saving decisions. With the hot summer months just around the corner, you have to start planning now if you really want to save some dough. Below are a few simple ways to save some cash this summer and help you shed a few unnecessary costs while still enjoying the weather.

    Lose Two Wheels

    Although not entirely practical for your long commute to work, but for shorter errands and any similar trips where you’d usually take your car, take your bike instead this summer. Not only can you save money on gas, but you’ll also get some additional exercise at the same time. Plus, you can easily avoid all that beach traffic!

    Learn to Love the Farmers’ Market

    Rather than simply paying what the grocery store tells you too, farmer’s markets are typically much more open to negotiation. You can wrangle your way to much better deals here than at the corner store. You’ll also typically find fresher produce and veggies at farmer’s markets, along with a lot of other goodies that you can’t pick up at the corner store. The U.S. Department of Agriculture has a great search page for farmers’ markets if you can’t find one in your area.

    Ditch Your Cable

    Since you’ll be spending more time outside enjoying the weather, why pay for your top-tier cable package? Thanks to the wonders of the Internet, you can catch most of your favorite shows online for free. You can also use Netflix to fill in some of the gaps and give you access to a large supply of movies for much less than you’d pay for a year of HBO and Showtime. Netflix also offers instant streaming of a variety of movies and TV shows as an added bonus for subscribers, so you can choose and watch a show or movie instantly on your PC. You can up the ante by hooking up your TV to a variety of Netflix-friendly devices, including your Xbox 360 and Nintendo Wii.

    Stay Cool for Less

    You’re not paying to cool the whole neighborhood, so keep your windows/doors shut when using your air conditioner. To save even more, if you happen to live in a dry, arid climate, an evaporative cooler is a much less expensive cooling option. Swamp coolers, as they’re affectionately known, can cost as little as half as much as their air conditioner brethren. They’re energy efficient too. Swamp coolers aren’t the best fit for everyone though, so make sure to do your research and read the swamp cooler information closely.

    Keep an Eye Open for Deals

    Most businesses will try to avoid a summer slump and kick-start sales by offering special deals and discounts that can save some good money. This is especially true in the entertainment industry, as every theme park and movie theater will try to win your business with coupons and deals galore. Since a couple good summer months can make or break a business, why not take advantage of everyone competing for your business?

    Mike Tennant is a freelance writer and columnist from Orange County. Mike currently works with Air Conditioner Home as a content developer to help consumers make the right decision when looking for the best swamp coolers.

  • When Is Your Online or Garage Sale a Business?

    courtesy of H&R Block®

    Long before eBay existed, garage sales and classified ads helped people unload unwanted items. To figure out if sales have tax implications, H&R Block advises sellers to know how to determine if the resulting cash is reportable taxable income and if the IRS classifies the particular activity as casual selling, a hobby or a business.

    “Generally, transactions resulting in a gain are reportable, regardless of whether the taxpayer is conducting a business,” said Gil Charney, principal tax researcher at The Tax Institute at H&R Block. “Even taxpayers who are not operating businesses have tax implications when they sell something for profit.”

    Whether it is a garage sale, selling in their spare time or running a business from their basement, the following information will help sellers determine if their activities are those of a casual seller, hobbyist or business operator and the tax implications.

    Casual Seller

    Sales may not have tax consequences if the seller is not in business and the selling price is less than the original price paid, as is often the case with garage sales. This activity results in a personal loss, which is not tax-deductible. A taxable gain (a profit) is realized when an item is sold for more than originally purchased. Personal gains like these are reportable.

    People who prefer not to sell unwanted belongings may get a tax break by making a charitable donation. Although no cash is generated, the fair market value of the donated items may be eligible to be claimed as itemized tax deductions.

    Whether sales occur occasionally or regularly and if there is intent to make a profit are two factors that separate casual sellers from hobbyists.

    Hobbyist or Business Operator?

    Every second, $2,000 worth of goods are sold on eBay. In fact, $60 billion* worth of items were sold in 2009, meaning “extra” money for many sellers, whose activities put them in different sales categories. With online sales often comes a gray area as to what’s considered a hobby and what’s a business.

    Hobbyists sell items occasionally without intent to make a profit. However, if sales become frequent activities done to make a profit, the hobby may be considered a business.

    A taxpayer with a hobby must report all income generated from sales. As a hobbyist, the taxpayer may deduct all related expenses, but not more than the total revenue from that hobby.

    A hobby that supplements income could be considered a business by the IRS. If a taxpayer regularly buys and sells items to the extent that a business results, each sale has a tax consequence. If the taxpayer is the sole proprietor, purchases and sales must be reported on Schedule C.

    For example, if a business buys basketballs for inventory at a wholesale price of $3 each and sells them for $10 each, the business can deduct the $3 cost. The $10 sales price is revenue and the $7 profit is taxed. If a basketball is sold for $2, the $1 loss is tax-deductible. Also, there are several Schedule C tax deductions the business owner may be entitled.

    “Sellers must keep good records about what was purchased, and what was sold, when, to whom and for how much. One good way to help separate personal from business expenses is to have bank accounts used for business only,” Charney said. “If income was earned, despite the source and the amount, it is required by law to be reported to the IRS.”

    For their 2011 tax returns, taxpayers who annually sell more than $20,000 worth of goods and have more than 200 electronic transactions will receive the new 1099-K Form, which will report payment card and third-party transactions, including PayPal and eBay payments.

    * Figures reported by eBay

    For assistance determining if sales activities are that of a business, contact an H&R Block tax professional. To find the nearest H&R Block office, visit www.hrblock.com or call 800-HRBLOCK.

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