Personal Finances

High interest checking account

So, how do you get a high interest checking account? Well, banks are very competitive. This means you will have a lot of options for a high interest checking account, and should be able to get one at the banking or financial institution you already bank with. Or, you can find one that offers a higher interest, or is a better fit for your needs.

]]> What you are going to want to do is get a high interest checking account by finding the best company to get a high interest checking account from. This means the one with the best interest, best terms, and what not. Some require minimum balances, others require things like direct deposit. So, figure out what you can do, and find the best offer for your situation. How do you do that? Your resource for finding high interest checking accounts is bankrate.com.

Bankrate.com gives you up to date information on what various banks are offering their customers. So, go to their site, and clck on the tab at the top that says "checking and savings" and then from there choose the box that says find a checking account. There is a drop down menu with options for interest accounts, or non interest earning checking. Choose interest, and whether you want a local or national, and whether you want internet based or traditional. It will then pull up a list that shows you things like the minimum balance to open an account, the minimum to avoid fees, the monthly fee and the NSF fee, as well as other things like ATM surcharges, and any comment that the bank makes about their offering.

This is a great tool because it helps you make an educated decision about where to put your money to get the highest return according to your terms and ability.

Just remember, that the high interest checking accounts that offer the best rates, also come with some steep terms and conditions or large monthly fees. So, make sure you know what you are getting yourself into before you use one, otherwise it might not be worth the interest earned.

Having fun for less money

Tip one: Look for simple ways to save on the things you really love to do. Most people will tell you that to save money on entertainment you have to cut out the activities, but this is not the case. Instead, look for less expensive ways to do them. For example, instead of seeing a movie on a Friday night, go on a Thursday where you don't have to pay the increased weekend price. Or, go to a matinee for an even bigger discount. Use coupons at restaurants, or skip things like drinks and appetizers, as they can really add to the bill. Look for deals, discounts, coupons, promotions, etc. before you head to the activity. Usually you can find some sort of way to save.

]]> Tip two: Stay home more. Many times, to have fun, people think they have to leave their home. This is not necessarily the case. If you want to have fun for less money, look for things you can do at home that you will enjoy. For example, invest in a wii, or other gaming system and enjoy that. Play games, there are a number of fun board games and card games that can be played with two people or ten. Read a book, make cookies, watch a show or a movie. There are a number of activities that can be done at home if people are open to looking for them, and most are low cost or free.

Tip three: Give yourself a strict budget. Sometimes people want to have fun a little too much, and because they are not holding themselves to any kind of budget, they overspend, and put themselves in financial binds. So, instead of limiting how often you go out for fun, put a spending cap on your fun each week. That way you can determine how you want to use it, and when it is gone, it is gone, and you choose alternative options like getting together with friends, or eating in. A cash budget is a great way to go because then it is more of a physical reminder that you are out of funds for entertainment for the time being.

It is possible to have fun without spending a lot of money. Activities in nature, such as hiking, biking, rollerblading, rock climbing, floating the river, etc. can be low cost, and still a great time. Getting together with friends, making dinner with a loved one, or snuggling up on the couch to watch a movie are all great ways to save money and still have a great time.

Financial assets

Financial assets are an interesting term. There are all kinds of classes of financial assets, and often people do not know what their financial assets are, or where they should be allocating their funds as to increase their financial assets. The following is a look at the basic classes of financial assets.

]]> First, you have cash or your standard bank accounts. These are things like any cash you have in a safe in your home, or the amounts you have in your checking and savings accounts at various banks and financial institutions. This is basically cash, or bank balances. These are considered the best financial assets as they are very liquid, and while inflation affects them, they are going to be good all the time, and don't really lose much value, or gain it, however.

The next class of financial assets are things like securities, 401k, IRA, and other employment saving programs and retirement accounts. These can be any kind, they can be self directed, roth, traditional, etc. These financial assets are great, but have restrictions about use and taxes, so they can get tricky. They are not as liquid as a cash asset.

Your next class of financial assets are the things you have such as homes, real estate, time shares, etc. These things have to have a real title, and be a physical thing, not just a membership in a program. They are great financial assets in that they can provide you with income, while still retaining value. For example, a piece of commercial real estate can make you money while you still own it. You do not have to sell to make money off it. However, the values can drop significantly, and the liquidity is questionable. So, many would argue they are not the best financial asset to have, as a downturn in the economy can cause the value to drop significantly.

Last, you have other items of value. These usually include things like precious metals, stones, arts, commodities, and the like. These are not things like personal property like boats and motorcycles, but are investment items, things like gold, rubies, diamonds, etc. They hold value better than other investments, tend to raise in value over time, but can be difficult to get cash out of if the markets are bad. However, with that said, commodities are often more valuable than cash itself, depending on what the commodity is.

Now that you understand the different classes of financial assets, you should put together a plan for acquiring them, and a wide diversity of them so that despite the economic condition you have something of value that can help bolster your own wealth and keep you economically stable. Of course, most people can't start to acquire financial assets without some wealth, but as your wealth builds, these are great assets to attain, and are often far more valuable then other asset considerations.

Do you need a college degree to earn money?

While a college degree can certainly help you earn more money, it is not necessarily a must in order to have a good job, and make good money. For the majority of the population, college just seems like the right step for a financially sound future. However, school is not for everyone, and if you don't know what you want to do, it can actually cost a lot more than it is worth. If you go to school for several years without figuring out your degree, tuition, living expenses, text books, and the like can add up really quickly, and the payoff not be high enough to justify the student loan debts. So, what can you do without a college four-year degree, and still make a decent living?

]]> Try being a plumber. It takes some time to get your license, and you may have to start out as a journeyman, but after a few years (The same amount of time it would take you to get through college anyway), you will probably be up to $40-$80 an hour, which is often significantly higher than you would earn just out of college, and for some, more than they will ever earn. So, this is a great path to consider. People are always going to need plumbers.

Another great job that does not require a four-year degree is a mechanic. Auto mechanics and repair does not require a degree. You do need a license, but that is far cheaper than a four-year degree, and can help you earn just as much. You can specialize by brand of car, or by auto type, such as recreational vehicles, etc. The practical uses of this job are many, and the pay great.

Another great job for the person who doesn't want to go to college, but does want to earn a fair amount of money is dental assisting, or other health technology specialties. You can get a license to be an x-ray technician, or something similar and make a great paycheck without having to spend four years studying things you are not interested in. Instead, you can study for one year, but not generals, but practical application, and then go to it with less debt, and often more applicable and useable knowledge. It is not just knowledge, but a skill.

Firefighting is yet another great job without a degree. For this you have to pass certain tests of physical fitness, etc. and you may want to do some courses on emergency medical training in order to get a better job, but it is still less than a four year degree.

These are all jobs that do not require a bachelor's degree, but pay more than $40,000 a year. This is above the starting salary for most college grads, at least in their first few years, and like any job, there is opportunity for advancement and pay upgrades.

Children's checking accounts

A question many parents ask themselves is if they should get checking accounts for their children. Savings accounts are the norm for kids, so when should you get your child a checking account? An account they can have access to with a debit card or checks? These days kids start earning money at a fairly young age, with paper routes, odd jobs for neighbors like mowing lawns, raking leaves, taking trash out, etc. babysitting, and then of course jobs in the traditional sense. Thus, getting a checking account is not a bad idea, and may even be a fairly good idea. There are a lot of positive things that come from a child having a checking account, as long as you, the parent evaluate their ability to handle the responsibility, and teach them how to use it.

]]> So before we even look at when you should get your kids a checking account, let's look at what age kids have to be to get one through a bank on their own. In order for a kid to get a checking account, most financial institutions require that they be eighteen years old. This is when they deem a kid old enough, and usually responsible enough to have a checking account, which gives them a way to build some credit, and establish relationships with financial institutions, as well as provide a means for them to exercise fiscal responsibility. Of course, many kids are earning money, and want easier access to it than a savings account provides, before they are eighteen.

What do you do if your child wants or should have a checking and they are not yet eighteen? If younger, the child's account has to be guaranteed by a parent or grandparent. This means that if they overdraw or whatever the case may be, the parent or grandparent that cosigns on the account will be responsible for it. This is a good way to help them learn to manage their money better before they are out on their own. You can guarantee the account, and then teach them the valuable skill of balancing a checkbook, creating a budget to ensure they don't overspend and overdraw their account, etc.

A checking account is a great thing to get kids, as long as you can take the time and effort required to teach them how to use it, and exercise the patience to work with them as they learn, sometimes the hard way, how to use a debit card and checks. A checking account is one of the first financial instruments for a kid. It also provides a great way to build credit with the financial institution you have the checking account with. Thus, it is a starting step toward the financial and credit situation you will want your child to be in so that they can buy a car, a house, get loans for school, and the like.

Car buying mistakes you need to watch out for

Managing your personal finances can seem like a big challenge when a car breaks down or you have another issue happen. If you are suddenly thrust into the role of buying a new car or fixing up your existing one for thousands of dollars, making the wrong decision right now can have devastating consequences. So what can you do? Here are some money management tips and mistakes to avoid when you are shopping for a new car:

]]> Mistake # 1 - Only having 1 choice
If you are only committed to the Toyota Corolla, you could be doing a lot of damage to your personal finances as you really need to look at all your options. Look at all the various car models that are in your price range for the need you have. Consider what you will be using the vehicle for and go that route instead of just sticking to the "cool" car that is fun to drive. A car with 2 seats and 2 doors won't do you much good if you have 4 kids to drive around.

Mistake # 2 - Letting the dealer educate you
As you are shopping for the best vehicle of your choice, you need to educate yourself ahead of time. Never go into a dealership uneducated because they will take advantage of this in a hurry. Take the time to do some research about the various vehicle models, prices, specifications, and features so you know what you are getting yourself into. If you are buying a used vehicle, look further down the road about the problems that are common for this vehicle so you know exactly what you are getting yourself into. Review sites from current drivers are one of your best options to really know what type of vehicle you are buying.

Mistake # 3 - Improper financing
Another mistake car buyers make is letting the dealership finance the vehicle. If they tell you that you can only get a vehicle with 9% interest, they are lying to you. You can easily get a lower interest rate if you talk to a few different lenders. Take a look at what your financial position is currently at so you know how much you can truly afford to spend on the car. Never go above 15-20% of your total paycheck amount when you are financing a vehicle as this is very dangerous and not the smartest money management strategy you will take.

Mistake # 4 - Too many add-ons
Do you really need leather seats, sunroofs, and GPS systems in the car? When you start to get overwhelmed with all the different "wow" factor things, these add-ons will drive up the price in a hurry. You can easily add a GPS system to the care after you purchase it for a lower cost so you aren't stuck paying interest on something that will only cost you $90 versus $300 like the dealer will try and tell you.

Mistake # 5 - Not negotiating
Be careful about paying the sticker price as it is not the actual price you will end up walking away with. You need to negotiate for $500 or $2000 less if it is possible. If you aren't negotiating for a lower cost, you are doing yourself a big injustice. The dealer negotiates for a lower price so you need to as well. Watch for things that can drive up the price like licensing and registering the vehicle. Make sure this is affordable to the car loan you have chosen.

Take your time when you are shopping for a new vehicle and make sure you are looking at your financial situation and considering all of your options. Do not get stuck in a vehicle that is a lemon and will cost you thousands of dollars in repairs.

3 keys to personal finance

If you want to be financially stable and sound, there are three things you have to do. Knowing the keys to great personal finance, of budgeting, managing your money, and achieving your financial goals of wealth and security.

]]> Spend less than you earn: Save money.
The first key to personal financial success is to spend less than you earn. This is a basic principle, but one of the ones people struggle with the most. If you want to ever get well off, you have to save some money. So, start by making up a plan to spend less than you bring in. Write down all of your expenditures and obligations, and then balance that out against your income. Create a great budget and save first. If you are spending more than you are making, it is time to make a pretty major adjustment. Otherwise you will never have money to save, and without money to save, you can't get the next two keys down.

Make the money you have work for you: Invest it.
The next key to personal finance is to make the money you save with the first key work for you and earn you more money. If you do this, your financial security will be far closer than if you don't. So, you have to save money, and then take the money you have saved, and invest it. Then, your money will earn money for you, and you can sit back and just manage it. Of course you want to make sure you choose your investments wisely. Look for investments that offer you a high rate of return along with a low risk factor. This is your money that you are putting at risk, and you wouldn't want to ruin it by making an investment that is risky.

Have an emergency fund: Protect your money
The third key to personal finance is to protect the money you save and the money you earn through investments by putting together an emergency fund. If you save and earn money, but don't plan for the future and for emergencies, you might have trouble. If you want to protect your money, don't just invest wisely, also make sure that you are putting some money aside into an emergency fund so that if you have injury, illness, or accident, you do not end up in debt up to your eyes, or in some sort of financial ruin.

If you can really focus on these three keys to personal finance, you will find yourself in a far better financial position. Of course there are other things you can do to make sure you make these three things easier, like setting up a budget, and taking your savings out prior to spending other money, etc. but in general, these are the three most important things you can do.

What is financial planning

Financial planning is the process that helps you map out how you use your money to get to your goals. Basically, you have to come up with a way to take the money you have, and get from where you are to where you want to be financially. The following are some of the steps for financial planning.

]]> Set goals: Make them SMART goals. These are goals that meet the following criteria.
Specific: What do you want? How much does that cost? If you are going to have a financial plan, you have to know what you want, and where you want it. The more specific you are, the easier it is to set up a financial plan. So, for example, you might say that you want to buy a house. When do you want to? How much does the house cost? How much will you need to put down versus finance? Knowing the specifics is critical to a successful financial plan.

Measurable: When do you want it? Your goal has to be measurable. You can't just say, "I want to pay for college." You have to say you want to go to a specific school, and how much that school costs. Then you can decide how to get to that measurable number.
Attainable: How can you save it in that much time? Do you have the income to do that? For example, if you say you want to buy a ranch that costs a million dollars, and you want to do it in three years, and you make $40,000 a year, it may be a little out of your reach, even if you saved every cent you earned, you wouldn't have enough to put as a down payment without making some pretty great investments. So, make sure that the goal is attainable, if it isn't, you have to change some of your spending habits and earning potential to make it attainable, or change the goal.

Reasonable: How will your life be if you try to do this? You might have six months to save three thousand dollars, and on paper $500 a month sounds doable, but what are you going to be sacrificing or doing without to make it happen? Can you really do that? Is your goal reasonable and still allow you to live a basically comfortable life?
Time bound: Time frame for when you need to do this by. Does your goal have a time frame?

Once you set you goals, make sure you analyze information: Look at income, and look at expenses. Can you accomplish your goals with the income and expenses you have?

Now create a plan to make it possible. This is like creating your budget.

Next, implement your plan. Talk to other people about your plan. They will be supportive, and there will be some accountability and pressure to make sure you are actually doing it.

Last, monitor and modify. Look at how you are doing, do you need to save more? Do you need to save less? What adjustments should you make to your plan to make it possible? Now go and do.

Using a debit card

Using a debit card, many of us know how, some don't, but most new comers to the banking world are unaware of how to use a debit card the right way. Here is some great information on using a debit card:

]]> First, know how a debit card works, know what you need to do to use it responsibly, and know the extra benefits and perks that you could have so that you choose the right debit card.

What is a debit card? A debit card is a card that resembles a credit card, allowing users to access their funds immediately, electronically. But does not involve the use of credit, rather it is like an automatic check, that deducts immediately by using the same electronic system that a credit card would use.

A debit card allows you to take money out of your account electronically whether it is while purchasing goods, or taking out cash. One of the benefits of a debit card is that you can get one for any kind of account. Money taken out of account, can be checking or savings. This means that you can have emergency access to savings, through a debit card.

Something of value to note about debit cards is that while they take money directly from your deposit account, the card does not contain checking or saving account numbers. Thus, if you lose the card, you can cancel it, and not be in danger of someone having your bank account number. Additionally, many debit cards come with an insurance of sorts that says that if someone steals your card, or you lose it, and someone uses it after they find it, you can get the money back, and the company will dispute the charge, and get reimbursement for it. Thus, they are fairly safe, and much safer than carrying around cash, which if lost, is just lost. So, look for a company that offers some form of insurance for theft or loss.

In summary, using a debit card offers convenience, but you need to keep track of purchases and control expenses. It is not really any different from writing checks except that it is immediate, and electronic. However, if you write a check and don't have the funds to cover it, you overdraw your account, or bounce your check. A debit card purchase is the same. It deducts funds from your account, so if you don't have enough money to cover the purchase, it will decline. Because it is not credit based, you have to be careful that you don't forget about purchases, as that will mean not knowing where you are at financially with your accounts.

Many people who use a debit card regularly also carry around a check register, and basically register their purchases, just as they would if they wrote a check, so that they can then balance their accounts, and make sure they have the funds to cover their bills, other purchases, etc.

Tips for homeowners that want to trade up

With the real estate market suffering so many different setbacks right now, it can be next to impossible to find the right type of advice when it comes to your personal finances and real estate investing. Should you buy a new home or stick to the home you already have? Homeowners that want to trade up are constantly battling the different advice and cannot seem to find a way to know what to do.

]]> Sales have been stalling for awhile now, which makes it hard for real estate investors that thrive on it to make them money. If you have some commercial properties and other investments, you may have already lost a substantial amount of money thanks to the real estate fallout. Home sales were up in early spring only because people were interested in getting the tax credit but they have fallen by 3% in June and the numbers are looking pretty bleak for the future and for the next 2 years according to many real estate investors and analysts.

Buying a home at a higher price at the moment may not seem like the best investment decision. However if you have outgrown your existing home and you are ready to invest in a larger one, a trade-up is a great way to do this. Distressed properties are the best option out there in a market like the current one that is struggling to survive.

Reluctance to sell is common right now since the home prices have dropped and most homeowners are out $20K or more in the home and it's not a good idea to take an even bigger loss on the home. The good news is existing homeowners with good credit ratings are able to trade-up without a big problem. Banks can offer you low interest rates right now but you need to have good credit and a stellar payment history in order for them to agree to offer you the loan.

However having 2 mortgages isn't the best idea especially right now with how vulnerable the investing world is. If you are feeling that you are stuck with your mortgage, you may want to look into a few different ways in which you can sell your home.

Assumable Mortgage - an assumable mortgage is a great way to get out of a home so you can trade up. With and assumable mortgage you can transfer the terms of the loan from you to the new buyer of the home. An assumable mortgage allows both parties to save money as you don't have to pay the closing costs and the buyer will end up owing you the rest of the leftover funds.

Below market value - you don't want to list your price too high when you are trying to trade-up. Instead you want to look at what the market value is so you can list it below this value, with the intent to sell it sooner. Have the home appraised in order to find out what you can afford to list it at. By listing even $2,000 below what other homes are at, it helps to draw the attention of all the people that are looking for a great deal.

Cost versus benefit - take a look at what the cost versus the benefit is when you are trying to sell your home. How much can you get out of the home now or home much can it be worth if you wait another year or two before you decide to sell it? If you are going to take a very large loss, the reward of selling now for a trade-up is not going to be worth it.

The best way to invest money for college

Saving money for your college education or the education of your children is one of the best decisions you will ever make. While some people are blessed to acquire scholarships, you never know if your child will be fortunate enough to acquire one so your best option is to start putting aside some money now to help pay for their future.

]]> Gaining a college education in today's world as there aren't too many jobs that you can acquire without a college education. Not only do you need a Bachelors degree for most jobs, you actually need to go further with your schooling and look for a Masters Degree or even Doctorate degree for the highest paying jobs out there.

If you are saving for your children, you need to make sure you aren't sacrificing money that you need for your retirement. Kids do have extra chances to make money and they will be able to find a way to pay for college without your help so if you are pressed for cash, saving for your retirement is more important. Your children will thank you for it as they won't be forced to pay for you as an elderly person.

There are a number of college savings accounts. You can contribute $50 a month and save up $18,000 or more by the time your child is ready for college. Look into the college savings accounts that will provide you with tax deductions and provide you with higher interest rates so there will be plenty of extra cash to pay for more than just their schooling (books, supplies, and rent).

Many insurance companies are promoting excellent college savings accounts right now and you can set up the money to be automatically deducted from your checking or savings account each month until the time when your child is ready for school. to ensure that the account is going to make decent money, you should try and look for an account that allows you to invest in stocks. This is ideal as you will be able to earn a higher return for the money, providing plenty of extra cash to pay for more than just their Bachelor's degree.

With tuition costs constantly on the rise and the future looking worse for tuition rates, providing your children with something to help pay for school is going to be a big financial relief to them. They will be able to get off on a good start with their future as they don't need to go into debt to complete their education and spend years trying to pay it off.

Contact your insurance provider, bank, or even your existing retirement account provider to find out what type of college savings plans they have. They will be able to help you look at your entire situation in order to help you determine if you have plenty of money to pay for your child's college education. Ask about the 529 savings plan, this is the best way to save for your child's college education as it also comes with some wonderful tax breaks that will help you save money on your yearly taxes.

If you don't want to deal with the hassle of watching stocks and making sure the account is growing, use mutual funds. They may grow slower than stocks but at least with mutual funds you don't need to worry about checking the account a lot. You will continue to have the money invested and you can sit back with the assurance that the money is going to be there for your child when they reach the right age.

Savings account interest rates

Understanding your interest options for savings accounts is an important part of being financially responsible. If a savings account offers certain interest, it may be a better place to put your money then in other investments. Of course, it is important to understand how savings account interest rates work, and why the bank is willing to give you some money for your savings accounts.

]]> First, why do banks allow you to earn interest on savings accounts? They allow you to earn money on savings accounts because when you put money in a savings account, you are agreeing to let a bank use your money to lend. They use this money to create loans for mortgages, car loans, credit cards etc. They have to have a certain amount of cash to be able to loan out money to people who want to get credit to buy something.

When someone gets mortgages, car loans, or credit cards through a financial institution, they will pay interest on the loan. Thus, because the bank was able to use your money, they receive interest, and as a result, they will pay you some of it. Basically, if they are earning interest on a loan at 7%, and they only pay you 2.5% on your savings account, they are still earning 4.5% interest themselves. So, they make money because you allow them to use your money, and you make money from them using it.

The more money you have, the higher interest you can get. Basically, your money is your bank's spending power. If they get more money on which to loan against, they have more ability to earn interest. So, as a result, they are more willing to give you a bigger cut of the earnings. So, in order to get a good interest rate on savings accounts, one of the things you can do is put in more money. Most people with large sums of money to save, do not put it in a traditional savings account, but choose other investments and things like CDs, bonds, etc. So, a bank offers incentive for larger amounts being deposited in a savings account.

Another thing that can get you higher interest is to have your money in the account for a long time. The longer period of time you give money to the bank, the higher rate of interest you will be able to get. They want to be able to continue lending against your money, so the more long term you allow them to use it, the higher the interest they will be willing to pay you. It is like the saying that it is easier to retain a customer than get a new one. So, they would rather pay you higher interest to keep your savings account with them, then have to go out looking for other customers to open savings accounts.

Reducing household expenses

One of the biggest costs of life is the basic household expenses we have, from food and clothes to cleaning supplies and utilities. If you can cut out some of these things, and reduce your household expenses you will be far better off financially.

]]> 1. Do you have a budget? How much am I bring in? How much am I spending? Record what you spend for 30 days, and record your income. The first step to reducing household expenses is know where your money is being spent, and whether or not you are overspending. If you are exceeding your income, you can use that as a guide for how much to reduce your household expenses by. Set your budget, write it out so that you are very clear on what you should be spending, when, where, and how.

2. What do I really need? Your next question to ask yourself is what do you really need? You have to take a look at your household expenses and determine which of them are things you actually need, and which of them are extras, or things that are not really necessary. For example, do you really need 400 television channels? Do you need monthly subscriptions to the gossip magazines? Do you have to have high speed internet, or would dial up work? If you have a cell phone, do you need a home phone, or vice versa? Ask yourself what you need versus what you want, and start cutting out or down on some of the extra fluff in your life.

3. How can I save on the things I really need? Now ask yourself what you can do to save money on the things that you decide you actually need. For example, you have to have food, so look for ways to make the food less expensive. Here are a few ways you can reduce the needed household expenses.

a. Coupons. Many people have made an art out of using coupons. They can take $100 worth of groceries and get them for $15 because they have all kinds of coupons, from store to manufacturer, buy one get one, and more. So, if you have to buy something, look for a coupon to get it at a discounted price.

b. Saving on utilities. Next, look at your utility bills, and look for ways to cut the cost down. For example, you can focus on doing the little things like turning off lights and air conditioning units if you are not home. You can make sure that you keep your home cool or warm by opening and shutting blinds, doors, etc. Look for energy efficient appliances, etc. Look for ways to save, and you will cut your utilities down significantly.

c. Waste reduction. One of the best ways to reduce household expenses is to cut down the waste. Don't run water while brushing your teeth, don't over buy groceries, as this is expensive, don't pay for channels or other things that you don't need.

Proper tax planning to reduce your tax burden

Do you find that you are constantly paying thousands of dollars in taxes and getting a nice fine for owing so much money too? Proper tax planning will help you reduce the financial stress and burden you feel if you have money to pay in taxes and it helps you to have money set aside so you aren't frantically trying to get a loan.

]]> How can you reduce your tax burden? The most common ways to reduce your tax burden include taking advantage of the various tax credits that are available along with using deductions or you can reduce your income. If reducing your income is not something that is possible for you to do, increasing your deductions is one of your best options.

On your paychecks, never withhold money from the checks. Always let the full amount go to taxes as this usually increases your ability to get a refund. You don't want to be stuck paying the entire amount in taxes come April 15th so paying a little bit here and there can really save you a lot of headache in the end.

Pay quarterly taxes. Use the IRS spreadsheets to find out which tax bracket you fall into so you can check and see what your tax percentage is at and what the average tax burden is. You want to pay more money in your quarterly taxes if you want a nice refund in April but just know you have to pay for the following years taxes in April so it might be a good idea to just pay what you owe instead of trying to get some money back since you have to pay it right back.

Are you a homeowner? Are you in college? Do you drive energy-efficient vehicles? There are so many different deductions and tax credits out there that you really need to look for some that can help you reduce your tax burden. If you have been thinking about buying a new home, look into home buyer's tax credits and see If there are any worthwhile ones. Recently there was a big one for $8,000 and it was perfect for new homeowners that needed some extra cash to use to get started with their new home.

While you may think that making more money is a great way to help pay for your taxes, making more means you will be taxed more. You need to be sure that you have the right balance with your income and if you are making more, you need to learn how to set aside money to pay for taxes ahead of time so the IRS doesn't penalize you for not making your quarterly tax payments or for owing more than $1,000 in taxes. If you are making more money, start contributing more to your retirement accounts. The money you contribute is tax deductible (if you don't have a Roth) now and you will pay taxes when you pull out the money in your retirement years.

Hire a good CPA to help you find all of the tax deductions you are eligible for. They will be able to look over your medical expenses, car registration fees, property taxes, charitable contributions, and many other things to find out how you can reduce your tax burden. Keep track of all your itemized deductions throughout the year and make sure you hang onto receipts in order to show them to the IRS in the event that you are audited. You will be surprised to see how many deductions you are eligible for instead of just sticking to the standard deduction.

Paying for "unexpected bills"

Life tends to throw curve balls at you every now and then, and often they are financial curve balls. Those "unexpected bills" like a trip to the emergency room, or a car repair can really throw you off your financial game. It can be hard to pay for these unexpected bills, and even harder to get back on track after one of these. The following is a look at some of the things you can do to better prepare you for life's unexpected events.

]]> 1. Get a general idea of what you think your "unexpected bills" will be. This might seem like a contradiction of terms but most people have a good idea or can get a good idea of what they spent the year before on "emergencies and unexpected bills". So, look at your last year's year-end statement, and figure out how much it was last year. This is going to be a big part of what helps you be prepared for the unexpected.
2. Divide the amount you came up with in number one by twelve. This is going to help you prepare for the unexpected. If you had $600 worth of unexpected bills the year before, you can assume you will have similar to this in the current year. This means that if you want to prepare yourself for the unexpected you would want to save $50 a month. Of course, one bad health issue, or severe car accident, and that number might jump way up. A good idea would be to save enough to cover your deductible, and whatever amount you had the year before.
3. Start saving. Those unexpected bills really stink, but they can be a whole lot worse if you have not done anything to prepare for them. No one likes to pay for a visit to the ER, or to pay for a car repair, or deal with a broken home furnace, but it happens, and if you have a healthy emergency savings set up to deal with it, you will be far better off.

So, what happens if the rainy day hits and you don't have a savings in place to deal with the unexpected bill? If it is a hospital bill, talk to your hospital financial department, and work out some sort of repayment plan with them. If it is a car repair, consider putting the work on a credit card, and then working hard to pay it off. If you can't do that, your option is to negotiate with the place that you owe money to, borrow from family or friends, take on a second job to pay for the increase, or whatever it takes.

One of the things you should always do is plan for the worst, so that you are prepared and appreciative of the best. In addition, keep yourself viable so that if you need to take on a second job, you can.