Archives for 2012

The Cost Of Resolutions

The New Year is here and we are all striving to get ourselves off on the right foot by committing to the right resolutions. However, not all resolutions are created equal. While most will improve your health or your mental well-being, there are a few in particular that will save you thousands of dollars over the course of your life in addition to improving your mental and physical well-being. A few of the most cost-effective New Year's resolutions include:

Losing Extra Pounds – $10,000 in Lifetime Medical Costs

Being obese is no joke. There are higher food bills, higher insurance premiums and higher medical bills. So if you are looking to save a substantial amount of money, consider joining a gym and committing to a healthy diet plan. You'll look and feel great, and be able to put several thousand extra dollars into your retirement account.

Quitting Smoking – $1,200 in Cigarettes Annually

Cigarettes, emphysema, and lung cancer are just a few of the typical costs associated with smoking. However, the costs can be even higher if your health insurance provider finds out that you are a regular smoker. So give yourself back a minimum of $1,200 by putting down those cigarettes once and for all.

Giving Up the Night Cap – $200 in Monthly Bar Tabs

While we all may enjoy the occasional drink to unwind, enjoying a few regularly or hitting the bars each weekend can lead to steep bills. However, if you have vowed to give up drinking for the new year, you can save yourself nearly $1,200 annually and improve your overall health. So before you order another fancy cocktail, think about what that money could be spent on instead.

Going green and finding a new job are also great resolutions, but they generally require additional investments which may make their return a little longer to see. With these resolutions there are generally solar panels to buy or tuition at one of many pharmacy technician schools to pay for – which aren't exactly cheap. However, by giving up vices and dedicating yourself to a healthier lifestyle, you can actually improve your overall quality of life and increase the size of your savings as well.

Double Check Your Employer’s Retirement Plan

By Miranda Marquit 3 Comments

When you work for an employer, you might have access to benefits, including a retirement plan. Your company's retirement plan — usually a 401(k) — can be a way to help you build your nest egg through the power of investing and compound interest. However, you want to double check to make sure that your employer's retirement plan is what you want to be devoting your resources to.

In some cases, you might not want to rely too heavily on your employer's retirement plan to build your wealth. Here are some things to consider:

retirement plan double check

Matching Contributions

One of the biggest advantages of many employer sponsored retirement plans is the matching contributions that you can receive. Your employer will match your contribution up to a certain amount. This is free money that goes into your retirement account.

Before you sign up, make sure that you check into the vesting rules. In some cases, the employer portion of your contribution might not be available to you for a certain number of years. If you're planning on changing jobs in the next couple of years, you might lose the employer match portion because of vesting rules.

Employer Stock

Another consideration is how much of the plan's investments are in company stock. Some retirement plans require that a large portion of your contributions buy employer stock. If the company goes down, this means that you lose out in your 401(k), as well as in terms of your job. An employer's plan that is heavily weighted in its own stock might not be the choice for a large portion of your money.

Investment Options and Fees

What investment options are available with your employer's plan. Some plans only provide options to invest in managed funds with high fees. Other plans may not provide you with enough options that you are interested in. You want to be able to make decisions that work best for you, and if your company plan is light on low-fee options, you could lose a lot of money on unnecessary costs.

What to Do if You Aren't Happy with Your Retirement Plan Options

You can always talk to your human resources representative about your options. You might be able to persuade your employer to re-vamp the plan offerings. If this isn't possible, consider your other options. If your employer offers a matching contribution, it might be worth it to contribute the maximum you can to get the match, and then use an IRA for the rest. You can open an IRA even if you have a 401(k) at your job. This can make it possible for you to invest in low-fee options with the bulk of your contributions.

In some cases, employees will fully fund an IRA, and then invest whatever's left in terms of budgeted contributions with an employer's plan. It's important to weigh your options. A tax-advantaged account has benefits that a “regular” investment account doesn't have when it comes to the long-term. Consider what is likely to work best for you, and how you can make the best of the situation if you aren't happy with your employer's 401(k) options.

Tax Preparation Checklist: All The Things You’ll Need At Tax Time

By Mr. Money 1 Comment

Tax time is quickly coming upon us as we move into the new year. A lot of people actually look forward to tax time because they plan on getting a big refund around this time -and it's often used as a time to splurge on vacations, big screen TVs and more! While I personally try to work out my withholding so that it comes out about even with no refund and no taxes owed, the fact is most people don't do that. In fact, the average tax refund for 2010 was around $2,892, so a lot of people will be ready to file as soon as they can. They want their money!

So today I thought I'd get everyone ready for the day that they finally plan to file by giving a tax checklist you can use – so you have everything you need in one place on tax day.

tax preparation checklist

Tax Preparation Checklist

When you're filing your taxes there is a ton of information that you'll need to have at the tip of your fingers when filing. There are a lot of blank spaces on that tax form! In fact, there are 165 blanks on tax form 1040, 127 on Form 1040A, 94 on Schedule C, 77 on 1040EZ, 55 on Schedule A, and 44 on Schedule B! Do you have all of that information ready to go – ready to fill in all those blanks? Here are some of the pieces of information you'll need.

Tax Information To Have Handy

Tax returns for the last two years
Birth dates and occupation(s)
Change of address (if you moved)
Bank name, routing and account numbers (for refunds or payments)
Spouse name and social security number
Dependents names and social security numbers
W2s and 1099s for all income and compensation
1099 Interest, 1099 dividends, 1099 Misc, 1099C cancellation of debt, 1099G unemployment compensation, 1099R distribution from IRA, 401k, etc.
Last year’s state tax refund
Health care costs if they were greater than 7.5% of AGI
State and local income tax, car sales tax
Charitable contributions
Theft and casualty losses
Home office deductions
IRA contributions or retirement plan contributions
Student loan interest
Moving expenses
Student tuition fees
Estimated federal and state tax payments
Energy efficient home improvement tax credit info
Credit for child and dependent care info
Education credit info
Child tax credit/adoption credit info

So there’s a good start on the information that you should have handy when filing your taxes this year.

What Does It Cost To Prepare And File Your Taxes?

How much it costs to do your taxes will vary pretty widely depending on how you file. You can hire someone to file for you, file a paper form yourself (does anyone do this anymore?), or use a software like TurboTax like I do. 32% of people did in 2010 used a software to file, so you'd be in good company if you did that. Your amount of income made can also have an impact as there is free-file available for some lower income folks.

Hiring a CPA or company: On average around $230.
Tax preparation software: About $18-60 on average, depending on which software or site you use.
Doing it yourself with paper forms, or using low income free file: Free. Click here read up more on free tax filing options.

Why Would You Ever Pay Someone To Do Your Taxes?

There are quite a few situations where it would make sense to hire a professional tax preparer to help you with your taxes. Here are a few:

You’re self employed, have your own business and a complicated tax situation.
You got married or divorced in the past year, and your situation is changing.
You’ve bought or sold investments during the year, or received a large windfall.
You just don’t do well with complicated topics like taxes.
You think you could save a lot of money using tax strategies you don’t understand.

These reasons are only the beginning of why you might want to hire someone to do your taxes. What other reasons can you come up with?

Do you think we missed anything on our tax preparation checklist? Did we leave anything off the list – what would you add? Any other tax time tips for the rest of us?

Dress For Success: Find Business Attire For Less

By Miranda Marquit 3 Comments

After I graduated college and began looking for my first job, I realized that I didn't have much in the way of business-friendly clothing. I wanted a skirt suit for interviews, as well as a few pieces that could be worn to work in a professional environment.

The first thing I bought was the suit. We went to Nordstrom, and bought a suit off the clearance rack. It was a simple, classic black affair of decent quality. We got it for close to 70% off. The suit was perfect for job interviews, and it could also be mixed and matched, since I could wear the skirt, sans jacket, with different shoes and blouses.

As I built the rest of my professional wardrobe, here are some things I kept in mind, since funds were limited at the time:

Look For Versatile Items

Versatility is one of the best ways to avoid spending a great deal of money on business attire. Look for solid colors, and try not to buy too much that can only be worn with one other piece. My husband has a few different slacks, in black, brown and dark blue, that he can mix and match with button down shirts.

Versatility can also include buying classic pieces. While one or two trendy items can be fun to have (and cheap to pick up if you get them on clearance just as the trend is on the way out), you will always be replenishing your wardrobe to keep up with the latest. Classic clothing items can be used for years, giving you more bang for the buck, and saving you money.

Buy On Discount

There are a number of ways to buy on discount. The Internet is full of discounted clothing. Additionally, you can look for clearance items and big seasonal sales from department stores in town. And, of course, don't forget stores like Marshalls, Ross and TJ Maxx. You can find a number of quality name brand clothing items (and accessories to go with them) for low prices. However, if you do end up with flawed clothing, make sure that the flaws aren't noticeable. Buying clothing for less, especially if it's versatile, can ensure that your wardrobe budget stretches that much further.

Second Hand

Search for high quality second hand clothing. Ask your friends and family for hand me downs. You can also head to consignment shops. Some thrift stores also have high quality clothing, gently used, at low prices. However, if you do buy at a thrift store, try to identify the day of the week on which new items are set out. Many thrift stores have a regular schedule, so if you are there on the day new merchandise is displayed, you have best pick of what's available.

Sometimes, you can also find good deals on second hand clothing at yard sales, but you are likely to have more success at an estate sale if you are looking for something a little more high end.

Of course, I no longer worry too much about a professional business wardrobe, since I work from home. But if I ever need to rejoin the professional workforce, I'll have a strategy ready.

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