Smart On Money

Personal finance topics including budgeting, debt reduction, investing, income creation and saving.

Main Menu

How To Enjoy A Cheaper Road Trip

By 1 Comment

One of the fun things about the summer, in my opinion, is the road trip. I've already been on one this travel season, and I'm excited for further road trips. Most of the time, my road trips are relatively short, ranging from three days to a week. Road trips can be a great way to spend time with family, and even enjoy a fairly inexpensive vacation.

If you want to have a cheaper road trip, though, it helps to plan ahead.

Tips For A Cheaper Road Trip

cheaper road trip

Here are some tips for creating a cheaper road trip that everyone in your family can enjoy:

  • Map your route: The first step is to map your route. You don't have to have everything perfectly timed (that takes some of the spontaneity out of the journey), but you should have a general idea of where you want to go, and which days you should arrive. Plus, mapping it out can help you find the best hotel deals, as well as the cheapest gas prices.
  • Car maintenance: Before you head out, check your car. Make sure that everything is in good order. Breaking down in the middle of a road trip is an expensive proposition. A little expense now can save you big later.
  • Be smart about food: One of the things I remember from my childhood is the big cooler. My parents brought a big cooler packed with drinks (including milk and juice), deli meat, condiments, and other items. We made our own sandwiches, and had access to other food. A smaller cool, and a bag with other items, was available as well. Bring your own food, and you'll spend much less. When you do need to replenish your supplies, head a little farther into town and visit the local grocery store.
  • Use your rewards: Maximize your road trip with the help of a rewards program. You can save up money for a road trip, but then use credit cards. Earn the rewards, pay off the balance when you get back, and be ready for the next trip. You can also sign up for hotel rewards and earn free stays. If you already have free stays, use them during your road trip to reduce costs.
  • Look ahead for discounts and promotions: Find out if there are discounts and promotions in the area. Look online for coupons on food, attractions, and lodging. It's a great way to cut down on costs. Groupon, LivingSocial, and Restaurants.com can all provide you with discounts to use during your road trip.
  • Choose souvenirs carefully: Rather than load up with expensive souvenirs that clutter the house, choose carefully. We buy a magnet or two, and postcards. These items don't take up much room, and they are inexpensive. We save money on those items, and can spend on the things that are more important to us.

A road trip can be a fun way to go on vacation. If you are careful about what you spend your money on, and if you plan ahead, it should be possible to enjoy an inexpensive vacation that helps you create plenty of good memories.

What are your tips for taking a cheaper road trip?

How To Avoid The Capital Gains Tax

By 2 Comments

Investments are difficult enough without losing huge portions of your investments to taxes, and capital gains are no exception to taxes. Capital gains are the profits that come from investing in capital assets, such as stocks, bonds, or real estate. If the profit exceeds the purchase price, which is what we all hope for, then the difference between the higher selling price and the lower purchase price is considered a financial gain for the investor, which is subsequently taxed. However, there are a few ways to get around paying large amounts of your investments. These are all legal, commonly used, and designed for investors to maximize their investment gain, without losing hard-earned funds to taxation.

“The government always wants its portion, but donating is one of the ways around tax requirements,” said Charles Bulger from RetirementCalculator.com. If you bought stocks in the past for 2,000 and the stock is now worth 10,000, you can donate the shares to charity for a tax deduction of 10,000 without having to declare the 8,000 profit as a taxable gain in capital. This is a common device used by investors called a charitable gift trust, which is offered by brokerage firms. You are allowed to donate a block of appreciated stock over a period of years, and the stock is sold by the trust, not the investor. No capital gains tax is applied.

If you’ve made some gains in your stock and you’re in a higher tax bracket, the appreciated stock is going to get hit with some hefty taxes at a higher rate. To bypass this tax, you can transfer the stock to a family member who ranks in a lower tax bracket. The gain would be placed on their tax return and, if the tax rate is low enough, they could end up having to pay much less than you would have. There are some drawbacks to this type of gift. Over 13,000 will eat into your lifetime gift and estate exclusion. Talk with your broker about this option, and see if it would work to your benefit.

This option is for those who are not relying on investment for financial support. If you want to bypass paying any gain taxes, consider your stocks, bonds, and other investments as one portion of your will. Death is one extenuating circumstance around taxation. It sounds morbid, but it’s one way of keeping the government out of your investments. Your heirs never have to pay income tax on the appreciated value between the time of purchase and your death, which your investments in their entirety to the next generation.

These are just a few of the many ways you can get around paying huge sums to the government. Forbes also has an article that goes into other ways that consumers can get around this form of taxation. As always, you should consult your broker and discuss in greater detail the usefulness of these types of actions. Looking into some of these options can save you a lot of money, and can help keep government hands out of your hard earned cash.

30 Tax Organization Tips For Faster Filing

By 3 Comments

You’re scrambling around your home office, looking for the paperwork you so desperately need to file your taxes. W-2s, 1099s, expense reports – it’s all blurring together and you’re asking yourself, “Where is that last piece of paper I need?”

Getting organized for tax time shouldn’t be something you cram into the evenings leading up to April 15. Instead, it should be a yearlong process. Tax time can be overwhelming enough without having to dig through piles of paperwork and the mess on your desk to find just what you’re looking for.

That’s why we’ve put together a list of things to get you ready. You’ll find essential steps for getting organized, tips to help you get ready for next year, and more.

Read on, my friends…

6 Reasons Being Organized For Tax Season Can Eliminate Stress

Come January, your mailbox becomes filled with all the documents you’ll need for filing your taxes – not to mention all the piles of receipts you have filed away. Here’s why being organized sooner (rather than later) will save you time – and stress.

  • If you don’t have organized files, you’ll run the risk of misplacing documents and receipts that are essential for your taxes.
  • You won’t get stressed by running to your tax preparer or post office in the days leading up to April 15.
  • If you’re not organized and leave that up to your accountant, they may charge extra fees for the time it took them to get your paperwork in line.
  • Thinking long-term, you should keep your tax records for four to seven years. Having these well organized throughout the year will help if an audit ever occurs.
  • It’s also recommended you keep your W-2 forms until retirement. Having these filed nicely will also help down the road.
  • It will make next year’s return easier. Having your old returns on hand will give you a great starting point when considering your credits, deductions, etc.

16 Essential Steps for Getting Organized

By early February, you should’ve gotten all of the paperwork you’ll need to file your taxes. Now, it’s time to get organized:

  • Make a tax appointment – Call your tax preparer to schedule an appointment. Late February or early March is best, as they get busier as April 15 approaches.  (too late for that this year!)
  • Purchase an expandable file folder or box to keep your paperwork – Ideally, a device with partitions (so you can separate by category) is ideal. In the future, buy one of these at the beginning of the year. Whenever tax documents are sent to you, put them in the folder right away so they’ll all be in one place.
  • Categorize – Categorize your folder into sections like: W2’s and pay stubs, 1099s, medical expenses, mortgage interest statements, real estate taxes paid, tax-deductible contributions, and business expenses.
  • Eliminate clutter – The first step to finding the documents you need is to eliminate what you don’t need. Go through your files and get rid of expired warranties, year-old bank statements, and anything else that’s no longer needed.
  • Gather all tax-related documents – This includes things like:
    • W2’s
    • 1099’s
    • Checking and savings account interest statements
    • Real estate tax statements
    • Mortgage interest statements
    • Investment statements
    • Receipts for charitable donations
    • Pay stubs
    • Retirement plan statements
    • Record of any tips (this is most common for bar and wait staff)
  • Gather all expenses – Hopefully, you’ve kept good track of these throughout the year. Gather all receipts that are considered business expenses, including:
    • Advertising and promotion
    • Professional dues and subscriptions
    • Licenses and permits
    • Utility, Internet, and cable bills
    • Meals and entertainment
    • Professional fees (tax preparation, business coaching, etc.)
    • Interest statements
    • Auto-related expenses
    • Computer equipment
    • Business-related books and magazine subscriptions
    • Travel expenses

8 Commonly Forgotten (Yet Extremely Useful) Items

There are also several pieces of documentation that you may not even think of, but they’ll actually be helpful when determining your deductions. Look around your home office and gather the following:

  • Rental property documents – Find any records that detail the purchase, improvements, or maintenance of rental property.
  • Insurance policies – These can help determine how much you should be reimbursed for a casualty or theft, business losses, or medical expenses.
  • Family records – Have records like marriage certificates and birth certificates handy in case your filing status or dependency information has changed.
  • Capital asset records – This includes things like jewelry, stocks, bonds, antique collections, and more.
  • Medical bills – This will give paper proof of any deductible medical expenses.
  • Energy-efficient purchases – Anything installed on your property that is considered energy-efficient may be eligible for a credit.
  • Theft or loss documents – If the unfortunate event of theft or loss occurred, collect information regarding when the item was missing, your proof of ownership, and the value of the property before and after loss.
  • Gambling winnings – These are fully taxable, along with the market value of prizes, and should be reported using Form 1040. Be sure to include the type of gambling activity, the date, address of the establishment, and the names of anyone who was with you.

Using even a few of the above steps to get organized before filing your taxes will relieve much unneeded stress, saving you time and energy.

What tips can you give us for getting ready for filing?

Pamela King promotes tax literacy and tax payer empowerment through research and education. She preaches the “KISS-AF” gospel – Keep it Super Simple and Free. If you can use the 1040ez form and e-file then you should do it!

How To Financially Prepare For A Disaster

By 9 Comments

There is no way to be completely prepared for a disaster. However, you can do your best to prepare yourself financially for an emergency that could cause you problems. If you haven't thought about it in the past, think about it now. Recent events, from large scale natural disasters (such as the earthquake in Japan) to man made problems (like last year's oil spill in the Gulf of Mexico) can impact your income, as well as prevent you from accessing your money. You need to be ready for these situations.

Build Up an Emergency Fund

An emergency fund is there for…emergencies. You should build one up so that you are prepared. Your emergency fund can help you pay for repairs not covered by insurance, and it can also help you offset other costs that might be related to a natural disaster. Another reason an emergency fund is important is that your income might be interrupted by a disaster. What happens if you can't get to work? Or if the disaster results in you being laid off altogether? If some sort of catastrophe knocked out the Internet in my locale, I'd experience a severe drop in income. An emergency fund can help you avoid complete financial disaster in such circumstances. Take some time to get your finances in order, and start an emergency fund.

Keep Emergency Cash at Home

As nice as an emergency fund is, you should realize that power outages and interruptions in the banking system can limit access to your money. An earthquake once made it impossible for me to get my money via ATM for two days. Realize, too, that a lack of power or downed phone lines can mean that using a credit card might be out. Have a stash of cash at home, kept in a safe place. Don't use it for every day expenses; instead, save it for when you really need it. Consider three days' worth of cash to complement your 72-hour kit.

Know Important Numbers, And Protect Your Financial Documents

In addition to making sure that you have access to liquid funds, you need to consider your financial documents, and your financial accounts. Keep a list of financial account numbers and contact information for insurance policies, retirement plans, bank accounts, loans and credit cards. This list should be kept someplace safe and secure, along with hard copies of documents, such as insurance policies, loan papers, car and home titles, passports and birth/marriage certificates. A waterproof fire safe is one of the best options for these papers. You can even keep some of your emergency cash stash in the safe. That way, your most important information is safe guarded.

What If You Have to Leave?

Your next concern should be whether or not you have to leave. Your emergency stash of cash should be easy to get to, so that you can take it with you. Account numbers and other information should also be taken with you, just in case you need to get in touch with representatives of different companies. Have a 72-hour kit prepared for each member of your family (or create a family kit), and keep it somewhere accessible. These are things you need to grab and take with you in addition to cash and financial account information. You also need identification (if you have a passport, bring it along) and insurance cards.

Make sure everything you need is in a central location so that you can just grab it and go.

Do you have any other tips for financially preparing for a disaster?

How To Find The Cheapest Gas In Your Area

By 9 Comments

If you've been watching the news lately, you know that gas prices have been on the rise, and that we could soon be seeing $4 (or even higher) per gallon gasoline. With unrest in the middle east, government collapse in Libya, and our government not allowing us to drill, who knows how high the gas prices could go before we're done.

So while you probably can't stop using gas and just stay at home every day, you can do what you can to minimize how much you're paying for your gas when you do fill up. To help in that goal, today I thought I'd throw out a few of my favorite gas prices websites that will help you to find the cheapest gas near where you live.

Find The Lowest Price On Gas Near You

While it's probably not a good idea to drive 20 miles out of your way to find gas for 5 cents cheaper, it probably IS a good idea to find the cheapest gas in your immediate area.  Prices can often vary from 5-20 cents per gallon!   To help in that aim here are some useful sites that I've found.

Gas Price Websites

  • GasBuddy.com: GasBuddy.com is probably my favorite gas prices tool.  Gas prices are submitted by users in the local area along with the time/date they saw the price. I’ve found it to be pretty accurate, and they have a variety of other tools available as well like a gas price heat map, fuel logbook.
  • Automotive.com Gas Price Tool:  To use the tool just type in your zip code and it will come back with the local gas prices in your area. Easy as pie! The site also has an assortment of gas prices widgets that you can place on your desktop, website, blog, facebook account or google homepage. Very cool!
  • MSN Autos Gas Prices: MSN Autos has a gas prices tool as well. Similar to the ones above, but not always as up to date.
  • Mapquest Gas Prices: Yet another gas price tool, this time from Mapquest.

There are sites to find your gas prices, but those are the ones I found most helpful.  Have your own?  Leave a comment below!

Gas Price Apps

  • Local Gas Prices: App that shows a list of the gas stations nearby, and allows you to sort the list according to price or location. Tap on one of the gas stations, and it opens Maps, showing you that station and your current location.
  • Cheap Gas:  Gives you a list of stations, sorted in order of the lowest price. Tap on a station listing, and it opens Google Maps.
  • Gas Buddy: My favorite app, from the same folks as the website above, gives you a choice of a list or a map of gas stations. You can configure it to list the stations in order of how close they are to you, or by price, and you can sort the stations by fuel grade, including diesel. This app is also available for Android and Windows 7 smartphones.

Other Ways To Save On Gas

While you're trying to save on how much you pay for gas, here are a few  other ways you can save.

  • Buy gas at a warehouse club: Another easy way for some people to save gas is by buying their gas at their local warehouse club (Sam’s Club, Costco, etc). Many of these membership shopping clubs have gas as well, usually 4-5 cents cheaper than everywhere else. Granted, you usually have to be a member to take advantage of their prices, but if you are, buy your gas there. When searching for cheap gas at the websites above, the cheapest gas was consistently at the Sam’s club right down the road from us.
  • Use a connected GPS with local gas prices: Many GPS systems that you can buy nowadays can connect and download local gas prices. TomTom Go 740 for example has the ability to connect automatically to access traffic feeds, updated fuel prices, Local Search powered by Google and weather – so you always know what's going on. Of course some of these connected GPS do have an extra subscription cost, so beware.
  • Use a gas rebate credit card to pay for gas: Depending upon the credit card you can save anywhere from 1-3% or more using your gas rebate credit card. Make sure to research to find the best card available.
  • Practice fuel economic driving:  Do your best to drive in a way that conserves fuel, instead of wasting it.  In other words, don't speed away from a green light, or speed up to stop at a red.  Don't drive too fast on the highway, and do your best to drive at an even speed – without speeding up or slowing down too much.   Also make sure to keep your tires properly inflated and remove any unnecessary weight from your vehicle.

What are some tips you’d like to share to save gas? Let us know in the comments!

Starting A Side Business: Making Money From Blogging

By 10 Comments

From time to time I get questions about blogging from friends and family members.   They know I've started a couple of blogs and made them somewhat successful, and they want to  know how they might go about setting up their own successful sites.

At this point I usually start talking to them about how much work it is to blog, how you have to constantly be writing content, promoting the site, networking and researching SEO.   After I've been talking to them about this for a few minutes usually their eyes start to glaze over, and they begin to realize that making a blog successful isn't an going to be an easy project.  Most of them ditch the idea before they even get started.  To me that's a big mistake because starting a blog, while it is a lot of hard work, can also be extremely rewarding – both monetarily and in other ways.

If You Treat Blogging As A Business, You Can Make Good Money

Once they've heard just how hard blogging can be, they often move on to the question of how I can afford to spend so much time doing something that is essentially just a hobby in their mind.   At this point I have to explain how I started blogging as a hobby, but after a year or so of constant effort I realized that it could be so much more.  Blogging has the potential to become a nice side income, and if you work especially hard and have a bit of luck – you can turn it into a full time income.  Because of that I started to treat my blogging more as a business.  I think without that added benefit of being able to make quite a bit of money from blogging, I may have stopped writing quite some time ago.

While I haven't matched my day job income yet from my blog, I am blessed to say that it has been enough to replace my wife's day job income so that she could stay home with our son that was born 5 months ago.   To me that's huge, having the peace of mind that this extra blogging income creates is priceless.

A Blog Has Almost No Startup Costs

One of the great things about launching a blog is that it has almost zero startup costs, but has the potential to make quite a bit of money.   What costs can you expect to incur right at the beginning?

  • Domain name:  You can usually find a domain name for anywhere from $7-10 a year.  That's dirt cheap.
  • Hosting:  You can find a cut rate hosting plan for about $5-10/month.  That's only a few cups of coffee!  I'm on a higher tier plan now with Media Temple, and that costs closer to $30/month.
  • WordPress: The standard for blogging software, the self hosted version of WordPress is actually a free product!
  • WordPress theme: You can find a ton of free themes to start with (which I recommend), but premium themes like Thesis, Genesis,  Catalyst or Headway will cost you anywhere from $70-165.

Those are the main things you'll need to pay for.   So for anywhere from $67-$200+/yr you can start your own money making business. That's not a bad deal!

I actually started another site last weekend. In about 1 hour I bought a domain name, added the domain to my hosting account, installed WordPress and the Thesis theme.  Now it's up and running and being indexed by Google!    Once you have done it a couple of times, setting up a new site is a breeze!

The Main Blog Costs Are Related To Your Free Time

To me the biggest cost that there is related to blogging is the free time you'll lose to writing content, promoting your site, getting backlinks, tweaking your site, networking, engaging in social media, etc.  There are endless tasks to perform with a blog, and if you don't enjoy it, you could burn out pretty quick.  For me I would probably have blogged as a hobby anyway, and doing it for money just made it all the more attractive.  I don't mind spending 20-30 hours a week on my sites because I actually enjoy the entire process.  For others it might be more of a chore. Make sure you go in with eyes wide open.

How To Make Money With A Blog?

Making money with a blog isn't easy, and it takes time.  In order to make real money, you'll need to start building up content, get plenty of backlinks by participating in carnivals and writing for article sites, guest posting and a variety of other things.

As a general rule, however, if you do everything the right way, you can probably expect to be making at least something by your 5th or 6th month.  My first site didn't take off until the 6th month, and at that point it's been a money maker ever since.  This site you're reading this post on started making money it's second month because I already had some contacts to sell advertising to from my other sites.

So what are some of the biggest sources of income for some of the bigger sites?

  • Google Adsense:  by far the biggest. to do well with adsense you have to write about the right topics though.  Check out other successful sites to see what they write about.  I suggest adding Adsense right away, better to have the ads there from the start, and possibly make some money!
  • CPM ads:  If you can find a premium ad network that will accept you – and if you have enough traffic, CPM ads can pay pretty well.
  • Direct sold banner ads:  If you can sell ad banners directly, it can do pretty well.  The key is finding people who want them.
  • Affiliate sites:  sites like shareasale, flexoffers.com, linkshare.com and a variety of credit card sites do pretty well for me as well. Promoting these works best with posts usually -reviews/etc.  Banners in the sidebars don't tend to do as well.
  • Your own info products: If you can come up with an ebook or other info product that people are willing to pay for, you'll have a nice source of recurring income.
  • Get paid to sites:  If you have a blog it's a good place to promote “get paid to” sites like cashcrate.com, swagbucks, ebates and others that will pay you for referrals.
  • Paid posting:  I have become a staff writer at a couple of places in exchange for payment for each article. Usually in the range of $10-75 /article depending upon how long you've been blogging and the quality of your work.
  • Use your blog as a launching pad to write a book:  I haven't done this, but I know of several bloggers who used their site as a means to write and publish a book.

What  it really comes down to is that your income opportunities are only as limited as your imagination!

Some Things To Remember About Blogging

I won't go in depth in this post as far as step by step instructions on starting a blog, but here are a few tips for things I've learned about blogging.

  • Less is sometimes more:  I've found that my adsense ads do better when i have fewer ad placements on a page. I put one or two ads in a well placed location, and it tends to do better than say 3 ads on the page.
  • Do your research:  take the time to do some research as to what the popular and newsworthy items of the day are. Write about those things because people are searching for them. Do your keyword research.
  • Content is king: having good content is key.  The more you write, the more content that you have that gets indexed by google – and the more chances you have for coming up in the search engines.
  • Do blog carnivals: participate in blog carnivals, they're free backlinks, and backlinks are like gold.
  • Don't expect huge money right away, it takes time:  I think it was 6 or more months before i made any real money.  Have patience, it will come.
  • Network with other bloggers and help each other:  Sometimes blogging may feel competitive, but actually it's more of a team challenge.  If you can cooperate, give each other links and promote each other's content -you all win.

So there's my brief intro into blogging as a business.  I'll probably be writing more about this in the coming weeks.  In the meantime, however, if you're interested in starting a blog, here's a comprehensive ebook on how to make money with a blog.

You can get  $5 off by using this coupon code for a limited time: som5

Have your own blogging tips, or questions that you'd like answered? Tell us your thoughts in the comments!