Posts Tagged ‘expenses’

Five Best Ways to Save Your Money While on Vacation

June 21, 2011

Saving your hard-earned cash can be tough on vacation because of expenses such as buying fast food on the road, going to nice restaurants, doing fun activities, and paying for gas and souvenirs.  You don’t have to skip having fun on vacation since, after working or going to school for half the year, you deserve to have a good summer vacation!  Here are a few tips on stretching your money while on vacation:

  1. Overspending while you are on vacation can create worry that your trip away from home was supposed to get rid of. Here are some tips on how to spend less while on vacation.Watch what you spend your money on; don’t just throw cash away.
  2. The best souvenir is a picture, so bring a camera (they’re built into most mobile phones nowadays) and take lots of them instead of buying silly knick-knacks you can pick up in the hotel lobby.  You can also collect “free souvenirs” like match boxes from hotels and restaurants, room key cards, or ticket stubs.
  3. Instead of paying loads of money at an amusement park, go sit pool side at the hotel or go to the beach.  Quality time there is not just free, it is fun!
  4. Have budgets for hotel rooms, activities, and food.  Don’t overspend!
  5. Make sure your trip is planned out well in advance to ensure that you know what you and your wallet are getting into.

Vacations are a great way to recharge your batteries, but spending money can be difficult to do this summer.  Plan out your vacation right and budget your trip so that you can avoid spending traps.  Remember to have a fun, stress-free time!  You do not have to spend as much money to have fun as you think.

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Taylor P.

Tax Season

March 3, 2011

The Internal Revenue Service, better known as the IRS, opened the 2011 tax filing season by announcing that taxpayers have until April 18, 2011 to file their tax returns.  This year, Emancipation Day, a District of Columbia holiday, falls on Friday, April 15th.  By law, District of Columbia holidays impact tax deadlines the same way federal holidays do, giving taxpayers an extra three days to file.  The IRS suggests that taxpayers use e-file, which is the best way to ensure accurate tax returns and get faster refunds due to recent tax law changes.  For those not using an e-file, here are a few things to bring to your tax preparer, whether you are a business owner of any size, a homeowner, or a student.

January through the first half of April marks Tax Season, a period when Americans file their taxes with the state and federal government. In order to make filing your taxes as smooth as possible, here is a list of the paperwork you should prepare in advance.For every tax payer:

  • Last year’s Federal and State tax returns (for new clients)
  • Income/Wage statements:
    • W-2’s
    • 1099’s
    • Alimony received or paid
    • Commissions received statement
    • Brokerage account year-end statements
    • ESPP statements
    • Stock options sale papers
    • Rental property income and expenses
    • Partnership, S Corp, trusts, or estate yearly statements
    • Pension or retirement income statements
    • Social security income yearly statement
    • Unemployment income yearly statement
    • State income tax refund statement
    • Gambling and lottery winnings (and losses, if you have winnings)
  • Car, motor home, and boat registration paperwork
  • Donation receipts
  • IRA contributions
  • Child care expenses and provider information
  • Medical expenses
  • State taxes paid
  • Unreimbursed employment-related expenses
  • Job-related educational expenses
  • Casualty or theft losses
  • Foreign taxes paid

For Homeowners:

  • Mortgage interest year-end statement
  • Home equity year-end statement
  • Property tax information
  • If you sold your home, purchase and home improvement information

Businesses:

  • Income and expense reports
  • Mileage logs for autos
  • Receipts for business assets purchased

Students:

  • Tuition and education fees
  • Student loan information
  • Grants and scholarship information

By bringing all the necessary paperwork listed above, you will help make your tax preparation as quickly and easily as possible.  You receive most of these documents in the mail from January to February.  Organizing paperwork is a great, time-saving idea.  You can create binders for each year and in them, you should save receipts, pay check receipts, old Federal and State tax returns, and other important documents.  This is a great idea for two reasons.  The first reason is that you will be organized and, should you need a certain document, you will know where to find it.  The second reason is, if disaster or an emergency strikes, you can have all your important files in a secure location, since some of the documents cannot be replaced.  Organizing your important documents now will save you and your tax preparer from headache in the future!

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Taylor P.

Living within your means: Avoiding life’s spending traps

April 29, 2010

Just before the economic decline that began in the last quarter of 2007, the average personal savings as a percentage of disposable personal income for households in the United States hovered just below 1%.  Over two years later, despite high unemployment, the percentage remains seemingly unchanged.  Credit card debt.  Recession.  Real estate meltdown.  What relief do we have in the face of a steady stream of economic gloom?  We can start by setting aside money for future expenses as well as keeping in mind a number of spending traps.

What does it take to live within your means and avoid life's spending traps? Awareness of your financial situation, making sound financial decisions, and discipline to follow through with a carefully made budget are a good start.Paying off debt is much harder than taking it on

We dislike being confronted with this reality until the monthly statement arrives in the mail or their inbox.  While credit cards serve a useful purpose when used carefully and with responsible planning, we cannot forget how much they can afford to pay back.  Easy access to our money with debit cards and ATM machines do not help matters, but we can take a proactive step and setup a text message alert with our bank that notifies us of our account balance before making a purchase.

The allure of home equity loans

We like the fact that home equity loans are tax-deductible and that we can use the money to pay off a large debt like a credit card.  If we do not intend on using that credit card ever again, using a home equity loan would make sense.  However, if we fall into the trap of using our newly paid-off credit card and resume our spending habits, we would have the loan AND the credit card to pay off.

Spending unexpected income in your mind

Did you or your spouse already spend the extra money in your minds?  For example, you want to remodel the kitchen, whereas your spouse wants to take the family to Hawaii.  Before the money arrives, deduct any taxes from it, then work with the remainder.

Creating a “complete” budget

Does your budget include spending on food, housing, and transportation?  Yes, as it should.  However, is it complete?  No, especially if you excluded occasional expenses such as taxes, gifts, insurance, car repairs and family vacations.  How can you include occasional expenses practically in your budget?  Estimate how much these expenses will come to on an annual basis, then divide that figure by 12, allowing you to set aside enough money each month.

Budgets are a mutual agreement

You and your spouse are agreeing not only on the “complete” budget, but also on allowances for each of you to spend money on what is important to you or them.  Drawing up a budget that excludes these allowances would cause resentment and cause one to spend the money in other ways.

So what does it take to live within your means?  Awareness of your financial situation, making sound financial decisions, and discipline to follow through with a carefully made budget come to mind.  Understanding that using credit cards produces debt straightaway whereas spending cash is merely a reduction in assets would be a significant step away from falling into a spending trap.  You can borrow money against your home to pay off a debt, but make sure you never create that debt again, lest you have two payments, the original debt and the second mortgage, to make every month.  Finally, creating a complete budget that includes spending on regular and intermittent expenses, as well as allowances for you and your spouse, will help you both live within your means and be better prepared for life’s spending traps.

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Francis M. Unson

Before you buy anything that costs more than $20…

March 26, 2010

Ask yourself these four questions:

  • Do I really need it?
  • If yes, can I afford to pay for it with cash?
  • If so, do I already own an equivalent item?
  • If I don’t own any such item, have I shopped around for the lowest priced item?

Before you buy anything that costs more than $20, ask yourself the questions in the blog.If you have a satisfactory answer for all questions, give yourself another 24 hours before making the purchase.  You may end up not making the purchase at all and, thus, save yourself some money.  Try asking yourself these questions on your next shopping trip.  The more you can prevent instances of impulse shopping, the more money you will find in your wallet over time.

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Francis M. Unson