Get a $250 Grocery Gift Card
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Economic Recession
Frugal Baby Necessities
How do you purchase baby necessities on a budget? This can be relatively difficult. If you aren’t careful, you could easily break the bank. So what’s the key? Here are seven tips for buying and using frugal baby necessities.
1. Budget
This is the most important tip for saving money. If you fail to do this, you could easily end up spending a small fortune. Set an amount you won’t go over every month, and stick with that at all costs.
2. Buy bulk
When you purchase items in bulk, you generally save money. This is because stores will mark them down when you buy the largest amount. So if you are purchasing wipes, getting a packet of thirty will cost you less than a packet of ten (assuming you use all thirty, of course).
3. Use reusable wipes
This is a critical method to conserve cash. You can conceivably go through twenty to thirty in a day if you don’t buy reusable. And consider getting natural organic wipes. These make sure that the cotton doesn’t have chemicals, and are much healthier for the baby. You might want to get the softer version, as this is better for the baby’s skin. What about cleaning the reusable wipe? You can just use simple warm water, or you can make your own solution. There are plenty of recipes for doing this online. However, water is often good enough.
4. Avoid brand name companies
Generally the quality doesn’t dip much from one firm to the next. Therefore, you save a lot by going with a lesser-known firm. However, if you have coupons for name brand items, by all means buy the name brand item and use your money saving coupons!
5. Wait for sales
Buying in bulk is always a good idea. However, doing this during a sale is even better, and using coupons takes saving money a step further. Be on the lookout for markdowns on the item you want, and then purchase a large amount.
6. Make your own items
You can do this for some or all of the baby items you need. Since diapers are one of the baby’s biggest requirements, this is one that you might want to make yourself. Is it hard to make diapers? Not really. All you need is some cloth. There are plenty of sewing methods, and for a complete list just go online. And for instructions on making virtually any baby item, just use the net.
7. Buy online
You can usually save money on the internet. Often times these stores have lower overhead expenses, so they pass these savings on to you. Just go to a number of different sites, do some comparison shopping, and select the lowest priced items.
The bottom line is, you don’t have to break the bank with a new baby. Follow these seven frugal tips and you could save a lot of money.
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Are Mortgage Closing Costs Tax Deductible?
There are a lot of tax benefits for home owners, some of which include deductions on expenses paid during your mortgage closing. However, there are a lot of categories included in your mortgage closing costs, not all of which are deductible. To determine which closing costs involved with your mortgage are deductible, read on.
* Points are deductible on your tax return during the year in which they are paid. For example, if you pay points on your closing costs during the year 2010, you can deduct them on your 2010 return. Points are the costs of obtaining the loan, or a loan origination fee. Most points are equal to 1% of the total mortgage.
* Seller’s paid points are deductable by the buyer as an expense if there is an agreement that the seller will pay the points on the mortgage. However, the seller is not able to claim those points on their tax return; rather the net gain on the sale of the home is reduced by the amount of the points paid.
* Interest costs are fully deductible through the first 10 years of home ownership. During the closing, you will prepay interest through the month, especially if you close in the middle of the month. Prepaid interest is deductible on your tax return.
* If you make too much money, there are limitations on the amounts that you can deduct. For matters in regards to this, it is best to contact a tax professional to assist in filing your taxes. A certified public accountant will know the limitations and can apply them to your taxes in the proper manner.
* Pro-rated property taxes are also deductible. In most cases you will have to pay pro-rated property taxes on the property at the closing. This expense is completely deductible when you file your return.
Closing costs consist of many fees totaled into one lump sum to be paid upon closing of the house. Some of these expenses are tax deductible depending upon your income and the purpose of the fees. Points, interest and property taxes are a few of the items that are considered tax deductible. To get the maximum deductions allowed, it is best to talk to a tax advisor or CPA to determine how much of your closing costs is deductible.
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Top Strategies to Motivate Yourself to Start Saving Money
Mustering up the motivation to start saving can take some effort, especially if you have never set up a savings plan before. In order to start saving it helps to have a specific goal in mind. You also need to have a good overview of your finances and your expenses. It can be difficult in the beginning to create a savings account, but once you start it will be easy to continue.
* Keeping a goal in mind will help motivate you to start saving. Be specific in your goals – do you want a new car in a year or a down payment on a house? By being specific when choosing your goals, you never lose sight of what the money is for. In addition to choosing a goal, be sure to figure out how much you need to save up to meet your goal as this will help to keep you on track.
* Analyze your finances and expenses. This is an important step because it will show you how much you can afford to put away each month. Eliminate any needless expenses. For example, skip eating out and bring a bag lunch to work. Bring your own coffee instead of buying. While these may seem like little sacrifices, chances are they will add up to a nice chunk of change at the end of the month. Instead of spending it, put it in the bank.
* Update your goals as necessary. It is human for us to change our minds about goals. Instead of kicking yourself when you do, just revamp your savings plan to meet that particular change. Sometimes, emergencies happen and we have to use the money we planned to save to take care of the situation. Just continue to save as usual when things return to normal.
* Save your change. It’s pesky and heavy and it’s everywhere, but it is money. Keep your change in an empty jar or buy a special jar to contain it. When the jar is full, wrap the change up and deposit it into your savings account. You will be amazed at how much money you are able to save up just by collecting your change.
It can be difficult to get motivated to save, but it does help when you have a goal in mind. Analyzing your finances and expenses will allow you to see just how much you can afford to put away each month. You can save up by eliminating unnecessary expenses and also by collecting your change and depositing it into your savings account.
Keep your goal in mind when you are saving up, but don’t kick yourself if you get deterred. Simply pick back up where you left off and reward yourself for your hard work.
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Top Tactics for *On Sale* Shopping
It is always great to take advantage of a sale. Many items can be purchased at a steep discount which, in turn, will save you money. It is always best to shop a sale with a plan; a plan will help you to avoid needless spending. When preparing to shop a sale, take the following tips into consideration.
* Plan ahead. View the fliers for the sale beforehand and make a list of the items you want to purchase. This will help you avoid any needless spending as most stores place sale items strategically next to highly-coveted merchandise hoping for impulse buys.
* Set a budget and stick to it. Take cash only, as this will help you to stay on budget. You cannot spend it if you do not have it to spend.
* Most people like to shop the sales early to get first dibs on the merchandise. The earlier you arrive at the store, the greater your chances are at finding the sale items that you want. You can still visit later in the day but you may find that the items you were coveting have been sold out. This is especially true around the holidays.
* It is easy to get carried away with sale items. You may be tempted to purchase things that are on sale, but which are not necessarily needed in your household. If this is the case, try to hold off on the purchase until it becomes a necessity.
* Use coupons to further your discount. This may not work with every sale, but sometimes credit card holders will get additional discounts on top of the sale prices. Oftentimes coupons, if available, are posted in the sale flier. Clip these when you can and use them to further your savings.
* If your store has an email newsletter, sign up with them to get fliers and exclusive sales emailed to your inbox. Members are typically privy to sales before the general public. This will help you be aware of upcoming sales if you are not especially attentive to newspapers.
Finding a sale can be a real bargain for your budget. If you plan ahead, you will likely find that you can save more on your purchase than just the advertised sales. Set a budget and stick to it by carrying only cash and avoiding needless spending.
Signing up for email notifications is a great way to be aware of sales before the general public, or to be notified if you do not receive the daily newspaper. By utilizing the above tips you will be able to save even more money, and who doesn’t like that?
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Top Tips for Refinancing Your Mortgage
Many banks and financial advisors are trumpeting the benefits of refinancing your mortgage at a time when interest rates are fairly low. But there are some things to keep in mind which will make your pursuit of a better mortgage go smoother.
* Look at your current situation – Ask yourself why you want to refinance your mortgage. Is it because everyone says you should, or is it because you need to do so to drop your mortgage payments? Is your credit as good as or better than it was when you took out the first mortgage? A worse credit score could actually raise your interest rate. Is your house worth more than you owe? If so, then you may not be able to find a lender willing to take on that risk.
* Try your current mortgage holder first – If you have been a good customer, your current mortgage holder could be your best bet for obtaining a refinance. They may make you a better offer just to keep you as a customer. There also may be some advantages such as a reduction of fees.
* Investigate the interest rates – Shop around and find out what the best interest rate is that you can get with your current credit and income. Your rate may not be the one advertised by the lender and don’t forget the PMI, points, and other factors. It makes no sense to refinance your mortgage if you are going to end up paying more in the long run.
When you add up all the factors, if your new interest rate will be less than half a percent lower than your current one, then you are better off staying with what you have.
* Pay down your mortgage – If you owe more than your home is worth, you will probably not be able to refinance in a tight mortgage market. If possible, pay down your mortgage by several thousand dollars over the next few months before attempting to refinance. Your chances of refinancing, and of reducing or eliminating PMI, should be better afterwards.
* Wait it out – Even though everyone is touting the benefits of refinancing, you might find it’s not worthwhile to you. If you plan to sell in a year or so or if you can’t get a better deal, then just wait. Selling in a few years could net you more profit if you continue making your normal payments now. If you aren’t selling but have paid down more of your mortgage and improved your credit rating, you could get a lower interest rate even if overall rates have gone up.
Refinancing your mortgage can be frustrating, but keeping these tips in mind will help to smooth the process.
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Tax Benefits of a 401(k) Plan
Planning for retirement is vitally important in a world where little if any Social Security will be available when today’s young people are ready to retire. There are many options available, such as IRAs, pensions and 401(k) retirement plans. The 401(k) is perhaps the most advantageous plan available when looking at tax benefits.
The single best benefit to you today of a 401(k) is the opportunity to put money into your retirement savings while reducing your taxable income at the same time. The money you contribute, up to a certain amount, comes out of your earnings before tax.
For example, if your paycheck before any deductions would have been $1000 and you contribute $100 towards your 401(k), Uncle Sam only gets his fingers into a percentage of $900, not the whole $1000. This means that your pay will be larger than it would be if you took $100 out of your post-tax check and put it towards savings.
The fact that your 401(k) payments are pre-tax also affects your earnings at tax time. The maximum contribution of $16,500 could be enough to kick you into a lower tax bracket if you are lucky. At the very least the amount of tax you are responsible for is going to be less.
It’s easier to report it to Uncle Sam as well, since most employers include it on your W-2. If you are instead dealing with IRAs and other forms of savings, you will have to provide all of those tax documents to your tax preparer and make sure they are each reported in the correct section of the 1040.
Another great tax benefit is the tax-free money your employer will be contributing towards your retirement. If you are contributing the full amount allowed by the IRS towards your 401(k), $16,500 in 2010, and your employer is providing a 50% match, the most common amount, you are effectively raising your per-hour earnings by at least a few dollars.
For example, if you earn $100,000 a year and contribute the maximum of $16,500 towards your 401(k) this year, your employer could contribute a match of up to 6% of your income. At 50 cents on the dollar, that would be $3000 of extra income going towards your retirement this year alone.
The final tax benefit is the opportunity to grow your retirement savings without having to pay taxes on that amount as it grows. Capital gains, dividends and other type of distributions will all be put back into your 401(k) account and allowed to grow even more without being taxed.
Remember, you will of course be paying taxes on your 401(k) when you withdraw it, but if you wait until you are at retirement age there will be no penalty and you will pay income tax based upon whatever your income is at that time. Assuming you are making less per year, then the amount of tax you pay on this income will be much lower than what it would have been when you were at the peak of your career.
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