Saturday, June 28, 2008

Personal Finance Reading Techniques



I just got finished reading Save Now or Die Trying by Mark Bruno and for the first time, I realized that there are different ways of reading a personal finance book.


1. Read a book from cover to cover. Just sit down and plow through the material like you were reading Marx in college. Dry and not too fun.


2. Read for research. You’ve got a question and you’re going to find the answer by looking up the subject in the index and reading the 3 pages it lists till you’ve got the answer.


3. Read with a calculator/spreadsheet and your last paystub in hand. You read something and you start calculating what numbers apply to you.


Obviously, we’ve all done these sorts of things before. Some books out there are meant to be read from cover to cover. Others are resource books that can sit on your shelf when you want to reference them. But then there are some books that lend themselves to an interactive experience. There are worksheets printed in them. They command you to take 10% of your gross income and put that aside annually in a savings account. I wholeheartedly believe that if you read a personal finance book slowly and deliberately with your paystub next to you, you’ll get a lot more out of it.


I started out using the paystub as a bookmark and realized I could open it up and really see where the money was going with a personal finance book to guide me through. I could see that I’m doing ok by saving 17% of my annual salary in a 401k account and a Healthcare Savings Account. I could manipulate numbers with a calculator to adjust and see other things happening to my money while absorbing the ideas the book.


Give it a try the next time you’ve got a personal finance book you are reading. I don’t promise an epiphany, but maybe some good insights will come your way.



Battling the tendency to hoard



I have this tendency to hang on to things, thinking I might need them some day. I do pretty good with resisting this tendency to hoard in regard to physical things, but other things? Not so much.


By other things, I mean things like bank accounts and domain names. I always think, “Well, but what if I need them some day?” and so I leave them be, even though I'm not using them. When I wrote about finding balance, I vowed to make some changes in this area.


I started by calling up my credit union and closing my checking account there. I hadn't used it in hm, over a year, and didn't see any reason why I would use it in the future. I felt good after making the call, and I told my husband what I'd done.


He wondered why I'd left the savings account there open. I thought about it, and realized that it was the old “but what if I need it?” excuse. “Well,” I thought, “What if I DO need it?” I could open another one, among other things. This is not a permanent choice. So I called them back up and closed my account entirely — an account that I'd had for over twenty years. I felt even better after that.


Coincidentally, I got the quarterly statement from the credit union in the mail that day. I was so happy, knowing that I'd only get one more statement from them and then that would be IT. One less envelope to open. One less account to reconcile. One less paper to file. Five more minutes in my life every quarter. I felt good. Remembering that good feeling will give me the help I need to continue battling the tendency to hoard.



Thursday, June 26, 2008

Tax help for summer camp costs



Summer is officially here and for many kids, that means camp.



For a couple of summers, I spent time at Cisco Junior College learning how to twirl. A baton, not just how to better spin around! Although the classes didn't help me make it as a majorette leading the Kermit High School band on parade routes, it was a fun experience.



That camp of my youth is no longer around, but another Texas school, Kilgore College, offers a similar baton camp experience.





Idol_camp_logoRock camps, which I blogged about last year, are a big deal here in music-mad Austin. And speaking of music, you knew it had to happen: There's an American Idol Camp.




That's right. If your child is a natural performer, or you're an overbearing stage parent, this camp in Lake Arrowhead, Calif., is for y'all. Young Jimmy or Janie will, according to the camp's Web site, learn from "former Idols, performing artists and inspiring teachers … how to take your skills to the next level."



And the camp's new West Coast location, says the site, "will offer campers even greater access to the
inspiring industry professionals located in nearby Los Angeles!"



Yep, there literally are camps for just about any interest or aspiration. Just take a look at SummerCamps.com.



Do you or your child have hopes that he or she will one day be a major leaguer or at least have good enough game to get a college scholarship? In addition to the standard football and baseball offerings, there are camps for hockey (field and ice) players, wrestlers, soccer and swimming.



Summer_camp_2 Unconventional sport camps include paintball, wake boarding, SCUBA diving and something called zipline, which apparently is that rope you zoom down via pulley, but in camp vernacular it also covers other X-Game type of activities.



If your child prefers a more cerebral experience, check out the art, academic and technology camps.



There also are specialty camps -- why didn't my folks send me to Secret Agent Camp? -- and kid getaways for youngsters with special needs. And, of course, most religious denominations offer their own camps for kids.

While it's fun for kids and parents to get a break from each other, these overnight camps can be costly. So a lot of families rely on close-to-home day camps to help occupy the kids when school is out and mom and dad are at work.



And when it comes to day camps, Uncle Sam might help cover some of the costs.



Tax credit for camp care: If you incur care expenses for a child younger than 13, you can
claim the Child and Dependent Care tax credit if the expenses are
necessary for you to go to or look for work.



Tax_tip_icon_3
And camp costs might qualify as tax credit eligible costs for working parents. Of course there are lots of rules. This is the IRS after all.



The biggest requirement is the work-related necessity. If you're a non-employed parent and you just want to send the kiddies to camp, day or otherwise, to get them out of your hair, Uncle Sam understands but he won't help pay.



The other big requirement is that the camp be one that operates only during the day. While having the kids off at a sleep-over camp probably will make getting to work much easier, the IRS
doesn't consider sending your child to an overnight camp a legitimate
work-related expense.



There also are monetary limits. Not all care costs, camp or otherwise, are covered. In computing the credit, you can count only up to $3,000 in expenses for one qualified dependent or up to $6,000 for two or more.



Even then, you only get to claim up to 35 percent of the costs. But, hey, every little bit helps.



You can get the full official scoop on the child care tax credit in general and camp and other care considerations in IRS Publication 503, Child and Dependent Care Expenses. This blog item from last August also discusses the IRS' final, formal child care rules care rules, as does this story.



Camp reflections: Kim of Kim & Jason Escape Adulthood has some interesting reflections in Summer for Some Kids on school vacation and day camps. She also offers some advice to working and single parents so they can "allow their children the opportunity to experience the freedom of summer, that many of us look back on with delight."



Sun camp image courtesy of Summit School Summer Camps.



Developing my legitimacy bit by bit



It pleases me to report that I have passed the first of two exams necessary for me to attain the certification of Accredited Financial Counselor, a designation awarded by the Association for Financial Counseling and Planning Education. Once I have completed a second exam (probably sometime in the spring), finished several hundred hours of practicum experience, subscribed to the Code of Ethics and paid the membership fee, I will be a blogger with a legitimate, real-life accreditation, and not merely an "internet professional"! How many other personal finance bloggers can say the same?

It was quite a test. Nothing at all compared to the CPA exams or the CFP nightmare, but it definitely required a lot of preparation to fully understand all concepts covered.

If you are eligible and interested, this program is a great opportunity for military spouses and survivors to get free education and certification in an important field. The certification would cost about $900 out of pocket otherwise. Applications are accepted in the spring sometime, usually in March. For more information on the program, click here.

Wednesday, June 25, 2008

Lingerie Quest



This is a rant and there will be no pictures, so move along now if you have more prurient interests.


This is the bitter me on trying to find the right pieces of undergarments over the last three years and how much it’s been a trial. I was inspired by Mrs. Micah’s post on the Lingerie ROI.


I worked for Express in college and I’d get a coupon for Victoria’s Secret and Cacique because they were owned at that time by the same parent company. Cacique is long gone now. It never took off like VS did. But they used to make 100% cotton undies and sell them 4 or 5 for $20. I’d use my coupon and get them for $15. I ended up with about 50 pairs after graduation, over 10 years ago. Yes, I can admit to hoarding them but they are great. I used to have a little cache of them with the tags still on but even that final stash is its last legs and I have to find suitable replacements.


I liked these because they were bikini style with encased elastic, 100% cotton in plain colors and cute floral patterns. They were full coverage bottoms, with a leg cut that was neither too high, nor too modest. Heck, I even made a dress out of similarly patterned fabric to match one pair because I liked the blue/white scheme so much.


Unfortunately, it’s really hard to find comparable underpants. I’ve tried Victoria’s Secret signature underpants and they do not cut the mustard. Neither does Hanes (in several types). The primary problem is that no one makes encased elastic waistbands anymore. I admit, I haven’t checked online for any, but I don’t feel like I should have to buy something so mundane as my skivvies online. Why can’t you go and just buy them in a normal store anymore? WHY? WHY? WHY? WHY?


As for upper body undergarments, I curse Target for dropping my favorite lace demi cup design. They never stocked them in quantity so I couldn’t buy 10 of them at once. The last time I checked for them I was very sad. In my desperation though I found something suitable, also from Target. In fact, this new bra was $3 cheaper. It’s the Gilligan and O’Malley house line (same as the old one I liked) but this one is not a demi cup, but at least it fits ok and makes a nice line under your clothes. They are still understocked at the store, but this time, I’m going to buy them online. I have one reservation which is that the top of the cup tends to roll *outward* which is very bad under a t-shirt. I swear, I’d give my kingdom for Target to bring back the old demi cup I liked.


One of my friends asked me about finding a bra with no underwire. She told me it was driving her crazy because she couldn’t find one anywhere. I found one by Hanes (also at Target) and tried it, but it was unflattering and the tag placement is in the worst spot under your armpit. The new bra I like has the tag printed on which is much better, but it wears off quickly so I’ll have to write the size onto the fabric if I want to remember the specs later.


At any rate, the quest for a decent replacement for underpants is going nowhere. *harumph* I may end up going commando because all of my favorite Cacique pairs are dying rapidly. One of my dear hippie friends from California hasn’t worn them in 25 years, but I’m still skeptical. I’m a little too modest to be quite *THAT* frugal.



Watching the Money Flow Out



I just paid out $3084.00 to the contractor for my apartment. It’s done. It looks great.


Total cost was $5684.00. Not bad for a DC area bathroom remodel. They’re between $7K-12K for a low-end estimate. But since my bathroom is exceptionally tiny to fit in my studio, I saved some money by ripping out a tile backsplash around the room (but also spending $300 extra to remove some extra concrete under the tile). Paint is a lot cheaper than tile, plus you don’t have to wait extra for the grout to cure.


My contractor left me extra bath and floor tiles, just in case they cracked. He’s going to send a granite care sheet for the countertop. (Basically no ammonia cleaner and wipe up all acidic liquids right away.)


I saved money by telling my contractor about a special deal at Home Depot for a towel bar, toilet paper roll holder and handtowel and generally keeping my eye out for the things that I liked in particular so he would have an inkling for what to pick up for me. We sent a lot of pictures back and forth via email. It really does help to have a cameraphone sometimes, though it’s the most loathsome of all cellphone features.


Half of the construction was paid for by my tax refund, stimulus package payment and the insurance payout. I took out $5000 BT on a credit card, but I was able to payback $2000 right away. It’s put a dent in my finances psychologically more than anything else. I have definitely depleted my emergency fund and added a little to my credit cards over the same period.


Was it worth it? Well, if I add up my construction cost to my remaining mortgage amount, I’m slightly over my original purchase price. If I look around my bathroom, touch my fixtures, and stare into the mirror with really good lighting, I am satisfied. Pleased. Happy.


While I won’t recover all the cost of the remodel, I think it was a good idea. There were small little patches all over the place. Just little stuff, but it added up in a way that didn’t look good. I figure I’m more likely to get a premium for the bathroom now if I sell it because it looks intact and unified.


The only downside is still the dust everywhere, but at least now I can rearrange my closet more efficiently. (A lot of studios in DC have a walk through closet with the bathroom on the other end. I hate the layout, but it’s what it is.)


Que sera sera. I’ll just have to live with it now! muhahaha!



Tuesday, June 24, 2008

I love my apartment. I really do.



After a deluge of rain this spring, my windows are still leaking. I tried to tell the HOA about this 2 years ago when we had a crappy representative from the property management firm. However, they’re only taking action on it now.


So now that I’m done the bathroom, I’m going to have to move out and redo the entire back wall. And if I do that, I’ll rip out the carpet and put in hardwood flooring. And when there’s money once more, I’ll have to redo the kitchen.


But since my HOA is somewhat incompetent, I will wait to do all of this until the window leakage problem is fixed. Since that’s probably not for a few months, I’ve got time to save.

Blah blah blah.


At least the flooring is something I can do myself on the weekend with a few friends.



Sunday, June 22, 2008

Some folks are getting too much rebate money. Really!



Remember when I blogged about (here) my relative whose ex-husband got their joint $600 rebate (they're retirees, due $300 each) even though they both sent in 1040As as married filing separately? Apparently, that's happening to other folks, too.



According to this MarketWatch story, "Even as millions of people are anxiously checking their mailboxes and bank accounts for their stimulus payments, others have received more than their fair share."



So what's a person to do if they get the excess money? Don't spend it.



Stimulus_rebate_2
The IRS is likely to eventually discover the mistake and want the money back. And since it wasn't properly the taxpayer's to begin with, the agency is within its rights asking for repayment.



This story talks about such instances; it refers to refunds, but the problems and procedures are the same for the economic stimulus payments.



In the case of my family member who's involved in a wrong rebate amount situation, her ex-husband got the erroneous $600 that was meant for joint filers and my relative, the former wife, got her separate, correct, $300 amount a couple of weeks later.



So the ex-husband should be prepared to come up with the overpayment amount. Not that I hold a grudge or anything, but nyah-nyah!



Some extra checks are correct: The MarketWatch story also notes, as did I in this previous blog, that some second stimulus payments are OK.



In these cases, the IRS is making up the rebate shortfall that about 350,000 taxpayers experienced because their original stimulus payments did not include the bonus money for eligible children.



Learning process: This whole rebate process has been a learning process for both taxpayers and the IRS.



Because of the eligibility specifics (you can read about whether you can expect a check here), many filers were confused and sent in incorrect forms that resulted in incorrect rebates. Many of them will be able to correct the mistakes on their 2008 returns they'll file next year.



But some of the screw-ups fall squarely on the IRS.



I know politics played a part in rushing these payments through the system. But still, there are some things the IRS could have done better.



So here's my unsolicited advice for the IRS if it ever has to deal with rebates again.



Trash the timetable: The whole delivery schedule idea. Good intentions, bad PR move. So scrap it!



Remember the 2001 rebates? Those were distributed the same way as these 2008 checks, using the last two digits of Social Security numbers. But seven years ago the IRS didn't put out a firm timetable. That worked OK.



This year, however, folks are apoplectic because they didn't get their rebate money when the IRS said they would. Sure the agency has some legitimate reasons why the delivery dates weren't met, but because they gave folks specific date hopes, they basically invited angry reactions from every person who didn't get his or her check on schedule.



Next time, and I'm sure Capitol Hill will come up with a next time sooner or later, use the 2001 no-delivery-dates method.



Make sure the system is ready to go: Secondly, and most importantly, don't send out checks until you're absolutely, positively sure they are right. If that means the process starts a bit later or takes somewhat longer, so be it.



In the end, people will be happier. Sure they'll complain about the wait, but at least when it's over, things will (should be) correct.



Again, the deadline pressure might have contributed here. In trying, at the constant urging of the Administration, to get the money to taxpayers ASAP, the IRS learned that valuable haste-makes-waste lesson.



True, most folks are getting their checks -- their correct checks -- and in reasonable time. But those who didn't (or aren't) are making life miserable for the IRS, their accountants, their family and friends, for everyone!



From this whole process, the IRS needs to take heed of a basic business lesson: It's much easier and less expensive to do the job right the first time and keep customers relatively satisfied than it is to clean up after your mistakes and make unhappy folks happy again.



Stimulus_check_in_question_lg_2
Tracking down your correct check:
If you filed your return and your rebate delivery date has come and gone, contact the IRS.



You can check out the agency's various Web pages, such as Where's My Rebate? or the IRS' consolidated links found here, for more information. Or you can call the IRS' toll-free Rebate Hotline at (866) 234-2942.



Saturday, June 21, 2008

Deliver Us From Human Resources



Somebody over at Tower Perrin doesn't have enough to do as evidenced by this 'study.' I struggled through it but not sure I can draw any conclusions except that Mexican companies have the greatest percentage of 'engaged' employees. From what I saw in Mexico they are engaged because they just feel damn lucky just to have a job.



Interesting remarks about Japan as well. Well, interesting if you are in Human Resources.



On the 'road to engagement?' What is that?



Read on and figure out your own conclusion. Please share any insight because I'm not sure I get this. Or even want to.



Few workers are 'engaged' at work and most want more from execs
Sunday October 21, 10:28 am ET
By Andrea Coombes

Just 1 in 5 workers are 'engaged' -- and most want more from executives





SAN FRANCISCO (MarketWatch) -- Only 21% of workers worldwide are "engaged" -- that's human-resource-speak for ready to expend some extra effort at work -- while 38% are either disenchanted or disengaged, according to a new survey.

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