Archive for Budget

Keep Your Kids Busy Learning This Summer with www.Kids.gov

Kids and Dad at the Beach

 

Are your kids out of school for the summer yet? How many days will go by before you hear the inevitable, “Mom, I’m BORED!” or the fingernail-on-chalkboard whine: “There isn’t anything to DO!

Someone asked me tonight what I would have done when I was younger if I had access to the technology of today. I sure wouldn’t have been bored, and your kids don’t have to be, either.  This generation of kids has access to www.Kids.gov, a free, safe, and online world brought to you by your tax dollars at work.

A Free, Safe, Web Portal for Learning

Kids.gov is the federal government’s official web site for kids. The web portal is packed full of activities for K-8th, and is a great way to keep kids learning during their vacation. Kids.gov is a wonderful resource for parents and teachers, too. Take a look!  It’s worth it!

Games & Videos

“Please, Mom, can I play just one more game before I go to bed?!” With the Play Games section at Kids.gov, children can learn math, science, history and more when they spend time playing online games. Your child will become an adventurer as she solves secret codes from the National Security Agency (NSA), or an engineer when he works on word puzzles from NASA, learning all about the Earth.

On rainy days, when the kids are stuck inside, plug them into Kids.gov and let them pick out videos! No way will they have these plots memorized! The Videos section has a wide selection of things for kids to watch. Learn about cool careers in archeology, and how money is made at the US Mint. Meet a keeper at the National Aquarium, and learn how she takes care of an albino alligator. Your kids will love learning about the mysteries of weather and tornadoes as they follow along with a storm chaser. There are videos that educate about current social issues, too, such as how to handle a bully and bullying.

Unleash Your Child’s Inner Van Gogh

Encourage your child’s creative urge with art projects from Kids.gov. Coloring pages, digital photography projects, interactive painting, collage making, animation projects and so much more are available for every artist medium. Meet up with Curious George, or Sesame Street, and let your little artist run wild!

Family Physical Fitness, too

Blue skies and sunshine – kids and adults alike love to be outside during the summer. When you’re ready for a computer break, take it outside. Kids.gov has an Exercise, Fitness, and Nutrition section that is full of ideas to keep the whole family in shape. Learn to work physical fitness into your family’s daily routine. Take your pick of family friendly ideas for exploring America’s beaches, mountains, cities, and everything in between!

 

Kids on summer vacation on the beach

What are your summer vacation plans? 

Are you going on a trip or staying home?

If you’re traveling with kids, what is your #1 travel tip for parents?

 

 

 

 

 

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Easy & Cheap Recipe: Basic Red Tomato Sauce

Mouth with red lips eating spaghetti

Years ago a friend gave me the following recipe. She said it was a family favorite that she had eaten growing up and was now feeding her own kids. After making the sauce a few times and seeing how versatile it can be, it quickly became a family favorite.

This is a basic red tomato sauce that can be used over pasta, fish, meat, chicken, vegetables, egg dishes, spaghetti squash, eggplant, or anything else you like to eat red sauce on. It’s easy to put together and good to eat!

The sauce is quick cooking, and can be ready to serve after a short 30 minute simmer time on the stove top. I’ve gotten into the habit of throwing all of the ingredients into my Crockpot and let that do the cooking for me. On the low setting, the sauce will be ready in 3-4 hours, depending on how your Crockpot cooks. On the high setting, the sauce can be ready in as little as 2 hours. When cooking this sauce in your Crockpot, stir every once in awhile to keep it from sticking to the sides around the top and burning.

A Versatile Sauce That Can Be Used Dozens of Ways

The sauce is very versatile and can be dressed up and changed in any number of ways by any number of additions. If I’m making this for a quick pasta dinner, I’ll add diced fresh or canned tomatoes, chopped sweet onion, and crumbled, cooked hamburger. Try adding any of the following for a complete change of pace:

  • Cooked, crumbled hamburger or sausage
  • Cooked hamburger or sausage meatballs
  • Sliced mushrooms
  • Chopped red and green pepper
  • Fresh diced tomatoes or canned diced tomatoes
  • Cooked stew meat
  • Diced sweet onion
  • Sliced Italian sausage or Kielbasa (quickly brown to remove as much grease as possible)
  • Chunked or sliced zucchini or yellow squash
  • Green beans

On to the recipe:

 

Old Family Favorite:  Basic Red Tomato Sauce Recipe

  • 4 cans tomato sauce (15 oz. Each)
  • 4 cans tomato paste (6 oz. Each)
  • 4 cups of water (use the water to get all of the tomato sauce out of those cans!)
  • 2 Tablespoons Oregano (or to taste)
  • 2 Tablespoons Basil (or to taste)
  • (or, 4 Tablespoons Italian Seasoning)
  • 1 1/2 teaspoons garlic powder (I also use fresh or jarred chopped garlic, a couple of cloves worth)Bowl of tomato sauce with wooden spoon
  • 1 teaspoon onion powder (or to taste, or use diced onion)
  • 1 teaspoon sugar (optional)

Place all ingredients in a large saucepan. Cover.  (Add your alternate ingredient(s) of choice, if desired. Cooked ground beef, fresh mushrooms, cooked meatballs, chopped pepper, etc)

Bring to a boil and reduce to a simmer. Simmer 20-30 minutes until flavors are well blended. Stir occasionally to keep from sticking.

Easy & Cheap!  Feed Everyone or Just The Two of You

This makes a large pot of sauce that will serve 10-12 in one sitting. When I make it and I’m not serving a large crowd, I’ll divide the sauce and freeze half of it for another meal.

You can also divide the recipe in half and make smaller batches if you’re feeding two or three. You can feed 3 at least 2 meals with half of this recipe. If I’m cooking this in a Crockpot, I’ll wait until the last hour of cooking time before adding any fresh alternate ingredients.

If you shop at CostCo or any other membership warehouse, buying canned tomato sauce and canned tomato paste by the case, and pasta in bulk will reduce your cost even more.

When you try this, let me know how you liked it!

Disclaimer:  This recipe was given to me years ago.  If a credit needs to be given, let me know!

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Jan
19

Big Changes to Office in Home Deduction

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Woman working in home office

IRS Changes Office In Home Deduction

Do you own a home based business? Do you own a small business and use a room in your home as an office away from the office? Do you work for a company that requires you to keep an office in your home, too?

If you use part of your home as an office for your business, it just got easier to claim the Home Office Deduction!

Beginning January 1, 2013, instead of keeping track of the percentages of square feet and stacks of a dozen different expenses in order to calculate the Home Office Deduction, you can now claim a flat rate. Read on – this may save you some time and record keeping this year.

The IRS will now allow you to claim an “optional” deduction instead of the usual “regular” percentage based deduction for business use of your home. This simplified, “optional” deduction is calculated at a flat $5.00 per square foot, up to 300 feet, with a $1500.00 cap for the year.

Example:

  • If your home office is 100 square feet, your Home Office Deduction would be $500 (100 x 5 = 500)
  • If your home office is 250 square feet, he or deduction would be $1250 (250 x 5 = 1250)
  • Simply take the square footage of your home office, multiply it by $5 per square foot and you have your deduction amount.
  • If your home office is 400 square feet and you elect to take the optional method, your deduction will be capped at 300 feet and $1500.

According to the IRS, tax payers spend 1.6 million hours a year on record keeping and paperwork for the Office in Home Deduction. By using a flat rate based on space used, people will save a lot of time and effort.

Claim Mortgage Interest & Real Estate Taxes on Schedule A

You can still claim home real estate taxes, allowable home mortgage interest, and casualty losses for the filing year as itemized deductions on Schedule A. No longer will these expenses be allocated between personal and business use if using the optional method. Depreciation on your home cannot be taken when using the optional method.

Business expenses not related to your home are still deducted as regular business expenses, no change there. These include employee wages, office supplies, stamps, advertising, office equipment, etc. You will continue to claim regular business expenses on Schedule C or the appropriate business form.

Qualified Business Use Is Still the Rule

The old requirement that the home office space must be used regularly and exclusively for only business still applies when using the optional method. Qualified business use is still the rule!

The rule that limits the office in home deduction to income earned by the business is also still in effect.

Year By Year Determination

The good news is, the IRS will allow you a year–by–year determination with this deduction. If you decide to use the optional method for filing year 2013, you can still change and go back to claiming actual expenses for 2014. If you want to flip back to the optional method in 2015, you can do that. Be aware that once you file that original tax return for the year that you claim either the optional or regular method you cannot go back and change that election. An election for any taxable year, once made, is irrevocable.

Need More Info?

You can find out more about the new optional method HERE

Do you qualify to claim the Home Office Deduction? Find out HERE

Contact the IRS

The IRS welcomes comments about the new law. You can contact the IRS if you’d like to tell them what you think:

E-mail to: Notice.Comments@irscounsel.treas.gov. Include “Rev. Proc. 2013-13” in the subject line.

Mail to: Internal Revenue Service, CC:PA:LPD:PR (Rev. Proc. 2013-13), Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.

Hand deliver to: CC:PA:LPD:PR (Rev. Proc. 2013-13), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue NW, Washington, DC, between 8 a.m. and 4 p.m., Monday through Friday.

 

 

 

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Jan
18

A Different Kind of Birthday Present

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Chocolate birthday cake with candles

Last week was Mr.BP’s birthday. If I had asked him what he wanted for his birthday, he would have easily rattled off a long list that included everything from motorcycle parts to ski lift tickets.

As I sat at my desk paying bills the day before his solar return, it occurred to me to make charitable contributions in his name instead of buying a gift and wrapping it in pretty paper and a bow.

I have a short list of charities that I contribute to on a regular basis. Usually, every time bills are paid, I dash off a couple of checks to a few of the charities on my “favorites” list.

That night I wrote four checks and donated money in honor of the birthday boy to:

WAYSIDE WAIFS   This is a local no-kill shelter that places over 5000 animals in homes each year, and takes care of thousands more. Wayside Waifs has been around since 1940. Wayside Waifs is totally independent and non-profit, and does not receive any money from any local, state, or federal government. They do what they do entirely from donations and gifts. Almost 75% of their revenue is spent on shelter programs, with approximately 20% spent on fund-raising. Administrative expenses are nil.

SOLES 4 SOULS   This charity is trying to change the world one pair of shoes at a time. They collect new and gently worn shoes and distribute them to people in need in over 125 countries. Soles 4 Souls began in 2006, and as of the end of last year had given away over 19 million pairs of shoes. This is another charity with very small overhead – $69 million of the $70 million dollars they collected last year went to program services.

SOUTHERN POVERTY LAW CENTER  is a non-profit civil rights organization. The SPLC has brought the issues of hate and bigotry to national attention through the courts and the media. This is another one that spends the majority of its income on program services.

UNITY VILLAGE is a local religious organization. They have gorgeous rose gardens in season and beautiful fountains made for walking around when I want to wind down from my day. We take the dog over and romp through trails in their woods, so I send a few dollars now and then to help cut the grass.

These are just a few charities I donate to. PAWS is a local non-profit that provides free or reduced cost spay and neuter services for pet owners that can’t afford to have their pet fixed. PAWS is also independent, relying only on donations and taking no government money.

So many elderly seniors I know benefit from HARVESTERS that I give as often as I can to that organization. There are a few more local food pantries and rescue missions that are on my list, including a veterans charity or two.

Do you donate to charity? If you do, have you taken a look at how much your charity spends in administrative and fund-raising costs? Based on the money they take in, how much do they pay out in salaries to the highest paid employees?

You may be surprised to learn that the charity you are donating to spends very little on the cause they fund raise for. You do not want to donate to a charity that pays the CEO and other administrators huge salaries but spends very little on their program services.

It pays to check out your charity before you pay them any money. You can do that using Charity Navigator or GuideStar:

http://www.charitynavigator.org/

or

http://www.guidestar.org/

Both of these sites are filled with information about many charities. You will have to sign up for a free account on each site in order to have access to all of the information available, but all you need is a name and an email address.

If your charity isn’t listed, try checking with the major Better Business Bureau (BBB) in your area, or check the state corporate database. Charities have to file annual reports, and those should be on-line and/or available. Check with the Secretary of State if you can’t readily locate the state database on-line.

Don’t be afraid to contact a charity and ask questions about how much money they collect and how they spend it. The legitimate, transparent ones will gladly tell you how they spend your money.

After I signed the checks for the birthday contributions, I slipped them into envelopes. I handed the envelopes to Mr.BP and asked him to put stamps on them. He pulled out a check and looked at it, then glanced through the envelopes at the names, while giving me a puzzled look. I explained what his birthday present was this year. The wide grin on his face told me he liked his present very much.

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Nov
13

Give Your Money Away – Tax Free!

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The end of the year is coming fast, which makes tax season right around the next corner.  Quite a lot of people receive income tax refunds, so they are in a hurry to file and get that money back! There are bills to pay and things to do!  The kids need shoes! 

There are things you can do now that will make filing your income taxes easier when the time comes.  In the coming months I’ll be writing about different tax topics you should be aware of, and tax saving tips you can use to get back the maximum refund you’re owed! 

White Gift Box with Red Ribbon BowJanie is a friend of mine, and every year her parents gift Janie and her husband Steve a 5 figure check – each.  This year, each of them received $13,000 from her parents – for a total of $26,000 – and that is completely tax free income.  Janie and Steve don’t owe any taxes on the money, and Janie’s parents don’t have to pay any gift taxes for giving their money away.

If your estate is sizable, and you’re trying to minimize estate taxes, you can use the Annual Gift Tax Exclusion to reduce your estate tax liability.  You can give away up to $13,000 tax free this year to any individual, and to as many individuals as you want – and, if you are married filing joint, your spouse can also give $13,000 to the same people.  Tax free!

According to the tax code, any gift is a taxable gift.  Gifts can be property, money, the use of property, or the right to receive income from a property.  According to the tax code, there are exceptions to this “any gift is a taxable gift” rule.  (Of course there are, Congress wouldn’t have it any other way!)

The following gifts are usually not considered taxable:

  • Gifts that are not more than the annual calendar year exclusion (from 2009 through 2012 this has been $13,000 annually for each gift)
  • Tuition or medical bills paid for someone else (you must pay the institution directly, not the person)
  • Gifts to your spouse
  • Gifts to a political organization
  • Gifts to charities

If someone receives a gift that is valued at more than $13,000, taxes are owed on the amount that is above the $13,000 exclusion.

Any gift you receive is not treated as income.  The person giving the gift is responsible for paying the gift tax.

For example:

1.  Mary gave Joe a cash gift of $9,000 during the calendar year.  This gift is not taxable because it is under the $13,000 exclusion.

2.  Jack gave Susan a cash gift of $16,000 during the calendar year to pay for college tuition.  IF Jack had paid this gift directly to the state university Susan attended, the entire $16,000 would be non-taxable due to the education exclusion.  BUT, Jack gave Susan the money personally – so the first $13,000 is not taxable due to the annual exclusion, but the remaining $3,000 is considered a taxable gift.  Jack, as the donor or gift giver, is responsible for paying any gift tax due.

3.  Aunt Joan gave Lisa $20,000 cash to purchase a used car.  The first $13,000 of this gift falls under the yearly exclusion and is not considered taxable, but the remaining $7,000 is considered a taxable gift.  Aunt Joan is responsible for paying any gift tax due.

4.  Pete and Sally are married.  Sally gave a cash gift of $25,000 to her daughter during the calendar year.  Pete gave his son a gift of $15,000.  Neither of the gifts are taxable, both are completely excluded from the the gift tax.

This example messed up your thinking, didn’t it?  If Sally gave her daughter $25,000, then the amount over $13,000, which is $12,000, should be taxable, right?  What about the gift Pete gave his son – that was $15,000, or $2000 over the exclusion limit.  That $2000 is taxable, isn’t it?

Not so fast.

When you are married, and both spouses agree to the gift, Gift Splitting becomes a factor.  When Pete and Sally agreed to split the gifts they made during the year, each gift was split equally between the two of them.  That $25,000 Sally gifted her daughter?  When split, Sally gave $12,500 and Pete gave $12,500 – this is under the exclusion amount of $13,000, and therefore this gift is not taxable.  The same math works with Pete’s son:  his gift was $15,000, but when equally split between Sally and Pete, the gift becomes $7500 from each – well under the $13,000 exclusion and not taxable.

Take a minute and realize how powerful a tool this can be – you can get creative and give gifts that will benefit you as well as the gift receiver.  You can gift your children yearly to the max, and not only build a nest egg for their future, you can do it relatively tax free.

Let’s try one more example:

5.  This year, Sonny decided to give 10 of his grandchildren checks for $13,000 each.  Sonny also paid the college tuition for a nephew, writing a check to the local college for $15,000.  Sonny paid a local hospital $14,000 for medical care his son, Carl, received.  The $14,000 bill was the balance due after Carl’s health insurance paid in full.  Carl was off work for 3 months, recuperating from his injuries.  During this time, Sonny also paid $2500 in health insurance premiums for his son.  Carl’s wife, Connie, took an unpaid leave of absence from her job to care for Carl.  Sonny gave Connie a gift of $25,000 to replace her lost income.  Sonny gave $20,000 to Shari, a good friend of his.  Shari promptly sailed to Hawaii.  Sonny also gave $25,000 to his sister, Ellen.

  • None of the $130,000 gifted to the grandchildren is considered a taxable gift.  The $13,000 exclusion applies in each case.
  • The $15,000 paid for college tuition falls under the education exclusion.  This gift is non-taxable.
  • The $16,500 Sonny paid for Carl’s medical bills and health insurance premiums is non-taxable due to the medical exclusion.  (Sonny paid the hospital and the insurance company directly, which classifies this as medical exclusion.  If Carl would have been paid directly, only $13,000 would have been excluded from tax)
  • The first $13,000 of Connie’s gift is not taxable.  $12,000 remains after applying the exclusion and is considered taxable.
  • $7000 of the gift Sonny gave Shari is taxable.  ($20,000 – $13,000 = $7000)
  • Sonny owes gift tax on $12,000 of the gift he gave Ellen.  ($25,000 – $13,000 = $12,000)
  • Sonny gave away $231,500 in cash gifts this year.  $31,000 of that is subject to gift tax.

Sonny will be required to file a Form 709, US Gift Tax Return, and $6,220.00 in taxes will be assessed on the $31,000 we’ve determined is the taxable amount of all the gifts Sonny gave this year.  But guess what?  Sonny won’t pay a dime in gift tax.

I’ve really confused you now, haven’t I?  (Please don’t bang your head on your desk, and stop pulling your hair – this will eventually make sense) Let me explain about the Unified Credit to Gift Tax.

You see, because Congress writes the tax code, and because Congress is made up of of millionaires and billionaires, they write the tax code to benefit themselves and their friends.  Become familiar with what is in the tax code as it applies to your situation, and use the law to your benefit.

In addition to an Annual Gift Tax Exclusion amount, and in addition to a list of gifts that are not considered taxable, there is a Unified Credit available.  This credit is used to eliminate and/or reduce any gift tax due.  As an added bonus, any Unified Credit not used to eliminate gift tax can be used to eliminate or reduce estate tax.

Back in 1979, the Unified Credit available was capped at $38,000.  In the year 2012, the Unified Credit is $1,772,800.  (The Unified Credit to may increase – it was steady at $330,800 from 2002 through 2010, but then jumped to $1,730,800 in 2011 and increased another $42,000 in 2012)

Remember:  this is a tax credit – as you can see by the example above, $31,000 in gifts generated $6220 in tax – the Unified Credit available is $1,772,800 – and Sonny will use this credit to offset his gift tax due.  Tax credits are applied to tax due, reducing or eliminating tax.  A tax credit “pays” for the tax instead of you – and everyone gets the credit.

Do you understand how powerful gift giving can be when it comes to reducing your estate tax burden?  You can give away your money, not pay any taxes on it when giving it away, reduce your estate, and in the end save major dollars when it comes to any estate tax assessed!  Set up accounts for your children, gift them to the max, and they don’t have to report the gift as income.  It sounds unbelievable, doesn’t it?  See how nice Congress is when it comes to making the law concerning gifts and taxes – and take note that one of those examples above of non-taxable gifts is money given to “political organizations”!

I hope I’ve given you food for thought when it comes to your income, giving cash gifts throughout the year if you can afford it, building wealth for family members, and possible tax strategies when it comes to the tax on those gifts and your estate.

 

There is a spirit in the world of generosity that brings good things to all of us, whoever we may be … A Christmas Carol

Note:  Please consult a qualified tax professional when mapping out your gift giving.  This is a brief overview, and there are more rules when it comes to the definition of a non-taxable gift.  If a husband and wife are gift-splitting, certain tax forms must be filed.  The gifts you give may or may not have have to be reported to the IRS.  When gifting to grandchildren, Generation-skipping Transfer Tax may apply.  Giving away real property may come with tax disadvantages, and may be better left in an estate until death.  Usually, the gift giver is responsible for paying the gift tax, but if he doesn’t, the gift recipient may have to pay the gift tax.  Nest eggs built for children could impact them in a negative way when it comes to qualifying for college financial aid.  Exclusion and credit amounts are subject to change based on changes to the current law.

 

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Oct
24

Who Do You Know?

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It’s the middle of October, and a cold snap is due to hit next week.  I’m going to have to turn the furnace on, and it needs to be serviced.  I read the other day that 1/100 of an inch of dust on the motor can reduce the efficiency quite a bit.  I have no doubt there’s enough dust on the motor that a cleaning is needed!  The furnace is getting up there in age, too, and it really needs to be checked for carbon monoxide.

The price of a regular seasonal furnace check from any of the licensed companies in the city is approx. $150.  I was able to find a few coupons, which would bring the cost down to about $100.  If I want to bundle services and buy a package deal for both summer and winter check-ups, the cost is around $200.

I’m going to spend $50 to service the furnace – because I know Jerry..

Side Work Is Lucrative

In April, my husband lost his job. I had an appointment scheduled the very next week for an AC check-up, and I’d scheduled the package deal for $200.  When I made the appointment weeks before, the package deal made sense – buy summer and winter and get a discount!  Of course, I took the package deal!  Because of the job loss, however, I was reluctant to spend that kind of money – even with an emergency fund available.

The next day, during a trip to the mailbox, I ran into my next-door neighbor.  I asked him if he knew anyone that did home AC servicing, and did they do side work?  Bingo!  He did know someone – a young man who worked for a heating and cooling company in the city, and had serviced my neighbor’s appliances for the last couple of years.

I made a call to Jerry, who came out that weekend.  While chatting with Jerry, I found out he was in his early 20’s, had a 3 year old daughter, and had been doing appliance service work in the 3 years since he’d graduated from Vo-Tech school.  He worked for a family-owned small business that had been in the business for 30 years.  Jerry played hockey on the weekends, and serviced all the rental homes of a couple of real estate agents in town – and one of those I happened to know.  When Jerry was finished servicing the unit, he gave me a written report about the unit and its performance – and a bill for $50.

In July, on the hottest day of the year, the house woke up to a broken AC unit.  I called Jerry that morning, and at 8 PM, after he had finished his work schedule for the day, he came by and fixed the unit.  A capacitor had burnt out and needed replaced.  Total cost:  $75.  This fix normally would have been a $150 repair.

If you know the right people, or know the people who know the right people, you can save money on just about anything.  Auto mechanic, auto body repairman,  heating and cooling, hair dresser, roofer, concrete finisher, brick layer, teacher, carpenter – these are the occupations of people that I personally know that work a regular 8-5 job, but will also do side work.

Ask around, you never know who your friends know!  Not only can you save money, but the person doing the side work also profits.  Depending on the job, a lot of money can be made by doing side work.

Side Work to Self-employment

If you have dreams of owning your own business, or simply going out on your own and away from any employer, you can use side work to build up a clientele.  Once you’re got enough money coming in that you can replace your employee income, jump out into your dream.  (Beware of any contracts you signed for your current employer:  non-compete, exclusivity, etc)

 

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Oct
15

Get Your Free Obama Phone!

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The Obama Lady 

The political ads and graphics are everywhere:  TV, newspaper, YouTube, Facebook, email – we’re inundated 24/7 with political advertising, and most of it isn’t very nice.  One of the not-so-nice videos I’ve seen floating around Facebook via YouTube is “The Obama Lady”.

The video is of a woman, jumping around and waving a poster board sign in a reporter’s face, all the while ranting about her “Free Obama Phone”.  In 2008, an email with the same script made the rounds, but four years down the road, technology has moved the email to video.  “The Obama Lady” video is tasteless, with the intent to convince the public that their tax dollars are going to give free cell phones, courtesy of President Obama, to every disadvantaged person in Cleveland, and, in turn, the entire country.  It’s an effort to embarrass and disenfranchise the poor among us, and generate anger toward the current White House Administration.

Lifeline Phone ServiceA few things in the video ARE true.

The government does give out “free” phones.  They’ve been doing it for almost 30 years, based on a Congressional mandate that ensures communication is available to all Americans.

In 1985, a program named “Lifeline” was started that gave discounted phone service to the poor, the elderly, disabled veterans, and the sick.  “Lifeline” was there so that if someone needed to call 911 due to an emergency, or make an appointment with their doctor, or call and check on a job application because they were unemployed and trying to find work, they could.  If Grandma fell and broke her hip, she had a phone to call for an ambulance, even when her Social Security check didn’t reach far enough each month to cover the phone bill.  The program started by furnishing land-line service, and expanded in 2005 to include limited, pre-paid cell phone service.

Do You Need a Hand-Up, Not A Hand-out?

The “Lifeline” program is available in every state, but it doesn’t come without rules and regulations.  Since its beginning, the program has required that anyone participating must have an income at or below the poverty line or participate in one of the following low-income assistance programs:

  • Medicaid
  • Food Stamps or SNAP
  • SSI
  • Section 8 Housing
  • Low-income energy assistance
  • Free school lunch program
  • Bureau of Indian Affairs General Assistance
  • Temporary Assistance to Needy Families
  • Head Start
  • State assistance programs (if applicable)

There are other rules, too.  Only one Lifeline phone is allowed per household.  The household can have a land line or a cell phone, but not both.  The program doesn’t come with a lot of bells and whistles – this is basic and limited phone service.  The cell phone service is pre-paid with a limited number of minutes, and the land line is limited in service.  You’ve got to reconfirm eligibility on an annual basis in order to remain in the program.

Are You Eligible?  Is Grandma? 

If you’re interested in the Lifeline program, start by calling your phone company.  Over 2,000 phone companies across the country provide discounted phone service through Lifeline.  You can find a list of companies by state here:

Lifeline Support Companies By State

You can also use the Lifeline Pre-Screening Tool and check eligibility status.  It takes about 15 minutes:

Lifeline Pre-Screening Tool

 

Learn more about Lifeline here:

USAC – What Is Lifeline?

Lifeline Program for Low-Income Consumers

Lifeline Public Service Announcements 

 

Who Pays for Lifeline?

The phone companies contribute a percentage of their revenues to the Universal Service Fund (USF).  Your phone service provider may charge you a service charge called “Universal Service” if they try to recoup part of the cost of the program from customers.  The USF is administered by the Federal Communications Commission (FCC) and Universal Service Administration (USAC), which pays for the discounted Lifeline phone service out of the fund.

The USF is also responsible for other communication programs.  In addition to Lifeline, the fund also makes discounts available to schools and libraries for telecommunication services, Internet access, and information services.  Rural health care providers, through the fund, have the capability to link to city hospitals and medical centers, giving rural America access to medical services they wouldn’t normally have available.

Find out more about the USF and FCC here:

FCC Consumer Guide

 

 

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How to Plan Your Budget When You are in Financial CrisisAlicia is a financial tech writer from the UK, and is guest posting today with interesting budget ideas that you may use in dealing with a financial crisis.

 

An unexpected and unavoidable financial crisis can be difficult for anyone to overcome, especially when income levels are low and debt levels are very high. If you are facing such a situation in your life then it is time to plan and evaluate the situation, and create a budget plan to handle your financial crisis. Here are a few steps that help you to create an effective budget plan when you are in financial crisis:

Step 1: Determine your expenses; this will enable you to know how much you are spending every month and where your income is going. Writing down all your expenses and analysing your spending habits is a good to start in creating an efficient budget plan. Start with your monthly income and check for any opportunity to save your money by trimming unwanted expenses; this could help you save lot of your money.

Step 2: Analyse your spending and trim expenses especially whilst in the midst of financial crisis, this means eliminating all the unnecessary expenses. If you have any monthly financial obligations such as paying off your mortgage, auto loan and so on then allocate your income to fund those expenses, don’t delay any monthly bills as they could increase due to late fees.

Step 3: Another important step you can take when you are in financial crisis is to reduce your utility or monthly bills.  Make a list of fixed and variable costs in your budget plan; this is how you can save some money wherever possible.

Step 4: Your savings account is very useful to resolve your emergency situation; it is very difficult to save money from your income while in financial crisis. Consider payday loans which are the short-term loans that are secured against the borrower’s next pay cheque, they don’t require any collateral and even a person with bad credit can avail urgent cash to resolve their financial emergency.

Step 5: If you could develop an efficient budget plan that suits your lifestyle then it is just a good idea to save some money. Adjust your plan if your income is not balanced with your regular expenses, review your budget frequently and find the easiest way to stick to your budget plan. Find an extra source of income if you cannot fund your basic needs through just a single income. There are plenty ways you can earn some money with a part time job.

Author Bio

My name is Alicia. I am a tech writer from UK. I am into Finance. Catch me @financeport

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Oct
11

Emergency! Emergency!

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No Job SignSix months ago, April 6th, on Good Friday (oh, the irony!) – my husband lost the job he had for 13 years. This came completely out of the blue, with no warning. I now know what the bug hitting the zapper in the back yard feels like.

Once the initial shock wore off, we took stock. We had an Emergency Fund, and my husband was owed vacation pay. When I added the two together, we had approx. $25,000 cash. I knew we’d be alright for a few months with the emergency fund, but I also knew we’d have to cut spending to the bone. We didn’t have any credit card debt, nor any car payments, which was a big plus. Those are expenses that can drain finances quickly. We did have a mortgage, insurance, utilities, food, gas – basic and necessary expenses that kept the roof over our heads, the Internet lights on, and food on the table.

I wasn’t overly worried. MrBP is good at his job. I knew the phone would be ringing fairly soon with a job offer, or he’d be able to network a bit and find an opening. This layoff was going to be just a little bump in the road in the overall scheme of things, and we would be fine.

The first thing MrBP did was file for unemployment. Unemployment in this country is not fair to the unemployed, as I’m sure anyone out of work will tell you. MrBP did qualify for the maximum amount of weekly unemployment: $320.00. Wow. I know $320 is better than nothing, but a month of unemployment checks still wouldn’t cover the mortgage. MrBP could also draw unemployment for the maximum number of weeks: 20. Another Wow. Twenty weeks of unemployment equals thirteen years of work history. If he had worked the for company for 30 years, 20 weeks was still the maximum number of weeks he could draw. There is something wrong with that government math!

When a person files for unemployment it takes some time to get that first check. Remember that vacation pay I mentioned? That had to be claimed as income for 3 weeks.  (If what you claim is more than the amount you’re eligible for – you don’t get paid unemployment that week)  At the end of the 3 “vacation” weeks, a waiting week had to be “put in”. This happens to everyone – the first week you are unemployed basically doesn’t count – for anything. Unemployment benefits don’t become available until the second week a person is out of work. Checks don’t come the second week either – the process of being approved for unemployment can take 2-3 weeks, or much longer. Considering the majority of the working population lives paycheck to paycheck, losing a job can be a big deal. All of this waiting for money is going on when people need that money the most!

MrBP was out of work for a month. He never did draw an unemployment check, because the 3 vacation weeks and the 1 waiting week took up that month. We had enough money in the bank that life went on as normal – we just didn’t spend any extra, we didn’t go out to eat, we didn’t go to the movies. Cutting out all unnecessary spending opened my eyes to the kind of money we did spend in some areas. Because there was enough coming in, neither of us had paid much attention to some of the conveniences that were going out. (After all, life shouldn’t be all work and no play, right?)

If we hadn’t had our Emergency Fund, life would have been a completely different story. We would have been in financial trouble fast, as fast as the bills came due. We spend $3000 monthly on house, utilities, insurance, and cell phone payments, but that doesn’t count food, gas for the cars, incidentals, etc.

Emergency Funds are as necessary as homeowners insurance is if you own your home, as necessary as car insurance is if you drive a car. Everyone should have an Emergency Fund. If you don’t have one, you need to start one. Don’t tell me you can’t afford one – you can’t afford NOT to have one!

An Emergency Fund is intended to replace income if you can’t work, but it’s also nice to have when the car needs major repair or the AC unit quits on a 100 degree day in July.

Most financial planners recommend having 3-6 months worth of living expenses saved. But, due to the state of the economy, the average length of time a person is unemployed these days is 9 months (Bureau of Labor Statistics). If you’ve only got a 3 month cushion, what are you going to do the other 6 months when the rent is due, and you’re still looking for work? I know what you’re thinking – you’ve got those credit cards in your billfold, and you’ll fall back on those if you really need to. Let me ask you this: when the credit line is used up, how are you going to repay that debt?

Starting and regularly adding to your Emergency Fund may feel daunting, and may seem like an insurmountable task.   The good news is, you may not need as much as you think. Sit down and make a list of every single bill you pay every month. Go through your bank statement and write down all debit card transactions and what they were for. Check the bank statement for ATM cash withdrawals, and write down what those were for. Get out your credit card statements and add those transactions to the list of money going out for the month. Add all the numbers up.

Now, cut out what isn’t absolutely necessary. The mortgage payment is necessary. $5 at Starbucks twice a week is not. Look closely at bills such as cell phone, cable, gym memberships, newspaper delivery, lawn care – if it came down to it, are these as necessary as food and electricity? No?  Cut those out. Once you figure out the basic living expenses you need to survive, multiple that by 12. Write that number down. Your savings goal is 12 months of basic living expenses in an Emergency Fund.

Work out a savings plan, even if all you can do is save $1 a week, or $25 a month, or the change from your pocket at the end of the day. Put that money in savings and forget it. Cut out one or both of those lattes every week and put that money in savings instead. Treat your Emergency Fund like it’s your water or gas bill, figure out how much you can save regularly, and pay the savings account just like it’s the mortgage company.  Start today.

I was glad we had savings to fall back on. We spent a lot of it, and it went faster than planned because the AC unit did break down on the hottest day of the year, along with a few other things.

During the 5th week of unemployment, the phone rang and MrBP was offered a job – at the opposite end of the state. A 3 hour drive, one way, from the home we’ve lived in for the last 24 years. Whoa.

The new job – and where it was at – brought up a lot of questions: were we going to relocate? Sell our home here? Rent it out? Rent in the new location, or buy? Where would MrBP live for the near future – with family in that area, and if so, for how long? How much was all of this going to cost? There were so many variables and many unknowns six months ago!  A few things didn’t work out, while great truths were learned … stay tuned to find out what happened!

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Oct
04

Free One-on-One Financial Planning Help

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Financial Planning Day What is Financial Planning?

What financial goals would you like to obtain?  What’s on your “Wish List” when it comes to money?

Do you want to buy a home?  Do you own your home, but dream about a vacation home in the mountains or a weekend home at the lake?

Do the kids want to go to Disney World next summer, but you’re not sure you can afford a local pool pass for the season?

Are you able to save today for college for the kids, or have you put that off until tomorrow? Tomorrow is already here, you know.

What about your retirement – how many retirement accounts do you have, and do you regularly fund those to the max?  Is your retirement diversified, or do you have all of your eggs in one basket?  Can you retire without Social Security and live in the manner to which you are now accustomed?  Have you thought about retirement very much, or is that something you’re going to do “tomorrow”?

Financial planning is a must, no matter who you are or what your circumstances are.  What is your financial plan right now?  What strategy do you have in place – right now – that will allow you to retire financially independent?  Do you know where to start to make your financial dreams your reality?  Do you know how to make your dreams your reality?  Are you lost when it comes to implementing changes to your money situation?

We all have money dreams, but most of us aren’t smart enough to know how to make our dreams come true.  We don’t have the time to do the research we need in order to know where to invest, or how, or how much.  We don’t know what goal to tackle first.  We aren’t sure of the quickest way to the goal line.  We’re lost when it comes to the math.  We need help.  During the month of October 2012, personal, one-on-one help is available in many cities across the country.

Financial Planning Days Initiative

During the month of October 2012, “Financial Planning Days Initiative” is taking place.  Four different non-profit organizations**  are bringing together highly qualified, professional, Certified Financial Planners to provide one-on-one counseling sessions to the public.  There will also be classroom style learning sessions held, and free packets of financial literature given away.  All of the work being done by the professionals is on a volunteer basis, and no payment is expected.  Services are free.  You can sit down with a financial planner and ask for personal advice – with no strings attached.  The volunteers will not try to sell you anything, they won’t even give you their business card.  No business will be promoted at all – the professionals are there to answer your questions and help – that’s it.  (If you are a professional, certified financial planner and would like to volunteer, you can find out how here)

Gather your questions about retirement planning, debt, credit issues, budget questions, taxes, college, mortgage loans, investments, estate planning, small business finance, and insurance together, and find out if the Initiative is available where you live:

Click here to find a Financial Planning Day in your area

A list of 2012 events can be found by clicking here

A list of participating states:

  • Arizona
  • California
  • Colorado
  • District of Columbia
  • Florida
  • Illinois
  • Indiana
  • Maryland
  • Minnesota
  • Nebraska
  • New Jersey
  • Ohio
  • Oregon
  • Pennsylvania
  • Texas
  • Virgina
  • Washington

Can’t go?  You Can Still Get the Same Information Packet Being Handed Out

If there is no Financial Planning Initiative in your state, the free information packet information is still available to you and can be found at the links below.  Take a look at the information available, and give yourself a quick education in the basics of financial planning.  Pick up tips and advice on everything from a college savings plan to long term care insurance.

You Can Organize & Simplify Your Financial Life:  A How To Guide

Saving and Investing:  A Roadmap to Your Financial Security Through Saving and Investing

Savings Fitness:  A Guide to Your Money & Your Financial Future

Smart Saving for College – 529 Plans & Other College Savings Options

Guide to Disability Income Insurance

Guide to Long Term Care Insurance

Consumer Guide to Financial Self-Defense

 

** Certified Financial Planner Board of Standards, Inc.®, Financial Planning Association®, the Foundation for Financial Planning, and the U.S. Conference of Mayors

 

 

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