Get Out of Debt - Take Back Control
Posted at 8:35 PM
Get Out of Debt - Start with your spending.
How to Tell If You Are Living Beyond Your Means
Despite several warnings, many people find themselves falling into the trap of living beyond their means. It may start out gradually, but left unchecked you can find yourself swimming in a quagmire of debt.
The following are some warning signs that you are on the path to financial ruin
1. You are becoming more dependent on your credit card. This is a red flag that your spending is beginning to outstrip your available income. The availability of a credit card is seductive in the beginning and many people give in to the temptation to use credit to fund impulse purchases. If this behavior becomes the norm, it could spell disaster because soon enough you will be using all the credit available to you and paying punitive rates of interest on purchases that could have been either deferred or avoided entirely.
2. You are behind on your bills. When your bills roll over from month to month this is a definite sign that you need to take a close look at your finances. It is best to get this in check as soon as possible before the amounts outstanding become completely unmanageable. Try to reallocate funds from certain areas or cut down on non-essentials like cable television until the situation gets under control.
3. Housing amounts to more than 28% of your gross income. This percentage is used by conservative banks as a benchmark to determine the size of loan you qualify for. Typically they estimate that housing should not use up more than 28% to allow for other expenses and to put aside some money for savings. If your mortgage, property taxes and insurance bill amounts to more than 28% of your salary you just may be in over your head, but this is nothing to be overly alarmed about if you have the discipline to control it.
4. If your credit score is below 600. Your credit score is a very tangible summary of your financial situation. Even if you are not sure that you are living beyond your means a look at your credit score can clear things up a bit. Your credit score takes into consideration the amount of debt that you have as well as how often you pay your bills on time, and the presence of any legal judgments against your name. If your score is below 600 you should take a closer look to determine how you can improve your situation.
5. You save less than 5% of your income. If you cannot afford to save more than 5% of the money you make, you are basically living from paycheck to paycheck. To increase the amount of money you can save, you should reassess your expenses and try to work towards getting rid of smaller debt obligations. This can free up cash that can be saved on a monthly basis. Of course, you must ensure that you actually save the liberated funds, otherwise your effort would have been in vain.
Some people love keeping up with the Joneses, others simply lack the discipline it takes to keep finances in the black. Either situation can be turned around with conscious effort.
For more personal finance advice check my profile at http://www.helium.com/users/499051 or visit my blog at http://financialfertilizer.blogspot.com/
Robert Allen made $94,000 in 24 hrs on the internet. Home business success strategies for developing multiple streams of income with your home business.
How to Tell If You Are Living Beyond Your Means
Despite several warnings, many people find themselves falling into the trap of living beyond their means. It may start out gradually, but left unchecked you can find yourself swimming in a quagmire of debt.
The following are some warning signs that you are on the path to financial ruin
1. You are becoming more dependent on your credit card. This is a red flag that your spending is beginning to outstrip your available income. The availability of a credit card is seductive in the beginning and many people give in to the temptation to use credit to fund impulse purchases. If this behavior becomes the norm, it could spell disaster because soon enough you will be using all the credit available to you and paying punitive rates of interest on purchases that could have been either deferred or avoided entirely.
2. You are behind on your bills. When your bills roll over from month to month this is a definite sign that you need to take a close look at your finances. It is best to get this in check as soon as possible before the amounts outstanding become completely unmanageable. Try to reallocate funds from certain areas or cut down on non-essentials like cable television until the situation gets under control.
3. Housing amounts to more than 28% of your gross income. This percentage is used by conservative banks as a benchmark to determine the size of loan you qualify for. Typically they estimate that housing should not use up more than 28% to allow for other expenses and to put aside some money for savings. If your mortgage, property taxes and insurance bill amounts to more than 28% of your salary you just may be in over your head, but this is nothing to be overly alarmed about if you have the discipline to control it.
4. If your credit score is below 600. Your credit score is a very tangible summary of your financial situation. Even if you are not sure that you are living beyond your means a look at your credit score can clear things up a bit. Your credit score takes into consideration the amount of debt that you have as well as how often you pay your bills on time, and the presence of any legal judgments against your name. If your score is below 600 you should take a closer look to determine how you can improve your situation.
5. You save less than 5% of your income. If you cannot afford to save more than 5% of the money you make, you are basically living from paycheck to paycheck. To increase the amount of money you can save, you should reassess your expenses and try to work towards getting rid of smaller debt obligations. This can free up cash that can be saved on a monthly basis. Of course, you must ensure that you actually save the liberated funds, otherwise your effort would have been in vain.
Some people love keeping up with the Joneses, others simply lack the discipline it takes to keep finances in the black. Either situation can be turned around with conscious effort.
For more personal finance advice check my profile at http://www.helium.com/users/499051 or visit my blog at http://financialfertilizer.blogspot.com/
Robert Allen made $94,000 in 24 hrs on the internet. Home business success strategies for developing multiple streams of income with your home business.
Labels: eliminate debt, finances, get out of debt, money, spending
Tax Preparation - Costly Money Mistakes
Posted at 11:25 AM
Costly Tax Preparation Mistakes - By Phillip Jr Kimpo
April is a dreaded month for many people, all because it's tax month. Many people cram their tax return preparation, and this can result in many costly errors. In this article we take a look at some of the tax mistakes that millions of people commit. Avoid them, and you ensure yourself of a more peaceful tax month. You also get to save cash!
Typographical errors -- Misspellings (such as in social security numbers) will cause delays in processing your tax return. It's more deadly when you transpose digits when writing cash amounts (e.g. writing $42,903 instead of $42,093). You can lose cash or earn the ire of the IRS with this kind of mistake.
Taking the standard deduction -- It's almost always better to itemize your deductions, as you're going to save more money this way. According to the Government Accountability Office, there are more than two million taxpayers who overpay their taxes by not itemizing.
Overlooking deductions -- When you itemize your deductions, make sure you exhaust all possible deductions. The extra effort will be worth it. Important deductions sometimes overlooked by taxpayers include charitable contributions, medical expenses, traveling expenses, gambling losses, clean-fuel deduction, education expenses, and job expenses not reimbursed by the employer. You can even deduct your tax preparation expenses!
Math errors -- According to the IRS, basic arithmetic errors rank as the number one mistake of taxpayers. Sometimes, these errors just involve simple addition and subtraction! A great way to avoid math errors is by using tax preparation software.
Forgetting to attach documents -- Many people forget to attach essential wage statements to their tax returns. Don't forget the W-2 and 1099 forms from all employers.
Missing the deadline -- Very easy to avoid, right? But many taxpayers still miss the deadline, sometimes because they don't have the money to pay for the taxes. If you can't make the deadline, file an extension instead. Don't get charged a late penalty!
Forgetting about taxes when it's not April -- You should keep your taxes in mind every day of the year. Sure, it's a hassle, but dutifully recording those little tax-deductible things that happen day in and day out will save you a lot of cash in the long run. You'll need to keep documents, receipts, and bills from the entire year if you want to get a lot out of your itemized deductions.
A word of caution: Once you've taken care to avoid these mistakes, don't ruin an otherwise perfect tax month by falling for the multitudes of tax scams out there, such as those which arrive in fraudulent emails.
Also, if you've committed mistakes on your tax return (e.g. wrong filing status, typo error, wrong number of dependents), always remember that you can correct them even after you've filed the return. Just file the Form 1040X, which allows you to revise your tax return.
Last but not the least, you can minimize tax mistakes by hiring a tax professional to prepare your tax returns. You might also want to consult a tax advisor before tax month.
The author recommends an article on Costly Tax Mistakes for a more in-depth discussion and the best practices after tax season. He also recommends Tax Information for general info about taxes.
Debt Crunch
April is a dreaded month for many people, all because it's tax month. Many people cram their tax return preparation, and this can result in many costly errors. In this article we take a look at some of the tax mistakes that millions of people commit. Avoid them, and you ensure yourself of a more peaceful tax month. You also get to save cash!
Typographical errors -- Misspellings (such as in social security numbers) will cause delays in processing your tax return. It's more deadly when you transpose digits when writing cash amounts (e.g. writing $42,903 instead of $42,093). You can lose cash or earn the ire of the IRS with this kind of mistake.
Taking the standard deduction -- It's almost always better to itemize your deductions, as you're going to save more money this way. According to the Government Accountability Office, there are more than two million taxpayers who overpay their taxes by not itemizing.
Overlooking deductions -- When you itemize your deductions, make sure you exhaust all possible deductions. The extra effort will be worth it. Important deductions sometimes overlooked by taxpayers include charitable contributions, medical expenses, traveling expenses, gambling losses, clean-fuel deduction, education expenses, and job expenses not reimbursed by the employer. You can even deduct your tax preparation expenses!
Math errors -- According to the IRS, basic arithmetic errors rank as the number one mistake of taxpayers. Sometimes, these errors just involve simple addition and subtraction! A great way to avoid math errors is by using tax preparation software.
Forgetting to attach documents -- Many people forget to attach essential wage statements to their tax returns. Don't forget the W-2 and 1099 forms from all employers.
Missing the deadline -- Very easy to avoid, right? But many taxpayers still miss the deadline, sometimes because they don't have the money to pay for the taxes. If you can't make the deadline, file an extension instead. Don't get charged a late penalty!
Forgetting about taxes when it's not April -- You should keep your taxes in mind every day of the year. Sure, it's a hassle, but dutifully recording those little tax-deductible things that happen day in and day out will save you a lot of cash in the long run. You'll need to keep documents, receipts, and bills from the entire year if you want to get a lot out of your itemized deductions.
A word of caution: Once you've taken care to avoid these mistakes, don't ruin an otherwise perfect tax month by falling for the multitudes of tax scams out there, such as those which arrive in fraudulent emails.
Also, if you've committed mistakes on your tax return (e.g. wrong filing status, typo error, wrong number of dependents), always remember that you can correct them even after you've filed the return. Just file the Form 1040X, which allows you to revise your tax return.
Last but not the least, you can minimize tax mistakes by hiring a tax professional to prepare your tax returns. You might also want to consult a tax advisor before tax month.
The author recommends an article on Costly Tax Mistakes for a more in-depth discussion and the best practices after tax season. He also recommends Tax Information for general info about taxes.
Debt Crunch
Labels: debt, money, revise tax return, taxes
