Posts Tagged ‘Finances’

by Megan M., Contributor, All a Bunch of Momsense (@taxmegan)

I’ve seen it posted on Facebook, especially on Mondays.

“I owe, I owe, it’s off to work I go.”

The reality is we do owe. We owe money to the mortgage lender, the auto lender, the student loans, the credit card company. As a society, we owe. And frankly, it stinks!

I’m ok with certain debt – I didn’t just have the money to plunk down for us to buy our house, so we obtained a mortgage. That’s “ok” debt to me. We’re building equity in property, the interest that we’re paying is at a good rate and is tax deductible* for us, and I’m comfortable with that. Student loan debt doesn’t bother me to much either – again, there’s the tax deductible* aspect, coupled with education being instrumental in obtaining a good job.

But then, there’s the nasty one.

“Unsecured Personal Debt” – often obtained in the form of a credit card.

The interest rates can be astronomical. Annual fees, over-limit fees, late payment fees; even with the recent legislative changes that set limits on these different aspects of credit card usage, they can add up quickly. The key? Moderation. Use a credit card if you know you can pay it off at the end of the billing cycle, or in a reasonably short time frame. Be sure to pay on time, every time. If you can pay more than the minimum payment due, that’s fabulous.

Are you carrying balances on more than one card? Wanting to pay them off? Put as much money as you can towards the one with the highest rate. Once it’s paid off, apply what you’ve been paying on it to the card with the next highest rate.

Finally, be aware that “settling” your debt with these lenders usually results in a taxable* income. The settlements they offer are a cancellation of debt, and a form 1099-C will be issued to you and the IRS. You’ll have to report the part of the debt that they write off as income, unless you are eligible for exclusion.

Even “good” debt can create stress if the payment amounts are more than you can realistically afford, or if your circumstances change. Any time you decide to take on a payment, be sure to evaluate how it will truly fit into your budget. Don’t stretch to far to keep up with the Jones’s – I’ve been known to fall on my face a time or two when reaching for something that’s just out of grasp!

*Check with your tax professional to determine the deductibility of mortgage and student loan interest, and impact of cancelled debt, as applies to your individual tax situation.

By Megan, Contributor, All a Bunch of Momsense (@TaxMegan)

Did you dream? Did you think about what it is you really WANT?

Good. Now, let’s talk about some smart, simple ways to get there. These are not “get rich quick” things, and honestly, most of it is going to be pretty common sense.

Let’s start with your bank account. Do you have a checking account? Just a savings? No account because of a bad experience with a previous bank? Let’s look at some basics.

Checking accounts can cause a lot of headache (and wallet pain!) if not properly monitored. I am a huge fan of free checking accounts, and here’s why: I have four. Yes, four. I learned pretty early in our relationship that my husband doesn’t write stuff down. He was in his thirties when we met and married, and he was pretty set in his ways. He knew what he had in there, he’s a “cash” guy, so he didn’t really feel it was necessary for him to record his transactions.

Me? I was meticulous. Every single transaction was recorded immediately. Receipts were organized by purchase date. If I didn’t balance at the end of a month, we were doing NOTHING until I found my offage.

These were not the makings of a good joint checking account, so we have a “his” account, a “her” account, an “our” account, and I have a separate account for my Avon business. Four. See why I need free ones!?

Now, when I refer to “free” here, I’m referring to a monthly account service fee. There may be “requirements” with your account, including minimum balances, direct deposit, or other similar stipulations. Take a good look at yours, and make sure that you aren’t paying a fee you don’t need to be. (I once encountered a lady who was willing to pay a $10 monthly service fee to draw interest on her checking. That would have been fine if she had been drawing over $1 in interest each month. See, common sense.)

Those “other” fees? Yeah, those are to be avoided at all costs. Overdraft fees, returned item fees, they add up fast, and become a hard hole to get out of. My bank offers an overdraft protection where I can link up a savings account (or credit card, but I try to avoid those too) so if I do happen to overdraw the checking, it pulls money automatically from my savings. There is a fee if they do that transfer for me, but it’s substantially less than the overdraft fees.

The best thing you can do for yourself from a banking standpoint though is keep a register and keep it accurate! That ATM balance? It may not reflect the check you wrote a few days ago. Know what you’ve spent, and don’t try to “float”. While several years ago that might have worked out fine, with improved processing of checks and other bank transactions, you don’t still have 3-4 days before that check clears. If you don’t have it, don’t spend it!

Saving on those bank fees means more money in your pocket. Take a look at your checking account– when’s the last time you overdrew? Are you paying a monthly service fee? Is there an overdraft protection you should be signed up for? Do you and your spouse run into issues sharing an account? Can you be better with your banking?

By Megan

April 15^th has come and gone.

I’ve caught my breath, and caught up on a stack of other stuff. Hopefully, you have too.

Now, let’s talk money.

We are a society immersed in instant gratification. We don’t typically do well planning for our futures. Truth be told, many women don’t involve themselves in that process at all, assuming that their partner is taking care of it. Perhaps they are, but you need to know what steps they are taking, so that if you have to step in at some point, you aren’t overwhelmed.

Ladies and Gents, it’s time to take control – if not of the finances themselves, we’re going to take control of our level of involvement, and awareness. And if you are married, this is a team event.

I think it’s imperative that we have a solid understanding of where we are, and where we want to go in our financial lives. I don’t know about you, but I want to GO places! I want my kids to go to college. I want to get to go comfortably into retirement. I have goals for myself professionally that include business ownership. And if I don’t set goals for myself, I don’t know how to go about trying to reach them.

Before I can go anywhere, I need to know where I am starting from. What do I have to work with? What are my current expenditures, and can I reduce or eliminate any of them to help me reach my goals? Do I have a retirement base? An emergency fund?

Over the next few posts, let’s visit such things as smart banking, debt management, building a safety net, insurance, and planning for tomorrow. In the meantime, start thinking about your goals and dreams, so we know what we’re shooting for.

What financial dreams do you hold? What steps do you have in place to reach them?

Megan shares snippets of her life and random, well caffeinated thoughts as a working mom of three on her blog, All A Bunch of Momsense. Family, food, and fun at your fingertips!

By Megan @ Life As We Know It

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My mom once told me, “You can learn a lot about a person by looking at their checkbook.”

Think about it. The way we spend money reflects our values, desires, and our current stage in life. If you glanced in my checkbook here’s what you’d learn:

As I examine how we spend our money, I am more and more aware of the person I am…. and the person I long to be. It’s a process, but I want to share with you a few changes that I’ve made. Here goes:

So, dear friends, if I could glance into your checkbook, what would it tell me about you?

Are you ready for some change? Start an envelope… let’s go on this journey together!

What are some ways you save money?

Megan is mom who wants kids to come with a user’s manual. You can read about her journey in life and motherhood on her personal blog, Life As We Know It.