Christian Personal Finance » Ways to Save Money http://www.christianpf.com Christian Personal Finance - Financial help blog, debt help and other financial resources Sat, 13 Mar 2010 18:46:53 +0000 en hourly 1 What Is The Easiest Way to Save Money? Automate it! http://www.christianpf.com/what-is-the-best-way-to-save-money-automate-it/ http://www.christianpf.com/what-is-the-best-way-to-save-money-automate-it/#comments Fri, 05 Mar 2010 12:05:06 +0000 Jason Price http://www.christianpf.com/?p=5583

According to a recent article in Money magazine, saving more money depends on ways to make it easy and automatic.  In other words, people just don’t save enough when it’s left up to them to decide.  Given a decision of spending an extra $100 a month, or saving it, most of the time it will be spent.

But perhaps we’re not giving people enough credit.  Maybe most people do want to save money, it’s just one thing leads to another and the money is gone be for they know it.  Sure, that $100 might be consciously spent on clothing or entertainment in many cases, but sometimes life happens and if the money is there, it’ll be used to meet life’s needs, i.e.,  more groceries were needed for the current month.

Opt-Out Savings

The article mentions people are much more likely to save if they have to first opt-out of savings options.  So if the decision is made for us, we don’t consciously have to think about savings, our savings rates will increase?  Yes, that’s the idea conveyed.

Did you know starting in 2010 the IRS will issue tax refunds in the form of savings bonds unless you choose to opt-out of this option?  For those who like to receive their tax refund each year as a check in the mail or electronic deposit, it won’t be so unless you make a conscious decision and tell the IRS otherwise.

You may already know some employers automatically sign employees up for 401(k) savings. Perhaps they think this is in the best interest of their employees. Probably so, but is it right to make the decision for them?

Perhaps there are some good intentions in helping America save more money, but I’m not sure I’m ready for others to start making money management decisions for me unless I direct them myself.

Do-It-Yourself Savings Options

There are certainly ways people can take action themselves and proactively save more.  Sure, it requires savings conscious decisions, which is what this article is suggesting doesn’t always happen.  But let’s examine a few of these before deciding one way or another:

1.  Automatic transfers: There is already an easy service to take advantage of with automatic transfers of money into your savings accounts.  You can set up such savings transfers through banks such as ING Direct and Ally Bank to occur based on a scheduled day each month.

2.  Automatic deposits: Or, you can contact your HR department and have them deposit a portion of your paycheck directly into a savings account.  As with the above option, it’s kind of like never having the money to begin with; you learn to live without it while your savings grows.

3.  Treat savings as a bill: If you look at savings as another bill that must be paid each month, you’re more likely to save versus spending it.  This requires including that savings as another line item in the budget and paying it at the first part of the month.

4.  Get a tax refund? Some would say getting a tax refund is a good idea.  Do you think it’s good or bad? Well, one argument is getting a large tax refund is a way to create a barrier to your money for the entire year.  Yes, you’re loaning your money tax free to the government, but typically you’re not losing much in interest.  Personally, I prefer to have the money in my hands to manage each month, but I thought I would include this as an option.

5.  Flexible Spending Accounts (FSA): While it might not be savings for emergency situations that ideally include easy access to cash, Healthcare FSA’s are a great way to unconsciously save.  Once you’ve made the decision on how much and signed up, the amount is automatically saved each month for your healthcare expenses.

6.  Invest using a 401(k): 401(k)’s are certainly easy savings options.  Granted, you still have to sign up (not the case with same employers) and choose your investments and allocation.  However, it’s relatively easy process and most employers connect you with an advisor to help make investment decisions.

Final thoughts

Rather than using opt-in savings options, there are certainly a number of ways, in my opinion, to make it easy and automatic for people to save more, if they’re willing to put forth a little effort to get them initiated.

Two of my favorite models to follow are the 401(k) and health care FSA’s.  Granted, they are before tax savings options, but the model in general works.  After signing up, the money is withdrawn from your paycheck as if it were never there to begin with.  The same could be accomplished with setting up automatic transfers or savings deposits.

All of these approaches create some sort of artificial scarcity of money.  The general idea behind them is to get the savings money out of mind and out of site quickly.  I think that’s what our government and some employers are doing with the opt-out options, but the same can be created by you as the money manager.

What are your thoughts about opt-out savings?  Can the savings options I mentioned work instead?

Jason Price is a personal finance writer at One Money Design and a Money Map Coach. His mission is helping people achieve true financial freedom. He provides practical tips for managing money wisely and shares Biblical financial principles. Beyond personal finance, Jason enjoys spending time with his family and playing soccer. You can also find him on Twitter and Facebook.

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The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation. Also, many of the CPF articles help us pay the bills by using affiliate relationships with Amazon, Google, eBay and others. Find out more here.
]]> http://www.christianpf.com/what-is-the-best-way-to-save-money-automate-it/feed/ 12 How to be Frugal and Have Fun http://www.christianpf.com/frugal-and-fun/ http://www.christianpf.com/frugal-and-fun/#comments Thu, 04 Mar 2010 15:26:41 +0000 Craig http://www.christianpf.com/?p=5491

To some, the idea of being frugal sounds like a death trap.  Where’s the dotted line? If I want to be frugal, I know I need to sign off ever having any fun. This line of thinking complexly misunderstands frugality.

To start, you might want to review what I think are the key differences between being frugal and being cheap.  Frugality wrongly practiced can feel like a trap.  However, frugality practiced properly will be liberating and will allow you to truly enjoy yourself.

frugal and fun - five dollar bill

4 qualities of those who are frugal and have fun

1. Frugal People Establish and Focus On Goals

Frugality is about finding the areas of life where you truly want to say yes.  What are your greatest joys and passions?  What are your hobbies?  You can never be frugal until you identify your goals.  Once you have some personal goals, they become your motivation for being frugal.

For example, my wife and I love to travel.  As a result, we know that when we save money in other parts of life we are enabling ourselves to do what we truly enjoy.  This way when we ask if we can afford a family vacation, the answer will be yes.

Frugal people know how to say no to useless and meaningful expenses so they can say ‘yes’ to the activities they really enjoy.  They know how to create a proper balance to avoid extreme frugality.

2. Frugal People are Willing to Exert Effort To Reach Their Goals

Many frugal alternatives require a little extra effort.  It might mean a few extra moments searching for a coupon code online or cutting out a coupon.  Frugal people take time because they know how to save money with coupons.  It could be rewashing a cup instead of throwing it out. But, a frugal person knows she must exert a little more energy in order to accomplish the goal she is focusing on. They focus on the best ways to save money.

3. Frugal People Enjoy the Excitement of Frugality

I’ll admit.  This paragraph must reveal my true colors as a super geek …

You cannot be frugal because someone wants you to be.  Forced frugality would be terribly restrictive.  However, for some (like myself) frugality offers excitement and challenge.  Where can I find the cheap books?  How can I get the best deal on a rental car?  None of this is burdensome because I enjoy the frugal life.

4. Frugal People are Always Creative

Frugality means find more ways to say yes.  For example, you could form a frugal community and find that you can go on just as many dates as before.  Now you use friends to babysit and have a homemade dinner instead of spending money at the restaurant.  When you do eat out, you know the best ways to save money eating out.

To be a frugal ‘yes man’, you must master the art of initiation and redirect.

Initiation: “Hey, do you want to come over for dinner and a movie at our house on Thursday night.”  This way you control the cost of dinner, watch a rented movie, and still get time to spend with your friends.

Redirect: Your friend says, “Hey, do you want to grab some dinner and catch a movie?”

You respond by saying – “You know, we were thinking about having you guys over for dinner some time.  Would you be interested in bringing a dish and coming to our place instead?  We’d be happy to rent a movie.”

Frugal people look for creative alternatives so they can do the things they truly enjoy.

This is the ultimate irony of frugality.  One person might skip the movies so they can go on vacation.  Another will skip the vacation so they can go to every new release.  Both parties have opposite goals, but they use frugality as a vehicle to help them accomplish their goals.

While spenders see frugality as imprisonment, the truly frugal recognize that frugal choices open the doors to a host of possibilities in the future.  As a result, frugal people often feel liberated instead of the commonly perceived miserable.

Photo by photos8.com.

Any other suggestions?  How do you practice frugality without giving up on the fun parts of life?

Craig is a fulltime missionary in Papua New Guinea who writes Money Help For Christians and Help Me Travel Cheap, a frugal family travel blog. He is the author of Money Wisdom From Proverbs, has a Masters of Divinity degree, and (most importantly) eats homemade pizza with his family every Friday night.

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The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation. Also, many of the CPF articles help us pay the bills by using affiliate relationships with Amazon, Google, eBay and others. Find out more here.
]]> http://www.christianpf.com/frugal-and-fun/feed/ 5 Savvy Ways to Save while Shopping http://www.christianpf.com/savvy-ways-to-save-while-shopping/ http://www.christianpf.com/savvy-ways-to-save-while-shopping/#comments Sun, 28 Feb 2010 18:47:15 +0000 Guest http://www.christianpf.com/?p=5447

The following guest post was written by Shannon M. Medisky. She focuses on discovering and recovering the hidden abundance we all already have. Visit her blog at HiddenAbundance.com or you can pick up her book: The Complete Idiot’s Guide to Stretching Your Dollar.

Money may make the world go round, but it’s certainly nice – and now days a necessity – to have money leftover at the end of a round of shopping. Want to find ways to discover deeper discounts? Looking for savings strategies that stretch beyond coupons? Keep reading.

It helps to think of saving money while shopping as a game. It’s simple. You’re pitted against your opponent, the store. He (or she) who has the most money at the end of the game (a.k.a. shopping) wins! The key to winning – and keeping the most money possible where it matters most (your wallet) – is being able to outwit, outlast and outplay the store. Retailers pay big money to experts who do nothing but study the habits and weaknesses of consumers. Make sure you’ve got a few tricks and strategies up your own sleeve to tip the odds in your favor.

The old saying is true: you won’t get something for nothing. That said, be willing to do a bit more work, or in this case walking, to reap substantial savings. Clearance bins and discount racks are usually placed towards the back of the store or nearest the walls. Same principle also applies to grocery shopping and generic brands; they’re often placed near the bottom of shelves, furthest away from eye level.

Avoid Convenience

Convenience isn’t cheap, so don’t expect convenient product placement to be cheap either. Consider checking alternative departments for things you need in order to get the best deal. Need a funnel? Check the automotive department instead of the kitchen section. Do you regularly purchase gum or breath mints? Avoid picking them up at the check stand. Instead venture over to the candy aisle where you can pick them up in multipacks for much cheaper.

Ask store employees

Don’t forget to ask the experts – store employees. A smile and some talk can be a great lead-in and warm up to asking if there’s any insider information regarding upcoming store sales and/or discounts. Wondering if posted clearance prices will get any lower before you plunk down your cash? Just ask!

Create your own clearance

Create your own clearance items and associated price markdowns by asking for discounts on damaged goods. If you don’t care about the small tear in the dog food bag or the button missing on a blouse, speak up! You could likely snag a great deal without having to wait for it to hit the discount bin.

Speaking of clearance markdowns, don’t forget to inquire at customer service regarding when most new clearance items hit the aisles. While employees may not be able to divulge exactly what will be marked down or when, at the very least you’ll likely walk away with a general idea. Whether it be a particular day or time, you’ll know when to go treasure hunting for less.

Strategize your spending

Strategically select where you spend your money. One-stop shopping is a convenience, but not necessarily the most economic option. Maximize value and minimize cost by determining ahead of time where to buy what. Grocery stores, for example, carry health and beauty products as a convenience to their customers. Discount retailers, on the other hand, purchase such items in greater quantities and, as a result, can often offer them at a better price.

Search for coupons

Lastly, if you shop by clicking the mouse instead of hitting the pavement, don’t forget to do a quick search for the words “coupon codes,” “discount code” or “promotional codes” followed by the name of the site where you’re shopping. Simply copy and paste the provided character code into the discount or coupon field at the site where you’re making the purchase and – voila! – You’ve instantly saved money.

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The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation. Also, many of the CPF articles help us pay the bills by using affiliate relationships with Amazon, Google, eBay and others. Find out more here.
]]> http://www.christianpf.com/savvy-ways-to-save-while-shopping/feed/ 4 Computer Repair Tips: How To Save Money http://www.christianpf.com/computer-repair-tips-how-to-save-money/ http://www.christianpf.com/computer-repair-tips-how-to-save-money/#comments Sun, 21 Feb 2010 18:00:51 +0000 Guest http://www.christianpf.com/?p=5340

The following guest post was written by Shirley Robinson who writes at her blog SurelyWords.blogspot.com.

Advice from a former computer repair technician

In the United States in 2009 over 70 million homes had at least one computer. I can guarantee that many of those moms, dads, and teens in those households had quite a few headaches related to their computers. Whether a virus took root, a hard drive died, or the dreaded BSOD (blue screen of death) appeared, millions of Americans were sitting in their desk chair staring at the screen letting out a huge sigh. When it comes to the frustrations above, the average computer user is not only baffled, but they usually end up paying a small fortune to a repair shop, or worse yet- a chain store. The good news is, those charges can be easily avoided.

1. Most frequent computer problem and solution: Viruses.

A. Do not underestimate a virus. If you notice a suspicious program that you did not install, especially if it pops up warning about viruses or malware and/or asks for money, immediately run your antivirus protection of choice. (Sites like Limewire and Myspace are notorious for being virus packed.)
B. Always make sure you have an antivirus program installed on your computer. Make sure that the program you choose is frequently updated and run on your. (My personal favorites are Avast! Antivirus or AVG. These programs are both free and user friendly)
C. If for any reason you cannot get rid of a virus infection do not look to the internet for help. Online programs that promise to speed your computer up, clean your registry, and get rid of all viruses, do more damage than good. Call a local repair shop, (avoid calling places like Best Buy and Staples. You will be overcharged and chances are you will end up visiting a privately owned computer store to fix their mistakes.)

2. Computer performance frustration and solution: Slow down.

A. Antivirus programs are incredibly important, but they have a downside. Most antivirus programs are big, meaning they use a lot of your computers resources to run.  You should never have more than one antivirus program on your computer at a time. Having more than one will dramatically slow your computer down, and leave you vulnerable to more infection.
B. When your computer slows down, there can be many causes and many solutions. For starters you may need to add ram (memory.) Memory is often confused for the hard drive, however the space on the hard drive does not determine how fast your computer operates. If your computer is slow, your first step should be to find out if your memory can be upgraded. Crucial.com has a tool that will allow you to do this free of charge. Next, check prices, if you decide to order the memory online, at a site like Newegg.com, you could pay anywhere between $15 – $30 depending on the type and size of ram (memory) you need. The same type and size at a local repair shop, or at computer chain, may be double that price or more. The mark up on memory is usually over 100%. Summary, buy the memory yourself (double check that you are buying the right type and size), then call a local repair shop or a computer savvy teen in the neighborhood and ask how much they would charge to install it for you. Installing memory takes less than a minute.
C. Did you know whenever you turn on your computer, little pieces of the programs on your computer start up as well? It’s true, and when a program starts up with your computer, it slows down the start up time. This can be fixed quite easily at a computer repair shop, (ask a technician to do an msconfig, and only that!) Most shops wont charge for this service because it is so easy for technicians to do, but if they do it will still be cheaper than adding new memory or wiping/redoing a PC.

3. Additional, avoidable charges on computer repair bill: User Error.

A. Never download or use a program that has the word “registry” in its name or promises to clean your computer’s registry. This is dangerous and will cost you dearly. Messing with the registry often leads to problems on a computer that can cost a minimum of $80 at a privately owned PC repair shop, and upwards of $150 at a chain store. (Refers to average cost of “wipe and redo.”)
B. If you are unable to remove viruses from your computer, immediately disconnect your computer from the internet. If caught early a virus removal at a repair shop will cost anywhere between $50-$100. At a computer chain store the price will be at least $90-$175.
C. Upgrades can be great or they can be a money pit. If your PC is in a repair shop for upgrades, take in to account what you need and what you don’t need. If the technician suggests an upgrade, do a little research, find out if your getting a good price. Remember, computers are made from mechanical parts, and these parts will fail! They are not made to last forever. Don’t put $200 worth of parts and repairs into a computer that isn’t really worth it.
D. Back up your files! Repair shops and computer stores are not responsible for lost files or data. If a virus corrupts your files, and a computer store is unable to retrieve them, or if your hard drive (the part that stores your files) dies, you will lose valuable data, files, pictures, music, anything you stored on your computer. Some technicians are able to retrieve these files, but it takes a lot of work and usually costs about $200.00. If they are not successful (they will still charge for labor), and you still need the files, specialized companies can attempt to retrieve the data, if you send them the hard drive. This costs $1500 at the lowest, and can take several weeks. No, that is not a typo, so back up your files.

Final tips: Protect and Prevent.

Take care of your PC, research upgrades, choose a private repair shop instead of a chain like Best Buy, and avoid viruses. The Bible reminds us that if we put unholy things, garbage into our minds, that is what will start to come out. Same thing with PC’s if we fill it up with garbage and visit pages that are filled with unholy images and words, viruses will pile up and the computer will crash.

Do you have any other tips for saving money on computer repair bills?

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The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation. Also, many of the CPF articles help us pay the bills by using affiliate relationships with Amazon, Google, eBay and others. Find out more here.
]]> http://www.christianpf.com/computer-repair-tips-how-to-save-money/feed/ 13 Should You Convert To A Roth IRA In 2010? http://www.christianpf.com/should-you-convert-to-a-roth-ira-in-2010/ http://www.christianpf.com/should-you-convert-to-a-roth-ira-in-2010/#comments Thu, 18 Feb 2010 17:23:48 +0000 Jason Topp http://www.christianpf.com/?p=5421

To Roth or Not To Roth – That is the Question

So 2010 is upon us and there is a lot of controversy regarding whether folks should convert their Traditional IRAs to a Roth IRA. Some of you might be wondering what exactly is a Roth IRA, well, here’s the basics:

A Roth is funded with after-tax contributions; the money grows tax-deferred; and withdrawals are TAX FREE!

In other words, you use money you’ve already paid taxes on to fund the Roth, and provided you meet certain qualifications you never have to pay taxes on that money again!

What is a Roth IRA Conversion?

A Roth IRA conversion then is taking money from a Traditional IRA, pulling it out and putting it into a Roth IRA where it will grow tax free.

Sounds good right?

Well, the problem is that whenever you do this you have to pay taxes on the amount you withdraw from your Traditional IRA.

So, let’s say you are converting $5,000 from your Traditional IRA — you would have to tack on 5G’s to your income for the year and pay tax at whatever rate you are at. It’s as if you earned an additional $5,000 of income for the year.

As many of you already know, one big change for 2010 is that anyone can convert to a Roth regardless of income level. Previously, if you made over $100,000 you could not convert to a Roth.

If you convert your IRA to a Roth in 2010, you now have a choice to pay all of your taxes in 2010 or average the taxes owed on the conversion over two years (i.e. pay in 2011 and 2012). Uncle Sam is giving you a choice on when you pay your taxes.

Don’t forget though that 2010 is the last year for the current low income tax rates. The current law plans for higher tax rates in 2011 — so, if you chose to average your tax payments over the two year period in 2011 and 2012, you might get hit with higher tax rates. That Uncle Sam – he’s always got an angle doesn’t he?

Should You Roth It?

Back to the question at hand. Should you convert to a Roth IRA or not?

Usually the answer to such questions is “it depends”. This might be a great year to convert your money to a Roth and potentially pay lower taxes than you would normally if you are in a lower bracket due to retirement or a layoff and you’ve got some cash on hand to cover your taxes!

This is important because if you are under 59 1/2 and use your IRA to pay the taxes on the conversion you’ll get whacked with a 10% penatly on top of the taxes!

Also, although the markets have rebounded significantly, account balances are still off their 2007 highs. If you convert when accounts are lower, it will result in less overall tax paid plust all the earnings and growth will be tax free!

Factors to Consider

  • Do you have money to cover your tax liability? Having cash on hand to cover your taxes will help soften the blow.
  • Will the money you convert push you into a higher tax bracket? If so, you probably don’t want to do it.
  • Do you have non-deductible contributions in your IRA? No taxes are due on the non-deductible portion. *There are some additional factors to consider here that go beyond the scope of this post.
  • Are you planning on applying for financial aid for yourself, your spouse or your child? Better think twice about the conversion – conversion income counts on your application.

Ultimately, whether you convert your Traditional IRA to a Roth will not determine your retirement success, there certainly are other factors to consider to help you make a great run at retirement.

Consider these factors and your overall situation to determine whether the Roth IRA conversion makes sense for you in 2010.

What do you think? Will you be converting to a Roth this year?

Jason is a Certified Financial Planner (CFP) by day and a blogger by early morning. He writes at Redeeming Riches where he tries to help others Restore Their Money and Renew Their Minds.

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The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation. Also, many of the CPF articles help us pay the bills by using affiliate relationships with Amazon, Google, eBay and others. Find out more here.
]]> http://www.christianpf.com/should-you-convert-to-a-roth-ira-in-2010/feed/ 10 How To File Your Taxes For Free (or pretty cheap) http://www.christianpf.com/how-to-file-your-taxes-for-free-or-pretty-cheap/ http://www.christianpf.com/how-to-file-your-taxes-for-free-or-pretty-cheap/#comments Wed, 17 Feb 2010 22:33:35 +0000 Guest http://www.christianpf.com/?p=5462

This guest post is contributed by Manny Davis, who is a tax accountant and author who helps individuals with back tax returns and major tax problems like tax liens, tax levies, tax audits, and more.

Ways to spend less on filing your taxes this year

About 120+ million US taxpayers are expected to file a tax return this year. With the Federal tax code now approaching 72,000 pages, it is nearly impossible for a US taxpayer to complete the process without the help of a tax professional or computer software program. The average taxpayer this year will spend about 26 hours completing the IRS form 1040. Nevertheless, there are many ways you, as a taxpayer, can file your taxes for free – or at least without spending too much this tax season.

Guidelines for Low Income Taxpayers, Military Personnel, and the Elderly:

Utilize FreeFile For Your Tax Return If You Qualify

FreeFile is a partnership between the IRS and the Free File Alliance, LLC (FFA). The FFA is basically a collection of tax software companies that allow taxpayers to prepare and eFile their Federal tax returns for free. Of note, some of these software providers will charge a fee to complete state tax returns. Freefile is available for taxpayers (married or single) with an AGI of $57,000 or less in 2009. To clarify, your Adjusted Gross Income (AGI) is wages, capital gains, pensions/annuities (taxable) minus contributions to before tax retirement accounts, like 401ks or traditional IRAs (standard and itemized deductions are not included). The IRS will help you determine your eligibility for FreeFile and help you select a company by completing this form here.

Utilize the IRS’s Volunteer Income Tax Assistance (VITA), TCE Program, or MyFreeTaxes.com If You Qualify - With your tax returns, if you are a member of the military or have an AGI generally of $49,000 or less, you typically can receive free tax preparation services through VITA. Moreover, if you are over the age of 60, you may qualify for free tax preparation services through the “Tax Counseling for the Elderly Program” or TCE program. These volunteers are certified/trained by the IRS. For information on the TCE program or the nearest VITA location call 1-800-829-1040. Do not forget to visit myfreetaxes.com, which offers programs sponsored by the Walmart Foundation and Beehive (One Economy Corporation) in order to help low income taxpayers file State and Federal taxes.

Guidelines For Middle to High Income Taxpayers:

Unless Your Tax Situation Is Overly Complex Use a Tax Software Program

In most cases it does not pay to have a tax preparer complete your individual tax return if it is not complex. For around $70-$80, utilize software programs like TurboTax or TaxCut (leaders in the industry) to prepare both your State and Federal tax return and eFile them. If you do not plan on itemizing deductions on your tax return, then Turbotax will allow you to file for free.

Do Not Pay To Efile Your State Tax Return

Turbotax does not charge you anymore for efiling a state tax return, but some programs like TaxCut do. In this case, you can either prepare, print and send it via certified mail, or see if your State is one of the 26 states that offers free state tax efiling online. However, if you are in Alaska, Florida, Nevada, South Dakota, Texas, Washington or Wyoming this would not apply to you.

Do Not Take A Refund Anticipation Loan

This could be considered part of the cost of filing if you elect to borrow against your tax refund. The problem with this option is that these loans against your refund not only carry extremely high interest rates, but if your State or the IRS disagrees with something on your tax return (like a deduction or credit) you will then have to pay back a loan that carries a high interest rate.

Overall, there are many ways you can save this tax season when filing. If you do not qualify for any low income tax assistance, it is best to do your taxes yourself by using a software program as tax-preparers can be expensive.

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The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation. Also, many of the CPF articles help us pay the bills by using affiliate relationships with Amazon, Google, eBay and others. Find out more here.
]]> http://www.christianpf.com/how-to-file-your-taxes-for-free-or-pretty-cheap/feed/ 4 How to update your wardrobe on a budget http://www.christianpf.com/how-to-update-your-wardrobe-on-a-budget/ http://www.christianpf.com/how-to-update-your-wardrobe-on-a-budget/#comments Tue, 16 Feb 2010 16:21:21 +0000 Linda http://www.christianpf.com/?p=5243

When I first got married, my financial life changed drastically! I was used to living at my parents house and spending more than I earned. But then I met Bob. :) He showed me that I can’t have everything I want and it has been a good lesson to learn, but a difficult one. So, I made drastic changes to my spending by not spending money on clothes and other things in order to pay our bills and more important stuff like that.

So, here’s what I learned:

1. Don’t get overwhelmed if you can’t buy everything today.

Start with one new thing and keep building. If you find an amazing dress to wear to a wedding, get it! (Don’t be the girl crying the week before that special event because you’ve waited too long to get something-and we all know you can’t find what your looking for when you’re desperately looking for it.) And do the same with everything else, one thing at a time.  Snowflakes pile up one at a time, and your wardrobe will be completely revamped before you know it!

2. Don’t lie to yourself and buy stuff you don’t like/need.

This will just add to your frustration. Before I had restraint on my spending, I bought things I didn’t really like, or that didn’t fit, but I liked it on the hanger, so I tried to make it fit, etc. But once I had the restraint/budget, I started making much better choices.

3. Get a really good shopping partners.

Gertrude and I on a shopping adventure

You need friends that a) will be honest with you, and b) know how to find the deals! My friend Gertrude (see photo on the right),  is a great shopping partner because she’s so truthful and won’t say something to make me feel good. She actually told me about a dress I tried on, “That makes you look like you’re wearing a diaper! Take it off!” She’s also taught me how to find bargains. I used to look for them before and get annoyed and go to the full price racks. Now, I have to say, I’m really good at finding $11 jeans at Gap or a dress for $4 at Target. And this way, I can constantly update.

4. Know your budget.

Just because you find something on sale doesn’t mean you should buy it. One day I found great sales and I returned half of the items I bought before I even left the mall because I knew I didn’t have the money to pay for it.
If you’re completely overwhelmed, MAKE it fun. One of my sisters doesn’t really like shopping. She just gets overwhelmed when she can’t find what she wants. Last time we went shopping, her attitude drastically changed because we got a Starbucks and decided if she didn’t find what she wanted, that was OK. We were just there to have fun.

Hope this helps. And please, share your shopping tips in the comment section. Happy Shopping!

Linda loves chocolate milkshakes, a day of shopping & lunch & coffee with friends, Honeycrisp apples, perusing fashion magazines, laughing for no reason at all, fresh-cut flowers, Boaz (from the Bible), warm weather, and watching movies on the couch with her husband Bob.

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The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation. Also, many of the CPF articles help us pay the bills by using affiliate relationships with Amazon, Google, eBay and others. Find out more here.
]]> http://www.christianpf.com/how-to-update-your-wardrobe-on-a-budget/feed/ 12 How Much Can You Afford To Pay For A House? http://www.christianpf.com/how-much-can-you-afford-to-pay-for-a-house/ http://www.christianpf.com/how-much-can-you-afford-to-pay-for-a-house/#comments Sun, 14 Feb 2010 18:00:57 +0000 Craig http://www.christianpf.com/?p=5322

So you are buying a new house and want to know how much house you can afford, but is that even the right question?

Why are we always seeking the maximum?  Do we really believe that more is always better?  Isn’t it possible that we really could get more out of life by having a small house?

Instead we could ask, how little house do I need to meet our family needs, provide a healthy home setting, and be free from financial restraint?  Chances are, you would be better off answering that question than the first question – how much.

how much house can you afford?

But, since it is the standard question, let’s address the question …

How Much House Can You Afford?

Sometimes I read something that I must write about – just for a personal outlet.  While reading Tips and Traps When Buying a Home, I came across the following advice:

Most people can afford to pay far more than they initially believe they can.  As we’ll see in the next chapter, it’s to your advantage to stretch when buying a home – trying to get into the most expensive house you can afford usually pays off later on when your income increases and property values appreciate. (pg 16).

Personally, I think this is dangerous advice.

Think 2008.  Mortgage payment delinquencies, foreclosures, declining house values.  And what was the biggest cause of that financial avalanche?  Too many people made poor money choices by following this type of ill-informed advice.

To stretch means to risk.  Thus, one could read the above phrase as saying it is to your advantage to risk (your house, your comfort, your marriage, your peace) when buying a home.  Why take that risk?  Because it usually pays off?

Don’t undermine the power of emotions.  I would much rather have a smaller house, a cozy residence, than the emotional turmoil of wondering if I stretched a little too far.  For this reason, I’d rather pay off my mortgage instead of investing – even if it doesn’t make math sense.  Emotional peace should come before math equations.

The book (Tips and Traps) then suggests three factors that help people know how much they can afford.

  1. Down payment – you need to have enough cash to offer as a down payment
  2. Mortgage qualifying – how much will the bank willingly lend you?
  3. Closing cost

While I agree with #1 and #3.  I disagree with point #2.

Don’t Buy A House Based On How Much You Qualify For

Buying a home is one of your biggest financial decisions.  Thus, the home purchase cost should be determined based on your budget, your needs, your income, and your future plans.  The bank only knows your income.

As an example, if a young couple plans for the wife to stay home with their kids they should buy a home based only on the husband’s income.  The bank, however, might be willing to loan you money based on both of your incomes.

Please consider following these first time home buying tips.

The Home You Can Afford Is A Home That Fits Comfortably Within Your Spending Plan

Your total housing related costs should not exceed 35% of your take home pay.  Otherwise, your house payments will take up an unhealthy percentage of your budget.  Be sure to include all housing related costs:  Mortgage payment, taxes, insurance, utilities, association fees, Private Mortgage Insurance (if needed), maintenance, and telephone bills.  All of those numbers should not add up to more than 35%.

However, I’ll finish this post once again by challenging the ‘how much’ approach.  Sometimes the better question is how little house can I purchase that meets all my family needs.  This will give you some financial margin and the emotional benefits will amaze you.

Photo by Jsome1.

What do you think – should people try to buy as much house as they can afford or as little house as they can?

Craig is a fulltime missionary in Papua New Guinea who writes Money Help For Christians and Help Me Travel Cheap, a frugal family travel blog. He is the author of Money Wisdom From Proverbs, has a Masters of Divinity degree, and (most importantly) eats homemade pizza with his family every Friday night.

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The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation. Also, many of the CPF articles help us pay the bills by using affiliate relationships with Amazon, Google, eBay and others. Find out more here.
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The following article was written by Bob Hartzell who is a freelance writer for Get Degrees®. They feature 100’s of majors from accredited online colleges and universities in various fields.

Eight reasons why the 529 is the best college savings plan

The 529 college savings plan is probably the most flexible college savings option out there at the moment. It is named for Section 529 of the Internal Revenue Code, which created the fund concept and codified it in 1996. 529 Savings Plans function much like a 401k or an IRA – they are accounts into which you place funds that are then put into mutual funds or other mainstream investments.

Section 529 plans are administered by state agencies, but the investing, record keeping and reporting is usually delegated to a commercial investment firm. Every state has at least one 529 in place and some have several.

1. Impact on Scholarship and Financial Aid Eligibility is Minimal

When a college financial aid office is calculating student eligibility for aid, they will only apply 5.64% of the 529 Fund value as an asset. If the student controls the fund, that same 5.64% is used to calculate the Expected Family Contribution (EFC) which is based on assets and income. For a standard student savings account, the financial aid calculation applies 20% of the balance. This protective feature is one of the major innovations of a 529 plan.

2. Tax Free when Withdrawn to Pay for College Expenses

Unlike IRAs and other federal savings plans, these college funds are not subject to taxation upon withdrawal. They are a great mechanism for building a college nest egg that is subject to substantial tax benefits and that does not alter financial aid eligibility. Here are several ways that everyone in the family can contribute to building tax-free college funds.

3. Tax Breaks on Savings Contributions

While your contributions to a 529 are taxed by the IRS, thirty one states and the District of Columbia offer breaks in state income taxes for 529 contributions. There are generally no limitations to your selection of a 529 plan – you can live in California, invest in an Indiana 529 and send your student to a Florida university.

4. Students can Contribute Too

If your student is working to help save college dollars, they can contribute to the 529 fund and not have their eligibility for financial aid come under scrutiny. High school students working part time aren’t generally going to be paying federal income taxes, so those dollars are tax free going into the account and coming out.

5. Fund Growth is Tax Free

The investment profits accrued by a 529 are also tax free if applied to legitimate college expenses. It’s another form of shelter for college savings that are set aside to grow as an investment while the student grows to college age. Legitimate college expenses include books, tuition and room & board.

6. Family Members can Contribute Subject to Gift Tax

If a grandparent or other family member wishes to contribute to the 529 they can do so as a gift and do so tax free if the gift is under the $13,000 annual federal tax-free limit. Those donations are also limited by the other strings included in gift tax rules, so the law is worth checking.

But unless the contribution is a large one, it’s a great way to help bring a grandchild or favorite niece along with minimal tax impact on anyone. If a grandparent owns the 529 Fund, it is not calculated in financial aid eligibility at all.

7. Fund Management is Simple

It’s important that all withdrawals apply to eligible college costs. Ineligible expenditures are subject to taxation plus a 10% penalty. But dispensing the funds is relatively simple – it can be done by the plan manager to the plan owner (parent, grandparent or student), to the student or to the college. At the end of the year the college will inform you of the eligible expenses charged to the student beneficiary.

8. Reward Programs that Link to 529 Plans

The “rewards” craze that started with airline miles and has overtaken the credit card industry can now be applied to certain 529 plans. Over time, your purchases can generate rebates that add up to hundreds, and potentially thousands, of extra dollars for the college fund. For example, The Fidelity 529 Rewards American Express Card offers a 1.5 percent rebate on your card purchases for direct deposit to any one of the five Fidelity-managed 529 plans.

What other features do you love about the 529 plan?

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The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation. Also, many of the CPF articles help us pay the bills by using affiliate relationships with Amazon, Google, eBay and others. Find out more here.
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The first way save money on your wedding is the most important: you have to want to save money. I’ve noticed in the past few years that some things are worth paying for, and some things are not. But just because you don’t pay for something doesn’t mean you can’t get great results (and sometimes better results) by using your creativity. Here are a few simple tips if you are planning a wedding on a tight budget. They all involve creativity, so open your mind and get creative (or call you sister or friend or aunt in the room to help you out).

1. Do it yourself.

When Bob and I got married, we made our own invitations and mailed them ourselves. We printed out everyone’s names and addresses on the envelopes and just made it happen. Our wedding was a less formal (which we’ll talk about later) so making them in Word worked fine for us. But what are some things like this that you can do yourself? Flower arrangements? A friend of mine had all her bridesmaids over and they all made their own bouquet. My sister ordered candies and boxed them herself and gave them as favors.

2. Use the people you know to help you.

One thing I noticed when Bob and I got married is that there were so many people who wanted to help us. Some knew we were planning it with a tight budget and some didn’t, but it was almost overwhelming how many people wanted to help us. And it made me want to help anyone I can in the same way. I thought I shouldn’t take anyone up on their offer, but now that I’m on the other side of it, I see it differently. Let people help you!

For instance, if you have a friend who is a graphic designer (or even knows how to use design programs), see if they’ll help you with your invitations. Then, go print them on paper you pick out yourself and buy for a much lower cost. You can do this with anything: your band/DJ, photographer, centerpiece design, food, etc. And what’s wonderful about this is you get to let others in on your life, and that is so valuable!

One of the most beautiful weddings I’ve seen was one where everyone pitched in. Below are some pictures to show how beautiful they can be.

Wedding Example #1:

The ceremony was held indoors at a park clubhouse. As you can see, it was beautiful. My friends grandmother made her homemade canoli’s for dessert!

They had lot a bird theme and these were their favors – hand made.

The centerpieces were made from items found at thrift shops, the lace table cloths were found at vintage shops. Each table was different, unique, and so beautiful! There were also branches of a birch tree on each table, coming out of vintage vases. I’ve never seen centerpieces so beautiful!

Since they got married at a park, there were some amazing photo opportunities! Can you believe how beautiful this is!?

Wedding Example #2:

This backyard wedding has an amazing view, as you can see. They had friends and family participate in their ceremony by holding this beautiful lace above them. Easily removed to make more space for the guests after the ceremony was over, and it added such a personal touch!

She and her bridesmaids did their own hair! And these beautiful hair pieces were made by a friend.

Don’t you love the way the lit up the night? And check out these chandeliers they made:

They are mason jars hung from trees with candles in them. AMAZING!

3. Think about your location.

I used to work for my church, so we got a great deal when we got married there. But, not everyone has that luxury. A friend of my got married at a beautiful clubhouse in a park. Another friend got married at the entrance of her aunts house. There was a fountain and it was absolutely beautiful. And that was free!

I also knew someone who wanted to get married at a very expensive location. Upon further investigation, he found out that if he got married on a Sunday instead of a Saturday, the price dropped dramatically.

4. Redefine your idea of a wedding altogether.

Bob and I had a wonderful, tiny wedding. We invited our immediate family only, plus grandparents, and each had 1 friend. My brother, a wonderful musician, played piano as I walked down the aisle, my brother-in-law video taped, and Bob’s friend took the photos. It was an amazing day for us to spend with the closest people to us and there was no stress because it was so small. We wouldn’t have had it any other way. We went to lunch after and had a small reception a month later (which we made the invitations for) and it was absolutely perfect for us. I don’t recommend this for everyone, but I do recommend everyone think about how they can make their special day reflect them as much as possible. If that means having a big wedding, great! Hopefully some of my tips will help. :) But I hope to at least inspire some of you to think of wonderful, original ideas to save some money and make your wedding a day you’ll never forget.

There are so many creative tips for planning a wedding on a budget, and I know everyone has learned at least a few, so please share them in the comments section below.

Photos by Gertrude Bell

Linda loves chocolate milkshakes, a day of shopping & lunch & coffee with friends, Honeycrisp apples, perusing fashion magazines, laughing for no reason at all, fresh-cut flowers, Boaz (from the Bible), warm weather, and watching movies on the couch with her husband Bob.

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The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation. Also, many of the CPF articles help us pay the bills by using affiliate relationships with Amazon, Google, eBay and others. Find out more here.
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