PT Money

I Really Did Just Save a Bunch of Money with GEICO

PT — Wed, 17 Mar 2010 19:56:17 +0000

There are two ways to a more affordable auto insurance policy:

1. you can either review your current auto insurance policy and reduce the amount of coverage and extras, OR
2. you could request an affordable auto insurance quote and change insurance companies all together.

I guess technically you could do both, right?

In the coming days and weeks I’ll be sharing some information on auto insurance: how to evaluate your policy, where to find inexpensive auto insurance, what to look for in a new auto insurance policy, and specialty information about cheap car insurance for young drivers and students, women’s car insurance, temporary car insurance, etc. But first here’s my recent story…

How I Found an Affordable Auto Insurance Policy

For a while I simply tried to save money by reviewing my auto insurance policy every years and removing all the extras and increasing my deductibles. I was able to trim my bill by quite a bit over the years, while still maintaining the level of risk I was comfortable with.

Recently though I decided to look into a different insurance company. I looked for a discount through a trade organization I’m a part of first. And there was a link to GEICO. I’ve obviously heard of GEICO before and seen their crazy commercials. But I never tried to hook up with them. My next step was to search for an affordable auto insurance quote online with GEICO. I was pleased at the results and I offer them up to you to see if you can save a bunch of money with GEICO too.

Auto Insurance Plan Before and After

Old Policy – $734.10/6 months = $122.35/mo
GEICO – $523.80/6 months = $87.30/mo

When comparing auto insurance policies it’s important to do an “apples to apples” comparison. See if you’re getting the same coverage. The above two prices were based on similar level of coverage and deductibles. I also had several discounts through both companies (multi-car, safe driver, anti-lock, anti-theft). GEICO came out significantly ahead. That’s an extra $400 I am saving annually. I’m not sure if I was just over paying with the other company or whether GEICO is just that much more competitive. Possibly both. I’m curious if any of you have had a similar experience?

More Discounts Available

In addition to the above discounts, I just found out I’m eligible for a defensive driver discount of $50. That would make my policy even more affordable.

Visit GEICO Car Insurance to get a free auto insurance quote today! Find out how much you could save.

Do you have a similar story? Have you tried GEICO and had success? Any issues to report with their claims service or general customer service?

Starting Up Taxable Investing

PT — Wed, 17 Mar 2010 05:21:28 +0000

I’m Not an Investor That Likes to be Taxed

Up to this point in my life, with the exception of company stock options and the occasional bonus deal from an online discount broker, I’ve avoided investing in taxable investment accounts. This is mainly because my focus with investing has remained on retirement.

And since there are so many tax advantaged investing options available to me (401k, Roth IRA, Traditional IRA, 529 Plan), I just put my focus there. I love them. I can’t get enough of the concept of sheltering my income. I think to myself, “why on earth would anyone want to invest their money in something that doesn’t involve a tax advantage?” After a bit of research and thinking beyond my own situation, today I’m going to answer that question.

What’s Inside these Different Accounts

As I mentioned last week when I was reviewing the best Roth IRA rates, it’s important to note that for the most part, you are able to invest in the same types of investments in or out of tax advantaged accounts. The account, like a Roth IRA, is just a place to put your investments.

So When Do You Start Taxable Investing?

When You Max Out Your Options - When you’ve maxed out your annual 401K contributions, your Roth IRA contributions, and your SEP IRA contributions, if any are available to you, a taxable account comes next. In fact, after you’ve taken care of these investment accounts, you’re only choice is to move into taxable investing. Of course, that’s a lot of income you are putting towards retirement each year. Does anyone out there max out both a 401K and a Roth?

When You Reach Income Limitations – Secondly, if you earn above a certain amount of money, you will not be able to invest in a Roth IRA. Therefore, after you maxed out the 401K, the next best choice is probably taxable investing.

When You Want Flexibility – Next, and probably the most important point here, is that taxable accounts generally give you more flexibility with how you use your money. Money in a 401K must remain in the 401K until you retire or you will have to pay the taxes on that money, and possibly face penalties for withdrawing early. With taxable investing, you can move your money in and out as you please. A Roth is a bit more flexible than the 401K, but it doesn’t touch the flexibility of the regular old taxed brokerage account.

When You Want to Invest in Tax Free Investments - Lastly, there are apparently some investments types that are tax free (i.e. tax-free bonds) that you can only get in a taxable investment account. If you’re dead set on using these investments, then you’ll have to settle for a taxable account.

Should You Have Both?

I don’t see the harm in having both types of accounts. If you’ve reached one of the milestones listed above than it’s probably time for you to begin with the taxable accounts. However, make sure you have your debt situation under control and a decent emergency fund built up prior to shoving a bunch of extra funds into one of these accounts.

Where to Open a Taxable Investing Account

You can open these up at the same places you open up tax advantaged accounts: at low-cost online brokers (if you’re going to be active with your trading) or full service investment houses, like Vanguard (if you can meet the initial balance requirements).

So what’s your opinion on investing in taxable accounts? Have you started one? Are you waiting to reach some of these other milestones first?

Cheap Workouts: Staying Fit Without Busting the Budget

Guest — Tue, 16 Mar 2010 17:10:25 +0000

Many families have been forced to review their budgets over the past 18 months, carving out excess expenditures and tightening their financial belts. Unfortunately some unforeseen side effects to budget cuts have ramifications to our health and fitness.

Reuters recently reported that the price of fruits and vegetables is actually climbing faster than inflation, while junk food continues to get cheaper. Exacerbating this issue is the fact many gym memberships found themselves excused from recent budgets overhauls as well.

Saving money has become a priority to so many families, mine included. However it should not take priority over your health and fitness. The great news is staying in shape, eating right, and feeling good doesn’t mean spending more money. It just requires creating alternatives to visiting the local smoothie stand and health club.

As a long time runner, a good jogging program tops the list of my favorite ways to stay healthy. I have also included several more ways to stay trim, both in the belly and the wallet.

The Frugal Sport: Running

A true purists sport, running is free and can be done anytime and anywhere. The weather makes this is the perfect time of year to start a running program. While you’re running you may find a set of bleachers to replace the Stairmaster. Find a running or walking club in your area to help keep you motivated and accountable. Check out these tips for new runners.

Hit Craigslist for Cheap Workout Equipment

Stationary bikes, treadmills, and multi-station home gyms start out at $35 on craigslist. The treadmill I run on every week is perfect and can be purchased used for less than $100.

Try Netflix for Free Exercise Videos

A subscription DVD service, Netflix is about the least expensive way to get movies at home. There are thousands of exercise, aerobic, and yoga videos with free exercise videos for women and men you can do in your living room. A membership runs about $9 a month; and if you stick with your program you can throw in a new release too. I won’t tell. See PT’s review of Neflix.

Make Your Own Healthy Drinks

My spouse has a certified smoothie addiction. Living at Jamba Juice isn’t in the budget this year. For about $20 we stock up on organic frozen fruit at Costco and make our own. No special equipment necessary, just a blender.

Workout Like A Pro Running Back

Hershel Walker was a fantastic running back in the NFL for 12 years. I rode a bike alongside him a few years back for 75 miles and I can tell you he still looks awesome. His workout secret – there wasn’t one. He never lifted a weight but had an incredible routine of push ups, chin ups, and sit ups; that’s it. Sometimes the simplest exercises are the best. Check out the hundred push ups challenge.

Getting involved in a fitness routine creates a virtuous cycle. You start looking good, eating better, and that motivates you to find more ways to stay healthy. Some of the best fitness activities are free so grab some sunshine and make living healthy a top priority.

This is a guest post from Joe of JoeTheRunner.com: A Place for the Every Runner. Check out Joe the Runner for daily running advice and training tips.

Images Released: What Your New Credit Card Bill Will Look Like

PT — Mon, 15 Mar 2010 19:03:09 +0000

I’ve scoured the interwebs for images (or proposed images) of the new credit card bill designs that the credit card companies are coming out with. So, unless you’re the type to pay credit card bill online, you will see this new design.

These changes, of course, are a result of the CARD Act, the credit card reform bill, that recently went into effect. I thought it would be useful to compile all these images so you can know what to expect from your credit card company.

American Express

More information about the new American Express credit card bill. Also, check out more images of the American Express Blue credit card statement.

Discover Cards

More information about the new Discover credit card bill.

Chase Manhattan BankCredit Cards

More information about the new Chase credit card bill.

CitiCards

Although I couldn’t find picture of a new Citi credit card bill, they do have a website that contains information about the changes to the Citi credit card bill.

Bank of America

More information about the new Bank of America credit card bill.

Wells Fargo Credit Cards

More information about the new Wells Fargo credit card bill.

What do you think of the changes? Will consumers use credit cards any less?

What If You Cannot File Your Tax Return by April 15th?

Guest — Mon, 15 Mar 2010 11:00:42 +0000

The US tax deadline is approaching. We’re just one month away. If you haven’t filed your taxes by this point it probably means: (1) you owe taxes (and you’re waiting to pay at the last minute), or (2) you’re a procrastinator, or (3) you don’t have enough information. If you’re in one of those last 2 categories then here’s how you should approach this year’s filing:

File an Extension Using Form 4868 for an Automatic 6 Month Extension. This gives you until October 15th to file your tax return NOT pay your taxes. You can print the form and mail it following the directions on the form or use FreeFile to file the extension free electronically. This will save you up 25% or the 5% per month failure to file penalty on the tax debt amount. If you owe no taxes (but rather a refund) there will be no penalty assessed. However, if you don’t file, you cannot get a refund (if due) and you only have 3 years to file a return in order to get a refund.

Pay all or up to 90% of taxes owed (if you owe taxes). In fact, if the IRS does not get 90% of your estimated taxes owed on April 15th, the failure to pay penalty of .5% compounded monthly will take effect on the tax debt amount. Whenever the failure to file and pay penalty intersect in one month the total combined penalty is reduced by by the failure to pay penalty. If you cannot pay 90% of what you owe read situation 1 above.

Bottom-Line: If you cannot file your tax return on time, file an extension, instead of not filing anything at all. You can save up to 5% per month on any balance unpaid. Even if you are owed a refund, when you file you can lock in credits and deductions that will lower your tax liabilities instead of waiting for the IRS to file a return for you (which eventually will happen and they will not include all deductions and credits).

Learn more about filing your taxes for free this year.

This is a guest post from Matt Robinson at TaxDebtHelp.com. Matt has been helping Federal and state taxpayers find IRS tax debt relief for over 10 years now. His firm focuses on on tax debt solutions and has constructed a new self-help site for taxpayers to resolve minor tax problems.

Discover More Card – $50 Cashback Bonus

PT — Sun, 14 Mar 2010 19:02:16 +0000

A new credit card change of terms just went into effect, rocketing the Discover More Card up to the top of my favorite credit cards list. Discover is currently offering $50 cash back when you sign up for the card and spend a certain amount of money over the first 3 months. They also changed the terms of the balance transfer promotion to 12 months. This is also a solid rewards card because of the 5% reward points earned in rotating categories.

Discover More Card – $50 Cashback Bonus

5% rewards points for rotating categories: travel, home, gas, restaurants, movies, and more
No annual fee
$50 initial bonus
0% for 12 months on balance transfers
This is the best balance transfer card that I have to offer. A solid rewards card too.

Personal Finance Links

Matt from Debt Free Adventure shares his experience with re-financing a home loan. Paul from Fiscal Geek talks about the single most important financial step. Amanda from My Dollar Plan shares how to save money on a wedding. Pete from Bible Money Matters shares how to open a SEP IRA. Joel from Free From Broke discusses why health savings accounts are so great. Ron from the Wisdom Journal talks about creating a family charter. Jeff at Good Financial Cents shares how to save money when moving. Ryan from Cash Money Life gives you some info on what to do when you can’t make the mortgage. I was in carnivals about debt reduction, money hacks, and frugality.

Question of the Week: Are You Lucky with Money?

PT — Fri, 12 Mar 2010 15:13:50 +0000

We’ve got one of my favorite holidays, St. Patrick’s Day, coming up next week. I thought I would focus on luck today. Have you been lucky in your financial life? Was it your smarts or your luck (or something else) that got you where you are today?

Looking back over my life, I can’t really pinpoint a single lucky incident or event that has catapulted me into financial success. I didn’t win the lottery or stumble upon a fantastic business idea. However, I do feel like I’ve lived a blessed life.

Richard Wiseman did a small study on luck back in 2003 where he concluded this:

“although unlucky people have almost no insight into the real causes of their good and bad luck, their thoughts and behaviour are responsible for much of their fortune.”

Do you attribute your financial success to luck or something else? And if you feel like luck can be created, what are you doing right now to create your own luck?

Sallie Mae Bank Savings Account: Includes a Upromise 10% Bonus

PT — Thu, 11 Mar 2010 20:32:06 +0000

Why is Sallie Mae a Bank Now?

Sallie Mae is getting into the online savings business. It makes sense I guess. They offer college loans and are finding, just like any lender, that they can do more loans by possibly taking on customers via online savings. Perfect marketing strategy actually. Get a bunch of guys like me with a kid to save money in their savings account and then by the time my kid needs to go to college, I use my savings, 529 plan, and add on a Sallie Mae loan to cover the rest. Genius.

Also, it probably doesn’t hurt them to get a nice influx of cash right now. That, plus, I think online banking is just becoming more acceptable these days, and since Sallie Mae doesn’t have to build bank buildings to make this happen, it works out for them.

About the Sallie Mae Savings Account

Their savings account it pretty straight forward. The rate is good compared to other online savings accounts. There is no minimum balance requirements like EverBank has. Although there are some minimum requirements if you want to take advantage of the 10% Upromise earnings match. See more below.

Fees? The only fees that I see on the account are a $5 statement fee (which you incur only if you have a statement mailed to you) and a excessive transaction fee (which is standard for online savings accounts) of $10 for each monthly withdrawal over 6. These fees are online savings industry standard and should never affect you if you just use the account as a normal savings account.

Certificates of Deposit

There are three different CD options at Sallie Mae: 12 months, 36 months, and 60 months. The rates are pretty straight forward and there are no minimums. The early withdrawal fees are standard. See how they compare with other CD rates and consider a CD laddering strategy.

Upromise 10% Annual Match on Earnings

This is where the Sallie Mae savings account shines. If you are Upromise user and earn a decent amount from Upromise each year, you will want to take advantage of this account. Here’s how the match works. Sallie Mae will look at your Upromise earnings at the end of the year (Dec 31) and multiply your total earnings for the year by 10%. They will then fund your Sallie Mae savings account with those bonus funds. That means if you earn $500 in Upromise earnings during the year, Sallie Mae will pay you $50 in bonus money. Nice.

Requirements to get the match:

To be eligible for the match you have to link your savings account to your Upromise account, and do one of the following: set up a automatic savings deposit of at least $25 OR fund the account with $5,000. Earnings from the annual match will be deposited in your savings account each February.

How To Open Either the Savings Account or the CDs

You will need to visit Sallie Mae Bank. Select which account you want (savings or CD). Then, provide the following information: SSN, drivers license or other ID, and checkbook to get your account and routing number for the initial deposit. You will also need joint account member info if you plan on making it a joint account.

The set up process is really quick. And once you’ve made your initial deposit you’re off and running. Remember to get the 10% Upromise earnings bonus you will need to create the $25 automated savings deposit, or fund at least $5k.

Common Tax Deductions for Freelancers

PT — Thu, 11 Mar 2010 08:06:05 +0000

If you are a freelancer with your own business there are numerous tax deductions that you will want to be aware of. Why? Well, a tax deduction reduces the amount of taxable income you’ll have when you file your taxes. Here is a look at some of the most common tax deductions for freelancers:

Home Office Space Deduction

If you work from home you are entitled to write off your dedicated work space. You can write off a percentage of your mortgage or rent in relation to the size of the space that you use to conduct your business. A portion of your homeowners or renters insurance is also a deduction.

Percentage of Bills

If you are using your home to conduct your business, a percentage of your utilities, phone and internet can be deducted. If you have a dedicated fax and phone line for your business, that is also a business write off.

Technology Expenses

Most everyone who runs their own business today uses some type of technology to do so. You can write off any technology purchases you make and use to conduct your business including computer equipment, computer upgrades, fax machines, internet routers, printers, web cameras, zip drives and the list goes on. Any computer software you use for your business is also deductible.

Office Supplies

This includes purchase you made on everything from your desk, filing cabinets, desk chairs to paper, pens, paper clips or any other supplies you use to conduct your business. Envelopes and the cost of postage are also tax deductions.

Business Related Expenses

This includes everything from business cards and letter head to copyright and incorporation fees.

Education, Training and Subscriptions Fees

This can be a large array of items including seminar fees, workshop fees or any other type of educational course fee related to your business. Educational magazine subscriptions, other subscription fees for anything related to your business, professional affiliation or association fees are all considered tax deductible.

On-Line Fees

If you have a website, you can deduct the cost of your domain name(s) and web hosting fees.

Travel Expenses

Any time you travel for your business there are numerous tax deductions. These include transportation expenses like parking fees, mileage, airfare, taxis, buses and trains. Other travel deductions include hotel rooms, office space rental, meals on the road and even your cleaning or laundry expenses while traveling. Some of your travel expenses will be 100% deductible while others will only be 50% deductible – consult with a tax professional if you are unsure.

Everything Else

Other expenses you can write off include your health insurance (if you are paying for it through your business), annual credit card fees paid to a credit card used for business purposes, unpaid client invoices and fees from collecting money like Paypal or bank fees. If you rent a post office box or safe deposit box for your business those fees are also deductible. Tax software and tax preparation fees are deductible as well. Finally, client related expenses like the cost of a business lunch or gifts given to clients are also tax deductible.

As you can see, if you own your own business there are numerous tax deductions you need to be aware of. In order for you not to miss anything it will be important to carefully keep track of all of your expenditures throughout the year. Always make sure to document and keep receipts for all of your expenses. A great tool to do this with is Quicken.

This article is provided for Backtaxeshelp.com, a site designed to help you with IRS back taxes. Owing back taxes to the IRS is stressful, and negligence will only worsen the situation. Learn how to pay back taxes.

Mvelopes: Automated, Online, Envelope Budgeting System (Plus Bill Pay)

PT — Wed, 10 Mar 2010 22:29:58 +0000

This week (or two) of budgeting reviews continues as I take a look at Mvelopes. Mvelopes is an automated, access-from-anywhere, budgeting tool based on the envelope system of budgeting. It also comes with bill pay.

Upfront, it’s important to tell you that Mvelopes is a subscription based system. So, along with all the nice features, you have to pay a monthly fee. Albeit a very low fee. But Mvelopes is a solid budgeting tool and has been recognized as such: PC World gave them a World Class Award – one of The 100 Best Products of the Year. Here’s how Mvelopes describes themselves:

“Mvelopes is the most effective online personal finance and spending management system ever. Mvelopes Personal is an online budgeting system that makes it easy to create an effective personal budget and track every aspect of your spending as it happens. It will help you always know exactly how much you have left to spend, instantly know the impact of every spending decision, effectively manage credit card spending, and quickly create an easy to use household budgeting plan.”

What You’ll Get with Mvelopes

Financial Account Aggregation – See all your accounts in one place and visualize your financial situation at a glance. This helps you track your net worth effectively.

Traditional Envelope System – Mvelopes, as the name suggests, is built on the idea that at the beginning of the month you put your income into different spending folders (or envelopes). Then you spend the rest of the month using the money from the envelopes. This helps you to spend every dollar before you earn it. That way you can make sure you spend it on things like savings, debt reduction, and giving. Mvelopes sets this up automatically for you each month once you’ve done the initial setup. You can quickly transfer money between envelope (drag and drop), and you can even take into account credit card usage.

Online Based – No download needed. It’s online-based software. You log in to your account from any PC or Mac or mobile device. This is the big advantage Mvelopes has compared with You Need a Budget 3.

Bill Pay – Another big selling point for Mvelopes is the bill pay feature. I’m not aware of any other budgeting software that lets you do this. Pretty handy.

Community – Mvelopes has a very robust community of users who all interact via the community groups and forums. You can also get training, live support, articles, and even premium life coaching services. You can also make some referral money through Mvelopes. They have a refer a friend program where you can earn $15, and your friend saves 20%.

Free E-Book Download

The folks at Mvelopes created a free E-Book to get you motivated and help you start using the Mvelope system. It’s called Money 4 Life. That link is a direct download. Right click and “save as” to put it on your computer and read it at your convenience.

First Steps with Mvelopes

I tested out Mvelopes using their free trial and I walked through the first steps. Be aware that you will need to sign up with a credit card for the free trial. You just need to set yourself a reminder to cancel in the event you’re not happy.

When you first sign up and get into the system, you’ll need to add accounts your financial accounts (link bank and credit accounts using online credentials), automate your bill payments, set a spending plan, fund your various envelopes, and finally, set up mobile phone access.

So there you have it. Mvelopes looks like it has some great benefits to offer for those people who want an online system to help them manage their spending and create a better financial future. If you’ve used Mvelopes extensively I’d love to hear your thoughts in the comments below.