Over 800 million have shopped online worldwide and the number of internet shoppers has grown by almost 20% every year. The internet is becoming the virtual mall for the consumer and a gold mine for an internet marketer or online business owners.

The online world has offered various business models and opportunities as well. You can make money even if you are not selling a physical product. If you have a blog or website, you can make money by selling advertising spaces, selling digital/downloadable products or from joining affiliate marketing programs. Others may be interested in selling tangible products, which requires shipping and handling. These are normally sold via online stores such as their own websites or the use of forums such as eBay, Amazon.com, Yahoo stores, sulit.com, craigslist,  etc. A lot of people can save money  in paying hefty office space rents since most of these online business can actually be conducted at home. You can also save a lot of taxes by taking advantage of the tax deductions that are usually only available to business owners.

Anyways, below are the top 4 reasons why people start an online business:

1. It is very easy to start

It is very easy to start since most online businesses require only a website to start with.  Even if you do not know how to build a website or any coding/programming knowledge, there are a lot of website builders or templates that are available out there that you can use. It has gotten much easier for people nowadays because of the easy access to these business tools and software. In fact, there are a lot of online business owner who are not programming experts yet they make more money than those who are. Moreover, even if you do not own a website, you can still set-up your online stores through virtual mall or online forums like eBay, Yahoo! Stores, Amazon.com, etc.

2. It is very Inexpensive to start

For some online business, the expense would be just the cost of designing and hosting a website. But for the most part, you may need to incur start-up expenses such as licenses, permits, office supplies, advertising, etc. Others may involve carrying an inventory if you are selling a product. Some businesses can be started for as little as $100 while others may spend around $1,000 or more. However, the overall start-up expenses are chump change compared to starting a brick-and-mortar business.

3. Can reach worldwide customers

One thing I like about the online business is that your customers may come from various part of the world. You are not limited locally and you don’t even need to spend a lot of money for tapping a huge market base. Talk about a global business without even setting foot in your customer’s country! You can sell products like e-books, online training videos, informational membership for a fee sites, other digital/downloadable products, or you can even create a blog that generates worldwide readers and earn money through advertising. Tangible items that require shipping are usually feasible domestically due to logistics reasons but others have thrive selling and shipping to worldwide customers. Again, it all depends on your business model.

4. Flexibility on the Location

Yes, it is more likely a home-based business, and as you know, operating a home-based business comes with a lot of advantages. It works for a lot of people so they can stay at home and spend time with the kids or just have flexibility as opposed to being an employee and getting stuck in a cubicle. In addition, you are not limited to just one place. Some online venture, such as blogging or informational websites, can be done every where you go. You can be in a vacation in Bahamas and still be able to update your website or blog as long as you have your laptop and internet connection.

What about you? Do you have an online business venture? What’s your top reason on why you started it?

Most college students use some sort of financial aid to help pay for the costs of college such as student loans, grants, scholarships, IRA accounts, and other educational tax savings programs.

Among all the financial resources, scholarships and grants are probably considered the best resource because students do not have to pay these back.

Scholarships are based on merit and these are determined on a case by case basis. It is a common misconception that scholarships are only available to those with financial need. This is not really the case since students coming from well-off families are still able to take advantage of them as long as students pass the qualification requirement. A perfect example is the athletic scholarships offered by universities.

For the most part If you are a member of the following minority population, you can take advantage of the various scholarships programs that they offer. It is best to visit the websites and check the availability of scholarship programs and find out on how to apply and qualify. In fact, most of the private scholarships for the minority population are administered by the following organizations:

1. United Negro College Fund

Website: www.uncf.org

The United Negro College Fund (UNCF) focuses on the educational status of African Americans of all ages from pre-school through adulthood. The Institute seeks to understand and expand the multiple pathways leading to educational attainment and serves to positively impact public policy and improve local education.

The Program Services Department administers various scholarship programs. Each program has its own eligibility criteria, open/close dates and required documents. In order to apply for a UNCF Program Services Scholarship, you must apply through the online application process. Below is the list of all programs currently accepting applications:

Sample Scholarships Administered:

• Arlene Benton Nolan and John Nolan Scholarship
• Catherine Roberts Bridgeman Scholarship
• Central Florida Black, Nurses Scholarship
• Central Florida Scholarship
• Dallas Independent School District Scholarship
• Deborah L. Vincent/ FAHRO Education Scholarship
• Fort Worth Independent School District Scholarship
• Google Scholarship
• Hausman
• Family Charitable Trust Scholarship
• Hershey Company
• Jethro Pugh Scholarship
• John Walter Bridgeman Scholarship
• MCCA Lloyd M. Johnson Jr. Scholarship
• Northwest Indiana Scholarship
• Ossie Davis Endowment Scholarship
• Red Hot & Snazzy Gala Scholarship
• Richardson ISD Scholarship
• Rosa E. Blackwell Scholarship Fund
• Sprint Scholars Program
• St. Petersburg Golf Classic Scholarship
• UNCF/Sororities of Broward and Miami-Dade Florida Scholarship
• Youth Gala Scholarship

2. The Asian &  Pacific Islander Scholarship

Website: http://www.apiasf.org/

The Asian & Pacific Islander American Scholarship Fund (APIASF), established in 2003, is the nation’s largest non-profit organization that provides scholarships to Asian and Pacific Islander Americans (APIAs) with financial need. APIASF is currently based in Washington, DC.

The vision of the organization is to ensure that all APIAs have access to higher education and resources that cultivate the students’ academic, personal and professional success regardless of their ethnicity, national origin or financial need.

In addition, the organization seeks to make a difference in the lives of APIA students by providing them with resources that increase their access to higher education which serves as the foundation for their future success and contributions to a stronger nation.

Scholarships Administered:

• AT&T Foundation Scholarship
• Coca-Cola Foundation Scholarship
• Darden Restaurants Foundation Scholarship
• Farmers Insurance Scholarship
• Frances Sonn Nam Memorial Scholarship
• FedEx Scholarship
• Gates Millennium Scholar
• Hilton Hotels Scholarship
• Honda Scholarship
• MassMutual Scholars Program
• MetLife Foundation Scholarship
• Sara Lee Foundation Scholarship
• Southern California Edison Scholarship
• Target Scholarship
• Thai Alliance in America Scholarship
• United Health Foundation Scholarship
• USA Funds Scholarship
• Verizon Foundation Scholarship
• Wachovia Wells Fargo Foundation Scholarship
• Walmart Foundation Scholarship

3. American Indian College Fund

Website: http://www.collegefund.org/

The American Indian College Fund provides scholarships and other support for the American Indian students. Tribal colleges, the vast majority of which are located on or near reservations, provide opportunity and access to post-secondary education. Tribal colleges are changing the face of Indian education by providing accredited degrees and keeping Indian culture and tradition at the heart of their curriculum at the same time.

The Fund disburses approximately 6,000 scholarships annually for American Indian students seeking to better their lives through higher education. The Fund also provides support for tribal college needs ranging from capital support to cultural preservation activities.

Scholarships Administered:

• Tribal College Scholarship Program
• Tribal College Special Scholarships
• Graduate Special Scholarships and Mainstream Scholarships such as Austin Family Scholarship Endowment
• Ecotrust Native American Scholarship Program
• Ford Motor Company Scholarship
• Morgan Stanley Scholars Program
• Nissan North America Inc. Scholarship
• Traveler’s Foundation
• Sovereign Nations Scholarship Fund
• United Health Foundation Scholarship

4. Hispanic Scholarship Fund

Website: http://hsf.net/

The Hispanic Scholarship Fund’s (HSF) mission is to strengthen America by advancing the college education of Hispanic Americans. The organization delivers a range of programs to Hispanic families and students through community outreach and education, affordability via scholarships, college retention and career opportunities.

HSF supports a successful path for Latinos to attain a college degree – creating an increasingly valuable asset for a stronger, more competitive America in the 21st century.  HSF has awarded over $300M, resulting in close to 100,000 scholarships to students in need.

Scholarships Administered:

• HSF/General College Scholarship
• ALPFA Scholarship
• AT&T Foundation Scholarship
• Bakersfield Scholarship
• Budweiser Cup Tournament Scholarship
• Cummins Scholarship
• Coca-Cola Live Positively and Hispanic Scholarship Fund Essay Contest
• Exxon Mobil Scholarship
• Freddie Mac Scholarship Program
• Gold Standard Scholarship
• Goldman Sachs 10,000 Women Business Leadership Award
• HACEMOS Scholarship
• Honda Award Scholarship
• Hormel Scholarship
• HSBC-North America Scholarship
• Macy’s College Scholarship
• Marathon Oil Corporation College Scholarship Program
• MassMutual Multicultural College Scholarship
• McNamara Family Creative Arts Grant Project
• Morgan Stanley Foundation Scholarship
• Nissan North America, Inc. Scholarship
• President Obama/STEM Teacher Scholarship
• Procter & Gamble Company Scholarship
• Qualcomm Q Awards Scholarship
• Sendero al Futuro Scholarship
• Shell Scholarship
• Telemundo Scholarship
• Travelers Foundation Scholarship
• Winchell’s & Yum Yum Donuts Scholarship.

The IRS considers any withdrawals from your retirement plan an early withdrawal or distribution if made before you reached the age of 59 1/2 years.

In general, the early distributions from most retirement plans will be included in your taxable income. In some cases, this may put you in a higher tax bracket and you may end up paying at a higher tax rate.

In addition to this, you will have to pay a 10% early withdrawal penalty unless you meet the IRS exemption criteria.

Thinking of taking money out of your Roth IRA before reaching the age of 59 1/2 years?

Before you do, you should understand the various rules in order to minimize the tax consequences of early withdrawals on a Roth IRA.

The one unique distinction of the Roth IRA among other retirement plans is that the contributions to the plan are made using your after-tax dollars. The key advantage is you won’t get taxed at all when you start receiving distributions come retirement time. However, it is a different story if you are making an early withdrawal.

Tax Consequences of An Early Withdrawal

• Original Contributions - Unlike the traditional IRA, there are no tax and penalties imposed when you are withdrawing the original contributions on the Roth IRA. This is because you already paid taxes on it so the IRS does not care. You can take the money at anytime for any reason tax free. This is similar to putting your money in a regular savings account without any restrictions on the withdrawals.
• Earnings - when you make an early withdrawal on your earnings, you may have to pay taxes and penalties on it unless you meet the conditions for the tax-free exemption as discuss later on this article.

How do you know if your withdrawals are return of contributions or earnings?

On a Roth IRA, it is important to know which ones are classified as your original contributions, conversions or earnings in order to determine if the withdrawals are taxable or not. One big question that most people ask is how do you determine which one is which?

The IRS does not want to make it complicated so they made a rule that when you make a withdrawal, it will be treated as withdrawals of your original contribution first then followed by the conversions (from traditional IRA or other qualified plans), if you made any.  The only time that it will be classified as Roth IRA earnings is after you have exhausted the balance of your original contribution and conversion or roll-over amounts.

• Example 1: You have just opened your Roth IRA five years ago and have contributed a total of $25,000. In addition, your Roth IRA earned $5,000 putting your Roth IRA balance to $30,000. This year, you have made an early withdrawal of $10,000 so you can use it to purchase a brand new car. Because you still have $25,000 of your original contribution in the account, the full $10,000 withdrawals will just be treated as return of your original contribution. Thus, you won’t get taxed nor penalized even if the reason for the withdrawal is not one of the exceptions as discussed later.
• Example 2. Same situation as Example 1 but instead of withdrawing just $10,000, you decided to withdraw the whole $30,000 Roth IRA balance in your account to purchase the car. In this case, the withdrawals will be classified as $25,000 return of your contribution and $5,000 earnings. You do not have to pay taxes and penalties on the $25,000. However, you will be taxed and penalized on the $5,000 withdrawal of your earnings because it did not meet the exceptions discussed on the next section.

Exceptions to the Early Withdrawal Penalty on Roth IRA Earnings

Once your withdrawals have been classified as earnings, you need to determine if you are going to pay taxes on the earnings. There are two requirements that you need to meet before your earnings withdrawal qualifies for the exemption (hence the term “Qualified Distribution” as defined by the IRS): the holding period and the use test.

However, you need to meet both requirements for it to be called a “Qualified Distribution.“

Holding Period Test – In order for you to avoid paying the 10% early withdrawal penalty and the regular income tax, you must make the withdrawals after the 5-year period beginning with the first taxable year for which you set-up your Roth IRA and made the first contribution.

The way it works is the clock starts on the the beginning of the year and not on the day you actually started making your first contribution. As an example, if you began making a regular Roth IRA contribution on July 1, 2009, the 5-year holding period begins on January 1, 2009 and not on July 1, 2009. The same rule applies for the conversion. If you converted your traditional IRA on May 12, 2007, the holding period starts on January 1, 2007. So in essence, you have been given more time if you made your first contribution in the middle of the year.

Use Test - In addition to this holding period, you must also meet one of the following conditions:

Your tax filing status determines what tax bracket you’re going to be at. Generally speaking, married people filing jointly (MFJ) usually receives the best tax rate.

The United States tax system is progressive, which means that as your income increases, your tax rate increases as well. But the good thing is that the highest tax rate is not applied across all of your income as different tax rate applies at each level of income. Thus, the word “tax bracket” became a common jargon and this just means  tax rate bracket your total income falls into.

Below are the 2011 tax brackets and how taxes are determined for single, Head of Household, Married Filing Joint, and Married Filing Separate.

SINGLE

HEAD OF HOUSEHOLD

MARRIED FILING JOINTLY

MARRIED FILING SEPARATE

The following are a few of our articles related to home buying that you can use if you are thinking of purchasing your next house!

A. Buy A House or Rent

• Our Frugal Ways: Rent A Few More Years Before Buying
• The financial benefits of owning a house
• 7 Homeownership Tax Credits and Deductions
• What You Need to Know About the True Cost of Homeownership

B. Things You Must Do Before Purchasing A Home

• Check Credit History and Improve Your FICO Score
• Save Money – Why you need savings and how much do you need
• Determine how much house you can afford
• Mortgage Credit Certificate: How this program adds more money come tax time
• MCC Program By State

C. About Hiring Your Agent

• Buying a Home: Should You Hire an Agent?
• Buying A Home: Tips on Hiring an Agent
• How to compare agents anonymously

D. Which Type of Home Should You Buy?

• Single family homes
• Townhouse
• Condominium
• Should you buy previously owned or newly built homes?

E. Online Resources for Searching Your Home

F. Financing Your Purchase

• Various government loan programs that you may qualify for
• Need A Down Payment for Your House? Your City or County May Have Free Money For You
• Other sources of down payment that you can utilize
• Understand the types of Loan Programs
• Where to Get free loan comparison
• Get loan pre-approval Before Making an Offer

There are no clear cut answer since most of us run different types of businesses. What may be deductible in one business may not necessarily be deductible in another.

Because it is difficult to identify and list all the expenses for your particular business, the IRS made a general rule that must be satisfied in order to qualify the business expense as a tax deduction. According to the IRS,  you may be able to deduct your business expenses if all the following requirements are satisfied:

1. It must be both ordinary and necessary
2. It must be reasonable in amount
3. It must be directly related to your business

 Ordinary and Necessary:

The first test is the business expense must be ordinary and necessary expense for your business. So let’s break it down this definition a little bit.

Ordinary expense – For an expense to be considered as an ordinary expense, it must be common and accepted in your trade or business and usually refers to expenses that are ongoing and frequent. Such types of expenses include your office supplies, utilities or accountant fees. However, this can also apply to something that you pay only once, such as an installation fee to set-up your computer network.

Necessary Expense – It is considered a necessary expense if it is helpful and appropriate for your trade or business. An expense does not have to be required or indispensable to be considered necessary.

• Example –  Joseph, who is a telecommunication engineer, is in the construction of cell sites business. Most of the time, the business requires him to work off-hours such as midnight to dawn and in a secluded area. He has experienced getting “held-up” at gunpoint for a few times. For security reasons, he bought his own gun. The expense incurred for the gun purchase is “necessary” but is not an “ordinary” expense and is therefore not deductible.

Reasonable in Amount:

The second test is that the business expense must be reasonable in amount. For the most part, there is literally no limit on how much expenses you can deduct on your tax return for as long as the amounts are reasonable. If you are wondering what is a reasonable amount, the IRS may claim that it depends on your particular situation. However, it should be noted that the IRS has actually put limitations on a few items such as entertainment, meals and business gifts because these expenses are usually considered extravagant in nature.

Directly related to business:

The last test is that the expense must be directly related to your business.  All this means is that you cannot claim a tax deduction if those expenses are used for personal use instead of your business. However,  some expenses may cross the both the business and personal use such as when you use a section of your home as your business office to which common expenses such as utilities and insurance are applied on a single account or if you sometimes use your personal vehicles in business. In cases like this, the business portion must be determined from the total cost and only the business portion goes on the business tax return section. The qualified personal expense portion is generally deductible only if the taxpayer is itemizing his/her expenses (using Schedule A).

Source: IRS Publication 535

Did you know that one of the best ways to reduce your taxes is to start a home-based business?

Did you know there are a lot of tax breaks available to business owners that are normally not available and in some cases have a lot of restrictions if you are just working for someone else?

I. Things to Consider Before Starting A Business

When starting a new venture, one of the first things that you would do is to weigh the pros and cons of it. Does the advantages outweigh the disadvantages? Is it right for you? What home based business should you start?

• Advantages of a Home-based Business
• Disadvantages of a Home-based Business
• Tips for Selecting a Home-based Business
• Most Common Home-based Business Career Opportunities

II. The Business Start-up Checklist

When starting a big task, it is always good to have a checklist so you won’t forgot the important things. Starting a business is no exception. Below are the five task on the business start-up checklist.

A. Writing A Business Plan

Why you need a business plan and 7 must have sections for your business plan - Your business plan is your roadmap to assist you on where your business is headed.  This should help you understand the various aspects of your business operations.

B. Choosing Your Business Entity

Selecting a business entity is one of the most important thing to do when starting a home-based business. Which form of business should you choose depends entirely on your specific situation and your objectives. Among the factors considered are how much control of the business, taxes on the earnings, ability to raise capital, liability concerns, continuity of the business, ease of formation, dealing with government regulations, and potential for growth. So the question is which business structure should you select?

C. Obtaining Business Licenses and Permits

Business Documents You Need to Obtain and File Before You Start. Before you start your business, there are a few things that you have to do such as obtaining the required business license and permits. Discussed here are the six most common documents that you will need to obtain.

D. Business Accounts, Insurance and Financing

Opening business accounts, insurance and finding financing –  When operating a business, there are a few more administrative task that you have to complete. Check what business accounts that you need to open, what insurance do you need for your business and where can you find financing if you ever need one.

E.  Establish Your Business Office

Establish your business office - This process is not just clearing out a space for your office but it also involve 4 other important things in order to operate a home-based business.

F. Tax Payment Issues  for Home Business Start-ups

4 Most Common Tax Payments Issues – As a home-based business owner, you also need to be aware of the types of taxes that you have to pay. Discussed here are the four most common tax payment issues you have to be ready for.

She’s been really working hard on it and was stressed out because she had a test as well on one of her classes. There was a citizenship packet sent to her when she first applied and this includes the review and study guide. The good thing was that the questions that are going to be asked will be taken from the study guide.

The whole citizenship application process has been really quick so far when compared to the previous cycles. A closer look at the application progress:

• March 2011 -submitted application
• April 2011 – fingerprint
• July 2011 – interview

When she got to the interview room, the USCIS officer was very nice and accommodating. The officer knows that the interview can really be nerved wracking so as much as possible she was trying to put my wife at ease. The interview process took around 30 minutes starting with the 10 question US history test, review of the application and a couple of verification questions. After the interview, my wife saw the officer approving the application so she just had a sigh of relief.

Now, she is just waiting just for the oathtaking and it will be complete.

Below are some of the tips that we can share based on our experience

Study hard for the Citizenship Test

When my wife applied for the citizenship, she received a packet with instructions. There is also a review packet along with a CD as study aids. My wife has been reading the packet and listening to the CD from time to time but she crammed the week before the interview. US history may be easy for those who have taken the class at school but for someone who has not studied here in the United States, he/she won’t have any idea about the topic. As stated in the application, the questions that will be asked would be taken from the review questions so it was advised to study the review packets thoroughly. My wife said that that the computer randomly picked the questions and you must answer 6 out of the 10. Luckily, my wife had answered the first 6 questions so the officer did not ask the other four.

Review and Bring the Submitted Applications

It is critical to review the applications that you have submitted as the officer will be asking questions based on your application. Also, don’t forget to bring copies of your application. In some cases, where you are applying based on the 3-year rule (married to a US Citizen), you may include additional paperworks.

Arrive early

Just like with any other interview, try to arrive early. When we went, the office is only 15 miles away but with traffic, it would take as an hour to get there. So we left our house an hour and half early. If you can, try to visit the place ahead of time so can survey where to park, the best route in case there is traffic etc. Of course you can always use a GPS to help us navigate through the LA traffic.

Dress up appropriately

Try to dress up as if you are getting interviewed at work. Treat this as if you are applying for a job. When we went there, the guys are dressed up in suits and most of the women are in business clothe. You don’ want to wear jeans or anything inappropriate.

Procedures for Bringing a Lawyer

My wife did not have to do this but some people may be very uncomfortable during the interview. When we went, there was a couple who brought their lawyer with them. Obviously, both of them were scheduled for the interview but they were interviewed separately. The husband got called in first and the lawyer went with him. However, the wife got called in ten minutes later and since the lawyer was still with the husband, she requested to wait until the lawyer was available to go with her.

If you are interested in bringing a lawyer, there is a form that you need to fill out G-28 Notice of Entry of Appearance as Attorney or Accredited representative. and this must be send before the interview.

Always be honest during the interview

The USCIS knows everything about your records so you might as well be honest. Explain any discrepancies or any arrest or convictions. Nope, my wife did not have any of those but they do ask questions mostly related to the application such as if she is going to school, is she working and where is she getting her support. They also know when you went abroad and the funny thing is they ask this questions even if they already know the answers. They are just trying to see if you are lying.

For the former immigrant turned US Citizens, what is your experience? Do you have any tips that you want to share?

Although most hobbies are done just for leisure such as listening to music, playing sports, playing video games, reading books, traveling, or what have you, there are hobbies that can generate a little income on the side such as blogging, collecting and trading baseball cards or stamps, painting, craft-making , etc. In some cases, people have turned their hobbies into a very profitable business.

Going back with the hobby issue, income may not be consistent every month but it is still extra money. In most cases, there are expenses involved and these could be more than the income you’ll receive.

So, the question is what are the tax implications of your hobbies?

Reporting Hobby Income

Unless the IRS says it is exempted, all income are taxable and this includes income you receive from your hobby. One key advantage of hobby income is that since you are not running a business, hobby income is not subject to self-employment tax. You are only subject to your regular tax rates.

However, just like with reporting gambling losses and winnings, you cannot offset the expenses from your hobby income and report only the net earnings. You have to report hobby income and expenses separately on your tax return.

Where to report hobby income

Hobby income must be reported in line 21 of Form 1040. You also need to write the description on that line and in this case you need to write “hobby income.”

Reporting Hobby Expenses

Restrictions or Limitations

There are many restrictions or limitations when deducting your hobby expenses:

• Separate Reporting With Income- As stated previously, you cannot offset the expenses against the income and report only the net earnings. Hobby expenses must be reported separately from hobby income.
• Deductible Only if itemizing – Hobby expenses are only deductible if you are itemizing your return. This means that if you are just claiming the standard deduction, then you cannot deduct any of your expenses at all.
• Limited to the amount of income – You can only deduct up to the amount of the income. So, if the expenses exceed the income, you cannot claim the excess expenses on your tax return. As an example, if your hobby generated $500 in revenue and your expenses is $850, the amount of the expenses that you can report is only $500, the $350 will be forfeited
• Subject to the 2% of AGI (Adjusted Gross Income) limitations – Another catch is after factoring in the maximum limit on expenses based on income, the allowable expense  is also subject to the 2% of AGI limitations and is included as part of the Miscellaneous Expenses. The 2% AGI is called the “floor” amount and you can only deduct the amount that are in excess of this floor amount. As an example,  if your AGI is $50,000 then your “floor” amount for the miscellaneous expenses is $1,000 (2% x $50,000). If the aggregate total of all your miscellaneous expenses is $1,300, then you can only deduct $300 ($1,300 less $1,000 floor) on your tax return.

What exactly can you deduct?

Just like the rules used for the business, the expenses that you can deduct must be ordinary, necessary and directly related to  your hobby. As an example, if you love painting, then any expenses that you used for your painting that are ordinary and necessary can be included as hobby expenses such as the paint brush, paint, binders for your portfolio, and even travel expenses if you go to paint exhibit shows.

Where to report expenses?

Expenses must be reported in Schedule A line 23 and write hobby expenses on the appropriate description.

Source: IRS Publication 17 and 535.

I have taken care of the “mechanical” aspects of my car by following the periodical maintenance consistently and this is one of the reasons on how the car made it to fifteen years and has at least 245,000 miles! And believe it or not, it is still in good running condition.

On the other hand, the physical attribute is a different story. My car has suffered a lot of body damages due to numerous accidents.

• The door on the left rear side had a pretty bad damage and this one was caused by a hit and run. Those irresponsible and inconsiderate people struck my car in the parking lot but took off and never left any insurance information. The saddest part was that there were no witnesses that came forward. I no longer have the full or comprehensive coverage since it does not make sense to pay for a high premium knowing that the book value of the car is around $2,500 only. So this means that I have to pay for the damages myself.
• The fender and bender has been replaced so many times due to car accidents to no fault of mine and even though the other party paid for the damages, the fact that the car suffered damages may also cause the frame to deteriorate down the road. So far, body shop experts say that there were no damages to the frame.
• There were a lot of dents and dings around the car.
• And lastly, the paint has really faded on some areas while there are a lot of scratches and paint chip throughout the body.

So you can pretty much paint a picture on how my car looks like!

BEFORE

At first, I did not want to fix all the damages and restore the paint but since the car still runs good and may potentially last for another 5 years, I decided to have it fixed.

I’ve been approached by a lot of  people and offered their services for just $250 to $300 to fix the damage but I just do not trust those people. I much rather have it fixed at a body shop and obtain warranty on the job.

So I went to various car body shops and asked for quotes and these were what I got:

The problem with fixing and painting just the doors is that my car would look funny when the job is finished. One door looks brand new while the rest of the body were still in a pretty bad shape!

So, of course I opted for the $1,000 job, which offered the most value.

If my car were newer, I would have replaced the door and spent money on the paint job for the whole car for a total cost of around $4,000. Since it is old and may only last around 5 more years, I figure that the $1,000 body and whole car paint job is good enough. Besides it has a 5 year warranty for any peeling and fading. In addition, they claim that the paint is good for 9 years.

AFTER

All I want is to drive a presentable car since it just not very appealing driving around with that big damage. In addition, often times, we have guest coming from other countries or states and it’s also good to have a “spruce up” car! Purchasing a new car is still not in our financial agenda yet so I much rather just fix the car.

Last year alone, I only spent $500 in repairs and have been averaging only $300 in repairs for the past five years. By far, this is the biggest repair expense that I have incurred on but the fact that I am still gaining substantial savings versus purchasing a new car with an average monthly payment of around $500 (for the same car plus comprehensive insurance coverage). I do not count the maintenance into the equation since even on a brand new car, I would still spend money on oil change, tune-ups, tires, brake pads, etc. I normally count only the repairs to see if it’s time to purchase a new car.

So far, our car is still hanging in there.