1st Ever Carnival of Passive Investing - December 31, 2010 - Hittin' The Open Road Again Edition

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Welcome to the 1st ever edition of the Carnival of Passive Investing!

As discussed in my introductory post for this carnival, the purpose of this carnival is two-fold:

• To provide a forum to showcase articles and research in passive investing strategies (i.e. investing in ETFs, index mutual funds, etc. in such a way that one avoids employing active stock picking). By investing with the market, we are able to beat 70% of investment "professionals."
• To create a community of passive investment bloggers to connect and share expertise.

Considering that the Carnival is less than a week old, I am proud to report that there has been a very positive response thus far from the blogosphere!

The theme for this month's Carnival is world travel! Below, you will find various images of some of the amazing places my family has had the privileged of seeing through the years. This theme is quite fitting since I am very excited about going to Chile next week for a family vacation! 

Please enjoy!

Listed below are this month's top 3 editor's picks! Congrats to Free Money Finance, PT Money, and Smart On Money for winning!

1) FMF presents The Active versus Passive Decision posted at Free Money Finance, saying, "Why passive investing is a more reasonable approach to investing."

2) PT presents Dividend Mutual Funds Provide Protection From Complete Losers posted at Prime Time Money, saying, "The basics of dividend paying mutual funds."

3) Mr. Money Smarts presents 5 Reasons Why You Should Never Open A Roth IRA posted at Smart On Money, saying, "Why you should never open a Roth IRA."

View from the Porch at Our Hotel in Cabo San Lucas, Mexico - 2009

Listed below are the top picks of this month's awesome passive investing articles in the various Carnival categories.

Financial Planning

Mike Piper presents shares some valuable tax considerations to keep in mind as we are executing our passive investing strategy in 2011 Tax Brackets: What Will Change and How Should We Plan for It? posted at The Oblivious Investor, saying, "After the passing of the new tax act, what is going to change in 2011, and how should we plan for that?"

Michael Pruser presents The Disappointing Status of Social Security posted at The Dough Roller, saying, "Social Security seems to be getting worse with each passing day but don't lose hope yet!"

Me at Mont Blanc, France - 2008

Investing

FreeFromBroke presents Busting Common Investing Myths – A Tweetup With Motley Fool’s Tom Gardner and ShareBuilder’s Dan Greenshields posted at Free From Broke, saying, "I had the fortune to see Tom Gardner of The Motley Fool speak. One of his pieces of advice? Invest for the long run and control your emotions."

Aussie presents Buying Shares posted at Australian Stock Market Blog, saying, "So you've managed to save a little extra money. You know that to make it grow you'll need to consider some other investment options beyond term deposits and online savings accounts. You've heard that buying shares is one of the investment options you should consider - but what's the next step? This article discusses how to get started if you want to buy shares as an investment."

FIRE Getters presents Tax FREE Money Market Mutual Funds! posted at FIRE Finance, saying, "Most astute investors are aware of municipal mutual funds also known as MUNIs. These funds invest in term debts issued by various state and local governments. In general, dividends and gains from muni funds are exempt from federal as well as state taxes."

La Sagrada Familia, Barcelona, Spain - 2008

Personal Finance

Michael presents Traditional and Roth IRA Contribution Limits posted at Consumerism Commentary, saying, "When filing your taxes this year, don't forget to count the money you've deposited into your IRA!"

Sun presents Six Money Moves To Make Before Year End posted at The Sun’s Financial Diary.

Highest CD Rates presents What is a Jumbo CD? posted at Highest CD Rates Info, saying, "A jumbo CD can be a safe place to earn some extra money on a large sum of money."

That concludes this month's edition. Submit your blog article to the next edition of Carnival of Passive Investing using our handy carnival submission form.

Did you like this article? You can get the complete text of all the latest articles at My Personal Finance Journey in your email inbox each evening by clicking the link below and entering your email address. Your address will only be used for mailing you the articles, and each one will include a link so you can unsubscribe at any time.

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***Photo courtesy of http://www.reyncoinc.com/Images/Travel%20Plane.jpg

Educate Yourself On Finance, Knowledge Is The Key To Fiscal Responsibility

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Today's guest post comes to us from Brad Tussle. Brad lives and breathes personal finance. Writing in his free time, he enjoys sharing his knowledge about some of the top online finance schools.

Educate Yourself On Finance, Knowledge Is The Key To Fiscal Responsibility

In today's economy, practicing fiscal responsibility is more important than ever. Being fiscally responsible means managing your assets in a way that is productive and in the best interests of your future. 

It means not wildly spending money or buying things that are outside of your price range. While that hot new car or big TV probably seems like a necessity today, it will come back to haunt you in the future. A person who is fiscally responsible understands that they can't get caught up in what they want today because they need to be able to have money to finance their needs of tomorrow. Before someone is qualified to practice fiscal responsibility or teach others about the topic, they must understand several basic concepts of finance.

What You Need vs. What You Want

The basic principle of personal finance is understanding the difference between needs and wants. A thorough understanding of this topic can be a significant budget helper because it allows you to make sure you have enough money to make the purchases that are most important to your life, while the extras and frivolous wants are only purchased after all needs are met. The basic needs include shelter, clothing and food. That means you should make sure any rental or mortgage payments and grocery bills are taken care of before worrying about anything else. To some people, a higher education is also a basic need. If you are one of these people, you should put money away into a college fund before making other purchases.

Save Save Save

You need to know what to do with any money you have left over after meeting your needs. Saving money must be your top priority for surplus income if you want to practice true fiscal responsibility. A percentage, no matter how small, of your paycheck should always go into a savings account. Even modest contributions to a savings account adds up over time, giving you financial security in the event something goes wrong. Even if you completely happy with your life, you should still be putting money away. You never know when something out of the ordinary might occur and you could be stuck in a financial bind.

Stick to Your Budget

The concept of a simple budget is one of the first things taught in any finance class. People should be taught about budgeting as early as possible. As soon as someone earns an income, even if it from a part time job, they should be creating a budget. On a budget, the basic necessities of life should be the top priority. Those are followed by any goods or services that are not completely necessary, but make your life easier. For example, an automobile tuneup is not a necessity to survive, but it will sure help your commute. Adding things like this into your budget can actually help you save money in the long run. Make sure to include the amount of money you want to put into your savings on every budget.

Want to Learn More?

While these are the basic things you need to know about finance to practice fiscal responsibility, you may want to learn more to really make your money work for you. If so, it might be a good idea to take some classes on finance at your local college or university. 

Learning about finance from online schools is also a quality option. You can learn at your own pace from the comfort of your home. The top online finance schools teach you everything you need to know about finance. With this knowledge, you are qualified to teach your kids or friends about how they too can be fiscally responsible and live a better quality life.

How about you all? What is the biggest key in your life to being fiscally responsible? Have finance classes helped you to further your understanding? 


Share your experiences by commenting below!

Did you like this article? You can get the complete text of all the latest articles at My Personal Finance Journey in your email inbox each evening by clicking the link below and entering your email address. Your address will only be used for mailing you the articles, and each one will include a link so you can unsubscribe at any time.

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My Current Asset Allocation and Net Worth Growth - September-December 2010

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So, this fall has been quite crazy. I got all moved in to my new condo in Virginia, and started graduate school on August 23.

As is usually the case with buying a new home and moving, my finances were all over the map towards the end of July. However, I was finally able to sit down after the fires had died down from the semester and assess where I stood financially.

Let's take a look....

Net Worth Growth (not including condo)

From July 14 (when the last portfolio update was published - see link below for more information) to December 28th, the S&P 500 index went up by 14.9%. Very nice run for a quarter!!!

My Personal Finance Journey - July 2010 Portfolio and Net Worth

During that time period, my net worth (excluding condo ownership) increased by 5%. While this increase is respectable, the fact that my net worth growth is not keeping up with the market indicates that since I have taken a 67% pay cut in graduate school, I am not able to save money as effectively (which is probably to be expected)

Condo Equity Growth


Since I am not counting the home equity in my condo as part of my asset allocation, I have added a new section to these monthly portfolio reviews to account for this important aspect.

Currently, I have 9% home ownership in my condo (up from 0% in July), with this accounting for 34% of my real net worth (so net worth subtracting the condo loan - this is different from the net worth above).

Update on Financial Goals for 2010

I have now achieved the following financial goals in 2010. I have done quite well I think - thanks to everyone's help for keeping me motivated and accountable!

• Achieved my short term target net worth for this year.
• Contributed the maximum contribution level of $5000 allowed for my Roth IRA for the year 2010 (and 2009 as well).
• Eliminated all significant holdings in individual stocks from my portfolios.
• Eliminated the actively managed Vanguard Short-Term Investment-Grade Fund (MUTF: VFSTX) and replaced it with the following short-term bond index fund - Vanguard Short-Term Bond Index Fund (MUTF: VBISX).
• Successfully purchased a condominium to live in for graduate school. Yah!!!
• Initiated Rollover IRA to Vanguard from my Fidelity 401k from my previous employer.
• Purchasing a TIPS inflation protected mutual fund.
• And last but certainly not least, sold out of the actively managed mutual fund, CGMFX (CGM Focus Fund) recommended by Jim Cramer several years ago that didn't make me any money at all! 
• Completed my will. Next step is to have it reviewed by a lawyer.
• Set up accounts for making home ownership automatic - automatic deductions for loan repayments, real estate taxes, maintenance reserve funds, insurance, etc.

For a detailed list of my short term, mid term, and long term financial goals, click on the link below:

My Personal Finance Journey - Financial Goals

Review of Current Asset Allocation (excludes condo)

• Overall Fixed Income / Equity Allocation
• Currently, 26% of my net worth is invested in fixed income instruments (cash or bond funds), and 74% is invested in equity.
• This is almost perfectly aligned with my targets for these categories of 25% (fixed income) and 75% (equity).

• Equity Allocation
• In the equity portion of my portfolio, 74% is invested in US Domestic Equities with the remaining 26% being held in international equities. 
• This is almost perfectly aligned with my equity breakdown targets of 71% and 29%, respectively, for US Domestic and international holdings.

While the overall percentages for these categories looks pretty good, a detailed look (table below) at the allocation breakdown reveals the real story and provides for better analysis of the current state.

Remember: a red flag goes off if your current % allocation in a category is greater than +/- 5% off of the target allocation. This is my trigger that I need to rebalance that aspect of my portfolio.

% Cash (money market target 5%) 7%
% non-inflat Bond Funds (target 15%) 15%
% TIPS Bonds (target 5%) 4%
% International Equity (Target 11%) 11%
% International Emerging Markets (Target 11%) 9%
% Domestic Large Cap (Target 8%) 8%
% Domestic Small Cap (Target 8%) 9%
% Domestic Small Cap Value (Target 14%) 15%
% Domestic Large Cap Value (Target 13%) 14%
% REIT (target 10%) 9%

Analyzing my current asset allocation percentages, it appears that I am lucky enough to be exactly on target with all of my asset classes (within +/- 5% banding) . Therefore, no rebalancing is required.

My next moves for the December 2010 / January 2011 time frame will be to do the following:

• Begin contributing to my Roth IRA for the 2011 tax period!
• Reanalyze my dreams and goals and set  new ones for 2011.
• Possible candidates at first glance would be to save money for a washer/dryer installation in my condo and saving for a possible trip to the Grand Canyon (something I have never seen).

Wish List

• At some point, purchase the Vanguard Total Stock Mkt Idx (MUTF:VTSMX) to replace S&P 500 index fund. This gives better, broader diversification to the US stock market.
• Purchase more microloans in developing countries as part of my "making a difference" life value in my Purpose Focused Financial Plan.

How about you all? Did you make any big moves that affected your net worth this past month? 


Do you consider your home equity as part of your net worth or do you leave it as separate?

How about you all? Share your experiences by commenting below!

Did you like this article? You can get the complete text of all the latest articles at My Personal Finance Journey in your email inbox each evening by clicking the link below and entering your email address. Your address will only be used for mailing you the articles, and each one will include a link so you can unsubscribe at any time.

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Best of Credit Cards and Saving Money Carnival - December 28th, 2010 - Ridiculous Arnold Schwarzenegger Videos Edition

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Welcome to the December 28th, 2010 edition of the Best of Credit Cards and Saving Money Carnival.


The goal of this carnival is to highlight articles each week that provide a unique view of credit cards, credit scores, and personal finance that can help people save money.


To give us all a little break from the stresses that can almost certainly come around the holidays, the theme of this week's edition is the one, the only, Arnold Schwarzenegger. 


Enjoy the articles and be sure to let me know which clip is your favorite in the comments section! 

MadTV Spoof of Arnold's Made-Up movie, Stolen Identity 3. Enjoy!

Credit Cards

Janet presents Credit Card Use and Materialism posted at Credit Cards Canada.

Silicon Valley Blogger presents Blue Sky Credit Card from American Express Review posted at The Digerati Life, saying, "My review of Amex Blue Sky. :) Thanks!"

Michael Pruser presents Citi ThankYou Premier Card $200 Bonus posted at The Dough Roller, saying, "Citibank has launched a new and improved rewards credit card known as the “ThankYou” card, offering $200 in gift cards right away."

Michael presents The Plum Card® from American Express OPEN 1.5% Cash Back posted at Consumerism Commentary, saying, "The Plum Card from AMEX Open offers small businesses a chance to survive and thrive."

Jeff Weber presents Getting a Virtually No Fee Balance Transfer posted at Smart Balance Transfers, saying, "Tips on how to reduce balance transfer expenses."

Clair Schwan presents “Abusing” Credit Cards – A Contrarian Perspective | SELF RELIANCE WORKS posted at SELF RELIANCE WORKS, saying, "Mark Zeiger presents an alternative view of credit cards, and highlights how even those with a subsistence income can use them responsibly."

Boomer presents Get Out Of Credit Card Debt! posted at Boomer& Echo, saying, "If you are currently holding a balance and continue to use your card when credit becomes available you are basically paying your future income to the credit card companies for decades to come."

MoneyThinking presents Kids Do Stupid Things in College posted at Money Thinking.

Tim Chen presents Best Way To Buy Gas? Gas Credit Cards or Discount Stations? posted at NerdWallet Blog - Credit Card Watch, saying, "Figuring out how you can score the cheapest gas can get complicated."

Ben presents Citi ThankYou Premier & Preferred Cards posted at Money Smart Life, saying, "A comparison of the new Citi ThankYou cards"

Jeff Weber presents Chase Freedom Card Review | Chase Freedom Visa and Mastercard posted at Smart Balance Transfers, saying, "A look at the Chase Freedom credit card."

Every Arnold Scream From Every Movie - All In One!

Credit Scores

BWL presents Consumer Info About Credit Scores posted at Christian Personal Finance, saying, "A look at some of the things that affect our credit scores..."

Finance

David de Souza presents Three Ways Christmas Could Affect Your Tax Bill posted at UK Tax Blog, saying, "Guide to three ways that Christmas can impact on the amount of tax that you pay"

Kyle Taylor presents Best Ways to Sell a Gift Card posted at The Penny Hoarder.

Frugality

Tim Rakeman presents How To Be Frugal: Grow a Garden to Save Money posted at All Things Frugal, saying, "When it comes to saving money on groceries, unfortunately that usually means eating a lot of processed crap. Anyone who has been in a grocery store knows the cost of a calorie is a lot cheaper in the form of a frozen pizza than it is in an apple."

Miranda presents Is a Prepaid Cell Phone Right For You? posted at Moolanomy.

Hercules in New York Clips - Arnold's First and Best Movie Ever! 

Personal Finance

Card Wisdom presents Tips for Recovering from Credit Card Debt in the New Year posted at Credit Card Wisdom, saying, "Ideas to get finances in order and reduce debt in the new year."

BWL presents Tax Act 2010: Social Security Tax Reduced in 2011 posted at Christian Personal Finance, saying, "A look at how the latest tax act has social security rates reduced in 2011..."

Michael Pruser presents You Have Many Choices When it Comes to CD’s posted at The Dough Roller, saying, "When it comes to saving in CD's, you have more options than you might think."

PT presents Do You Need Insurance For Your Internet Business? posted at Prime Time Money.

And if you really are a fan and want to relive all of Arnold's 10000 movies from the past 20 years in ten minutes, take a look at the clip below! (Beware, there are a few bad words)

Saving Money

One Family presents Mortgage Refinancing Decision – How to posted at One Family's Blog, saying, "Thanks!"

Darwin presents Energy Tax Credit 2011 – Not What It Used to Be posted at Darwin's Money, saying, "Check out the new 2011 Energy Tax Credits in the spending bill just passed by Congress. The window, door and HVAC credits aren't as generous as they used to be, but they're in there."

That concludes this edition. Next week, the Carnival of Credit Cards and Saving Money will be returning to Card Wisdom. Submit your article for inclusion in the upcoming edition by clicking the following link - Jan 3 Edition of the Carnival

Did you like this article? You can get the complete text of all the latest articles at My Personal Finance Journey in your email inbox each evening by clicking the link below and entering your email address. Your address will only be used for mailing you the articles, and each one will include a link so you can unsubscribe at any time.

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Carnival of Wealth - December 26th, 2010 - Fantabulous YouTube Christmas Videos Edition

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It is an honor to be hosting this week's edition of The Carnival of Wealth. The focus of the carnival is to feature writings related to creation, management, and enjoyment of wealth.

The weekly Carnival of Wealth features the best articles in the blogosphere on the following broad topics - Investing, Personal Finance, Taxes, Estate Planning, Careers, Entrepreneurship, Family, Lifestyle, and Travel.

The theme for this edition (since it is Christmas and all) of the Carnival of Wealth is awesome, amazing, funny, hilarious, fantastic YouTube videos related to Christmas! Enjoy! Please let me know which video is your favorite! 

Merry Christmas From My Personal Finance Journey

My Personal Finance Journey Homepage

Good Christmas morning everyone! 

I know we're all busy with our families today, but I just wanted to send out a quick Christmas greetings note and say thank you for being supporter of our blog! 

My family shared our gifts and had Christmas dinner last night to accommodate work schedules, but I think today, we are going to go for a hike and then go see Meet The Little Fockers at the movie theater!

How about you all? Do you have any good Christmas plans for today?


Share your experiences by commenting below!

Did you like this article? You can get the complete text of all the latest articles at My Personal Finance Journey in your email inbox each evening by clicking the link below and entering your email address. Your address will only be used for mailing you the articles, and each one will include a link so you can unsubscribe at any time.

Subscribe to My Personal Finance Journey via Email


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Announcing a New Personal Finance Blog Carnival - The Carnival of Passive Investing

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Good day blogosphere! I wanted to let everyone know about a personal finance carnival I created just today - The Carnival of Passive Investing

3 Risks To Consider Before Investing in Fixed Annuities

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Today's guest post comes to us from Lisa Cintron on behalf of OnlineAnnuityRates.com.

Annuities are savings instruments issued by insurance companies to individual investors. The annuity contract specifies the amount and time period for the premiums to be paid. It also specifies the amount and time period for payments to the investor after the premiums are paid. Fixed annuities do not invest in stocks, only fixed income assets such as bonds and guaranteed insurance contracts. Fixed annuities have guaranteed principal and payment amounts that do not change.

The Basics of Debt Snowballing

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Today's guest post comes to us from Louise Baker. Louise is a freelance blogger and journalist who writes for Zen College Life, the directory of higher education, distance learning, and online degrees. She most recently wrote about where to get the best online criminal justice degree.

The Basics of Debt Snowballing

The idea of using a debt snowball to eliminate debt has become a commonly used debt reduction strategy in recent years. A debt snowball prioritizes debts by balance rather than interest rate. Many debt counselors will suggest this as the method of choice due to its ability to motivate individuals and families to continue on their path to becoming debt free. The snowball debt method is most commonly used for revolving debts, such as credit cards, but can be successful with other debt as well. Oftentimes, debt counselors will leave mortgage and car loans out of the debt snowball and focus on those debts at a later step.

At a very basic level, a debt snowball works in this way:

What Are Balance Transfers & How Do They Work

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Today's guest post comes to us from Jeff Weber. Jeff writes about saving money with balance transfers at www.smartbalancetransfers.com/blog, a site designed to help people find the best money saving balance transfer offers.

What Are Balance Transfers & How Do They Work

There are two types of credit card balance transfers: those with introductory offers and those with fixed rates for life.  

An introductory offer transfer means you will receive a 0% or a low interest rate on the money transferred to the card for a limited period of time.  You will commonly see 0% balance transfer offers for 12 months, for example.  A fixed rate balance transfer provides a specified interest rate on the money transferred until the balance is paid in full.  Fixed rate balance transfers are currently not available due to economic conditions, so if you are looking to do a balance transfer, you will need to seek out a card with a low short term rate.

20 Ways You Can Save Money on Gas

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Today's guest post comes to us from Bailey Harris. Bailey writes for www.carinsurancequotes.net, a car insurance comparison site. Visit their site to find out more!

20 Ways You Can Save Money on Gas

The rising price of gas has created financial hardship for almost everyone. Prices at the pump seem to spike day by day. While there may be no way for you to control the gas prices, there are a few tips and tricks that can be employed to help save money at the pump. Here are 20 to try.

How To Compare Business Loans

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Today's guest post comes to us from Andrew. Andrew has been working in the finance industry for several years. He helps people to refinance their home loans and provides advice on debt consolidation.

How To Compare Business Loans

Business owners occasionally need financial assistance to assist in start-up costs, working capital, business expansion, or renovations (i.e to make money in the long run).  For each of these reasons and many more, there’s a countless amount of loan options available.  In order to make an efficient decision on a business loan, business owners need to understand how to assess loans and what the differences can mean for their business.

The following questions will help you, as a business owner, to differentiate the options available and give you a better understanding of the loans offered.

Regulation 60 in the Life Insurance Industry

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Today's guest post comes to us from Denise Manchini. Denise is a manager with AccuQuote.com, a leading Life Insurance Quotes company, providing free term life insurance quotes from some of the top-rated insurance companies in the United States. To learn more about her website, please visit the link above.

Regulation 60 in the Life Insurance Industry

Insurance companies are regulated both by the federal government and the state government. These regulations are designed to protect the integrity of a company as well as consumer rights.

Regulation 60 is a consumer protection law in the State of New York that pertains to the replacement of life insurance and annuity contracts. Regulation 60 requires that insurance companies give out specific information and disclosure to consumers wanting to replace their existing policy with a new one.

Debt Free Christmas: Saving You Time and Money

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Today's guest post comes to us from Elias Cortez. Elias is the editor of topnetbookpicks.com and provides reviews and information for netbooks computer products, such as the toshiba nb305 review . You can read all his mini netbook reviews and other popular netbooks information at his website.

Debt Free Christmas: Saving You Time and Money

As time has passed, I’ve discovered that the holidays often end with a large amount of holiday debt incurred because of large gift purchases for friends, family, extended family, teachers, coaches, and everyone else. Each year, the budget for Christmas gifts seems to get smaller and smaller and the list gets larger and larger. The list gets longer and the kids get older and their participation grows. Sharing your appreciation with everyone who contributed to the success of your previous year doesn’t mean that you have to go over budget. Incorporating your children and friends into making inexpensive holidays gifts is a great way to laugh and play while taking it easy on your checkbook.

Debt free living during Christmas time begins with setting your budget ahead of time so that you don’t overspend. By starting the saving process early in the year, set aside in a bank account or a sock drawer, you will find that paying for Christmas doesn’t make you cringe. While there are numerous volunteers, co-workers, coaches, and teachers, they don’t all need an individual gift to express your gratitude. A hand-written card will make anyone’s heart smile. Also, purchase a bulk of small tealight candles and attach a note that says something such as “you light up my world” or “you light up our lives” or even “you light up the office”.

Personalized Gifts:

• With your home computer and a few decent photos of the family, friends, or sceneries, you can personalize calendars, photo collages, or cards through a free photoshop program, through an online program such as Shutterfly, or through store photo centers at Target or Walmart. 
  
  
• Target also has a dollar bin section which is great for smaller gifts of appreciation for volunteers, coaches, teachers, and instructors. These dollar sections are conducive to themed gift baskets, as a majority of the contents available match other content. 
  
  
• For example, for friends or significant others you could buy a dollar or five dollar movie with popcorn and an individual popcorn bowl from these dollar sections and make it into a themed gift appropriate for whole families or couples. 
  
  
• For coffee lovers, a coffee cup filled with beans is the perfect gift.

Friends:

• Close friends always appreciate reminders of shared moments which can be done through scrapbooks. As an annual theme, you could easily make one or two scrapbook pages for each holiday/birthday/special occasion which you bound together at the end of the year as a Christmas gift.
  
  
• For those adult couples with whom you are acquainted, painting customized wine glasses and complementing it with a bottle of wine makes for the perfect holiday party.

Family:

• As far as extended family goes, there can be a lot of them. Making personalized Christmas ornaments is an easy way to check them all off of the list. By mixing flour, salt, and water you can make dough which can be shaped into ornaments and left out to dry and solidify. By poking a hole in the top, once it is dry you can paint or decorate the gifts and run a small hook through it. 
  
  
• A video or DVD compilation of the family activities having taken place over the last year is a great idea for grandparents or aunts and uncles who live far away. Collecting filmed bits throughout the year of performances, soccer matches, recitals, can all be clipped and combined using DVD software and a home computer.
  
  
• Framing a family photo makes an easy and inexpensive gift for extended family members as well.

Themed Kits:

• Having a hobby can make it much easier to select gifts that won’t break the bank. For instance, someone in the family who enjoys music can be given an inexpensive gift card for itunes and a book or magazine about their favorite band or singer. 
  
  
• Those who enjoy sewing can be given a small kit full of needles, pins, and threads in their favorite color. 
  
  
• An inexpensive red and white plastic table cover with red plastic utensils provides for an endearing picnic pack. 
  
  
• The outdoorsman or woman in the family would greatly benefit from a gardening pack including a packet of seeds and a gardening tool inside of a small bucket. 
  
  
• A car wash kit can also be made with dollar section sponges, car soap, and or a tire brush.

Cooking Kits:

• For anyone who isn’t on a diet or watching their holiday weight cookies, pies, cakes, breads, and desserts are great gifts. Everyone loves baked goods. 
  
  
• Breakfast packs can be made for multiple people by purchasing large bags of pancake mix or waffle mix with chocolate chips and a box of ziplock bags. You can separate small quantities for each gift and place them inside of a ziplock bag with a note that instructs them to add water, oil, and eggs.
  
  
• A BBQ kit would include a single BBQ utensil with a bottle of sauce. You can purchase a set of BBQ utensils with multiple bottles of sauce and simply divide one utensil from each with a single bottle and distribute them to the men in the family. 
  
  
• A chocolate kit can be made by purchasing large bags of fun size chocolates in different kinds such as bars, truffles, kisses, etc… and mixing and matching handfuls placed inside waxed paper, tied off with string.
  
  
• If you are better at cooking than your friend, offer to come over and cook for them as a gift. 
  
  
• If you have a printer, download and print a variety of recipes from the internet and place them on 3 X 5 cards, then place them inside a small plastic box usually found in the dollar section at Target.

Gift Cards:

• For any of the aforementioned kits, a small gift card can be purchased and included. 
  
  
• A Starbucks gift card can be placed inside of a coffee mug or an itunes gift card on the inside of the book on their favorite band.
  
  
• A movie theater gift card complements a popcorn bowl perfectly.

No matter which online gift cards you want, be sure never to pay full price for them. There are websites which sell unwanted gift cards from consumers at a discount such as giftcards.com or plastic jungle. Halfoffdeals.com is one of many half price websites which offer gift cards for restaurants, trips, shows, and stores at great deals. Warehouse stores such as Costco or Sam’s Club also offer gift cards at a rate of 15-20% less than the face value for places like Baja Fresh, iTunes, Regal Cinemas, and AMC Theaters.

How about you all? What techniques do you use to save money around Christmas time? Share your experiences by commenting below!

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Withholdings and Estimated Taxes: Avoid A Big Surprise At Tax Time!

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Today's guest posting comes to us from Alan T. Hostetler, CPA. Alan's accounting practice, Hostetler Stott, CPA, provides tax preparation and planning for individuals, small businesses, and informational returns for non-profits. 

Visit his website at the following link to find out more! Hostetler Stott, CPA.

Withholdings and Estimated Taxes:  Avoid a big surprise at tax time!

Tax filing season is right around the corner and many taxpayers dread this annual ritual.  Not only can filing a tax return be a tedious administrative chore; it can also lead to an unpleasant surprise if a tax liability is due.  Sending in extra money with your return is always a bummer, but the opposite can be upsetting as well.  If you end up with a large refund you may be wondering why you effectively let the government borrow your money while you struggled with cash flow throughout the year.  The following are some common questions I hear from taxpayers regarding withholdings and payments and some explanation that I hope you will find useful.

My employer takes out my taxes for me so isn’t it their fault if my withholdings are wrong?

Occasionally employers do make mistakes in withholding and it is important that you communicate with them if you feel something was done in error.  However, employees are responsible for providing correct information on their form W-4 Employee’s Withholding Allowance Certificate and the equivalent form for state withholdings when they are hired.  If your address, marital status, or allowance information changes at any time, make sure you inform your employer. Providing fraudulent information (or failing to provide the required information) on your W-4 form may result in penalties of up to $1,000 or imprisonment, so you really don’t want to lie on this form.

 

If you itemize your taxes, it is a good idea to update this form on an annual basis.  Page two of the form W-4 includes a worksheet to more closely figure your withholding amounts for taxpayers who expect to itemize their taxes.  Ask your employer for this form or find it on the IRS website.

If I am self-employed, who takes out my taxes?

Self employed taxpayers, and those who are owners in a partnership usually need to withhold their own taxes and pay them in the form of estimated tax payments.  The IRS provides 4 payment vouchers on form 1040-ES, which you will send in four times per year with payment on a portion of your expected year-end tax liability.  The IRS divides the year up into 4 periods:  1/01-3/31, 4/01-5/31, 6/01-8/31, and 9/01-12/31.   At each of these cutoff dates, you should calculate your estimated taxable net income from your business (and personal income statement) and compute the amount of tax you expect to pay on this income.  15 days after the end of each period, you need to send in your payment to the address in the instructions on the form.  Alternatively, you may make secure payments online on the IRS’s EFTPS website (www.eftps.gov).

Why can’t I just wait until year end to pay all my taxes? 

Even if you are extremely disciplined financially and are able to save up enough to pay your taxes at the end of the year, you should pay throughout the year because you will otherwise likely end up paying penalties on top of your taxes.  The previous paragraph described how to calculate your estimated taxes.  If you do not make adequate estimated tax payments each period, you will be penalized at an annual rate of 4% of the amount you underpaid each period, prorated for the number of days you underpaid your estimated tax payment. 

How can we make sure that we pay in enough to cover our taxes and avoid a penalty?

It is nearly impossible to predict your exact yearend tax liability before year end.  Not only can your income and deduction expectations change, but the tax laws affecting your liability may not be fully determined until after year end!  In 2010, we are still waiting to hear from Congress whether or not certain tax deductions will continue.  With all this uncertainty, we can expect to miss the mark a little, but by making careful projections and understanding the rules for tax payments we can avoid big surprises come tax time. 

There is relief for some newly self-employed taxpayers. The penalty for underpayment of estimated taxes can be avoided by ensuring that your total estimated payments plus any withholdings for the tax year exceed the lower of:

• 90% of your current year tax minus credits
• 100% of your prior year tax minus credits (for those making more than $150,000, or $75,000 if married filing separately, this figure increases to 110% of your prior year tax minus credits)

In other words, plan to pay in at least the amount of tax you paid the prior year (10% more if you have high income) and you won’t need to worry about the penalty.  Just be sure you have enough saved up to cover the additional taxes if you have an exceptionally profitable year!

Where can I find more information on estimated taxes and withholdings?

The IRS makes all of their forms, instructions, and publications available online at www.irs.gov.  Here are a few useful links to information on this topic:

2010 Form W-4 and instructions: http://www.irs.ustreas.gov/pub/irs-pdf/fw4.pdf

2010 form 1040-ES and instructions: http://www.irs.gov/pub/irs-pdf/f1040es.pdf

EFTPS online federal tax payments: https://www.eftps.gov/eftps/

IRS Publication 505 “Tax Withholding and Estimated Tax”: http://www.irs.gov/publications/p505/index.html

How about you all? Have you ever had any big surprises around tax time? If so, how did you handle them? What is the most difficult aspect of tax filing in your opinion? 


Share your experiences by commenting below!

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7 Ways to Save Money Driving

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Today's guest post comes to us from Alban. Alban is a personal finance writer at Home Loan Finder, a free home loan comparison website. Click on his website to find out more!

7 Ways to Save Money Driving

It can seem that gas stations have us by the fuel caps the way prices can fluctuate from day to day and week to week. While there is no getting around our need to fill up, you can put more time between each visit to the gas station, and save money when driving with just seven steps which are easy to implement in your life. 

1 – Choosing the car

You may not see a boost in your savings account balance if you go out and upgrade your car when you weren’t planning to, or couldn’t afford to. However if you’re in the market for a new vehicle, you should pay as much attention to its fuel consumption as to the number of seats and whether you like the color. 

When you are comparing a new car, look for the fuel consumption rating. This will tell you how many litres/gallons of fuel are used per 100 kilometres so you can compare each vehicle across a level playing field. This fuel consumption figure will be an average of the consumption during city driving, and the consumption during country or suburban driving, therefore make sure to compare the consumption which relates to the type of driving you’ll be doing most. 

2 – Regularly servicing your car

New or old, every vehicle can be made more fuel efficient through regular servicing. With clean filters and regular oil changes your vehicle will run more efficiently and use less fuel, you’re also able to pick up on any maintenance issues and rectify wear and tear of parts which can make your car have to work harder. 

At your periodic services, your mechanic should also rotate and check your tires. Tires with a good tread, and at the right pressure will ensure your car uses fuel efficiently when you’re on the road. 

3 – Save your driving habits

Even driving the most fuel efficient car erratically can use excessive amounts of fuel, and to save money when driving aim to drive in a more measured way. For example, quick acceleration from the lights gains you little ground even if you feel speedy, and will cause a sudden and significant surge from your fuel tank too. Driving above the speed limit also makes your car work harder to go faster in most cases, as can rapid changes in speed if you speed up and slow down repeatedly to try and fit through a break in traffic. 

Instead, use your cruise control wherever you can to maintain a constant speed and conserve fuel. If you drive a manual, make sure you change gears at the correct rpm for each gear range, rather than maxing out the lower gears. 

4 – Change your type of fuel

Gasoline is one of the most expensive types of fuels you can be putting into your car, unfortunately a diesel vehicle or a gas conversion can be just as costly as filling your tank every second day. Therefore, before you consider buying a diesel car to make your fuel consumption more efficient, or converting to gas to pay less per litre, look at the savings you would make from the conversion, and whether they would be outweighed by the cost of the fuel change. If you do a lot of driving then the cost could be outweighed fairly quickly, but if you only drive around the city, it could be some time before you break even. 

5 – Plan your drives

If you can do more than one thing each time you’re out in the car, you can save another trip at another time. For example if you return a video at the video store around the corner from your child’s school on the way to pick them up in the afternoon, you’re saving the fuel of another car trip, to almost the same destination. 

Planning your trips in this way does require you to be more organized. Therefore, always make sure to take a shopping list to the supermarket, so you don’t have to make return trips for forgotten items. You can aim to car pool, picking up other children in your child’s class on the way to school, and saving when their parents drop your child home. Also make sure to plan your trips using a GPS system or maps, to save time in getting lost, and potentially travelling further, or retracing your steps. 

6 – Get smart with your air-conditioner use

We all know our cars use more fuel when we have the air-conditioner running, and you don’t have to melt on hot days just to save a little in fuel money. Instead, just be aware that when you are driving around 60 km/h it is more fuel efficient to have the windows down to cool off. However, if you are travelling faster than 60 km/h it is more fuel efficient to roll the windows up and use the air-conditioning due to the reduced wind drag. 

7 – There’s an app for that

If all of this fuel watching and habit changing seems like a lot to remember when you should have your eyes on the road and your mind focussed on driving, then your iPhone can help. There are several apps available which can help you drive more efficiently, and save money on fuel.

• GasBag. The GasBag app keeps track of fuel prices and will be able to find the cheapest fuel station, the shortest distance from you, so you don’t use up those fuel savings in getting to the pump. GasBag also has a log book function which allows you to track each time you fill up, and the mileage you are getting.
• EcoDriveEd. The EcoDriveEd app actually teaches you how to drive more fuel efficiently. The app uses your iPhone’s built in accelerometer to teach you driving techniques which will reduce your emissions and help you save on fuel costs. You will even receive real time feedback from the training programs, so you can adjust your habits as you drive. 

How about you all? What techniques do you use to save money on the road or with your car? 


Share your experiences by commenting below!

Did you like this article? You can get the complete text of all the latest articles at My Personal Finance Journey in your email inbox each evening by clicking the link below and entering your email address. Your address will only be used for mailing you the articles, and each one will include a link so you can unsubscribe at any time.

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