Money Crusade

Christmas and Credit cards two words that are synonymous with each other.  Christmas doesn’t have to mean increased debt and credit card payments.  With a little pre-planning and creativity Christmas can be fun again.  Christmas is one day 5 minutes  once a year yet the payments from the marathon shopping and Black Friday sales last for months.  July is a great time to start planning.  There are 176 days until Christmas start preparing now.

My philosophy on Christmas saving is exactly like the my philosophy on building an Emergency Savings Account automate it as much as possible. I have a fascination with round numbers; I would start with $10, $15, $25, or up and set-up an automatic savings plan.  When Christmas comes you have a savings account stocked with money.  Money that can be spent on Christmas gifts or credit card payments (see the post about maximizing  credit card rewards located on my sister blog).  Do not worry if the account doesn’t have enough to cover the full cost of your Christmas, start small and build.  The first year we had our Christmas Savings account we had just paid off one of our loans, we simply rolled that payment over into the Savings account.  The money was never missed and at the end of the year there was $1500 in the account, but my limit for Christmas s $1000; at the end of shopping we were able to carry $500 into the next year.

As cliche as it sounds; time is your friend.  Every little bit that is able to be put away early saves more in credit card interest.  Let’s take the same $1000 I spent at Christmas time and assume it was put on a credit card.  According to Bankrate the current fixed average interest rate is 13.74%.  Paying only the minimum, $15.00/month (estimated), it will take 80 payments (6.66 years) to pay off the $1000 balance.  The interest charges are approximately$442. Christmas spending by your family has just increased by 50% without any extra gifts.  Instead of that particular Christmas costing $1000; it has now cost your $1442.00 and depending on your credit ratio – it could have cost you credit score points which results  in higher rates on everything in your life.

If there is consistently a small amount of money placed into a savings account you could make $5.00-$10.00 in free money and save interest fees on the credit card.  Stay tuned for more tips throughout July on saving money and making the most of Christmas through our Christmas in July Series.  Calculate your own interest fee here.

What tips and tricks do you find works best for you family to prepare of Christmas and stay out of debt?  We love reader comments and questions.

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Follow Nicole on Twitter for immediate notification of new posts.  She also writes more about finances an credit at her personal blog, Finance Diva.

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June 30th, 2010 the Senate overwhelmingly voted to extend the closing deadline for those buyers who qualify for either the $8K first time homebuyer credit or the $6500 existing homeowner credit.  President Obama is expected to sign the bill into law Tuesday, July 6th.  What does this mean for all of the would-be homeubyers?

Under the extension the homebuyer must have met the April 30th deadline to be UNDER CONTRACT for a home.  Since short sales are making up a large portion of the homes currently under contract the extension merely provides more time to close to transaction.  The old deadline was June 30, 2010 to close.  The new deadline will be September 30, 2010.

It is estimated that approximately 200,000 people would have lost out on the credit had the deadline not been extended.  Congress has been trying to pass the extension for the last month, but it got caught up in Washington politics. Only when it was separated from a larger jobs bill did deficit-wary lawmakers sign off on it. The extension will lower the deficit by $9 million over a decade since it is offset by certain other provisions.

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You can keep up with Nicole on Twitter or her personal blog.  Feel free to leave your thoughts below.  We love reader feedback and reader questions.

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As Congress debates whether to extend the first time homebuyer credit to September 2010; let’s take a look at how the credit has changed over the past two years. Who might qualify and not realize it.  Who has to pay it back and who doesn’t.

The first time homebuyer credit became law on July 30, 2008 allowed for those who hadn’t owned a main home in the last 3 years to take advantage of a refundable tax credit, 10% of the purchase price, up to $7,500.  There are certain AGI (Adjusted Gross Income) tests that have to be met in order to qualify.  The credit in its original form had a maximum amount of $7,500 and has to be paid back two years after receiving the credit.  Those homebuyers who claimed the credit in 2008; will start paying the credit back on their 2010 taxes in the amount $500/year for the next fifteen years.  This could do one of two things depending on your situation; either decrease your refund or increase the amount of your taxes.

An update to the first time homebuyer credit was signed into law Feb 17, 2009 by President Obama and it both changed and expanded the tax credit.  The maximum amount was increased from $7,500 to $8,000 for those Married Filing Jointly and $4000 for those Married Filing Separately.  The requirements for this credit are that the house be purchased between January 1, 2009 and December 1, 2009.  As with the original bill; there are income requirement. This refundable credit does not have to be paid back provided the people receiving the credit live in the house for 36 months.  The credit can be claimed on either the 2008 taxes or 2009 taxes.

November 2009 the first time homebuyer credit was changed and expanded for a 3rd time.  The credit remains the same at a maximum of $8000 and it does not have to be paid back (unless, the house is sold or stops being the primary residence within 36 months after purchase).  The end date of the credit pushed back until April 30, 2010.  The house must be under contract by May 1, 2010 and must close the mortgage by July 1, 2010.   The law allows for long-time home owners to purchase a new primary residence and qualify for a reduced amount of credit ($6,500) as well as raised the income limitations for the credit.  If you didn’t qualify before due to income limitation or current homeownership; you might qualify now.  Check with your tax advisor as we stay up to date on these changes.  Members of the Armed Forces and certain federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and still qualify for the credit. An eligible taxpayer must buy or enter into a binding contract to buy a home by April 30, 2011, and settle on the purchase by June 30, 2011.

We may see a 4th set of rules soon; as there is currently debate on extending the credit to September 2010.  Keep updated on the changes by following me at Twitter or my Personal Finance Blog.  I will continue to provide the information through the Kitsap Sun Reader Blog as it comes available.

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You can keep up with Nicole on Twitter or her personal blog.  Feel free to leave your thoughts below.  We love reader feedback and reader questions.

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With today’s economy many Americans are dealing with creditors and collection agencies calling.  These calls can come at inconvenient times or even at work.  Luckily, there is a simple and quick way to stop those phone calls.

Tell the creditor or collection agency not to call.

I realize that seems almost to easy, but the government has enacted two laws that protect the consumer from being harassed, threatened, or even simply inconvenienced.  These two laws are the Fair Credit Reporting Act (FCRA) and Fair Debt Collection Practices Act (FDCPA).

Under the FDCPA, you have rights, and one of those rights is the right to not be called at an inconvenient time or number.  When the creditor/debt collector calls you simply tell them that it is inconvenient for them to contact you at any time, at any phone number they have on file for you.  Then, ask them for their name, mailing address, and your account number with them.

Follow the phone call up with a letter (most commonly referred to as a Cease and Desist letter); add language into the letter that states: “It is inconvenient for you to contact me at any time at any phone number on file.”  Mail the letter using the Certified Mail Return Receipt Requested – you should receive a signed green card back from the company in the mail, costs about $5.00/per letter.  Once the letter is received; the phone calls should stop and all communication can only continue in writing.

This does not stop you from calling the creditor/debt collector yourself; but it does stop them from calling you.  If they continue to call you after receiving the cease and desist letter; they are in violation of the FDCPA and for every violation you can prove in court its a $1000  fine. Small Claims anyone?

Do not let creditors/debt collectors make you afraid to answer your phone.  Consumer law is on your side.

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You can keep up with Nicole on Twitter or her personal blog.  Feel free to leave your thoughts below.  We love reader feedback.

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I can hear it now.  I can’t save.  I don’t make enough money. There are always late minute bills, or birthdays, or Christmas.  These are excuses not reasons.  We all would like to have money in savings.  Even having $10.00 in savings will make  you feel less stressed about money, (gasp) and the unexpected.  So, I am going to teach you how you can build an Emergency Fund, or a Christmas Fund, or Birthday Fund or whatever Fund in 5 steps.

• Pay yourself FIRST!
  • This is the absolute most important thing you can do, the credit card companies, the mortgage company, the car loan people they do not care about you.  They care about themselves, only!  So, right now.  Pick a number – $10.00, $15.00, $25.00, $100.00 for a monthly goal.  If you can’t decide on a monthly goal, then think to yourself a year from now how much money would you like to have in savings; then divide it by 12.  (I highly suggest starting with a smaller number).  Personally, my family started with $25.00

• Open a NEW Savings Account!
  • Open a brand new savings account at a bank or credit union you don’t normally use.  If you pay your bills with an account at Bank of America; then don’t open the savings account at Bank of America.
  • Personally, I use ING DIRECT and EMIGRANT DIRECT: I have accounts at each and each has a specific use. (These links may be affiliate links and I may receive compensation if you click on them, but this opinion is 100% honest)

• Turn OFF paper statements
  • The two banks listed above are virtual banks; which means you can complete any and all tasks from any internet connection.  You will never have to go into a branch; and you can elect to receive your statements electronically through your email

• Set-up automatic savings plan.
  • Whichever bank you decide to use should offer an automatic savings plan; set that up.  Take advantage.  The more automated; the better.  This allows you to just forget about what’s happening.  I can hear you saying, but what if.  Don’t worry about the what ifs; just set a small manageable number for payday every month and let the bank automatically draft it.  I promise you won’t even miss it.

• A year or six months from now, or even when/if you get a raise,  review, how much you are putting into that savings account.  By now, you should have $50 – $500 or more saved.  Doesn’t it feel great? It does. So, if you have received a $100 raise; then up your automatic savings by $10 – that’s only 10% of your raise.  And you are used to living without that $100 so, your not taking anything away.

What are your saving goals for the next year?  How much would you like to see in your savings account?  What tricks do you use to grow your own emergency/saving fund?

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You can keep up with Nicole on Twitter or her personal blog.  Feel free to leave your thoughts below.  We love reader feedback.

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Only two things in life are certain – Taxes and Death.

Each of us starts the journey of dying on the day we are born and none of us knows the exact moment of our death.  We all know the the time for taxes.

Taxes are the 3.5 months between Christmas and Summer and for most of us our tax returns need to be postmarked or electronically filed no later than April 15th of each year.

What exactly does that mean for each of the law abiding, tax paying American Citizen?  Better get busy!

Taxes are a moving target.  You cannot simply say I made 20K last year; how much is my refund?  Its more complicated than that especially once you decide to itemize (itemize = systemactically save/catalogue every receipt throughout the year).

This post does actually have a point to it – to point out my top ten list of laws that have changed since last filing season, things that could very well affect your tax bill.

1.  Three Children can now be claimed for the Earned Income Credit – Prior to 2009 you could only claim two.

2.  Maximum EIC (Earned Income Credit) is now $5,657 for 3 or more qualifying children.

3.  Maximum amount of money made to be eligible for EIC has increased

4.  Personal Exemption amount increased to $3650 per person

5.  Standard deducation for all filing statuses increased

6.  NEW! Standard Deduction of Real Estate Taxes paid

7.    If you bought a NEW car (must be the first owner) between February 1, 2009 and December 31, 2009 – you can deduct the sales tax you paid.  If you do not itemize it can be added onto the standard deduction for your filing status.

8.    Earned Income Credit increased for all categories

9.    First-Time Homebuyer Credit Increased and doesn’t have to be repaid – currently there are 3 versions of this credit.

10.  Making Work Pay Credit – up to $400 if single and up to $800 if MFJ

Those are my top 10 list of items that affect the majority of tax returns.  Not all of them will apply to your situation and if you have any specific questions about a specific deduction then ask a qualified tax preparer.

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You can keep up with Nicole on Twitter or her personal blog (After March 1st, 2010 as it is relaunching)

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I am not sure which is harder – naming my children or naming my blog. 

I would like to thank the Kitsap Sun for allowing me the opportunity to write a reader’s blog for them, even though I only read their paper online. I hope that over the coming months and with your support years I can assist you, the reader, in creating more wealth for yourself and your family.

Guess you might be wondering who I am and why I want to write this blog and why I picked of all things, finances.  Its simple:  I like money.  I like saving money, I like spending money, I like tax refunds, I like coupons, I like raises at work, and I LOVE making my money work for me instead of against me.  What I don’t like – well, I don’t like debt and I don’t like making the rich – richer.  Debt when managed wisely can be beneficial to us all.

Now, I am not just some random person who decided to start bossing people around when it comes to their money.  I actually have some experience and some credentials  (life experience).  I was a licensed loan originator (I.E. I could help you purchase or refinance your home) – that means, I passed a background check through the great State of Washington and I passed a Licensing test, plus took continuing education to make sure I understood the newest laws, requirements, disclosures, and my ethical duties to my clients.  I allowed my license to lapse when the housing market decided to take a dive.  Secondly, I am a professional tax preparer.  This year; I am managing a tax office (did it last year as well), this is in addition to actually completing tax returns for people.

What else, I have repaired my credit (legally) from when I was 18 and stupid – who would have thought that I actually had to pay off those credit cards that were being mailed to me when I will still a student without a reliable source of income.  Plus, I have the most important job in the world.  I am a mom and the CFO of my family.  I am the person who has to figure out the best way to save and the best way to spend. 

I want to empower others, by helping them to learn from my mistakes and by sharing my knowledge with the world.  When I am not sure about something I go to the source.  Not sure if something is deductible on taxes – I read the IRS website or order Publications.  Not sure about the terms of the loan and how best to pay off debt?  I use my financial calculator and calculate APRs, interest rates, and how to save the money interest, pay off debt quicker, and still not affect my familys’ lifestyle.  Kids will always need clothes, food, attention, and miscellanous other school expenses.

Got questions? This is a great way to find non-biased answers to those perplexing questions about loans, credit cards, taxes, saving money, and debt.

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