A Penny Saved

I’ve been wondering lately if my methods aren’t a bit flawed.  I currently use a copy of Money Deluxe and Business 2003 to keep track of most of my financial accounts.  Of course, with any software, there are things it just won’t do.  Like track my loans properly.  For some reason, it just never wants to calculate the interest properly.  This makes it a little difficult to carefully map my networth or even keep a good eye on debt ratios.

What does everyone else out there use?  I’m sure that Quicken and Money are popular choices, but do any of you use custom spreadsheets?  Leave a note in the comments, let us all know!

Technorati Tags: spreadsheet, quicken, money, finance, books

As summer approaches we all stop worrying about the high cost of heating our homes and start worrying about the cost of cooling our homes.

So here are some tips to help keep those costs down.

• Programmable thermometers: Installing a programmable thermometer to let the temperature rise during the day when you are gone and begin cooling it again shortly before you get home.  Do you really care if your house is 5-10 degrees hotter while you are gone?
• Use Fans: If you don’t have central air of some sort, and are using a window unit to cool your domicile, use fans to help push the air into your house.  Doing so can help the air conditioner work less often and make your entire house more comfortable.
• Maintenance:  Make sure your Air Conditioner isn’t low on refrigerant.  Clean out the fan unit outside your house, making sure that all leaves and debris are removed.
• Do a Curtain Call:  Try to close your blinds and shades during the day to prevent the sun from making your windows into instant-greenhouse windows.
• Insulate:  Sounds funny to talk about insulation when it’s hot out, but having the recommended 1 foot of insulation in your attic can keep a lot of the cool air in and the hot air out.  It also pays to make sure that you don’t have any major drafts that could let the cool air escape.  Adding insulation may be eligible for a tax credit!

I’ve heard rumor of a $30 rebate for a programmable thermometer, but I don’t seem to be able to find any info on it.  There are several things on this list that I still need to do, as my house is nearly 50 years old and needs a little TLC.  The winter isn’t the only time to worry about energy costs.  Fuel prices tend to dip right before summer and during the fall and peak during winter and summer months.

Technorati Tags: Energy, energy savings, hot, thermometer, save

My Money Forest and Musing Money both pointed it out.  MIT has a program called OpenCourseWare.  It’s a online posting of many different courses that are freely accessible by anyone.  Think of it as your very own college course online.  Sure, you don’t get access to the faculty, but if you have that undying urge to learn, it’s got what you need.

It’s got Aeronautics to Writing with plenty in between.  Some of the courses are dated a little, but I’m sure they are still very aplicable.  Give it a look and see what you think.

[tags]MIT, Learn, courses, opencourseware, college[tags]

This post is the ninth in a series of 10 that covers each point of the MSN Money top 10 mistakes and hopefully will elaborate and add a little new parent thinking to the equation.

Money Mistake 10:

Oversimplifying the work vs. Stay-at-home question

At a glance, the question of whether one spouse should quit work to care for your new baby seems clear cut: If the spouse earns only enough to cover child care costs, staying at home probably makes sense.

Believe me, that question is anything but clear cut. My wife and I have discussed this many, many times over the last 6 months and each and everytime, we come to the same conclusion. We can’t afford either… At this point, we believe that it will still be more beneficial for both of us to continue to work since the child care costs here are not as bad as they could be. A close look at the child-care costs and your salaries that takes into account the loss of benefits and such is necessary.

Part 9: Saving in a child’s name

Part 1: Skimping on Life insurance

Technorati Tags: parent, money, mistakes, stay-at-home

This post is the ninth in a series of 10 that covers each point of the MSN Money top 10 mistakes and hopefully will elaborate and add a little new parent thinking to the equation.

Money Mistake 9:

Saving in a child’s name

Many parents try to eke out more tax savings by opening a savings account in their child’s name under the Uniform Gifts to Minors Act.

There are several reasons to save for your child’s future, but saving for your child in your child’s name can cause problems. The most obvious of those problems is that the money becomes wholly the childs when the child turns 18. Another of the pitfalls of saving in a child’s name is that the money counts agains the child when the child applies for fianancial aid for college. A 529 or Coverdell would be better option if the money is for college.

This is another of the mistakes that I very well could have made. My wife and I will be sure to sock money away for our child if at all possible, but in our names not theirs.

Part 8: Overlooking tax benefits for parents

Part 10: Oversimplifying the work vs. stay-at-home question

Technorati Tags: parent, money, mistakes, savings, childs name

This post is the eigth in a series of 10 that covers each point of the MSN Money top 10 mistakes and hopefully will elaborate and add a little new parent thinking to the equation.

Money Mistake 8:

Overlooking tax benefits for parents

As your spending skyrockets, at least you can take some solace in a few tax breaks geared for parents.

The two biggest? The $1000 tax credit which is excellent as it reduces your tax bill by $1000. As opposed to a Tax deduction which only reduces the taxable income. The other is really two different ones, but you can only claim one of the two. There is the child-care tax credit and the Flexible Child Care spending accounts. The Flex account is an employer sponsored account, so check to see if your employer has one. If not, then your choice is obvious. If they do? Well, your choice is not as obvious, but you’re probably better off with the Flex account. The money that you put into it is pre-tax so it can amount to quite the savings. Obviously, my wife and I will be claiming the $1000 tax credit, but have not decided on te flex account yet. My employer does offer one, but we are waiting to see the cost basis on the child care to make a final decision.

Part 7: Overspending your baby costs

Part 9: Saving in a child’s name

Technorati Tags: parent, money, mistakes, child care, flexible, Flex, tax credit, taxes

This post is the seventh in a series of 10 that covers each point of the MSN Money top 10 mistakes and hopefully will elaborate and add a little new parent thinking to the equation.

Money Mistake 7:

Overspending your baby costs

Before you start setting up a nursery, come up with a spending plan. Accept hand-me-downs, and shop at yard sales and consignment and second-hand shops.

If you frequently go to garage/yard sales like my wife and I, you will know the sheer amount of baby clothes and such that are available during the season. It is amazing. I’ve looked at the prices of baby clothes and it sickens me to think that the kid will only wear it for 3 months and it’s a $10 shirt. I have a hard time paying that much for my own shirts and I wear them for 3 years or more. We will be buying clothes and toys in mass quantities at garage/yard sales this spring/summer. No question there.

Part 6: Postponing a will

Part 8: Overlooking tax benefits for parents

Technorati Tags: parent, money, mistakes, garage sales, yard sales, overspending

This post is the sixth in a series of 10 that covers each point of the MSN Money top 10 mistakes and hopefully will elaborate and add a little new parent thinking to the equation.

Money Mistake 6:

Postponing a Will

Many parents assume they don’t need a will, because they don’t have large estates. But if you have a child, a will is essential to designate guardians. “If you and your spouse die prematurely without a will, a court will appoint guardians for your children,” says Elizabeth Lewin

I fall into the “Many parents assume” category. I have very little true net worth, so I assumed that a Will would be unnecessary. Obviously I assumed wrongly. While my wife and I have chosen the child’s godparents, law dictates that we set out who would become guardians in the event of our death. This is something that my wife and I will have to begin researching and looking into.

Part 5: Forgetting whats most important: Retirement savings

Part 7: Overspending on Baby costs

Technorati Tags: parent, money, mistakes, will, death, guardians

This post is the fifth in a series of 10 that covers each point of the MSN Money top 10 mistakes and hopefully will elaborate and add a little new parent thinking to the equation.

Money Mistake 5:

Forgetting whats most important: Retirement Savings

Once you’re faced with the monumental task of saving for your child’s college tuition, it’s easy to shrug off saving for retirement.

This is a mistake that I really could see myself slipping into. The reason for that is simple. My parents didn’t save for either, and as a result, I paid for my college education entirely. If it were not for my college loans, I would be in much more sound position financially. I do not want to do that to my children. It isn’t a fault of my parents, but I want to give my children the gift of a better financial situation when they finish school. So, yes, I can see myself saying to heck with the IRA and bring on the College savings account! Luckily, the easiest way around this is something that I already do. I participate in a employer sponsored 401(k) plan. My retirement money is on it’s way to my account before I even see it. That way it’s nearly impossible for me to redirect it into a college savings account. It is important that both parents have a retirement plan though, and my wife doesn’t have a plan that she contributes to at the moment. She can begin participating in her companies retirment plan next month!

Part 4: Delaying savings for college

Part 6: Postponing a Will

Technorati Tags: parent, money, mistakes, retirement, savings

This post is the fourth in a series of 10 that covers each point of the MSN Money top 10 mistakes and hopefully will elaborate and add a little new parent thinking to the equation.

Money Mistake 4:

Delaying saving for College

Most parents start fretting about tuition when their kids are entering high school - way too late.

Take the money you saved by not buying life insurance for your baby and put it into a college savings account of some sort. He/She will thank you in 18 years. There are two common college savings accounts, the Coverdell and the 529. Both allow for tax-deferred or tax-free growth as long as the funds are used for qualified education expenses. There are many other options that include a simple savings account. Each option can have significant tax repercussions and you should speak with your tax professional before beginning on any of the above. Oh, and A penny saved does not qualify as a tax professional in case you were wondering. My wife and I haven’t decided exactly the route we will take, but I do plan on us beginning to save as much as we can towards our child(ren)s education(s). From the research that I have done, it appears that it is smart to keep the savings in the parents name unless the parents make close to $200,000 or more a year(AGI). At the $200,000 mark, the tax benefits of transfering the money into the childs name may outweigh the potential loss of grant and loan eligibility.

Part 3: Buying life insurance for baby

Part 5: Forgetting whats most important: Retirement savings

Technorati Tags: savings, parent, money, mistakes, college savings, tuition, college, 529, coverdell