Starting this month, your credit card statement has to show how long it will take you to pay off the credit card balance by paying the minimum balalnce. On your statement you will now see the minimum payment amount and the number of months or years that it would take to pay off the balance.
This information was intended to help you see the bondage that a credit card is. If you see that it could take 6 years or more to pay off a $500 balance, you might begine to understand what a trap you are being led into.
If you saved $20 a month, you would have $480 in 2 years. The difference between saving up first and putting something on credit, is that you could pay for that item 2 or 3 times.
Use this information to your advantage and consider that you might have more motivation to save up for something that you want than motivation to pay for something you've already used up.
Wednesday, February 17, 2010
Sunday, February 7, 2010
New Credit Card Rules
It's true that new credit card rules were passed by congress to help the consumer this past year. However, the rules do not go into effect until July 2010. In the mean time, banks and credit card companies are trying to make up the income now that will be affected when the rules become law.
You can get more information about credit cards and all the rule changes at the website: http://www.federalreserve.gov/consumerinfo/wyntk/creditcardrules.htm
I'm giving you the whole link so that you will see this is not a link to someone's opinion of the new rules or to a website that is just drawing your attention for their advertising links. This is the Federal Reserve website.
A summary of a few new rules that will benefit you include:
Here are just a few of the concerns you need to be aware of:
Interest rates have been raised to extremely high interest rates in the last few monts. I have seen some go for 5.9% to over 29% and there was no late payment(s) to cause this action. The banks simply want to make as much money as they can before the laws take affect.
If this doesn't convince you to pay off your credit cards, I'm afraid I don't know what will. Using credit cards has become so common for every type of purchase that the vast majorit of people have no idea what fees and interest they are paying. Do yourself a favor and get your finances under control by getting out of debt as soon as possible and staying there. Look for more tools and information on this blog.
You can get more information about credit cards and all the rule changes at the website: http://www.federalreserve.gov/consumerinfo/wyntk/creditcardrules.htm
I'm giving you the whole link so that you will see this is not a link to someone's opinion of the new rules or to a website that is just drawing your attention for their advertising links. This is the Federal Reserve website.
A summary of a few new rules that will benefit you include:
- Universal Default practices were eliminated
- You Payment will go the highest interest balances first
- Double cycle billing practices were eliminated
- You must be over 30 days to trigger a rate increase
- 45 Days notice will be given for rate increases
- Monthly statement will show how long it will take to pay of the debt if you make only the minimum payments
Here are just a few of the concerns you need to be aware of:
- There is NO LIMIT to the how high interest rates can go
- There is NO LIMIT to how high existing fees can be raised
- Annual Fee cannot exceed 25% of the original line of credit
Interest rates have been raised to extremely high interest rates in the last few monts. I have seen some go for 5.9% to over 29% and there was no late payment(s) to cause this action. The banks simply want to make as much money as they can before the laws take affect.
If this doesn't convince you to pay off your credit cards, I'm afraid I don't know what will. Using credit cards has become so common for every type of purchase that the vast majorit of people have no idea what fees and interest they are paying. Do yourself a favor and get your finances under control by getting out of debt as soon as possible and staying there. Look for more tools and information on this blog.
Friday, January 29, 2010
Donations to Haiti Tax Deductible for 2009 Returns
The IRS published new information this week on a law IR-2010-12 that allows donations to qualified U.S. charities for relief in Haiti may be deductible for you on your 2009 tax return.
This means that your donations made after January 11, 2010 and before March 1, 2010 specifically given to organizations providing relief work in Haiti after the earthquake, can be taken as contributions on you 2009 tax return due April 15, 2010 instead of waiting until next year.
Here are some additional items you will need to consider:
This new law provision gives you the taxpayer, the option to take contributions made for relief efforts in Haiti on your 2009 tax return or to take them as you normally would on your 2010 tax return to be filed next April 2011.
IRS Publication 526 can provide you with more detailed information on Charitable Giving Contributions and can be found at the www.IRS.gov website.
This means that your donations made after January 11, 2010 and before March 1, 2010 specifically given to organizations providing relief work in Haiti after the earthquake, can be taken as contributions on you 2009 tax return due April 15, 2010 instead of waiting until next year.
Here are some additional items you will need to consider:
- You must itemize your deductions on your 2009 tax return on Schedule A in order
to take the additional contributions on your return. - The contributions must be made specifically for relief of those in affected areas
by the January 12, 2009 Haiti earthquake. - The contributions must be made to charities that qualify for contribution
deductions. Gifts to specific individuals do not qualify as a tax deductible
contribution. Contributions to foreign organizations are not generally
deductible. You can visit www.irs.gov and use the keyword "Search for
Charities" to see if a particular organization qualifies. - Only cash contributions qualify for this provision. Cash contributions can be
made by the text message options, writing a check to the organization, or using a
debit or credit card to give cash to a qualifying organization.
This new law provision gives you the taxpayer, the option to take contributions made for relief efforts in Haiti on your 2009 tax return or to take them as you normally would on your 2010 tax return to be filed next April 2011.
IRS Publication 526 can provide you with more detailed information on Charitable Giving Contributions and can be found at the www.IRS.gov website.
Saturday, January 9, 2010
2009 / 2010 Homebuyer Tax Credit Extended
2009 / 2010 Homebuyer Tax Credit Extended
As part of the economic stimulus in 2009, a tax credit was created for first time homebuyers to help people buy a new home in the stressed economy. On November 6, 2009 the Worker, Homeownership and Business Assistance Act of 2009 extended the First Time Homebuyer Tax Credit.
Home Buyers who are looking to purchase a home before April 30, 2010 may be able to take advantage of the extended credit.
Here are some things you need to know to see if you might qualify:
Tax credit details can also be found on the IRS website at www.irs.gov .
As part of the economic stimulus in 2009, a tax credit was created for first time homebuyers to help people buy a new home in the stressed economy. On November 6, 2009 the Worker, Homeownership and Business Assistance Act of 2009 extended the First Time Homebuyer Tax Credit.
Home Buyers who are looking to purchase a home before April 30, 2010 may be able to take advantage of the extended credit.
Here are some things you need to know to see if you might qualify:
- First-time Homebuyer is someone who has not owned a home in the last 3 years.
- Any home bought for a principal residence for a price of equal or less than $800,000 will qualify for the credit.
- The tax credit can be up to $8,000 or 10% of the purchase price, whichever is less.
- The extended dates will qualify homes purchased between Nov 6, 2009 through April 30, 2010.
- Taxpayers that qualify for thefull credit will be buyers with incomes up to $125,000 for a
single homebuyer or incomes of up to $225,000 for couples. Taxpayers who make more
than these income levels, will qualify for a prorated amount of the credit. This income
range for the extended tax credit is higher than the original income ranges for homes
purchased before Nov. 6 2009. - A written binding contract to purchase a home in effect on April 30, 2010 will have until
June 10, 2010 to complete the purchase and still qualify for the credit. - The taxpayer will not be required to repay the tax credit if they occupy the home for
three years or more. If the property is sold before that time period, a prorated portion
of the credit will have to be repaid.
Tax credit details can also be found on the IRS website at
Tuesday, January 5, 2010
2010 Blessings: May you be in Health
January. A month that is filled will getting back into the swing of things after joyous holidays. We need rest about now, a little quiet time, maybe even a little alone time. Then we try to re-focus and re-adjust our priorities for the future. We are full of hopeful change.
I like to spend the whole month of January pondering adjustments to what I do, think, and pursue. So here I begin to share a few Blessings for the New Year for you to ponder as you look to the new year with hopeful change. They may not all sound financial in focus for a dollarplanning blog, but all either affect our finances or our finances affect them. Your health and the health of your family is certainly affected by things like debt in that debt causes stress, or debt may prevent you from being able to join the local recreation center. So consider the fruit of getting your finances in order this year before you tackle the dreaded tasks of managing your money. Set your sites on hope.
For 2010, May your family be in health -
May your household be full of activity that keeps the body strong, and full of love and care for one another throughout the year. May you be protected from injury and illness, and when you do suffer from either, may you recover completely. May you find the foods and acitivities that bring life to your body and soul.
3 John 1:2[NASB] is a prayer to consider for yourself this year:
I like to spend the whole month of January pondering adjustments to what I do, think, and pursue. So here I begin to share a few Blessings for the New Year for you to ponder as you look to the new year with hopeful change. They may not all sound financial in focus for a dollarplanning blog, but all either affect our finances or our finances affect them. Your health and the health of your family is certainly affected by things like debt in that debt causes stress, or debt may prevent you from being able to join the local recreation center. So consider the fruit of getting your finances in order this year before you tackle the dreaded tasks of managing your money. Set your sites on hope.
For 2010, May your family be in health -
May your household be full of activity that keeps the body strong, and full of love and care for one another throughout the year. May you be protected from injury and illness, and when you do suffer from either, may you recover completely. May you find the foods and acitivities that bring life to your body and soul.
3 John 1:2[NASB] is a prayer to consider for yourself this year:
Beloved, I pray that in all respects you may prosper and be in good
health, just as your soul prospers.
Saturday, January 2, 2010
Happy New Year 2010
Ok, I realize it's January 2nd and not January 1st, but I am still wishing you a Happy New Year.
Do you feel like you are starting this year a day late and a dollar short? If so, you are among friends. 2009 was a rough year financially for many people with job loss or job uncertainty along with many financial changes. Your 401k retirement savings may have lost what seems like dramatic amounts late in 2008. The fund seems to have bounced back but not completely in 2009 so you may still be at a loss starting 2010.
One thing we learn in 2009 is that things can change and we are not always prepared. So in 2010, I hope to make some wiser decisions. Take advantage of that New Year feeling. You know the feeling of hope, or at least I hope this year is better than last. This year is what you make of it and you can make it a Happy New Year.
Do you feel like you are starting this year a day late and a dollar short? If so, you are among friends. 2009 was a rough year financially for many people with job loss or job uncertainty along with many financial changes. Your 401k retirement savings may have lost what seems like dramatic amounts late in 2008. The fund seems to have bounced back but not completely in 2009 so you may still be at a loss starting 2010.
One thing we learn in 2009 is that things can change and we are not always prepared. So in 2010, I hope to make some wiser decisions. Take advantage of that New Year feeling. You know the feeling of hope, or at least I hope this year is better than last. This year is what you make of it and you can make it a Happy New Year.
Wednesday, October 15, 2008
Auto Loans
In a previous post I mentioned that I financed my car over 5 years. I also financed that car with my own money that was put into CD's. The CD's were then used to garauntee the loan and not the car itself.
One clarification I would make about auto loans is that you should really consider whether or not you can afford a car. As a very good general rule, you should only finance a car over 3 years.
Yes, I said 3 years - that's three, not four or five or even more.
If you cannot afford a car payment with the car being financed over 3 years, this is a good indication that you can not afford that particular car. You cannot afford the car payment within your current budget, and you may not be able to afford the maintenance on that vehicle that will begin after the payments end.
If you live in a metropolitan area, your brakes will need to be replaced approximately every 23,000 to 28,000 miles. The price of gas, while lower this week, will continue to increase in your budget.
In the area where I live, 3 year financing seems almost impossible. However, after taking more time to look for a car, I found very good used cars that fit into my 3 year price range and I purchased one. I still financed the car with my CD's, but I will pay myself back within a 3 year time period.
The good news is that I plan to drive this car for at least 5 years and hopefully at least 100,000 miles. If I continue to make car payments continuously, I will have money set aside for maintenance on this vehicle and I will also be setting aside money for the next vehicle. Either way, I win by not paying interest to someone else and staying within my current living expenses.
Grace to you as you live within your means -
L. Taylor
10/15/2008
One clarification I would make about auto loans is that you should really consider whether or not you can afford a car. As a very good general rule, you should only finance a car over 3 years.
Yes, I said 3 years - that's three, not four or five or even more.
If you cannot afford a car payment with the car being financed over 3 years, this is a good indication that you can not afford that particular car. You cannot afford the car payment within your current budget, and you may not be able to afford the maintenance on that vehicle that will begin after the payments end.
If you live in a metropolitan area, your brakes will need to be replaced approximately every 23,000 to 28,000 miles. The price of gas, while lower this week, will continue to increase in your budget.
In the area where I live, 3 year financing seems almost impossible. However, after taking more time to look for a car, I found very good used cars that fit into my 3 year price range and I purchased one. I still financed the car with my CD's, but I will pay myself back within a 3 year time period.
The good news is that I plan to drive this car for at least 5 years and hopefully at least 100,000 miles. If I continue to make car payments continuously, I will have money set aside for maintenance on this vehicle and I will also be setting aside money for the next vehicle. Either way, I win by not paying interest to someone else and staying within my current living expenses.
Grace to you as you live within your means -
L. Taylor
10/15/2008
Saturday, September 27, 2008
Pay Yourself First and Pay Yourself Back
Many of us have heard the savings philosophy of Pay Yourself First. This is where you pay yourself out of each and every paycheck at least some amount by depositing that money to a savings account. Over time, this savings does grow and eventually the goal is that you will not be living paycheck to paycheck.
A follow up to the Pay Yourself First plan, is what I call the Pay Yourself Back.
I was able to put aside money in savings over a long period of time that accumulated to about $5,000. That was and is alot of money, especially if you don't have any other savings. Then the car situation required the purchase of a new to me car. Of course I bought a used car and I was very grateful that I had savings to help me do that.
However, I agonized over spending the very $5,000 that took me so much effort to save. I could of course finance a car and pay someone else about $250 a month (at that time) and not spend my savings. I knew that I was not yet disciplined enough to pay myself back.
A credit union can be a great benefit for people trying to keep their financial house in order. I found a used car for $6200. I took the $5,000 and put it into a 5 year CD at the credit union. Then I borrowed my own $5,000 with my CD as collateral and not my car. The CD loan interest rate was 3% over what the CD was earning. For example, I my CD earned 4% per year in interest, so my CD loan was 7% per year. The 7% rate was 1 % higher than a car loan at the time, but I was also earning back 4% on the CD. Over time as I paid the CD Loan off, I would earn more and more of the interest.
This allowed me to pay myself back over 5 years, but at the end of the 5 years I had a CD now worth over $6,000. I also continued to Pay Myself First, so I had another CD of about $3,000. Now that it's time to buy another car, I will do the same thing all over again. Basically, this is my prepaid car. When I pay off my CD Loans, I can buy another car. If I want a nicer car, then I need to Pay Myself First - more.
This buy my own car plan took a few years to get started at first. But I am glad I did. I just bought my 3rd car. I am happy to say that I was able to borrow my own CD's again and take a little money out of my savings to pay for nearly new car with less about 29,000 miles. I hope to pay off my CD Loans in 3 years this time and not 5, but I have the flexibility to do what I need to do in this very uncertain financial market.
Do yourself a favor and start paying yourself first even if it is only a few dollars a month. You are not just saving money, you are changing your mindset. It won't be long until you can move to the next level and Pay Yourself Back.
If I had financed my car for 5 years through the dealership or through the credit union, I would basically pay for that car twice with the interest going all to someone else. This way, I do pay some interest, but I also get the benefit of earning some interest and not having to discuss my credit report with anyone at the car dealership.
Do the math.
L.Taylor
9/27/2008
A follow up to the Pay Yourself First plan, is what I call the Pay Yourself Back.
I was able to put aside money in savings over a long period of time that accumulated to about $5,000. That was and is alot of money, especially if you don't have any other savings. Then the car situation required the purchase of a new to me car. Of course I bought a used car and I was very grateful that I had savings to help me do that.
However, I agonized over spending the very $5,000 that took me so much effort to save. I could of course finance a car and pay someone else about $250 a month (at that time) and not spend my savings. I knew that I was not yet disciplined enough to pay myself back.
A credit union can be a great benefit for people trying to keep their financial house in order. I found a used car for $6200. I took the $5,000 and put it into a 5 year CD at the credit union. Then I borrowed my own $5,000 with my CD as collateral and not my car. The CD loan interest rate was 3% over what the CD was earning. For example, I my CD earned 4% per year in interest, so my CD loan was 7% per year. The 7% rate was 1 % higher than a car loan at the time, but I was also earning back 4% on the CD. Over time as I paid the CD Loan off, I would earn more and more of the interest.
This allowed me to pay myself back over 5 years, but at the end of the 5 years I had a CD now worth over $6,000. I also continued to Pay Myself First, so I had another CD of about $3,000. Now that it's time to buy another car, I will do the same thing all over again. Basically, this is my prepaid car. When I pay off my CD Loans, I can buy another car. If I want a nicer car, then I need to Pay Myself First - more.
This buy my own car plan took a few years to get started at first. But I am glad I did. I just bought my 3rd car. I am happy to say that I was able to borrow my own CD's again and take a little money out of my savings to pay for nearly new car with less about 29,000 miles. I hope to pay off my CD Loans in 3 years this time and not 5, but I have the flexibility to do what I need to do in this very uncertain financial market.
Do yourself a favor and start paying yourself first even if it is only a few dollars a month. You are not just saving money, you are changing your mindset. It won't be long until you can move to the next level and Pay Yourself Back.
If I had financed my car for 5 years through the dealership or through the credit union, I would basically pay for that car twice with the interest going all to someone else. This way, I do pay some interest, but I also get the benefit of earning some interest and not having to discuss my credit report with anyone at the car dealership.
Do the math.
L.Taylor
9/27/2008
Government Bailouts
Today congress will agree to some $700 billion dollars in bailing out the banking and credit industry in our country. I understand that we need them to do something in order to avoid a full collapse of our system, but don't be fooled. The bailout means that more money will be available for credit to be extended to small and large businesses and to allow people to buy a home or car.
But think about this. We are in this crisis because many many businesses and people borrowed more money than they could afford to repay. So in order to avoid the collapse of the whole system, we need to allow some of these same people to borrow yet more money. Hmmm....?
The reality is very scary.
The important thing is, that you as an individual need to take a look at your own finances. I took a look at mine this week and I was shocked. I have enough to pay for my needs and I am very grateful for that. However, I had not realized how much of my 'savings' that I had been setting aside I had actually spent recently. So a quick adjustment to my monthly budget this week to pay myself back.
While the economy needs you to borrow money, you need to get out of debt. Americans are in debt to the tune of some $850 Billion dollars according to reports on financial networks this week. So the government bailout of $700 Billion dollars basically almost doubles your personal debt. No, you won't make monthly payments, but you might see it in other areas such as fees, taxes, and other unknown charges.
Where will it all end? The economy needs credit and cash flow to grow. But wisdom would say on a personal level, that you need to get out of debt as quickly as possible and stay there. If you do not pay off your credit card bills every month and you carry debt on a home, a car or cars, credit cards, and other loans, you are in trouble and noone is going to bail you out. In fact, they will standing in line to collect from you for the rest of your life.
Wake up! I know it's scary, but get a reality check on your personal finances and get up enough courage to start a savings and get out debt plan. This is not just about finances, this is about your physical, mental and spiritual health as well.
Good Luck and Grace to You!
But think about this. We are in this crisis because many many businesses and people borrowed more money than they could afford to repay. So in order to avoid the collapse of the whole system, we need to allow some of these same people to borrow yet more money. Hmmm....?
The reality is very scary.
The important thing is, that you as an individual need to take a look at your own finances. I took a look at mine this week and I was shocked. I have enough to pay for my needs and I am very grateful for that. However, I had not realized how much of my 'savings' that I had been setting aside I had actually spent recently. So a quick adjustment to my monthly budget this week to pay myself back.
While the economy needs you to borrow money, you need to get out of debt. Americans are in debt to the tune of some $850 Billion dollars according to reports on financial networks this week. So the government bailout of $700 Billion dollars basically almost doubles your personal debt. No, you won't make monthly payments, but you might see it in other areas such as fees, taxes, and other unknown charges.
Where will it all end? The economy needs credit and cash flow to grow. But wisdom would say on a personal level, that you need to get out of debt as quickly as possible and stay there. If you do not pay off your credit card bills every month and you carry debt on a home, a car or cars, credit cards, and other loans, you are in trouble and noone is going to bail you out. In fact, they will standing in line to collect from you for the rest of your life.
Wake up! I know it's scary, but get a reality check on your personal finances and get up enough courage to start a savings and get out debt plan. This is not just about finances, this is about your physical, mental and spiritual health as well.
Good Luck and Grace to You!
Wednesday, September 17, 2008
Constitution Day - September 17, 2008
Happy Constitution Day - September 17, 2008:
In honor of Constitution Day here are a couple of links that you might find interesting.
Read the Constitution of the United States for Yourself :
http://www.archives.gov/exhibits/charters/constitution.html
You might also want to take a look at the Federalist Papers and related facts since this collection of essays on the Constitution are often referred to when trying to intrepret the Constitution:
http://thomas.loc.gov/home/histdox/fedpapers.html
More Information on the Constitution of the United States:
Constitution Timeline:
http://constitutioncenter.org/timeline/
Supreme Court Justices discussion on the Judicial Interpretation:
http://www.uscourts.gov/outreach/resources/constitutionday.html
In honor of Constitution Day here are a couple of links that you might find interesting.
Read the Constitution of the United States for Yourself :
http://www.archives.gov/exhibits/charters/constitution.html
You might also want to take a look at the Federalist Papers and related facts since this collection of essays on the Constitution are often referred to when trying to intrepret the Constitution:
http://thomas.loc.gov/home/histdox/fedpapers.html
More Information on the Constitution of the United States:
Constitution Timeline:
http://constitutioncenter.org/timeline/
Supreme Court Justices discussion on the Judicial Interpretation:
http://www.uscourts.gov/outreach/resources/constitutionday.html
Subscribe to:
Posts (Atom)