The following article is a guest post.  If interested in submitting a guest post, please read my guest posting policy and then contact me.

Buying your own property is probably as big a decision as getting married is for most people. Well, not as important, but it’s definitely up there. Anyways, what I’m simply trying to say is that buying a house is a monumental decision.

Recent studies from the National Association of Home Builders (NAHB) revealed that age affects people’s preferences in choosing the size of their homes. According to this study, older people consistently show a preference for small houses, while younger ones prefer bigger ones(it’s inversely proportional). 

Let’s see if this inverse proportion of preference applies to you as well in the current state of your personal finances.

1.       Monthly Cost

The cost to maintain a property should not be overlooked when calculating the large amount of money you need to buy a house or any other property. Young professionals who are at the top of their game will be able to sustain such costs because they have monthly income to look forward to.

If you were to live in a big house, just imagine how much electricity you’re going to consume. Not to mention the air-conditioning you direly need and cannot live without in the blistering summer.

Add in the soaring energy costs – young people usually forget to factor these in and you have a recipe for high bills. Some young people tend to just want the big house so that they can show it off to their friends. Older people tend to be a bit wiser. They’ve already experienced the high monthly costs so they revert to a smaller house.

2.       Cleaning and Hiring A Maid

I doubt anyone would want to live in a messy house. So unless you’re a hoarder of, I don’t know garbage maybe, you’d like a very well-kept house.

Again factoring the age and finances, older people wouldn’t want to clean a ridiculously large house. And even if they could afford a housekeeper with them, they’re not into the idea of having “other” people around. A young couple, however, are more open to hiring a maid. And since the two of them are financially capable, hiring people to clean for them is a good use of money.

3.       More $$$ = More Breathing Space

When you carry the vitality of young age, you may feel like a gazelle running into the open forest. When you’re old, you are content with a nice pillow and a small table to play chess on (just to save money). In a more “mature” age, you don’t want to walk an entire hallway just to cross from your dining area to the living room (Buckingham Palace must have drove Queen Elizabeth crazy).

4.       Cheaper Neighborhood Lifestyle vs. High-Profile Neighborhood Lifestyle

More $$$ = Bigger houses = High profile neighborhoods.

Older people, in their wisdom, choose smaller neighborhoods because it has a more close-knit community. This is especially beneficial to older homeowners because if there are emergencies (knocking on wood), it is easy to ask for neighbors’ help without having to superhuman-jump to their 10ft. high wall (is it just me or does having a ridiculously high wall and security camera actually give away that you’re filthy rich?). On the other hand young people are into high-profile neighborhoods so they can show off their Camaro without fear of it getting stolen.

5.       The Smaller, The Simpler

The smaller, the simpler, the cheaper – that just says it all and I don’t think I need to elaborate further, so let’s just leave it at that.

What is your take on this study? Is it consistent given your age and your ability to pay monthly mortgage? Let me know.

Author Bio:

+Lara Seers is a real estate agent for properties in Queensland. She presents buyers with several options and describes each property in full detail to make it easier for them to make the best choice.

The post How Age and Personal Finance Affects Home Preference appeared first on Your Personal Finance Pro.

Since I tend to get a lot of questions in my inbox and search hits from Google on building credit and opening credit cards I’m going to be talking about it a lot this month.  I’ve already answered a reader question on credit and I’ll be discussing my latest round of credit card applications(5 for 5!) in the next couple weeks.  Today, I have an interview with Andrew Boyd who runs a credit card comparison site.  

Tell us a bit about yourself?

My name is Andrew Boyd. I live in the UK and co-founded CreditCardCompare.com.au, an Australian credit card comparison website, along with my brother David who emigrated to Australia a number of years ago. I have a background in digital marketing (both search and social), which has come in handy in the promotion of my business.

Credit card comparison websites are a dime a dozen, even in Australia. What is it that sets yours apart?

You’re right. There’s no shortage of credit card comparison websites, particularly in the USA, UK and Australian markets. You’d be deluding yourself if you thought you could open another, spend a bit of time writing some reviews, throw some links at it and reap your rewards. It’s not like that. Google isn’t the biggest fan of affiliates, so you’ve got to add value. In our case, we’ve got a blog, a learning center, and a suite of tools designed to make it easier for customers to make an informed decision. This is on top of over one hundred individual card reviews and comparison tables, which are maintained on a daily basis.

What is the main difference between the Australian market and here in the USA?

To put it simply, interest rates are the main difference. What looks like a good credit card interest rate in Australia would be considered laughable in the USA. It’s even worse if you compare Australian interest rates against the leading offers in the UK. As an example, take the ten cards listed on my balance transfer page. As of right now, only half of them have a 0% introductory offer. The rest have balance transfer deals in-between 2.99% and 4.99%. In the US, such deals are so uncompetitive that they wouldn’t be taken seriously. In Australia, they’re very common. Having said that, most Australian banks do not charge an admin fee on balance transfers, which can save a consumer a lot of money compared to the 2-3% fee levied on American and British consumers.

But there must also be similarities?

Yes, there are. The popularity of balance transfers as a means to get out of debt faster is as strong in Australia as it is in the USA. As are ‘instant approval’ cards (although these aren’t really instant approval – instant decision would be a better description). Most months, those are the highest trafficked pages on our site.

Australian consumers might like cheap interest, but they also like rewards. Frequent flyer cards, especially those linked with Qantas (the national flag carrier) and Virgin Australia (Richard Branson’s airline), are perennial favorites. Look at a map and you can very quickly appreciate their popularity – Australia is isolated geographically. It’s not like Europe where you can drive from one country to another with relative ease, so if an Australian needs to go somewhere, they’re probably going to need to fly.

What are the trends?

The cost of living in Australia has been growing steadily for years. What was once an affordable place to live is now hideously expensive. The fact that two Australian cities, Sydney and Melbourne, now rank among the top ten most expensive places to live is evidence of this. This is influencing consumer choices. Firstly, interest rates are more important than ever before. Secondly, balance transfers, at least on our site, are gaining in popularity. Thirdly, banks are having to compete more in order to attract increasingly cautious customers, although in Australia ‘The Big Four’ banks own many of the smaller banking brands, so the market is fairly sewn up.

Lastly, give us your tips on using credit cards effectively.

Keep things as simple as possible. Although some rewards hackers do this to take advantage of sign up bonuses, try to avoid opening lots of new credit card accounts. Pay your balance off every month in full – if you can’t afford it, don’t buy it. Take a note of when your card’s introductory offer expires, be that for a balance transfer or interest free purchases, and shop around to see if there’s something better out there.

The post Interview With Andrew Boyd of Credit Card Compare appeared first on Your Personal Finance Pro.

If you do most of your shopping online like me, you’ll know that certain items were not made to be sold on the internet.  I rarely buy things like dress shirts and pants online since it’s so tough to tell what type of cut a shirt is or how well a pair of pants will fit.  Even though Amazon now charges tax in CA, I still buy a lot of items there because of their low prices, free 2 day shipping and awesome customer service/return policy.

When I do have to go in store to shop though, I always make sure to compare prices online since once I’ve found what I want there’s no need to pay the higher price.  Let’s say I walk into a Banana Republic on a Saturday and pick out a pair of pants that I want.  The first thing I’ll do is go online on my phone and see if the price is the same on the website.  Often times, companies may have different pricing in-store compared to their website for the exact same product.

Mobile Comparison Shopping

One great use of my smartphone is for comparing prices when I’m out shopping.  I use the ebay and Amazon mobile apps to scan barcodes of products that I’m looking at in-store and then compare them to the prices online.  That way, I know that I’m comparing apples to apples since you can easily make a mistake otherwise.  Alternatively, you can also use the unique item code and search for that if the barcode method doesn’t yield the results you’re looking for.

Online Coupons are Easy to Find

If I decide that I want to buy the item online, I always end up searching for online vouchers.  The last item I bought online was a digital camera, so in this case, I did a quick google search for ‘Canon Rebel Online Coupon’ to see if anything came up.  I ended up using a coupon code that let me save over 40% on digital cameras.  A lot of times you should be able to find a coupon code and although it might not always save you 40%, you could easily get a 10-20% in savings for one google search’s worth of work.

Always Free Shipping

The great thing about shopping online is that all these companies are competing for your business.  Most of them will either offer free shipping straight up or with a minimum purchase.  Most companies set the free shipping threshold at $50 or $100 but return shipping is usually free so there’s no risk.  You can probably even return the item in-store too if that’s more convenient for you.  So even if I only want one shirt, I might buy it in another color just to see if I like that one better and so that I’ll reach the minimum threshold for free shipping.

Coming home from work to a box of new clothes or new shoes is a great feeling.  Online shopping can get addicting since it’s so easy and hassle-free so make sure you don’t get too carried away.  Even if it is online, it’s still real money.

Readers, do you ever get carried away online shopping?  What type of items do you buy in store and what do you buy online?

-Harry @ PF Pro

The post Comparison Shopping Online Before You Buy In-Store appeared first on Your Personal Finance Pro.

One of the most popular articles on this site is an article I wrote last year about ‘piggybacking’ off someone’s credit(1,121 views in just the past month alone).  In the article, I actually did a case study where I added my fiancee as an authorized user to my AMEX Gold card and compared her scores and report before and after.

Needless to say, strong credit is a very important aspect of people’s lives and at the bare minimum you’ll need credit if you ever want to purchase a house.  But some employers and even landlords are starting to check credit scores when screening potential hires or tenants so it’s more important than ever to maintain good credit.  You can read all about maintaining good credit and my free identity theft protection plan if you’re interested in learning more about credit but today I’m going to answer a reader question about raising your credit limits.  Reader DD writes in:

Quick question. I now have a credit score of 755(up from 680) and I can qualify for a bunch of new credit cards. I have two now, one is an old one with a low low limit and another that is two years old with an OK limit  of 2500 dollars. I want my utilization to be less than 30% of my total limit to benefit my score. What can I do? Should I get another card with an awesome limit? Should I dump the old high interest low limit card? Should i increase the limit of my low limit and high limit cards?

Just Getting Started

When you’re first getting started with building credit, your score will be dominated by the low age of your accounts, the total limit of your accounts and your utilization.  There’s not a whole lot you can do about the low age of your accounts other than wait it out.  You always want to keep your oldest line of credit open even if you rarely use the card.

Utilization is the percentage of available credit that you’re using.  So in DD’s case, he has 1 card with a $500 limit and another with a $2,500 limit so his total monthly limit would be $3,000.  If he spends just $1,000 a month and pays it off every month, he’ll still have a reported balance of $1,000 giving him a 33% utilization.  You want your utilization to be as low as possible.

Tip:  If you ever plan on applying for a big loan and are worried about the Debt to Income Ratio, you should consider not using credit cards for one month before applying.  That way, when you apply for the loan they’ll see a $0 monthly balance instead of $xx amount.  It doesn’t even matter if you pay off your balance in full every month since credit card companies will report your current balance to the credit bureaus.

What’s the Solution?

Here’s my response to DD:

A 755 score is great, that’s about what I’m at too. Closing cards that you don’t use can actually hurt your credit score since it will reduce your total available credit(won’t be a huge issue in your case if you have low limits) but if the card that you’re going to close is very old, it will reduce your average age of credit lines. It probably won’t matter much if the card is only 1-2 years old, but if it’s any older than that, I would keep it around(as long as there’s no annual fee).

Are you paying off your credit card in full every month? If no, that would be the first thing I would focus on. The interest rates credit card companies charge are seriously ridiculous. Once you’ve got a handle on that, you can usually call your credit card company and ask for an increased limit. You can tell them you have some large purchases coming up, you plan on traveling, etc. That will help the utilization part of your score which is calculated by taking your outstanding debt divided by your total credit limit.

In your situation, I would probably keep both cards but call both of them up and ask for a limit increase. Even if they agree, I still might open one more and try to get a nice high limit solid card that you can use for all your purchases from now on. Just make sure to pay the balance off in full every month.  If you’re the type to put a lot of things on credit when you don’t have that much money in savings, a high limit card is a bad idea.

With a mid 700 score you should easily be able to get any of the entry level cards with Chase, Citi, etc. These cards should all have no annual fees and a lot of them have nice cash back rewards like 3% on gas, 2% on groceries and 1% on everything else.

So in summary, I would keep both cards but ask for a higher limit on each one and probably open a new entry level card like the Citi Preferred Card where it’s easy to get approved and you can get a super high limit of 10k+.  That would bring his total number of cards to 3 which isn’t overly complicated in my books.  At that point, he could even close his $2,500 limit card(since it’s newer) if he wants to simplify things even further.  I’d probably keep the low limit oldest card though because age is one thing you can never get back.

Readers, how’s your credit profile?  Do you care about your credit score or do you only worry about it when you need financing?

-Harry @ PF Pro

The post Reader Question: Should I Close My Old Credit Cards and Open a New One? appeared first on Your Personal Finance Pro.

Most articles around this time of year talk about what to do or not do with your tax refund.  I’ve already talked about that, so instead I’m going to help you come up with ways to avoid paying taxes next year.  I don’t mean stashing all your money in offshore savings account but we can probably all agree that paying taxes sucks!  What makes matters worse is how inefficiently the government spends your money.  I’m all for re-distribution of wealth to the people who need it but we know that doesn’t happen very often.  I’d rather donate my time and money directly to the organizations that need it and pay less in taxes than get gouged by the US government.

Taxes are a necessary evil in any civilized nation, we need roads to drive on, we need schools to educate our kids and so on.  But it’s not all bad with taxes, the government does provide some options in order to help every day taxpayers like you and I to save money on taxes.

Standard Tax Deductions

These are the deductions that the average taxpayer usually takes advantage of.  They may include:

• Retirement Accounts: 401k, IRA, HSA, etc
• Owning a home: Mortgage Interest Deduction, Property Tax
• Charitable contributions: Cash/Gifts, Stock

Reduce Your Tax Rate

Last year during the presidential election, there was a popular anti-Romney sentiment that blasted him for paying a lower percentage than the average taxpayer.  But that’s because Romney earned most of his income from capital gains,which is taxed at a much more favorable rate than regular earned income.  But most every day people won’t be able to really take advantage of this since they get paid W2 salary.  Even though executive-types are the last ones who need it, they are generally the ones that tend to get compensated in company stock.

Gray Area of Tax Avoidance

Ok those are some of the more legal ways to avoid paying tax.  Like I said, I don’t recommend blatantly lying on your taxes but I don’t think there’s anything wrong with knowing where to take advantage of the tax code.  The IRS tax code is anything but fair.  In 2013, a single filing taxpayer would pay a marginal tax rate of 39.6% on income over $400,000.  A married couple would pay a marginal tax rate of 39.6% on income over $800,000 $450,000.  Huh?  Does that make any sense to you, why should married couples face such a high tax penalty for getting married?  I might feel bad about cheating the tax code when these unfair policies are reversed(I’m getting married soon so this makes me even more mad!)

Earn Tax-Free Income

If you’ve ever gotten paid in cash you know how sweet it is.  Legally, you are required to report this income to the IRS but I don’t think many people do.  If you’re looking for a source of second income, cash jobs can be a huge boost to your total income.  Since your primary job will most likely be W2 income, every additional dollar you make at a second job will be taxed at your marginal(highest) rate.  Here’s an example:

Joe the plumber makes $50,000 a year in W2 income.  He takes on a second job with Home Depot to make a little extra cash and gets paid $10,000 in W2 income over the course of the year.  That’s great for Joe but that $10,000 in Home Depot income is being conservatively(would be more with state, fica, medicare) taxed at 25%(federally, assume no deductions).

So he really only made $7,500 extra after taxes.  Instead, Joe decides to tutor up and coming plumbers willing to pay him in cash.  Now once he makes $7,500(or maybe even less) from tutoring he’s at the break even point with the Home Depot job.

There are quite a few options when it comes to finding cash jobs and some may take more work than others but once you build up a small clientele it will become easier and easier to make tax free income.  I’ve done everything from selling used textbooks for a profit to tutoring and coaching high school aged students.  Everything I did was fun, easy and I got paid in cash.  Here’s the list I came up with:

• Child care jobs: everything from tutoring to babysitting
• House-sitting or pet sitting can be very lucrative
• Cleaning Jobs
• Private lessons in some niche sport(I do volleyball lessons at $65/hr) or field(ie music lessons)

Get a Roommate

If you own your own house or condo, you can find a roommate and immediately start saving money.  Again, it’s up to you to report the rental income but you can come up with creative ways like having them pay for all the utilities, food and housing supplies so that you don’t have to pay taxes on that income.  I think the rules are a lot less strict when you’re living in the property and charging someone rent as opposed to renting the entire unit out to someone.

Start a Business

Did you know that I own my own business?  I work as an independent contractor for my volleyball club so the IRS considers me a business owner.  The income is minimal(less than 10k/year reported as 1099-Misc) but it allows me to take on many deductions that I would normally never be able to get.  I’m able to deduct my home office, the miles I drive to and from practice and tournaments, meals/entertainment, hotel stays, etc.  Each year, I’m able to nearly deduct my entire coaching stipend and pay almost nothing in taxes.  This makes a huge deal to me for the reasons outlined above in our ‘Joe the Plumber’ example.

I actually end up making about the same on a per hour basis at my coaching job as I do at my real job.  And the former is a lot more fun, I would actually barely call it a job.  On this one, you might be best served to talk to a friend who’s a CPA/tax professional because you might be able to find a ‘business’ you can open and start saving on taxes.

Readers, are you ok with paying these ridiculous tax rates or do you look for every avenue to try and legally slip past the IRS rules?  Do you think it’s ethical to skirt the IRS?  If your answer is no, what do you think about the marriage penalty, how is that fair?

-Harry @ PF Pro

The post The Best Ways to Avoid Paying Taxes appeared first on Your Personal Finance Pro.

For some reason, the April showers haven’t quite hit San Diego like they normally do and the weather has been fantastic lately.  Warm days and a nice breeze are why I love living in Socal and this past weekend I decided it would be a good time to take my sister(age 5) to Sea World.  Even though it wasn’t too crowded, there was still a ton of people there and I couldn’t help but think about how much money everyone was spending.

From admission tickets to stuffed animals and concessions, money was flying around almost as if Sea World was paying us to visit the park.  Unfortunately that’s not the case, but I thought of some travel tips that should save you anywhere from a little to a lot(depending on how extreme you are) of money at Sea World(or any park for that matter).  All it takes is a bit of planning, so onto the ways to save.

1.  Admission Tickets

I love buying things on Craigslist and I’ve now completed successful purchases with Disneyland and Sea World tickets.  You have to be careful on Craigslist because unfortunately there are some scammers out there, but as long as you use a common sense approach, your chances of getting screwed over will be very minimal.

You used to be able to just look at a ticket and if the stub was still attached it was still good.  But these days, a lot of tickets have scannable bar codes instead of a tear-off portion so don’t automatically assume your tickets will be valid if they look ok.  I actually receive hard tickets for my Chargers season seats but I can override them at any time and print out e-tickets.

If you’re buying from a private seller, try to get some personal information from them, like where they work or their home address.  Basically anything that you could use against them should the tickets turn out to be fakes.  I like dealing with small time ticket brokers since they offer the best discounts and can usually prove to you that they are legitimate.  Buying tickets on Craigslist isn’t for everyone though.  It can be nerve-racking since you won’t know for sure that your tickets are good until you step foot inside the venue.  There will always be a greater supply than demand when it comes to these types of tickets so don’t be scared to just walk away if something doesn’t feel right.

I found an ad on craigslist for $35 Sea World tickets and the seller I bought them from actually had a blog where she posted all her positive feedback.  She also offered to e-mail me the tickets and told me I wouldn’t have to pay until Monday at 11 am.  That was fine with me since now I assumed no risk of getting scammed out of my money.  It all worked out perfectly, I got the e-tickets morning of, went into the park and paid the next day via Chase QuickPay.  I ended up only spending $105($35 * 3) for 2 adult and 1 child tickets(full price would have been $226: $78 for adults and $70 for a child).

2.  Bring Your Own Food

I don’t really enjoy paying $5 for sodas and $10 for an average burger so I always plan ahead and bring food.  Most parks won’t let you bring actual food inside the park so instead bring a cooler and leave it in your car.  You can usually bring in small snacks like bags of chips, nuts, fruit snacks, etc (and of course water) so toss it all in a backpack and you’ll have something to snack on until lunch time.

If you’re on the adventurous side, you can always try and sneak in a full picnic at the bottom of your backpack or purse.  At a recent music festival I went to, I actually saw a couple people(not going to name any names) sneak in alcohol in a sunscreen bottle.  Just make sure you wash it out well!  At Sea World, all they did was poke around with a wooden stick for about half a second.  I almost felt ashamed that I didn’t try to sneak in more food.

We ventured the park for about 3 hours before we got hungry so we got our re-entry stamps and headed back to the car for a picnic.  It was actually nice to sit down, turn the A/C on for a while and relax and eat.

3.  Free Parking

I absolutely hate paying for parking but this was the one time I had to give in since there was nothing available within a reasonable distance.  I even did a quick google search the night before for free parking but came up dry.  It was ‘only’ $15 to park though so I figured it was worth it since we were going to spend most of the day walking already.  It also allowed us to leave the food close by so we could have a picnic lunch when we got hungry.

I think the best alternative to paying for parking would probably be public transportation.  There are usually lockers out front of most parks so you could probably leave a cooler or two there if you’re set on picnic’ing, otherwise take the bus and spend all the money you save on junk food inside the park.

4.  Be Careful of Kid Traps

I finally realized why all these rides end in a gift shop: it’s for the kids.  My sister nearly broke into tears when I told her I wasn’t going to buy her this cute baby beluga whale stuffed animal.  Eventually, I succumbed to her superpowers and we went back and I bought it for her(at least it was only $10).  But you do have to be careful when you’re visiting with kids since there are a lot of things they will want.  I told my sister she could pick out one thing and the whale was what she chose.  That made it a lot easier later on in the day, when she wanted a turtle, dippin’ dots, ice cream, etc haha.

5.  Accomodations

I’ve never had to stay overnight to visit an amusement park but I could only imagine how much that would cost(especially with kids).  I’d try and find a friend that lives nearby and stay with them or maybe use up one of my free hotel nights from a credit card sign-up bonus.

Readers, are there any other tips that I should know about?  I’m pretty lucky to live within 100 miles of 10 major theme parks so I’m sure there are a couple things I haven’t thought of.

-Harry @ PF Pro

The post 5 Ways to Save Money at Amusement Parks: Sea World San Diego appeared first on Your Personal Finance Pro.

This is a guest post by Todd at Fearless Men.  Head over to his blog and check out what else he has to say if you like this article!

There’s a never ending list of ways to get into debt. Overspending. Using credit cards and only paying the minimum balance. Using credit and NOT paying. Not paying bills. Letting overdraft fees ramp up. Taking on bad loans. Losing money in bad, or even good investments.

But WHY do people go into debt? That’s a much bigger, less specific, but more powerful question. And I think it’s more important.

We’re not discussing here the particular how’s of getting into or out of debt, but the big WHY of people getting into debt. Let’s take a look at one of the root issues many people in financial straits struggle with. If that can be rooted out, some people can be saved from getting into debt in the first place, or spiraling further down the debt tunnel.

What is one of the roots that shuttles people to Debt Island?

F.E.A.R.

That’s it. Simply fear. Fear so strong and so loud that people can’t help but listen to it. Second guess themselves. Hesitate. Let their conscious gnaw at them. Lose their confidence.

Then.

Then fear becomes so powerful it paralyzes them.

What happens when fear seizes upon someone that’s in or headed towards debt? A few things.

1. Fear paralyzes people from looking at their finances.

Looking at a growing credit card bill can be so emotionally daunting that an in debt person just simply wants to turn away their eyes. They may not login to their credit card and bank accounts for weeks or even months.

2. Fear paralyzes people from looking at their growing interest bill.

Sure, maybe they have autopay set up, but that’s only so they don’t have to look at the painful interest they are accumulating.

3. Fear paralyzes people from taking action.

If you’re not in lazy mode, you may not appreciate how powerful fear is over people. When people are discouraged, it can be hard for them to even roll out of bed in the morning. Let alone login into their Citibank account and make extra payments on three cards each with $5000 of debt accruing interest.

If you’re a person that’s stuck in this cycle—a fear of failure so strong that it’s caused paralysis, there’s hope. Many people have been stuck in the same lonely spot you’re in, and they successfully navigated out of it.

Here’s what you can do:

1. Look fear in the eye.

Whatever’s drawing you back, don’t turn from it anymore. Acknowledge it. Know that you’re experiencing it, and it’s time to face it.

2. Identify the fear.

What is it that you’re specifically afraid of? What’s paralyzing you and holding you back? Is it the fear of someone finding out your in debt? Is it the lingering voices in your head?

Is it the fear of losing your house or your spouse? Identify those things, register them, and feel them.

Without knowing what’s causing you to pause and hesitant you can’t…

3. Take the first step.

I know it’s simple, yet that doesn’t make it easy. You know you already know the first step. And that’s mashing your snooze button, rolling out of bed, logging into your looming account, and paying it down some.

I know it might hurt to look at the numbers, but do it.

4. Identify the next problem or habit

Now that you’ve made some steps in the right direction and are paying down debt, identify other habits that need to be eliminated to increase your frugality.

While you’ve got a breath of psychological fresh air, keep moving forward with your newfound momentum!

This is a guest post written by Todd. He’s the co-founder and content manager at Fearless Men, a blog on Manliness that inspires men to grow strong, get fit, be wise, kick fear in the face and become a better man.

[Image credit Chris Morrison / http://dribbble.com/shots/857372-Bills]

The post Is Fear Paralyzing You From Looking at Your Finances? appeared first on Your Personal Finance Pro.

The IRS provides a lot of deductions for hard working Americans like us but a lot of people are unaware of them or maybe scared of an audit.  I say bring it on, as long as you have the receipts and proof to back it all up, you should take advantage of every deduction available out there.  The ‘moving expenses’ deduction is one of the more valuable ones since it’s above the line, meaning you don’t have to itemize to take advantage of it.

But you can’t just move across the city to take advantage of this deduction, the move must be work related.  The IRS is actually pretty smart and they require you to pass two tests: the time and distance tests.  But should you meet both requirements it won’t matter whether it’s your first job, same job or a new job, you’ll still get to take the deduction.  

Time and Distance Tests

The first test is to prove that you didn’t just move because you like the weather in your new city more than your old one.  You must be employed full time for at least 39 weeks of the immediate 12 months after your move.  The weeks don’t need to be consecutive though so you could even take a break or switch employers if you wanted to.  There’s also a provision that waives this portion of the test should you be laid off or transferred.

The second test is to show that you didn’t move just to be closer to the beach.  The distance between your new primary job location and your former home must be at least 50 miles greater than your old commute.  So if you currently live 5 miles from your work, your new job location has to be at least 55 miles away from your current home.

Benefits of the Deduction

Now that you’ve passed both tests, what exactly can you deduct?  Make sure you save your receipts because you can deduct all of the following:

• The costs to move household goods and any personal property(packing and shipping)
• The cost of traveling to your new home(only once though!) including lodging but not meals
• Actual driving costs like gas and oil or the standard 24 cents/mile rate
• Travel arrangements for pets

There are a lot of things you can’t deduct but I know I’d be much more likely to hire one of the big moving companies to help me out if the cost was tax deductible.  You can get free, no obligation quotes on MovingRelocation.com.

Normally, I just ask my friends to help me out but I always feel a little bit guilty.  Once you’ve piled up all the receipts it’s a relatively straight forward to complete IRS form 3903 – Moving Expenses and get your deduction.

The last thing to keep in mind is if your new employer reimburses you for moving costs you’re not allowed to take the moving expense deduction.  Unfortunately, there’s no double dipping with this tax deduction since moving taxes paid by your boss are not tax deductible.

Readers, have you ever taken advantage of this tax deduction?  I’ve never had to move further than a few miles since I’ve been working but I definitely plan on taking advantage of this in the future.

-Harry @ PF Pro

The post Writing Off Moving Costs During Tax Time appeared first on Your Personal Finance Pro.

On Tuesday, the labor department announced the latest CPI-U numbers.  With these numbers, you can calculate the upcoming inflation portion of I bonds and determine whether it’s better to buy your bonds now or wait until May.  As you may know, I bonds are composed of an inflation rate and a fixed rate.  The fixed rate is expected to be zero again but the inflation rate actually went down from 1.76% to 1.18%.  According to the labor department, the decrease is due mainly to a decrease in gas prices(I didn’t even notice!).

Buy Your I bonds Now

Even though the rate will be decreasing to 1.18% on May 1st, you can lock in the 1.76% rate for 6 months by purchasing before the end of this month(April).  You would receive the higher rate for 6 months until October 2013 when you would receive the new 1.18% rate for 6 months giving you a net yearly return of 1.47%.  Even though that may not seem like a lot, it’s a pretty good return for a risk-free investment.  Assuming the fixed portion will be 0%, your I bond interest rate would change every 6 months according to the CPI-U.

I bonds increase in value on the first day of the month so you can actually buy your I bonds on the last day of the month and get a full month’s interest.  Alternatively, when you redeem your I bonds, you want to redeem them early in the month in order to get a free month’s worth of interest.

Better Than a CD?

I own $6,000 worth of I bonds(5k purchased in 2012, 1k received as a gift in 2013) but I don’t include them in my overall retirement allocation.  Since I have plenty of tax advantaged space for my bonds, I don’t feel the need to invest in bonds in after-tax accounts.  Instead, I use them more like a CD or fixed rate investment.  So how do they compare to the best CD rates?

Ally 1 year CD’s are currently(4/17/2013) paying 0.90% but remember you should always invest in their 5 year CD’s since there’s only a 2 month interest penalty.  Ally’s 5 year CD’s are currently paying 1.54%, so if we were to invest in a 5 year CD with Ally and redeem it after one year our effective rate after the 2 month interest penalty would be 1.28%.

You should always purchase an I bond towards the end of the month but I would give yourself at least a 2-3 day cushion to make sure you get your order in on time.  Assuming we buy our I bonds on Monday April 29th, 2013 that would give us an interest rate of 1.76% from April to September and a 1.18% rate from October to March.  But since we can buy at the end of April and sell at the beginning of March we only need to hold the I bond for just over 10 months to get a full years worth of interest.  Our net annual return after the 3 months interest penalty would be 1.40% which is a bit better than the return on a CD.

There is a mandatory 1 year holding period on I bonds so if there’s any chance you might need the money, you should probably go with an Ally CD.  I like I bonds though since they’re tied to the inflation rate, which minimizes the interest rate risk and they are exempt from state and local taxes.

Readers, have you bought any I bonds this year?  Does it make sense to buy now or would you wait and hope that interest rates go up in September/October?

-Harry @ PF Pro

The post March CPI down 0.2%: May I Bond Rates Announced appeared first on Your Personal Finance Pro.

The following article is a guest post.  If interested in submitting a guest post, please read my guest posting policy and then contact me.

You hear the phrase “cash is king” talked about a lot in these credit-crunched times. But what’s really different about today’s low rate environment? Businesses survive on cash flow, it’s a bit like running a car. You can have the best car money can buy but if it runs out of gas, it will grind to a halt regardless of how well you’ve looked after everything else.

The same is true with our personal finances. We need cash to run our lives and all the assets in the world won’t save us in the moments when we really need liquidity.

So yes, cash is always king. The only thing different about today’s credit markets is that credit is harder to come by as the banks impose more stringent lending conditions; a hangover of the recklessness from the past decade. But this shouldn’t present a problem for the far-sighted person who always keeps enough fuel in the tank to make the trip.

There are many steps you can take to make sure that you or your business doesn’t run short of cash. This is obviously easier said than done for businesses that are profitable.  And for people who have managed to build up a solid asset base, capital can be leveraged more readily. The situation is not necessarily a problem, you just need to plan ahead.

Most small businesses flounder before reaching profitability  but they all need funding along the way. And if you’re running a small business, you need cash to be able to run your life while you build up the business. This is the life-blood you will need that should enable you to survive until profitability is achieved. And once you are profitable, there may still be ups and downs in cash-flow that threaten the very survival of your company.

Finance providers like Debt Free Direct specialise in helping you iron out the peaks and troughs in your business and personal cash-flow. Just be sure to always borrow carefully and use debt facilities wisely. Overall, the best advice is to seek guidance from experts who know that cash is always king and who have many years’ experience in planning ahead for positive cash-flow.

The post Cash is King For Small Businesses appeared first on Your Personal Finance Pro.

If you’re like me, you’ve probably sent a peer to peer payment before.  Whether its the monthly rent, or gambling debts owed to a friend, sending money through Paypal or similar services is pretty easy(and free!).  Bitcoin essentially does the same thing but with its own currency.  Yes that’s right, Bitcoin has its own currency that can be used to pay for merchandise/services all across the web.

Bitcoin can be exchanged through a computer or smart phone app without the help of a financial institution.  In order to acquire Bitcoins you need to pay money for them or trade some type of service with someone who already has some.  You can also try your luck at ‘mining’ Bitcoin which essentially forces your computer to do memory intensive calculations in order to receive a fraction of a Bitcoin.  Most Bitcoins are already out in the market though so your best bet is to pay cash or trade some type of service for them.

The Price and Volatility of Bitcoin

Bitcoin has seen a huge jump in value since it was released in 2010, but during that time the price has also been very volatile.  The USD value of a bitcoin increased ten-fold in early 2013 from $13/BTC on 1 January to $190/BTC on 9 April, three months later.  On April 10, 2013, Bitcoin dropped from a price of $266 to $105 before returning to a value of $160 within six hours.

I think part of Bitcoin’s huge price increase has to do with the recent Cypress bank tax.  Since Bitcoin is not owned by any government or organization, it requires a majority vote of Bitcoin holders in order to change any lines of coding.  The Cypress Bank Tax would have been the first case we’ve seen where a government decided they had the power to go in and take your savings away from you.  That would never happen with Bitcoin since there’s no one that can come after that money.

Ever since I was young, people have told me that when you put your money into a bank it will stay safe.  I know I can’t expect great interest rates anymore and it might not be worth as much due to inflation when I take it out but I didn’t think I could ever lose money.  In the US, we have FDIC limits that guarantee(up to 250k) our money.  As we’ve now seen, those guarantees aren’t nearly as strong in other countries.

A Drug Dealer’s Best Friend

There aren’t many black market drug dealers who take credit card but what if they took Bitcoin?  Bitcoins are untraceable and considered the online form of paying with cash.  A lot of critics have pointed out the negative uses of Bitcoin but I think the benefits more than outweigh the drawbacks.  Any time you involve a middle man like a bank or the government, you lose.  They’re always going to want their cut or make things in-efficient.

As for how I would use Bitcoin, I don’t think the government should be allowed to tax the money I make online since I could be making that money anywhere in the world.  It would be nice to get paid for all the work I do online in Bitcoin since the US government would have no record of it and wouldn’t be able to tax it.

I hate having to exchange money, worrying about ATM withdrawals in foreign countries and so on.  Even though the dollar is widely accepted throughout the world, it would be pretty cool to be able to pay with Bitcoin in any country around the world.

Bitcoin as an Investment

Although Bitcoins were designed to be used as a form of digital currency, most people these days are just hoarding Bitcoins.  Why would anyone pay 20 Bitcoins for a tv today when they can wait until tomorrow and it will only cost 19.75 Bitcoins?  So you have the hoarders and you also have the Bitcoin investors, people who are looking at Bitcoin as an investment and holding it until a later date so they can sell for a nice profit similar to what you would do with gold or stock.

It seems like I’m a little late to the Bitcoin party so I won’t be investing any money in it.  But should you decide to invest in Bitcoin remember that you shouldn’t invest anything you aren’t willing to lose.  I don’t really see Bitcoins taking off in the future since no one is actually spending Bitcoins right now.  You can use Bitcoins on a few hundred sites across the web but I don’t think you’ll see any large retailers accepting Bitcoins anytime soon.  The price volatility makes it too risky for a company like Amazon or eBay to accept Bitcoin.

How Can Bitcoin Succeed?

Even though I do think Bitcoin is a bubble that will eventually burst, I like the idea of a non-regulated digital currency.  Most of the ‘dollars’ I use on a daily basis might as well be a digital currency.  I rarely use cash and any transaction over a couple hundred dollars is almost always performed online.  So in a way I would say that the dollar is already a digital currency.

Honestly, I don’t see a whole lot of difference between dollars and how Bitcoin is used.  Money is valued only as a medium of exchange.  Why is gold worth so much more than salt or pepper?  Most gold is traded electronically these days anyways so again I ask, why is gold worth so much?  Once the initial excitement and flurry of Bitcoin dies down I think it could become a legitimate form of online currency.  The main problem with Bitcoin right now is its volatility.  But once its exchange rate settles down, it could be a good way to pay and get paid all across the world and web.

Readers, have you ever heard of Bitcoin before reading this article?  Do you think it could ever become a legitimate form of currency or is it just a fad that will pass with time?

-Harry @ PF Pro

The post What is Bitcoin and Should You Invest in it? appeared first on Your Personal Finance Pro.

The following article is a guest post.  If interested in submitting a guest post, please read my guest posting policy and then contact me.

Buying items in bulk is almost always less expensive per unit than buying a single item. But a great deal in bulk is only a great deal if you eventually save money and spend less. Think of it as a long-term project instead of instant gratification. Here are 5 ways to make buying in bulk work for you.

1. Buy What You Need

When you’re spending more money on things you don’t need, you’re not really saving money. The problem is that some things are items you only need one at a time. The trick is to buy things you’ll eventually use. Things like bath tissue, household cleaning supplies and pens and pencils will eventually be used. If you’re buying a large amount of products for the same price or slightly higher than you’d pay for a single item, it’s probably not worth your trouble. Also be sure to avoid things that look cool but have no place in your home.

2. Share the Load

Buying birthday party supplies or paper products is a good example of something you might not need a lot of often, but still use with regularity. Try sharing the load with friends or family. Maybe you don’t need 72 paper plates that say “happy birthday” on them and 72 cups to match. When split in half, that’s 36 apiece though. It’s manageable for one or two parties a year. Grab a friend and put your heads together. Make a list of what you both need, then split the cost in half. You’ll both have what you need and spend less doing it.

3. Organize Storage Space

One reason why most people don’t buy in bulk is because they’re spending a little more money up front, so they feel like they’re not really saving money. The reality is though that you won’t have to buy it again for weeks or months and the unit price will be substantially less. So what are you supposed to do with the extras until you need them? Get organized. Set up some shelves or cabinets in a place that’s out of the way; perhaps the basement or the attic. Be conscious of your inventory and use it before you buy more.

4. Use Special Offers

Look for specials and shipping discounts. If you’re serious about saving money, do your homework and take advantage of special offers. They’re out there. Some stores offer a free ship-to-store feature or contests and giveaways for shoppers who sign up for their value clubs.

5. It’s Not As Big As You Think

When most people think of bulk products, they think of giant cartons of hundreds of products. Not everything comes in giant cartons so look at the packaging or order information. There may be a unit price with a minimum quantity involved that suits you. Do the math and see if it fits your needs.

Buying in bulk might take a little more effort, but when you shop wisely and plan ahead, it can cut down on your shopping budget. Only you can determine what works best for your household so be selective.

Nikki is an independent writer for DollarTree.com. Dollar Tree offers great deals on office supplies, party supplies and more.

The post 5 Ways to Make Buying in Bulk Work For Regular People appeared first on Your Personal Finance Pro.