Home buying in 2010

There's plenty you can do to make sure your homebuying experience is a good one in 2010 – for you, your family, your wallet and your future. Here are a few biggies right off the tops of our heads.

Do some upfront housework. Get a feel for the market, crunch the numbers, get pre-approved and stick to your guns on price range.


Find the best mortgage. Shop around, but choose the lender with the least complicated loan and a low interest rate. That's a nice way to own your home sooner from the get go.


Pick the right agent. Word of mouth is always good. Ask around. If you decide to use an agent, make sure to choose one who's looking out for you vs. one who's looking for a quick commission.



Make a "new house" list. Do you really need a 2-car garage? Does the house have to be in "move-in" shape? In THAT zip code? All come with a price tag.


Save up a healthy down payment. Put down at least a 20% chunk of the home's total cost. That's what we call instant equity.


Don't forget 2010 tax credits. First-time buyers get tax credits of up to $8,000 and certain repeat buyers can get up to $6,500. That's a huge incentive to buy and terrific way to save. Check with your tax advisor for details.


Before you make an offer, make another walkthrough. Review this list again. Visit the place several times with a relative or friend. Another set of eyes never hurts, you know.

Happy house hunting!

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Saving Tips in the New Year

If it's January, then it must be time to revisit New Year's resolutions past and present. Eat better and exercise? So far, so good. Call mom weekly? Oops. Take care of your money? You knew that was coming.

Check out this countdown to help keep you on the road to saving in 2010:

Spend less than you earn. Saving part of every dollar's the foundation of financial independence.


Take care of the things you have. You work hard for your possessions. Don't make them disposable.



Make your money grow. It's not enough to just have money in the bank. Put it someplace where it can grow.


Defend your credit worthiness. Good credit's precious – pay bills on time and only borrow what you need.


Weigh credit card offers carefully. Do you really need another one? You might want to explore your best credit options, especially in case of emergencies, for special family or home projects.


Know the cost of borrowing. Figure out how much interest you'll owe and ask yourself, "is it really worth it?"


Avoid paying fees. Check out your bank statement, poke around, read the fine print and challenge your bank on fee policies.


Invest for the long term. Your future's built on patience and prudence. Not luck.


Use your home as a savings account. A house provides shelter and comfort. It also provides equity.


And, last but not the least:

Remember what matters. Spend more time with friends and family, and spend less money on all the stuff that doesn't last.

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6 Ways to Cut Your Bills at Home

Bills add up fast, and if you’re the type that’s getting 20+ bills a month, you probably just want to sit back, and pull out your hair. Instead of stressing out about your bills, there are some things that you can do, in order to cut back on them either completely, or by knocking a good portion off of them. Here’s what I have done in the past year, and I’ve easily been able to save 20-30% each month. It all adds up, trust me!



Ditch the Cable TV
Cable TV is expensive, no matter what package you have today. In today’s technological era, you can gather up a lot of shows for free online. With services such as Hulu, and YouTube, there’s no reason to watch all the shows you love on TV for a price. Purchase a HDTV antenna, and you can enjoy all your local channels for free.

Study your cell phone bill
A lot of us Americans pay a lot for our cell phone bill, and if you’re paying $100+ a month for your phone, you may want to look into your bill. If you have a family plan with more than 2 phones, you need to sit back, and look at how much you use. Do you use all of your minutes? Do you use all of the options? Do you really need the data plan? I think you get my point. Consider cheaper alternatives online for your phones, with companies such as Magic Jack, and Google Voice.

Cut back on the electric
If you don’t have an electric thermostat, I highly recommend that you purchase one. When you go to bed at night, set the temperature down to 60-65. Do this from the time you go to bed, until you’re about to wake up. You really don’t need the heat blasting at night, since you’ll have a ton of covers. It’s also important to scale back the heat as well, when you’re off at work. This alone can knock 20% off your heating bill alone.

Do simple things around the house
There are some small, but simple things that you can do just to save on your utility bills as well. Change your light bulbs to florescent, check your windows for leaks, fix breaking faucets, use fans instead of the A/C, and more. It’s just important to be smart with your usage.

Save on groceries
If you’re like me, you want to turn grocery shopping into a game. See how much you can truly save, every time you go out, and shop. Use free online coupon databases, and services such as TheGroceryGame.com. It’s a great source to use, when you’re looking to save 40% on your groceries each, and every time.

Look at your services
Do you have any services such as landscaping? Pool services? Analyze these services, and see if you really need them. You’ll be surprised at how much you can save by simply doing all of the work yourself. It really isn’t that hard to so. If you have to, you can always consider the neighborhood kid to do the lawn cutting for you.

It’s really not that hard to save money on your bills. As long as you use your head, and try to attempt to cut back on your bills, you really can save 20%+ each month.

This is a guest post written by Elizabeth Cutten. Elizabeth is a frequent contributor, and co-creator for FINDSecuredCards, a getting out debt blog helping those that are looking to save up money, and fight debt.

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Student Budgeting Tips

Being a student at university or college will be one of the best times of your life, so you don’t want to be continually stressed about money, or be stuck at home because you don’t have enough funds for a night out with your new friends. Therefore, you need to know how to create a budget which will work for you as a student, because if you are able to create an accurate budget, you’re more likely to be able to stick to it.

1 Make an accurate and usable budget

If you start out with a realistic budget then you’ll save yourself time and stress because you can avoid going back over your budget because you’ve forgotten an expense, or underestimated a cost. Therefore, when you are entering your expenses overestimate them and round them up a little each time. This gives you a little extra breathing space if for example you go over your phone plan or you do a little extra driving and chew through more fuel.



To make sure your budget really is accurate and includes everything you spend, keep track of all of your expenses. This is as simple as holding onto the receipts for everything you buy, and entering these amounts into your budget. This allows you to track and allocate funds for everything you need – rather than just the things you can think of at the time you make your budget. Having an accurate budget will help you stick to that budget as you don’t have to make calculations on the go, and you know at every moment how much you have to spend, and on what.

2 Compile and review your budget monthly

Checking over your budget every month means you can see whether you really are keeping to your expected expenditures or whether there are still things you have forgotten to account for. Reviewing your budget you can see if there is a place where you regularly go off course and you may need to re-evaluate your other expenses to allow for it. For example, do you find you’re going over your phone plan each month and could find a better deal for your calls with another provider? Or maybe you’ve realised that you’re using your mobile phone all the time and don’t need to pay for a landline rental at all.

To make your budget even easier to review, compile it in an excel file which can be easily changed, not to mention it will do all the calculations for you. You can save a file for each month and this also allows you to look back on your spending habits to see where you could make changes.


3 Don’t forget the sporadic expenses

In making a monthly budget you will be able to account for things like rent and phone bills but you may forget about costs which occur six monthly or yearly. Therefore, make sure your budget includes expenses like car registration and insurance, dentist bills or driver’s license renewal. These expenses which don’t come around very regularly are often a blow to many budgets, but you will be prepared for when they come, and being prepared means you are more able to keep to your budget.

4 Create an emergency fund, and one just for fun

An important part of your budget as a student should be a savings plan. While it’s easy to spend as much as you earn when you are studying, it is important to remember that studying is just one part of the rest of your life and you’ll need to plan for your working life expenses too, plus all the things you want to do after college like buy a house, or travel, or get married, or buy a great new car.

To help you with your savings as a student, open an high interest savings account which has the feature to allow you to open several sub-accounts too. A high interest savings account is an online account which helps you easily and effectively save your money, without you noticing it’s even gone from your account. Opening a savings account with sub-accounts allows you to save for emergencies, nights out or holidays, the future, and those yearly expenses which can hit you hard. By directing some of your wages or study allowance into a high interest savings account and its sub-accounts, you’ll be able to keep on top of all your expenses now and into the future.

5 Part time work

As a student you may not have a lot of time to work, but this is perfect because working just enough to pay your bills and have some spending and saving money means you are likely to fall into a lower tax bracket, or you may even be able to avoid paying tax at all. Even if your parents have an education fund set aside for your expenses, or they send you an allowance, earning a wage on top of that means you can more easily set aside more money into your savings account, as well as keep to your budget.
Earning, saving and budgeting are important lessons you should learn on top of your studies, and learning them while you are a student will serve you for the rest of your life.
This is a guest post by Fred Schebesta who works for Savings Account Finder, where helps people to compare savings accounts and term deposits online.

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Roth IRA conversions: Should you pay tax now or later?

As you may already know, beginning on January 1, 2010, you can convert your traditional IRA to a Roth IRA regardless of your income or tax-filing status.

If you're thinking of taking advantage of this change, keep the following in mind before deciding when to recognize any conversion income.

More people are eligible
First, let's review how the rules will change.

Today, only investors with an adjusted gross income of $100,000 or less are able to convert a traditional IRA to a Roth. Married couples who file separately are unable to convert to a Roth IRA at all.



The upshot of the income-restriction elimination, says Joel Dickson of Vanguard's Quantitative Equity Group: "A lot of people who aren't eligible today to make a Roth IRA conversion will be able to do so in 2010."

The special tax option for 2010 conversions
Investors who convert from a traditional to a Roth IRA in 2010 will also have the option to spread any resulting taxable income evenly across 2011 and 2012 unless they choose to recognize all of the income in 2010. (The two-year tax option exists for conversions during 2010 only.)

However, keep in mind that your tax liability on the income may differ depending on when you decide to recognize it. Because the conversion amount increases your total taxable income, it potentially could reduce the deductions or credits available to you in a given year. If the income is significant, it could potentially push you into a new tax bracket and you'd wind up paying a higher rate on at least some of the amount.

Future rates are uncertain
You should also consider that, under the current tax code, tax rates are scheduled to increase after 2010. Therefore, if you elect to spread taxable income across 2011 and 2012, you may actually owe more tax than if you recognize the income in 2010.

"It's not clear that it would be a big advantage to spread your taxes into years where you might actually face higher rates," said Mr. Dickson.

If you convert to a Roth IRA in 2010, you'll at least have some time to make up your mind about how to handle any resulting tax bill; the deadline for making a decision about the two-year option is your tax-filing deadline—April 15, 2011. (However, keep in mind that you may have to pay estimated tax to avoid an underpayment penalty.)

Source: Vanguard

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