Archive for January, 2007

Federal judges ruled illegal the 3 percent federal excise tax on long-distance phone service. Service providers were ordered to stop charging the tax by August 1, although federal excise tax on local phone service still applies.

You may qualify for at least $30 from the government as your share of the $15 billion dollar telephone tax refund. Businesses and heavy cell phone users may qualify for a good bit more. Approximately 146 million individuals and 14 million businesses are expected to be issued a refund.

For individuals, the IRS will give you a flat amount ranging from $30 to $60, depending on the number of exemptions on your return. You write the amount on a line on your tax return and that’s it. A more complicated, but possibly more rewarding way, to get your break is to add up your taxes on 41 months of phone bills (billed between March 1, 2003, and July 31, 2006) and file a separate form (Form 8913). If you are a heavy phone user who keeps good records your refund could be sizable. If you have not saved your records, it may prove worthwhile to contact your service provider and ask the charge for copies of past bills. If you are not required to file a return, you may also claim the refund by filing Form 1040EZ-T.

Businesses do not have the flat refund option. Instead businesses have a choice to file for actual taxes paid over the 41 months or to submit two monthly phone bills (April 2006 and September 2006) to estimate taxes paid for the entire period. State and local telephone taxes are not part of the refund program.

Here’s a great way to improve your finances and your health painlessly. If you regularly pick up a muffin for breakfast, you are probably spending close to $2 (and untold calories) each day on pastries. No big deal? That adds up to $730 each year, enough for a mini-vacation. Or a couple of car payments.

Exchange your muffins for oatmeal. I know, I disliked it myself as a child but it is truly delicious. At about 35 cents per serving you’d save approximately $1.65 per day by switching to oatmeal for breakfast. $600 per year is a healthy savings.

Speaking of healthy, oatmeal is good for your heart. Research shows that eating oatmeal can help reduce bad cholesterol and the risk of heart disease associated with high cholesterol. Oatmeal also helps keep your arteries healthy and clean.

The average serving of oatmeal contains an estimated 150 calories, 20 of those from fat, no transfat or saturated fat, no cholesterol, one serving of whole grains, and lots of essential vitamins and minerals. Be sure to pick up oatmeal with fruit for added taste and nutrition.

Cutting costs does not necessarily mean cutting lifestyle. If you are living on a budget, you need to get creative with your available discretionary funds. Here are a few ideas for living better without spending a lot of money.

1. A new mattress
Few things in life bring as much peace of mind and basic creature comfort as a good mattress. A quality mattress costs around $1000. Divide by the number of nights of good sleep, and you realize this is an incredible bargain.

2. Yoga
You don’t need to join an expensive gym to reap the rewards of yoga. Spend $20 or less on a yoga mat and try out a few poses you can easily find online. Used regularly, yoga can renew your life at no cost. Your vigor, flexibility, and sense of calm will be unparalleled by investing just a few minutes each day.

3. Learn a language
Buy an inexpensive electronic music player and borrow language CDs from your local library. Transfer the recordings to your portable player and then make listening to your lessons part of your normal routine. If you walk regularly, listen to your new language at the same time. I guarantee your errands will fly if you pretend everyone around you is French!

4. Drink tea
Tea is high in antioxidants and much cheaper per cup than coffee, even if you brew it at home. Tea costs pennies per cup and it is good for you. Give up that expensive coffee habit today and save big over the long run.

5. Read library books
Reading is a great way to expand your horizons but the cost of books can add up quickly. Not to mention the weight they add to any move. Save your dollars and check your reading material out of your local library. Just be sure to return your books on time and avoid late fees.

A credit score is a number indicating your level of credit risk to potential lenders, typically a higher number represents lower risk. It is arrived at using statistical models involving different numbers from your credit report. The models were created using payment data from thousands of debt holders, which make the scores extremely effective in predicting credit behavior among consumers.

Your score is usually generated live when a lender asks for your credit report. Your credit score changes as the numbers in your credit report vary. For example, if you make a payment or open a new account, your score may fluctuate.

How are credit scores used?

Credit scores help lenders such as banks, credit card companies, car dealers, and retailers quickly assess a customer’s credit history, allowing them to provide a faster risk decision. Although many factors are used to determine risk, including applicant’s income and amount of loan, a credit score is a major indication of one’s ability to repay debt.

What impacts my credit score?

Generally, your credit score is affected by:
• Total debt
• Recent inquiries
• Number of late payments
• Number of days late on payments
• Number of accounts, type of accounts, and how long the accounts have existed

How do I obtain my credit score?

Lenders usually make credit scores available to consumers during the process of a loan being issued. If you need to access this information outside of a loan process, go to freecreditreport.com for your free copy.

How can I fix my credit score?

Paying your bills on time is the most important thing you can do to earn a high credit score. Even if you owe only a little bit, it is critical that you make your payments on time every time. Try to pay down debt, avoid taking on more obligations than you can manage, and never apply for credit that you do not really need. Time can be your best ally when it comes to improving your credit.

Did you resolve to become financially healthy this year? Here is a list of tips to get you and your money in shape. Act on your financial plan today, it will pay off tomorrow. You can do it!

Do a reality check Assess your net worth using this handy browser based balance sheet. Get into the habit of checking your net worth monthly and resolve to increase it each time you check.

Watch what you spend Get a small notebook and write down every penny you spend for the next month. Your spending habits may surprise you. While shocking, this exercise can help you decide where to make changes.

Plan to be rich Now that you know what you are spending, make a written budget and follow it. This is the most effective way to live within your income and learn good spending habits. Review your expenses against your budget weekly or monthly.

Clean financial house If your bank account is unreconcilable, open a new one and resolve to keep it clean, meaning record every transaction in the register and reconcile it when the statements come. At a minimum, use online banking to keep an eye on your account and never give the bank the satisfaction of charging you a single overdraft fee.

Check your credit score Get a free report at freecreditreport.com. If it’s low, take steps to improve it. Always pay parking tickets and library fines, if left to amass fines and penalties these can actually negatively impact your credit score. Even if you aren’t looking to use credit yourself, potential employers and landlords may run a credit check on you before making a final decision.

Make a habit of recordkeeping Don’t scramble at tax time -– or miss a deduction -– by organizing your records early in the year. Save receipts, cancelled checks, pay stubs, bank and investment statements, and proof of any other deductions you may want to claim. Folders and spreadsheets are handy tools to keep order.

Reduce your debt The less money you owe, the less interest you pay, and the more money you can funnel into future investments. Figure out which of your credit cards has the highest interest. Pay the minimum monthly charge on all of your debts except the one with highest interest. Throw every extra cent you have at that debt until it is paid off. Continue in this way until you are debt free. If possible, consider switching high interest balances to a 0% APR credit card.

Start saving Set aside a percentage of your monthly income as savings. Ten percent is a good rate for investors in their twenties and thirties; if you are behind in your retirement planning, adjust to a higher percentage. Keep it simple, set up an automatic investment plan to pay yourself first monthly.

Plan for retirement Contribute to an IRA or your company’s 401k plan. Your company is likely to match a portion of your contribution, check with the plan administrator at your place of employment for more information.

Pay with cash This is the absolute surefire way to stay out of debt. If you don’t have the cash for a purchase you are considering, decide not to buy it right now. Then make a plan to come up with the cash to make it happen. Remember, there are two things you can do with money: save it or spend it. Saving money increases your wealth, spending money leaves you poorer.

Credit Card debt can be a pain in the neck and with the holidays now behind us, I know I’m not the only one with a little holiday related debt. Sometimes it can be just too easy to swipe the credit cards and not worry about how you’re going to pay for that sweater for Mom or socks of the brother.

However, now that you’re in a little, or a lot, of debt doesn’t mean you have to be penalized for it. You could keep your debt on high interest credit cards or you could switch them over to a 0% APR credit card that allows you to transfer your balances free of charge. It’s a way for credit cards to get you to bring your debt to them and hopefully not pay it off, or at least use their card instead of a competitors.

So use that to your advantage. I recently happened across a website, quite randomly, at www.BalanceTransfer.cc. They’ve organized all the most current 0% APR credit card offers into a great, easily navigable page(s). They’ve even got a 0% credit card offer blog that can help explain some of the issues with gimmicks and help you save a lot of money in interest.

I’ve noticed also, and had some friends sign up for, discover card 0% intro APR deals that not only save them the pain of paying interest on high debt but also give a little back if they ever decide to manage their debt well and use the card to pay for common purchases (more on that to come).

I’ve used a chase credit card 0% intro APR card that seems to be a great deal but I’m also thinking about going with an American Express credit card because I’ve never had one before and have wanted to have an AE card on hand just in case I’m ever somewhere that I need to use one. Plus they’ve got that cool “blue” card that’s almost see through.

Anyway, the point is, you can save a lot of money if you transfer your credit card debt to a 0% APR credit card. Make sure you don’t have to pay any balance transfer fees (some will sock you $75 or more to just bring your money over), and you’ll be on your way to living debt free in no time.

Exchange Traded Funds made quite an impression in 2006 and ETF’s look to make and even bigger splash in 2007.

The ETF is a great thing if you want to get into many a mutual fund but don’t want to deal with going through a management firm. Most management firms make you join with a lump sum and only allow you to buy with a certain amount. This can put a lot of restrictions on your investments.

With ETF’s you can buy and sell shares of “funds” just like a stock on any stock market. You can use your online discount broker to buy the shares and sell the shares. You can get into funds like SLV which trades silver or FXI which trades china related companies.

To find the most traded funds in one place and get into the funds look at iShares.com. It’s the company that’s putting ETF’s on the investment map and will be your single resource to find an ETF on everything.

If you’re looking for a good investment vehicle that’s as safe as some mutual funds but as easy to day trade as stocks then ETF’s are the thing for you.