I found an interesting link through CNN.com. The article lays out a step by step lesson guide to organizing your finances and making sure you keep them that way. In times like this it’s very crucial that everybody understands how to manage their money. I’m going to go over a brief overview of what the website talks about, then I’ll supply you the link so your wonderful inquisitive eyes can go and look for yourselves at the more in depth guide.

First and foremost, before you attempt to handle anything regarding money, you should set your priorities. You need to know what ‘money drains’ are most important. IE: High interest cards & loans, outstanding payments, monthly bills etc. Paying off high interest cards & loans first will make your final payment smaller in the long run. Think about it… sacrifice- give up a little money and bite the bullet to pay more on your principle each month, or pay small amounts for the rest of your life. Seriously. You’ll probably be paying forever. Forever. Read more…

Photo by micsalac.

In my last post, Save Early and Become a Millionaire, I commented on how a 16 year old can go from a pauper to a millionaire by saving up some cash and investing it in a Roth IRA over 40 years. I wanted to do a little more research and find out exactly what an IRA is. So this is what I found out…

IRA stands for Individual Retirement Account. It’s a retirement plan that lets you contribute up to a certain amount per year and provides tax advantages too. After you establish the account you can invest in bonds, stocks, mutual finds and CDs just like a regular cash account. There are a few different IRAs but the two most common types are Traditional and Roth. Roth IRAs were created to encourage people to save for retirement by offering significant tax breaks.

So what’s the difference between Traditional and Roth? Good question. Now listen up, this part is important. With a Roth IRA you pay income tax, and then make your contribution with after tax dollars. There are no taxes when you make a withdrawal. With a Traditional IRA you get a tax deduction, which lets you deposit before tax dollars then when you make contributions but you also pay income tax on the entire amount of your withdrawals. Roth has the extra advantage since taxes will probably rise in the future; paying taxes now rather than later will save you money in the end. Read more…

Within the last twelve months, 9.3 million Americans were victims of identity theft. While this may seem like a lot, it’s actually a decrease from past years. But what is growing is the monetary loss associated with each theft. Fewer identities are being stolen due to more people knowing how to protect themselves. But if you are ever unlucky enough to be struck by identity theft, here are a few things you can do to gain back your good name.

If you are ever the victim of identity theft, first go to the police and file a report. The reason you need to do this is simple: to establish the time of discovery and what actions you have taken since the theft. Give the police copies of all relevant documents pertaining to the case. Be as detailed as possible when listing all your creditors, cards and anything else affected. And obtain a copy of the police report, to refer back to later.

The next step is to contact the credit reporting agencies; Experian, Equifax and Transunion. This will place a 90 day fraud alert on your identity. If anyone tries to open a line of credit, you will be contacted to verify your information. They will also issue you your credit reports. Once you get a copies of your credit reports, review each report and list all creditors affected. Contact those creditors directly and tell them of the theft. Close the fraudulent accounts and dispute any charges.

Lastly, file a complaint with the Federal Trade Commission. By sharing your identity theft complaint with the FTC, you will provide important information that can help law enforcement officials across the nation track down identity thieves and stop them. Read more…

Photo by SeraphimC.

Society is moving toward going green, so doing your part is becoming more important than ever. People now have more ways than ever to help the environment, such as paying bills online to save paper. Many banks have given their customers the option of using prearranged automatic payments from bank accounts, debit cards and credit cards to handle anything from a car payment to Netflix subscriptions. Automatic bill pay takes the thought out of paying bills altogether, but it can also become a problem if you don’t keep careful tabs on your expenses.

Be smart about automatic payments. It’s smarter to use a credit card rather than debt or a bank account since you will be able to notice mistakes in your monthly statements and fix them before any money is taken from your account. Also, if you have a habit of keeping a low balance, overdraft fees will add up if you forget to keep track of your balance.

The MSN Money article, Perils of Automatic Bill Pay, says:

The best candidates for automatic-payment arrangements are those bills that are the same amount every month. They’re not as likely to be the source of contention or error.

But there can still be errors. Watch out for charging the wrong amount and double billing, the two most common errors. Skip auto pay for bills that change from month to month, like phone and utility bills. Read more…

Tired of trying to write essay upon essay for scholarships and grants? Maybe applying for student loans turns your stomach? Or do your parents tell you “get a job” when you ask them how to pay for college? If this sounds like you, don’t worry. Today there are many alternative ways to pay for college apart from loans, scholarships and finding a job. Here are a few ideas that can get you started on the path to funding your college education.

Start your own blog or website. Blogging is not only for housewifes and techies. This blog actually came from the idea of starting a website to help me pay my loans. Start writing about your experiences. Ask businesses if they would like to sponsor your website. Luke Livingston had this idea too. His site, SponsorMyLoans.com every month features a sponsor’s ad, which in turn pays his student loan payment for the month.

Another site, Milliondollarhomepage.com, was started by Alex Tew. The idea:

to try and make $1 million by selling 1,000,000 pixels for $1 each. Hence, “The Million Dollar Homepage.” The main motivation for doing this is to pay for my degree studies, because I don’t like the idea of graduating with a huge student debt.

The best thing to do here is to have a really good idea. If you have an idea, try it. A cheap and easy way to start your own blog without spending a lot of time with the setup is Wordpress. Read more…

Unless you’ve been living in a cave for the past ten years, you know that there is a big movement out there to reduce the use of paper to help save the environment. Many companies, including banks and credit card companies, have provided their customers with ways to pay their bills online, thus curbing the mass quantity of account statements and bills they send out each month. If good karma and saving the planet isn’t enough for you to change your ways, here are a few more you may not have thought of.

Not only can you help Mother Nature but you can also make your life a little more convenient by going paperless. According to a 2007 report by Javelin Strategy and Research, the typical U.S. household sent or received an average of 26 bills, statements and checks per month in 2006. Instead of paying your 26 separate bills, one by one, you can pay them all online in a matter of minutes. Chances are your bank has online bill pay, but even if it doesn’t many credit cards and utility companies have online portals where you can sign on and pay. Read more…

Last week I wrote an article about taking advantage of education benefits and deductions for your taxes. With the tax deadline of April 15 quickly approaching, I thought a few more tips to save the most on your tax return was in order. So without delay, here are more ways to take advantage of education benefits and tax breaks for students.

If your employer is cool enough to agree to reimburse you for a course you take, up to $5,250 of that income is tax free. The Employer Education Assistance benefits must have been used for the usual college expenses: tuition, fees, books, and supplies. Other expenses such as travel, housing and food are not included. And courses involving sports, games or hobbies are not included, unless they are required as part of a degree program or are related to the business of your employer. If payments above $5,250 have been made, these may also be tax-free if they represent a working condition fringe benefit. This means that if you had paid for the expenses, you would have been able to deduct them as an employee business expense. Read more…

Teaching your kids about money management is a very important lesson, but that lesson becomes even more necessary when your kids are ready to leave the nest and to go to college. College is usually the first time people are exposed to managing their own finances and the way they deal with them at this important time can be a benchmark on how they will manage their finances throughout their lives. If you’d like to teach your teen about money and credit, keep reading to get some good tips. Read more…

If you are a student and you are doing your taxes this year, there are a few things you should know before you start. Did you know you can get federal tax breaks on education related expenses? These benefits exist, you just have to know about them. By being available to part-time, full-time, married students and parents of dependent students, these benefits and credits can save you a nice chunk of cash when you go to the taxman this year. Read more…

Ah. Tax season. That magical time when everyone is usually miserable because they put off doing their taxes till the last possible minute. If you are a student you may not need to worry since your parents may claim you and file your taxes with theirs. But, the unlucky ones, may have to do some prepping and planning of their own. Take heed students and recent graduates: this year take your taxes in early but before you do here is what you need to know.

Before you start gathering your paperwork, check with your parents. They may claim you as a dependent. If your parents claim you as a dependent and you file separately by accident, expect a nice letter the IRS asking that either you or your parents amend the returns. Read more…