Roth IRA Contributions - IRS Rules
November 13, 2008
Confused about whether you can contribute to a Roth IRA? Try using these simple rules:
Income
To contribute to a Roth IRA, you must have compensation (e.g., wages, salary, tips, professional fees, bonuses). Your modified adjusted gross income must be less than:
$160,000 - Married Filing Jointly.
$10,000 - Married Filing Separately (and you lived with your spouse at any time during the year).
$110,000 - Single, Head of Household, or Married Filing Separately (and you did not live with your spouse during the year).
Age
There is no age limitation for Roth IRA contributions. Unlike traditional IRAs, you can be any age and still qualify to contribute to a Roth IRA.
Contribution Limits
In general, if your only IRA is a Roth IRA, the maximum 2005 contribution limit is the lesser of your taxable compensation or $4,000. For individuals age 50 or older, the contribution limit is $4,500
The maximum contribution limit phases out if your modified adjusted gross income is within these limits:
$150,000-$160,000 - Married Filing Jointly
$0-$10,000 - Married Filing Separately (and you lived with your spouse at any time during the year)
How to Save Money in a Grocery Store
November 2, 2008
Now there are ways to save money in the grocery store, and they may or may not take much effort on your part to learn some great ways to save money. Your greater savings can often be found in the perishable departments of a grocery store. The perishable departments are the bakery, meat, and produce departments. Looking at the grocery ads can also be of great assistance. Also, believe it or not something as simple as writing down a list can help you save money. I’ll show you a few techniques that will help you save money.
Now for me, I have saved more in the meat department, than any other department. No, I am not purchasing meat that is barely fresh. Keep in mind that often the same or similar cuts of meat can be sold at very different prices. Why buy stew meat for a couple of bucks more, when you can buy a chuck roast, and cut it yourself. Did you know that the chuck sits right next to the ribeye? If you look closely, you can get some chuck steaks that are on the tail end of a ribeye, and enjoy a similar tasty cut of meat, for the same basic price. For the product department, take a look at the bags of bulk produce, you can find some good deals there, but check to make sure all of the fruits/veggies in the bag are good and fresh. Please bypass the cut up veggies, you can cut your own fajita veggies, or stop by the salad bar for less.
Budgeting Your Way to Financial Freedom
October 23, 2008
Financial freedom cannot be achieved without budgeting. Budgeting involves tracking your sources of income and more importantly tracking your expenses. It is novel tool for controlling your expenses and making you aware of how you spend your money. At the outset, budgeting may seem to be onerous and boring, particularly for those of us who hate numbers. But once you realize the benefits emanating from it, you will find it an interesting exercise. Even businesses, whether small or large, use budgeting as a tool to achieve their financial goals. It is, in fact, an integral part of managing an organization.
Benefits of budgeting:
Helps to control impulse buying.
Helps to control your expenses.
Ensures that you pay your bills on time.
Helps you to borrow money when you need it.
Helps you by not defaulting on your loan repayments, thus, protecting your credit rating.
Helps you to save money which can routed to different investment vehicles that can in turn help you build your net worth over a period of time.
The budgeting process
The first step in the budgeting process is to determine your net worth.
The World is Not Enough - Calling for a More Ethical Approach to Personal Finance
October 15, 2008
At a time when the entire world’s attention is focused on the problems of world debt, with the Live 8 concerts, the G8 summit in Scotland, the Make Poverty History Campaign (MPH) and the various anti-poverty marches, it seems that everyone wants the world’s governments to behave more ethically towards the manner in which international finance is conducted. This is obviously a laudable attitude to take, and has gained immense momentum with such a groundswell of public opinion that even the UK Chancellor, Gordon Brown, has stated he is planning to participate in the Make Poverty History demonstration in Edinburgh during the G8 summit.
Mr Brown has urged world leaders to follow up their decision on debt cancellation for the poorest countries with a doubling of aid and fairer trade rules.
The Chancellor said, “This is a day for the people not for politicians. It is the people’s voice that must be heard.”
Whilst the support from such a prominent member of the British cabinet with his accompanying statements that the world was “angry” and “outraged” over the poverty in Africa, which has continued despite repeated past pledges from the richer nations, has been welcomed by many who believe that the various organised events could have an influence on the leaders who attended the summit, others see his words as hypocrisy.
Bank On It: Places to Hide and Invest Money
October 4, 2008
Today I passed a thermometer at a bank that read 110 degrees, but I am not telling you that to show you how hot it was. I am telling you that because this bank really needs to fix their thermometer. According to their thermometer, it was also 110 degrees in December. There are a lot of people, places and things that can be more accurate with the weather, and as I’ve never said (but have always wanted to), “Whatever I trust with the weather is what I also trust with my money.” Here are some examples:
A random old lady: Certain beings can predict the weather through their bones, and that group includes random old ladies and dogs. I specify “random” because that way I won’t get e-mails from people stating, “Hey, why are you messing with my grandmom? Are you saying she’s like an alien or some kind of meteorologist or something?” And no, I’m not. I am talking about a “random” old lady, and grandmoms don’t fit into that category, not even on Bingo Night. Regardless, my plan is to give my money to one of these random old ladies instead of keeping it at a bank because I know this lady won’t go too far with it, and if she does disappear, I’ll know to find her in Florida. Also, I don’t have to worry about her making any silly investments except for lottery tickets and candy buttons. Plus, who is going to try to rob a random old lady? It’s just not feasible…
How You Feel Affects How You Shop & How Much You Spend
September 25, 2008
Have you ever stopped to think about how your “mood” affects the way you shop, not to mention the amount you spend? Think about it.
If you want to save a lot of money, avoid shopping whenever you are in one of these moods:
DEPRESSED, UPSET, or ANGRY
It’s very dangerous for your pocketbook to shop when you’re either depressed, upset or angry. Why?
Many people find that shopping takes their mind away from their problems. In fact, it probably does. But how much does it cost you?
Not only does shopping not solve your problems, but you will also spend money that you did not originally intend to spend.
When you’re not feeling “well”, instead of shopping, do something where you do not have to spend money. Go to a park. Check out the local library. Go on a nice jog or bike ride.
Remember that if you HAVE to get out of the house, plan an activity where you do not have to spend money. You’ll feel much better about this decision after you have cooled down (or cheered up). 
Envy Shopping
Developing a budget? Watch out for Those Budget-Bursting Gremlins
September 13, 2008
If you’ve developed a household budget to get your spending back in line or to just reduce stress, good for you! Creating and sticking to a budget isn’t easy by all means. But it represents the best way by far to manage your finances so you can relax and worry about other things.
A budget can also be a very useful tool for ending financial arguments — assuming that you and your spouse agree how much to allocate for each of the categories in your budget.
The big categories are usually the easy ones. You know how much you pay for rent or your mortgage. Ditto other items such as your car payment(s), heating bill, phone bill and the like.
These are all fixed expenses. In other words, they are expenses that cannot be easily cut. They can be reduced but not without a major effort. For example, you could sell your home and buy one that requires a monthly mortgage payment.
However, many of the other items in your budget are discretionary expenses. In other words, they are expenses you can control and cut. This category includes items such as clothing, entertainment, insurance (yes, you can cut the cost of your car and health insurance), cable or satellite and groceries.
Affording a Home
September 5, 2008
Can you really afford a house? If so, how much house can you afford? To determine this answer will take serious financial planning, and the best time to start is at least six months before buying the home.
Although buying a new home may seem like an American Dream or romantic venture, the reality is that the house you can afford depends on your current income and debt obligations. You must be able to pay your mortgage, satisfy all your current debt, and still have money left over each month to put in the bank. When you consider all these issues, you may find you will actually be shopping for a lower-priced house than the anticipated dream home.
If after careful financial evaluation, you realize you cannot afford the house of your dreams, don’t feel tempted to count on expected annual raises, thinking that eventually you’ll be able to afford the higher payments. Most raises are generally 4% to 7%. In bad times, you won’t get a raise, while inflation overtakes you. In the worse case scenario, you may get laid off and you won’t be able to afford your monthly bills. If you don’t have a budget that includes a savings account worked out on a spreadsheet, you are faced with a serious debt problem waiting to happen. If you cannot recite from memory all the creditors you owe and how much you owe them, you have a credit problem.
Chex Systems ? Why Every American Needs To Guard His Checking Account With His Life
August 26, 2008
Most Americans have been brought up to be concerned about a good personal credit rating, because of the role a positive rating can play in your long term plans; purchasing a home, buying a car, getting a business loan, etc. They have also been made to understand that the premier organizations that pretty much hold the key to their financial futures are Equifax, TransUnion and Experian.
However, there is another organization operating "behind the scenes," that is recording information about a singular aspect of every American’s financial life, that, if you’re unfortunate enough to mishandle, can get you on their list of offenders, which will mean an almost immediate change in your quality of life. The name of this organization is Chex Systems, and the information they record is your banking history, specifically, your negative banking history.
Negative banking history can mean many things, but typically the following are what the banks report, and what Chex Systems, records in its database:
- Honoring a payment you may have made without sufficient funds (atm charge, check payment or automatic debit).
- Abuse of your atm cards, debit card, or savings account.
- Check fraud.
- Lying on your account application.
Saving Money - The Magic 20 Percent
August 16, 2008
Saving money is not easy and is made more difficult if you have a short-term outlook regarding your personal finances. If, like many people, you are living from one pay cheque to the next, it is difficult to put some money aside for a rainy day or for a summer holiday. But what if you were to change your financial outlook into a medium to long-term one? You might believe that you cannot afford to think ahead and make plans, but in most cases you would be wrong. Most people should be able to save some money and with some effort, maybe even as much as 20 percent of their salary each month. Income Analysis First of all it is important to have a handle on where your income is going. Unless, we are on an extremely tight budget or are very money conscious for other reasons, many of us have never really sat down and considered what our money is being spent on ? we just know that by the end of the month, it has all gone! You will know if you are consistently spending your money on unnecessary purchases, for example. Having this knowledge equips you with the control to change things a little or a lot. Saving Money Mentality Many people have never been taught to save and as children, immediately spent the money they received without any forethought. You often hear people say, "Life is short, if you want something buy it now", but thankfully for most of us life is not really so short and along the way we will have to deal with both opportunities and challenges. Having some money saved will help you make the most of the opportunities and ride the challenges. Savings ? Seeing the Big Picture If you could save 20 percent of your salary each month, imagine what that would mean in real financial terms. For example, if you earn 2000 dollars per month and you saved 20 percent or 400 dollars out of every pay cheque, after 12 months you will have saved 4800 dollars! Regularly saving this amount of money would give you the financial freedom to take advantage of more of life’s opportunities. You could plan the special holiday you have always wanted to go on, buy the car that you have been dreaming about for years, or help put a child through college. When it comes to life’s challenges, having a lump sum put away could help you pay for private medical care or deal with an expensive plumbing problem in the home, all without having to turn to the bank for a loan and getting into debt. How Can it Be Done? As we have already seen, knowing exactly where your money is going is the starting point. Next, start thinking about the big things you could achieve with some money in the bank. Some people compensate themselves for not having what they really want, by making many frequent small purchases and getting a temporary "feel good" sensation afterwards. Rather than satisfying yourself with small purchases, such as new clothes and CDs every week or always buying the latest mobile phone, think about how much more satisfying it would be to save up and buy or do something special, which you previously thought was out of your reach, but is achievable with a little effort.
