What are Your Options for Tax-Advantaged Retirement Savings and Investments?

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One of my favorite overused sayings is the one that states, “There are only two things certain in life – death and taxes.” However, I suppose this statement is used so frequently for the reason that it really does hold true. You are going to die, and you are going to in some way or another pay tax on your income now or in the future.

I personally have not heard of anyone that has ever been bankrupted or kept from reaching millionaire/billionaire wealth status because of taxes alone. Even so, that doesn’t mean that the effect of taxes should be ignored. Quite the opposite in fact – the effect of taxes is significant. As savers and investors responsible for self-directing our own money, I believe we have a fiduciary responsibility to ourselves to optimize our finances in such a way that we pay the fewest taxes required by current laws. 

One very potent strategy that we, as normal individuals, have at our disposal in performing the aforementioned optimization is to utilize various tax-advantaged savings/investing vehicles. As I mentioned several days ago in my post about blindly saving for retirement without considering the withdrawal process, there are two big problems I have encountered over the past few years (and ones that I am guilty of as well) circling in the air around how people utilize tax-advantaged money vehicles:

• Problem 1 with the Way People Use Tax-Advantaged Vehicles – People focus far too much on the advantages, while forgetting to really have the disadvantages sink in.
• Problem 2 with the Way People Use Tax-Advantaged Vehicles – People don’t fully understand all of the various tax-advantaged vehicle options at their disposal (i.e. getting focused solely on one with the exclusion of the others).   

In order to address these two problems I have experienced, the purpose of this post will be to review the tax-advantaged savings options on the market today. While doing this, we’ll cover both the advantages and disadvantages of each, but I’ll try to more blatantly call out some of the disadvantages of each vehicle in order to help people know what they are getting in to with the use of red text. I’ll also include my take on how I will or will not incorporate each in to my personal investing/saving strategy at the end of the post.

Let’s get started!

Tax-Advantaged Vehicles – Retirement Accounts

The first group of tax-advantaged savings/investing options that are available can be grouped in to the broad category of “retirement accounts.” Essentially, these carry this label, as you probably know, because they are designed to be vehicles that are only tapped/accessed/have money withdrawn from DURING RETIREMENT (hence the name!). With the possible exception of annuities, all of these retirement accounts are self-directed in the regard that you more-or-less have discretion in investing the funds as you want.

In general, it can be said that these have significant tax advantages, but you have the distinct disadvantage that your money is not quite as accessible as if it were in a taxable account. Having said that, let’s now work through each of these one by one:

Traditional and Self-Employed 401k

This is the tax-advantaged savings/investing retirement account that is most often used (in my experience) by workers at mid to large-sized companies.

• It has the significant advantages of contributions being on a pre-tax basis and your earnings accumulating on a tax-deferred basis. 
• This is nice because you don’t have to worry about the possibility of triggering a taxable event when you go to re-balance your asset allocation each year. 
• Another big advantage (one that you definitely want to capitalize on) is that employers often match contributions up to a certain % of your income. Don’t ever let free money pass you by! 
• They also do not have a low-income requirement like Roth IRA’s. 

Yes, putting money in to your 401k is super easy (done by your employer before it ever hits your bank account), and since it is pre-tax, it allows you to save 30% more money minimum! However, these benefits come with a price, i.e. disadvantages that I feel need to be highlighted more than they often are:

•  All amounts withdrawn (contributions + earnings) from a 401k are taxed as ordinary income at the state and federal level. 
• At first glance, this may not seem like that big of a deal because, hey, after all, you got a tax break on the funds that you put in to the 401k in the first place.
• However, if we dig a little deeper in to an example, it becomes obvious that pre-tax 401k contributions are not perfect since at the withdrawal point, you’re paying taxes on a large amount of earnings that have accumulated after 40+ years (we’ll take a look at an example in the Roth IRA section below).
• Just consider that you’ve got $1 million accumulated in your 401k for retirement. You’re feeling pretty good about your future. However, don’t be surprised when you find out that you really only have $600,000 because you need to pay 30% in federal income tax and 10% in state taxes prior to the money hitting your bank account in retirement.
• Your savings/investments are NOT accessible prior to the age of 59.5 without a 10% penalty.
• Unless you meet one of the specific IRS exceptions such as disability, death, or unemployment (a good article explaining the different exceptions can be found here), you will not only pay the ordinary income tax on 401k withdrawals, but you will also pay a 10% penalty for early access. This could amount to 40-50% of your withdrawals! Quite steep if you are needing the cash to capitalize on other needs or opportunities. 
• This penalty alone would personally keep me from tapping my 401k with the exception of if it were an extreme emergency. This would be somewhat inconvenient in the event that something comes up where I need a good chunk of my savings – a child getting married/going to college, buying a rental property, etc.
• You are required to make RMD’s, or Required Minimum Distributions, after the age of 70.5. 
• If you don’t make these distributions, you’ll be hit with a 50% penalty (essentially, a penalty + income tax at a high bracket) on the money that you should have been distributing. 

SEP, Traditional, and Rollover IRA

The next tax-advantaged retirement vehicle that we come to is the group that go by the name, Individual Retirement Accounts (IRA’s). From a taxation and savings withdrawal perspective, SEP, Traditional, and Rollover IRA’s are treated very similar to the Traditional 401k described above (although the contribution limit for a SEP IRA is generally higher):

• They have the advantage of contributions being on a pre-tax basis, and your earnings accumulate on a tax-deferred basis.
• They do not have a low-income requirement like Roth IRA’s.

Also like with Traditional 401k’s, the benefits of these three types of IRA’s come with a price, i.e. the same  disadvantages discussed previously:

• All amounts withdrawn (contributions + earnings) from a 401k are taxed as ordinary income at the state and federal level. 
• Your savings/investments are NOT accessible (excludes exemptions) prior to the age of 59.5 without a 10% penalty.
• Unless you meet one of the specific IRS exceptions such as disability, death, first-time home-buying, higher education, or unemployment (a good article explaining the different exceptions can be found here), you will not only pay the ordinary income tax on IRA withdrawals, but you will also pay a 10% penalty for early access.
• However, the good news is that compared to the penalties for 401k withdrawals, the rules regarding what situations avoid the penalty for IRA’s are much more lenient (encompass more situations). See the link mentioned above for more details.
• You are required to make RMD’s, or Required Minimum Distributions, after the age of 70.5. 

Roth IRA

Having covered the more traditional pre-tax retirement vehicles, we can now move on to some well-established, but perhaps less widely-employed/known retirement accounts that approach taxes from a different angle.

First, let’s discuss the Roth IRA – my favorite and perhaps the most powerful tax-advantaged savings vehicle currently available. 

• A really cool thing about Roth IRA’s is that they are tax-advantaged in a way that they are in fact tax free! 
• Although the contributions are made after-tax, your money accumulates tax-free, and withdrawals of contributions + earnings are tax free after the age of 59.5, provided that you opened and funded your first Roth IRA more than 5 years ago. What this means is that if your current Roth IRA balance is $1 million, all 1 million of those Dollars can actually hit your bank account and are not subject to taxes skimming 40% right off the top.
• Aside from the withdrawals in retirement not being taxed, the distributions also DO NOT increase your Adjusted Gross Income, meaning that distributions don’t cause your general tax bracket to increase.
• Due to the power of compound interest, I’ve read that at retirement age, retirement accounts consist of 90% earnings and 10% contributions. Because of this, it makes sense to at least consider the desire to only pay taxes on the 10% contribution part in exchange for skipping the taxes on the 90% earnings side.
• An example is useful to illustrate this difference. Let’s say that a 22 year old lands her first job after college and saves $1000 in a Roth IRA. Assuming a level 30% tax bracket during her lifetime, this would equate to contributing $1300 on a pre-tax basis to a 401k. 
• After 40 years of 10% annual compounded growth on the contributions, the $1000 Roth IRA contribution would have grown to ~$45,000, while the $1300 invested in the 401k would have grown to ~$59,000. (Note: $1000 is approximately 2% of the total account value of $45,000)
• The Roth IRA amount could be withdrawn free of taxes, so the $45,000 balance is still intact. However, since the 401k amount is exposed to taxes, that balance gets reduced to ~$42,000.
• So, this means that if you assume a constant tax bracket (which is not realistic because being 22 years old, you are likely in a lower tax bracket than at retirement), you still end up with a higher balance in retirement with a Roth IRA. 
• Of course, this example also operates under the assumption that the 22 year old does indeed invest the larger amount in the pre-tax 401k account since that is before taxes. In my experience, I have found that people do NOT indeed take this tax difference in to account when they invest. They simply want to invest $XXX.XX and don’t think about it’s current worth on a pre or post tax basis.
• A very powerful, yet little-known aspect of Roth IRA’s is that you can actually take out your CONTRIBUTIONS at ANY TIME without tax and without penalty. 
• If you think about it, this can be huge! If you have a contributed to your Roth IRA for 20 years at $5,000 per year, you could have $100,000 to remove and use as you want without tax and without penalty. And even better, whatever earnings this money has accumulated in the Roth IRA at the time will continue growing in the account tax-free. Pretty cool if you ask me! 
• This is a stark difference from the IRA’s and 401k’s discussed already where earnings and contributions withdrawn prior to 59.5 years of age are not only taxed but also subject to a 10% penalty! 
• Rollover Roth IRA contributions can be withdrawn after a 5 year seasoning period without taxes or penalties.
• Unlike the other vehicles discussed above, you are NOT required to make RMD’s, or Required Minimum Distributions, after the age of 70.5.

As I mentioned above, no retirement vehicle is totally perfect, and the Roth IRA is not exception in that it does have certain distinct disadvantages.

• You have to pay taxes in the current year on the contributions you make to a Roth IRA (since they are made with post tax Dollars). 
• This could be a BIG disadvantage if you make a lot of money now and will not have much income in retirement when you take the withdrawals.
• Unlike the 401k’s/IRA’s discussed above, you must have a sufficiently low income to qualify to make Roth IRA contributions. 
• Full Roth IRA contributions can only be made if you are single and make $110,000 per year or married filing jointly making $173,000 per year.
• However, if you do make over these income levels, you can still have a Roth IRA by performing a backdoor Roth IRA conversion by converting Rollover/Traditional IRA’s (which do not have income requirements) to a Roth IRA. 
• The earnings on your savings/investments are NOT accessible (excludes exceptions) prior to the age of 59.5 without a 10% penalty on top of ordinary income tax.
• Mike from Oblivious Investor explained this better than I ever could, so I will refer you all to his post here for more detail. 
• Briefly, if you do not die, become disabled, or purchase a home for the first time, withdrawal of your earnings in your Roth IRA prior to the age of 59.5 will be subject to normal income taxes. This is not a good thing since you already paid the taxes on that money, right?!!?
• Further, if you don’t fall in to the exception category, on top of income taxes, you will also owe a 10% penalty for withdrawal of earnings. 
• Essentially, what this means is that unless you have a “qualifying” reason for withdrawing earnings from a Roth IRA, you pretty much won’t be able/won’t want to take out your earnings.

Roth 401k

Another tax-advantaged retirement account that utilizes Roth-style tax treatment is the Roth 401k. What I’ve read is that these accounts were pretty slow to catch on after their introduction in 2006, but due to a 2010 extension that kept these plans in place, they are becoming more and more popular. Indeed, I think they are a very promising option for long term investing/savings.

Let’s take a look at some of their characteristics:

• As with a Roth IRA, contributions are made after-tax. 
• Your money accumulates tax-free, and withdrawals of contributions + earnings are tax free after the age of 59.5, provided that you opened and funded this specific Roth 401k more than 5 years ago (Note: this is different than with Roth IRA’s where the 5 year rule counts from the time that you funded your first ever Roth IRA).
• You can contribute much more money each year than with a Roth IRA. For 2013, employee’s can contribute up to $17,500 to their Roth 401k. Nice! You can also have/contribute to both Traditional and Roth 401k’s, provided that the combined yearly contribution is less than $17,500.
• Along these same lines, there are no low-income limitations that prevent higher income earners from contributing to a Roth 401k, like there are with a Roth IRA.
• Roth 401k contributions are still eligible for employer matches. However, the employer match money will sit in a pre-tax traditional 401k account. Even with this, it’s hard to turn down free money! 
• After you terminate your employment with your employer, you can roll over Roth 401k balances to a  Roth IRA. This is very useful to avoid the Required Minimum Distributions after age 70.5 (more on this in disadvantage section below).

Along with some strong advantages, the Roth 401k is also not without its respective shortcomings/disadvantages.

• You are required to make RMD’s, or Required Minimum Distributions, after the age of 70.5. 
• However, as I mentioned above, you can get around this by rolling over your Roth 401k to a Roth IRA, a vehicle which does not have RMD’s. Nice! 
• You have to pay taxes in the current year on the contributions you make to a Roth 401k (since they are made with post tax Dollars). 
• Your savings/investments are NOT accessible prior to the age of 59.5 without a 10% penalty + ordinary income tax. In other words, you have the same access to a Roth 401k as you do with a Traditional 401k. No more, no less.
• The rules regarding Roth 401k withdrawals are particularly dizzying, even for me as a PF blogger who enjoys learning about this stuff! 🙂 This is likely due to the fact that people have not fully adopted the use of this financial account yet enough to write much about it in plain English. I tried reading the IRS’s Q&A page, but found it of no use really. Surprise surprise, right?
• A very important difference between the Roth IRA and the Roth 401k is that Roth 401k contributions CANNOT be withdrawn at any time tax and penalty free.  
• Unless you died, became disabled, have huge amounts of medical bills, or are unemployed for a long time, ALL WITHDRAWALS prior to the age of 59.5 will be subject to a 10% penalty. A good article explaining the different exceptions to the 10% penalty can be found here.
• The taxation on withdrawals made prior to the age of 59.5 are confusing as well.
• The amount of taxable income on withdrawals of any size (even if they are less than the total amount you have contributed over the years) is calculated based on the % composition of the earnings in the Roth 401k account at the time of the withdrawal.
• For example, say at age 69.5, you have a total balance of $100,000 in your Roth 401k, consisting of $90,000 of earnings and $10,000 in contributions.
• If you were to take a $10,000 withdrawal before the age of 59.5, 90% or $9,000 of the withdrawal would be taxed as ordinary income, even though it is less than your total $10,000 contribution made over the years. A good description of this process can be found here. 

Stand-Alone Annuity

Our last stop on our tour of the various tax-advantaged retirement vehicles brings us to the somewhat-controversial annuity. As is the case with whole life insurance, the thing that makes these products so controversial is that the people offering them often do not have a fiduciary responsibility to get you hooked up with the most optimum product, since ones that are poorly designed will make the person selling them more money and you less money. There are, however, fairly good no-load annuities out there, such as the ones offered by Vanguard. At least that is my 2 cents…

• As mentioned in my previous post about investing in annuities, annuities are essentially a mix between an investment instrument and an insurance policy. You (the investor) opens up an annuity account, funds it, and in return, the insurance companies gives you a guarantee that you will receive a regular stream of monthly payments/income and/or return for a set amount of time, depending on how the annuity is structured.
• In the account, your contributions grow tax-deferred until withdrawal at the age of retirement (59.5 years of age). 
• Annuities have no annual maximum contribution limit.
• Contributions to an annuity are after-tax. However, once in the annuity account, your contributions can grow tax deferred until withdrawal.
• Another good thing about annuities is that they are currently being offered in many different flavors. Some give you a fixed interest rate, some invest in equity mutual funds, some start paying out immediately, and some accumulate for years before paying out guaranteed income.

As usual, along with these beneficial characteristics, the annuity has some significant disadvantages as well.

• Your savings/investments are NOT accessible prior to the age of 59.5 without a 10% penalty.
• Ordinary income tax is owed on all withdrawals (early or after age 59.5) of annuity earnings but never for recovering your contributions/basis.
• This is a definite disadvantage because even though you put post-tax money in to the annuity, you still will owe income tax on the earnings when you withdraw even during retirement (Note: this is different than the Roth IRA/Roth 401k above).
• Annuities can be complicated and have decreased visibility of their inner-workings.
• Often, you have to deal with sales-people that don’t necessarily have your best interest in mind. 
• Because of this, you’ll likely need to really study up to make sure that the annuity product you are picking out is indeed right for you. 
• Annuities are also complicated because it is difficult to understand how/if a guaranteed return is applied. This is especially true for variable annuities, and it makes all the more reason for the investor to know the right questions to ask before buying. 
• Another thing I don’t like about annuities is that they are not as transparent as a mutual fund. In other words, you cannot simply go on Google Finance and look up the performance of an annuity, I don’t think at least…Because of this, you just have to trust that the information the agent or broker is provided you is correct. This is the same situation of trust/lack of trust with whole life insurance as well. 
• Annuities can have higher fees. 
• Because of the insurance wrapper around an annuity, there is going to be a cost involved. 
• For Vanguard’s annuity products, the cost is between a 0.5-1% expense ratio. While that expense ratio isn’t bad, I wasn’t able to tell if that included the return guarantee. If it didn’t, I was reading something about it possibly costing an extra 2-3% of my holding values each year. Yikes! 

Conclusions and Path-Forward

If you’re fairly confused after reading this, you’re in good company! We’re all human. After writing about all of these products in one post, I became a bit dizzy as well and had to go drink some wine with dinner!

All of these products have so many things in common, yet have so many small things (that could potentially be significant on the money withdrawal side) as differences, that it is indeed hard for people to not be scratching their heads at this point.

In an effort to clear some of my personal confusion and indeed try to place some finality to this post, I’ve listed my brief personal opinions/verdicts/bottom lines/path-forwards for each of these tax-advantaged retirement vehicles below:

1. We must never pass up free money, so the first place that I would commit my money is to fund my 401k to the maximum that is matched by your employer.
2. In focusing on what I would do next, I cannot underestimate the power and flexibility that the Roth IRA allows in that I can access my contributions at any time tax and penalty free. Thus, my second move would be to fully fund my Roth IRA. Since I fully funded my Roth IRA, I cannot contribute to a Traditional IRA, so I don’t have to worry about that option. 
3. If I had more money left to invest during the year, I would at this point need to ask myself the question – “Do I have enough money saved outside of retirement accounts that I can access without penalty for any needs before the age of 59.5?” (I need to work this out – keep an eye out for a post on the way soon!).
4. If I determined that I had enough money accessible in non-retirement accounts, the third thing I would focus on would be fully funding my Self-Employed Roth 401k with Vanguard. I established a Self-Employed 401k back in 2011, but at the time, they didn’t offer a Roth 401k feature. However, I looked again recently, and low and behold, the option was there! Since I am a big fan of paying taxes in the current tax year in exchange for in the future, I would go with this option. If you currently have a Traditional 401k with your employer, I would highly recommend calling HR to see if a Roth 401k option is available.
5. Due to the higher fees and increased complexity, investing in annuities would be something that I would only do if I was completely maxing out all of my other retirement account options (a nice situation to be in!). I do like the guaranteed return that annuities offers, so that might be more valuable as I age. However, if I wanted to stability right now, I could simply invest more in my short-term bond index mutual funds, which even in the turmoil faced in recent years only varies in price by 2% or so. 

Well – that about wraps things up for tax-advantaged retirement accounts!

In an upcoming post, I’ll detail the various non-retirement tax-advantaged vehicle options that investors have on the market these days. Keep an eye out for that – on the way soon!

How about you all? Which of these tax-advantaged retirement accounts is your favorite/do you use the most and why? 

Do you feel you’re possibly using one of them too heavily?

Share your experiences by commenting below!

***Photo courtesy of http://farm5.staticflickr.com/4047/5120304358_72af165e30.jpg

Ways to Shop Smarter and Save Money on Groceries

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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The following is a guest post. Enjoy! 

We’ve all done it at times; shuffled down to the nearest supermarket rather than making a detour to the shop with the best deals. But, with many households still struggling to balance their income and expenditure and food which has risen more quickly than inflation, it’s important to make the right decision when it comes to shopping.

Shop at a Store with the Best Deals

Many people shop at a supermarket simply because it’s the one they have always frequented and probably their parents before them, never questioning whether it really offers value for money. But, taking a closer look at how much things cost can bring home some uncomfortable truths.

In recent months, supermarkets have launched into a fierce price battle in a desperate bid to attract shoppers and steal custom from their rivals. Savvy spenders are taking advantage of the price war and rather than staying loyal to just one shop, regularly switch between stores, depending on the offers and deals available.

Buy Generic When Possible

In addition, you may be one of the many shoppers that prefers to purchase brand name goods only, steering clear of generic own-label supermarket goods. However, in reality, many of these are manufactured by the branded company and simply sold under the supermarket packaging.

Researchers recently carried out a taste test and discovered that in a large proportion of cases, shoppers could not distinguish between branded and own label goods when blindfolded. And in many cases, the own-label goods were actually identified as the preferred brand!

Buy Frozen Foods to Save Money

Another means of cutting back on the price of shopping without skimping on your favorite foods is to consider purchasing frozen goods.

Frozen food is often viewed as substandard in some way and more comparable to convenience meals. However, a recent study by nutritionalists found that even high end items such as prawns contained the same nutritional value whether they were purchased frozen or chilled. With the price of meat being particularly hit by inflation, frozen food is a good way to reduce the cost without having to compromise. In many cases, frozen vegetables are preferable to fresh because the nutrients are sealed in and no degeneration can take place.

Consider Purchasing Items on the Internet

How often have you gone shopping and ended up with a basket load of items that you weren’t planning on buying and don’t really need? If this sounds like you, Internet shopping might be another way of saving some money.

Most supermarkets charge a small fee for delivering your items but offsetting this against the price of the gas you would use and the extra money you would spend, it could still work out cheaper. In addition, for the first few shops you could find that you get it for free as different supermarkets frequently offer to waive the delivery charge for the first order.

The other advantage to home shopping is that you have more time to check out the best bargains without any pressures of time or children playing havoc in the aisles. The first time you shop will take slightly longer but after that your preferences will be saved, making it quick and easy to re-order items. This will give you more time to compare prices between different brands and, potentially, even different shops!

Least We Forget Coupons..

No article on being a more savvy shopper would be complete without a mention of the latest craze: couponing. Shoppers everywhere are saving money by snipping money-off vouchers or special offers from papers and magazines. Some people claim they can save literally hundreds of Dollars per year!

Couponing can be a great way to save some money, but it’s important to keep an eye on what you need to spend in order to get the discount. If, for example, you need to buy 10 cans of dog food to qualify for a free packet of breakfast cereal – and you don’t own a dog – you could end up worse off.

With a bit of careful planning, it is possible to radically cut your shopping bill without having to go on a starvation diet. There are lots of different ways to save money and leave a bit more in your pocket, making household budgeting a little easier and less of a juggling act.

But, if you find that you’re struggling financially each month, you could try and consolidate debts into a lower, more affordable monthly repayment plan and free up a little money each month. To help you work out what solution would suit you best, one financial expert has put together this helpful free debt guide that will tell you everything you need to know about getting out of debt.

How about you all? What methods do you use to save money at the grocery store that work well for you? Have you tried any of the ones mentioned above?

Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

• Personally, I employ a lot of these techniques in my monthly shopping to save money. 
• The most potent method for me is making sure to make my big grocery shopping purchases at the cheapest place around (in my case, this is Wal-Mart). I’ve found that I can literally get about 30% more food for about the same price as I would spend at Kroger, even with my Kroger card discounts.
• Next, I always buy Wal-Mart’s generic Great Value brand whenever possible. As mentioned in the article above, I am pretty sure that these are the same products, just with different packaging than the brand name ones. That saves me a lot of money as well! 
• I don’t buy many of my normal monthly items online. However, my sister is happily using Amazon’s new recurring shipment service where they will automatically put in an order of say toilet paper each month and deliver it to your doorstep for free. Nice right?!
• Regarding coupons, since I mainly shop at Wal-Mart and buy Great Value, I don’t really need to use coupons since the items are already at rock bottom prices. However, if I do buy bigger-ticket items, I usually try to find online coupons or sites that provide me cash back by buying through them as well. 

***Photo courtesy of http://upload.wikimedia.org/wikipedia/commons/7/75/Colourful_shopping_carts.jpg

TurboTax vs. H&R Block vs. Tax Act – Which is the Best Online Tax Preparation Platform?

In a recent 3-part post series, we took an in-depth look at the three most popular online tax preparation platforms in an effort to determine 1) how they work, 2) what income/deduction options they offer, and 3) what is free/what you have to pay for. If you missed any of the three posts, I’ve listed links to each below:

• Part 1 looked at TurboTax,
• Part 2 examined H&R Block, and
• Part 3 dissected Tax Act

While these posts were very informative if you are already using one of their respective platforms, a very important aspect missing from the articles was a comparison of the 3 to determine which is best for your specific tax preparation needs. As such, the purpose of this post will be to compare TurboTax, H&R Block, and Tax Act side by side to see what the benefits and pitfalls of each program are.

Let’s get started!

For easy comparisons, we’ll break our analysis down in to the relevant categories listed below:

Pricing

Between the three big tax prep online platforms, pricing is one of the biggest and most important differences that we see:

• TurboTax is by far the most expensive, both in the respect that their free edition offers the fewest features and the paid versions cost more than the equivalents at H&R Block and Tax Act.

• Basic = $20, Deluxe = $30, Premier = $50, Home/Business = $75
• State tax filing involves an extra fee = $28-$37 per state.
• If you have business income, you are required to use the $75 version.
• If you have income from sales of taxable securities/stocks/mutual funds through a 1099-B form, you are required to use at least the $50 version.
• In my opinion, the reason that TurboTax is the most expensive is simple – because users allow it to be.
  • What I mean by this is that TurboTax users have been using their platform for so long, trust it, and are so used to having their information automatically imported year-to-year that they simply do not bother to leave, even if TurboTax isn’t necessarily the perfect fit for them.
• Since TurboTax does cost the most, if you are a current user, I would highly recommend that you make sure to have a good reason (i.e. ask yourself, “is it worth the cost?”) that you want to keep using it, given that there are indeed other dependable options available out there to you.

• H&R Block represents the “middle of the road” option as far as pricing is concerned.
  • Basic = $20, Deluxe = $30, Premium = $50.
  • State tax filing involves an extra fee = $28-$35 per state.
  • If you have business income, you are required to use the $50 version.
  • If you have income from sales of taxable securities/stocks/mutual funds through a 1099-B form, you are required to use at least the $30 version.

• Tax Act is by far the cheapest option, both regarding what their free option provides and that their upgraded versions are very inexpensive also. 

• Deluxe edition = $9.95.
• State tax filing involves an extra fee = $15 per state.
• If you get the Ultimate Bundle, it is only $18 for the Deluxe edition plus a state filing. Talk about value here!
• All types of income are included in the free edition! This includes business income, sales of securities covered in a Form 1099-B, and income from rental real estate. It’s pretty awesome that all of that is included in a free edition, right?!
• Since Tax Act is by far the cheapest option, you are probably thinking that it must be hard to use or lacking in some aspect, right? This is not the case. Read below to learn more.

User Interface / User Experience

In my opinion, the overall user experience from the TurboTax, H&R Block, and Tax Act online tax preparation platforms are pretty much equivalent. In fact, it is likely that they all benchmark each other (since there is nothing stopping their competitors from logging in to their systems and seeing what a competitor offers!) to make sure it is like this.

• All three platforms…….
  • Save your information you entered immediately and make it available for you to log in at a later date and continue/finish your tax return.
  • Require you to use a paid version in order for them to import your previous year tax information in to your current year return or to import your employer’s W2 data based on their EIN.
  • Are logically organized by tabs across the top of the screen, proceeding from personal info to federal income and deductions, then on to state taxes and filing.
  • Feature counters on the site sidebars that update automatically to show you how much federal and state return you can expect “on the fly.”

The only difference I found in the overall user experience of the three platforms was that there seemed to be sections of the Tax Act and TurboTax site that contained very hard to understand language about whether a certain functionality (which required a paid upgrade) was expressly required to accurately complete my return or if it was optional.

I discussed these roadblocks in detail in my three posts of the series mentioned above. Briefly, the confusing section on the Tax Act site involved the Life Events tab. Unfortunately, TurboTax ranked last in the user interface category based on the NUMEROUS screens that would pop up trying to get me to upgrade at every step of the way, when in reality, it was not needed.

Are You Blindly Saving for the Future? – Forgetting to Analyze the Withdrawal Process During Savings Accumulation

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Since I finished my undergraduate degree in 2008, I have been pretty good at aggressively saving for retirement and the future in general. For the most part, I have been able to do this simply by keeping my expenses low, being fortunate enough to have escaped college with no consumer debt, and also integrating saving in to my everyday life as a hobby (I am a personal finance blogger, after all!).

However, only recently, I realized that I had been doing something wrong all this time. While this mistake isn’t something as serious as say racking up $50,000 worth of credit card debt via overspending, it is still significant and something that needs to be addressed. And, from what I’ve been reading recently, it is one mistake that is made by many young and middle-aged people because of what society has deemed as the “normal” way to invest for the future.

What was I doing wrong? Well, I realized that I have been so focused on saving (input) as much as possible and subsequently investing it with an appropriate strategy/asset allocation (execution), that I hadn’t stopped to consider what ramifications my inputs and execution would have on the withdrawals I will eventually take as a result of investing (output).

Essentially, I have just been working under the assumption that if I save, save, save as much as possible and invest it appropriately, my future and retirement will take care of itself. After all, what more can someone do to prepare financially for the future except for save as much as possible? Nothing, right?

Wrong! By making sure that we not only save as much as we can but also place the savings in to appropriately structured buckets, we can more adequately prepare for the variety of financial situations that life throws our way.

Society’s “Norm” for Investing for Retirement – The Good Ole’ 401k

With the primary collapse of the traditional pension system of retirement income that one received after working for the same company for 30 years, the bulk of the emphasis society places on saving for retirement and the future these days is the traditional 401k.

If you’re like me, you’ve no doubt been taught that if you don’t have any other debt to payoff, have an established emergency fund, and have an adequate amount of liquid cash on hand to meet your predicted short term needs, putting as much money as possible in to a 401k account is absolutely one of the best things that you can do to prepare for the future because you get tax-deferred growth and tax deductions in the current tax year.

Sure, if you’re fairly young like I am and meet income constraints, it is common knowledge that it’s more advantageous to first make sure to fully fund a Roth IRA prior to fully funding a 401k (which I do each year). However, with the current annual contribution limit for IRA’s being $5,500, a Roth IRA alone will likely not be sufficient to fund an extremely comfortable retirement, even if you’ve started early like I did at age 21-22. You will want/need to save more.

So, after exhausting the option of fully funding a Roth IRA, where did I (and I assume a lot of people) end up parking the bulk of their savings for retirement (with the exception of maybe a little bit of money here and there in taxable accounts)? 

You guessed it – the 401k because of society’s emphasis on all of the tax advantages that you get in the present time. 

Problems with “Blindly” Parking a Majority of Your Savings in IRA and 401k Retirement Accounts 

While IRA’s and 401k retirement accounts are a very good way to save money (in my opinion), I have realized recently that they are slightly over-emphasized in the financial planning process.

Sure – they definitely have an important place, but I’ve recently concluded that in order to fully optimize my finances, they cannot be the ONLY main buckets in which I place money saved for long term needs. In addition, I have realized that I should frequently review my financial needs to determine what ramifications are incurred during the withdrawal process if/when a need arises that I need to access my savings.

There are two primary reasons/withdrawal considerations for why it is not a good idea to blindly “save as much as you can” in IRA and 401k accounts:

• Loss of Access
• While going through all of the minute details of treatment of withdrawals from retirement plans would likely take a post all by itself, it will suffice to say that savings parked in IRA’s and 401k’s are not very easily accessible. And, easy access to savings is without a doubt, a very powerful thing that I had been underestimating.
• For example, let’s say that a fictional 22 year old man named Jim contributes $16,500 per year to his company’s 401k. On top of that, he fully funds a Roth IRA with around $5,000 per year. He continues to save vigilantly in this manner for 10 years, at which time, he decides he wants to purchase a condo to rent out as a real estate investment and needs to find some money for a down payment.
• Since the purchase of rental real estate isn’t a “qualifying” purchase, any money being withdrawn from his 401k would be hit with a 10% penalty and any earnings from his Roth IRA would have this same penalty (his contributions to his Roth IRA can be withdrawn at any time tax and penalty free, an important thing to know!).
• Essentially, the moral here is that you don’t want to be in a situation where you are surprised because have a lot of net worth, but none of it is liquid/accessible to execute on the endeavors that you want to.

• The Effect of Taxes
• Yet another pitfall that I realized I have experienced by blindly saving as much as I can in retirement accounts over the past few years is the effect of taxes on the withdrawal side.
• Basically, the question here becomes when do you want to pay the income taxes on your savings – now or in the future?
• With traditional IRA’s and 401k’s, even though you are not taxed in the current year for the money, you will definitely pay a good chunk of income tax on the withdrawals after the money has experienced years of compounding.
• For example, do you want to pay income taxes on $1000 today or income tax on ~$45,000 after that $1000 has grown at 10% per year in the stock market for 40 years.
• As I mentioned above, I definitely have realized and am utilizing the Roth IRA as a way to achieve tax free income in retirement (since the contributions are after-tax when they go in).
• Essentially, I would rather pay the income tax now since I have a very low 20-30% overall tax rate as opposed to later in life when I have more savings compounded and income (and likely the government increases tax rates to deal with health care, Social Security, etc, but that is only speculation).
• However, after maxing out my Roth IRA, the mistake I made was that I just sort of blindly assumed that there were no other tax-free options worth looking in to that would be better than a traditional 401k because the 401k is generally assumed to be a great thing!
• Thus, for the past few years, I have been dumping as much as I could in to my employer’s or self-employed 401k accounts.

If you’re like me, you have likely read these access and tax provisions/considerations many times before. 

You know – it’s the stuff that’s in fine print on the account signup forms and/or lumped in to the category in our heads as “boring tax stuff that I don’t have to really need to pay attention to.” For me specifically, what I realized was that even though I was reading these details, they weren’t sticking because I just assumed that it wasn’t a big deal because it would “happen some distant time in the future,” and everything would magically work out since I used the popular 401k! In other words, I was reading the facts, but wasn’t making the connection about what it would be like to LIVE the considerations. This is a huge difference that you want to make sure to be on the right side of! 

Conclusions

As I mentioned above, the point of this post is not to say that IRA’s and 401k’s are evil or bad. They are actually quite good.

However, the key thing to remember is that before you commit to putting any significant amount of money in to one of these buckets now, make sure you acutely understand not only the benefits (which society touts readily), but also the things you will lose in regards to 1) access and 2) taxes on withdrawals 10+ years down the road.

After thinking about these considerations, you may conclude that you’re on track exactly like you need to be. If this is the case, then great! Just keep on saving as much as you can and diverting the funds to your retirement accounts. However, I imagine that most people (including myself) are somewhere in the middle in that we are on track pretty much, but still have some room to improve upon the positioning of our long term savings in buckets that are slightly more accessible (without penalty).

How about you all? In thinking about your current asset distribution, do you feel that you are placing too much, too little, or an appropriate amount of savings in to retirement accounts vs. other vehicles? What would say the %’s are for your assets in retirement vs. non-retirement accounts?

Would you prefer to pay taxes now or when you receive income during retirement?

Share your experiences by commenting below!

***Photo courtesy of http://pixabay.com/get/1f6984b99b1d905f282e/1363046890/sign-41432.png

Take Control of Your Finances by Settling Your Debt

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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How about you all? Have you ever used or looked in to using a debt management/settlement company to help you with your debt payoff?

Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

• As mentioned in the article above, a debt management plan is not necessarily the best answer for everyone. 
• In fact, you can actually accomplish quite a bit yourself by simply calling your creditor and explaining your situation. I don’t have personal experience doing this with payday loans, but I have experienced first hand that it can work well for credit card debt.
• One thing that a debt management plan can help with though is to provide extra incentive/motivation for you to change your behavior of spending, if that is a challenge you are facing. Our staff writer, Travis, explained this very well in his post about his personal experience with his debt management provider.
• If you are considering a debt management plan, it is very important to carefully review your options to make sure you are not being taken advantage of/paying too much for something of no value.
  • The National Foundation for Credit Counseling is a great place to start to find an honest debt management company.

***Photo courtesy of http://upload.wikimedia.org/wikipedia/commons/c/c3/Chess_board_opening_staunton.jpg

A Detailed Look Inside Tax Act’s Online Tax Preparation Platform – What is Free and What Must You Pay For?

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Tax season is in full flight here in the US.

In my mind, a much better option for individuals without a business (if you own your own business, I honestly believe that you should have the help of CPA to make sure you don’t miss anything and to bounce ideas off of) over filling out the 1040/1040EZ tax forms directly are to employ one of the many low-cost online tax preparation platforms available on the market. These platforms ask questions in normal language (read non-IRS talk), and then populate the numbers in to the tax forms for you. A pretty sweet deal in my book!

As I have mentioned previously, the most widely-used online tax prep platforms seem to be TurboTax, H&R Block, and Tax Act. 

Because of the wide-spread use of these three platforms, I think it’s important for people to have a good working knowledge about what they offer. However, in my experience helping people with their taxes, the primary thing that my friends get confused about is what these programs offer for free, and what is it you have to pay for. More specifically, I find that they often end up paying for one of the service upgrades being offered, when in fact, their taxes were actually simple enough that they could have just used the free versions.

So, the purpose of this post series is to dissect each of these 3 most popular programs one-by-one to determine what they offer, what is free, and what you need to pay for. Since the first two posts in this series dissected TurboTax and H&R Block, this post will analyze the third key player, Tax Act. 

Note: If you missed either of the first two posts in this series, you can access them by clicking here to read about TurboTax and clicking here to read about H&R Block.

Tax Act

Tax Act is perhaps the least well-known of the three major players in the online tax preparation platform world. However, they are gaining new users and followers each year, and do truly offer a useful platform at the lowest costs (by far) of the TurboTax, H&R Block, and Tax Act “trifecta.”

Shown below is the overall pricing for the various options on offer by Tax Act that pop up on the site’s main page upon arrival. In my opinion, this table is a pretty nice overview of the options and is pretty self explanatory/clear for normal folks like us. There are three things that I want to make sure to point out though:

• You don’t actually pay for anything until you officially click “file taxes.” This means you can go through the system and fill in your tax information without worrying about accidentally paying for anything until the very end of the process. 
• The prices in black bold letters shown in the below screenshot are only the pricing for filing your federal tax return (with the exception of the Ultimate Bundle, which does actually include the cost of filing both federal and state tax returns. A pretty sweet deal for only $18!). What this means is that you will have to pay an extra fee on top of the ones shown in the chart below because you are required by law to file state taxes. Don’t be surprised by this!
• According to Tax Act’s State Tax filing pricing, it costs $15 per state to file your state taxes using the Free Federal Edition, and $8 extra to file state taxes in the Deluxe Federal Edition. 
• What this means is that the state tax filing is absolutely where Tax Act makes most of its money!
• One of the nice little perks about the paid versions of Tax Act is that they will automatically save and import your previous year’s tax information to the current year. They will also auto-populate your employer details based on solely their EIN.

So, as I mentioned above, this chart is pretty straight-forward and easy to understand. However, the place where it gets confusing and people with simple taxes end up paying for un-needed service add-ons is DURING the process of filing out your tax information as you are going through the various steps in the system. 

Because of this, I feel we need to spend some time discussing places where potential mistakes could occur causing, someone that started their tax filing using the Free Edition (far left above) to end up unnecessarily using the Ultimate Bundle version. This happens quite often, in my opinion, because at almost every step of the way, the questions prompt you to upgrade to one of the paid options.

Of course, in the case of Tax Act, the total difference that you would pay if you went with the Ultimate Bundle is only $3 more than the Federal Free Edition (if you include paying for the $15 state tax filing). So, either way here, I suppose that you are not going to severely hurt yourself.

First, right off the bat, if you select the “Compare Online Tax Products” option, you are taken to this screen:

Now, I’m not sure what your reaction to this screen above is, but to me, I can tell a couple of things. First, I note that they do claim that with the Federal Free edition, Tax Act’s platform is still going to help you find a good number of the deductions that are due to you. However, after going through the whole Tax Act information entering process, I definitely feel that this chart understates all of the great options that the Federal Free Edition gives you. This simply is not the case. You can still get many deductions owed to you by using the free edition (even if you made donations to charity).

Tax Act’s “Life Events” Section

As I was going through the Tax Act online preparation system, I honestly became very confused when I ran in to the “Life Events” tab/section.

When I first came to the life events screen (an example is shown in the screen shot below), I figured, “OK, this is the section where I input my income and deductions for the various things listed.” As you can see in the screenshot below, this includes MANY very common items such as tip income, gifts, moving expenses, business income/expenses, investment income, etc. However, I then read the verbiage in the second paragraph stating that in the Free Federal Edition, you only get access to two of these categories. Upon reading this, I said, “Wow! That sucks – looks like I’ll have to pay for the upgrades if I want to enter any of this information.”

After spending some time reading over the Life Events section, I quickly realized that this section is only an area to obtain guidance/information about how the various things listed here affect your taxes. You don’t actually enter your specific numbers until later in the Free edition. Don’t let this trip you up like it did me!

What is Free and What Must You Pay for Regarding Income?

Having dodged the Life Events upgrade landmine, you then proceed to enter any income you had for the relevant tax year for your federal tax return.

I was very pleasantly surprised with Tax Act’s version of the income section of their tax preparation platform because ALL types of income are included for FREE in the Free Federal Edition. I am guessing that they don’t require upgrades because the total pricing for the Free Edition is only $3 off from the Ultimate Bundle, so why bother, right?!

Shown below is a screenshot of all of the different options for income types that are offered through Tax Act’s online platform. It pretty much includes everything you could think of, even business income!

Just to drive this point home, the all of the following types of income are included for free in the Free Federal Edition of Tax Act:

• Included in Free Edition
• Wages from regular employment (includes scholarship/fellowship income).
• 1099-INT and 1099-DIV.
• 1099-MISC income, provided that it is not regular/self employment income. 
• 1099-B (sale of taxable securities).
• Income from rental properties, farming, or self-employment.

The only thing that gets mildly tricky here is that screens such as the one below OFTEN pop up recommending that you upgrade to a paid version. However, all of the screens I saw were worded clearly that they were in fact additional perks, not something that was absolutely required in order to enter a certain type of income in to the system, as is sometimes the case with online tax prep platforms. Just don’t be thrown off guard when you see this!

What is Free and What Must You Pay for Regarding Deductions?

In the deductions section of Tax Act, they also make it very clear to discern what is included in the Federal Free Edition and what you must pay for. In fact, it’s so simple because there ARE NO PAID UPGRADE REQUIREMENTS when it comes to deductions. Pretty sweet, right?!

That’s right, all of the deductions I inspected (shown on screenshots below) are actually included in the Federal Free Edition. 

Just to drive this point home, all of the deductions listed below are in fact included in Tax Act’s Federal Free edition. 

• Home loan interest paid. 
• Kids.
• Car / property tax.
• Student loan interest paid.
• Medical/HSA contributions.
• Job-related moving expenses. 
• Business expenses.
• Self Employed Retirement Accounts.
• Estimates taxes paid (as long as they are not for self employment income).
• Charity donations. 

Conclusions

In my opinion, Tax Act offers a reliable, moderately easy-to-use online tax preparation platform that is hard to go wrong with. Even if your tax situation dictates that you have to use one of their paid options, I would consider it money well spent, and likely, a significant tax savings over the use of live tax professional. Besides, the most expensive paid option is only $3 more than their Free Federal edition + paid state filing! haha So, you don’t have much at all to worry about! It’s also really cool that all of their income and deduction options are included in the Free version, something that is hard to find online these days.

I sincerely hope this post helps you to understand not only a little more about what features Tax Act offers, but to also help you determine what level of services/pricing you actually need to use in their platform to accommodate your personal tax situation.

This 3rd post now wraps up our series here on MPFJ taking an in-depth look in to the 3 key players in the online tax preparation world. On the way soon will be a post comparing and contrasting the three side-by-side to determine which is best.

How about you all? How about you all? Have you ever used Tax Act’s online platform to do your taxes? If so, how did you like it? Did you ever find yourself paying for a upgrade to the online service when you really didn’t need it?

Share your experiences by commenting below!

Everything You Need To Know About Estate Taxes And Gift Taxes

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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What Is The Estate Tax?

Estate Limits And Tax Rates

How Are Estate Values Calculated? 

What Is The Gift Tax?

What Gifts Are Taxable? 

How Do They Affect My Federal Taxes?

Share your experiences by commenting below!

***Photo courtesy of http://www.flickr.com/photos/davidreber/4471416713/

IberiaBank Visa Gold Cash Back Rewards Card vs. Chase Freedom Visa – Credit Card Boxing Series – Match # 3

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Let’s face it. Sometimes, reading about personal finance can make for some pretty dry reading. Annual fee this, interest rate that, blah, blah, blah, blah, blah. Zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz. Are you still awake?

So, in an attempt to spice things up a little bit, I decided to start a series on MPFJ called, Credit Card Boxing. In each match, two credit cards (of the same general category of credit card) will be compared side by side in an attempt to determine which reigns supreme over the other. When applicable, the winner from the previous match will advance to compete in the next round.

In this, the 3rd match of the series, we’re again comparing two general purpose credit cards.

In the left corner, we have weighing in at a hefty 5.23 g (weighed in the scale in my lab), my favorite credit card that I use for almost all of my purchases, the Chase Freedom Visa Card. If you missed the first and second MPFJ credit card boxing matches the past two weeks, this card beat out both the new Discover it Card (although it was a close match) and the Barclaycard Rewards MasterCard.  

In the right corner, we have weighing in at a respectable 5.6 g, the IberiaBank Visa Gold Cash Back Rewards Card. I haven’t personally tried out this card yet, so I was curious to learn a little more about it.

Shown below is a screenshot from CreditCards.com (the first place I go for looking up information on credit cards) listing all of the pertinent details for the Chase Freedom Visa Card.

• Chase Freedom Visa Pluses
• There is no annual fee.
• A very nice $100 bonus for signing up.
• 5% cash back in rotating categories every quarter. From personal experience, I can tell you that these categories are actually quite useful. They are not highly specific like with some cards. For example, right now, they are doing 5% cash back for gas stations. I think pretty much anyone can relate to the benefits of getting cash back for gas purchases. They have also done grocery stores in the past, although discount stores like WalMart, Sam’s, and Costco do not qualify for this.
• 1% cash back on all other purchases.
• Chase Freedom Visa Minuses
• Requires excellent credit history, which can be a deal breaker for some folks. 
• 3% transaction fee for all transactions completed in a foreign currency. This can add up quickly if you plan on using this credit card whilst traveling! 

And, shown below is a table listing out all of the pertinent details for the IberiaBank Visa Gold Cash Back Rewards Card. You can also click here to view the card’s Terms and Conditions as well. 

• IberiaBank Visa Gold Cash Back Rewards Card Pluses
• No annual fee – always a nice thing!
• 1% cash back on all purchases.
• IberiaBank Visa Gold Cash Back Rewards Card Minuses
• 2% transaction fee for all transactions completed in a foreign currency (so slightly less than the Chase Freedom Card above).

WHO’S THE WINNER?

Although I honestly wouldn’t be ashamed of having either of these cards, I would have to say that for my money, the clear winner here is the Chase Freedom Visa Card. 

What made me lean towards this one was because Chase Freedom offers higher cash back benefits than the IberiaBank Visa Card (5% vs only 1%). Of course, this does assume that you can qualify for both cards, which might be a little difficult given that Chase Freedom requires pretty good credit history. Thus, the IberiaBank Card might be good to look in to if you find yourself being denied from your first choice cards.  

How about you all? Do you think the Chase Freedom Visa or IberiaBank Visa Gold Cash Back Rewards Card sounds like a better deal?

Do you personally carry either of these cards?

Share your experiences by commenting below!

I’m Not Saving for Retirement

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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The following post is by MPFJ staff writer Travis. Travis is a customer blogger for CareOne Debt Relief Services, and also appears weekly at Enemy of Debt.  Travis candidly shares his personal journey to pay off $109,000 of credit card debt and the tips he’s learned along the way. As a father and husband, he provides a unique perspective on balancing debt, finances, and family.

Share your experiences by commenting below!

***Photo courtesy of of Ambro / FreeDigitalPhotos.net

Are You Making These Silly Money-Wasting Mistakes?

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***Photo courtesy of http://www.flickr.com/photos/59937401@N07/7214443324/