4 Ways to Minimize Your Tax Burden Before Year-End

The following post is by MPFJ staff writer, Laurie Blank.  Laurie is a wife, mother to 4 and homesteader who blogs about personal finance, self-sufficiency and life in general over at The Frugal Farmer. Part witty, part introspective and part silly, her goal in blogging is to help others find their way to financial freedom and to a simpler, more peaceful life.

We’re into the last quarter of the year, which means that personal finance buffs like you and me are getting our year-end money ducks in a row, figuring out how we can end the year on a high note from a personal finance point-of-view.

With that in mind, I thought I’d share some year-end money moves for helping minimize your tax burden. It’s a smart money move to keep as much of your own money as possible in your pocket so that you can increase your ability to care for yourself and your family, and so that you’ve got extra money to give away where you see a need that tugs at your heart. Making smart year-end tax moves helps ensure you put yourself in a better position to care for yourself and those around you.

Here are some ideas for making your own financial situation more secure and helping increase the money you have to give to causes you’re passionate about.

Contribute to an IRA

Go Banking Rates reports that nearly a third of Americans have nothing saved for retirement. When you get to retirement age you’ll not only need cash for basic necessities, but potentially for rising medical costs as well. One way to save more cash for expenses during the retirement years is to sock some cash away in an IRA.

Those under age fifty can put as much as $5,500 per year in either a Traditional IRA, a Roth IRA or a combination of the two. If you’re over age fifty, you can put away up to $6,500 per year into one or more IRA accounts.

Putting additional monies into a Traditional IRA when possible will help reduce your taxable income and help you save more money for your retirement years at the same time.  It’s important to note too that you can make a current-year IRA contribution as late as April 15^th of the following year.

Max Out HSA Contributions

If you know you’ll have some upcoming medical expenses before the end of the year – or even for next year – now’s the time to start contributing more to an HSA account.  For us it’s kids’ braces. Although our dental insurance plan pays up to $2,000 for each kid’s braces that still leaves nearly $3,000 that we need to pay out of our own pocket. As such, we’ll be ramping up HSA contributions in order to deduct as much money as possible before the end of the year for HSA contributions.

Current annual HSA contribution limits are $3,350 per individual and $6,750 per family. Those age fifty-five and older can make an additional catch-up contribution of up to $1,000.  Since HSA monies don’t expire, you can even save them to use toward medical expenses during retirement, and the distributions are tax-free as long as they’re used for qualified medical expenses.

Give to Your Favorite Charity

Qualifying charitable contributions can consist of up to fifty percent of your income in some cases. If you’re looking to reduce your tax burden and do some good in the world, consider making a cash donation to your favorite qualifying charitable organization.

You can also gain a deductible contribution by clearing out the clutter in your house (up to $500 worth without a receipt) and donating it to a qualified thrift store or clothing/household item operation that has 501(c)(3) status.

Contribute to a 529

If you’ve got kids, grandkids or even nieces and nephews, consider opening up a 529 account with them as beneficiaries in order to ease your tax burden and help your family members save for college at the same time.  Here is the general rule on 529 contribution limits for 2016, according to the IRS.

Are there contribution limits?

Yes. Contributions cannot exceed the amount necessary to provide for the qualified education expenses of the beneficiary. If you contribute to a 529 plan, however, be aware that there may be gift tax consequences if your contributions, plus any other gifts, to a particular beneficiary exceed $14,000 during the year. For information on a special rule that applies to contributions to 529 plans, see the instructions for Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return.

If you’re looking to reduce your taxable income and do good by helping a family member save for college, 529s are a great contribution option.

How about you all? What steps are you taking to help ease your tax burden before the year is out?

Share your experiences by commenting below!

Buying a Car 101: What You Need to Know

The following post is by MPFJ staff writer, Melissa Batai.  Melissa is a freelance writer who covers topics ranging from personal finance to business to organics to food.  She blogs at Mom’s Plans where she shares her family’s journey to healthier living and paying down debt.

I hate the whole car buying process.  From haggling to sitting in a dealership for hours, I just hate it.  That’s probably why my husband and I have not bought a car since we bought our current car 12 years ago.  However, the time had finally come when sharing one car was no longer working for us, so we set out on a search for a second vehicle.

Although our search lasted only two weeks, the entire process was annoying and stressful.  We did learn a lot, though.  If you plan on buying a car anytime soon, let me share with you what we learned.

Cash Is Not Always King

The old rumor used to be that you’ll pay less for a car if you pay cash.  While it is true that you’ll pay less for the car because you won’t be paying the interest over the life of the loan should you finance a car, paying cash won’t give you a lower price at the dealership.  When I asked one salesman about this, he said that dealers now prefer that you get a loan through them.

Why?  When you get a loan through the dealership, “an auto dealer actually acts as a middleman for car lenders.  To make money off the loan, some dealers will then offer you an interest rate higher than what they are paying the actual lender—or the financial institution that is backing your loan.  This rate increase is typically called the ‘dealer markup’ and can be an additional 3% in interest—significantly increasing the cost of your car.  This is perfectly legal most of the time, with only a few states limiting how much a dealership can markup rates” (Fox Business).

Know Your Credit Score

Before you even set foot in a dealership, make sure you know your credit score.  The higher your score, the more power you have to get very low interest rates.

Get Pre-Approval First

An easy way to learn your credit score is to go to your bank and seek pre-approval for a car loan before you begin your car search.  The bank will run your credit report and tell you how much you’re approved for.  This will give you a baseline number when dealing with the dealership.  It will also help you determine how much your monthly loan payments will be at different price ranges.

For instance, my husband and I were approved for by our credit union for a loan at 4.5% interest, which was more than we needed to pay.  Dealerships we visited offered us 3 to 3.5% interest rates, which we knew were a better deal than we could get at the credit union.

Know What Monthly Payments You Can Afford

I was surprised that our credit union pre-approved us for a loan amount with monthly payments higher than we felt we could comfortably afford.  Instead, we choose a car that was $6,000 less than our pre-approved amount—at that price, we could comfortably afford the monthly payments.

Just because you’re pre-approved for a certain amount doesn’t mean you need to use the full amount.

Don’t Negotiate Based on Monthly Payments

Every time we stepped on a car lot, we were always asked, “What is the monthly payment you’re looking for.”  Not, “How much do you want to spend for this car?”  Most Americans already have debt, so they’re comfortable evaluating the price of the vehicle based on a monthly payment amount, and the sales people use that to their advantage.

If you negotiate based on the monthly payment, not the overall price, you’re giving the salesman a tremendous amount of leverage.  “A dealership can easily meet your maximum monthly payment by stretching financing out over an additional year instead of actually reducing the price” (Money).

You may be surprised, as I was, to find that now banks and credit unions are willing to offer up to 72 month loans for used cars!  Am I the only one who thinks that’s crazy?!

Check the Blue Book Value

Once you have a car in mind, make sure to check the Kelly Blue Book value, either at home before you ever step foot on the lot or on your smartphone while walking around the lot.  My husband and I always searched the Internet for cars we wanted to look at in the dealership before we went on the lot.  At home, I checked the Kelly Blue Book value of the car we were interested in.  This let me know if the car was priced fairly or not.  It also helped me consider how much room I had to negotiate the price.

Be Aware Online Prices Are Not Always As They Seem

This was probably the biggest lesson I learned from our car search.  Internet prices are subjective.  We drove two hours to a dealership because we were very interested in a car that was in our price range and had fairly low mileage.  We took a test drive and were ready to buy the car.  When we sat down to negotiate, imagine our surprise when the dealer tacked on an additional $2,700 in “dealer extras” that were not listed as part of the Internet price.  That’s not even including the additional cost for plates, title, etc.

What were the dealer extras?  Applying a special exterior coating to keep the paint from fading or peeling and a special coating inside on the upholstery and flooring to repel stains.  We called foul and left the dealership.  That was a whole day wasted from what I called false advertising.

When we called the next dealership, we were on to this game.  I asked if the Internet price had any additional fees added on.  It didn’t.  That dealership was upfront with their Internet pricing, and we ended up buying from them.

Negotiate Up from the Dealer’s Cost, Not the Sticker Price

When you begin negotiating, you have a powerful tool if you don’t start your negotiations based on the sticker price.  Money states, “Consider starting around the invoice price, or the price a dealer pays the manufacturer for the car.  Edmunds.com notes that a popular strategy is to ask to see the dealer’s invoice and offer an amount, say $500 over that.  Invoice forms can be difficult to read, so spend a little time looking over one before testing this strategy out.

“While getting a price at or below invoice is ideal, be prepared to spend an amount somewhere between the sticker and invoice price.  Ideally, you’ll at least pay no more than the average sales price you were supposed to look up on sites like Edmunds and Kelly Blue Book.”

Don’t Be Afraid To Walk Away

People always say, “Don’t be afraid to walk away,” and I found that to be true.  I couldn’t believe how many sales people would call us at home and continue to negotiate.  I wish that they wouldn’t say, “final offer” when it’s not really their final offer, but keep in mind if you walk away, you likely still have room to negotiate.  The sales person will likely be calling you to further negotiate.

Car buying is not fun for me, but I wish it had been easier.  With these tips, you can hopefully have a smoother, less eventful car buying experience than we did.

How about you all? What other tips would you add to help make the car buying experience smoother?

Share your experiences by commenting below!

****Photo courtesy https://www.flickr.com/photos/rubelroy/9096822638/

One of the Benefits of Financial Independence: Sabbaticals

The following is a post by MPFJ staff writer, Kevin Mercadante, who is a freelance professional personal finance blogger for hire, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry.

One of the benefits of achieving financial independence is the possibility of creating sabbaticals. These are breaks you can take from work, every few years. They can last anywhere from a few months to a couple of years. They are more typical in the education field, but if you have financial independence, you can work them into your own lifestyle.

After all, since we all have limited time in his life, there’s often a trade-off between time and earning money for a living. We can see the value in weekends and vacations, so periodic sabbaticals aren’t a ridiculous idea.

Early Retirement Doesn’t Have to be the Ultimate Goal of Financial Independence

The whole concept of financial independence has now become almost synonymous with early retirement. The idea is that you will reach a level of financial worth where you will no longer need to work to earn a living.

That’s certainly a worthwhile goal, but it does have a few flaws in it. The first is that it’s not likely that most people are going to reach a point where they can stop working fairly early in life, and never have to worry about money again. Another is that not everyone necessarily wants to stop working and retire. For many, it’s enough just to have the ability to retire, even if you never do.

But that’s where sabbaticals can come into the picture. Even if you don’t fully retire for the rest of your life, you can take periodic breaks during your career. For example, you could decide to work for five years, and then take a year off.

One of the advantages of this is that you don’t have to wait until you have the enormous amount of money you will need to keep you from having the work for the rest of life. Instead of waiting until you can early retire at say, 50, you can take sabbaticals much earlier in life. If you create some level of financial independence, you could even do it as early as 30. It’s a less challenging task, which makes it more doable in the near-term.

Sometimes You Just Need a Break for a While

So why would you even want to take a sabbatical? Sometimes you just need a break. For many people, working year after year is a recipe for job burnout. But if you take a break every few years – and schedule that into your life – just the idea of doing it could prevent burnout from happening.

It may not even be that you dislike what it is you do for a living. Sometimes just getting out of it for a while helps you to reorganize yourself and clear your head, so that you can come back with a fresh perspective and a new determination.

Recharging for the Next Major Advance in Your Life

It may also be that you just need some time to get yourself ready for a major change in your life. It could be a career change, starting a new business, taking a different approach with the same career, or perhaps taking some time to get some additional training or education. A sabbatical can help you to bridge the gap between where you are and where you want to go.

Sometimes those advances are not necessarily career related. For example, you may need to take some time off to be with ailing relative, or even to welcome a new child into the world. Your employer may allow you up to 12 weeks for either of those responsibilities, but you might choose to take more time. If you have achieved a solid level of financial independence, you can take that time.

Adding Rich Experiences to Your Life

Maybe you just want to take some time off to travel the world. While it may be nice to have such a plan for when you retire, what if you don’t want to wait another 10, or 20, or 30 years to do it?

Planning a sabbatical can enable you to take such a trip in just a couple of years. There’s no need to wait until you are 50 or 55 or 65. And let’s face it, even if you’re on track to retire early, there’s no guarantee how it will all play out, or what your outside circumstances will be at the time.

If you’ve achieve financial independence, you should be able to take that time now, rather than waiting for sometime in the distant future.

Creating a Series of Mini-Retirements

It’s not necessary to try and pack a lifetime of experience into a single sabbatical. You can plan one every few years. That will give you time in between to decide on new goals and directions.

It will also help you to prepare financially. Let’s say that you want to take a sabbatical in five years. If you can save 20% of what you will need to live on for a year, each year between now and the time the sabbatical starts, you will be able to take the time off and not worry about how you would survive.

Usually when people achieve financial independence, it’s because they are able to save a much higher percentage of their income than most other people. For example, while the average person might save 10% of their income each year, you may be able to save 20%, 30%, 40% or more. If you allocate some of your savings for your sabbatical, and some for longer-term savings and investments, you will be able to have the best of both worlds. That means a sabbatical in the near-term, and greater wealth in the future or whatever else you want to do.

Early retirement is an excellent life’s plan. But if you don’t entirely trust all the possibilities that the future may hold, it’s not a bad idea to plan on taking some extended time off in the not so distant future. Think about what you want to do with your life, and how a sabbatical might help you do it. You may find out that it’s the best time off you’ve ever had.

How about you all? Have you ever taken a sabbatical from your career? What were your experiences and what did you learn?

Share your experiences by commenting below!

***Photo courtesy https://www.flickr.com/photos/tylerkaraszewski/2654986116/sizes/q/

Don’t Get Trapped into Buying Credit Life Insurance

The following is a post by MPFJ staff writer, Kevin Mercadante, who is a freelance professional personal finance blogger for hire, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry.

Have you ever made a major purchase, and been told that you must pay for a credit life insurance policy in order to get a loan to make that purchase? It’s a common practice, and even though it’s usually not a true requirement, it is almost always presented as though it is. But in most situations, credit life insurance is not a requirement, and represents little more than an extra expense for you.

What is Credit Life Insurance?

Credit life insurance is a form of life insurance that has a single specific purpose. Regular life insurance is usually taken out for a general purpose. The insured purchases a policy for a certain amount of money, which is then paid to his or her beneficiaries at the time of death, and can be used for any purpose.

Credit life insurance, on the other hand, is taken out for the purpose of paying off a single loan upon the death of the insured. The proceeds cannot be used for any other purpose. And in fact, the proceeds don’t even go to the insured’s beneficiaries. Instead, even though the policy is paid for by the insured, the beneficiary is the lender. The proceeds will go to the lender to pay off the remaining balance of the loan at the time of death.

Now even though credit life insurance is for the direct benefit of the lender, there is a secondary benefit to the insured’s family. Because the policy will pay off the loan on the asset, the insured’s heirs will be able to retain ownership of the asset, free of the loan that was used to purchase it.

Credit life insurance is most commonly used in connection with the purchase of a major asset. This can include a house, a car, a boat, furniture or appliances, and computer equipment. Any time an asset is purchased using credit, credit life insurance can enter the picture.

Why Credit Life Insurance is Such a Bad Deal – For You

There are several reasons why credit life insurance is best avoided:

Credit life insurance is expensive. It costs significantly more than an equivalent amount of ordinary life insurance. This is partially true because the amount of the policy is generally small, and life insurance costs proportionally more for smaller amounts.

It is also because credit life insurance comes under the category of guaranteed issue. That’s a term used to describe a policy that does not require you to disclose the condition of your health, nor does it require a medical exam. The insurance company is issuing the policy with no knowledge as to any factors that might affect your mortality.

Declining balance of death benefit. Since credit life insurance is tied to a loan, the death benefit declines in value as the loan amount is paid down. This means that as the loan is amortized, you’re paying proportionately more for less coverage.

Single premium payment. The lender will often require you to pay the full cost of the policy at the time you purchase the asset. In doing so, the premium will be financed into the loan amount. That means that you will be paying interest on the amount of the premium.

Worse, should you pay off the loan early, it is unlikely that you will get a refund of the unapplied premium. More likely, you will forget all about the life insurance policy, and assume that the remaining portion of the premium is simply part of the loan balance that needed to be paid off.

Why Are Companies So Aggressive in Promoting Credit Life Insurance?

Though few lenders or product dealers will admit it openly, it’s extremely likely that they are receiving some sort of incentive in order to promote the use of credit life insurance in conjunction with the purchase of their products. In the simplest terms, credit life insurance represents an additional revenue stream for both the company and its sales staff. They will be strongly encouraged to add credit life insurance to the purchase.

It may also be that in some cases the existence of credit life insurance might help to enable a marginal borrower to get a loan. This is a common requirement with various types of subprime loans. The existence of credit life insurance will eliminate at least one potential risk for the lender, which is the death of the borrower before the loan is repaid.

There may also be certain situations in which a product vendor and the insurance provider are related organizations. It could be that one owns the other, or that they have a common corporate parent. Any of those connections could result in an attempt by each subsidiary to promote the products of another.

Credit Life Insurance is Usually Not a Requirement

Credit life insurance is not supposed to be a requirement for obtaining a mortgage. And depending upon what state you live in, it may not be required for any other type of loan, including auto loans.

But that won’t stop a vendor from selling you a credit life insurance policy. They may even press the notion that it is a requirement. Even though state law may require some sort of disclosure or waiver, the sales staff may bury the document in a thick bundle of paperwork, in the hope that it will be ignored.

They tend to be most successful in promoting credit life insurance in connection with subprime loans. For example, if a person has less-than-perfect credit, they may just be happy to get a loan – any kind of loan – even if it has some expensive requirements. That can include credit life insurance.

How to Avoid Being Trapped into Buying Credit Life Insurance

One of the best ways to avoid being trapped into buying credit life insurance is to maintain good credit. Since the competition to make loans to people with strong credit profiles is so heavy, neither lenders nor vendors will risk including credit life insurance for prime borrowers, who always have the option to go to another source. Maintaining a high credit score will likely prevent the topic from ever even coming up.

You can also check with laws in regard to credit life insurance in your state. The laws vary in each state, and you can never expect a vendor or a lender to tell you what the law is if it doesn’t work in their favor. You need to do your homework and know what the laws are. Get a copy of them, and be prepared to present them when you make your purchase, in the event that anyone tries to push credit life insurance as a requirement.

Another option is to shop. Even if you fall into the subprime credit category, the knowledge that you are working with two or three different vendors could force one of them to drop the credit life insurance requirement in order to win your business.

Credit life insurance is expensive, and works primarily for the benefit of the lender or vendor and not you. For those reasons, you should do everything you can to avoid having to take a policy.

How about you all? What are your thoughts on credit life insurance?

Share your experiences by commenting below! 

Low-Effort Ways to Lower Your Spending

The following post is by MPFJ staff writer, Chonce. You can read more articles by Chonce over at her personal blog, My Debt Epiphany. Enjoy! 

Many times in the past, I used to tell myself I needed to earn more money in order to improve my financial situation and make all my money problems go away. Once I started earning more, I found that this thought process was wrong as my money problems didn’t subside at all.

This leads me to ask you: Do you have an income problem or a spending problem? Maybe you have both, but you can’t expect to fix your income problem and improve your situation without fixing your spending problem first.

Overspending can look very different depending on the person. You may be an emotional spender and make impulse purchases at your favorite store each week. You may buy one too many lattes. You may not take the extra effort to lower your expenses so you spend less on utility bills each month.

Whatever you spending habit is, there are so easy and low-effort ways to lower your spending so you can have more money to put toward your financial goals whether they are paying off debt, saving, or investing.

Leave Credit Cards at Home

If you tend to overspend when you’re out and about, research shows that we spend more with a credit card than we do with cash. I know that personally, having a credit card in my hand makes me feel like I have more flexibility. If I go over my budget with a purchase, it’s not as big of a deal since my account won’t go negative and I can always pay the expenses off in 30 days.

The only problem, however, is that sometimes you don’t pay your credit card balance off in full which can lead to debt. It may be better to take your credit cards out of your wallet, or even switch to a cash budget and utilize the envelope system when you go out so you can avoid spending extra money.

Invite Friends Over Instead of Going Out

Going out when friends is super fun I’m not going to lie, but it adds up over time. A great way to lower your spending on dining out and having fun with friends is to invite them over to your place instead.

My husband and I like to go out, but we also tend to stay in quite a bit and watch movies or play games together to save money. We like hanging out with each other, but when we invite our friends over too, it’s also super fun because we get to laugh and talk all together as a group.

You can host potlucks at your house or even prepare cheap meals and snacks like nacho dip, cookies, popcorn, etc.  and have a fun night in with your favorite people. You’ll save a ton of money if you do it regularly or even let other friends host you as well.

Unplug Electronic Devices You Aren’t Using

This is a super easy way to save money on electricity. Besides clocks and your refrigerator, you should take the extra minute or two it requires to unplug items in your home you aren’t using.

Electronic devices that are plugged in 24/7 take up a small amount of electricity each day, but it adds up. I personally can’t stand when my son leaves the television on when he’s done watching it or playing a game. And I’m sure his Xbox eats up quite a bit of energy as well.

Plus, it’s not good to leave things like chargers plugged into the wall because it can drain their battery.

Read Through the Circulars Before You Go Grocery Shopping

If your grocery spending is out of control, you’ll need to take advantage of more sales and deals. The good news is that grocery store savings are all around you. You should receive weekly sales and promotions at local stores in the mail.

Most promotions are time sensitive so make sure you check the expiration dates for the deals. Before I go grocery shopping and as I’m making my list, I always check out the circulars to see what sales are being promoted.

If you don’t like looking at sales papers, you can download an app that will gather all this information for you and provide you with coupons that you can clip digitally. Free apps like Grocery Pal and Checkout 51 are great for this.

Stop By a Consignment Shop First When Buying Clothes

Clothes can be pretty expensive but if you need to buy something, you have no choice but the spend the money right? Wrong. If you’re heading out to pick up some clothing items anyway, stop by a local consignment shop first to see if you can score any deals on gently used apparel first.

Stores like Goodwill have monthly discount sales where nice clothing is dirt cheap, and other stores like Plato’s Closet offers trendy clothing for both men and women. If you have kids, I’d recommend stopping by Once Upon a Child for some good deals. I purchased half of my son’s school clothes from there and saved a ton by doing so.

If you don’t have any of these stores near you, you can try online consignment shops like ThredUp.

How about you all?  What techniques do you use to lower your spending? What do you do with the extra money?

Share your experiences by commenting below!

***Photo courtesy https://www.flickr.com/photos/alan-light/10891438675/

Cooking Holiday Meals on the Cheap

The following post is by MPFJ staff writer, Laurie Blank.  Laurie is a wife, mother to 4 and homesteader who blogs about personal finance, self-sufficiency and life in general over at The Frugal Farmer. Part witty, part introspective and part silly, her goal in blogging is to help others find their way to financial freedom and to a simpler, more peaceful life.

It’s that time of the year again. The food and wine are flowing and people everywhere are gathering for merriment and gift-giving. The holidays can be a real budget-crusher if you let them. There are gift lists, holiday clothes shopping and of course, parties to be given.

If you’re one that likes to host holiday gatherings you might be freaking out about what your entertaining expenses are going to do to your budget, but there are ways to entertain frugally. Check out these tips.

Keep Alcohol Purchases to a Minimum

Alcohol costs are a huge part of holiday entertainment costs and the expenses can add up quickly. You can save on alcohol costs for holiday meals a couple of ways.

The first choice is to throw a BYOB meal and provide only soda and mixers for guests. The second option is to have only a few bottles of inexpensive wines and/or beers served at your holiday party. Beer and wine vendors often promote specials on prices during the holiday season, and there are many small-time beer and wine producers that have great products but charge lower prices due to the fact that they’re still so little-known. By looking for that diamond in the rough you can get a good wine or beer for cheap.

Allow Your Guests to Share in the Meal Choices

Guests love being able to contribute to meals at parties and family gatherings. Simply write “bring your favorite appetizer/side dish/dessert to share” on invitations and let everyone have a hand in creating a bountiful holiday feast.  If you’re not comfortable requiring guests to share in the meal prep, be sure to say “yes” to anyone who asks you if they can bring anything.

Avoid Expensive Menu Items

Don’t serve prime rib roast for $10 a pound when you can serve turkey or ham for a buck a pound. Don’t buy a cake from the high-priced bakery down the road when the warehouse clubs have them for half the price. With a little creativity, you can put together a wonderful meal without spending too much.

Shop the Sales

There are a number of food products that always go on sale during the holiday season. Some include:

• Meats such as ham, turkey and prime rib roast
• Baking items such as flour, sugar and butter
• Side dish items such as potatoes, rolls and breads, vegetables and canned pie filling

If you’re serving a holiday meal, make your menu plan early and start checking your local grocer ads in the first week of October, buying early when possible if you can get something on sale. Remember that canned goods and other processed foods last for many months, and that many other items such as meats and breads can often be frozen for later use.

Also, don’t be afraid to go generic. Many generic items are simply name-brand items repackaged in different packaging, but you might want to do a trial taste-test run if you’re concerned about quality and/or taste.

For instance, Aldi sells a variety cracker pack that tastes nearly identical to the similar name-brand pack, but there are other generic items we won’t touch – such as generic macaroni and cheese – because the quality sacrifice just isn’t worth it.

When you’re shopping for list items, pay attention to the sales and the generic brands and save money when it doesn’t sacrifice quality.

Cook From Scratch

There is SO much money to be saved when cooking from scratch instead of buying menu items already prepared. Look online or ask friends for recipes for desserts and appetizers. Make your own stuffing and homemade mashed potatoes instead of using the boxed stuff. Put together your own cheese/cracker/meat trays and your own veggie trays instead of buying the pre-prepared ones from the store deli. Your meal will taste better, be healthier and you’ll save money in the process.

Decorate Thoughtfully

Decorating for holiday parties can be a huge expense if you’re not careful. Instead of decking the house out with oodles of flower arrangements and other expensive décor, simply use a few well-placed decorations to make the house feel special. Here are some ideas:

• Find décor at shops such as Michael’s and Joann Etc., but be sure to use their 40-50% off coupons
• Focus on decorating the tables with colored napkins and homemade place cards
• Get one or two silk flower arrangements to brighten up the dining or buffet table and the great room, provided you can find a great sale or find them for sale on eBay or Craigslist
• Add small, inexpensive touches such as themed salt and pepper shakers from Walmart

With a little forethought and planning, hosting a holiday meal can be an awesome experience that doesn’t break the bank.

How about you all? What is your favorite frugal holiday meal hosting tip?

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/55935853@N00/5882056608/in/

Top 5 Roles of Frictionless Banking in Financial Services

The following is a guest post by Ryan. Enjoy! 

The evolution of online banking solutions in the last couple of decades has been phenomenal. It has changed everything right from the way we shop to the way we bank. For the banking and finance industry – the evolution of online banking has brought its own share of benefits and challenges; however, there is one thing which is clearly noticeable now – the players in the industry can no more survive without keeping pace with the ever-evolving digital world.

The digital revolution has influenced all aspects of the banking and finance industry – from how customers avail banking services to how the financial market operates. The tech-savvy millennial generation doesn’t simply choose a bank because of its fiscal and social status but also looks for a seamless financial service experience. Banks are, therefore, in need of keeping pace with the digital world and competing to innovate, collaborate and increase their focus on providing superior digital services to their customers.

The need for frictionless banking experience  

The customer footfalls in the bank branches have drastically reduced and most of the customers are now fully accustomed and comfortable with a contactless world. The new banking experience is all about clicking few buttons or tapping the cards.

Despite these improvements in card transactions and mobile banking experiences, customers are left asking for more. For example, to access a bank account, a customer still needs to remember a PIN, a password or details to authenticate the transaction. Now with growing number of platforms requesting for similar access details, the customer starts feeling the pressure of remembering too much and verifying too many details. The situation in the mobile banking domain, therefore, is less than ideal.

This is precisely the reason why the concept of frictionless banking has come in to picture. Frictionless banking is the next big thing in the mobile banking domain.  Frictionless banking, as the name suggests, is about providing seamless access and hassle-free authentication by using verification features other than PIN, passcodes, and passwords. With customers getting more and more demanding about superior customer experience – the new rule of customer engagement for all types of financial institutions is to keep transactions simple and straightforward, without any friction at the customer’s end.

With the advent of new digital technologies, banks and other financial institutions are constantly looking for new ways to interact with customers and provide them with a more frictionless experience.  Biometric data such as iris, fingerprint scanning or facial and voice recognition are now being used as a part of verification processes for a transaction. Location data, digital fingerprints, online behavior of the customer are other ways in which verification processes for a transaction are being conducted to provide frictionless banking experience to customers.

Frictionless banking is the future

Frictionless banking will play a great role in the future because,

1. Retaining and attracting customers: Frictionless banking will redefine banking experience for customers; and therefore, it will play a great role in retaining old customers and attracting new ones. With customers finding simpler and hassle-free platforms to conduct transactions, they will come back to the bank again and again. This will translate into growing customer base, increasing number of patrons and, of course, more business for the banks.

2. Reducing frauds and forgery: With lesser dependency on the manually fed information, the chances of forgery and manipulation of the system will go down. As frictionless banking platforms are mostly biometrics-based, mistakes such as the customer divulging the password to someone, entering the wrong passwords and any similar manual error will have lesser or no impact on the banking experience. Frictionless banking will, in fact, make banking safer, secure and error-free.

3. Making banking faster: With password-free logins, banking would become much faster – it will just be a matter of swiping the fingerprints through a device or tapping the smartwatch. Peer-to-peer transfer, bill payment, and other such transactions will be possible without remembering a single password. Such password-free transactions will be possible 24 hours a day, 7 days in a week.
4. Streamlining customer records: With biometrics verification in place, the need for collecting too many identification documents for customers will be redundant. The customer records with banks would be limited to necessary biometric details. This will reduce the piles and piles of unnecessary customer data that a bank has and streamline their records.

5. Reducing operational cost: With remote banking experience becoming so seamless, there will be no need of walking into a bank for any transaction. This will bring down the needs of the banks to create more infrastructure, have more staff on the ground to manage the customers and hire additional help to assist the existing staff. Frictionless banking will also allow the customers to be onboarded remotely.

Creating a frictionless banking experience 

Banking, now, with the advent of highly evolved technological platforms has become much faster than one could have imagined about a decade back. Several IT and software companies now specialize in assisting banks and financial institutions in innovating newer platforms and making banking more and more customer friendly every day.

From designing customized core-banking platforms to different mobile banking platforms for different operating systems – these companies have evolved with the needs of the customers. With ‘frictionless banking experience’ becoming the buzz word of the future, there are several companies that have come up with innovative solutions for that as well.

7 Ways For New College Grads to Avoid Sabotaging Their Credit

The following is a post by MPFJ staff writer, Kevin Mercadante, who is a professional personal finance blogger, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry.

Credit problems often start early in life, and it’s not just a coincidence. New college graduates can easily get involved in credit situations that can have very negative unintended consequences. Part of it is simply not knowing exactly how the credit world works. But another part is overconfidence – the assumption that you will be able to overcome any problems you can face.

But the best way to deal with problems, especially credit problems, is to not get into them in the first place. That’s because credit problems are much more easily avoided then they are repaired. Here are seven ways for new college grads to avoid sabotaging credit.

1. Learn the Fine Art of Delayed Gratification

Otherwise known as you don’t have to have it now! If you’ve struggled financially while you were in school, you may be tempted to “live a little” after graduation. After all, you worked so hard to get your degree, you deserve some of the finer things in life, right?

Wrong. You don’t deserve it until you can afford it. Commit that concept to memory. There’s nothing magical about landing your first job. Sure you now have a steady income, and hopefully a generous one at that. But you’ll also begin to watch your expenses rise in tandem.

It will be tough enough to pay for the necessities in life, let alone luxuries. Buy what you absolutely need to survive right now, and don’t begin living the life until you have the salary and bankroll to pay for it directly. A lot of young people go horribly wrong on this front when they begin paying for luxuries using plastic and various types of creative financing. It can end up being the beginning of credit hell. Don’t get into that trap.

2. Work Off the Debts You Already Have Before Racking Up New Ones

There’s a better-than-even chance that you already had debt when you graduated. There’s probably one or more student loans, perhaps a modest car loan, and maybe even a credit card balance or two.

Before you begin adding any more debt to the list, first concentrate on paying off the debt you already have. If you don’t, then you will end up stacking debt on top of debt. Even if you have a healthy income, debt has a way of outstripping income, at least in part because it’s so easy to get into it.

Once you clear the deck of existing debt – with perhaps the exception of your student loans – you can then begin to contemplate the conservative use of credit going forward.

3. Make Sure You Pay Your Non-Loan Obligations on Time

If you’ve read many articles on credit, you are aware of how important it is that your debts are paid on time. But debts aren’t the only obligations that need to be paid when due.

There are other expenses you are likely to incur that may not show up on your credit report if you make your payments on time. But if you leave a bill unpaid, the vendor might report it to the credit bureaus. It’s unfortunate but true.

This is not at all unusual when it comes to utilities and cell phone companies. It can also happen when it comes to rent. If you leave an unpaid balance on an account, perhaps after making a move, the account can go into collection, and that will show up on your credit report. If the balance is particularly large, it could even become a judgment.

Whether it is a collection or a judgment, it will hurt your credit score. Do your best to make sure this doesn’t happen by paying all bills.

4. You Know Those Credit Card Offers Flooding Your Mail? Ignore Them

Many credit card companies aggressively court new college graduates. They are willing to ignore the financial stresses that come with transitioning from student life to adult life, in attempts to get into the new graduate’s financial life on the ground floor. They assume that as your financial situation improves, their business relationship with you will expand.

That may be good for the lenders – and it might even make you feel good on an emotional level. But by accepting too many of these offers it can be a one-way ticket to bad credit. The temptation to run up the balances may be too great to resist.

You should be able to get by with just one or two credit lines early in life. If you already have those, throw all of the new offers in the trash.

5. Never Assume a Lender Will “Understand” Why You Can’t Make a Payment

As a student, you may have grown accustomed to begging off mercy with teachers and professors for late or insufficient assignments. But the credit world is not so forgiving. Never assume that a lender will understand, and agree to float you through a lean time or two. Yes, they may agree to it verbally, but they will almost certainly give a negative report on your credit report nonetheless, hurting your credit score.

6. Never Let Credit be a Substitute for Income

Speaking of lean times, should you fall into one you must resist the temptation to use credit to make up for the lost income. The problem is that when you rely on credit to replace income, your debts grow much more quickly than you can imagine. And once you do get back on your feet, your progress will be slowed by all of the new debt you acquired when your income was soft or nonexistent.

The better route is to make sure that you have emergency savings to cover income disruptions. You should also have some sort of Plan B in regard to income. That isn’t to say that you need to be perpetually working a second job, but it will help to have one ready just in case.

7. Never – Ever(!) – Cosign a Loan for Anyone

When you cosign a loan for someone else you effectively concede your credit performance to that person. How so? If they have a late payment, you have a late payment. If the account goes into collection, you have a collection. To add insult to injury, if the lender comes after the primary borrower for the balance, and the primary borrower can’t pay it, they’ll come after you next. That’s the whole purpose of having a cosigner on a loan in the first place.

Cosigning a loan for another person is an outstanding way to get a bad credit rating through no fault of your own. Think deeply about that the next time you’re persuaded to be the nice guy/girl in someone else’s life.

I realize that all seven of these strategies kind of go against the natural flow of life. But understand that when you are young, the potential is great to do long-term damage to your credit. And if you do, it can haunt you for years. Do your best to stay out of these situations, and you can avoid the worst of it.

How about you all? What mistakes have you made regarding your credit score / credit history?

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/83633410@N07/7658305438/in/

Apps For Investing in Precious Metals

The following is a guest post. Enjoy! 

Precious metals like gold and silver have been a popular choice for investors for thousands of years: the intrinsic value that metals have provides investors with a sense of comfort and security.

Precious metals can be very volatile, however. Even with the historic stability, they have provided investors over the years, there are times when the prices can rise or fall just as quickly as any other stock on the market. Therefore, it’s important that investors have the ability to stay current on their stock of precious metals from anywhere they are. Fortunately, there are apps for both Android and iOS users that can help them follow the gold and silver prices right from their phone. Here are a few of them:

Gold Research

This application is a great beginners tool to help determine whether gold is right for your portfolio. Not only does it measure the price of gold in real time, it provides plenty of tools that can help make a savvy investor out of anyone.

Gold Research will provide insight into such important factors as supply and demand as well as offer strategic investment advice from experts, including the World Gold Council. The research focuses on the drivers of the gold market, like central bank policies, risk diversification, and many others that professional investors use every day to make decisions. The app even includes jewelry technology in its analysis.

There are also helpful charts that can help you track your investments as well as current and historical trends. This is a great way to continue your research and to determine times to buy or sell. You can also visit a “frequently asked question” page that can answer some basic questions if you ever find yourself stuck.

Bullion Vault: Gold & Silver

This app takes everything you need to know about investing in precious metals and makes it easy to understand. It is the largest online investment service for silver and gold, which give millions of private investors the information they need to make wise decisions and stay on top of the current markets.

This app isn’t just a tracking and investment advice app: it also lets you buy and sell gold and silver directly. If you are a customer of BullionVault, you can not only track the prices but can instantaneously purchase bullion that is housed in vaults all over the world, from London to Singapore to New York City. If you are confident that you know what you are doing, this can help save the cost of going through a broker, putting more money in your pocket. All from your mobile device.

Gold Live!

This application from Kitco is one of the highest precious-metal tracking apps out there. It includes pricing and research on gold, silver and other precious metals that can help you stay current on pricing and trends.

You can set alerts in the app that will notify you when your precious metal of choice hits a certain price point so you know instantly whenever you need to buy or sell. This is fully customizable to your standards, so you can have control over your portfolio. While gold prices are live and up-to-the-minute, other metal prices are available in reports that are made every hour, which you can have emailed

Gold Live! Also, features currency exchange rates with 13 currencies around the world, so you know what to expect when you buy or sell. There are also full-screen technical and historical charts that so you can keep up with your research wherever you go.

Gold Silver Price and News

For a one-stop app for all the information you need, it’s hard to beat this app. While you cannot buy any precious metals through this app, it does provide in-depth news and analysis that every savvy investor needs to be successful.

This app allows you to quickly check the spot prices of many precious metals so you always know what the metals are currently trading for. You can also call up 24-hour to 10-year charts to help spot trends and review historical data. The app also has breaking news stories and general financial news to keep you updated on the daily markets.

In a constantly-connected mobile world, it’s important that you stay on top of your finances. Try some of these apps and see which one is right for your portfolio.

How to Start a Profitable Home-Based Business From Scratch

The following post is by MPFJ staff writer, Chonce. You can read more articles by Chonce over at her personal blog, My Debt Epiphany. Enjoy! 

Working from home is still a big craze on the internet these days. What some people may not realize is that it take a lot of hard work to work from home regardless if it’s a side hustle or a full-time business.

Yet and still, the results can be very rewarding. As someone who just quit my job to run my home-based freelance business, it was important for me to understand what to do in order to set up a profitable online business that could allow me to meet all my needs and financial goals.

Since I’m the breadwinner in my household and my family still has some debt, it was crucial that I set up my online business up for success. If you are in a similar boat and you want to work from home, one of the best ways to earn a good income is to set up a small home-based business.

Benefits of Starting a Home-Based Business

There are numerous benefits to setting up a home-based business and they include:

• Having the flexibility to work from home and cut out tedious tasks like dealing with commuter traffic.
• The ability to set your own hours (if you are completely location independent, you can work from anywhere)
• An unlimited earning potential. Since you control how little or how often you work along with other aspects of the business like sales and marketing, the sky can literally be the limit in terms of how much you can earn. If you don’t like waiting around for an employer to give you a small raise once a year, this can be a huge perk that allows you to have more control over your future.

If all of those benefits sounds good to you and you’ve been playing around with the idea of working from home or starting a full online business, here are a few things you need to do in order to set yourself up for success.

Brainstorm Business Ideas

First you need to determine what type of business you’d like to have. This initial step may take a while because it’s very important. You need to choose something that you are good at and something you can see yourself doing in the long run. In other words, it should be enjoyable and a passion.

It’s also important to focus on earning potential because going into business for something you’re passionate about and not earning money will just turn it into a hobby and won’t put bread on the table. Who will you serve and what type of demand exists in that industry.

For example, if you plan on running a travel agent business because you love helping friends and family plan their trips, decide who your target market will be to gain clarity.

You can look at the industry as a whole and see if there is potential for growth and what competitors are doing to bring in income. If you can see longevity in the idea in terms of income and your happiness, it may be worth looking into further.

Some top home-based business ideas include:

• Private Tutor
• Childcare
• Business Coaching
• Consulting
• Transcription
• Freelance Writing
• Virtual Assistant
• Accounting
• Web Design
• Photography
• Bakery
• Wedding Planner

Develop a Business Plan

After you’ve determined what you will be doing and who you will be serving, it’s time to write out a business plan. Your business plan doesn’t have to be super extensive, but it should be thorough, clear, and summarize the mission of your business and how you plan to grow it.

This will help you stay organized when making certain decisions regarding your services, clients you work with, partnerships you develop, etc.

You should also include some financial information in your business plan since you might need to show it to potential investors. Determine what your start-up costs will be, if you will be providing specific services or resources to the community, and how much funding you may need to meet certain business goals.

Find Funding

Depending on what type of business you establish, you may need funding from outside sources.

If you have low startup costs and can invest your own money into your business, that’s fine, but it’s best to avoid taking out a business loan if you can.

You can start by pitching family and friends to invest in your business, but don’t stop there. You can also reach out to private investors or ask if they can sponsor a project, event, or campaign you’re having.

One business owner I know who started a remote business in order to travel around the country with his wife pitched a well-known job board to assist him and they ended up sponsoring a documentary he was working on.

Depending on the type of business you have, you may be able to qualify for some government grants. The Small Business Administration offers different types of loans and grants to businesses but the requirements vary. You can learn more about SBA grants here and search for various different grants at Grants.gov.

Sort Out the Legal Matters

You may not have to legitimize your business by forming an LLC or S-Corp, but it could help you out around tax time. Entrepreneurs need to set aside a rather large amount of their earnings aside for taxes because they don’t have an employer to supplement it for them.

Depending on your needs, you may want to just be a sole proprietorship, or become a limited liability company (LLC) or an S-Corp. You can learn more about your federal tax responsibilities here.

Trusted sites like LegalZoom.com can help you legitimize your business and if you choose this route, you’ll also need to make sure you register your business name with your state and get a tax identification number.

It’s Best to Start On the Side

While all of these steps may sound overwhelming, it’s important to realize that you can go at your own pace when setting up your business. One of the best things I did to ensure that my business was profitable was starting it on the side of my full-time job more than two years ago.

I started out slow and paced myself. I made use of the extra time I had to get organized, gain clients, and execute my business strategy and slowly it started to pay off and I was able to replace the income I was earning at my full-time job.

It was a lot of trial and error though but it wasn’t as risky because I knew that if my side business’ income didn’t meet the goals I had for the month I could always fall back on my full-time job.

Starting your business off on the side is a great way to play it safe so you can reach success when you make the leap and leave a traditional job with steady income.

How about you all? Have you ever thought about starting a home-based business? Do you have any side hustles?

Share your experiences by commenting below!

***Photo courtesy https://www.flickr.com/photos/duskblackwolf/4286862314/