Prime Rate Credit

Well, in other “woes” of the economy, something that should really be the first thing noticed when the economy takes a downturn, discretionary spending on things that are considered “discretionary”, meaning not necessary or luxury items and services that people typically of a more affluent financial stature would spend their disposable income on.

Things like luxury hotel rooms, massage services, spa services, expensive cuts of steak at upscaled steakhouses, and even first class seating on airlines are starting to notice a downturn in spending and more and more people are using frequent flier miles they get from credit cards, from this more affluent population of spenders. They are saying that the recession is starting to filter down into the luxury goods market simply because the recession affects and squeezes everyone’s pocket books, not just one population segment, unless of course you are Warren Bufftett or Bill Gates, who will always have a huge buffer.

The affluent are spending less on leisure activities that are typically reserved only for the wealthier segment, like golf, and are also spending less on luxury gifts and lines of products. Although I must say, they sold out of the upscale line of boots that goes for upwards of 300 bucks at Christmastime, so I don’t know how true this could be. I’m referring to the lambskin brand of boots, the Ugg brand, which is a celebrity favorite and also happens to be a favorite of the more spendy crowd in the general population as well.

Although no economist can truly call out this possible recession until all the numbers are in and it has been months, we probably are right in the middle of one, and since this is general consensus of everyone who matters, then I saw it’s a real recession no matter who validates it. That’s just my opinion though, and Lord knows I’m no economist!

Budgeting seems like one of those things that seems like such a great idea, and when written on paper, it seems to make complete and total logical sense, and even seems to be the only way to go if you want to have any hope of running a succesful financial life. However, when we step back into reality after our little budget planning systems, and are faced with both unexpected expenses as well as the occasional temptation to buy things that we know darn well are out of our budget, it becomes a lot less romantic to have a rigid budget.

Take for example by own situation. We just moved into a new house last year, and we’ve been in it for about a year now. The house was only about two years old when we moved in, so we figured we’d have minimal updating or repair to do when we moved in. The problem is that we didn’t account for how much furniture, decor, and other things we would be purchasing as first time homeowner, so it really messed up our budget from the get go.

You have to buy lawn mowers, many tools and other accessories that you didn’t have, including shovels, rakes, gardening things, maybe some landscaping items, and tons more stuff for the inside. Today, I still haven’t finished half of the rooms, and it won’t be another year before I intend to do so. It would simply break the bank if we were to try to force all of it into such a small time frame.

People are faced with these kinds of choices every day. What to wear, what to eat, and how to accessorize your home are only some of the ways that we can so creatively throw money down the prodigal toilet, so to speak, and I for one can be very good at doing that, especially if something strikes my fancy as being a “necessity” right away. For example, we are trying to take it slow and buy things that we really like that will also last a long time for our new home.

I made a trip to Bed Bath and Beyond the other day, fully intending to not really buy anything, just browse on my lunch break from work. However, I ended up purchasing a hundred dollar painting that I just had to have, because when was I going to find a deal like that again? These are the types of temptations that can sabotage your budgets, so it’s best not to go out just to “browse” as I’ve learned many a times.

Whether you’re preparing your own taxed or have an accountant prepare them for you, you want to be sure not to miss any deductions you may be entitled to. In the medical expenses area, they are considered deductible when they exceed 7.5% of your adjusted gross income. Besides doctor’s, dentist’s and optometrist’s care, there are many less obvious items that you may overlook.

The often forgotten expenses can include blood sugar test kits, childbirth classes, drug and alcohol addiction treatment, crutches, guide dogs, wigs for individuals with medical hair loss, fertility treatments and lead based paint removal.

Taxes paid by you can be deductible also and can include sales taxes on aircrafts, boats, mobile homes and home building materials. Work related expenses may also be deductible. Some examples of these would be work related conventions, work related cell phone service costs, any fees paid to an employment agency, passport fees, if required for work, and also security clearances.

Another deduction to look at is interest paid on your home or a second home. Included in this area are first or second mortgages, home equity loans or refinanced mortgages. Gifts to charity may be itemized for deductions. You must have documentation in the form of a cancelled check or a receipt from the charity.

Some other miscellaneous deductions include alimony, day camps for children while you’re at work, fees for safety boxes used for storing taxable income stocks and bonds or investment documents. The decision to itemize will be based on whether your standard deduction against your income will be greater than the sum of all of your allowable itemized deductions. It’s worth pulling out your calculator and comparing the two figures to see which route you should take.

I didn’t realize how important it was to find a good accountant until recently I ran into some more intricate tax situations such as investments
as well as business expenses. Up until tax year 2007, my tax situation was fairly simple, and I needed minimal guidance on how best to structure
my business and life so as to get the best tax breaks while still maintaining proper records and of course paying the proper taxes.

So, since my tax situation was pretty simple, I went for a simpler, more bare bones accounting service, and that was fine for that time, however
once I realized that I needed an accountant that I could really spend some time with strategizing for the year, as well as a business that had a tax
attorney on hand who knows all the ins and outs of the tax system so that I could do everything correctly and legitmately while still maintaining a tax
bill that wouldn’t turn my hair grey every year.

Now that I’ve gone with a more specialized and professional accounting service (again, not that I’m slamming my prior accountant, it’s just that
my situation got more complex this year), I realized that the advice seasoned and experienced accountant could offer was something that you just
couldn’t put a price on because the advice and information they had to give are so valuable, especially if you do own a business or if you make a lot
of investments that are taxable in the end.

Accountants with extensive backgrounds in handling taxes for businesses, or even just more complex tax cases are worth their weight in gold, many
times over when it comes to getting the best tax breaks and making sure more of the money you work so hard for stays in your pocket rather than sent to Uncle Sam every year. After all, you can put it back into the economy like a good citizen and help spur this weak economy!

I, for one, hate even putting this type of headline on this weblog, however, it seems to be what all the news outlets are screaming lately.
That is, among all the doom and gloom about our overall economy here in the US, there is a newly surfaced report that the Fed has announced the
outlook has gone from bad to worse. Call me crazy, but should they just maybe underplay that, or even not broadcast it so broadly?

After all, we as humans can’t help but follow the path we think we should be by what’s going on in the news, so in essence, is all this news
really furthering the depressed economy? Don’t get me wrong, I’m all for the information age and freedom of speech, but I’m just asking, when is all
this information just too much, to where it begins to set itself in our subconscious minds and actually create the economic bed we lie in for the
next several months?

With the Federal Reserve, headed by Ben Bernanke who succeeded legendary Fed chairman Alan Greenspan, authorizing two back to back cuts in the
interest rate, and then coming back and saying that the GDP, or Gross Domestic Product, which is considered to be the figure by which the health
of our economy is measured, is still going to be lower than previously forecasted, it seems that many people are losing hope that 2008 may be our
year to rebound.

Add into all this fiasco that the stock market has been pretty volatile for a while, and you’ve got people running scared from stocks and other
securities, and also taking their money out of the economy in other ways that would actually benefit it, making the whole thing a worse situation by
pulling money that might have been spent and invested in businesses which drive the economy, and exacerbating an already festering situation that is
ready to come to a head.

Many economists have said that we are already knee deep in a recession, but some other still feel we’re on the “brink” of one. Where do you stand?
How are you dealing with the recession, if at all? Economists may be split on their recession standings, but I for one believe we are already in one.
It’s difficult to tell whether a recession actually occurred until it’s over though.

We’re going to talk about something that is very important, but that some people neglect thinking about or talking about with family members. It’s life insurance, and it’s one of the most important small investments you can make in your family, to ensure their financial well being if anything were ever to happen to you.

I’ve seen families impacted by this, when a big earner, or even just a financial contributor in a family passes away, and did not have life insurance, the rest of the family is left with a financial burden and sometimes even has to sell their home and/or belongings and dramatically change their way of life. If there was a way to relieve this and give you the peace of mind that your family was going to be ok, I’m sure that you’d have no problem contributing a small amount to low cost life insurance, so that your family wouldn’t have to struggle should something happen to you, your spouse or partner.

As I said, it is something that we don’t like to think about, but it’s important, and should be just like having homeowners insurance and car insurance, a no brainer, so to speak, and one that could dramatically change what could potentially be a dire financial situation should a bread winning or contributing head of family die. Life insurance isn’t just all about covering for a potential situation that already is hard enough without the financial aftermath, but also has a ton of value simply for the peace of mind it provides, in my opinion.

Um, well, not exactly. You see, even though the coffee giant has experienced some stalling in their growth over the past year, and their stock has taken quite a beating, they must not be too expensive, what with the long line I just saw there yesterday while visiting a Bombay store that was going out of business. I’ll admit, I’m a bit too cheap to cough up five bucks for my favorite Starbucks drink, the white chocolate mocha and the peppermint mocha, all that often, but when I’m in the mood for a foofoo coffee drink, the undeniable champ that is also accessible and close is usually Starbucks.

And that’s not to say that they’re the best coffee out there. In fact, I believe that the disappearing Arabica franchise actually has superior coffee to Starbucks, it’s just that Starbucks markets theirs much more efficiently and widely.

With all the credit crises and people holding back on putting things even on their best credit cards with low, fixed apr’s, it’s not exactly a dream environment for any retail business to survive and thrive for too long in an economy like this where consumers are afraid to spend. Starbucks also does have their credit cards for their coffees that are reloadable though, and the newly reappointed CEO Schulz back at the helm, says that they are thinking about rewarding their loyal customers a little better than they are now.

I wouldn’t put too much stock in people saying Starbucks is on its way down though. With an accomplished CEO back at the helm, Starbucks is most likely just facing a little bump in the road, and customers will still gladly pay five bucks for a cup of foo foo joe in my opinion.

Gosh, doesn’t it seem like tax time JUST happened? Well, it does to me, but I suppose it’s because I don’t really look forward to tax time like those that get tax returns every year. I remember when I used to look forward to tax time, when I knew that I had overpaid the government during the tax year, and would be getting a decent little return, but those days are gone now that I actually have to pay quarterly tax estimates, and it’s pretty much up in the air whether or not I’ll get anything back if I happened to overpay.

By the way, did you know that by having the most taxes taken out of your check as possible may not be the best idea? Sure, it means that you’ll most likely receive a tax refund at the end of the year, but what about if you took that extra money you got in your paycheck during the year if you claimed, say a “1″ as opposed to a zero (if you’re allowed), and invested it?

Many people don’t realize, but if they did that, they’d end up working out to have a lot more money in their pockets at retirement, even though they never got refunds or maybe even owed a little money at the end of the year.

Let me explain. If you’re not confident that you could take that extra money and actually invest it or use it to only pay off high interest debt, like debt from credit cards for bad credit or some other form of revolving debt, even if it is a low apr credit card for balance transfers of some sort, then you may be better off just having the government take the highest allowance out instead and getting your refund. This is why I think many people do it this way, because they don’t trust themselves to save that extra money and invest it, or they are afraid of owing Uncle Sam money at the end of the year instead of getting a tidy sum back.

I guess the bottom line is being able to take that money out of your check (the money that would have been the additional federal tax had you claimed with no allowances), and save it rather than spend it. If you think you can do that, many financial experts say that is the way to go. Otherwise, you are essentially giving the government an interest free loan for the whole year, while you could be paying yourself interest on that money for the whole year. Something to at least talk over with your accountant, I think!

All of us, at one point or another, feel like we’re going to lose it when it comes to paying bills, keeping track of what you’ve paid out to whom, and the sheer frustration that occurs when you simply don’t have enough to pay the bills, and it seems like you are constantly “robbing Peter to pay Paul” so to speak. I’ve been there, and I’m sure many of us can identify with these feelings of stress, and yes, sometimes even hopelessness when we know we are simply not brining in enough income to justify our way of life.

And yet, so many Americans are still living this way, living paycheck to paycheck, that is, and worrying about it only when they sit down to pay those bills they’ve accrued and realize that they’ve overspent for the month. You have to realize that if you’re paying so much in bills that you cannot put away any money for retirement or any type of interest bearing account, that you are simply spending too much and bring in too little income to be able to comfortably and justifiably be spending that much.

So many young couples and young people in general are finding themselves in this same unfortunate situation, and this is a large part of the reason for the recent housing slump and the “mcmansion” phenomena where young families think they need to keep up with the Joneses or buy the nicest items and furniture on the block so that they can keep up a more lavish lifestyle than what their income comfortably permits.

My advice to those who are living in this financial fastlane without the income to back it up is to seek the help of a professional financial analyst or counselor, and they will in turn force you to write down all expenditures and come up with an alternate budget so that you can begin saving the way you should be again. We all need help sometimes, and there are tons of excellent counselors who can help us budget our money and get our financial priorities straight when we can’t seem to get them straight ourselves.

Yep, I can never believe when it is barely the end of September, and I’m already seeing the Christmas bags at fast food restaurants, the ads to online shopping deals on Black Friday (the playfully named day after Thanksgiving, which is the most notorious holiday shopping day according to mythology, but has actually been proven to be only one of the busiest shopping days, including online).

Is it really time for this already? Apparently so! I guess we’re all ready to get started extra early this year, huh? What’s that, you’re not ready yet? Well I for one know I’m not, as the weather has barely broken below the 80’s lately here in Ohio, and the mood is far from a holiday one since it’s more like a Bahamas vacation type of weather force.

Some of the tips we have to keep in mind as we begin to shop this holiday season, whether that season starts early or late for you, are that we must keep our credit card numbers safe and hidden at all times. It might be a good idea to scratch out the last or first digits of your credit card number when signing credit card receipts, just to be sure in case the number falls into the wrong hands, and can be used to online shopping at your expense failry easily.

Also, be aware that you should stick to a budget after you’ve made lists of what everyone wants who you are buying for. A lot of families now are getting tired of paying thousands of dollars or even hundreds for multiple family members, so many people, like my family, are choosing to instead do a secret santa, which cuts down on the number of gifts being given and the amount of money that everyone is spending on everyone else. Makes sense right? It did for us, since we cut everyone’s Christmas expenditures by more than 4 times or more.

Look for sales in the paper. Christmas time is one of the absolute best times to get some of the greatest deals you will find of the year, especially if you’re looking for some kind of electronics. Think of the $300 Wal Mart laptop sale that infamously was sold out in minutes. This is the only time of the year where you’ll find retailers fighting tooth and nail for your business through price wars, so take advantage! And keep only one of those credit cards on you, to avoid the temptation of overspending!