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All-star-cash-management lessons from the diamond

Written by Jeffrey Steele - One Comment

If you’re a baseball fan like me, it’s a good bet you read the Michael Lewis book “Moneyball” well before it spawned a Brad Pitt movie. The tome is a laugh-out-loud chronicle of how free-thinking general manager Billy Beane brought some respectability to his woebegone, small-market, tiny-budgeted Oakland Athletics.

But linking money and baseball is nothing new, as Lewis would likely be among the first to tell you. Throughout its history, the grand old game has been just as much about greenbacks as it has been about hits, runs and errors. No wonder the cash-rich New York Yankees, summering within a few miles of America’s financial epicenter and traditionally profiting from the game’s fattest television contract, have captured more World Series crowns than any other team.

This baseball season represents the 50th anniversary of my becoming a fan of the American Pastime, way back in that long-ago, star-crossed summer of 1964. And with the 2014 campaign getting underway this week, I thought I’d mark the golden anniversary of my fanaticism in a novel way.

I’m going to swing for the fences and suggest that baseball can teach a lot about personal finance to those of us who’d like to become better money managers. Then I’m going to ask some of you fans out catching some rays in the bleachers to step into the cage and take a few swings yourself at linking money lessons and baseball.

Whether a fan of the Los Angeles Dodgers or the Pawtucket Red Sox, or any major or minor team in between, consider these connections between personal finance and the action on the diamond as you root, root, root for the home team this summer.

Come to play every day

Unlike other professional sports that serve up a contest or three a week, baseball is a day-in, day-out affair that begins in February and isn’t over until the jack-o-lanterns are glowing. When your team crosses the lines on Opening Day, every player knows they’re in for a long grind. It’s the same thing with accumulating financial resources. To land some loot over your lifetime, you have to be in it for the long haul and come to play every day, conserving and banking money along the way.

Get off to a good start

The best center fielders get a good jump on every fly ball, and teams that win pennants often enjoy highly triumphant Aprils. An early start on success is key in baseball — and in growing nest eggs. If you start early, you don’t have to struggle late at putting together funds for a college education or retirement. In other words, you’re not losing the ball in the lights at the crack of the bat only to blow out a hammy trying to make a last-second, miraculous, diving catch.

Hit to all fields

Ask the fans who followed Ishiro Suzuki this century, or Rod Carew and Pete Rose in Bowie Kuhn’s day. Some of the most valuable hitters on any team are those who spray the ball in all directions. They don’t rely solely on pulling the ball but build their batting averages hitting to the opposite field and up the middle as well.

The parallel in money management is diversification. Those great at stockpiling soaring stacks of simoleons don’t place all their money in one asset class. They spread it around between large-, mid- and small-cap stocks, domestic and international equities and funds, bonds and real estate. Sometimes they even drop a bunt down into a certificate of deposit or a money market mutual fund.

Keep ice water in your veins

For years, it’s been acknowledged that baseball’s greatest relief pitchers have a special emotional makeup. They forget the bad games, stay calm, and embrace a cold-blooded detachment. Then they go out and mow down the side for the save.

It’s likely that those who profit as stock market investors are a little like great relief pitchers. It doesn’t matter if the market’s been on a tear or is losing ground faster than the ‘72 Philadelphia Phillies. These investors avoid letting daily events get them too high or too low and they dispassionately focus attention on long-term goals.

Be smart on the bases

How often have we all been part of a 30,000-fan collective groan touched off when a promising rally was nipped in the bud?

And why? Because after lining a frozen rope into the right field corner, our guy got thrown out trying to stretch a double into a triple. You don’t have to look far to spot analogies in the world of consumer finance. Just think of the folks who got burned in the tech wreck of year 2000, thinking they’d greedily load up on dot.com stocks or the over-reachers who around 2007 were convinced that home prices had nowhere to go but up — straight up, and forever.

Unlike our overambitious base runner, a lot of these people weren’t just called “Out!” They were called out of money.

Get ‘em on, over and in

The walk-off home run that sends a stadium full of fans home with ear-to-ear grins is among the most thrilling events in all sports. But let’s face it. If a team is going to mount a late-inning, come-from-behind uprising, it’s more likely going to do it by means of a couple walks, a seeing-eye single or two, an error and a double. In baseball parlance, the team will get ‘em on, get ‘em over, and get ‘em in.

By now, you probably see where I’m going. The walk-off is like the lottery ticket that pays big one time in a hundred thousand. Most people who get rich don’t do it in one giant blast. They do it over time, with discipline and tenacity, by seeking out the best savings account and best credit cards, getting money into investments, enjoying the gains, letting gains compound, reaping additional gains on principal and past gains, and eventually cashing in.

But they enjoy their largess just as much as someone whose scheme paid off big. Kind of like the team that forsakes the long ball for a grind-it-out win.

So here’s the takeaway: I know it’s out of left field, but if you want to enjoy wealth someday, look beyond currency and coins, and glimpse the wisdom in diamonds as well. Ready to take your cuts?

Batter up!

Published on March 26th, 2014 - One Comment
Filed under: Saving & Investing

Expensive tax mistakes to avoid

Written by Suba Iyer - 2 Comments

Tax season is in full swing. Thanks to tax preparation software, a lot of the common mistakes (i.e., missing social security numbers) are now automatically detected. Still, they are only capable of checking for math accuracy and missing fields. They can’t optimize a tax return to get the maximum amount possible or compensate for our misunderstanding of the complicated tax code. I have been using tax software and/or tax professionals ever since I started filing in 2003. In these ten years, I have learned that no matter what software or tax professional I use, the onus is on me to know what is best for me and what mistakes to avoid. Here is a list of dos and don’ts based on the mistakes that I have personally made or have come across in recent years. Use this as a checklist to make sure you avoid them too.

  • Don’t assume you can’t itemize: When I started filing taxes as a student, I spent a total of 10 minutes filing my taxes. I didn’t know anything about itemized deductions. I just assumed it is for people who have a lot of expenses like a mortgage or kids. When I started working, I continued with my belief that the standard deduction is the best for a single-filer without a home. When I got my first job, I decided to use one of the “professionals” at a big tax preparation chain. After a few nightmarish meetings with so many mistakes that I could spot, I decided to spend a weekend doing my taxes by hand. That is probably the best thing I did for my finances. It was an eye-opening experience to actually read all the IRS publications to see what I qualify for and don’t. The professional never asked if I ever donated to charity; she just assumed I don’t. That weekend I understood there is much more to itemized deductions than just a mortgage. Just because you are single, don’t assume you can’t itemize. Read up on the itemized-deduction publication and start collecting the relevant supporting documents throughout the year. You might be surprised to see a lot of small things adding up to a total of more than the standard deduction.
  • Don’t assume a deduction is not worth the effort: This mistake almost cost me over $500 last year. I knew the medical deduction had a floor of 7.5 percent. (This year it is 10 percent.) I mentally calculated 7.5 percent of our income (our gross income) and assumed our expenses wouldn’t cross that limit. In a desperate moment I decided to collect all the medical receipts and calculate the amount just to make sure. I earned over $500 in those few hours of effort. First, it is 7.5 percent of our AGI, not gross income; second, all the doctor co-payments, prescription drugs, eyeglasses, parking and travel costs added up to an amount I didn’t think we had spent. So never assume you can’t take a deduction. Always make sure.
  • Don’t choose a tax preparer based on his/her promises to get the maximum refund: I know a certain tax preparer in the area where I used to live who claims regular groceries and a whole range of regular living expenses as deductions for his clients. (Yes, I have reported him to the IRS, but nothing seems to have happened and he is still in business.) His business is booming because he promises the maximum return and charges a percentage of the return as his fee. It is an audit waiting to happen for the clients.
  • Don’t overestimate the value of your donations: Keep the receipts and use a standard guide for the value of your donations.
  • Don’t forget to claim all the deductions for which you are eligible: You don’t have to fear an audit to claim the deductions for which you are legally entitled. Many audits are in the form of a mail requesting supporting documentation; so if you have your paperwork in order and fulfill the eligibility criteria, the fear of an audit shouldn’t prevent you from taking a deduction.
  • Don’t wait too long to file your taxes: If you wait too long, you might be in a hurry to file before the deadline and forget to claim all your deductions. If you file with an accountant, he might not have time for a thorough review. Do your tax preparation throughout the year by organizing your receipts, and start your return as soon as the new software hits the market with the latest changes.
  • Check auto-import numbers: Most major tax preparation software now have a feature to auto-import your W2 and/or investment tax forms. It is a very handy feature, but it is not always perfect — especially if you have a complicated W2 or 1099 forms. Check to make sure the numbers are in the right place and you are not double-paying your taxes.
  • Check different filing status to see which will be best for your situation: If you had a major life change in the year like getting married or divorced, do the taxes using different filing status. One status might be better than another. For example, if you became a single parent, it might be beneficial to file as head of household instead of single.
  • Keep all your supporting documents in order: We should be taking every single deduction if eligible, but that doesn’t mean the IRS can’t question the deduction. Make sure to collect all the supporting documents and file them. It might be best to scan them and store them in cloud storage to avoid losing the documentation.
  • Report all your income, even if you didn’t receive the documentation: I had one of my contractors ask that I not issue her a 1099 so that she doesn’t have to pay taxes on it. It does not work like that. If you received income, you should report it no matter what documentation you receive. Make sure you keep the receipts for all the expenses you incurred for the job so that you don’t have to overpay taxes.
  • Check all your tax forms and income reports for errors: With ever-changing tax laws, sometimes companies make errors too. Make sure the numbers you receive in the tax forms tally with what you have on record.
  • Start your tax planning for next year right now: Many tax deductions will work only if you take advantage of it in the calendar year. By the time you are ready to file your taxes, it will be too late.

Have you made any mistakes in your taxes that cost you money? How do you make sure you have the maximum return that you can legally get? Do you use software, an accountant, or do it by hand?

Published on March 24th, 2014
Modified on March 17th, 2014 - 2 Comments
Filed under: Taxes

Three low-cost ways to capture your wedding day

Written by Linda Vergon - 2 Comments

This article comes from Christine Bilger from the Quicken Loans Zing! blog.

You know what’s expensive? Wedding photography. You know what’s even more expensive? Videography.

I’m not going to deny that I had more than a little sticker shock when I started looking for a wedding photographer. Unfortunately, I also really want a videographer – which isn’t in the budget. Unless I win the lottery or locate a long-lost wealthy relative between now and July, I’m definitely not having a videographer at my wedding.

So what’s a bride (or groom) to do? Luckily, the popularity of camera phones and the availability of other technology makes it super easy for you to get hundreds of pictures and videos from your wedding without hiring multiple photographers or a full-on camera crew. I’m not suggesting you forgo hiring a professional photographer (you will, after all, have these pictures forever), but there’s some seriously cool technology that can help you capture every little moment for a relatively low cost. Ready to get started? Here’s some wedding-related technology you should know about!

WEDIT

What it is

Have you heard of Wedit? From the rehearsal dinner to the reception, it’s an affordable way to capture videos of all the little moments you’re likely to miss while you’re busy greeting guests and dancing the night away. With Wedit, you receive five HD cameras (they currently use iPod Touches) in the mail. Hand them out to five of your most reliable guests, and they can capture hours and hours of high-definition footage. After your wedding, simply mail the cameras back to WedIt. They’ll upload the footage to their website so you can download it and share it with your guests!

What it costs

The basic wedding package (which includes the cameras and video hosting on Wedit’s site) costs $500. For an additional fee, you’ll get a beautifully-edited wedding reel. The Highlights Package, which includes a three-to-five minute highlight reel, is an additional $199. If you want a full-length wedding video (30–60 minutes) the package is $349 in addition to the initial $500. This might not sound like a low-cost option, but when you consider that videography often costs upwards a $2,000, this is a great money-saving alternative.

WEDPICS

What it is

WedPics is an app that lets wedding guests take, upload and share photos and videos in one easy place. Rather than begging people to email you their photos after the wedding, you can use WedPics to ensure that you have access to all of the photos from your big day. It’s super easy to set up. Simply download the app, make a profile and create a wedding password. Once you share your password with guests, they’ll be able to view all your pictures and add their own! You can even purchase WedPics cards ­– invitation inserts that tell your guests how to use WedPics – right from the app, for about $25 per 100 cards.

What it costs

FREE! Why not give it a try?

EVERSNAP

What it is

Similar to WedPics, Eversnap is an app that collects all your wedding photos and videos. Guests without smartphones can even upload pictures via Facebook or email. While WedPics is free, Eversnap costs money – although their packages have a few extras. With the Essentials Package, you’ll get unlimited photos and videos, as well as 200 custom instruction cards. The Unforgettable Package offers all that, plus photo retouching by a professional photographer. Their most expensive package, the Luxury Package, offers everything in the other two packages, but includes a live, moderated slideshow – a pretty cool feature if you ask me. Professional moderators will track the photos as they’re uploaded, and choose (based on appropriateness) what gets played during your wedding.

What it costs

Here’s what Eversnap’s packages cost.

  • Essentials: $99
  • Unforgettable: $199
  • Luxury: $249

Well Zing readers, what do you think? Have you tried any of these apps or services? Would you recommend them? Share with us in the comments section!

More stories from Zing:

Online sales tax: What’s the deal?

Buying and Selling Homes in 2014: A More Balanced Market

Decorating Your Home: A Guide for Music Lovers

Published on March 21st, 2014
Modified on March 11th, 2014 - 2 Comments
Filed under: Uncategorized

What you need to know about the impending Obamacare deadline

Written by William Cowie - 6 Comments

Tick, tick, tick – March 31 is the new deadline to get health insurance coverage. This time, the government is digging in its heels. There will be no extension. Some say the government will cave in (again) and move the deadline, but that’s by no means a certainty. The April Fool’s joke might be on you if you don’t have a qualified health insurance plan locked up the night before, and the deadline ends up staying in place.

For about 80 percent of you, that’s a non-event, because you’re covered already either through work, Medicare, or with private policies you bought. For the rest, Obamacare is something you will need to come to grips with, like it or not. This is the first of a two-part look at the new medical insurance landscape, and your best options.

The deadline

Obamacare’s main goal is to force medical coverage on the roughly 60 million uninsured out there. Why the government wants to do that is a question that has been debated in the press ad nauseum. The reality you face is that if you were one of the 60 million, you no longer have that option. By March 31, you have to have a qualifying insurance policy. If not, well, we’ll get to that below.

Why the deadline? Why not allow people to get medical insurance in their own time? Health insurers fear that people will only get a policy when a medical catastrophe hits them. As one insurance spokesman put it, that would be like buying a fire policy when the house is on fire — bad business for insurers. That’s why there’s a hard deadline of March 31.

If you want to obtain qualifying coverage after March 31, you will not be able to. There will be another open enrollment period starting November 2014, but those policies will not take effect before 2015.

The media is filled with chatter over whether the government will be forced to extend the deadline yet again. Time will tell whether it happens, but why gamble? The question no longer is whether, but when.

Exceptions

Not everyone will be penalized if they’re not enrolled by March 31. You’ll be given grace to enroll later only in the following situations:

  1. Glitches: The government has indicated that if you can prove that you started the process but were unable to complete it (hello, website), you will not be penalized for a late enrollment.
  2. Any change in employment status
  3. You have a baby (or adopt one)
  4. Kids leave home
  5. You move out of state
  6. There was a change in coverage in a spouse’s employer plan
  7. Entitlement to Medicare or Medicaid

Anyone with one of those “qualifying events” will be given sixty days after that event to get qualifying coverage.

Penalties

Given the high level of resistance from the people who elected it, the government pretty much had to put some severe penalties in place to ensure compliance. Any insurance plan only works if those with low risk participate to spread the risk.

If you don’t have qualifying health insurance coverage, the IRS will levy a fine on your tax return. For most people, it will be 1 percent of their household income. But that’s only this year. In only two years’ time, it will be 2.5 percent. For a couple earning $90,000 a year, that amounts to just over $2,000. For a $45,000 combined income, the fine would be just over $1,000. (You would still have to pay for all medical costs on top of that.)

Fine print:

  • Every taxpayer now will have to bring a certificate from insurers to prove coverage. (Just what the people who want to simplify the tax process want.)
  • If one spouse has qualifying coverage (through his or her job, for instance) and only one doesn’t have coverage, the full fine will be levied on both incomes.
  • If you have coverage for part of the year, you’ll owe a prorated penalty. It’s calculated based on the number of months you didn’t have coverage, with each month costing you 1/12 of the full-year penalty. So if you’re uninsured for six months, you’d owe half of 1 percent of your income.
  • If you’re uninsured for fewer than three consecutive months, you won’t have to pay a penalty.

Enforcement of the penalty is withholding of refunds, nothing more. People who decline to buy coverage would have the penalties deducted from their tax refund, not an insignificant enforcement tool, considering three out of four families qualify for a refund.

It’s not clear what would happen to those who don’t get a tax refund. The IRS can’t put people in jail or garnish wages to get the money. Underestimating the creativity of the IRS to get money, however, has never paid off.

However, the government’s main agenda is not making criminals out of ordinary citizens, but getting people covered.

Exemptions

There are two classes of exemptions — the first simply based on status and the second based on hardship. Some of these exemptions are:

  • Affordability — the cheapest option available would cost more than 8 percent of your household income
  • Your income is low enough that you’re not required to file a tax return
  • You belong to a federally recognized tribe
  • You’re a member of a recognized healthcare-sharing ministry (more about that next time)
  • You’re a member of a recognized religious sect with religious objections to insurance
  • You’re incarcerated
  • You’re not in the country legally

(As laws change, does jail look like a better option? It may just give new meaning to “freedom has a price.”)

Some hardships will allow you to claim temporary exemptions while those conditions persist:

  • Being homeless
  • Being evicted in the past six months or facing eviction or foreclosure
  • Receiving a shutoff notice from a utility company
  • Recently experiencing domestic violence
  • Recently experiencing the death of a close family member
  • Experiencing a fire, flood or other disaster that caused substantial damage to the person’s property
  • For six months after filing for bankruptcy
  • Having medical expenses you couldn’t pay in the past two years
  • Having unexpected additional expenses as a result of caring for an ill, disabled or aging family member

All eyes are on the enrollment numbers, which to date have been much lower than the government had set as a target. However, this is a nation that proves every year at tax time that there’s nothing like a deadline to get things done. That means we can expect a flurry of sign-ups in the next week or two.

Unlike your income taxes, though, you will be given grace if you can prove that you tried to get your insurance in place but couldn’t get it done.

Next time we’ll take a look at some options and strategies that have opened up recently, which could turn the new dispensation to your advantage in ways nobody foresaw.

Published on March 19th, 2014 - 6 Comments
Filed under: Insurance, Taxes

Sympathy for the banker

Written by Richard Barrington - One Comment

Bankers are not easy to love. In fact, from the mean old man in “It’s a Wonderful Life” to the bonus-baby CEOs who put the world through the financial crisis a few years ago, bankers have become a class of citizen that people love to hate. Like a lot of hatred, though, that sentiment might come back to haunt the hater — specifically, bank customers.

Bankers almost seem to be the inspiration for the concept of schadenfreude: the feeling of enjoyment that comes from the misfortunes of others. For example, I recently read two stories about bankers that most people would react to with something between an indifferent shrug and a satisfied chuckle:

  1. JP Morgan Chase, the nation’s second largest mortgage originator, forecast that its mortgage operations will lose money this year.
  2. Banking consultant Strunk, LLC, reported that, over the past decade or so, bank losses on the average free checking account have risen from $50 a year to $200.

Bad luck for the banks, you say. Yes, but also bad luck for banking customers. Here are some reasons why bad news for banks often becomes bad news for their customers:

  1. Today’s defaults are tomorrow’s loan refusals. During the mortgage crisis, it became a popular notion that it was somewhat honorable for people to walk away from their houses rather than continue to pay for a property that had declined sharply in value. You can rightly criticize bankers for predatory lending practices that included deceptive loan terms, but it is a completely different thing when people blame the banks because the market went against them. When people walk away from their loan obligations, chances are they are denying someone in the future the chance to get a mortgage, as loan capital is reduced and banks tighten lending standards.
  2. Everyone loses when a market goes sour. You may not feel sorry for JP Morgan Chase because its mortgage operations are losing money, but here’s how it will affect you or someone you know: Chase is laying off 6,000 mortgage employees in response, on top of 11,000 laid off last year. Constricting supply just means it is going to be tougher to get a mortgage in the future.
  3. Their losses become your fees. If product losses don’t restrict the future availability of those products, they are likely to increase the cost of them. When companies do not cut products altogether or reduce service for those products, the only rational solution to losing money is to raise fees. So, the fact that losses on free checking accounts have quadrupled over the past decade helps explain why free checking accounts are getting harder to find.
  4. Regulation raises costs — to customers. The right level of regulation is a delicate balance. I believe that repealing the Glass-Steagall Act in the late 1990s was a huge mistake. It didn’t cause the financial crisis, but it greatly contributed to the severity of it. Glass-Steagall worked for decades because it was broad in scope. When regulations start micro-managing how banks operate, it costs much more money to implement and to enforce — and those costs get passed along to customers and taxpayers.
  5. Taxing the banks means taxing their customers. Here again, costs get passed along. During good times, banks are popular targets for extra taxes and fees because they seem like fat cats, but raising the cost of doing business usually raises the cost of that business’s products.

Ultimately, the reason things that hurt banks end up hurting consumers is that we need banks. They keep our money safe, lend us money, and provide technological innovations from ATMs to smartphone apps that have made access to our accounts more convenient.

The problem is not that all banks are bad, but that some banks are much better than others. For example, some get the idea of customer service while others treat customers as a nuisance. Also, big banks use their name recognition and distribution to routinely get away with charging higher checking account fees, and paying lower interest rates, than smaller banks.

The solutions to these problems are informed and active consumers. The Internet gives you access to easy information on hundreds of banking options — including Internet-based accounts, which routinely offer lower fees and higher interest rates. So, the next time you are tempted to say something negative about banks, keep in mind that it may not be in your interest to tar all banks with the same brush. It is more constructive to blame specific banks rather than all banks.

There is an old, idealistic saying: “If you don’t like the world, change it.” That’s a nice sentiment, but not often easy to do. However, if you don’t like your bank, you can change it. That’s much more easily done, and it won’t just benefit you; but if consumers reward the best banks with their business, it will slowly but surely change banking for the better.

Published on March 17th, 2014 - One Comment
Filed under: Banking

Documents you need to bring to your tax appointment

Written by FCN Staff - Leave a Comment

This post comes from Victoria Araj from the Quicken Loans Zing! blog.

It’s tax season, and that means it’s time to sort through your shoebox of receipts, those envelopes of stock statements and that drawer of paperwork that hasn’t been touched in 12 months.

Depending on your income, assets, marital status and a host of other life factors, making sure you have all of the necessary documents needed to file for your specific situation can seem daunting.

Here’s a quick checklist of items you may need to gather before meeting with your tax professional.

INCOME

  • Your W-2 form from your employer, or if you changed jobs, you’ll need one from each employer.
  • If you receive income from interest, dividends, self-employment, pensions or payments from the government, you will need to have a 1099 form.
  • If you own a business or are in the farming industry, you’ll have to provide records of your income and business expenses.
  • If you’re a beneficiary of a trust or an estate, or if you receive income because you’re a stockholder in an S Corporation or a member of a business partnership, a Schedule K-1 may be required.

ASSETS

  • Any sale of real estate, such as for your primary residence, second home or investment property, will require documentation.
  • If you own a home, bring the property tax bill and mortgage statement to your appointment. Mortgage interest on first and second homes is generally deductible for taxpayers who itemize their deductions. If you have a home equity loan and want to deduct the interest, you may need additional documentation aside from Form 1098.
  • If you relocated because of your job, you should bring documentation that shows expenses for your job-related move that were not covered by your company or organization.
  • If you are reporting sales of stock, you’ll need to bring a year-end statement that shows the original cost of the stock and information about the sale.

PERSONAL

  • If you made contributions to a Health Savings Account or Medical Savings Account, or need to report distributions made from them, you’ll need these forms. Certain medical expenses may be deductible if they exceed a specific percentage of your adjusted gross income. Check with your tax professional regarding the paperwork necessary to obtain these deductions.
  • If you made charitable contributions, you should collect your receipts showing those donations. If a single contribution exceeds $250, the charitable organization should/will provide you with a statement you can use to file.
  • If you have kids in daycare, bring documentation that shows the cost as well as the name, address and ID of the provider.
  • If you were divorced within the last year or filed for divorce, your tax preparer will let you know the forms needed based on how you will file your taxes. If you have children and are the noncustodial parent and want to claim a dependent, you’ll need Form 8332.

While many Americans dread tax season (at least prior to any refunds), it’s always smart to have a good idea of the documents necessary to make your filing efficient and painless. A wealth of resources can be found by visiting www.IRS.gov.

If you’re in doubt, simply contact your tax professional who can help you get a handle on what you should assemble for your appointment.

More stories from Zing:

Online sales tax: What’s the deal?

Buying and Selling Homes in 2014: A More Balanced Market

Decorating Your Home: A Guide for Music Lovers

Published on March 14th, 2014
Modified on March 11th, 2014 - Leave a Comment
Filed under: Taxes

Putting the brakes on aggressive driving’s exorbitant cost

Written by Jeffrey Steele - 5 Comments

According to a new survey from Insure.com, the most expensive 2014 car to insure in the United States is the $110,000 Nissan GT-R Track Edition, which requires a few bucks less than $3,200 in premiums to cover for 12 months.

The super car is better known in some quarters as “Godzilla,” for it is a monster that emigrates from Japan. Sporting a twin turbocharged V6 engine that boasts 545 horsepower, the lighting quick GT-R Track Edition rockets from zero to 60 in a scant three seconds, and touches speeds of 190 to 200 miles per hour.

So what kind of person buys and drives Godzilla? A well-heeled one no doubt. But also a guy, for it is inevitably a male buyer, who just adores aggression.

We’re not talking just about aggressiveness on the track, either. GT-R buyers don’t shell out that many simoleons to dawdle in the slow lane when running for a quart of milk at the local convenience store.

And therein lies the reason for the high cost of insurance. It’s not just the GT-R’s many carbon components, which if damaged in a wreck can only be replaced, never repaired, that propels its premiums into the auto insurance cosmos.

“It’s flat-out brilliant to drive,” Santa Barbara, Calif.-based John Pearley Huffman, who writes for Car & Driver, told me recently. “It’s driven by people who like to drive fast, and it’s expensive . . . It’s a fantastic car, and I believe it to be an easy-to-handle car. But the consequences of screwing up at 150 miles per hour are radically different than screwing up at 50 miles per hour.”

Ubiquitous aggression

In the working class neighborhood I call home, I can’t recall ever seeing a GT-R. People here are a bit too concerned about making their next mortgage note and funding Friday’s family dinner at Red Lobster to shell out for a six-figure super car. But I glimpse drivers on a daily basis who’d be right at home behind the wheel of one. These motorists, male and female, are in such hurry to get where they’re going that speed limit signs might just as well read “Any Speed You Like.”

The hallmarks of these domineering drivers are known to us all. They’re laying rubber at the sight of a red light turning green. They’re throttling to a stop sign or red light so they can stomp the brakes and skid 250 feet to a halt. They’re the ones — on dry pavement or black ice — who tailgate so near your rear bumper you can count their inflamed facial pores in your rear view mirror.

You’ll see them abruptly sliding across multiple lanes to reach three car-lengths of open road, turning right from the left lane, cutting off other motorists without so much as a turn signal, and appearing intent on making your stretch of asphalt into an open-road triage center bathed in the flashing lights of first-responders.

And, as I noted, speed limits don’t apply when they’re in the driver’s seat. When I hear yet another traffic report about an eight-car pileup, featuring overturned vehicles, rolled-over buses and jackknifed semis, I inevitably say to myself, “Well, at least no one was driving above the speed limit.”

Yeah, right.

High aggression, high costs

Watch the countless aggressive drivers on the byways, and you begin to sense how little saving money means to so many American motorists. These clearly aren’t people carefully searching for a high-yield savings account, the best credit cards or strategies to better save for retirement.

Let us count just some of the ways aggressive driving can put the raging road warrior into the poor house.

Insurance costs. You may recoil at the notion of spending an average of $3,167 a year on auto insurance, as GT-R owners do. But your insurance will bolt northward with every speeding ticket and reckless driving ticket — which are expensive in and of themselves — and accident you rack up. Studies show a reckless driving ticket sends car insurance rates up by 22 percent. Wouldn’t punching a speed bag be a less expensive way to get out your aggression?

Gasoline costs. According to a recent article by Laura Mauney in Renewable Energy World Magazine, tailgating requires hard-braking and re-acceleration, both of which unnecessarily burn fuel. If these maneuvers waste 10 percent of gas in a tank, that will add up to $9 for every gasoline fill-up of a 25-gallon tank at today’s gasoline prices. If a tailgating motorist fills up every week, that brings the unnecessary cost to $460 per year, or eight additional 25-gallon fill-ups yearly.

All in all, jackrabbit starts and hard-braking can increase fuel consumption by up to 40 percent, Mauney states.

Wear and tear. Hard-braking is associated with earlier demise of brake pads and drums. On the whole, aggressive driving just wears down a vehicle more quickly, resulting in more frequent visits with the mechanic for costly repairs.

And don’t forget to throw in the cost to society — meaning all of us — of thousands of needless motorist and pedestrian injuries and deaths each year, and the impact on the environment of unnecessary auto emissions.

When you do, it’s evident that about the only thing more frightening than the high cost of aggressive driving is a surprise visit by Godzilla.

The original one.

Published on March 12th, 2014 - 5 Comments
Filed under: Automotive

How to save money on road trips

Written by Suba Iyer - One Comment

It is time to plan summer vacations. If you are planning to fly to your destination, now is the best time to start setting up price alerts for the plane tickets and signing up for credit cards if you want to use the miles and perks that come with carrying a particular airline card. With an infant, we don’t relish the thought of flying; so this year we’re looking into a road trip for vacation. Just because we can drive to our destination doesn’t mean we don’t have to plan for it. A road trip can easily break the budget too. Here are some of the best tips I compiled to help us keep our expenses low.

PREPARE YOUR CAR

  • Do a mini maintenance: Make sure your car is in good condition. Before your road trip, do a mini maintenance to see if your tires are properly inflated. Then check your brake pads, fluids, battery, wipers and the lights.
    Keep your destination in mind when you are doing the maintenance. When I was living in Southern California, I never used the wipers more than a few days of the year. So when I went on a short road trip to Big Bear Lake, it never occurred to me to check my wipers. I arrived in the middle of a heavy snow storm and my wipers gave up within a minute. (I learned my lesson.)
  • Save money on rental car: Create a separate travel email and sign up for the newsletters of different rental car companies. Look through them once a week and see if there are any good deals you could use. After you book the car, continue this exercise once every few weeks to make sure you still have the best deal.
    You could also outsource the task to a site like Autoslash. They will take your reservation and keep checking if the price drops. I like to check the bidding sites like Priceline or Hotwire as my vacation date gets closer as well.

PLAN YOUR TRIP IN DETAIL

Some people like spontaneous road trips; I like to plan. Planning is part of the enjoyment for me. Planning helps me keep my trip within budget and still allows me to discover cool, new places to visit.

Lose your car in big cities: In some cities, the parking can run hundreds of dollars for a few days. Look up the parking rates of the hotels and the parking garages near the attractions before you go. Consider parking in a garage just outside the city and taking public transit too. For example, when visiting New York City, you can save quite a bit by leaving your car in a garage near a transit station in New Jersey and taking the train into the city. Taking your car to every attraction, paying for parking and the tolls in a city like New York will just add needless expense to your vacation.

PACK THE RIGHT GEAR

After wearing flip flops to Chicago in early fall, I learned to pack the right gear. Checking the weather at your destination and packing all the right gear will help you save a lot of money and the need to frantically look for a place to buy winter gear. Think about how you will store these items in the car too, so they’re accessible when you need them.

LOOK FOR DEALS ON LODGING AND MEALS ON THE WAY

  • Cook your meals: One of the best ways we save money while vacationing is finding a place with a kitchen. We make breakfast and lunch ourselves, and just eat out for dinner. We have also tried carrying a small electric rice cooker. Find a few great soup mixes at REI or World Market which you prepare by just adding water, cook a small batch of rice, and you have a great meal. If you don’t mind cold sandwiches, you can always whip one up with a stop at the supermarket even if you don’t have any utensils.
  • Save money on eating out: If DIY meals are not for you, then start looking at different forums like TripAdvisor and Yelp to find restaurants that offer a good value, especially if you are travelling with kids. Look for restaurants that let kids eat for free. Check out the city’s newspaper and travel brochure for coupons at local restaurants. If you will be dining mostly in a chain restaurant, sign up for their email newsletters to get coupons to use on your trip. It might also be a good idea to start collecting gift cards for those restaurants, either via credit card rewards programs or through discounted gift card sites.
  • Save money on lodging: Similar to the rental cars, sign up for deals with the hotels. Call the hotels directly. (Sometimes this will get you the best deal.) If you are not particular about which hotel you get, you can try Priceline or Hotwire. Though for big cities, they are not my first choice of booking because the parking at some hotels can cost up to $40/day and ruin any savings I made by blind booking. You can try sites like betterbidding.com or biddingfortravel.com to make an educated guess on the possible hotels you might win.

SAVE MONEY ON GAS

Map out your optimal route: You don’t have to map a strict route — where’s the fun in that? But it is always better to have a map on hand instead of getting stuck somewhere without cell signal.

Plan gas stops before your leave the house: I have been using Gasbuddy.com for years now. It is a great way to plan the gas stops instead of driving around looking for a cheaper gas station. You can also use GasBuddy to check the approximate cost of the trip so you can budget for it.

Sign up for related rewards programs: Is there one particular chain that you will be using most of your trip? Sign up for their rewards program. You might be able to save few cents a gallon or get some snacks for free at their convenience store.

FIND FREE OR LOW-COST ENTERTAINMENT ALONG THE WAY

If you have the flexibility with dates, look up the free or discounted days in museums and parks, and plan your trip around those dates. Even if you don’t, try googling “free attractions [your destination city]” and that should point you in the right direction. If you don’t have the time to look through all the results, try the AAA TripTik travel planner app or the Yelp app to get you started in the right direction.

What do you do to save money on your road trips?

Published on March 10th, 2014
Modified on March 7th, 2014 - One Comment
Filed under: Automotive, Consumer, Family & Life, Frugality, Planning, Travel

Which fitness band is best for you?

Written by FCN Staff - 4 Comments

This post comes from Stephanie Koske at our partner site Zing.

I find myself face to face with all sorts of life-changing decisions these days.

Hit the snooze button? Or rise early for a morning workout?

Hop in the elevator? Or take the stairs?

Binge-watch “Breaking Bad” on Netflix until the crack of dawn? Or hit the hay before 10:00 p.m.?

Order the beer-battered fish tacos? Or opt for the grilled salmon with vegetables?

You’re right: these aren’t life-changing decisions, per se. (Though I have had some fish tacos I’d consider COMPLETELY life changing.) But when you consider that making healthier and smarter choices truly can make a difference in your well-being – and even add years to your life – picking the stairs over the elevator seems much more sensible.

It’s not always that easy, though, especially when it comes to putting the remote – and an overflowing bowl of Fritos – down in the middle of a particularly RIVETING episode. Making smart choices and building healthy habits both take serious commitment, and it can be difficult to stay on track without someone to keep you motivated and accountable. But maybe it’s not someone we need to keep us on the straight and narrow. It’s something, like the wearable, smartphone-compatible fitness trackers currently on the market, and on the wrists of everybody and their mother (including my own … now I really feel behind the times).

That’s where my next tough choice comes in: Which fitness tracker bracelet would benefit me most? If you, too, are in search of one of these popular gadgets, check out these overviews of the Nike+ FuelBand SE, Fitbit Flex and Jawbone UP to figure out which one is right for you.

Nike+ FuelBand SE

Price: $149

Band color options: Black/black, black/lime green, black/red, black/hot pink

Battery life: 1–4 days

Here’s how it works…

Nike+ FuelBand SE measures movement for nearly any activity – from cycling to raking leaves – and converts it to FuelPoints (Nike’s universal metric) based on the intensity of your workout. With its sleek display, you can view your steps, calories burned, hourly “move” reminders and time right on the band. Nike+ FuelBand SE syncs wirelessly via Bluetooth to its namesake app for Apple devices only (not currently compatible with Android), which also allows you to share your accomplishments on social media and connect with your friends by challenging them to daily FuelPoints competitions.

The Nike+ Sessions feature helps you understand which activities earn you the most points (say, mowing the lawn vs. walking the dog) and helps you monitor harder-to-track, non-step based actions. When you want FuelBand to differentiate between your regular movement and specific workouts or activities (like yoga), you can press a button on the band to begin a session. Each session gives you a more detailed look at the FuelPoints earned each minute.

Fitbit Flex

Price: $99.95

Band color options: Black, teal, lime green, hot pink

Battery life: 3–5 days

Here’s how it works…

You’ll wear your Fitbit Flex all day – even in the shower – while it tracks your steps, distance and calories burned. By night, the band monitors your sleep patterns and wakes you silently in the morning. All the stats are synced wirelessly with your computer and Fitbit smartphone app for Apple and Android devices (along with MyFitnessPal to enter your daily food choices and RunKeeper to log your workouts), and you’ll have access to graphs, charts and other tools that help you monitor your improvement.

With the Flex, you’ll know if you’re meeting your goals, and you’ll see how your stats stack up against family and friends! LED lights on the band indicate your progress toward your goals throughout the day, and you also have the ability to share your stats and compete with others on Fitbit’s leaderboard.

Jawbone UP

Price: $129.99

Band color options: Black, blue, light gray

Battery life: 10 days

Here’s how it works…

Jawbone UP’s motion sensors track your steps, calories burned and sleep quality, along with your active and idle time. Unlike the FitBit Flex and Nike FuelBand’s wireless technology, this band plugs into your smartphone’s headphone jack and syncs with the UP App for Apple and Android devices. Despite the lack of a digital display, Jawbone UP still keeps the pep in your step with its built-in idle alert that gently pulsates on your arm when you’ve been inactive too long and its smart alarm that wakes you at the optimal moment in your sleep cycle.

The UP App’s Insight Engine analyzes your stats to help you discover connections and patterns in your activities. Along with its easy-to-use meal log feature and mood tracker, it also celebrates your milestones and suggests daily goals based on your habits.

Decisions, decisions. All three fitness trackers will help you measure your progress and manage your stats and, when used correctly, can keep you motivated to make healthy changes and build lasting habits. But while they’re alike in that respect, many of their key features differ and make my choice a tough one. Nike+ FuelBand SE doesn’t have a sleep feature like the Fitbit Flex and Jawbone UP. Fitbit Flex lacks a built-in alert to remind me to move like the Nike+ FuelBand SE and Jawbone UP. And the Jawbone UP doesn’t accurately track non-step based activities (say, Pilates) like the Nike+ FuelBand SE and Fitbit Flex. It’s a toss-up!

Do you use a fitness tracker? Tell us which one works best for your lifestyle!

More stories from Zing:

Online sales tax: What’s the deal?

Buying and Selling Homes in 2014: A More Balanced Market

Decorating Your Home: A Guide for Music Lovers

Published on March 7th, 2014
Modified on February 7th, 2014 - 4 Comments
Filed under: Family & Life

How Expensive Is Your Ego?

Written by William Cowie - 6 Comments

Social media has changed our lives in many ways, but here’s one nobody probably foresaw: criminals brazenly boasting about their deeds on Facebook. Some misdeeds are probably more humorous than deadly, like Michael Baker, who siphoned gas from a Jenkins, KY police cruiser, and then posted a video on the site with many eyes, complete with a bird salute to Kentucky’s finest. Then he boasted about spending time in jail for that.

He’s not alone. All you need to do is a Google search with something like “criminals caught after boasting” to see hundreds of cases. More seriously, pedophiles, rapists and even murderers have been arrested after boasting about their crimes on various social media. One guy even put his wanted poster on Facebook after moving, along with his new place of work and his hours. It was just a matter of time before the authorities took advantage of this and arrested him with minimal fuss.

The first time I stumbled across such a story, I just shook my head and smirked at the stupidity of these criminals. We know most criminals are not the brightest bulbs on the Christmas tree, but actually advertising your misdeeds when arrest could put you in jail for many years? How smart is that?

Then I flipped to my little racing game app. Suddenly, I noticed I’m not that different. Two of the games I play when I hit writer’s block have various levels of difficulty — as you win at a certain level, the speed of your competition goes up and you have a harder time winning next time. Call me cheap (or boastful) but I pride myself on not spending a nickel on these games which constantly entice you to buy upgrades so you can go faster (and beat the competition). Logic says I should always aim to come in second because that still gives me good “prize money” to use on upgrades. But I find myself constantly trying to win, when all that does is up the ante, making it more difficult to get that prize money because the competition gets better at every level. Nobody sees me, not even my wife, but I still drive to win even though it costs me.

That’s what unites me and those criminals with, shall we say, a common sense deficit: the price of our ego. They would rather go to jail than pass up the opportunity for people to envy or respect them. Well, I tell myself I’m not quite that bad, but my choices reflect the same tendency to pursue my ego, even if it gains me nothing, while costing me. We aren’t the only ones, those criminals and I. Just look around you, and don’t skip over the mirror so fast. It doesn’t take long to notice how many people do things that cost them in one way or another, all to look or feel better.

Logic often falters in the face of ego

An ex-colleague and his wife went through a patch of financial hardship a few years ago and the day came when they needed to replace her car. She could have gotten a good used Corolla for something like $8,000, but she demurred. Her job, she said, required her to get an SUV. There were times, she said, that she needed to cart cases of eats and drinks around for her employer, and a humble Corolla (like my wife’s) or reasonable facsimile would simply not do. She “needed” that $15,000 SUV. That hauling capacity was required maybe six times a year, and a truck or minivan could be rented for those occasions for less than $500 a year. Compare that to the $7,000 price difference. That logic simply cut no ice with her. It didn’t take long to figure out the “employer” thing was simply a smokescreen. She wanted that SUV, and nothing would stand in her way, logic least of all. The price on that little SUV was “such a terrific deal,” they simply couldn’t pass it up. (As an aside, have you ever met someone who didn’t think their car was “a terrific deal” when they bought it?) They’re still in a hardship situation… but she has that SUV.

Lest we be too hard on our ex-friend, there are many areas of our lives where shrewd marketers have succeeded in convincing us that we simply have to hand them more money so we can feel good about ourselves. Is Starbucks coffee really that much better than the brew offered next door? Maybe not, but no self-respecting worker wants to be be seen entering the office with a paper cup from a cheap coffee place in their hands. Same with purses, sunglasses, sneakers (anybody still wear those?) and phones. If you really have to be part of the iPhone revolution, why not buy a perfectly good iPhone 4 on eBay for $200, rather than (effectively) $700 for a new 5? The newer one is not more than three times better, no matter what criteria you use (coolness, of course, excepted).

Many of our parents and grandparents were perfectly happy in a Levittown house with about 900 square feet, one bathroom and no garage. Those things were so hot in the ’50s that their developer made the front page of Time magazine. When was the last time that happened? Today, things are different. Now it’s McMansions or their (only slightly) smaller cousins. Do we really need more space for our smaller families, or can it be that we simply would feel embarrassed to invite folks over to a Levittown house?

Employers know this too. How many excellent salespeople have accepted a promotion to sales manager, which actually pays less?

Ego is a choice

As we’re riding the tail end of this economic cycle, are you utilizing that little bit of extra income to boost the emergency fund or get caught up with the IRA, or are you finally getting that thing you’ve been wanting for the past few years but couldn’t quite afford until now? A friend who really “felt” the last recession recently bought a new Buick Enclave, the poor man’s Escalade (poor being a decidedly relative term here). He looks good in it, gotta tell ya. And it is a peach. U.S. News even ranks it the #1 affordable midsize SUV today. For $40,000 (terrific deal, of course). Could he have gotten a perfectly nice vehicle, similar, for half the price? Of course he could.

How about you? How expensive is your ego? What are you driving or wearing, compared to what your geeky left brain says you could have done if nobody ever saw you? How do you rationalize the (always terrific) deal?

Published on March 5th, 2014 - 6 Comments
Filed under: Consumer, Frugality, Saving & Investing

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