College Financing: Budgeting Without Boredom

Truth #1: College is meant to be fun! Truth #2: Too much fun can totally ruin your finances! Fortunately, there are several ways for you to preserve your finances without limiting your fun to the point that college becomes a bore! Here’s a look at some great ways to manage your money, and have fun at the same time!

  1. Know Your Funding

The first major way you’ll save money in college is by knowing what money you have to begin with. A lot of college students use their Work Study positions as a personal Entertainment Fund. That’s all well and good if all your college expenses– from tuition to the outfits you’ll need big presentations– are already paid for. But there’s nothing worse than spending all your cash on fun and games, only to have a professor spring a new required reading or class trip you now don’t have the money for. Figure out how much of your earned money, and savings, you can put towards paying off any outstanding school balances, if it’s worth it to use your job payment that way (which it almost always is, even if you’re not making hundreds), and what you can stand to put to more personal use, like checking out that new Blockbuster your friends want to see this weekend!

  1. Set an Allowance

A great way to keep yourself from spending more than you can afford to in college is to set an allowance. Whether it’s setting aside just twenty dollars for a weekly entertainment and recreation fund, or splitting your paycheck in half to pay for necessities and luxuries, figure out how much you can allow yourself to spend without putting yourself in the hole. It may sound weird to set an allowance for yourself, but even some major banks are starting special programs for college students that only allow account users to charge certain amounts to their accounts. Setting your boundaries yourself helps you both keep track of your money, pick and choose what you really want to spend it on, and make sure you’re not spending more than you can really afford to. And don’t cut yourself too much slack; if you overspend your allowance one week or month, cut back on your allowance the next time! It might help to have a trusted friend keep you accountable by reminding you you’re on a “fixed income” when you’re talking about going out to dinner again!

  1. Learn to Say No

When I was in college, friends were constantly suggesting day trips, dinner outings, and other fun activities I just couldn’t afford. Unfortunately, I had not mastered the art of saying “No” to them; on several occasions I spent money I knew could have been put to better use on trips that were fun but costly. Learning to say no to your friends, and yourself, helps you to keep from spending more than you should just because you can. Friends will always want to spend time with you, and may not think about the fact that you’re pressed for cash if they can afford to do whatever it is they’re suggesting! On some occasions that I said no to activities, some friends mistook my inability to afford those activities for an unwillingness to hang out with them. Though it’s not your job to explain to your friends that you either don’t have the money to do certain things or are trying to put your money to better use, it’s also good to let them know that as much as you like hanging out with them you like taking care of your finances a lot, too!

  1. Pick the Right Meal Plan

This suggestion seems a little out of place in the midst of the rest, but trust me when I say picking the wrong meal plan can be costly when it comes to paying the college bill. Let’s say you have one meal plan that’s $2000 for unlimited access to the cafeteria and includes $100 flexible spending dollars for meals in other on-campus restaurants or cafes; you have another meal plan for $1500 that offers just 10 meals a week in the cafeteria and $600 in flexible spending. If you’re a student who always has time for a meal in the cafeteria, the first meal plan is a better deal because you get all the meals you want in the cafeteria with a little money on the side you can use for movie night snacks or the occasional quick snack between classes. If, on the other hand, you’re never around during the cafeteria’s meal hours (many have set hours for breakfast, lunch, and dinner), the second plan is better for you because with the first plan you’d wind up with more meals than you’d ever use and no way to eat! Look at your class schedule to see when you can eat, and compare that to the times different places on campus are open for you to eat. Check your work schedule, too. You’d be amazed at how much you can shave off a tuition bill by picking a cheaper meal plan without starving yourself! And make sure you use your meal plan; if you opt for a plan that offers unlimited meals in the cafeteria, don’t let friends convince you to eat off-campus every other night!

  1. Living Expenses -vs- Livin’ Expenses

This is basically to say: know the difference between what you want and what you need. Sure, that new iPod might be really cool, and can hold your entire three week collection of music. But is it really more important than getting the supplies you’ll need for your Chemistry and Computer Science classes? Probably not. Don’t waste money on things you want when there are plenty of things you need to spend your money on! That includes trips to amusement parks that could have been trips to the museum to research for your Art History class, or renting that multi-disc classic version of Pride and Prejudice starring your future husband Colin Firth when you could have been watching the version of Romeo and Juliet your professor recommended as a great external resource for your English class.

  1. Find it for Less

What applies for buying clothes in college applies for buying just about anything else. Learn to search for the best bargains on everything you buy, from dorm decorations to appliances. Make sure you’re buying the things you really need. Is that flat screen television a necessity? Could you get away with using your parents’ spare floor lamp instead of buying a new one? Many of the common dorm necessities you’ll need can be found at thrift shops; just make sure the things you buy work before you get them home! Check out online sites that offer discounted prices, item swaps, et cetera. Does your campus have any public billboards where students and organizations post flyers? These will often be filled with advertisements from students looking to unload some unwanted goods. Check these out during the first week of school (when many students realize they’ve packed too much and can’t keep it all), at the end of the semester (when students will unload their books, class supplies, and other items), around the week students will receive notification of their acceptance to a study abroad semester (that’s usually between the last week of one semester and the start of the next), and at the end of the year (when many students want to get rid of anything from unwanted books to refrigerators and televisions they can’t take home). Trust me when I say that those campus billboards are your friends; people advertise everything from clothing-swaps to CD and DVD sales. Every once in a while when I was in college, I’d see an advertisement for the sale of a used car when a student either received a new one or had no more use for it. You’ll find just about everything you could ever want advertised on those boards.

  1. Limit Your Address Book

Lots of college students fill their cellphone address books with contact information for just about everyone they’ve ever met. This leads to the temptation to send text messages to just about everyone you’ve ever met. Limit unnecessary spending like text messages to people you really need to get those messages to. Usually the same information students will send via text message could have been sent in an email, by way of another friend, or the classic sticky-note-to-door maneuver. Take advantage of the free services your campus offers: free calls to different dorm room extensions, email, etc. Instead of running up your cellphone bill, use these resources to save yourself some extra money during the semester. Let friends know the times you can be reached on your dorm room phone verses your cellphone. If you have free nights and weekends, try to limit your talk time to then. Save up your minutes for that long distance call to your parents every weekend. Let friends know if they’re sending you too many messages that you’re paying for. Don’t be afraid to set boundaries concerning when people can call and/or message you. Even if you’re only paying a few cents per text message, believe me, after a while those nickels and dimes can really start to stack up against you. Limit your messages to important things. (In other words, no, “I see u!” texts from across the room in the library.)

  1. Thrift is the New Black

Isn’t it great when college savings and fashion align? Well in the case of thrift shopping, we’ve stumbled upon a dream come true! On colleges across the United States, thrift is officially the new black. It’s cool to buy used. I can’t count the number of times I heard the following exchange on my college campus: “I’m headed to Sal Val [Salvation Army].”/ “Oh, can I come?!” College students are quickly becoming the prized possessions of Good Will and Salvation Army workers across the nation! If you just have to get a new shirt or pair of jeans, trying buying a used pair from the thrift store before you fork over some hundred dollars to a place like Urban Outfitters to simulate that used, worn-out look!

  1. Beat the Books

I once had a college professor muse, “You know, if you were really smart, and really wanted to save money on your text books, you could just check the book out of the library before we start using it. The check-out period lasts for longer than we’re even going to be using the book!” That is so true it isn’t even funny! This clearly doesn’t work for all your classes, but it doesn’t hurt to check. Find out if the library on campus, or a library close by off-campus, has any of the books you need for classes. Plan ahead so you can check those books out of the library before your class starts studying them, and you’ll save potentially hundreds of dollars on books! Another way to beat the bookstore is to find friends or fellow classmates who have the same class with the same professor at a different time, even if it’s only five minutes apart. Split the cost of your books with people taking the same class at a different time (note: it’s important to be sure you’ll actually be using the same books). You can debate who gets to keep them later; for now, you’ve cut back majorly on the cost of your text books!

  1. “Let Us Entertain You”

Lots of college campuses campaign for your attention on the weekends; try opening your eyes and seeing what they’re offering before you go gallivanting off-campus! Many colleges have dollar or $2 movies, sports events, free dances, and even free concerts. Colleges host these events over weekends and even during the week. And it’s all usually dirt cheap! At my college, the Student Activity Board brought in some amazing performers like Rosie Thomas, Regina Spektor, and Nickel Creek for anywhere from $15 to free admission. Most of the things you’d like to go off-campus to do can be done on campus for next to nothing. Instead of running to Blockbuster to rent movies for the weekend, check if the campus library has a copy of the film you’re interested in. Why pay to go to a sports emporium when you’ve got a baseball field, tennis and basketball court, track, and more right there on campus? Find things to do on campus instead of leaving the campus and increasing your chances of spending money on things you don’t need.

Refinanced Your Home Lately? Be Prepared for the Unexpected!

Unless you’ve been hiding under a rock, I’m sure you’re heard that home mortgage rates are at all-time lows. But unless you’ve recently refinanced, what you may not have heard is that the process can be nothing short of a nightmare-for you and your Loan Officer. That’s right-money may be cheap these days, but ‘easy’ it is not.

Let’s start with the obvious, your home’s value. Gone are the days of the “Do you have a pulse and can you fog a mirror?” loans, where stated values were used. And back in the ‘old days’ when lenders did require a licensed 3rd party appraiser to inspect and photograph your home inside and out and analyze a multitude of data to determine the price your home would fetch in an open and competitive market–the appraiser’s opinion of value was generally accepted, with few questions asked.

But no more! With the housing market crash, no matter how much an appraiser justifies value, chances are it’s not going to be accepted. In a lender’s foreclosure, it’s this always changing difference between your home’s value and what you owe that can literally ‘break their bank’.

Whether it’s before your loan closes or after you default and your lender forecloses, they want to make sure your home can be sold for enough money to pay off your mortgage balance and all associated costs they’ll incur in getting rid of your home-which costs, according to the Joint Economic Committee of Congress-can average a whopping $77,935!

THIS is why your home’s value is critical -can your equity absorb your lender’s cost to foreclose? And the nightmare in today’s market? No one can figure that out! It’s like trying to appraise a pile of crumbling rock during earthquake after-tremors. Lenders need more valuation proof. They want more “comparables”-recent sales of nearby homes like yours-as many as 5 and 6 rather than what used to be the standard 3. And if you’re watching “For Sale” and “Foreclosure” signs proliferate in your neighborhood for months on end, then you’re right in thinking appraisers must be having a difficult time finding 3 cookie-cutter open and competitive market sales.

Lenders also want more neighborhood data like foreclosure and short-sale trends in the ‘hood’. They want more ‘desk reviews’ (that’s when an appraiser in NY City sits at a ‘desk’ and reviews a local South Carolina appraiser’s opinion of value on a quaint little country home in the Low Country), and more “AVM’s”, an automated valuation model using scientific measures and computer decision logic, versus a human’s inclination and actual details of the home or transaction.

Here’s a real example of a recent refinance my Loan Officer colleague had to deal with:

His borrower was refinancing to a lower rate where the first appraisal came in at $287,000. The homeowner knew his home’s value was low-balled. So another appraisal was ordered, which came in at $345,000. That’s a big $58,000 difference, his equity. Next, the lender ordered the “AVM”, which is like selecting a spouse from an on-line dating site based on nothing but physical stats. And what happens? Well, of course, the “AVM” result was that it can’t support the $345,000 value. Next came the dreaded desk review, performed by an appraiser who wasn’t familiar with local market conditions and who didn’t physically inspect the property, neighborhood or comps. So naturally, the desk reviewer (who’s also covering his ‘backside’) goes conservative at $284,000. And which figure did the lender use? $312,000. Are you scratching your head yet? And, you want to hear the worst part? The cost for determining value is the borrower’s responsibility. In this particular case, what should have been a $400 appraisal cost ended up being over $1,100!

To summarize, if you’re thinking about refinancing, brace yourself. Yes, take advantage of today’s low rates if you can, but be prepared in today’s market that if you ask 5 experts what your home is worth, chances are, you’ll get 5 very different opinions.

How I Stopped Fretting About Finances and Learned to Manage My Money

Growing up in my family home taught me a lot about living frugally. I have early childhood memories of the abundance of food our family enjoyed. All of this food largely came from my family’s farm. I remember the rows and rows of potato plants rising up from mounds of newly tilled soil. Tomato plants, green peas, cucumbers, onions, squash, there were so many delicious foods that came from my families garden every year. My parents didn’t seem to worry about financial success when they had all this abundance of nature’s bounty around them.

My father contributed to our family’s finances on a daily basis by doing a variety of home maintenance and car repairs. He chose to do this himself rather than pay someone else to do this work. My Mother sewed many of our clothes. Growing up in my family should have prepared me for many skills to live frugally. I had to wonder though if there is a difference between living frugal and knowing how to manage money. It seemed to me my parents never had any money to spare.

I realized only after I lived on my own for awhile that I had depended on my family’s resources, without really learning how to put those resources to use in my own life. I was different than my parents. I wanted to buy my clothes from a store. I wanted to live in town. I wanted shopping trips. I also wanted to manage my money with enough to go around to the end of the month, and from one day to the next. I wanted to have financial intelligence.

Here is What I Learned About How to Manage My Money:

— Keep a daily record (Mundis 94). I vowed to track my spending. I would carry a small notepad with me everywhere. Anytime I spent even .05 cents, I would write it down in the notepad. My record included what I spent my money on. I would find out where my money was going and how I was spending my money. I would stick with the daily record and not add anything to it until I was sure that I could track all of my spending. I would know exactly what I was spending my money on each and every day.

— Keep a weekly record (Mundis 97). In my weekly record I review where I have spent my money. For example, 5 dollars on coffee, 50 dollars on clothing, I made a weekly form to fill out tailored to my own needs. This is a form I could understand since I made it myself. This form would allow me to see my spending habits for one week. Along one side I put the areas where I had spent my money, such as, clothing, coffee, laundry, entertainment, groceries. I put columns all the way across with a total for each area of spending at the end. Once I had my totals for each area then I could add these combined totals for a complete total of spending for the entire week.

— Keep a monthly record (Mundis 98-99). The monthly record is an overall view of spending for the whole month. Again I made my own form, which was easy for me to read, for recording the amounts. I wanted to be able to see my spending habits, but I didn’t want to spend hours on a complicated budget sheet someone else designed. I wanted a financial plan simple, and tailored to my own needs. Once I had completed my first month of record keeping, it was easy for me to see many areas where I could make changes in my spending habits.

— Stick with a financial plan (Mundis 128-134). After reviewing my spending habits, it was time for me to decide how much money to spend on individual areas for the upcoming month. With my record in hand I was now prepared to make better decisions. For example, I lived one block away from a convenience store. After reviewing my monthly spending record, it was easy to see I spent close to 40 dollars a month at this store on snacks alone. I could cut back on some of these snacks and also I could purchase these snacks at various retail stores in the area, where the prices for these items would be much lower. Finally, this included my last form showing my financial plan for the upcoming month. At the end of each month I could compare my financial plan to my actual spending. Sticking with a plan would allow me to create a money surplus.

A Word About Spending Areas

Since this was my money, I decided how to spend it. I decided to have an area for entertainment, and shopping trips. Maybe I didn’t want to be rich, but I did want to enjoy life, not all fun costs money, but I couldn’t forget about the shopping trips. I would set some money aside for just the fun purchases, a new pair of shoes, or blue jeans, flowers, a vase, or a book to read, things I would personally find pleasure with.

Debt

I decided to be consistent about paying off debt. No matter how much or how little I could pay, I would never miss a payment. I would not make any new debt. If I couldn’t pay cash or figure out a way to save my money for a larger purchase, then it would have to wait. “Just for Today, One day, Do Not Incur Any New Debt. Not one. Don’t borrow $ 2 from a friend. Don’t accept a service you plan to pay for later. Don’t take a loan from a bank. Don’t charge anything on your credit card” (Mundis 83).

Plain Speaking on the World’s Cash Crisis!

Global cash crisis! We hear this screamed from headlines and news channels every day, but to the layman the language used is so confusing, it becomes lost in a meaningless gobblygook of deficit, and spending to return ratios, a concept for most of us that muddies exactly what is happening in terminologies beyond our normal understanding.

Let us speak plainly about world debt so we can perhaps learn by the lessons put before us. The more we spent – with offers of buy now pay later or interest free credit – the more in debt we became to banks and money lenders! To continue funding our drive for more and more credit the banks had to borrow from each other until they too ran out of money. Now a country can not survive without a stable banking system so in steps the reserves, lent to banks by governments to strengthen the deficit until these too ran dry. The only option left to countries was to borrow from other countries like a flue virus it was airborne! Now every country on every continent in the world is in debt!

So what can we do about this crisis? We could turn to charts and graphs and analyze the hell out of the problem until it becomes so vast and incomprehensible that we will end up analyzing the analyzed, or we could just simplify it all in ways we can understand.

Lets pretend each country is a person, and we have ten people owing each other money! The first thing to do is work out who owes what to who. We might find that number one person owes number two, and number two owes number three who owes money to number one, then it becomes a closed system where everyone is waiting for the first person to pay up so they can pass the money on to whoever they owe, a little like three people being locked in a room with a flue bug and passing it around forever without end. Like passing the parcel around and around, holding it for a moment and feeling rich but then having to hand it over to the next person, an endless circle of “I am owed what I also owe!”

How can we break this system? How about just saying? “Look you owe me, I owe him, he owes you, lets forget it and get back to making money!” It has been done before, many countries have been in debt to us, and others, and for concessions or trade agreements we have wiped the debt to move forward, we just need to talk to each other.

The only real problem is in the possibility that we all have ended up borrowing from the same person! If this is the case then we would all have to pay this person back, making us weaker then we already are, and them stronger, but that could never happen because especially in the world of finance, being the only lender creates a little thing called monopoly, and after all that is illegal!

What to Look for in a Debt Management Program

Everyone probably has debt. In fact, a survey shows that at least 70% of American households have credit card debts and this is because they spend more than they earn. If you are looking for a way to achieve debt relief, debt getting a debt management program might just be the best way for you to achieve a debt-free, worry free life.

If you have debt, you are probably always facing a barrage of phone calls from collection companies right now. Your first impulse might be to ignore these calls as we sometimes ignore the unpleasant things in life, hoping they would just go away. But these debt collectors wouldn’t go away. They will hound you and the best thing to do would be to face them now before things go worse. The best thing for you to would be to get into a debt management program. What are debt management programs anyway?

Most of your creditors wouldn’t want to settle your debts with you. They would want to bring a third party into the scene and most of the time, these are debt counseling agencies with debt management programs. These agencies will be the one to negotiate with your creditors and will be the one to budget your monthly payments in case you have a number of debtors. On top of that, they provide counseling to make sure that you don’t go back into the same routine again and even get deeper into debt.

However, not all debt management programs and debt counseling agencies are created equal. There are those who are better at helping you and here are some of the ways to find them:

A good credit counselor

A debt management program is indeed catered towards helping you pay off your debts but most importantly, it should incorporate a program that will help you better manage your finances. As such, a great program should be carried out by a good credit counselor who will help you budget and explore other options when it comes to debt relief.

Licensed and accredited

There are a lot of scammers online posing as the solution to your debt problem. The best thing to do would be to make sure that before you get into any of their programs, they are accredited and licensed by your state just so you are sure that you are dealing with a legitimate company. The last thing that you need is to get scammed out of your hard-earned money and find out that your creditors haven’t been receiving any of your payments and you now have to face a huge amount of penalty fees and other charges.

No or minimal upfront fees

Most agencies ask for an upfront fee before you can enroll in their debt management program. The average upfront fee is $50-$100 dollars, don’t pay any more than that. Also, don’t get tricked into paying an acceptance fee, and then an application fee, and then a consultation fee and so on.

There are a lot of credible, trustworthy agencies out there. Just do your research and you should be able to find one that could help you achieve a debt-free life.

If you think this article is interesting, you may be interested in this Debt Collection article.

Should Married Couples Share Their Finances or Keep Their Money Separate? Part 1

Whether you are just getting engaged, in the honey moon stage, or have spent a life time together; the question of combining money is extremely important for most to make and only a passing thought for others.

The tradition of automatically pooling funds can be hard to break. It works well for some couples but the discussion of whether to pool your funds, keep them separate or a combination of the two is often a very difficult subject to approach.

Money problems are often cited as the most common trigger for arguments and one of the top reasons that married couples get divorced. Before walking down the aisle couples should spend a great deal of time discussing their feelings about money and deciding how they will handle finances from paying the electric bill to vacations to retirement. At the same time they should decide whether or not they will share their money, in whole or in part or not at all.

While the ultimate decision varies from couple to couple – many financial advisers recommend that married people each have some separate finances (including bank accounts and credit cards) and have a joint account for certain shared expenses (such as mortgages, child care, groceries, investment goals, etc.).

Separate Not Secret – Please keep in mind that separate does not mean secret. Avoid financial secrets as any secrets can be devastating to a marriage.

Some of the Basic Reasons to separate accounts include:

From simple things like:

Avoiding the frustration when your spouse forgets to tell you about checks written, ATM withdrawals, charges on your credit cards, or an eBay addition.

Protection – Protects at least the separate portion of your money from these factors as well as when there are more difficult issues that can arise when a marriage goes sour.

To more complicated Financial Issues:

Examples include those that are brought into the marriage, such as:

Issues from previous marriages, child support, alimony,

When one spouse brings a ton of debt into the marriage,

If one spouse is a spendthrift, a gambler, impulse buyer,

If one spouse gets the “its my money” bug. or

If one spouse brings a great deal of money, property or an anticipated inheritance in. (This is a good time to ask “Do you need a pre-nup?”)

Be sure to look out for Part 2 of this article to learn more and to help you decide if sharing all of your money with your spouse is right for you.

If you have feelings as to whether or not couples should share finances or example of good or bad experiences related to sharing (or not) finances please feel free to share them below in the comment section. The more people know about the good and bad that can occur the more likely they will be able to make a comfortable decision as to how to handle their own situation.

Please follow me to receive updates and new article so that you will not miss anything. Feel free to leave comments or suggestions for new articles, if there is anything that you would like to learn about investing or any of the other topics that I will be writing about.

5 Ways to Organize and Stay on Top of Your Finances in 2011

If 2011 is going to be the year you get ahead financially, you need a plan to stay organized and on top of your bills and cash flow. Missing bill payments, spending without a budget and not monitoring your bank accounts can end up costing you in the long run, and will make it harder to keep your financial house in order. Getting your bills and cash flow organized is essential for staying on top of your finances in 2011m and these activities can also help you budget better all year long.

Use these five tips to stay organized and on top of your finances in 2011:

  1. Create a budget blueprint. You can use financial software to make a budget, or just create your own using your favorite spreadsheet software. The goal is to create a basic outline of your cash flow – a comprehensive list of your monthly fixed and variable expenses, all of your income sources, and any big purchases you expect to make within the next six to twelve months. Use this blueprint as a guide and reference it regularly (see #2) to keep your finances organized.
  2. Review and revise your budget at least twice per month. Keep a close eye on your expenses and make sure all of your bills are paid on time by reviewing your budget or cash flow statement at least twice per month. Make sure you write down confirmation numbers of bills you paid online so that you can correct any mistakes easily.
  3. Pay your bills on a schedule. If you can’t pay bills as soon as you receive them, at least have a plan to pay them on a specific date – well before the due date. One of the easiest ways to organize and stay on top of your finances in 2011 is by creating a bill payment schedule or calendar. Keep this calendar or schedule in a visible place so that you never miss a bill payment again.
  4. Create a monthly checklist of luxury or extra expenses. Are you planning on purchasing a big-ticket item this month? Are you looking to splurge on something for a special occasion? Create a list of these “upcoming” expenses so that you can add them to your budget and keep track of your expenditures. Forecasting your expense in this way can help you better organize your finances and may also prevent you from overspending.
  5. Open at least one checking account at a local bank. Even if you do most of your banking online, stay organized and don’t worry about check cashing by having an account at a local bank. Open a checking account at a local bank so that you can get an ATM fee-free debit card, and also cash your checks without having to pay a fee. Make sure you understand what your limitations are with this account and that you understand the minimum balance you have to maintain in order to avoid fees.

Managing Expenses for an Audit

Tracking your expenses is an integral step in managing your business’ finances. Unfortunately, merely writing down what you spend doesn’t cut it anymore.

When the IRS wants to have a look at what you’re writing off, or a potential acquirer for your small business wants to see how you spend your money, without any expense organization, you could end up deep over your head.

The following three tips for expense management will help survive your next audit:

1) Keep All of your Receipts

Anytime you spend over $75 on a business expense the IRS will require a receipt for it. But any business expense under $75, you are required to provide “convincing documentation” that the expense was actually incurred for a business purpose. While a calendar entry will provide some proof of a business expense, leave no doubt in your auditor’s mind by saving and collecting all of receipts, not just the expensive expenditures. There are plenty of portable receipt scanners out there such as ProOnGo Expense and Neat Receipts, but whatever you do, make sure you have a way to easily collect and store your receipts.

2) Log your Miles

Warren Buffet wrote-off his bicycle on his first income tax statement as a transportation cost at the age of 14. While you may not ride a bike to work, you can certainly write off the miles you drive. If you drive 20 miles round trip for work every day, then you could can write-off $10 for every day you drove to work in 2010.

3) Track both Business AND Personal Expenses

If you’re undergoing an audit, the main objective is to convince the auditor that the numbers you keep are dependable and accurate. This is why keeping track of your personal expenses, in addition to your business expenses, can give your auditor more confidence in your math. If you demonstrate you have a full understanding of what you can and can’t write off as business expenses, you will instill that much more confidence in your numbers.

An audit can be a major headache. Fortunately, expense management is a powerful tool in protecting yourself in case of an audit, so make sure you take the proper precautions the next time your write off your next business expense.

 

After Christmas Sales for 2010 May Have Fallen Short of Expectations

In the past many shoppers have been persistent in their efforts to find the ultimate bargains after Christmas. Retailers also anticipate huge crowds after Christmas as they continuously boast about the sales and bargains that customers will receive. They are hopeful that customers will come out eagerly buying that gift that they did not receive for Christmas. December 26, 2010 the crowds were smaller than expected. This reduction in the after Christmas shopping crowd came as a result of either in climate weather or just overall lack of funds. Now on the east coast in particular crowds were low because it was slammed by snowstorms. These snowstorms kept many would be bargain shoppers at home. Some stores were even offering extra discounts to people who were bold enough to fight through the storm to continue their shopping. Now the economic factor played a role also in the low customer turnout for after Christmas sales. If you really think about it, from a financial standpoint people cannot spend what they don’t have. Then there were some people like myself who were just overly frugal. Like other people I want to be able to weather the economic storm that we are going to face in the United States in 2011.

I went out to do some shopping but my purchases were so minimal I noticed that the after Christmas sales were not as good as they had been in the past. One thing that I observed while shopping was that most people were using cash instead of credit cards when they made purchases. I also refrained from using my credit cards because it makes no sense to be paying for items next year that were purchased the previous year. People are trying to get out of debt. Reduced consumer confidence also played a major role in people spending less money after Christmas. One stunning fact that consumers realized this year is that they have to get back to reality after the Christmas holidays. They took in consideration that they have to be prepared to live the other 364 days of the year.

Bloomberg News, Snowstorms smothers index after Christmas shopping, New Jersey Business.com

Gray Pilgrim, After Christmas Sales 2010, Buzzle.com

Bankruptcy Alternatives: Debt Relief Orders (DRO)

Due to the long-term problems of bankruptcy filing, which go beyond the mere consideration of a ruined credit record, many will seek one of the alternatives to bankruptcy. One key way to avoid bankruptcy is to consider applying for a debt relief order.

Avoid Bankruptcy: What are Debt Relief Orders?

Debt relief orders came into effect in the UK in April 2009 as an alternative to bankruptcy. A debt relief order is designed to help those who can not pay off their debts seek refuge from creditors and restore financial health within a 12-month period.

Should a court decide to issue a debt relief order, then the individual is protected from further actions from the listed creditors for the period of the debt relief order, which usually lasts for 12 months. Further more, at the end of the period all those debts which have been listed in the debt relief order will be written off.

 

Despite the benefits of a debt relief order, during the period of the debt relief order the individual will still have to make payments to any creditors which have not been listed on the debt relief order. In addition, at the end of the debt relief order any debts which where not listed will still have to be paid off in full.

Bankruptcy Solutions: Who Can Apply for a Debt Relief Order?

One can apply for a debt relief order as an alterative to bankruptcy if the following circumstances exist:

Level of Debt – The level of debt should not exceed £15,000. These debts must be considered as “qualifying debts”. Qualifying debts are usually unsecured forms of debt including rents, credit card debts, overdrafts and other unsecured personal loans.

Disposable Income – In order to apply for debt relief orders one must have a disposable income of less than £150 per month.

Personal Assets – To apply for a debt relief order an individual must not have assets greater than £300. This excludes motor vehicles; here an individual can only qualify for relief if they own a motor vehicle worth less than £1,000.

Residence – To apply for a debt relief order one must have resided, worked or owned a property within England or Wales for the last three years.

In summary, if one has personal unsecured debts less than £15,000, seeking a debt relief order may be a cheaper and less stressful option than going bankrupt. However, whilst debt relief orders offer a credible alterative to bankruptcy solutions, a debt relief order may not be suitable for everyone, especially where significantly large levels of debt have been amassed.