Paperwork Pile-up

I have been extremely busy lately, and my desk became overwhelmed with paperwork. You know the kind: too important to throw out, but not important enough to deal with at the moment. I finally spent half an afternoon playing catch up and I feel as if a weight has been lifted off my shoulders.

My desk is now organized, my billing statements are nicely arranged in a binder and I can once again see my desktop. Keeping on top of your financial paperwork is important though. From retirement account statements, bank statements, cell phone, cable, insurance, ect, it can get a little overwhelming from time to time.

Do you have a system of financial organization? I'd like to hear from you. Comment on this post.

Reminder- Daylight Savings Time Ends

Most people have a hectic schedule so be sure to take a moment and set your clocks back one hour before you go to bed. This will give all of us an extra hour to sleep, catch up on bills, relax, or whatever. The actual time change happens at 2am Sunday morning at which point it becomes 1am. I wonder if the auctions on ebay are affected?

Pets- Depreciating Asset or Quality of Life?

I know many of you have a pet of your own, your children have pets, or you know someone who does. A trip to the local pet shop leaves everyone with smiles after picking out the family's first adorable furry pet. Once the initial moment passes and the clouds clear, there is quite a bit of underlying costs to owning a pet. Some people can't live without their pet and treat them as well or better than a human family member. Let's take a brief look at some of the costs associated with pet ownership and the ROI- Return on Investment from to angles, financial and emotional.
Let's say your family just bought the cutest kitten in the world that just couldn't be passed up. You could be one of the lucky ones getting it for free to a good home in your local classifieds, or on the other end paying a premium of $250-$400 for that soft ball of fuzz. Kitty needs to be checked out by the vet- $35 for a general visit plus additional charge for a stool and/or urine sample. As your new kitten grows, a series of shots will need to be administered by your vet- shots $5-$30 per visit in addition to the $35 vet service charge for showing up at the counter. Cat food can vary greatly depending on the quality you plan to feed your new loved one or the frequency of sales or coupons for the brand of cat food you purchase. Top quality Eukenuba costs $18 for a 6.5 lb bag. Then there is a litterbox to consider, $8 for the starter disposable trays to $25-50 for a litter box with lid, scooper, and baggies included. Back to the vet for an annual checkup if your cat has had a healthy year. Otherwise, there are medication and treatment costs to consider. More and more people are looking to pet insurance to cover medical expenses for their pet. From a financial standpoint, the ongoing maintenance costs after the initial sticker shock on your cat's collar is nothing to sneeze or meow at. So there is a solid case for pets as being depreciating assets.

Now lets look at owning a pet from an emotional or quality of life standpoint. How many times do you come home from work and your dog or cat is right by the door to welcome you home with rubs or kisses? Not too many humans are consistant in that regard. How many times have you felt sad, depressed, or stressed and when your pet comes into the room or is close by, you almost instantly feel a little better inside. Some people believe animals are capable of loving and they do provide good companionship. As a relative ages or nursing home members are visited by pet charities to help cheer them up and make life worth living, does the value of a pet increase? Emotionally? Financially? Both?

Pets may not rank up there with a new car during a mid-life crisis, but they have thier own intrinsic value that maybe a price can't be placed on. Regardless of what side of the fence you decide to sit on, pets can be a worthwhile investment if not financially, in many other aspects. Buying a pet includes the responsibilities and costs that go along with them. Be sure you have the financial backing to be a responsible pet parent. It will pay off rewards in the long run in ways a greenback never could.

Tim Haibach
personalfinancedaily.com

Kiplingers.com has Clean New Look

Looks like the crew over at Kiplingers.com has been burning the midnight oil. The publishers of Kiplinger Personal Finance magazine, the first finance magazine in America, has a new look on their website that is both more informative and easy on the eye. Highlights include dropdown menus, segmented areas for Starting Out, Investing, Spending Wisely, Your Money, and Your Retirement. I'd like to mention that Starting Out is targeted strictly for those in their 20's-30's and is a good starting point before browsing the endless informative articles that Kiplingers.com has to offer.

Don't worry, for those who frequent the Kiplinger Forums, those have remained in tact. The link from the left hand menu entitled "Site Map" takes you back to the old familiar start page. What do you think of the new look? I'd like to hear from you. Post your comments at the end of this post using the comment link provided.

Featured article- "Student Loan Overload" at SmartMoney

In an article titled "Student Loan Overload" found on the Smartmoney.com website, three options are mentioned as possible solutions when faced with repaying student loans with ever increasing payments. Many former students including myself are lured into the college=better job/$$$ mindset which doesn't always hold true. Unless you are willing to relocate nationwide to follow decent paying job opportunities, you are left with the leftovers as was the student mentioned in the article who ended up as an electronics store manager in Massachusetts where the cost of living is much greater.

If you find yourself in this situation, talk to your lender and make them aware of your situation. It is best for the lender to work with you than to pay for a collection agency to recover a portion of the full balance owed. Unfortunately, private school loans are not able to be consolidated at a fixed rate like Federal Plus loans are. It may be worth reconsolidating to combine multiple loans into one payment with a reduced variable rate. It doesn't hurt to shop around.

College doesn't guarantee you a good job any longer and you're lucky if you score an interview. For those of us who already bit the bullet, review the steps in this article to see if one of the 3 options may be viable to you. The full article can be found here.

Time Value of Money and a Financial Calculator- A Powerful Duo

When is the last time you have heard the term TVM, if ever? This stands for Time Value of Money, and is a very powerful concept that may help assist you in making important financial decisions in life. What are some examples of this concept you may be asking? Here are a few that are able to be calculated using a financial calculator:

Compounding- determine the future value of a present amount, Discounting- finding the value of a future sum in today's dollars, Present&Future Value of a DollarOrdinary Annuity and Annuity Due, Future Value of an Ordinary Annuity and Annuity Due, Present Value of an Ordinary Annuity and Annuity Due, Payments Made or Recieved Other Than Annually, Present & Future Value of and Increasing (Inflation-Adjusted) Annuity, Combined Future Value of a Lump Sum and Annuity Payments.

This list may seem cumbersome, but let me give you a few everyday situations that may be more easily understood. You want to save for a downpayment on a house in 5 years. You put in $10,000 into a CD. Based on current rates, will this amount meet your goal for a downpayment for your house?

A second example would be someone making multiple payments toward that house downpayment throughout the year. With a financial calculator, you can take that into account and still determine if the amount compounded over your savings term will meet your goal. This is called Future Value of an Annuity.

A final example is a true Inflation-Adjusted Rate of Return. This is the return you expect from an investment after subtracting the current inflation rate but it's not that simple. Using that approach may give you a close approximation, but to be accurate, the use of a financial calculator would be involved.

A financial calculator does much more in addition to basic math functions. For $25-40 dollars, this type of calculator can be used as a tool to assist you in making better financial decisions throughout life and one can be found in just about every desk of a financial planner. I have one and it has helped me both plan for and achieve my financial goals.

When to File Taxes- Wesley Snipes Takes Hard Way

An article posted this morning on cnn.com states that Wesley Snipes has tried to cheat the government out of $12 million dollars for falsely filed tax claims. It was also found that Snipes failed to file between 1999 and 2004. A warrant has been issued although his whereabouts are currently unknown. Snipes may face a maximum of 16 years in prison for tax fraud.
Filing a false claim or failing to file at all if required will quickly get you into hot water with the IRS. Flags are raised with obvious situations like reporting zero for your adjusted gross income or having earned income and not reporting it at all. So when are you required to file? Let's take a look. Publication 501 from the irs.gov website explains situations when you must file. The following is an excerpt from this publication.
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Who Must File- If you are a U.S. citizen or resident, whether you must file a federal income tax return depends upon your gross income, your filing status, your age, and whether you are a dependent. For details, see Table 1 and Table 2. You also must file if one of the situations described in Table 3 applies. The filing requirements apply even if you owe no tax.
You may have to pay a penalty if you are required to file a return but fail to. If you willfully fail to file a return, you may be subject to criminal prosecution.
Filing Requirements for Most Taxpayers- You must file a return if your gross income for the year was at least the amount shown on the appropriate line in Table 1. Dependents should see Table 2 instead.
Deceased Persons You must file an income tax return for a decedent (a person who died) if both of the following are true.
You are the surviving spouse, executor, administrator, or legal representative.
The decedent met the filing requirements described in this publication at the time of his or her death.
For more information, see Final Return for Decedent in Publication 559.
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With less than 3 months left in the calendar year, it's not too early to start thinking about year end tax savings and whether or not you need to file. In any case, don't try to work over the system because it will be sure to catch up with you sooner or later. Was it worth it Mr. Snipes?