Archive for the ‘Money-saving tips’ Category

3 Tips for Maintaining Your Resolution

January 3, 2012

Happy 2012!

Research shows that 40 to 50 percent of Americans make New Year’s resolutions. If you’re among them (I am!) then I bet yours had something to do with either money, career or health. In that spirit, I thought I would share a few tidbits on maintaining those resolutions.

Money/Shopping Believe me, I completely understand the adage, “The clothes make the (wo)man.” With The Magnificent Mile out my office window, it’s easy to be drawn in by the beautiful clothes and sales promotions. But most people (myself included) simply can’t afford to go clothes shopping on a regular basis. And when it comes to the latest trends, you don’t need to go all-out with a new wardrobe in order to look in style.

If you’re trying to trim your clothing budget this year, follow this favorite tip among wardrobe stylists: stock your closet with high-quality basics then use your clothing budget to update with one or two trendy items each season. For example, a scarf in the season’s color or a flattering dress that you can wear for a client meeting, networking event and an evening out will make you feel brand new without feeling broke.

Career Perhaps one of your goals for 2012 is to figure out your career path and make changes where needed. No matter where you are on the career spectrum, it’s always good to have choices. And by choices I mean that you don’t feel stuck in your job because you can’t afford to make a change. If that’s you, it’s time to get started on that rainy day fund.

Research shows that the reason people don’t save is because they don’t think they can afford to – “saving” means putting away big chunks of money, and they figure they’ll start that when everything else settles down. Guess what, it doesn’t. The key is to start small.

I save 5% of my income to cushion me in times of slow business. If you have a regular paycheck, start with $25 per pay, then tack on $5 to that amount each month. Before you know it, you’ll be saving $100 per paycheck and you’ll have a nice cushion built up for that day you decide to leave your job to start a business, go back to school or try a new industry.

Health To me, good health is an investment in itself. Barring an unforeseen illness, many of the diseases that bog down Americans like high blood pressure, heart disease and diabetes are preventable by maintaining healthy habits. Investing time and maybe a little money while you’re still healthy will pay dividends for years to come.

If your resolution has to do with losing weight, don’t forget the other aspects of maintaining your health. Make time for your annual check-ups and even if you fall off the wagon with your diet or exercise plan, keep trying to get that exercise in. Even a 30 minute walk will reduce your risk of many heart-related ailments. Also, try skipping the chips at the deli – you’ll save a little bit of money AND you’ll contribute to your health, saving you money in the long-term on health-related expenses.

Above all, join me in celebrating a chance to start another year anew. I wish each of you a ridiculous abundance of happiness, health and prosperity in 2012! Please share your resolutions in the comments below.

 

Kelley C. Long, CPA is the owner of KCL Financial Coaching, a member of the National CPA Financial Literacy Commission and a tax accountant. She moonlights as a BodyPump instructor and believes that the true meaning of financial security is having choices in life. Learn more about her at www.kclmoneycoach.com.

 

5 Year-End Tax Tips for 2011

December 6, 2011

Time is running out to take steps to lower your 2011 tax bill. Here are 5 ways you can do so, but act quickly!

1. If you’ve been putting off energy-efficient improvements to your home such as replacing your roof, windows, exterior doors, upgrading your furnace or hot water heater or adding skylights or insulation materials, time is running out to claim the tax credit associated with qualified improvements. There are lot of limitations to this credit, but it expires at the end of this year, so get cracking if you want the credit.* (and remember a tax credit is a dollar-for-dollar reduction of your tax bill, so you can knock the full dollar amount off what you pay)

2. Are you planning to make a big purchase like a car or other high-ticket item in the next couple months? If you itemize, you might consider making that purchase this year – it’s the last year you can elect to deduct total sales tax paid instead of state and local income taxes. This isn’t an excuse to go shopping, but if you’ve budgeted for it and it’s almost time, it might be worth it to get shopping before December 31.

3. Go ahead and prepay 2012 college tuition (for the first 3 months at least) while the higher education above-the-line deduction is still in effect. This provision expires at the end of this year, which allows you to deduct up to $4,000 in qualifying education expenses. Income limits apply, so if you make more than $80,000 (or $160,000 if you’re married) you don’t qualify. If you make between $65,001 and $80,000 ($130,000 or less if married) then you can only deduct $2,000. Not sure? Ask me!

4. If you pay estimated state or local income taxes and you itemize, mail those payments before December 31, (even though they’re not due till January 15) so you can deduct them against this year’s income.

5. Since tax rates aren’t changing for next year (they remain 10%, 15%, 25%, 28%, 33%, or 35%), try to defer income until next year so you can wait a whole extra year to pay the taxes.

Just remember: it’s perfectly legal to avoid taxes, but it’s quite illegal to evade. To ensure that you’re maximizing tax savings without violating the law, contact me for a consultation.

* If you’ve claimed the credit in the past (in one or more years since 2005) then you may be limited. There is a lifetime cap of $500 ($200 for windows). If you haven’t yet met the cap, you can claim the difference.

Kelley C. Long, CPA is a personal financial coach and tax preparer who believes that the true meaning of financial security means having choices in life. Visit her website at www.kclmoneycoach.com for more information.

Cohabitation: Your Ticket to Financial Freedom?

August 20, 2011

I recently had the privilege to write an article for LearnVest, a great website for women and finances, regarding the potential financial benefits of moving in with your significant other. Since the article that ran was a much-edited version of what I submitted, essentially losing the spirit with which I wrote it, I felt it necessary to post my original submission here. Hopefully this clarifies that my opinion is IF you decide to move in with your boyfriend/girlfriend, it can also significantly boost your bottom line. Read on for my original submission:

 

When my aunt moved in with her boyfriend in 1988 it caused quite a stir in our family. The perception was that she was “giving up the milk for free,” and he was the one gaining while she must be losing. It wasn’t until he’d put a ring on it that my grandmother was able to chill.

 

Nowadays, things are different. My grandmother still isn’t excited about the fact that I live with my boyfriend, but she understands that times have changed. It seems like young women who don’t cohabitate before marriage are the unusual ones now.

 

The thing is, rather than compromising ourselves by shacking up, we’re hoping to avoid divorce by giving it a test-run first. “Paradoxically, more people today value marriage. They take it seriously. That’s why they’re more likely to cohabit. They want to make sure before they take the ultimate step,” said University of Pennsylvania sociologist Frank Furstenberg in the May 28, 2001, issue of Newsweek.

 

Over 12 million unmarried partners are living together today according to the US Census Bureau’s American Community Survey: 2005-2007, a number that increased 88 percent between 1990 and 2007. “Today it’s unusual if you don’t live with someone before you marry them,” John Hopkins University sociologist Andrew Cherlin stated in Newsweek.

 

The decision to move in with your significant other should obviously be based on your love and level of commitment to one another, but it also offers some financial benefit if you play it right. My friend James* summed it up best when he said, “We moved in together because we simply wanted to be around each other all the time.”

 

Back when Shelby’s boyfriend moved in with her, she found that it improved her financial situation “quite a bit. We were saving his rent payment plus utilities, gas going to and from his place and we were able to cook our own meals more since we were coming home to the same place.” Shelby, who is a CPA, was appointed the CFO of their relationship and took over management of both of their finances.

 

Combining their homes and money also enabled them to become debt-free. “[Sam] did have a boatload of debt when he moved in. Combining our finances definitely helped pay off that debt more quickly. By a lot. Both because we significantly reduced expenses and because I was more aggressive in paying it off than he had been.”

 

Similarly Kaylie, a project manager from Ohio, found her financial situation better than it had ever been once she moved in with Zach. She was able to eliminate credit card and student loan debt and they “had the money to do pretty much everything we wanted to without worrying about whether we could afford it.”

 

The key is to be strategic about what you do with the money you save when moving in together. Like Kaylie says, “When you go from supporting two households (as a couple) to one, there is likely going to be a certain amount of flexibility when it comes to finances.”

 

Rather than increasing your daily latte intake or becoming a regular at Ann Taylor, sock your extra cash away to jettison any long-term financial worries you’ve been harboring. If you’re still paying down credit card debt, increase your payments till you’re debt free. And if you don’t already have an emergency nest egg of six months salary tucked away, get that going. Nothing spells financial freedom like knowing you can take care of yourself if things don’t work out.

 

When my sweetheart and I moved in together, our joint housing costs decreased by almost half. But that’s not the only perk I’ve enjoyed. Sharing a household with the love of my life has allowed me to save more toward retirement, and concern for our joint financial health has drawn us closer while offering us the chance to really improve our communication.

 

Walking through a financial decision together is also one of the best ways to really see someone else’s values in action. The way my boyfriend makes financial decisions shows me what’s important to him and the fact that we make decisions jointly serves to deepen our trust in each other and gives us a greater sense of being in it together.

 

In the end, if you’re considering sharing an address with your significant other, it can also be a great opportunity to change your financial picture for the better. With proper evaluation of the savings realized and honest communication with your partner, moving in together could be the ticket to long-term financial success and freedom for both of you.

 

* All names have been changed to protect privacy

 

 

 

Tax Time = Tuneup Time

March 28, 2011

This recent article by NY Times writer Ron Lieber is a great reminder that tax time is a great time to check in with your complete financial picture and make some tweaks to keep you on track. It’s also a great time to organize your filing and get rid of financial clutter!

In short, the article suggests the following steps as long as you’re digging into your financial records. I’ve added my own tips to the steps as well as the author’s advice.

1. 401k checkup: First, rebalance your funds. As mutual fund values change, so does the allocation of your 401k account. It’s important to go in at LEAST annually (I recommend twice a year and help clients do the same) to reset to your target allocation.

While you’re in there, liquidate any company stock that you have accumulated. Many employers give their match in company stock, but it is risky to hang onto this. If things go south with your company, you could be out of a job AND see your 401k value go in the tanker. Diversify away from having all your eggs in that basket.

What about those old 401k accounts from former employers? If they’re still sitting in the company’s plan, this is a good time to consolidate those accounts into a rollover IRA, where your options will be greater and you’ll save on administrative fees. Not sure how to do this? Guess what else I help my clients do…

2. Saving for the Medium Term: We’ve all heard the rhetoric about saving for retirement and the benefit of saving early, and who hasn’t heard of the absolutely-necessary emergency fund? But what about the other things in the medium term, like vacations, large purchases, home maintenance or other big-money items that probably don’t fit into your day-to-day budget but that you’d like to eventually buy? Get started today by setting up a separate savings account for each goal, then make your savings automatic. Fifty bucks out of each paycheck probably won’t be missed, but it can add up quickly toward that week in Nantucket or new tires on your car. ING Direct lets you set up subaccounts and they offer great rates, compared to what you might get down the street at your bank branch.

3. Automatic Donations: If you’re charitably minded but often put off writing those checks till the end of the year, consider dividing your donation by 12 and setting up automatic monthly donations to ease the burden on your end-of-year budget. And no matter when you are giving money to charity, make sure you’re either writing a check or using a debit or credit card to provide an accurate record of the donation for your tax return. The IRS no longer allows the “I put ten bucks in the offering plate at church,” deduction. You gotta prove it.

If you’re an American Express cardholder, Lieber recommends their Members Give program, which lets you set up automatic donations or you can even use Member Rewards to make your gifts. I’m all about credit card rewards as long as they’re not incurred by debt you’re going to carry from month-to-month!

Taking these little steps should only take about an extra hour as long as you have all your financial information out, and it can make a tremendous difference in your financial health going forward, so just do it! You’ll be glad you did when you begin to reap the rewards of sound financial management.

Kelley C. Long, CPA is a Chicago-based financial coach who believes you shouldn’t have to have a million bucks to receive personalized financial advice. Check her out at www.kelleyclong.com.

Grocery Shopping Tips

January 18, 2011

One of the changes I am working to make permanent in 2011 is to plan ahead with meals and increase my cooking at home, both to prevent mindless nibbling as well as save us a little bit of money on the food budget. I’m also hoping this helps me shed a few of the fifteen pounds I managed to pack on through 2010!

Tuna casserole for grown-ups!


Inspired by my new Jessica Seinfeld cookbook (thanks, Mom!), I’ve done pretty well so far. And Sweet Pea has even expanded his pallet a little to try some new things! But when I look at how the grocery bill has ballooned, I have to think twice about how I’m going about my weekly food shopping.

To that end, I’d like to share some food savings tips from the August, 2010 issue of O Magazine . I hope they help you too with your financial resolutions today and throughout the year!

Fish and seafood: Frozen fish is a great way to save, as much of the “fresh” fish at the grocery has already been frozen (the label will tell you this). If you want to splurge, wild Alaskan salmon is worth the money and is certified as sustainable by the Marine Stewardship Council.

Baking ingredients: Skip the name-brand sugar — you can’t tell the difference between the much less expensive store-brand. But when it comes to vanilla extract, experts say it is worth the extra money to buy the real deal.

Cookware: Cookie sheets and stock pots don’t require any fancy materials or coatings, so go ahead and buy the cheapest on the shelf. But don’t scrimp on a good skillet that you’ll use for things like searing or sautéing. You’ll appreciate the even distribution of heat offered by a high quality pan.

Liquor: I know this one from personal experience: if you’re going to mix vodka with anything (even olive juice, like my favorite cocktail), no need to buy the good stuff. Vodka is like tofu — it adopts whatever flavor you add to it. Save your money for a delicious bottle of single malt scotch!

Spices and herbs: Most name brand spices don’t offer anything different than generic brands, so go ahead and cheap out there. And when it comes to buying fresh versus dried, Alejandra Ramos advices that the only time you REALLY need to use fresh is when the recipe calls for basil and parsley.

Organics: The rule of thumb for buying organic produce is that if it’s sweet, go organic. But if it is a fruit or veggie with a thicker skin like onions, bananas or avocados, you’re safe from pesticides anyway.

Olive oil: If you’re going to cook with it, regular olive oil will do just fine. And if you’re making a dressing, you can mix two-thirds cheapie with one-third fancy and still enjoy great flavor. If you’re drizzling over food though, go for the good stuff.

Fruits and veggies: If a vegetable is out of season, buy frozen without losing a lot of the nutrients. Not sure what’s in season? Check out Eat the Seasons, a website updated weekly with what IS in season. Brussels sprouts, anyone?

Cheese: I saved the best for last, one of my diet staples. The only time you ever really need to go high-end on cheese is when you’re doing a cheese plate or fondue. Otherwise, go economy when serving with crackers, in meals, salads or even when grating over food.

I hope you’ve found some information to help with your next trip to the local market. Anything I missed? What grocery store tidbits can you offer? Anyone care to disagree with any of the above?

Kelley C. Long is a Chicago-based financial coach who believes you shouldn’t have to have a million bucks to receive personalized financial advice. Check her out at www.kelleyclong.com.

It’s Not Rocket Science – Achieving Goals

December 7, 2010

As we prepare to wrap up another year, many people will once again be setting goals for the year ahead – count me among those people. If financial goals are among your resolutions, then the next logical question is, “How do you get there?” Read on for the answer.

First of all, don’t forget to be realistic when actually setting financial goals. You don’t have to shoot for the moon to make a difference in your finances. And remember that your goal doesn’t have to be about amassing large amounts of money. It can be as simple as putting a little cushion in place for splurge purchases.

Once you’ve set your goal, the first thing you want to do is write it down and post it where you’ll see it frequently. Is your goal to pay off your credit cards? How about a sticky note that says, “Debt-free = stress-free,” stuck to your credit card. The next time you are tempted to stray, you’ll have a solid reminder to make you think twice. If your goal is saving for something great like a tropical vacation, get out that beautiful photo of the beach and tape it to your computer monitor for motivation.

But beyond setting the goal, how do you get there? Once you’ve established a dollar-amount, break it down into time increments. Let’s continue with the credit card debt example.

Say your balance is $2,000 (which is closer to what the everyday American carries than the scary $8,000+ average often cited) and you’d like it gone in a year. Divided by 12, that’s about $167 per month needed to reach your goal. (I know this calculation doesn’t take interest into account, but I’m trying to keep it simple)

So how do you find an extra $170 or so in your monthly budget? There are some great tips in this blog post by my friend Andy, or you could try the standard ideas like packing your lunch, scaling back from a latte to a drip coffee with lots of milk, or cutting back on entertainment spending by ordering the drink special when out with friends instead of your expensive favorite cocktail.

Most important to achieving any financial goal is to make it automatic. Your credit card minimum payment may only be $75, but in your head, it must become $170 until the balance is $0.

If your goal is to save some money, set up an automatic transfer to your savings account each time you get paid. Just like you don’t miss a mortgage payment because it’s automatically withdrawn each month, you’ll find it much easier to save when it happens without your having to click a button each month.

Setting and achieving financial goals is not rocket science, and even the most strapped of us can make them happen. Keep it simple, be gentle with yourself if you get off track and celebrate the little victories.

Now it’s your turn: What are your goals for 2011? Mine include saving some splurge money for our tropical vacation in March and investing in continuing education to keep me sharp on personal finance topics. Please share your goals and any additional tips you have for getting there below in the comments.

Kelley C. Long is a Chicago-based financial coach who believes you shouldn’t have to have a million bucks to receive personalized financial advice. Check her out at www.kelleyclong.com.

Three Tips for Smart Shopping This Holiday Season

November 23, 2010

I don’t know about you, but those years that I’ve been crazy enough to get up before dawn on Black Friday and wait in line for the doorbuster deals have also been the years that I’ve returned home with the greatest haul … for myself!

Throughout most of the year, I’m able to stave off the temptation to overspend on myself by avoiding casual strolls through Target or Ann Taylor. But this time of year, the siren song of big box stores and malls is at its peak. At some point, I’m going to have to hit the stores and face my temptress. On her territory.

So how to avoid being your own Santa during the time of year that the deals are the best and stores are pulling out all the stops to get you to buy, buy, buy? Try these tips and see if they don’t help you resist the pull of “To: Me, Love: Me” gifts.

Take a list: Much like going to the grocery store, it is much easier to stay within your budget if you make a list before hitting the mall and then stick to it. Map out your shopping trip ahead of time so that you don’t find yourself accidentally wandering into the handbag department at Macy’s when you should be shopping for your father. Shopping with a purpose saves time and money.

Take a friend: Join forces with another budget-minded friend and make a pact to keep each other from indulging. When you see your gal pal heading for the register with the centerpiece bowl you saw her admiring, kindly divert her path and remind her that she should simply add it to her wish list, then move to the next gift on your list.

Take your pick I’ve never been a fan of going cold turkey on anything, except for when my parents quit smoking five summers ago. But going cold turkey on shopping for fun is just like trying to give up chocolate for extended periods of time. It might work in the short term, but one day you’ll probably just snap and do more damage than if you’d allowed yourself a Fun Size Snickers bar each afternoon.

Same goes for shopping. Before you head out to the stores, pick one thing you really want and need, then make that part of your shopping mission. Is your scarf collection lacking the latest chunky cowl-neck beauty? Time to find one! Knowing you are allowed one treat will make it easier to resist those little, “Oh, that’s so cute! And the price!” voices that threaten to ruin your budget resolve.

Above all, remember the point behind all of this shopping madness – to show our love for family and friends by selecting that perfect something to remind them of our fondness when we can’t be there in person to show them. Embrace the joy of granting someone else’s wish and you’ll find the desire to find the next cool thing for you is a dimmed by how fulfilling it is to simply give.

 

Kelley C. Long is a Chicago-based financial coach who believes you shouldn’t have to have a million bucks to receive personalized financial advice. Check her out at www.kelleyclong.com.

November is the Best Time to Buy

November 9, 2010

When it comes to saving money and shopping for bargains, it’s a no-brainer that there are certain times of year that are better than others to shop for seasonal items. For example, you’re probably not going to score a smokin’ deal on a pair of winter boots in November. Best wait until after Christmas, when prices are slashed to make room for spring fashions.

Winter boots
Looking for a deluxe gas grill for your summer barbecues? You’ll pay top dollar in May. Waiting til August may limit the selection, but you could save up to half off the retail price and still celebrate Labor Day with deliciously grilled delights!

But did you know that there are better times of year to shop for non-seasonal items as well? I was delighted to learn this, and with a little advance planning or postponement of projects, it’s possible to save a bundle by being aware of the calendar.

November, it turns out, is the best time of year to buy kitchen appliances and power tools. So if you’re planning to while away the cold winter months with a home improvement project, prepare ahead of time and take advantage of the deals on sanders, power saws and even those stainless steel appliances you’ve been coveting.

See you at Home Depot!


Kelley C. Long is a Chicago-based financial coach who believes you shouldn’t have to have a million bucks to receive personal financial advice. Check her out at www.kelleyclong.com.

It All Adds Up!

August 31, 2010

Today I had the chance to engage in one of my favorite activities. It was coin-rolling day – the day my piggy bank won’t allow me to put another penny in, and I break out the paper coin rolls then head to the bank for a nice little bonus deposit to my checking account.

Ready to roll!

Ready to roll!

Call me a nerd, but I love coin-rolling day. Sorting quarters and dimes into neat little piles satisfies my organizational tendencies and rewards me with extra money I didn’t even miss. And it only takes 15 minutes – I kept track! You can sort your change while watching TV, listening to a podcast, or make it a family affair by getting the kids involved.

I had lots of help

I had lots of help

Back in the day when Suze Orman first hit the airwaves as a guest of the Oprah Show, she wisely suggested that one way to save money without even trying is by saving your change. OK, so maybe she wasn’t the first to think of it, but I remember seeing it and have been saving my change ever since. Do you? If not, I suggest you try.

What’s that? You don’t really spend that much cash? Well, I didn’t think I did either but even the little dollars here and there I use to buy coffee have produced enough change to add up. In fact, this little pile totaled $26 and I had several dollars left over that went back in the piggy bank since they weren’t complete coin rolls.

I know that doesn’t seem like much, but if it’s money you didn’t miss anyway, it adds up over time. Twenty-six bucks per month equals annual savings of $312, which is enough for cross-country airfare from most major airports! Think of it as a bonus vacation fund.

For complete disclosure, I have to share that when I arrived at the bank, the teller simply dumped all my neat little coin rolls into the electronic change counter. It turns out the banking centers in Chicago are a little more technologically advanced than those in Cincinnati! At least at my bank… I have to say, I’m a little bummed to learn this, as I actually like rolling my change. (Some banks charge for this service, so don’t toss those paper rolls yet!)

Regardless, my point remains: the next time you use cash for a purchase, use only dollars and pocket the change. You’ll be surprised how much money you “find!”

Note: No animals were harmed in the production of this blog post.

Myth-busters: No such things as “healthy” debt

June 21, 2010

Clients often ask me to recommend a “healthy” credit card balance that they should carry in order to boost their credit score. Contrary to popular belief (a belief created out of confusion and no doubt encouraged by the credit card industry), the answer is $0. You do not need to carry a credit card balance in order to demonstrate good credit history.

That’s not to say that you shouldn’t have credit cards or that you shouldn’t use them. Having them and using them responsibly are what helps keep your credit score high, and while carrying a low balance doesn’t always hurt your score, it doesn’t help it either. In fact carrying a balance that is too close to your limit can hurt and with high interest rates and fees it is certainly not the best way to maintain financial health. Let me explain.

When a lender, like a mortgage company or auto finance department, looks at your credit report, they are looking for the likelihood that you will pay them back if they give you a loan. Other parties also use them to protect against making a bad deal, like landlords who use them to judge whether you will pay rent or cell phone companies that want to determine whether you will actually pay for the airtime you use.

Even employers will sometimes request your credit history for insight into whether you are a responsible person. For example, if you consistently pay your electric bill late or have a history of running over your credit limit, chances are you may also be chronically late for work or distracted by personal financial issues on the job.

The reason that it is important to have a couple credit cards (two cards issued by major financial institutions like VISA or American Express will suffice) and to use them occasionally is to demonstrate what credit examiners are seeking: that you can be trusted with credit and that you will pay it back on time. Just make sure you pay your balance off each month and you will enjoy life debt-free!

Another way to ensure that you maintain the best credit score possible is to review your credit report at least annually, which you can do for free. Go to www.annualcreditreport.com to print your credit report from all three credit-reporting agencies and review each agency’s report for accuracy. If you find any errors, take the proper steps to correct them. Each agency tells you how to do this on their respective websites.

Things that could bring your score down include credit card accounts that are at or near their credit limit, unpaid bills from your past or too many examinations into your history in the recent future. If you have these items on your report and they are legitimate, you should take action to fix them. Pay down the high-balance cards (and stop using them until they are paid off), pay off any overdue bills and stop applying for credit at every opportunity. It will take time (up to seven years for some items), but eventually your score will improve.