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Joe is a former financial advisor and media representative for American Express and Ameriprise. He was the “Money Man” at Detroit television WXYZ-TV, appearing twice weekly. He’s also appeared in Bride, Best Life, and Child magazines, the Los Angeles Times, Chicago Sun-Times, Detroit News and Baltimore Sun newspapers and numerous other media outlets.  Joe holds B.A Degrees from The Citadel and Michigan State University. 

6 Money Saving Ideas That Aren’t – 2 Guys and Your Money #66

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Crazy man Len Penzo sits in for OG on today’s show, reviewing his article from Len Penzo dot Com called Money Saving Ideas That Are Anything But.

Thanks to Len for sitting in today!

SHOW NOTES

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<> Amazon.com – Follow this Amazon.com link when you do your shopping and not only will you score those great Amazon deals, but you’ll also help out the podcast! (You can also go to StackingBenjamins.com/Amazon and you’ll reach the same spot).

<> Len Penzo – 6 Money Saving Ideas That Really Aren’t

Book Mentioned: Kitchen Confidential by Anthony Bordain….I love this book:

How Much Will I Need To Retire?

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Ah, the age-old question.

Today I’m at American Debt Project chatting about that very topic.

Join me?

How to Slash Your Tax Bill – 2 Guys & Your Money

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This week Joe & OG tackle your tax bill….just in time for you to fill out your tax return.

SHOW NOTES

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<> Jemstep.com – Looking for a more scientific approach to diversification? Take a tour of Jemstep.com. See how Jemstep helps people balance their portfolio based on their goals. Thanks to Jemstep for sponsoring the show!

<> Joe & OG – Taxes Suck! How to Stick It To The Man With Taxes

Want to read the original article? Try this link.

<> End Show

Sandy Smith Talks Gen Y Money Habits – 2 Guys and Your Money #064

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Sandy-Headshot-LargeSandy Smith from Yes, I Am Cheap, joins us for a special episode of 2 Guys and Your Money (this episode Sandy and I decided to call A Guy, A Babe and Your Money….). How do Gen Y’ers manage money? We share statistics about how Gen Y pays bills, manage money, budget and invest money.

SHOW NOTES

<> Open

<> Amazon.com – Use TheFreeFinancialAdvisor.com/Amazon to score the same great Amazon deals (at the same great Amazon website) but help the podcast at the same time. Thanks!

<> Sandy Smith – What Can We Learn from Gen Y’s Money Habits?

Sandy’s Infographic at Yes, I Am Cheap!: Bill Payment Practices of Gen Y’ers

Sandy’s awesome special project: TheColorofMoney.net

Taxes Suck! 7 Ways to Stick It To Uncle Sam

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Let’s admit it: everyone wants a lower tax bill.

Well, everyone wants the combo of mo’ money AND a lower tax bill.

Doesn’t that sound like a “have your cake and eat it, too” scenario?

Maybe. But then again….maybe not.

Too many people pay WAY too much money on their tax bill. Sometimes they pay more because of poor decisions, but often it’s just because they don’t understand how taxes work and where to look for awesome opportunities.

Here are seven of our favorites:

Do you work for the man? Try these:

Open a retirement plan and use it. The #1 way to grow your net worth and help your tax return is to stuff money into your retirement plan at work. If you’re eligible for a 401k, 403b or 457 plan, jump on that opportunity.

I’ve heard many “reasons” people don’t invest in their workplace plan. Here are a few:

I can’t afford it. Ask yourself this: how will I afford to retire when I have no money later. If you’re too poor to save now, what will you do if you can’t work later?

I don’t like my work, so I don’t want to put money in the 401k plan. Your work farms out the administration of the 401k plan to professionals. Use your workplace plan.

They don’t match. Matching contributions by your employer are gravy on top of an awesome tax shelter. Don’t worry about the match….get invested.

Take advantage of workplace pretax plans: Besides the retirement plan, there are other opportunities, such as HSA accounts. Some companies allow you to pay for everything from childcare to optical with a health spending account. Use as much of this as possible to score huge savings on these services. (If you’re in the 25% tax bracket and have a 5% state tax, you’ll save 30% on your childcare!)

Use bonuses and incentives wisely:

It’s a great day if you’re getting a stock award or bonus, but make sure you understand what you’re getting into tax-wise carefully:

Stock options or stock purchase plan: You’ll pay taxes on these plans when you sell. Having a tough year tax-wise? Don’t sell today. There’s also a HUGE difference between short term and long term capital gains rates. Wait until you’re paying the (significantly lower) long term rate before selling.

Bonus money: If you’re eligible for a big bonus but this isn’t a good year to sell, ask your boss if you can defer your bonus until the new year. Or, if you feel that your income will stay consistent, ask if you can break up a big bonus into two even halves to lower the tax impact. This strategy is best used if you’re getting a bonus at year-end (I hate deferring money in my pocket for several months….).

Have a budget? Try these:

Give to charities. Not only are you helping your community, but you’re putting money back in your pocket if you itemize. Cash gifts will obviously lower the amount of money you have overall, but gifts in kind, such as clothing, old automobiles, and items to 501c thrift stores can both lower your tax bill and remove clutter.

An increasing number of people are now donating larger items and receiving sizable tax deductions as a result. For example, if you have an old boat that you no longer use, making a sponsored boat donation could help you to save a significant amount on your taxes.

Donating a boat is a great thing to do on a number of levels, since the boat is then sold at auction with the proceeds going to charity. Then, for your donation, you receive a tax deduction that is equal to the value of the boat or the boat’s true value.

Claim ALL of your refinance costs. If you’re FINALLY taking advantage of low interest rates to refinance, remember that any points or closing costs you pay might be deductible also. Ask your tax preparer or read this IRS notice to see if you qualify.

Investments? Here are some:

Think about your dividends. I love dividends as much as the next guy, but a portfolio full of dividend-paying stocks in a non-qualified account can be a huge tax speed bump on your investment returns. If you aren’t spending the dividends today, purchase dividend-heavy investments inside of your IRA and use your non-IRA account to house more tax efficient investments.

Buy/sell creatively. If you’re finally selling your big winning stock, look for that stock in your closet that’s been horrible and has no prospects of coming back. You can cover up all of your capital gains with losses from losing stocks…and $3,000 more.

Photo: DonkeyHotey

 

Blog Post of the Week! …Another Great Month edition

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Where the hell has the month gone? Well…we’re wrapping up a great January here at TheFreeFinancialAdvisor.

Here’s a list of things we accomplished between FFA and our sister site, Stacking Benjamins:

– We’ve completely redesigned this site. I hope you like the look of our new home. We’ve got more coming in February that I can’t yet disclose, but you’re going to love it!

 

star anis toothpaste stacking benjamins

Maybe not so lovable. “Made with real anis!” doesn’t sell me….for some reason.

 

– I also redesigned Stacking Benjamins, my personal blog. Now you’ll see pictures on the tops of the posts and the podcast player has been moved to the top.

– We created better written content this month. Now that I have a podcast editor (thank you to Isabella Bianca, our new editor!), I can focus more on the written word. Hopefully you’ve gotten some great tips from our new posts here.

I’m especially proud of:

5 Secrets Auto Insurance Agents Won’t Share

How The Repo Guy Nearly Took My Car

and on Stacking Benjamins:

What To Do When Your Mutual Fund Manager Leaves

21% Interest Rate Credit Card or Build Your Emergency Fund? The Choice is Obvious

Joe’s Top Films of 2013

I hope to do more of these in the future, so you’ll know these two sites are well worth your time every day!

Also – In the past, I had a hell of a time discerning the roles of the two sites. What was the difference between Stacking Benjamins and The Free Financial Advisor? From the beginning, I knew what I wanted to create with SB. I wanted a place that was MY home on the internet and a home for our podcasts. So, on that site, you’ll get my personal point of view with a big dose of “Joe” attached.

But FFA was a different story. When I began SB in the spring, I gave little thought to what FFA was going to become. I realized during January what FFA should be: exactly what the name implies. You’ll get lists of the best activities you should undertake with your money. Lists of the worst mistakes we’ve seen people make. Planning tips while you’re navigating the financial waters.

So, to try and put it succinctly, Stacking Benjamins will be Joe’s quirky thoughts and Free Financial Advisor – Average Joe’s Money Blog will focus on clear tips to manage money better.

Also in January:

– We tweaked the podcast to feature a better introduction sequence, a few more voices on the roundtable, and we added an awesome new contributor, The Evil HR Lady.

– I’ve been experimenting with video, and I’ll have our first Stacking Benjamins video up in February.

– Work has continued on my book. I’m now at 32,000 words, just over halfway to my 60,000 word goal.

– I’ve joined on as a contributor at another awesome site, Daily Capital. You can now find me at American Debt Project once a month and Daily Capital from time to time.

Enough about me, because this post is about you….and the best writing I read on the web this week.

The Blog Post of the Week!

My favorite article of the week comes from Snark Finance and was actually written eight days ago. I know….that should invalidate Mitchell from the grand prize, but in fairness, I missed the post and actually read it yesterday. So, the judges conferred and decided to grant an exception.

I’m sure Mitchell was sweating.

So, why do I like How to Become Creative: Tips!? People often tell me they aren’t creative, but they don’t realize that creativity isn’t something you’re born with….it’s a muscle you can develop. I love Don Hahn’s book on creativity: Brain Storm: Unleashing Your Creative Self, and Austin Kleon’s book Steal Like an Artist: 10 Things Nobody Told You About Being Creative
(our affiliate links if you’d like to help the site!). These books say in 60k words what Mitch stresses in a few hundred: work to become creative and soon you’ll have ideas when you least expect it.

So, Mitchell, here’s the deal. Congrats on the award….which is us allowing you to print this and post it on your refrigerator for exactly one week.

You’re welcome.

Other Articles That (to use Mitch’s term, since we’re all about Snark today) Didn’t Suck

I’m so incredibly happy to see our good friend Marvin at Brick By Brick Investing posting again. He featured this week a fantastic in-depth review of why dividend investing can go bad and has a good solution to even out your results: 11 Monthly Dividend Stocks That Let You Sleep Well At Night.

My brother called me this week to ask about purchasing foreclosures. Simon Campbell offers up which states are best to search for some low-cost housing in Looking For Foreclosures? Look In These Three States.

I love this idea at Krantcents about a Countdown Clock. As a guy who spent far too long in a job he liked but didn’t love, I constantly now feel the clock ticking on my life. I agree with him: if we had a clock all the time going in our brain, I bet we’d all accomplish more (or all be on medication for the neurosis it created….).

Here’s something that doesn’t often happen: Cameron at DQYDJ.net deals with the emotional side of paying off debt. Emotions and DQYDJ? Say it ain’t so….. Read: Maintaining a Debt Paydown Strategy.

Greg at Club Thrifty watched a film called Park Avenue and goes all left wing (not really….I just thought it sounded pot-stirry) in Park Avenue and the One Percent. I love his analogies: “I squirrel that shit away like a fat kid hiding Twinkies under his bed.” If I squirrel Twinkies under my bed does that make me fat, too? …just asking…..for a friend….

I’ve been in love with the concept of renting out our bedrooms to travelers, but Cheryl won’t get onboard with this idea….yet. Maybe that’s why I really liked How I Made $1,500 Renting My House To Travelers.

Hello, my name is: 

In the “new to me” department, let’s welcome DebtFreeTejana to our little world of financial bloggers. She’s been blogging seriously since what appears to be October….but this is how long it takes me to actually pay attention. Read: The Cost of Being a Female.

Hope you have an awesome weekend! We’ll see you Monday on the Stacking Benjamins podcast and back here with more fun articles on saving.

A Huge Thanks!

Big thanks to our friend J. Money. He popped our post 21% Credit Card vs. Emergency Fund: The Choice is Obvious on the top of his Rockstar Finance page. Have you heard our interview with J. from Fincon? Check out: How Much Does a Baby Cost?

Finally, a big thanks to Tonya at Budget and the Beach for mentioning Joe’s Top Movies of 2013 on her Big Picture list of reads. Have a great half, Tonya! Remember my mantra: start off slow and then settle into a slower pace….

photo: Greg.Buri

Podcast: 5 Secrets Your Auto Agent Won’t Share

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While it’s a good idea to have an auto agent (especially if you have a claim), agents aren’t all saints. There are five secrets your agent will avoid discussing with you about their job and your policy.

Show Notes:

<> Open (thanks to Steve Stewart from Moneyplan SOS for the intro!)

<> Amazon.com – Shop Amazon AND help the podcast at the same time by using TheFreeFinancialAdvisor.com/Amazon. Thanks!

<> 5 Secrets Your Auto Agent Won’t Share

5 Secrets Auto Insurance Agents Won’t Share

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5 Secrets Auto Insurance Agents Won't ShareCar insurance agents, for quite awhile, have been the butt of finance-related jokes. Lately though, with hard-hitting advertisements from big firms like State Farm and Allstate, agents are fighting back. People are beginning to understand that while you may pay less with an online auto insurance service, there’s a ton of value attached to having an insurer who’s there when you need them.

But that doesn’t make agents little angels, either, does it?

Insurance agents have a few tricks up their sleeves, and the more you know about those tricks, the easier it’ll be to navigate meetings and phone calls in the future.

Here are my favorite 5:

1)   Auto insurance is a loss-leader. Maybe the insurance company makes money on auto insurance, but the agent doesn’t. Auto insurance pays so little that it’s very difficult for an agent to survive. Therefore, the agent will sell you an auto policy as a way in to your heart. Most agents have a full line of far more lucrative products, ranging from life insurance to annuities, that they’d love to sell to you.

2)   If you don’t ask about the discount, I might not tell. This isn’t universal, but agents hoping to make a few extra bucks might try and steer clear from discussions about discounts. Because the agent is paid a commission based on the amount you pay, it’s in their interest for you to pay more.

Of course, agents who are after the “bigger picture” will try to give you as large a discount as they can find. That way, when you’re looking for help in other areas, you’ll come running back to them for advice.

3)   That multi-line discount, while giving you a little off the premium, might not be your cheapest option. For years, I’ve had my auto coverage through a different insurer than my homeowners. Yet, agents always ask me if I have a multi-line discount. I’ve found that by forgetting this discount and paying  a little more, I still save in the aggregate by purchasing from separate insurers.

Why doesn’t the agent share this one? That’s easy. Wouldn’t you rather have a client who thinks they’re getting a discount AND who owns two of your products instead of only one? You betcha.

…by forgetting this discount and paying  a little more, I still save in the aggregate by purchasing from separate insurers.

4)   I’m not going to monitor your policy. I remember people getting angry because their insurance agent never called them except when she wanted to sell something else. They never asked about bithdays or new discounts that might apply to the client. Simply put: agents don’t have time to waste on these small issues. With several hundred (or thousands) of clients, there simply isn’t enough time in the day for those personal calls. It’s up to you to take care of your own needs. Call your agent periodically to review your policy for discount opportunities and new rates based on any changes in your life.

5)   My assistant knows a ton more about you than I do. In most offices, the assistant handles 85% of the day-to-day “low commission” business. I always told my clients that for routine business calls, ask for the assistant, not the agent. While the agent might take two days to return your call, the assistant may be available right now to take care of address changes, premium payment changes, or small policy questions.

That doesn’t mean you should ask the assistant if you really need that permanent life policy. If you think your question is at all technical, talk to the agent for your best answer.

4 Factors to Weigh When Choosing a College

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college search 4 factors choose collegeCollege students in America are facing a financial crisis.

According to the Center for American Progress, more than 13 percent of students who started loan repayment in 2009 wound up in default by September 2012. Another 26 percent of those borrowers were delinquent.

Ouch.

Many experts argue that the causes for these epidemic rates are systemic: College is getting more expensive, forcing students to borrow more, but the rising cost of college degrees is not being met by increasing value of those educations.

Many students who began loan repayment in 2009 entered into an economy that struggled to create new jobs for the youngest generation, resulting in an employment crunch where college education was not rewarded with the employment they merited. With horror stories running rampant, today’s prospective college student is increasingly weighing the cost of college against its supposed value. If you’re facing a similar situation, here are some financial considerations to keep in mind:

Consider the Total Costs

For many students, college is expensive. But there are other costs associated with college that are worth considering when weighing the total cost. For example, if you go to a school where you need to own a car, you’ll have to pay for the up-front cost of the vehicle plus maintenance, gas and insurance while you’re in school. That could easily up the price of college by thousands of dollars per year, depending on the vehicle.

And if you plan to live off-campus, the local cost-of-living might also factor in. Consider housing prices, food budgeting, and other situational costs that might affect how you consider the overall cost of attending one college over another.

How Does Financial Aid Vary?

Federal financial aid is typically awarded according to your family’s presumed ability to pay for college. This affects the federal grants you qualify for as well as the types of student loans you are eligible to borrow. Additionally, individual schools also have financial aid packages that can feature an array of scholarships and grants. Depending on the school you plan to attend, strong students can sometimes lobby for better financial aid packages.

Because your financial aid is likely to be different at every school, you need to get hard numbers from each institution, and use this aid to reassess your college options. One report by HCM Strategists identified financial aid packages and emerging aid channels as vital tools to make college more affordable. These tools help avoid the worsening student-debt crisis, so don’t ignore how these alternatives might create much-needed economic relief.

You can even receive financial aid if you enroll in an online institution, depending on your overall financial need. Contact your school’s admissions advisor for more information on state loans, personal loans, veterans’ benefits, and tuition reimbursement through your employer. The tuition reimbursement program is a great option for employers who want to invest in their employees and keep them around long-term.

Will You Get Your Money’s Worth?

When it comes to saving money in order to get more bang for your buck, students have a number of options available to them. They may choose to first attend a community college and complete general education requirements while the costs are low. It’s also helpful to keep online college courses in mind, particularly if you’re looking to maintain flexibility while juggling school and a job. Browse a directory of online colleges and programs to educate yourself on all of the options available to you. Scourge the web for all available online college resources you can find, and start comparing and contrasting each resource.

For Some, It May Depend on Your Major

A college education can offer job prospects and income opportunities that vary widely across different majors. According to a report from Georgetown University’s Center on Education and the Workforce, unemployment rates tend to be much higher for some courses of study than for others, as Forbes highlights.

Architecture graduates have the highest current unemployment rate, largely because the stagnant economy has deflated demand for new buildings. Not far behind are Arts, Humanities and Social Sciences, all of which have unemployment rates of 8.9 percent or greater.

Given those numbers, students might find it particularly risky to invest in an expensive education that offers poor income prospects and a high risk of unemployment. Degrees in business and other stable professions, on the other hand, are more likely to deliver a strong return, making it more practical to spend for a more expensive education.

New Year’s Resolutions for 2014 to Revolutionize Your Finances

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It’s January. A new year. A chance to start anew. A blank slate to accomplish a fresh set of goals.

When it comes to your personal finances, January is also a good time to set up and automate your financial goals for the New Year. As such, listed below are 2 good goals / resolutions to shoot for in 2014.

1.      Set up a Zero-Based Budget

How does traditional budget work? Essentially, you lay out some financial needs for the month ahead, and if saving or investing money is included on the priority listing, you commit whatever amount you have leftover at the end of a pay period to your saving goal. The problem with this is that life gets in the way, and there never seems to be any money left over at the end of the month, correct?

In comes zero-based budgeting.

Similarly to regular budgeting, with zero-based budgets, you lay out your financial requirements/wants for the pay period. However, instead of waiting until the end of the period to see if you have money left over for your strategic goals, you transfer that money out at the beginning of the period in order to get your “balance to zero,” hence the name, zero-based budgeting.

This is a very effective strategy. Give it a try and see if you like it!

 2.      Stop Paying High Interest Rate Debt

When it comes to paying off high interest rate credit card debt, a little bit of knowledge will go a long way.

One strategy that can work for providing relief from high interest credit card debt is to find a new credit card that offers a 0% balance transfer that you can transfer your higher interest debt to. This strategy often works well for fairly small amounts of credit card debt that can be paid off in 6-12 monthly pay periods.

In addition, something a lot of people do not realize is that if you are a pretty good customer for a credit card, you can often get your interest rate decreased drastically simply by calling them and asking for a discount. If the first person you talk to at the credit card company says they cannot help you, it is often effective to ask for their supervisor.