Archive for the ‘Financial Literacy’ Category

Earth Day – Simple things to save Money and Earth as well

We only think about conserving energy and saving the planet when the gas price goes up and when we feel the pinch in our budget. But every year Earth Day reminds us that we need to do something whether gas price is up or down. It also gives us opporunity even during this time of unprecedented environmental challenge, for every citizen to make an impact.  This year Earth day is on April 22 and I want to share few simple things which I do every day and has an impact. You can also try it out and be satisfied for doing something.

1. First thing, avoid paper bills unless its really necessary. If we all reduce paper usage, it will eventually reduce the number of trees cut for this purpose. Many utility companies, financial institutions like banks, mortgage servicers, insurers are campaigning to reduce the paper waste by requesting customer to signup for ebills over the internet or email. Obviously they have better motive  which is to reduce their cost but still it makes sense to help reduce the paper waste by moving to ebill solutions. But do it subjectively.

If you think your bill will change every month and needs to verify before paying, you shouldn’t sign up for auto withdrawal but if they have an option to get ebill and then pay online then go for it. If they only have option for ebill and automate the payment, then continue with paper bill in those situations. On the other hand, if the bill stays same all throughout the year, you don’t need the paper bill. For example, mortgage is always going to be same every month and you can avoid paper bills instead get ebill reminder to pay them or setup auto deduction.

2. Next comes Electricity. We use lot of electricity at home everyday which is either generated by Coal or Wind. Wind is good but we don’t have lot of windmills to support our electricity demand. Currently it’s most electricity comes from coal which has lots of waste and emissions. For your part, reduce electric consumption by using fluroscent bulbs as much as possible instead incandescent  bulbs.

You might find incandescent bulbs cheaper than compact flourescent bulbs but things are getting better these days. Even if you pay more and buy flourecent bulbs  they will last longer than their counter part. So think again and do the right thing. We changed 90% of lightings to flourescent bulbs. Also Turn off the lights when you leave a room whether at home or office. Start making it as a practice. Don’t forget to Turn up the Thermostat during summer and Turn down during Winter. Turning up to 78 degrees uses less electricity and Turning down to 65 degrees during winter will use less natural gas to heat up. Both saves you money and good for the environment.

3. Plastic is another big chemical waste which is ruining our earth’s composition.  Try to reduce plastic waste. It also emits lot of unhealthy gas during decompositon or recycling process. You can help by reducing the plastic use by reusing them as much as possible. For example, save Ziplock bags or any plastic bags after first use and try to use them few times before you throw it out. Avoid bottle water if you can use filteration system like Reverse osmosis. That reduce plastic waste and also gives you good, healthy water for cheap. Check out a Costco offer for Reverse osmosis I posted last week.  


4. Water is another precious resource from mother nature. Try to reduce water consumption by not  leaving the water running while brushing your teeth or shaving.  Nearly tens of gallons of water just goes down the drain during our daily activities. By saving water, you save money and also natual resource which is getting wasted. So try to avoid wastage by only using limited quatity when needed during shaving, doing laundry, watering the lawn, washing the car, washing dishes.

5. Finally, Petroluem/Gas/Oil. Carpooling is the best way to reduce carbon footprint by reducing fuel consumption and also saves money on fuel cost and vehicle mileage. Also there are reports about effective driving can reduce gas usage. May be it’s true but it is hard to change your habit immediately whether it’s good or bad. No harm in trying, so I recommend you try one change at a time and see the effect and go from there. Like try to avoid rising your engine too quickly when you start from lights. Do it slowly which won’t consume more fuel. Try small things like above and you might see the difference in your gas tank.

These are just simple things which I follow and feel good in both saving money and helping save the planet. There are many websites like this one which shares lot more tips to help to do your part and make an impact in reducing bad impact to our Mother Earth.



Happy Earth Day!!

2011 Tax Filing Season – Things to know…

It is march and lot of people are now staying late and spending good amount of time to reconcile their last year taxes. Whether you use tax softwares like TaxAct like me or Turbo Taxes or uses your favorite CPA to file taxes, it is going to be daunting task if you aren’t really prepared for it. But don’t worry, there are lot of help available to make your life easier like free softwares which is capable of taking you step by step to complete your tax returns with no time.



General Things to remember



1. This year last day to file tax  is Apr 18, 2011 (Monday) because in observation of Emancipation Day in the District of Columbia on April 15th this year. April 15th will still be the last day for state tax returns on all states.



2.  Before you start working on your tax return for 2010 by yourself or with your CPA or tax preparer, collect all the required documents like W2, 1099’s like 1099-DIV, 1099-MISC and so forth. You should have recieved them from the corresponding institutions if you have income, dividend or interest earned. Also gather all your receipts for medical expenses, losses clamied due to theft or natural disasters, property tax and state tax paid and other deductions related documents which you can use to try filing itemized.

3. If you are married last year or had a Baby last year, don’t forget to count them as dependent and change your martial status to take proper dependent exemptions and standard deductions on filing jointly.



4. If you lost your loved one last year and you are still unmarried, you are still eligible to file married jointly this year. So don’t forget to file with Married Joint status to make use of exemptions and all the favorable tax phaseouts.



5. Don’t hesitate to try out Itemized Deduction option if you are using any tax softwares. You can compare the outcome and finally chose whether to opt for standard deduction or itemized depending on the outcome.

6. Try filing yourself if its simple return and take advantage of free tax softwares like TaxAct.com where you can efile free as well.

What are some important Tax rules changes for 2011?



1. Kiddie Tax – The amount of taxable investment income a child can have without it being subject to tax at the parent’s rate remains at $1,900 for 2010


2. The standard deduction for taxpayers who do not itemize deductions on Schedule A, Form 1040, has increased for those filing as Head of Household. The standard deduction amounts for all the other filing statuses remain the same for 2010:


Married Filing Jointly or Qualifying Widow(er) $11,400
Head of Household $8,400
Single or Married Filing Separately $5,700
3. The amount each taxpayer can deduct for each exemption remains at $3,650 for 2010.



4. Some taxpayers who purchased a qualified motor vehicle after February 16, 2009, and before January 1, 2010, did not have to pay their new motor vehicle taxes (state or local sales or excise taxes) until 2010. In these instances, they may be eligible to deduct the amount paid on their 2010 income tax return.



5. Each personal casualty or theft loss is limited to the excess of the loss over $100 (instead of $500). This is in addition to the 10% of AGI limit that generally applies to the net loss



6. For 2010, the minimum amount of earned income needed to claim the additional child tax credit is $3,000.



7. For tax year 2010, in addition to the three direct deposits, taxpayers can now use their refund to request up to three U.S. Series I Savings Bonds registrations and receive a paper check for the balance of the refund



8. As part of the Affordable Care Act of 2010, the adoption tax credit was extended, increased, and made fully refundable in the year claimed. For 2010, the adoption tax credit may be claimed for qualified expenses up to $13,170 for both nonspecial and special needs adoptions. The amount of the credit begins to phase out for taxpayers whose modified AGI is more than $182,520.



9. No more exclusion of up to $2,400 in unemployment compensation from income.


10. Itemized deduction for state and local general sales taxes expired.

There are more rule changes for this year and you can learn everything by going to IRS.gov. Also check out the detail checklist for filing tax returns.

Happy Tax Filing!!

Little bit about Inflation…

Lately we been hearing lot about inflation from all over the world. It is going up drastically in many parts of the world because of harsh climate and economical aspects.

BTW, What is Inflation?

Inflation is the general rise in price of goods and service over a period of time. In US, inflation is considered 3% in a average per year. Inflation affects every consumer spending on day today life.

Inflation can affect different areas of the economy at different times. Currently because of the climate conditions, crops are getting damaged in many parts of the world so the prices of food items like Corn, Sugarcane is going up. It pushes the prices of Ethanol and Sugar. That’s one example of inflation in food side. Similarly how other items like Housing, Transportation, Utilities are going up during a period of time will give a picture about overall Inflation.

Inflation is measured by the Consumer Price Index (CPI). Click here to see the detail chart and understand how different parts of goods and services used in our daily life are affected.

How we will be affected by Inflation?

Because of the Inflation in prices of goods and services, a dollar which used to purchase a certain item with certain quantity will be able to purchase only less quantity next year or time goes on. So the dollar/currency value diminishes which means worth of the currency goes down every day so a dollar worth today won’t worth same a year after. For example, during my last visit to India (Jan 2011), I witnessed a 500% increase vegetable prices and 50% increase in other commodities because of weather and economical conditions. That’s not good for middle class family.

Because of that reason, you would have to save more and beat the inflation by growing your money by gaining interest for it. Save more now and take advantage of compounding magic and also invest wisely to beat the inflation pest which can make your money worth less in the future.

Link courtesy: mymoneyblog.com