The Eleven Reasons People Can't Sell Their Homes

The environment for home sales becomes more difficult with each passing month. Some estimates put 11 million mortgages, about 20% of the U.S. total, underwater, meaning that homeowners owe their banks more than the underlying properties are worth. Home repossessions reached more than 100,000 for the first time in September. Rising foreclosure rates continue to further depress housing prices.

The federal government let its tax benefit for homeowners expire in April and has not renewed it since them. The program did boost sales earlier this year. Shoppers must now face a market without the credit in which many home prices continue to fall.


The clamor over flawed foreclosure paperwork and robo-signers could further chill the housing market. People who might buy have bought a home in foreclosure will now worry about obtaining proper documentation and effective transfer of title.

24/7 Wall St. spoke with experts at real estate research firms Zillow.com and RealtyTrac to find the best way to sell a home. We also interviewed management from the National Association of Realtors, a number of real estate brokers, bank managers and elected officials in affluent communities. What emerged from these conversations and our research is the following: successful home sellers often do the same small number of things correctly. Often, these tactics are the difference between finding a buyer and not.

1. Pick the Best Broker

Many people who decide to sell contact a real estate brokerage with a sterling reputation or go to one that has the largest number of listings. Frequently, when potential sellers call these firms, they are turned over to the first available broker in the office. That person is often not the best representative. As a matter of fact, what is a successful broker doing in the office anyway? There are a small number of brokers in most markets who have a better track record than their peers. Most of them have been brokers for a long time and did not lose their jobs when the housing bubble collapsed.

2. Get an Appraisal

Sellers should obtain an appraisal for their home before they put it on the market. One of the major reasons house sales fall apart is that the bank assesses the home for less than the buyer has agreed to pay. For example, a buyer and seller agree on a price of say $250,000. Then the buyer goes to his bank to get a mortgage. But, the bank appraises the house for $200,000. Now, the buyer has to put up more money. Sellers who get their own appraisals get a realistic idea of what price a bank would value a house at before they enter into a sale. Most appraisers already do some work for banks. An appraisal often tells a seller what a "safe" price is. And an appraisal's average cost is only about $200.

3. Get the Right "Comp"

Sellers must make sure that foreclosures in their area are included in the "comps" the Realtor gives them. Traditionally, a broker will give a seller a list of similar properties in the market and that information is part of what is used to set a price. What brokers do not always do is put the price of any foreclosed properties that are comparable into the calculation. A typical foreclosed home sells for 25% to 30% less than similar inventory in the same area. If sellers don't take that into consideration, their home will not be priced competitively and they put themselves at a disadvantage. Sellers wind up slashing prices after their overvalued properties are on the market for several months without success.

4. Tax Assessment

Low property taxes are critical to finding buyers. Property taxes in most cities, towns and counties have gone up for years as home values appreciated. This revenue is used to run schools and other local services. However, now home values have dropped sharply, and the appraisals by local authorities on which taxes are based are too high. Many cities have a process for homeowners to request lower appraisals, and as a consequence obtain a reduced property tax. Some states even have a board of appeals for homeowners who do not think they were treated fairly. One way for people to get local authorities to cut the tax assessment of their home is to put it on the market at below the appraised price. If the home does not sell for several months, they can present empirical evidence of the lower value. A home assessed for $300,000 that goes on the market for $275,000, but does not sell for a year, is probably not worth $300,000.

5. Conserve Utilities

Turn the lights off! Most buyers ask for utility bills. "Energy wasters" who sell a home will rue the times they forgot to turn off lights, turn down the air conditioner or left the TV on all day. It would be ill-advised to fake the amount of energy being used by simply living in the dark and cutting utility costs to nearly zero. However, careful and prudent use of energy can cut bills by enough so that a buyer does not have sticker shock about what it costs to maintain electricity, gas or oil to run a house.

6. Sell "Green"

Not very many homes are actually built with environmentally friendly material or heated by solar panels or wind. But those that are have a special appeal to the crowd that buys green cars such as the Prius. A seller may have one of only a few "green" homes in their town or city. That may make it highly desirable to many shoppers.

7. Curb Appeal

This item appears on most lists, and many sellers don't bother to take the advice to prune the hedges or clean the gutters. But it is even more complex than that. Walk to the road on which your home is located. Now walk toward the house. What does a buyer see for the first time? Most sellers never bother to look at their homes through a buyer's eyes. Do the shingles need a paint job? Are the shutters looking shoddy? "Love at first sight" is no less rare with homes than with people.

8. Everything Is Negotiable

Negotiate the fee with the broker. The fee paid to a Realtor for selling a home is traditionally 6%. Sellers often believe that they can get that down to 5% or even 4%. But, in a market where brokers are desperate for business, pressing for 3% or even 2% may work. Whatever the savings are, they can materially affect how much a seller can drop the price of his home and still walk away with a profit.

9. Get an Inspection

Sellers should do some of the inspection work and testing before their home goes on the market. Inspectors for buyers are often aggressive when they report what is "wrong" with a home to their clients. For as little as $250, an inspector will go through your house and tell you what the inspector is likely to flag such as a roof leak or old, energy-wasting windows. That gives the seller a chance to fix the problem for less than the buyer may want to lower the price by, or at least know the items that a buyer will use to negotiate down the price.

10. Hire a "Stager"

For as little at $200, you can hire someone who can make your home look better by moving pictures, furniture, lights and addressing problems that may make the home show poorly. These people are cousins to the men and women who "fix" expensive homes before magazines come in to photograph them for stories. "Stagers" have lists of tricks that few Realtors and almost no homeowners know. The "better" your home looks, the more appealing it will be to potential buyers.

11. Fix It First

Sell a house that does not need any work. In a market in which people count every penny and worry about job security, fewer buyers want homes that are "fixer uppers" that require work that could cost thousands or even tens of thousands of dollars to address. These days, a buyer choosing between two homes will most likely take the one that needs the least work. It may cost some money to get your home to the point where a buyer can walk in and do almost no work. However, it may be the difference between selling a home and having it languish on the market.

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15 Ways to Tell if You Are Ready to Retire

It can be difficult to determine if you are prepared to permanently exit the workforce. You need to save enough to last the rest of your life--and you'll need to manage that money to beat inflation and minimize taxes. Retirees should also have a plan for remaining connected to others and staying relevant in this new life stage. Here's how to tell if you are ready to retire.


Establish a Retirement Budget



Retirees no longer have to pay for professional work clothes or transportation to the office. But unless you enter retirement newly mortgage-free, most of your other expenses are likely to remain the same after you leave your job. "I don't find that people's expenses go down in retirement," says Leisa Brown Aiken, a certified financial planner for Veo Financial Counsel in Chicago. "You're probably going to spend as much or more as you spend now." If you plan to travel or take up new hobbies, your expenses could even increase in retirement.

Examine Your Cash Flow

Most retirees receive income from several sources, including Social Security, pensions, investments, and increasingly, a part-time job. You need to make sure you will receive enough income from these or other sources to pay all of your monthly bills. Less common sources of retirement income include home equity, annuities, insurance, royalties, and rental income.

Size Up Your Nest Egg

How much you need to save for retirement depends on what your retirement expenses are and how much income you have coming in from other sources. Your savings needs to fill in the gap between your monthly living costs and your Social Security, pension, and other guaranteed sources of income. Retirement savers should estimate how long they will live and take steps to protect that money from inflation. Donald Duncan, a certified financial planner for D3 Financial Counselors in Downers Grove, Ill., says healthy baby boomers should plan as if they will live until at least age 90, and perhaps 100.

Develop a Withdrawal Strategy

Retirees need a plan for drawing down their assets. Most financial advisers say that you can safely spend 4 percent of your nest egg each year. Withdrawals from tax-deferred retirement accounts become required after age 70 1/2. The withdrawal amount is calculated by dividing your IRA and 401(k) account balances by the Internal Revenue Service's estimate of your life expectancy. The penalty for failing to take out the correct amount is 50 percent of the amount that should have been withdrawn, in addition to regular income tax.

Minimize Taxes

Your entire nest egg isn't available for spending in retirement. When you take money out of tax deferred 401(k)'s and IRAs in retirement, regular income tax is due on the withdrawals. If your tax bracket fluctuates from year to year, you can time your retirement account withdrawals to minimize taxes. "Do withdrawals or convert to a Roth when you are in a low tax bracket and, if you can, withdraw less when you are in a higher tax bracket," advises Aiken.

Maximize Social Security

Retirees can sign up for Social Security beginning three months before their 62nd birthday. But annual payments increase for each year you delay claiming until age 70. Seniors who sign up at age 62 get smaller payments over a longer period of time. But retirees who delay claiming will get higher payments in old age when they are less able to work and more likely to develop health problems.

Get Health Care Coverage

Many people delay retirement until they become eligible for Medicare at age 65. Sign up right away to avoid a Medicare Part B premium increase of 10 percent for each 12-month period of delayed enrollment. You'll also need to shop around for the Medicare Part D plan that best meets your prescription drug needs. Those who retire before age 65 need to have a plan to purchase health insurance. Consider whether your employer provides health coverage to retirees, you are eligible for COBRA coverage, or will need to purchase your own individual policy. Health insurance exchanges will become operational in 2014.

Prepare for Long-Term Care

Retirees need to consider the possibility that they might need long-term care. Medicare pays for up to 100 days of nursing home care, but a prolonged illness or chronic condition could require care for a longer period of time. Purchasing a long-term care insurance policy is one way to shield yourself from high chronic care costs, but these often expensive policies are not appropriate for all retirees. The health reform bill created a voluntary government long-term care insurance program, Community Living Assistance Services and Supports (CLASS), which will begin in January 2011.

Consider New Activities

Plan to embrace a new activity in retirement. "You have to be mentally ready to not go into the office anymore," says Duncan. "You need to have something to replace the time that you spent working such as a hobby or travel." Consider volunteer work, taking a class at a local college, or a part-time job.

Join a Social Circle

When you leave your job, work-related social functions and lunches with coworkers often stop. "If your whole social life is tied up in your work life, it is a difficult transition," says Warren Ward, a certified financial planner for Warren Ward Associates in Columbus, Ind. Try to make friends or join a social circle outside of your company before you retire. "Very often, people will find a hobby or two, volunteer at the library, or become a boy scout leader because it introduces you to a new social circle," says Ward.

Coordinate With Your Spouse

Retirement may change your relationship with your spouse. Perhaps one spouse is ready to retire and the other wants to continue working. Even if you retire together, you may have to renegotiate responsibilities and boundaries. "The act of retirement itself can put a strain on a marriage because they were both working or one was working and one was home and now they are both home at the same time all day, " says John Migliaccio, director of research for MetLife's Mature Market Institute. "Negotiating retirement with your spouse is very important." Sure, you'll be able to take lingering walks on the beach in retirement, but you also need to decide who mows the lawn and who unloads the dishwasher now that neither of you is working.

Pick Out a Place

Once you're no longer tied to your job, you're free to move anywhere you wish. Frugal retirees can downsize into a smaller home or condo or relocate to a low cost area of the country (college towns often offer a low cost of living and plenty of amenities.) Many seniors move to sunnier climates and never shovel snow again, and some choose to move closer to their grandchildren.

Keep Your Emergency Fund

Although the fear of losing your job disappears when you retire, the need for an emergency fund doesn't. Retirees still get leaky roofs, broken-down cars, and other large and sudden expenses. "It makes sense for retirees to have a fund of cash of some kind, one to three years' worth of money that they will need in addition to Social Security, and keep that in something really safe," says Aiken. "It's your short-term spending money." Keeping your emergency fund in an FDIC-insured account will allow you to delay withdrawals from investment accounts in years when the stock market performs poorly.

Pay Off All Debts

Pay off as much debt as you can before you retire. "In general, people should have all their debts paid off when they retire," says Aiken. "If you have no mortgage you have more flexibility when things happen."

Take a Practice Retirement

One way to tell if you will enjoy retirement is to test it out by taking an extended vacation or leave of absence from your job. "Very often, people who are used to working really hard are just lost when they don't have some place to go," says Ward. "Their value in their own mind is being part of the workforce and going in and solving problems for people every day." Find out if you will enjoy hours of free time and lingering lunches or if you'll crave work to structure your days. "We encourage people to take a leave as an alternative to retirement as a chance to sample it," says Ward. "Consider what you want to do next and what you are going to give up."

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How to Make Your Money Last in Retirement

People are living longer and saving less. But there are ways to stretch out your dollars.

If you're like many people, you've put considerable time and effort into socking away money for retirement. But you've probably put less thought into how slowly you'll spend the money and in a way that will make it last--a potential disaster.



A perfect storm has foisted this challenge upon individuals. People are living longer. Fewer have pensions. Instead they have 401(k) plans that may have been decimated. Assets in savings accounts may actually be losing value thanks to short-term interest rates that are actually lower than the inflation rate. And Social Security seems iffy for younger workers.

There are steps you can take to make your money last. Spend less and work longer, of course. But even then you can't know how long you're going to live. All you have are the odds: for a married couple at age 65, there's a 58% chance one person will live to 90; a 50% chance one will live to 92; and a 25% chance one will live to 97.

William Wixon, owner of Wixon Advisors, advises many Minnesota clients to plan for a retirement of 30 to 35 years. How can they make their money last that long, or longer? Let's say you're 65 years old, want to retire now, and expect to need $100,000 annual income in retirement. You'll need to adjust that $100,000 to rise with inflation because, as Wixon says, "What's a loaf of bread going to cost in 30 years? Maybe nine bucks." Here are some options for you, with pros and cons.

Savings Accounts

If you have a Depression-era mentality, put your nest egg in savings accounts and certificates of deposit with no more than the FDIC-insured limit of $250,000 in any one bank. It's safe and will be there for you no matter how the markets do.

Unfortunately such low-risk investments may lose value over time after inflation and are unlikely to generate much income. If you have a pot of money to get you through your golden years, the most that can be withdrawn over a 30-year period is 5% (some people say 4%) per year, adjusted for inflation. At current interest rates of 2% or so, you'll need to start with $5 million to generate $100,000 a year in income. But that doesn't allow for $100,000 to grow with inflation, so plan to draw down that $5 million over time.

A Balanced Portfolio

If you don't just happen to have $5 million lying around, you'll need to take some more risk to have any chance of generating that $100,000 a year you desire. One alternative is to put money in a diversified portfolio of stocks, bonds and real estate that pays dividends. If you start with $3 million and the market performs as it has over the past 70 years, you should be in good shape. But if the market lags or companies cut their dividends, your money might not last.

A recent white paper from Vanguard Group discusses making systematic, fixed, inflation-adjusted withdrawals from a balanced mutual fund of stocks and bonds. Adjusting your withdrawals based on the inflation rate might reduce the risk that you'll run out of money, but it won't eliminate it entirely.

Immediate Annuities

With an immediate annuity, you put money in an insurance contract that usually pays a fixed rate of return (much like a certificate of deposit) and start receiving payments within a year. How much income your lump sum will generate depends on how much you invest, your gender and age at the time you buy the annuity, as well as the prevailing interest rate environment (currently unfavorable to annuity buyers). A 65-year-old woman living in Illinois would need to plunk down about $1.5 million to generate $100,000 in inflation-adjusted annual payments for life.

It pays to comparison-shop for immediate annuities, especially among low-cost vendors like Vanguard and TIAA-CREF. Also consider tailoring the annuity, for example, by arranging for payments to continue until both spouses pass away.

One downside is that an immediate annuity ties up your money, so you won't have access to it in an emergency or to pass on as an inheritance if you get hit by a bus the day after you buy it. It also locks into the prevailing low-interest-rate environment. You can get around this by buying annuities in chunks over several years. To lock in real, after-inflation income, opt for an inflation-adjustment rider, but understand that it will cut into how much you'll receive each month.

Deferred Annuities

With a deferred annuity, you pay now and hope to accumulate assets through either a variable product that invests in equity mutual funds or a fixed product that offers bond-like returns. How much you'll receive each month when you start to draw down your annuity will then depend on how your variable or fixed investments do over time.

Putting aside money this way may encourages you to save for retirement. But it may also come at the cost of hefty surrender fees or penalties if you decide you need to tap your savings prematurely.

Another reason to consider deferred annuities is that they enable you to continue saving tax-deferred after you've maxed out your 401(k) and your IRA. You will still have to pay taxes as you withdraw the money. Unlike with an immediate annuity, if there's a balance when you die, it goes to your heirs.

The downside of deferred annuities are the lockups and often exorbitant fees. You pay an average of 2.15% a year, according to one study, and you could pay up to 4% annually in fees. Unless the tax deferral is truly important, you might be better off investing in tax-efficient mutual funds or ETFs until you need the money, and then converting it into an immediate annuity. It's not risk-free, but it may save you a lot of money in the long run.

Guaranteed Lifetime Withdrawal Benefits (GLWBs)

Many deferred variable annuities buyers avoid the risk of out-living their savings by paying for guarantees that payments will last until they die. That's one way to guarantee your $100,000 annually lifetime income will continue (as long as the insurer remains in business).

Unfortunately $100,000 will not buy in 20 years what it does today. Cost-of-living adjustments come at a price of about 1% per year with GLWBs. That's on top of the cost of the annuity and the underlying investments. Add it up and the cost could come to a pricey 5% in all. If you tap your money for an emergency, you risk blowing up the guarantee. If you still want the product, prepare to shop with professional assistance because insurance companies seem to go out of their way to make GLWBs confusing.

Reverse Mortgage

If all your planning comes up short a reverse mortgage might help you make ends meet. It is essentially a specialized home-equity loan available to people 62 and older that lets you borrow against your home equity and collect the money as a lump sum or as regular payments for as long as you live.

The advantage is this lets you tap equity in your home without having to meet any income guidelines or make immediate payments, as you would with a home-equity loan. Unfortunately costs are high, and when you're gone your heirs might have to give up the family home to pay back the reverse mortgage.

If your home loses value, any shortfall against the loan is the Federal Housing Administration's problem. But remember, you still have to pay taxes, insurance and upkeep on your house. And it won't provide $100,000 for long. The maximum loan you can get in most cases is some percentage of $625,000, based on your age. Hopefully that will last you.

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How to Do Estate Planning on the Cheap

You could use software to write your own will, but here's a safer alternative.

Yes, it can be painful to pay for estate planning. Lawyers charge a lot. The benefits of a plan are delayed, and you don't live to see them anyway. Who wants to spend big bucks on a plan when times are so tough and the federal estate tax is in flux?

Fewer and fewer Americans, it seems. Only 35% had a will in 2009, and only about half had any estate-planning documents at all -- a will, a trust or a financial or medical power of attorney, according to a survey by Lawyers.com. That's a drop from previous years.


What about do-it-yourself planning? In theory, you can use books or software and websites that spew out documents for free or for a fraction of what lawyers charge.

There's a decent argument that doing something on the cheap is better than doing nothing. If you die without a will ("intestate," in legalese), state law will determine how most of your belongings are distributed, and it may not be in the way you'd want. If you're a single or surviving parent who dies without a will, the court will decide who should raise your minor children. And certainly, before you're wheeled into the operating room, it's better to have signed living-will and medical power-of-attorney forms -- even if you haven't consulted a lawyer.

The trouble with do-it-yourself planning, however, is that even if your situation seems simple, there are many oddball things a layman wouldn't think of that can go wrong, especially with a will. These mistakes can end up costing your heirs a lot more than you saved in legal fees.

Example: Fort Lauderdale lawyer Joanne Fanizza recently handled the estate of an elderly Florida woman who had a guy (not a lawyer) in her condo building write her will. He worded it in such a way that her estate lost "homestead protection" -- meaning protection from her creditors -- for her condo. So even though she had no debt, her kids had to sit out Florida's 90-day creditors' claims waiting period before selling the condo. "The real estate market was falling, and every day cost them money in lost value," Fanizza reports.

To be sure, not every will written without a lawyer leads to a horror story and some written by lawyers go awry, too. But owning a home, being married or having children complicates estate planning and increases the risk of foul-ups. And with the federal estate tax scheduled to come back next year for those who leave behind more than $1 million, minimizing Uncle Sam's bite will be a concern for many more people. (Plus, 19 states currently have their own estate taxes, and some of those kick in at fairly low asset levels.)

Here's another alternative: Capitalize on the fact that lawyers, too, are relying on software and find one who will prepare documents for you cost efficiently.

We've listed below five key estate-planning documents, rough low-end costs for having a legal pro prepare them and some of the value a lawyer might add. Each estimate is based on an hourly rate of $300 (although some estate lawyers charge as much as $1,000) and covers the document, a brief consultation and help spotting pitfalls or opportunities unique to your situation. The prices assume the matter is simple enough to take minimal professional time and that the lawyer uses software.

Jonathan G. Blattmachr, a retired partner of Milbank, Tweed, Hadley & McCloy and founder of the Melbourne, Fla. company InterActive Legal, which sells software for estate lawyers, helped us determine how much of an attorney's time would be involved under those conditions. He notes that a lawyer who prepares your will and perhaps a life insurance trust might throw in the other, simpler documents listed here for free or for a nominal additional cost. So it pays to negotiate for a lump-sum price. You should be able to get the whole package for $1,200 to $2,000, but don't be surprised if some lawyers ask for $4,000 or more. If, after reviewing this list, you still want to use do-it-yourself software, then consider hiring a lawyer to review your self-prepared documents. Figure on paying for one to two hours of his time at $300 an hour.

Basic Will: $600

As the cornerstone of many estate plans, a will should transfer assets, appoint a guardian for minor children and name an executor or personal representative -- the individual or institution that takes charge of your estate after you die and distributes property as you specified.

Value added: This is the document most fraught with land mines, some of which only an experienced lawyer can spot. One problem that can arise with DIY products is inadvertently cutting a family member out of your will. For example, some DIY software automatically disinherits a special-needs child if you answer yes or no questions a certain way. (If you have such a child, get professional help with your estate plan.) A more common trap goes something like this: Mom wants to provide equally for her three children. Shares in GE constitute a third of her estate. So she leaves the stock to one child and the rest of her assets to the other two. Several months before she dies, she sells the stock. The child who was supposed to get it receives nothing. If the other two siblings want to even the score, they could end up owing gift taxes.

Irrevocable Life Insurance Trust: $600

This trust is created to own a life insurance policy. Why use a trust? If the insured owns a policy on his own life, the insurance proceeds become part of his taxable estate. Your heirs can own insurance on your life directly, without using a trust, but not if those heirs are minors.

Value added: Though simple in concept, this trust requires careful execution. You can put money in the trust to pay insurance premiums using the "annual exclusion" -- a provision that allows anyone to give anyone else $13,000 a year. But the annual gift must be of a "present interest" -- something the recipient can use right away. To satisfy this requirement the beneficiaries of an insurance trust (or their parents, if the beneficiaries are minors) are usually given what's known as Crummey powers--the right for a limited time, usually 30 or 60 days, to withdraw from the trust the yearly gift. The lawyer can supply a sample letter, called a Crummey notice.

To keep the lawyer's cost low, consider in advance whom you should name as an independent trustee and a backup trustee. Think, too, about other issues, including the timetable for distributions from the trust and how much power the trustee will have over distributions.

Durable Power of Attorney: $150

This document appoints a trusted family member, friend or adviser as an agent to act on your behalf in a variety of financial and legal matters if for some reason you can't. Typically this is a concern of older people, but much younger people can also be incapacitated.

Value added: A lawyer can help you determine what rules apply in your state and whether, if you own real estate in more than one state, you will need a power of attorney in both. Other issues you might discuss: What powers should be included (for example, the power to make gifts or create a trust)? When should the document take effect?

Health Care Proxy: $75

Also called a health care agent or health care power of attorney, this authorizes someone to make medical decisions on your behalf if you can't.

Value added: The form, which varies from state to state, is generally not complicated to fill out. But if you're not sure whom to choose as your agent, you may want to discuss it with a lawyer. Whether you do this yourself or not, Blattmachr recommends signing four copies of both this document and your living will. Keep one yourself and give one each to your health care agent, your primary physician and a trusted adviser.

Living Will: $75

This expresses your preferences about certain aspects of end-of-life care, rather than simply leaving decisions up to the person named in your health care proxy.

Value added: A lawyer who has witnessed life-or-death decisions with other clients can facilitate conversations about this difficult topic. Bernard A. Krooks, of Littman Krooks in New York City, was meeting with a couple when the husband stepped out for a moment. In his absence the wife confessed that she couldn't follow her husband's wishes to pull the plug -- she would keep him alive under any conditions. Krooks disclosed that to the husband, who named an adult child as his medical agent instead

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How to Become a One-Income Family

It's no myth: More couples than ever are relying on two incomes to get by.

According to the Families and Work Institute in New York, 79 percent of today's married couples have both people in the work force, up from 66 percent in 1977.




But at some point, life happens — you start a family, go back to school or face a layoff — and this new reality may force you and your partner to question whether you're ready to jump off of the dual-earner treadmill.

While there are steep odds to overcome, living with only one family income can be done with thorough planning and a willingness to make choices





Get on the Same Page With Your Partner


It is critical to have a frank conversation with your spouse about why you're making the choice to live on one family income.

"Be sure to talk about all aspects of this decision, making sure this is a comfortable, mutual agreement," says Judy Lawrence, a financial counselor in Albuquerque, N.M., and author of "The Budget Kit: The Common Cents Money Management Workbook."

Feelings of ownership over money can be a thorny issue for one-income families, as the spouse earning the money may feel more entitled to spend it. Establishing a personal allowance for both partners can reduce those feelings, says Ben Gilbert, a Certified Financial Planner with Silver Oak Advisory Group in Portland, Ore.



Carefully Map Out Your Budget


Don't resign yourself to an all-ramen noodle diet without first setting a detailed budget for living on one family income.

"Once a couple can see what their obligations are, they can look at that list and determine what they give up," Lawrence says.

Beyond the mortgage and groceries, the budget should also include less obvious expenses such as life insurance and disability coverage, Gilbert says.

Set spending priorities and adjust your budget accordingly, Lawrence says. Should you give up dining out, or weekend entertainment, or both? Re-evaluate fixed expenses such as cable, cell phone payments and monthly subscriptions.





Trim Big-Ticket Items First


Forgoing a few lattes probably won't make up for the loss of an entire paycheck.

Trimming costs on housing, cars and other major monthly expenses will free up the most room in your budget. But this is the tricky part, as costs of living for necessities have risen drastically in recent decades, says Lois Backon, senior vice president of the Families and Work Institute.

Still, it's not impossible. "There are lots of surprising ways to lower housing expenses," she says.

Because selling a house in a depressed market might not be feasible, Backon suggests exploring nontraditional living arrangements, such as renting out a room.

Cars are another major expense, and it might be worth selling a vehicle if one person won't be commuting, Backon says. And clear off any credit card debt or other monthly bills that might prove cumbersome later as a one-income family, she says.



Say 'So Long' to the Joneses




With most of today's couples pulling in two paychecks, many of the trappings of today's modern family — the bigger house, new cars, dinners out — are the result of a two-income lifestyle.

Don't expect to have all of those things if a single-family income is your priority, Gilbert says.

"You need to have an open discussion with your peers and say, 'We really can't afford to go out to restaurants and do these other things because we've chosen to live this one-income lifestyle,'" he says.



Don't Cut Back Too Much


Don't fall into the trap of eliminating long-term savings, Gilbert says.

"Because the retirement savings isn't immediately tangible, it's very appealing for a lot of folks to cut back on it," he says.

The same goes for discretionary spending. Ever go on a super-strict diet and entirely deprive yourself of certain foods, only to take a hard fall off the wagon? That's what too much cutting can do, Lawrence says.

If dining out or coffee is a priority or a networking tool, it might be better to cut other things from the budget, she says.



Recast Your Savings Strategy


Just because you plan to live on one family income doesn't mean you have to give up that other paycheck.

Keeping two incomes but relying only on one for living expenses can open up a world of savings opportunities for things such as starting a business, planning for retirement or building a cash reserve in case of a layoff, experts say.

"A lot of people use one income for the necessities — the actual mortgage, the transportation expenses, the food," Backon says. "Then, they use the other income for things they could at some point do without."

[When You Can Save Money by Spending More]



Give it a Trial Run


Practice what it's like to live on a single-family income for a while, especially if you don't have a sound budget to begin with, Gilbert says.

"The best way to do this is to pretend you don't have the money," he says.

Gilbert advises setting up an automatic transfer from the bank and withdrawing the entire second paycheck so you don't even see that money for a year. Then put the cash toward a secondary goal such as savings or a vacation.

"In this day of instant gratification and unbelievable media pressure to spend, this ability to save and to make lifestyle adjustments is more powerful than anyone really realizes," Lawrence says.

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How to Keep Your Nest Egg Intact After a Layoff

Unexpected job loss -- stressful as it is -- comes with another headache: what to do about your 401(k). Without careful attention, there are plenty of taxes and penalties that could shrink your existing retirement account balance. Here is how to keep your retirement stash intact when your job is eliminated.




Find out if you are vested. All the money that you deposit into a 401(k) still belongs to you after a layoff. But you can only keep your employer's contributions if they are vested. Only about a third of 401(k) plans provided immediate vesting in 2008, which means employees can keep a 401(k) match when it is deposited, according to a Profit Sharing/401k Council of America survey. Other retirement accounts may require you to be with the company for several years before you can keep any of your employer match or gradually increase the percentage you may keep based on job tenure. Find out how much of your employer's contributions you are entitled to.

Make your move. You have several options to maintain the tax-deferred benefits of your 401(k) when you leave a job: You can keep the money in your old employer's plan, roll it into another tax-deferred account such as an IRA, or transfer your balance into a new 401(k) when you land your next position. Transferring your old 401(k) balance to an IRA makes sense when the IRA offers better investment choices and lower expenses than your old 401(k) plan. But you may want to leave your 401(k) funds with your former employer if the company has negotiated low investment fees on behalf of employees. David Loeper, author of Stop the Retirement Rip-off: How to Avoid Hidden Fees and Keep More of Your Money, says savers should aim to pay 0.75 percent or less in annual fees.

Avoid transfer penalties. If you decide to move your retirement savings, have your former employer directly transfer the money into an IRA or your new employer's retirement plan. "Have the check made out to the institution where it is going instead of the check being made out to you," says IRA expert Ed Slott, founder of irahelp.com and author of Stay Rich for Life!: Growing & Protecting Your Money in Turbulent Times. When a check for the balance is made out to the worker, the company will withhold 20 percent for income taxes. Employees have 60 days to deposit the cash in a new tax-deferred retirement account before Uncle Sam keeps the 20 percent, and the worker may also be responsible for additional taxes. If you're under age 55, you will also have to pay a 10 percent early withdrawal penalty. The employer withholding also means you have to come up with the absent 20 percent from another source if you want to roll your entire nest egg into an IRA. For example, if you have a $10,000 401(k) balance, your former company will give you a check for $8,000. If you put only that $8,000 into a new retirement account the $2,000 will be counted as income that year and taxes and penalties may be applied.

Consider your age. IRA withdrawals before age 59 1/2 result in a 10 percent early-withdrawal penalty. However, retirees can begin taking penalty-free 401(k) withdrawals at age 55. "If there is any possibility that you might need that money at age 57, you want to leave it in that 401(k) plan," says Kathleen Campbell, principal of Campbell Financial Partners in Fort Myers, Fla.

Leave employer stock behind. The stock of the company you work for gets special tax treatment when it is held in an employer-sponsored 401(k). "If you roll over the stock to an IRA, the deal is off forever," says Slott. When you withdraw company stock, the original cost of the shares will be taxed as ordinary income, but the appreciation of the stock is not taxed until you sell it (then it's taxed at the long-term capital-gains rate of 15 percent). If company stock is rolled over to an IRA, appreciation is taxed at the typically higher ordinary income tax rate of up to 35 percent when withdrawn from the account.

Think before you cash out. Almost half of laid-off workers who left their job in 2008 cashed out their 401(k), according to a Hewitt Associates study of 401(k) participants who terminated employment. But early withdrawals come with a significant cost. A worker with a $5,000 401(k) balance in the 20 percent tax bracket would receive just $3,500 after taxes and penalties. "If there is any way you can avoid touching that money, I would avoid it," says Loeper. If you need to spend some of your retirement stash on necessities, at least try to avoid the 10 percent early withdrawal penalty. Both 401(k)s and IRAs can be used to pay for unreimbursed medical expenses that exceed 7.5 percent of your income without penalty. Other Uncle Sam sanctioned ways to spend an IRA, but not 401(k), balance without incurring an early withdrawal penalty include health insurance premiums after 12 consecutive weeks of unemployment, college costs, and first home expenses up to $10,000. Income tax, however, is still due on retirement account withdrawals, even when used for emergency expenses

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How to Rehabilitate a Dying Career

Ariel Preminger spent a decade running a construction business that built entry-level homes for families in the Los Angeles area, but by the middle of 2008, Southern California's housing market had gone bust and Preminger quickly found himself without customers, and without a job.



"At the beginning of the recession, I thought we were going through a slowdown in the housing market for a couple years and then we would rebound," Preminger said. "But instead of a slowdown, it was a complete collapse and our business completely stopped."

Preminger, who moved to the U.S. from Chile in 1987 to build "a better future" for himself, realized he had no choice but to change his career to protect that future. He spent much of the year after his business collapsed weighing his options, considering whether to open a business in the food industry or perhaps start a trucking company. Eventually deciding it would be better not to abandon the home construction world he knew, he opened a home painting store in 2009 instead that is already doing quite well.


"The housing business had dried up, but I wanted to stay in this industry, so I chose the paint business because it's not something you can do away with," he said. "There is always a need for a paint."

Many Americans have likely had the unfortunate experience of realizing they are stuck in a dead-end job with little room for advancement. But in recent years, millions of workers like Ariel have had a different kind of awakening. It's not the job that's the dead end, but rather the entire profession.

Virtually every profession experienced some cut-backs during the recession, but for a handful of industries, the layoffs were much more severe. Estimates say that 8 million jobs were lost nationwide during the recession, and the majority of these were in the retail and manufacturing industries as well as construction. The number of people employed in the construction industry in particular dropped from about 7.5 million the month before the recession began to 5.6 million by the beginning of this year, and has largely stalled there. As a result, the unemployment rate in this industry peaked at 27% in February 2010 and continues to hover around the 20% line, more than twice the national average.

Even as the economy begins to improve, some economists now predict that these industries will never be able to reach pre-recession employment levels.

"I think we have entered a period of long and permanent unemployment for these industries," said Edward E. Leamer, director of the Anderson Forecast at the University of California, Los Angeles, which provides quarterly predictions about the direction of the U.S. economy. "This is completely unprecedented."

According to an analysis Leamer published recently, as many as 5.5 million jobs lost during the recession will never come back. These include some 2.5 million manufacturing jobs, 2 million construction jobs and roughly 1 million retail jobs. The reason, Learner noted, is that there is no longer a need for these jobs, either because the positions are being outsourced overseas, or assumed by computers and robots. The recession did not cause these problems, but simply accelerated the need for companies to trim the fat and modernize their workforce.

"It's been ticking away in the background and now we have to confront reality," Learner said. "A large fraction of our workforce is unsuited for work in the 21st century."



If you're working in one of these troubled industries, now might be the time to follow Preminger's example and find a way to fortify your career.

Step 1: Research Your Profession's Future

The first and perhaps most important step that all workers should take right now is to begin researching trends in their industry.

"Many employees don't realize that industry downsizing will affect their jobs until it's too late. But in this economy, you should be on the lookout for telltale signs," said Alexandra Levitt, a career expert and author of New Job, New You: A Guide to Reinventing Yourself in a Great New Career. "One key question to ask yourself is if there have been major layoffs or consolidations in companies similar to yours."

Levitt also recommends browsing through periodicals that relate to your industry so you can spot trends as they happen. Not only is this a good way to forecast your job security, it could give you clues about the next big thing in your industry or a related profession so you can begin searching for opportunities there.

If you don't feel like running to your local library to browse through niche periodicals, use online tools like the Future-Jobs-O-Matic, from American Public Media's Marketplace. Just click on any of the professions listed on the page, and this tool will show you the job prospects and average salary of the position in 2018, based on government data. If the outlook is grave, it may be time to look elsewhere.

Step 2: Focus on Your Skill, Not Your Industry

If you find out your industry is in trouble, it doesn't mean you need to spend thousands of dollars to go back to school and jump into a completely unrelated sector. Instead, focus on what you are particularly good at and see where you can apply the skills you have already learned.

"The people who do best in a difficult workforce are the most flexible, so focus on where you're flexible. Even if you are in a dying field, you are really just in an aspect of a dying field," said Penelope Trunk, a popular blogger and CEO of the Brazen Careerist, a career management site. "Maybe you specialize in the accounting part of manufacturing, or in the relocation segment in real estate, or the online section of a newspaper. Focus on the subset of your job, rather than the sector you're in, and transfer that skill to another sector."

Step 3: Don't Be Afraid to Tweak Your Resume

As part of this, it may also be necessary to give your resume a makeover to play up your skillset, rather than your dying profession.

"You absolutely need to start re-tooling your resume," Trunk says. "A lot of moving yourself from one sector to another is purely a matter of marketing. If you frame the history of your career as being manufacturing, then you're unemployable. So you need to work to re-invent yourself on paper first and accentuate your skills."


Part of tweaking your resume may mean leaving off certain jobs you've worked, or even making slight changes to the positions that you've had.

"That's not lying," Trunk says. "It's marketing yourself."

Step 4: Pay Attention to the Professions of the Future

While many positions in the country are gradually being handled by machines, some jobs will always need people.

"Many careers in fields such as health care, education and information technology simply cannot be automated," said a spokesperson for the Department of Labor. "That is something that any job seeker should consider when looking at a career change."

Indeed, the professions that are growing the fastest, according to government data, are positions like health care aides, physicians' assistants and personal trainers, not just because real people are needed to do these tasks, but also because the U.S. population is getting older and requires more care from these professionals than before.

Needless to say, the tricky part is finding a way to make the leap from your old job to one of these new ones. It may not be incredibly difficult for someone who handled technical computer duties in a manufacturing job to make the transition to an information technology position, but how can you suddenly move to the medical profession?

According to the Department of Labor spokesperson, it's not impossible, as there are various short-term training programs and education options around the country for people interested in pursuing jobs in information technologies and health care.

Workers can find these programs and other job resources on sites like CareerOneStop.org and MySkillsMyFuture.com, both of which are run by the Department of Labor.

And as with any career, Levitt, the career expert, notes that it's also useful to try networking with professionals in your desired industry and being willing to take opportunities at smaller companies to get your foot in the door.

Step 5: Embrace the Information Age

Regardless of which industry you choose to pursue, in order to secure your job prospects going forward, it is absolutely essential now to get comfortable with a computer, as this is quickly becoming a requirement for jobs in all major professions.

"Whatever field one wants to go into, they need to understand the information age," said Tyrone Everett, regional director at the Center for Employment Training, one of the largest career training programs in the country. "Plumbers, maintenance workers, roofers and more all need to understand how to access and pull information from the Internet to do their jobs now. There's no way around it."



Everett recommends Americans start doing what he calls "barrier reduction exercises," such as playing computer games with your children or grandchildren and simply being willing to get on the computer and "make mistakes so you realize the computer won't blow up when you do."

"We have seen so many people laid off from the post office and construction work sites who have a great work ethic but just need to be re-careered in this way," he said.

Step 6: Be Honest With Yourself

Obviously, no one wants to find themselves in the situation where their career is in danger, but the only thing that can make the situation worse is by failing to be honest with yourself and acknowledge that a change is needed.

"It's important to recognize that your industry or expertise is in decline, not growth," said Tory Johnson, CEO of Women for Hire, a recruiting company. "You need to avoid denial."

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Shopping Tips and Secrets

It is possible that you may be frequenting one of the supercenters for your groceries. These stores occupy a much larger land area compared to the regular grocery store. The super stores tend to sell almost a general list of goods such as apparel, electronics, toys, food, produce and much more.

In some of these stores there are other independent businesses within the super center like a bank, photo studio, or even a beauty shop. In addition to the company's main departments other branch department like automotive where car maintenance takes place as you shop. A classic one-stop shop indeed.

To make sure that you do not over spend or lose you money in anyway, consider these experiences to help you make an informed choice:

Coupons/ Cost Cutters

1. Check out the advertisement flyers at the store front or read the ones you get in the mail.

2. Cut out coupons, coupons also are easily found in magazines, the store flyers, back of receipts, within the aisles, on other products and more.

3. The store coupon machines are within the aisles extends out from the shelves usually next to a particular product take some if you buy that product.

4. Buy generic, or store brands, the secret is that most of the generic or store brand are usually manufactured by the same brand name company. For example, some toothpastes, for instance, both the brand and generic(cheaper) brands are manufactured by the same maker.

5. Some sources suggest that signing up for company's newsletters allow you the opportunity for more saving programs.

6. Joining a fan page on Face book and other social media may also be a good way to enjoy some savings, free stuff and more.

Apparel

1. Shopping for apparels consider the clearance rack, the items are mark down.

2. Clearance racks clothes are usually the season before items that are mark down very low to be sold out completely. You can buy for the next year‘s season.

3. Keep receipts and tags for return at least thirty days – ninety days. Wal-Mart for instance gives three returns without a receipt per household per year note, a valid drivers license is required.

Canned/Bottled Items

1. Check dates on items such as can foods, and bottle drinks before buying. The problem usually is severe in areas with fewer shoppers and if the item is hardly a hot seller.

Produce 1. Check your fruits and veggies for freshness before buying especially if you are not using them right away. 2. It is important to run produce under running water or rinse them before eating.

Deli/Prepared Foods

1. Foods at the deli are not always fresh. Some of them have been in the case for a few days. What they do is they change the bowls and put in the same stuff.

2. If all possible lightly rinse with water or cook your cold meats from the deli before you eat them. They are not always handled with care.

3. If you are hungry and you can, try to stick to hot items at the deli. The fried chicken is usually fresh, because in some states they are allowed to sell them after few hours of cooking. In Illinois, it has been that after about four hours of cooking fried chicken they should be thrown out.

4. Health inspections are not usually random, managers and owners of the deli departments and even your regular restaurants are usually notified. So they prepare for inspection in most cases.

General Grocery Store Secrets

1. Ask questions; ask for help.

2. Buy milk by the date, the furthest date is what you want.

3. Keep a list of items to shop for so you are not easily overwhelmed by useless and unnecessary stuff.

Check Out Stand

1. Get an idea of your bill before you go to the checkout counter.

2. Keep a small pocket size calculator along with your shopping list and budget.

3. This is most painful one, sometimes items are scanned twice by accident, in major stores in some cases, if the subtotal appears on your receipt more than twice be cautious of erroneous balance. Though it can be due to some valid reasons but once you get out of the store no one will buy your story.

4. Check your receipt before you live the store.

5. Be careful going to the express checkout lanes with double the quantity of items displayed for that lane.

6. If you have a lot of items say a cart full, do not check them all out on one receipt. Split them up, basically load about half the items on the conveyer belt and divide it with the divider (stick). And load the rest. The registers in the large stores can screw up or they can freeze, usually the manager will come and unlock the machine with a key.

7. Ask questions; ask for help with your grocery to your car.

8. Use your own bags if you like.

9. Refer store clerks by their names on their badges.

10. Initiate friendliness and respect toward store clerks that can go a long way for your everyday shopping experience and better care.

Though you may have encountered some of these tips for yourself before, it helps to know somebody out there also notice them as well. Some of the check out issues may be attributed to systems error others just human error but they can be costly. The best way to shop in these supercenters is to be prepared and be vigilant, knowing that you are on a mission.

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Credit Cards for Every Situation

By doing a little research you can see that credit card offers number in the hundreds to thousands. Just too many credit cards to choose from so the only problem is deciding on which one to choose.

Certain credit card offers require an annual fee for being a holder but there are also cards that do not require an annual fee. For every financial transaction there is almost a specific credit card offer for it.

Take a look at the credit card deals and make a selection. It isn't that tough but you'll just need to spend a little time going through the offers

You Can Compare Credit Card Rates

It won't be that difficult a decision on which card you would like if you have a good idea of what you features you want in a credit card. Looking for that 0 Credit Cards APR? Depending on the credit card, they will offer it. You pay no interest on the balance for the initial period of time (3-12 months) you own the card.

Airline Miles Credit Cards

Are you a traveler? If so it would be wise to look specifically for a credit card or airline card that offers miles for your specific airline.

Get Money to Spend Money?

Who doesn't want cash back when swiping their credit card? Many of the leading credit card issuers are indeed offering cash back for all purchases made with your card.

Transfer Your Balance Credit Cards

Have a little credit card debt on different card that you currently use? Check to see if you the card that you are applying for offers a balance transfer. Now when you become approved for the new card you can start a balance transfer have the old card paid off and moved over to your new card at one of the most competitive rates anywhere.

For those of you who have been trying to pay down your debt doing a balance transfer to a new card can really help you out. Even with a balance transfer do not lose sight of the fact that you are trying to pay down your credit card debt. Stay focused and this new credit card could be a godsend. Did you know that you can get rewards points for every dollar you spend using your credit card? The retailer does not matter. You'll get points anywhere the card is used.

The More Points the Better on Your Rewards Card

Those points can be traded in for actual items such as hotel stays, travel rewards, gift certificates, brand name items, golf clubs and so much more.

It is just amazing the whole catalog full of items that they offer you. You will feel like a kid in a candy store when you see the amount of rewards points you have totaled up at the end of the month.

Student Credit Card Offers are More Than Just Credit

If you are currently a college student looking for a student credit card then you are in luck because there lots and lots of student credit cards on the market. These credit cards offer students much larger discounts for what students spend their money on: textbooks and pizza.

Be Responsible Finding the Best Credit Card Offers

Just because you have a credit card does not mean that you can freely swipe your card everywhere that you go. Do not get into the habit of "spend now and worry about it later". A lot of people fall into this trap of spending without realizing how much they are spending. Once you lose focus of how often you used your credit card you'll be in shock to see your credit card bill. It doesn't make a difference if you pay with cash or charge to your credit card.

The money that you borrow is still money owed to the credit card company. This doesn't mean that credit cards are terrible. It is how disciplined you are when using the card. Don't fall off track spending money on your credit card, don't do any impulse purchases and you will love the great benefits of having a credit card.

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Confused by Life Insurance? Here's Help

You know why you need life insurance -- to keep a roof over your family's head, to pay off debts and the future education of your children -- but when it comes to making a decision, it isn't always easy.

Life insurance is confusing. Here's some help to sort out the different policies so you can buy the best possible policy to protect your family.

What are the Major Types of Insurance?

Life insurance falls into two major categories, protection and investment. Term insurance is for protection. In the event of death, the beneficiary gets a lump sum of money. This is what most people think of when considering life insurance.

Investment life insurance plans are those called 'whole life', universal life', and 'variable life'. The main purpose of these plans ore to increase the money you make in payments.

Let's look at these separately but before we do, here are some words you need to know:

Beneficiary - the person who receives the money when you die.

Premium - the amount you pay for the insurance. You can pay this fee monthly, quarterly, or yearly.

Term Insurance

Term insurance is temporary giving you protection for a certain amount of time - 5, 10, 15, 20, 30, or 40 years. It gives your beneficiary a lump sum of money when you die. This type of insurance is recommended if you're under 40-years-old and don't have a history of premature death in your family.

Pros: The premium is usually cheaper than other types of insurance. If you die, your family has money to make house payments, pay off debts, and pay for children's education or whatever the needs may be.

Cons: When the time period for the policy is up, you don't get anything in return for all your payments. Premiums for Term insurance increase as you age.

Whole Life Coverage

This type of insurance is permanent. You have protection, usually to 100 years of age unless you don't pay the premiums. With whole life insurance, you build cash value. Part of the premiums you pay build up the savings.

Pros: Your payments stay the same. If you sign up for whole life insurance at a young age, you might build up enough money to stop making payments.

Cons: The company invests your payments for you. You can't choose how to grow the money. Whole life plans aren't flexible but stay the same for your entire lifetime. If your insurance needs change, you may have to consider additional insurance.

Universal Life Coverage

Universal life insurance is the more flexible form of Whole life. With Universal, part of your premiums are invested by the insurance company with a usual rate of 4% guaranteed return.

Pros: Let's you change your policy as your needs change and lets you choose between more or less expensive premiums.

Cons: If your premiums are too small for too long, you lose coverage.

Variable Life Coverage

This insurance allows you to invest part of your premium into a separate account for investments. This means that the amount of life insurance and the cash value can change. Your beneficiary receives a guaranteed minimum amount of money at death but there isn't a guarantee on the cash amount.

Pros: You can invest money without paying taxes until you give up the policy. You can apply the money you earn in interest toward paying the premium.

Cons: You are responsible for the investment of your money. If your investments lose money, you have less money to pay the premiums and it may be too expensive for you to keep.

Choosing the Best Policy

Only you know which policy is best for you and your family. There are many things you need to think about before choosing such as your age, health, debt, income, plans for your children.

Now that you have a beginning knowledge of life insurance, you can weigh all these factors against the pros and cons of each type of insurance and make the choice best for your family.

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Are You Being Forced to Save for Retirement?

Retirement saving has never been at the top of most peoples minds as they struggle through the daily grind of paying bills, keeping a roof over their heads, and feeding themselves and their families. As the baby boomer generation is nearing or has already reached retirement age many of the younger generation are realizing that there will not be adequate social safety nets in place to provide for them in old age. The current retirees have a solvent Social Security system as well as now mostly extinct pensions to get them through the golden years of retirement. Younger generations can not depend on either of these, so what are they doing to prepare for retirement?

Before the economy crumbled in late 2008 savings in general and retirement savings in particular were at low or record low levels. As people have readjusted their financial lives to deal with the new reality of lower pay, uncertain job futures, and a soon to be insolvent social security system, saving has become much more popular. While for many this does not include retirement saving because of current budget needs, many private companies nationwide are doing something to make sure the next generation of retirees will at least have something to support them during their retirement years.

Charles Schwab recently released a survey that indicates the number of employers offering automatic enrollment in a 401(k) retirement plan has sky rocketed. 38% of employers surveyed now have automatic enrollment that require a specific opt out by the employee. This is up nearly 7 fold compared to 2005 when the rate was only 5%. On the flip side, matching contributions by the employer are not as standard as they used to be. 69% of employers currently offer some match which is down from a high of 76% in 2006. While this is discouraging it is to be expected as usually the first thing that gets dropped when a company enters a rough period is the employer match on retirement accounts. While I don’t expect this number ever to reach 90% I do expect it to head back up as the economy improves and companies begin competing for the best candidates.

While forcing employees to do anything is not really the best way to go about retirement saving it will be effective. This is a good trend to see as it means more and more people are saving for retirement without even thinking about it. The contributions are taken out of the employees’ paycheck before they even get it. While it does lower the amount of take home pay during this particularly tough period it will pay off in the long run.

Readers, where do you stand on this issue? If you are against it, are you preparing for retirement on your own or are you just hoping for the best? And if you are for it how far do you think employers can take this concept? Can they automatically enroll you in health insurance, what about gym memberships?

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

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5 Not So Painful Ways to Trim Your Budget

Every budget, either those meant for organizations/companies or personal budgets for a family includes two parts, income and expenses. The economic data over the past two years dealing with everything from bankruptcies to foreclosures to unemployment indicates that many families not only didn’t have a budget, but regularly spent more than they earned each and every month. The end result is the situation we are in now. Pay attention to the following list as it lists a few simple, not too painful changes you can make on a personal level that can dramatically improve not only your short term financial situation but could also potentially set you up for a worry free financial future.

1. Before you can work on trimming expenses to balance your budget you need to create a monthly budget so you can see where your money is going at the moment. This is the foundation of any Personal Finance makeover, without knowing how much money you earn each month after taxes and where your money is going when you spend it, it is practically impossible to improve your long-term financial prospects.

2. The 2nd highest monthly expense for most Americans after housing is groceries and food. The easiest way to blow money here is by not planning out your food expenses in advance and relying on takeout and restaurants for a significant amount of your monthly food expenses. While it is certainly convenient and family friendly to take your kids to the local fast food joint, it is not only unhealthy but also much more expensive than making a home cooked meal. Cut out all unnecessary restaurant trips, plan your food schedule for the week in advance, and stock up on fresh produce and non processed foods as these are typically much cheaper than processed and prepackaged foods such as pizza’s and microwavable dinners.

3. The average American family has two cars, and there are many more with 3 or even 4 cars to each household. While it may be convenient for everyone of a driving age to have a car it is certainly not cheap. Transportation can eat up a huge chunk of your monthly budget especially if you have a decent sized daily commute to and from work. While it may not sound appealing, if you are in a cash crunch try living a month with only 1 car. Use public transportation, car pool, or work together with your significant other so that one person has the car one day and the other has it the next day. Obviously this is not something that can work for every family, but don’t let laziness or inconvenience stop you from trying this out if possible. The savings may shock you as not only is your car payment a huge expense each month but don’t forget insurance, registration, gas, and repairs!

4. Cut down on your phone services. Most Americans nowadays have a cell phone plan as well as some sort of home phone service. You have two relatively pain free options when it comes to cutting down your monthly phone bills. One, eliminate your home line and rely entirely on your cell phone. While this option can work for most Americans there will be some that still need a home based phone line for business or international calls. The second option you have is to switch over to an internet based home phone line using Vonage, Skype, or MagicJack. All three of these options use the internet to make and receive phone calls on your home phone. Not only do they work just as well as your traditional phone line but they are also much much cheaper. Give these a shot before you cancel your home phone line to make sure it is something you are comfortable with.

5. Cut down or eliminate your television package. The average cable or satellite TV package now costs a consumer over $80 per month in this country. That’s almost $1000 per year that you handing over to your TV provider. Is it worth it? While for some it is, for the majority of viewers they don’t nearly get enough enjoyment out of this $1000 to make it worth it. Before I recommend getting rid of TV all together, I will recommend some other options. Downgrading to a basic package by itself can cut that average bill in half, and skipping on the HD and DVR boxes can save you another $20 or so per month. If you do want to eliminate your cable/satellite TV completely you can still enjoy TV. Hooking up a digital antenna will allow you to get HD signals of your local stations for free and an antenna typically costs less than $50 and the setup is very easy. If your favorite shows are not on a local station head online as many TV stations now broadcast their content online for free.

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6 Financial Issues to Discuss Before Marriage

Marriage is a monumental moment in every adults life, and the changes that come with this step are huge. Everything from living accommodations to how you spend your free time changes once you marry your significant other. With the economy being the top concern for most Americans and marriage rates at all time lows for America’s young adults, it is important to discuss and plan out a few important financial issues before tying the knot. The following list includes certain broad Personal Finance topics that each couple should discuss to see where compromise is needed and where common goals are already shared.

1.Bank Accounts. This is a subject that used to be a moot point in traditional marriages. In the past, bank accounts would be merged and that would be the end of it. But, in today’s America where it is quite common for both spouses to have productive and lucrative careers, many engaged couples are finding the issue of how to deal with separate accounts challenging. Should all accounts be merged or should each keep a separate account as well as opening one joint account? It’s a personal decision, but from a logistical stand point, having at least one joint account makes it much easier to keep track of expenses that are shared by both parties.

2.Housing: Do you or your spouse have bad credit? If so, the issue of buying your first home together could become really troublesome. If your score is significantly higher than your spouses, you might have to consider owning the mortgage solo to take advantage of the better rates that will be offered to you versus a joint application.

3.Spending Plan: If you haven’t had a budget while single now might be a good time to create one for your future combined household. A personal budget is the building block of any sound and successful financial plan. Figure out what you earn and spend each month, and then go through this list to see where waste can be eliminated or where income can be increased.

4.Billy Paying. This again is a generational shift that is occurring. In the past when only one spouse typically worked a full time job, the stay at home partner would handle all the bills. With today’s culture that expects both partners to work, the question of who runs the homes finances is front and center. While it may be beneficial for one to still handle the majority of the bills, the other partner should still be aware of what bills are being paid and where the couple stands financially.

5.Financial Goals. A constant in most Pre-Marriage counseling sessions, a couples financial goals need to be out in the open and accepted by both partners. Compromise might be needed here, but make sure your long term goals are being respected by your significant other.

6.Debt. This is a topic that needs to be discussed by each couple prior to marriage. Surprising your spouse with $100,000 in student loans on the day of your wedding is not the best way to start your life together. Make sure each partner understands what baggage is being brought into the marriage and figure out a plan to eliminate this debt as quickly and as efficiently as possible.

Readers, any other financial tips for soon to be couples? Do you agree with the ones listed above? Have you had issues during your marriage about any of these topics? Let us know and maybe you could help someone just starting out in their marriage make it a smoother ride!

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

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10 Tips for Helping You Survive the Recession

1. Create a budget. This is the first step to getting through hard economic times. Being aware of how much you are making, how much things cost, and how much you have left over will ensure that you are in control even in circumstances that may seem out of your control. As you track your expenses, you’ll be surprised at how much you spend and where. Decide how much money you should allocate monthly to food, gas, housing, bills, etc and do your best to stick with it!

2. Along with making a budget is abiding by the principle of living on less than you make. If you are doing this, then you will always have enough to go around. Try to avoid incurring additional debt, and work hard to slowly pay off the debt which you may already have. Getting out and staying out of debt is crucial to surviving a recession.

3. Companies will charge you quite a bit on fees for being late on a payment. Avoid the hassle and worry of remembering to pay your bills by setting up automatic payments online.

4. Earn a little extra money by finding odd jobs where you live. Ask around and see if you can watch your neighbor’s kids, freelance blog posts for a company looking to expand their social media plan, clean an elderly couple’s home or grocery shop for them. Put that money away and you’ll find that it will slowly add up to be a good chunk of change!

5. Reduce spending by cutting back on unnecessary spending. Take a look at your budget and decide where you could be spending less – groceries, driving less, eating out, shopping, etc. Saving every little bit definitely helps!

6. Purchase locally when possible. In addition to sustaining your local economy, you’ll find that fresh, in-season produce straight from the fields is often cheaper (and more delicious) than store bought produce. Check your local newspaper for a listing of farmers markets in your area and then check them out!

7. Purchase pantry staples on sale. You’ll save lots of money by stocking up on things that you use on regular basis while they’re on sale. Beware of the urge to use coupons advertising low prices on items you don’t normally buy – their goal is to get you to buy these things! Stick to your regular list and you’ll save money on sale items and avoid spending extra on junk.

8. Stay organized. It’s easy to feel overwhelmed and out of control when you aren’t organized. Make a list of things you need to do each day and take the time to cross things off as you complete them. You’ll feel more organized and productive as you do so!

9. As you’re organizing your life, take a day or two to clean out your garage and closets. You may be surprised what you find! Sell the things that you no longer need online and make a few extra dollars!

10. And finally, to survive the recession you need to be happy. Taking time to do the little things you enjoy can make a real difference in your attitude and outlook on difficult circumstances. Whether you like to visit the ocean, read a good book, take a walk through a local park, play the lottery online, call up a friend, bake chocolate chip cookies, or ride your bike, taking time for yourself will help you stay happy and optimistic amidst uncertainty.

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8 Reasons to Have a Side Business in Retirement

You can only do so much to increase your retirement security. Once you have set up a plan to save each month, selected an appropriate investment allocation, and set up an emergency fund, the only way to improve your chances of a comfortable retirement is to create more income.

Of course, there are many ways to make more money. One of the best ways to retire comfortably is to start a side business that leverages your expertise. Here are eight more reasons why starting a side business by the time you retire will increase your retirement security.

No age discrimination. You won't get fired because you are overqualified and the company thinks you are overpaid. When your business thrives, it's because of what you can provide, not how you look or how old you are.

You can start anytime. You can do it now, next year, or in a few years. Of course, the earlier you start, the more time you have to grow your business. But there are no time constraints or limits.

The hours are flexible. Once you start, you can work in the daytime, at night, on weekends, or on weekdays. And since there's no one else who is telling you that something has to be done, you can determine how much time you want to put into this venture.

Keep your mind sharp. Playing golf every day is great, but it doesn't exactly keep you mentally healthy. Running your own business could serve as a good way to spend your time post-retirement as long as you set up your business so it's not terribly stressful.

Extra income will help in retirement. If you decide to only work 2 hours a day, you may not make much money. But even a little bit of extra income could help to finance retirement necessities and maybe even a few luxuries.

Delay your Social Security payments. The income from your business might allow you to delay claiming your Social Security checks until you are 70. Then you will get more in each check when you do receive the money in the mail.

Grow your Social Security earnings record. Your Social Security payout is based on your 35 highest years of earnings. If you were only employed for 34 years, then $0 will be factored in for the 35th year. This drastically lowers your average. However, a side business in retirement can help with that. The income from your business could potentially boost your Social Security checks.

Deduct your health insurance. One of the benefits of being self-employed is being able to deduct your health insurance on your tax return. When you are employed, this isn't such a big deal. But when you are retired, you are essentially getting a discount on your health plan just because you run a business.

Any business is hard work. But if you put in the work and consistently try to improve, you could set up an extra stream of income. Remember to adjust your retirement savings plan to reflect the new influx of money.

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15 Home Business Ideas that Thrive During Recession

Many people are fearful of starting a business during a recession. Times are tough, and people are curbing their spending, which makes the idea of starting a business in a downturn economy even more daunting. Here are some types of home-based businesses that thrive during an economic downturns and present opportunities for home-based entrepreneurs.


Many people are fearful of starting a business during a recession. Times are tough, and people are curbing their spending, which makes the idea of starting a business in a downturn economy even more daunting.
However, for many families and individuals affected by the recession (whether they lost their homes or their jobs), finding more ways to make a living or supplement income streams is a crucial need right now. Even for those still employed, many are thinking of putting in place a backup plan in case they are laid off from their jobs. Then there are those who have recently graduated from college or about to graduate and are finding it to be quite a challenge to find a job.

As such, starting a home business is a viable option for many. Home-based businesses are great during recession because of little to no overhead costs.

Even during these tough economic times, there are great income opportunities for those who are willing to take the risk. After all, the right time to start a business is when you have a great idea where your product or service benefits customers, recession or not. The right business idea can help you beat the odds and succeed even in a recession.

Here are some types of home-based businesses that thrive during an economic downturns and present opportunities for home-based entrepreneurs:

1. Food business. Food is one business that remains strong during a recession. People still need to eat and drink no matter how bad the economy, though many are cutting on dining out and instead are staying at home and cook! People still line up in groceries to get their fresh bread supplies. Brides still need their wedding cakes, and so do children celebrating birthdays. The key is to customize your products to fit in your buyers’ shrinking budget. Sales of chocolates are also up as consumers treat themselves to smaller (and cheaper) indulgences that they can do from the comforts of their homes.

However, do check out your county’s laws regarding cooking and preparing food for commercial purposes from your home kitchen.

2. Financial advisor home business. In times of confusion and fear -- shrinking retirement funds, increasing debt, downhill investments, etc -- there's a huge number of people who need guidance on the steps they need to take. Small business owners are looking for advice on how to deal with unexpected financial constraints. Families and individuals may be looking for advice on how to manage their finances given their new budget reality. Investors, particularly retirees, need help in protecting their nest eggs and finding any opportunities in a down market.

3. Home staging. With the real estate hardest hit by the recession, home sellers need all the help they can get to increase the appeal of their properties and find buyers. The real estate market has increasingly turned to home staging experts, who prepares the property for showing from furniture arrangement, landscaping, even removing funky smells in the house. Banks handling foreclosures and real estate agents are in need of home stagers to get their properties sold more quickly. This is one recession resistant home business that interior-decorating aficionados and those with a keen eye for design can seriously consider.

4. Auto Repair and Maintenance. People tend to forego buying new cars when money becomes hard to come by and cheap credit is not as easy to get. Instead, they're more likely to keep their cars, which entail spending money on car maintenance. As such, there is a big opportunity for this business when the market goes down. An auto repair business has a lot of opportunities in a recession. You can opt to go with an automobile franchise, or find a troubled shop with potential to buy at a bargain price.

5. “Green” Home Businesses. Every industry is turning green, from manufacturing to fashion designing. Helping the environment is starting to seep into the mindset of the consumers, as more and more are turning to products and services that protect the environment. There are huge opportunities in a “green” home business, such as business opportunities offering environment-friendly gardening practices through organic products. Business waste consulting is also a growing field where home based entrepreneurs can advice businesses on how to efficiently deal with waste disposal, trim down their waste disposal costs and realize extraordinary savings.

6. Virtual Assistant. The virtual assistant industry is growing as businesses reduce their costs and outsource some basic functions. A virtual assistant, or VA, is a highly skilled professional who in more ways than one, serve as administrative assistant except the communication and work are all done online or via email. VAs provides administrative support and other specialized services to businesses, entrepreneurs, executives, and others who are unable to hire a full-time employee but need support. This can be a low-cost and recession resistant home business.

7. Eldercare. One reality we all face is that whether the economy is going up or down, we are all going to go old. Services such as adult daycare facilities are still going to be needed. However, if you are targeting the baby boomers market, most of which relies only their retirement funds (that may be shrinking) as their main source of income, this may be the group that will be tightening their belts even more. So niche travel for the active boomers may be hard hit during tough economic times.

8. Online video production. Watching videos on the Web have become much more commonplace. As household budgets shrink, online videos are an excellent source of entertainment for the family, without the cost of going to the movies and eating out. As a result, more Internet users are going to video sharing sites to watch videos of their favorite shows or videos shared by other users. The popularity of online videos is not only good for those who likes to have a good laugh or be informed. Videos now offer moneymaking opportunities to those who love to create them. There are a number of ad-based programs offered by video websites such as Youtube where the video producer can either be paid per view or per click on the ads. There are also sites that pay for the download of the videos. There are also opportunities to get paid to create videos on a commission basis. Read 8 Ways to Earn Money from Online Videos

9. Cosmetics and little indulgences. Guess what, demand for cosmetics remain strong even when times are tough! Demand for cosmetics seem recession proof as women continue to indulge themselves by buying lipsticks and powders. Ask any woman on the street if they will forego wearing a lipstick and you might get dagger stares everywhere. There's even an economic indicator for it: the lipstick index.

10. Trading Assistant. In a recession, more and more people are looking to sell some of their unused and unwanted items at home to get some extra cash to pay bills. While many have heard of online auctions such as eBay and classified ad sites as Craigslist, there are those who do not have the time or the knowledge to sell their things online. eBay has a program called eBay Trading Assistant that allows other users to sell items of other people on eBay. Trading assistants photograph the items, write the descriptions, and create the listing on eBay or Craigslist as well as handle all aspects of the sale. They earn a commission based on the sale price of the items they sell.

11. Bargain hunting and coupon websites and blogs. These are businesses that are most needed during a recession, yet will still generate strong demand even when times get better. An example of this type of business is bargain hunting, helping people find deals, coupons and discounts. Whether good times or bad, people want to save and get the best deals, but more so when everything is tight. These sites are typically monetized through advertising.

12. Blogs monetized by ads. One low-cost way of earning money from home is by starting a blog and monetizing it via advertising. Blogs, or web blogs, are commentaries, opinions or information that uses a dated log format. The key to a successful blog is to write about topics where advertisers abound, and those are usually topics that bring in visitors looking for ways to spend money. Instead of writing about personal musings, the commercially successful blogs are those that are able to generate a wide audience, and depending on the advertising programs implemented, with users that are responsive to ads. Read How to Make Money from Blogs

13. Buy into a home-based franchise. There are a number of franchises that are recession resistant and can be started at home. It is significantly riskier to start an unproven business from scratch as compared to starting a well-known franchise. As the economy tightens, more and more families require a dual income, which means there’s a greater need for childcare and education services. Environmentally friendly franchises are also big businesses. Check out our Directory of Home-Based Franchises

14. Direct sales. The direct-sales businesses have seen their sales force increase as recession depends and unemployment soars. Direct selling have become a great money making alternative for those who have lost their jobs, found their nest eggs dwindle and who want the opportunity to work from home. Home-based representatives are much in-demand to sell anything from vitamins to cosmetics from Mary Kay or Avon. Other independent contractors sell goods or services primarily through parties, demonstrations in someone's home and one-on-one interactions

15. Home-Based Tutoring Business. Even with a recession, education and learning are still high on the priorities of parents everywhere. Regardless of their financial situation, parents want their children to learn and succeed in school and will be willing to hire a tutor if necessary. There is also huge demand for learning other skills as well targeting the adult market. As the job market tightens and unemployment rises, more and more are going back to school, whether taking online classes or seeking specialized training in various fields. There are opportunities for education-based businesses. Read Starting a Tutoring Business from Home

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12 money mistakes you're probably making

Miscalculating your budget
Research suggests that creating an annual budget instead of a monthly one works better, largely because we feel less confident in our annual estimates, so we tend to add more cushioning for unexpected expenses. In one study, college students underestimated their monthly expenses by 40% while overestimating their annual expenses by 3%.

The best holiday deals and steals
Overspending on housing
It's almost impossible to get ahead financially unless you save a significant chunk of your income -- ideally, $1 of every $3 you earn. But many people get tripped up by their housing costs. Traditionally, financial advisers have encouraged buyers to spend about one-third of their income on housing. But for many people, especially anyone with student loan debt, child care payments or other hefty expenses, that's too big a chunk.

Skimping on career investments
Expect to pay more for your holiday meal

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Investing in a career coach or development course can help you snag a promotion, get "unstuck" from a career rut or transition into your dream job. The price of one-on-one coaching typically starts at around $200 an hour, but less-formal advice can come from meeting with more-experienced colleagues over lunch or coffee.

Falling into spending traps
Rewards credit cards sound good in theory, but in reality they encourage you to spend more than you would otherwise. Economists dub this phenomenon "purchase acceleration," because you ramp up your spending when that reward is in sight. Rewards cards also carry a higher interest rate -- two percentage points, on average -- than cards that don't offer rewards.

Failing to negotiate prices
Even department stores often offer some wiggle room on their posted prices, and big-box stores usually match competitors' prices. This negotiating trend has become so prevalent that the advertising firm Cramer-Krasselt came up with a name for such pushy customers: "neo-hagglers." But many consumers fail to realize that prices are flexible and don't bother asking for a better deal.

Earning from one income
The average worker now holds 10 different jobs before age 36. While some of those job changes are voluntary, many also result from layoffs. By earning income from a variety of sources, workers can increase their financial stability. Options for new sources of income include freelance work, a teaching gig at a local community college, or a potentially money-making blog.
Taking on too much -- or too little -- debt

Not all debt is bad. It can enable you to return to school, buy much-needed professional outfits before receiving your first paycheck or even cover your rent during a tough month. Being so afraid of debt that you avoid it altogether can force you to miss out on opportunities, while taking on too much can lead to financial ruin.

Trying to beat the market
Timing the market would require a "Back to the Future"-style time machine. That's why investing a little bit at a time, regardless of the market's behavior, is the safest way to go. Retirement accounts such as 401k's, which invest money from your paycheck each month, make it easy to invest this way.

Paying too much attention to the Dow
Focusing too much on the ups and downs of the stock market just causes stress. When the market's plunging, concentrate instead on your hobbies, family and outdoor activities. Avoid cable television news, which often treats every dip in the market like a major crash. If your investments are well-diversified, then you've done all you can.

Counting on Social Security
As they think about retirement, today's thirtysomethings should be aware that the Social Security trust fund is scheduled to run out in 2037. That means, if nothing changes, benefits will shrink to about three-quarters of what they are now, because only money that is being paid into the system will be paid out. Young professionals need to plan on funding the bulk of their retirement with their own savings.

Overspending on gifts
Pollster John Zogby has found that the amount of money people say they intend to spend on Christmas gifts has been steadily declining since 2001. Consider joining that movement by making your gifts more meaningful and less expensive. Instead of pricey jewelry and electronics, consider cookbooks and museum dates. You can also consult websites such as craftster.org to find unique do-it-yourself gift ideas.

Underestimating tax bills
People who earn money beyond their usual paycheck, from freelance work or a side business, are most at risk for owing a lot of money in April. And poor tax planning can also trigger additional fees. Married couples who earn similar high salaries are also at risk, because of the so-called marriage penalty. Check to see if you've been paying roughly the correct amount of taxes by reviewing your payroll stubs or other documentation.

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