When I grew up, I never really thought about donating my hard earned money towards any sort of charity or cause outside of buying some raffle tickets or dropping a dollar or two into the Salvation Army bucket. Now that I’m a little bit older and with a little more discretionary income, I’ve come to appreciate the importance of “large donations” (anytime you pull out a check or a credit card, I consider that large) because a lot of organizations rely on that income in order to continue to do their good works.

So, as I’ve done in the past, I’ll be donating money to the American Cancer Society and I ask that you find it in yourself to put a little bit extra in their stocking as well. Why the ACS and not some other organization? My grandmother suffered from and ultimately succumbed to cancer several years ago when I was in college and so it’s a cause I find myself easily supporting.

Originally, I was trying to get other personal finance bloggers to chip in $100 to the ACS and I was going to do a series of posts highlighting those bloggers but perhaps due to the Thanksgiving holiday or bad timing, only four bloggers took me up on the offer. So, I wanted to especially thank Ricemutt of Experiglot, Tricia at Blogging Away Debt and Nickel at Five Cent Nickel, all of whom sent generous donations to the ACS without even asking what was up my sleeve. I also wanted to thank Blunt Money for telling me that she would chip in some once I solidified what I was going to do.

So instead of a “twelve days of giving” as I originally planned, I’m just going to ask you all to find it in your hearts send a little money towards the ACS this holiday season. I’ll also be compiling a list of donors after the jump. (there are also the rules for appearing after the jump)

Donate To The American Cancer Society

(read full article…)

One of my friends recently purchased a home and she was sent a letter (if you recently purchased a home, you’ll probably be familiar with how many letters you will get informing you of great refinancing rates) about a program that would speed up her mortgage payments by sending them in every two weeks instead of just at the end of the month. She was primarily wondering whether it was a scam and whether it “worked” because I suppose the letter, which always looks shady, probably did a poor job of explaining why it would pay off her mortgage faster.

The biweekly mortgage payment strategy is one that’s been in existence for quite some time. It is legitimate and there are two reasons why it’s legitimate:

• More Payments - Let’s say your mortgage is $1000 a month. When you make one payment a month, you pay a total of $12,000 each year towards your mortgage. When you make two payments a month, you’re now talking about twenty six (26) payments (fifty two weeks divided by two) of $500 which is equal to $13,000 a year - or $1,000 extra. Clearly, if your budget can handle it, this will pay your mortgage off faster simply because you’re paying more.
• Less Interest - When you pay the standard once a month, interest accrues on your balance for that entire month. When you pay twice a week, a greater percentage of your payment is applied towards the balance and you speed up where you are on your amortization schedule. The principal, in theory, has less time to accrue interest.

So, now that you’re convinced this is a legitimate way to speed up the rate at which you’re paying down your mortgage, let me give you the advice I gave my friend if you’re thinking about getting one of these “services.” Don’t. You don’t need to pay some fancy expensive company for this service, you can usually talk to your lender and they can set something up for you. If they are unwilling and you have no prepayment penalties, just send in the payments yourself. With online banking, it’s easy to schedule regular payments automatically so you won’t even have to buy any more stamps.

So… does anyone know why companies were sending me letters asking me to refinance a month after I just got a mortgage? And why would they ever think I’d accept their offer?

This is an old tax tip I was surprised I hadn’t mentioned before but it involves postponing any extra income that you anticipate you’ll get, if you can, until January 1st of next year. By pushing it off until then, you can wait until you file for taxes the following year (April 15th, 2008) before you’ll have to pay taxes on that income.

This works the best if you have some self-employment income, as little as it may be. Try to push off receipt of that income until January and you won’t have to pay taxes on them until next year. If you don’t have any self-employment income but you do anticipate a Holiday bonus of some kind, ask if you can take that in January.

If you can push off $1,000 in income (and assuming you’re in the 25% tax bracket), you’ll have an extra $250 to play with next year. Enjoy!

If you have a student loan and recently starting taking advantage of your employer’s education reimbursement program, you’ve probably heard the words deferment and forbearance thrown around quite frequently and you probably aren’t 100% sure what the difference is (unless you were a wordsmith/geek and knew what forbearance meant). Due to a mix up with Johns Hopkins, they reported me as less than part time and my deferment became a forbearance, which resulted in about $340 of interest that accrued during that period of forbearance (which led me to research the difference). While it’s not a thousands of dollars, I’m not paying $340 when I don’t have to (no one should).

Webster Dictionary Definitions:
Forbearance - a refraining from the enforcement of something (as a debt, right, or obligation) that is due
Deferment - the act of delaying or postponing

So, how does this affect you, a student loan holder? In both cases, you will no longer be required to make your regularly scheduled student payments. With a forbearance, the interest accrual process still continues, you simply aren’t required to make any additional payments. As interest accrues, you may decide to pay that off or not, that option is left up to you. Any unpaid interest that accrues and isn’t paid off within the period of forbearance is capitalized (made part of the principal). With a deferment, your loan is frozen in time - interest doesn’t accrue and you aren’t required to make any payments.

(read full article…)

Oh yeah, you read that correctly… I will be contributing the maximum percentage allowed by my employer, 90% (my employer’s max), in the month of November, in an attempt to get my aggregate 401(k) contributions for 2006 as close to the maximum as possible. According to my last paystub from my former employer and my last paystub from my current employer, I’ve contributed a total of $4,352.09 to both 401(k) plans, which is $10,647.91 less than the 401(k) maximum contribution of $15,000 per year for 2006.

Why am I doing this? I want to reduce my taxes and as someone with no children, very little in the way of debt (only student loans and a mortgage), these are the years I want to try to put as much away for the future as possible before other financial demands come along. Right now I view the income from this site as supplemental and I’ve made a point of trying to use the extra income to maximize my contributions.

On the retirement contribution front, I’ve already contributed the maximum to my Roth IRA, I’ll be contributing the maximum to my SEP-IRA (20% of self-employment income) once I finish my taxes, and I’ll try to max out the 401(k) with this little scary 90% maneuver. Before anyone starts to warn me about putting too much away and not enjoying life, don’t worry, I enjoy life plenty and I’m not one of those Extreme Savers you read about on Yahoo Finance. I save when it’s sensible and enjoy when I don’t feel like being sensible.

It’s a little scary contributing 90% of my full-time income (leaving me with a scant 10%) and relying on my site’s accounts receivables - I guess this is what those full-time bloggers feel like when they make that plunge (except I’ll be jumping into a kiddie pool knowing I’ll leave in a month or two).

Thanksgiving is over (even though the leftovers are still packed into the fridge), the Happy Holidays are just around the corner, now is the time to make those end of the year tax decisions before you get overcome with all the craziness of the holidays. So, I dove into the archives and saw that last year I wrote a whole bunch of posts related to year-end tax moves that still apply (most of them) to this year, so I thought I’d link to them so I’d know where they were:

• Offsetting Your Stock Gains With Loses & the Wash Rule
• Claiming the Energy Savings Tax Credit - This refers to the tax rebate you can get if you make certain home improvements that increase the energy efficiency of your home.
• Home Office Deduction for Businesses - Started a business this year? I researched everything I could find about home offices.
• Six Great Tax Breaks - Some of which no longer apply, but others do.
• 10 Common Tax Filing Mistakes - It’s a little early for this article but it’s nice to keep this in mind (here are 15 more mistakes to avoid).
• More Tax Deduction Talk - Charitable donations, refinancing points, and education related deductions.
• Deduction Donations - IRS Tax Rules - I take an untrained look at deductions for charitable donations.
• Retirement Savings Credit - If you earn under $25k, give this article a read.
• Understanding Capital Gains and Losses
• Understanding AMT
• Education Credits!

And, if you don’t like taxes, read this argument about how the tax system will collapse in ten years.

Welcome everyone to this week’s edition of the Carnival of the Capitalists, one of the oldest and more celebrated carnivals out there, and this week, even though many of us in the US are all fattened up on some turkey, we still have a nice helping of leftovers to get you through the start of yet another regularly scheduled work week.

Enjoy!

1. Free Money Finance presents Six Wise Ways to Spend a Raise.
2. nickel of Five Cent Nickel presents Transferring 403(b) Funds via a 90-24 Transfer.
3. Jason Thomas of Effortless Office presents Seven Secrets Of Success.
4. Ed at Daily Dose of Opimism presents a Google Video of Warren Buffett at the University of Florida.
5. Laurie Bluedorn at The Homeschool Marketer presents A Special Time for Homeschoolers.
6. Jeff Burkey at HedgeFundDomain presents Cost Cutting.
7. David Maister of Passion, People and Principles presents Why Are Some People So Motivated?
8. Wenchypoo of Wisdom from Wenchypoo’s Mental Wastebasket presents The Politician Primer (L-O-N-G).
9. Barry Welford of StayGoLinks presents Walled Gardens - The Walls Keep Tumbling Down.
10. Scott On Money presents Reducing Friction in the Personal Credit Market.
11. About PMI writes about how now that the Democrats are in power in both houses of Congress, they are more likely to make private mortgage insurance tax deductible.
12. Phil for Humanity presents Dear Junk Mail Solicitors.
13. Steve Faber of Debt Free presents Investments That Aren’t – Just The Bad, and The Ugly.
14. Jim Logan presents The Role of Features and Functionality.
15. Trent at Simple Dollar presents Money For Nothing: Putting Money In Your Pocket With Minimal Effort.
16. Declare War on Credit Cards has an article about Getting Your First Credit Card.
17. Super Saver at My Wealth Builder presents My 2006 Year-End Stock Market Assessment.
18. Wayne Hurlbert of Blog Business World pens a post titled Entrepreneur peer support: Ending isolation.
19. Princeton professors Shivaji Sondhi and Michael Cook contribute a guest column at Econbrowser with some new ideas about how to move forward in Iraq.
20. Henry Stern, LUTCF of InsureBlog presents CDHC: Smaller Increases?.
21. cehwiedel at One-Man Band presents Healthcare for the One-Man Band.
22. Leon Gettler over at Sox First has an exclusive interview with Al Gore.
23. Starling David Hunter, who blogs at The Business of America is Business, presents End It Like Beckham.
24. Carmine Coyote charts how Hamburger Management responds to change: the well-worn sets of rude and dismissive phrases its proponents use browbeat their subordinates into remaining quiet about the inefficiencies and stupidities around them.
25. Jack Yoest of Reasoned Audacity presents Rush Limbaugh Does DC for the Fisher House Foundation.
26. Rich of Queercents presents Boycotting Homophobia.
27. Mark at SportsBiz reports that the NHL became the first professional league to sign a contract with YouTube to show video clips of its games the day after they are played and share revenue with YouTube in an undisclosed sharing split.
28. Big Picture Guy presents The Count of Montecristos.
29. David Foster at Photon Courier writes about how the success of on-line grocer FreshDirect provides an interesting contrast to the failure of lavishly-funded Webvan.
30. Brian Gongol explains how people who invest in penny stocks because they received “pump-and-dump” spam may be unwittingly funding terrorism.
31. Rob May of Businesspundit discusses an analysis of a recent study that shows entrepreneurs overestimate their likelihood of success.