It’s not easy thinking about Wills because doing so forces you to confront your mortality and that one day you will die. However, if you do not take care of this very important piece of business, the State will take care of it for you. In every state there are rules that dictate what will happen to your assets in the event of your death. Unfortunately, they may not match what you’d choose to do with it (chances are they don’t). Creating a Will is one of the most important and significant actions you can do for your finances and shouldn’t be put off. The preparation of Wills is big business too and can cost quite a large sum in lawyer fees, but there’s a way to significantly cut your costs - Suze Orman’s Will & Trust Kit.

My tentative plan is to create a Will with Suze Orman’s system and then get it reviewed by a lawyer. By having at least a draft, you save a ton of money on the hours that would’ve been spent preparing it. What makes this even better is that the kit is free for a limited time (meaning I have no idea how long it’ll last).

Suze Orman recently gave away her Will & Trust Kit to viewers of her show and you can get it by following these instructions:

1. Go to SuzeOrman.com
2. Click on Will & Trust Kit in the left sidebar menu
3. Click on the orange Gift Code button and enter “people first“

And now you have access to the Suze Orman Will & Trust Kit absolutely free.

Account Signup

Account signup was a cinch and took about ten minutes (but I type fast). You’ll have to put in a bunch of information such as your name, SSN, DOB, gender, address, phone, marital status, spousal/partner information (if necessary), value of assets, and answer a few questions about trusts. The system is very TurboTax-like in how it asks you questions rather than simply listing choices.

Throughout the screens, there is audio that you can listen to for additional information and guidance. There each only a few minutes long and I found them very informative. If you’re not in the mood to listen (or you can’t), you can also read a transcript of the audio underneath it.

Handling Personal Information:
With respect to personal information, you have three options to choose from when you first setup your accountL

Complete Save & Protect: All information you enter will be automatically saved.

Limited Save & Protect: The program will not save Social Security numbers or Dates of Birth; all other information will be saved.

No Save & Protect: None of the information you enter will be saved. Each time you use the Kit you will need to re-enter all information.

I chose the second option, Limited Save & Protect simply because I don’t know how secure Suze Orman’s site is. I trust companies like H&R Block and Intuit with that information when I prepare my taxes because they’ve been around longer but I don’t know about Suze Orman (her site does appear secure and I honestly have no doubts about it). Plus, it saves everything except Social Security and Date of Birth, those are easy enough to enter as needed.

Revocable Trust or Only a Will?

Here’s where the “TurboTax” like walkthrough during account signup comes in handy. About 80% through, there’s a question as to whether you want a Revocable Trust or Only a Will? Knowing nothing else and had I been given no guidance, I probably would’ve chosen Only a Will because I don’t know what a Revocable Trust is. However, based on net estate value and guidelines for my state (and other factors), I’ll want a revocable trust in addition to a Will (anyone with over $30,000 of assets in Maryland is recommended to use a revocable trust).

Documents

Following the account signup, I was presented with a list of four documents I’ll need to produce:

• Advanced Directive & Durable Power of Attorney for Health Care
• Revocable Trust
• Will
• Financial Power of Attorney

I don’t know how many documents there are in total but I suspect Advanced Directive & Durable Power of Attorney for Health Care, Financial Power of Attorney, and Will are shown to everyone; Revocable Trust is shown to those who feel their individual characteristics warrant it. (plus, there’s a menu up top and there isn’t much room for any other documents to be listed!)

Will

For the sake of brevity, I’ll only discuss how the Will part works but the creation of the other documents works in the same way. When you click on the Will tab you’re directed to a page that lists all the pieces of a Will. The will consists of the following five parts:

1. Will - “A will is a legal document that states where you want your assets to go after your death and what you want done with your remains.”
2. Letter to Your Executor - “If you want certain items of personal property to be given to specific people, you can simply write a letter to the Executor of your will about your wishes.”
3. Final Instructions Form - “Use this form to let your loved ones know your wishes regarding your funeral, burial, or cremation.”
4. What to Do When Someone Dies Checklist - “Review this checklist now and when the unexpected occurs you’ll know the necessary steps to take to make the proper final arrangements for your loved one.”
5. Funeral Cost Worksheet - “Funerals and burials are among the most expensive purchase older people make. When the time comes to make funeral arrangements, if you only contact on funeral home you may pay too much for services. To help you compare the costs of up to three different funeral homes, we have provided this calculator.”

As you can see, some of the documents are documents you need to create while others are simply useful tools. The will creation menus were quite thorough in what it asked from whether you wanted a traditional Will or a blended family will, how you wanted your remains treated (cremation/burial/donation? embalming?), selecting an executor & an alternate, cash gifts, personal property gifts, contingent beneficiaries, and a few other questions.

After about a dozen questions and ten minutes, I had a draft version of my will. The draft was slick and took advantage of the fact that I was viewing it in a browser because all the important parts were hyperlinked. I could click on it and change information as needed.

But you’re not done… for it to be valid, you need to print it, sign it, notarize it with a witness, and do all the legal legwork involved in making it a valid legal instrument. However, I bet you it’s a lot cheaper to start with this draft than it would be to sit with an estate lawyer and have them ask you these questions. Here’s the first paragraph of the product’s disclaimer (emphasis theirs):

This product provides information and general advice about the law, but laws and procedures change frequently and they can be interpreted differently by different people. For specific advice geared to your specific situation, consult an expert. No book or form of other published material is a substitute for personalized advice from a knowledgeable lawyer licensed to practice law in your state. THEREFORE, CONSULT YOUR ATTORNEY.

So, I would start with this and then talk to an estate attorney to finalize. Heck, it’s free and lawyers are never free.

I’ve never liked having any debt because it’s always made me feel uncomfortable owing someone money. When it comes to major purchases like a home, it’s unavoidable; but for smaller ticket items, I avoid debt like the plague because I know it’s a slippery slope to go down. You start owing a little here, a little there, and the next thing you know you’re making large monthly payments with little to show for it.

But we’ve all been there. We all slip up. Whether it’s eating too much at a meal, spending too much when you’re out with friends, or something else, stuff happens and you deal. Well, if debt happened and you’re looking for some tips on how to get it unhappened, I’d like you to check out these ten steps I’ve learned over the years.

1. Dedicate Yourself To Eliminating Debt
The first step to eliminating your debt is to really come to grips with it and your dedication to eliminating it. Whether you have $1,000 of credit card debt because you wanted a new television or if you have $100,000 in student loan debt, step one is to fully understand it all.

Get a piece of paper and write down every debt you have, the monthly payment, its interest rate, and the period of repayment. Just “knowing” in your mind is not enough, write the whole thing down so you know for sure how much you are paying. Now go to a site like Dinkytown.net and calculate how much you are paying in interest if you were to follow the repayment structure. Take a deep breath because that number will be huge. You now fully understand the magnitude of that debt and the importance of eliminating it.

Now make a promise to yourself, to your spouse, to your children, to whomever - you are going to eliminate this debt.

2. Get A Friend
Everything is easier if you get a friend involved with your goal of eliminating debt. Having a friend know that you’ve made this commitment will help you whenever you face obstacles. For example, let’s say you’re hanging out with a group of your friends and one of them suggests a movie. You’ve already spent your entertainment budget for the week and a $9 movie is going to take away from how much you’ll be able to pay towards the Visa bill this month. Having a friend there, one who recognizes what you’re trying to do, can help when you suggest a cheaper, or free, alternative.

Having a friend involved also helps in keeping you accountable. For me, and many other bloggers, blogging keeps me accountable because so many people know what I’m trying to do. Many debt bloggers talk about their debt out in the open, tracking it monthly, because they know it will keep them accountable. Heck, nothing is stopping you from starting a blog!

3. Budget, Budget, Budget
You can only make progress on your debt if you are aware of where your money is going. A budget is the only way you will be able to get a solid handle on your finances and the only way you’ll be able to continually pay down your debts. If you earn $1000 a pay period and spend $1001, you’ll never be able to repay your debts. If you earn $1000 a pay period and aren’t sure how much you’re spending, you’ll again never be able to repay your debts. Establish a budget for how much you will spend on each expense and stick to it (more on sticking to it later).

4. Prioritize It
How important is it to eliminate this debt? You understand the debt, you’ve made yourself a promise, you’ve even told a friend, but what is this debt preventing in your life? Is it stopping you from putting enough away to buy a house? Is the constant monthly payment preventing you from saving towards your children’s education? Many things in life are about trade-offs, what are you trading away in return for keeping this debt just one more month? By prioritizing, you might recognize that there are a hundred things more important to you than the stuff you bought with that debt or the other things you’re paying for. Trim them so you can put more money towards your debt.

5. Remind Yourself Constantly
I’ve written in the past about how you can curb spending by writing goals on your credit cards. Trent of The Simple Dollar takes it one step further and puts a picture of his kids on his credit cards to remind himself. It’s easy to forget our goals if we don’t constantly remind ourselves of them.

When I was younger, my father smoked cigarettes, as many Chinese men do. My sister and I wanted him to quit and he agreed to. To help him along, we put No Smoking signs all over the house as a constant reminder of his promise to his. I’m to report that my father hasn’t smoked since he made that promise and I like to think our little signs played a small role.

6. Eliminate Temptation
Alcoholics avoid bars because that’s where the temptation is. What is your vice? Love shopping at the mall? Stop going to the mall. Love electronics? Don’t go to Best Buy or Circuit City. Remember your priorities, remember your promise, and try to eliminate temptation from your life.

One of my temptations is good food, I like going to our favorite restaurants because I can order food I enjoy. To overcome this, I tap on the other things about life that I enjoy that are in concert with good food. My wife and I have been spending more time in the kitchen cooking new recipes and trying new things. I enjoy spending quality time with my wife more than I enjoy good food. The side benefit is that we save money by not eating out and we are healthier for it!

7. Establish Milestones
To help you achieve the goal of paying off your debt, it’s important to establish realistic milestones. Eliminating a large debt is a marathon, not a sprint, and this idea is much like one that I recommended people looking for jobs. By establishing achievable short-term and mid-term milestones, you give yourself a sense of progress and accomplishment. If you owe $10,000 and plan on paying it off over two years, set milestones every six months or every quarter. As you hit them, you’ll feel a sense of accomplishment and it will boost your morale…

8. Reward Yourself
… then rewards yourself for achieving those milestones and stretch milestones. If you manage to pay off $2,500 in the first six months, reward yourself somehow with something fun (but inexpensive!). Go out and get some ice cream (we love Rita’s Ice!) to celebrate your accomplishment. Treat your friend to some ice cream too, to thank him or her for helping you get this far.

9. Snowflaking
So you’ve been humming along for a few months, hitting your intermediary milestone, removing temptations, rewarding yourself for meeting your mini-goals; but you feel like there could be more you could do. There is. Snowflaking (a term I attribute to Paid Twice) is the idea that you take “found money” and put it towards your debt in the form of unscheduled payments. Sell a used book for $20? Put that towards your highest interest debt. Find a $5 bill somewhere? Snowflake it towards a debt.

10. Don’t Go Back
This final step is for those who have achieved their final milestone goal and have eliminated all of their debt. First off, congratulations. What you’ve accomplished is not simple, regardless of how you felt your progress went. It’s difficult taking that surplus each month and putting it towards a debt to someone else, so kudos for the achievement. However, the job isn’t finished yet. Much like how alcoholics are never “cured,” you always have the fear of relapse.

Unless you have the cash to pay for something, don’t borrow (unless it’s for a house or car) the money you need. For some this means you go to an all cash lifestyle (NCN doesn’t use a credit card for this very reason) and for others it means you simply make the card difficult to get a hold of. If you can’t pay it off at the end of the month, start saving until you can. You know how hard it is to get out of debt, don’t go back in.

(Photo by Christina Lam Photography)

According to howstuffworks.com, the United States consumes about 400 million gallons of oil a day across 100 million households, or approximately 4 gallons per household per day. If you drive a 25 MPG car, that’s a hundred miles of driving a day. How does your household stack up? You using more or less than your four?

If we melt Greenland, we can get 50 billion barrels of oil. Actually, it’s already melting and oil companies already have oil exploration licenses to start poking around in Greenland. So, really we need to do nothing differently. Oh, and I heard penguins and polar bears make excellent soups so let’s melt the ice from under them too.

General Motors, as of the recent IRS report, has sold a mere 8,485 hybrid vehicles. By comparison, Toyota crushed the 60,000 limit and Honda just recently exceeded it. Ford is over halfway there. GM is, well, slightly slower out of the gate but remember the tortoise beat the hare.

The Tesla Roadster is a fully electric car made by Tesla Motors. On a single charge, it can travel 220 miles with an efficient of a reported 4.7 mi/kW·h which is the equivalent of 135 MPG. $100,000 is the price of one of the Tesla’s “Signature One Hundred” in all its tricked out glory. Fortune just published an article yesterday about the Tesla.

Have a great weekend everyone!

You might not realize this but last year you probably cheated on your taxes.

Yep, even if you used TurboTax or hired an accountant, you probably cheated on your taxes and you didn’t even know it! We’re not talking about some obscure tax law that no one has ever heard of like a barrel of rum for each ship entering the Port of London, these are bona fide legitimate taxes. And you may be evading them.

Now, part of the reason why you may have cheated on your taxes and not known about it is because many of these are not enforced. Many of them are difficult if not impossible to enforce. Use taxes have been on the books for quite some time but I don’t know a single person who has paid a use tax.

So, here are the four ways you’re a tax cheat.

Use Tax

When you ordered that book off Amazon or that new Dell laptop, did you pay use tax on it? Most people don’t and that’s technically illegal. Use tax is a type of tax that is levied on products you purchase outside of the state you’re going to use them in. The tax often matches the sales tax rate of the home state, effectively giving the state the legal right to tax products you buy elsewhere. States aren’t entirely cruel though, many states have a rule that states any sales tax you pay to another state can be used as credit towards the use tax, that way you aren’t hit with a double whammy. How nice of them! (I wonder how many people pay the use tax?)

• Wikipedia on Use Tax
• Maryland Comptroller on Use Tax (you can search for “use tax [state]” to find information for your home state)

Sales Tax Evasion

An extension of the use tax example above is one in which you buy something in another state simply because the sales tax is lower there. A lot of people who live on the Maryland-Delaware or Pennsylvania-Delaware border often travel into Delaware to buy things because there is no sales tax there. Technically, that’s tax evasion.

We were tempted to buy all of the alcohol for our wedding in Delaware but scrapped the plan because the two hours drive was barely worth it and because we could return unopened bottles to our local liquor store. (we also would’ve been breaking alcohol transportation laws too)

Barter Income Tax

If you trade your services with someone else on a contract and commercial basis, you have to claim the value of services received on your 1040 Schedule C form. “A barter exchange is any person or organization with members or clients that contract with each other (or with the barter exchange) to jointly trade or barter property or services. The term does not include arrangements that provide solely for the informal exchange of similar services on a noncommercial basis.”

So taking turns mowing lawns with your neighbor without claiming the “barter income” is okay, but trading website design work with a landscaping business requires claiming barter income. If you’re part of a barter exchange or network, it sounds like that’s automatic grounds for claiming it as income. I’m sure this is difficult to enforce but I doubt most people consider barter to be taxable!

• IRS.gov Topic 420 - Bartering Income

Nanny Tax

If you have any household help, be it private landscapers/lawn care or nanny/babysitter, you may have to pay what’s known as a nanny tax. The nanny tax refers to payroll taxes (such as Social Security, Medicare, etc) and you are required to pay them if you pay someone more than $1,600 in a calendar year. Whether you are subject to this tax has been debated for quite some time but the crux of the matter is whether your “nanny” is considered an employee versus an independent contractor. The best advice I have for you is to check out the two links below to get a better handle as to whether you are subject to this tax.

Your babysitter might be an employee… and you might be inadvertently failing to pay your taxes!

• Grow up and pay the ‘nanny tax’ if you owe it [MSN Money] - This article is a few years old but the concepts are right, dollar figures are stale.
• The Nanny Tax [SmartMoney] - This has a worksheet to help you do the math and is current as of January 10, 2008.

(Amazon.com box photo by markuz, Nanny picture by teddyb)

Ahhh the lovely Alternative Minimum Tax. For years the government has been putting patches on the AMT so that it ensnares fewer and fewer people, though without the corresponding adjustment in spending, and we once again dance the same dance now that we have set candidates to the two major political parties. Where do each stand on the AMT?

McCain, during the primaries, proposed doing away with the AMT altogether but recently changed his stance from repeal to phase out. Under the phase-out, more than 4 million households would continue to pay the AMT. To be honest, I doubt McCain really meant “appeal” when he was spoke about it because the thing generates so much revenue, $2 trillion over ten years. He likely meant exactly what he’s saying now, “appeal” it for the middle class but keep it for the wealthy.

I sympathize with the wealthy who feel unfairly taxed for the same services, but the money has to come from somewhere and we all have to buy the same things. While it sucks for someone to have half their next dollar taken away from the government, it hurts that person less than it does someone who has far less earning power (that doesn’t make it right, it just makes it more manageable). Plus, rich people don’t riot.

I do think that the government has to reign in its spending (I used to work in defense, I’m aware of some of its excesses) but unfortunately it’s Presidential politics season and it’s far easier to tax a smaller group than reduce benefits for a larger group.

McCain will repeal the AMT. Wait, no … [CNN Money]

Hypermiling is the act of trying to get every last possible ounce of mileage from your tank of gas and it’s been getting a ton of attention lately because of $4+ gasoline prices. The problem with hypermiling isn’t that it’s dangerous, it’s that mainstream media is sensationalizing the more extreme, dangerous and aggressive aspects of it in order to garner attention. They focus on people pushing cars to get momentum before starting the car, they talk about drafting close to large trucks, and they talk about shutting off the engine at seemingly awkward or dangerous times.

But that’s not hypermiling is about.

In fact, calling those tactics as essential or typical does a disservice to the concept. If you visit Hypermiling.com, you’ll see it’s not actually about those fringe tactics. It’s about being aware of your gas consumption, driving skills, and your surroundings so that you don’t waste gas.

Here are a few tips that I try to follow when I’m out driving (these are all in the hypermiling playbook):

• Give yourself 2 seconds between your car and the car ahead of you. If they brake, this means you can coast without hitting the brake. The brake is the enemy when you’re hypermiling because it essentially converts gasoline into heat, not motion.
• If you see a red light or a “stale green,” a long green light that might go yellow, release the gas and coast. I’m a fan of coasting up to red lights hoping they’ll turn green. You can watch other cars for cues as to how long you have to wait (if the oncoming traffic’s turn lane’s are moving, you’re almost there).
• Accelerate slowly from stop. I try to let gravity get me going before I hit the gas, then I press it gently. I’m in no hurry!
• This article on traffic waves is great, I wish everyone read it.

There’s more to the site but I wanted to get back to the more extreme tactics. Those are the tactics that will get you that extra 2-5 MPG. Do you really need a $160 ScanGauge II 3-in-1 Compact Multifunction Vehicle Computer with Customizable Display? Probably not. Drafting behind a semi? Dangerous. The advanced hypermiling tricks are great to get you that extra mile per gallon but are hardly necessary or a staple of the mainstream hypermiling techniques. If you can understand the basics, you will save yourself a lot of gas and be just fine.

Do you have any useful hypermiling ideas not mentioned here or on the site?

Getting a good gas cashback credit card is the easiest way to save on gas, bar none. With gasoline prices increasing every single day, everyone is looking for ways to save on driving. Since you probably can’t sell your car and get one of these highest mileage cars, the next easiest thing is to get a credit card that gives you a little extra cashback on gasoline purchases. At the moment, besides specific gas station branded credit cards, I think the two best options out there is an American Express card and a Discover card.

The best option right now has to be the American Express SimplyCash® card because it offers 3% cash back on gas, office supplies, and wireless services and it credits the cash back automatically on your statement. You don’t have to request or wait for a check, you don’t have to find out what reward you want, everything is credited automatically (totally hands off cashback system FTW!). That’s a 3% discount off your gas with no catches, no gimmicks, no BS. The tricky part is that it’s a business card but anyone can apply for a business card. This is the land of opportunity and anyone can hang out their shingle, so enter your Social Security number as your Federal Tax ID and you’re golden (you’re technically a sole proprietorship, there are no additional tax forms to fill out to identify yourself as a sole prop and this is perfectly legal, check with a legal or tax professional and they will confirm this). I don’t know the criteria for approval so it’s just you and your credit score from here.

Other salient details of the card are that there is no annual fee (I won’t recommend a card with an annual fee unless there is a compelling reason) and they have a 0% introductory APR on purchases for up to 12 months. The card also gives 1% cashback on all other purchases and offers all the features and benefits of American Express’ OPEN network.

A close #2 is the card my wife and I use, the Discover® Open Road(SM) Card. The Discover Open Road card is a consumer card, so you don’t have to play business owner, and it offers 5% cashback on both gas and auto maintenance purchases. Whereas the AMEX card only gave you 5% on gas (and other business-like services), this one includes auto maintenance. Unfortunately, the 5% cashback bonus is only on the first $100 of gas and auto maintenance purchases a month! (Thanks Joe!). This makes the AMEX card a much better card. However, one additional perk of Discover is that you can get anywhere from 5% to 20% cashback bonus when you redeem your cashback in the form of a gift card from one of their retail partners. I used to get double cashback when I sold stuff on eBay because I’d convert my cashback for gift cheques to various stores I frequented. This card also has no annual fee and does offer a promotional 0% APY balance transfer until June 2009. This the card my wife and I currently use for gasoline purchases, but given the new limitation we’ll probably look for another one.

Update: How could I forget the awesomeness that is the Costco TrueEarnings card? If you get the Costco TrueEarnings Business card, you get 5% cashback on already cheap gas prices; if you get the Costco TrueEarnings regular card, you get 3% cashback on already cheap gas prices. You also get 3% back at restaurants and 1% back on everything else. The only downside is that there’s an “annual fee” in the sense that you have to be a Costco member ($50 annual membership).

Beyond that, you have a few cards that give gimmicky 12 month promotional cashback offers or are specific to a particular gas station company. I am never a fan of the limited time promotions unless the offer is especially juicy and I don’t want to be tied to a particular gas station, I like freedom.

What gasoline card do you use?

Late last month I wrote about how my wife and I were going to consolidate our Vanguard accounts by transferring the assets in her individual mutual fund account into my individual mutual fund account. As it turns out, there is an even better way to do this and I was surprised the original Vanguard CSR didn’t mention it (I don’t blame him as I did ask him three different questions and this was the third and least significant one).

The easiest way to do this was for me to open a Joint mutual fund account with both of our names on it, something you can do entirely online, then call up Vanguard and request that they transfer the assets from my wife’s individual account and my individual account into that joint account. By doing it on the phone, with all the verbal verification of our individual security data, we could skip a trip to a bank to get a signature guarantee. (I manage to always miss the branch managers or go to banks that don’t have a manager able to do a signature guarantee - I still haven’t changed the accounts for my TreasuryDirect account!)

This was all kicked off when I called up Vanguard to confirm I filled out their Asset Transfer form correctly. The form, while not too complicated, was a little confusing because it had two places for signature guarantees, lots of optional information, and I’m easily confused and befuddled. When I called them up, the CSR just asked if I preferred it if she did the transaction for me. Ha, of course I preferred it.

The phone conversation took fifteen minutes, which included a lot of explanation, and the conversion/consolidation process took approximately five business days; our accounts are now finally consolidated!