Author: Young Finances

LaTisha is the founder of Young Finances, which teaches simple finance for millennials. She is a millennial lifestyle and money expert helping clients take an existing skill and turn it into an online business.

What started as a financial blog to hold herself accountable while she paid off debt of over $32,000, transformed into a self-development journey allowing her to create a life by design and not by default.
She encourages her audience to blend smart money habits with a dash of the royal treatment as she believes nothing should be too lavish. Her work has been featured in notable publications including Forbes, Fast Company, and Business Insider.

Categories
Budgeting & Saving

How to Fix Bad Credit?

Wondering how to fix my credit myself? Or how to fix bad credit? There's no doubt that living in the modern world requires credit. Yes, you can live without a credit card and survive on cash or cashback debit cards.

I know because I did it for over two years as I paid off credit card debt. But what I really wanted to do was improve my credit score immediately.

However, when you are ready to buy a house, you'll need to get your credit straightened out. In this post I'll discuss getting a credit repair service as well as what steps you need to take if you decide you want to fix your credit score yourself. You might even be able to fix your credit in just 6 months.

These steps are so easy. Perfect guide for do it yourself credit repair.

Related articles from our approved partners:

How Can I Fix Bad Credit Myself? - 6 MonthCredit Repair Guide

First, watch this video from my friend Dominique over at Your Finances Simplified. He's going to tell you exactly how to fix your credit.

Watched the video? Good.
Feeling overwhelmed at the next steps?
Yep. I understand.
Let's take this step by step.

Take a deep breath. People think that having bad credit is the worse thing that can happen. But just calm down. You are taking the first steps which puts you on the right track.

Remember, it's just money.

No one is going to die. Take control and get back in the driver's seat!

Fix 1: Check Bad Credit

The first thing you'll need is your creditor information. Get the most recent credit card statements, loan balances, and installment loan reports along with addresses and phone numbers. I recommend printing everything old-school style. It's going to come in handy later.

Fix 2: Get a Free Credit Report

Then, take a second to get your free credit report from AnnualCreditReport.com. Each year you are able to pull your credit report for free from the three providers Experian, Equifax, and Transunion.

Optional: Get Your Free Credit Score

You can check an approximation of your credit score for free at Credit Sesame one of our approved partners, but if you are trying to fix your credit, you probably already know your credit score looks a little like this....

bad credit personified

But that's ok. We're going to put you on the good foot.

Fix 3: Review your credit report for errors (highlight each error).

You're getting ready to take charge and stop being a victim. Most people don't even realize what they could get removed from their credit just because of errors.

What should you look for?

Wait a minute. So, you're telling me you didn't watch the video above?

Scroll back up for me right quick and you'll find out exactly what you should look for.

Or keep reading...

Dispute incorrect names, addresses, SSN, and date of birth via the certified mail.

You will need supporting documentation and letters. You will have to write a dispute letter and include the specifics of the inaccuracies. You want to dispute inaccurate, erroneous, outdated, misleading, and unverifiable information in your credit reports.

Tired of being harassed by your creditors? Maybe you'd prefer that someone else handle all of this for you?

In that case, you might was to work with a credit repair company to improve your credit.


Are you ready to...

  • Remove bankruptcies to rebuild credit?
  • Permanently delete foreclosures and repossessions?
  • Erase debts that were in collection?
  • Completely get credit cards under control?
  • Get approved for loans?
  • Get the best financing on cars and homes?

In that case, check out our partner Lexington Law for more details on how they can help you clean up your credit report.

Finally, fixing your credit permanently also means creating good habits and getting out of debt.

How getting out of debt is like the MTV show, I Used to Be Fat.

I used to watch this TV show on MTV called I Used to Be Fat. The show documents young adults, usually high school seniors and high school graduates who want to lose weight before they start college. Each episode features a different teen. I absolutely LOVE this show. I like seeing the determination and perseverance of these kids, they are really focused on their goals. Most of them thought about quitting along the way but each one makes it to the end and they usually reach their goal.

I was thinking the other day about how the TV show is very similar to a battle with debt. When you're in debt, it can feel like you're carrying around a second person, experiencing frugal fatigue, or that you have a spare tire of bills around your waist. I know because I'm working on getting out of debt myself. I realized that there are 3 major points we can learn from the MTV show I Used to Be Fat when trying to take control of our debt.
debt

Improve Your Credit Step 1 - Give Yourself a Deadline

Before the teens even begin a weight loss program, their coach/personal trainer gives them a large tear off number calendar to place on their wall. It has the total number of days until their program completion date, and every day they rip off the next number.

It is a good idea, when you are paying off debt, to set a deadline for your debt-free date, like 6 months. Setting a deadline is a way of making your goal specific. Every time you look at that calendar or see that date it will push your brain consciously and subconsciously to make it to your ultimate goal, to reduce spending and get out of debt.

Improve Your Credit Step 2 - Check in Regularly with a Coach

Every week, the kids had a weigh in. Their personal trainer was making sure that they were on track with how much weight they were supposed to be losing at each stage in the process. Sometimes they were attempting to lose one pound a day! I never thought that was possible or healthy, but most of the teens actually accomplished it under the supervision of their coach.

If you really want to prioritize your goal of becoming debt free then you really have to give yourself check points. You can enlist the help of a friend or even a debt counselor to help you along the way. Having a good support system can make all the difference.

Improve Your Credit Step 3 - Get Rid of Old Habits and Create New Ones

When one of the teens was at a restaurant with her friends, she ordered a lean meal instead of the greasy french fries that her friends had. The personal trainer also taught her how to cook healthier meals so that she would be able to maintain her new lifestyle change.

Becoming debt-free is not a one-time goal. It has to be a lifestyle change. When I decided to start getting out of debt, I had to first evaluate why I was in debt in the first place. I had to eliminate my habit of impulse spending and replace that habit with a good habit. Now I impulse buy stocks and my portfolio loves it! It's not easy to change a habit that took years to cultivate, but with a good support system, it is entirely possible.

Are you ready to make a change?

Some of you may be thinking, I’m still young, so why should I care about my credit score? Lots of people have debt and less than stellar credit, but they’re still enjoying a cushy lifestyle. As long as I’m able to buy the things that I want, why should I be concerned? The answer is simple. Life is easier when you have good credit.

Take a look at it this way. Landlords, employers, and lenders need to determine whether they can trust you, and they look at your credit score as an indicator of your financial reputation. You may not think credit affects you greatly, but it does. When you ruin your financial reputation (a.k.a. credit score), it will take you a long time to restore it.

Poor credit affects your ability to rent, buy a car, get a home loan, and even open up accounts. Creditors don’t want to work with people with bad credit because the risk of not getting paid is very high. How can they trust that you will pay them back if you haven’t even paid others? If you’ve already tarnished your credit, here are some tips to help you fix your credit score and reestablish your life.

Improve Your Credit Step 4 - Make Your Payments on Time

This may sound trivial, but we all know that money can be tight, and skipping payments on one bill can help pay for other expenses. But, timely payments are the biggest factor affecting your credit score. Keep a budget, and make sure you have sufficient funds to make your credit card and loan payments on time.

Improve Your Credit Step 5 - Consider Getting a Secured Credit Card

Obviously, it will be very hard to get a regular credit card if you have bad credit. If you don’t qualify for a credit card, you can get a secured card instead. This is when the bank gives you a credit line equal to the deposit you make. If used wisely, a secured card can help nurse your poor credit to better health.

Improve Your Credit Step 4 - Add an Installment Loan

You can improve your score quickly if you show that you can be responsible for both major kinds of credit: revolving (credit cards) and installment (mortgages, auto, student loans, etc.). If you don’t have an installment loan and feel you are ready to handle one, consider adding a small personal loan. Stay away from expensive finance companies and “teaser” deals, and use a company that reports the loan to all three credit bureaus.

Improve Your Credit Step 5 - Avoid the Minimum Payment Trap

Credit cards come with high interest rates. We all know how our $2,000 computer ended up costing $8,168 because we only made the minimum payments at 20% on our credit card. Ouch, that hurts! Keep constant payments on your credit card (and don’t run them up again) and your balances will drop.

Improve Your Credit Step 6 - Use Your Credit Cards Lightly and Check Your Limits

Even if you pay your bills on time and in full each month, having big balances can hurt your score. Try to limit charges to 30% or less of your card’s limit. Lenders typically like to see a big gap between how much you’re charging and your available credit limit.

Improve Your Credit Step 7 - Keep Old Credit Cards

Don’t close out old credit cards. The longer your credit history, the better. Leave the accounts open but once you pay them off, stop using them. Closed accounts tend to bring down your score.

Improve Your Credit Step 8 - Suspend Credit Inquiries

The more credit inquiries you have, the more your credit score drops. Fix your credit and wait a while before allowing your credit to be pulled again.

Improve Your Credit Step 9 - Get a Goodwill Adjustment

If you have been responsible about paying your credit cards on time, the lender may agree to erase a late payment from your credit history. For more troubled accounts, communicate with your lender about possible options to erase previous delinquencies. If the lender agrees, it will improve your overall record.

Improve Your Credit Step 10 - Check Your Credit Report for Errors

You can check your credit report without negative scoring (once per year, for free) with the three credit bureaus at AnnualCreditReport.com. Make sure to look for any mistakes that could be hurting your score. If you see something wrong, make the effort to have it corrected.

Improve Your Credit Step 11 - Seek Professional Help

If you are overwhelmed with debt and don’t feel you can handle the problem on your own, consider working with a professional debt relief agent. They can help you explore your options and give you guidance on this post

It’s very easy to ruin your credit, but it takes time to build it back up. No matter how bad your credit is, you can take steps to make it better.

Sometimes we mishandle our budget, and we spend more than we should. (You know that you shouldn’t have bought that expensive flat screen TV). And, sometimes we end up in tough financial situations because of things beyond our control. Whether you have experienced job loss, illness, or another type of financial disruption, it’s important to know that you can turn things around.

It may not be easy, but step by step, you will be able to fix your financial situation. Just don’t delay facing the issue. The longer you wait, the harder it is for you to recover.

Categories
Earn Extra Income

SwagBucks Review: Earn Money Surfing the Web

Have you ever wondered how you can get something for doing nothing? It’s not too good to be true. Since I’m living on a limited budget so I can reach my financial goals quickly, I’m always looking for unique ways to save money and make extra money too.

Introducing Swagbucks

Swagbucks is an internet search engine alternative, like Google or Bing. But when you use Swagbucks for your internet searches, you can earn points. After you accumulate enough points, you can then redeem them for prizes. They have gift cards to thousands of different retailers, and they have the option of paying in cold hard cash via your PayPal account.

SwagBucks Review: Earn Money Surfing the Web | Young Finances

By using Swagbucks as your primary search engine, you can amass of rewards points and redeem for a gift card to Amazon or Starbucks. These gift cards will allow you to buy things off of your wish list, or things to use as gifts for friends and family members. If you use the gift cards to buy things you would’ve purchased anyhow, or redeem your points for PayPal cash, you’ve just saved yourself some money in your regular monthly budget.

Swagbucks Isn’t a Scam

When people first hear of things like this, they immediately think is Swagbucks a scam? Luckily, Swagbucks isn’t a scam. But you should also be aware that it’s not a way to get rich quickly either. It does take time to build up enough reward points to get good prizes. Here are a few great things about Swagbucks:

  • It’s free to join
  • The company has been around for years, since at least 2005.
  • I have received rewards from them several times, and lots of my friends have too.




How to Use Swagbucks

If you don’t do a lot of internet searching, don’t worry. There are lots of different ways you can use Swagbucks to get rewards. Here are just a few.

  • Internet Searching: As I said before, you can use Swagbucks’ search engine just like you’d use Google or Bing. Each time you search using Swagbucks you have the opportunity to earn points, but you won’t necessarily earn points every single time you search for something.
  • Shopping via their website: Just like ShopatHome.com or FatWallet.com, you can use Swagbucks’ website as your shopping portal to earn rewards points based on how much you are spending. Just be careful to not get too carried away with online shopping and buying things you don’t actually need or you won’t truly be “saving” any money.
  • Printing Grocery Coupons: Swagbucks’ website has a giant coupon database full of grocery coupons you can print out at home and use on your next grocery store trip. This one is a 2-fer as you’ll save money by using the coupons and earn Swagbucks for printing them.
  • Taking Surveys: Taking surveys is one the easiest ways to earn points quickly. Most surveys are worth a few hundred Swagbucks each! If you have time to take just a couple of short surveys each day, you’ll quickly be able to redeem your points for a gift card or PayPal payment.
  • Watching Video Advertisements: You can earn up to 150 Swagbucks each day by watching short videos and advertisements. Most of the videos are about the same length as a TV commercial and you earn about 3 points per video. Sometimes I even turn on the video and let it keep playing, as it will automatically keep going to the next video, while I work on housework.
  • Playing Games: If you have time on your hands and want to play some games, you should do so through Swagbucks so you can earn points while you play. Personally, I don’t use this option much as I just don’t have the time to play games.

Swagbucks is easy to use and everyone can benefit from it, no matter if you have a large budget or not. It’s a great way to earn points for something you’d be doing anyway and then you can redeem the points to help your budget or to “treat yourself” to something special now and then.

Have you ever used Swagbucks?

Click here to sign up.
Get Started

Originally posted 2016-06-03 10:00:16.

Categories
Career

4 Tips to Landing Your First Job After College

Graduating from college is a huge step! You are almost there and ready to join the ranks of the working world and get your first job. You put in four years of hard work, sweat and tears. You stayed up late, crammed as much as you could before the final exams and you finally get to walk across the stage to receive your college degree.

But, wait a minute.

Something's wrong.

You actually don't have a job lined up yet.

Not to worry! I have 4 tips to help you snag your first job after college so you can jumpstart your career.

How to Land Your First Job

If you're trying to get a job, this guide will help. I used 3 and 4 to snag my first job after college.

Go To Your School Career Center

The first thing you should do is head over to your college's career center. There you will get help to tweak your resume and cover letter. You want to make sure that when opportunities come your way, you are ready. The career center is also connected with local organizations that want you! Businesses contact the career center on a regular basis to offer open positions just for graduating college students.

Call, Email, or Meet your Professors

Using this one technique, I landed an interview with a company that I never would have known about. There are companies that specifically ask professors and department heads for top talent. If you were smart enough to become friends with your professors or if you were memorable in some other positive way then you should make it a point to contact them for help. Call and tell them you are still looking for a position.

Join an Industry Specific Organization

I used this technique to get an informational interview with someone in my field. When you meet people in your industry and continue to learn about your field, more and more opportunities will be available to you. Make sure you have some personal business cards printed up. Focus on meeting 1 to 3 people at each function. Don't feel like you have to meet everyone there. It will make it easier for you to make a meaningful connection and keep in touch.

I Have a Job! How Do I Spend My Paychecks?

Congratulations! You finally landed a job! Before you do a happy dance, there are a few things you need to take care of to make sure you get started on the right financial footing.

Ok, maybe you can do the happy dance first.

First Job, How Do I Spend My First Paycheck?

 

Take Advantage of Free Retirement Money

The first thing that you want to do is to figure out if your company has a company match program for retirement. There are typically retirement options where the company will match your contributions.

Let's say that the match is dollar for dollar for every dollar that you put up to the first three percent of your salary. In order to claim your free money, designate three percent of your salary to contribute to your company sponsored retirement plan.

Start Saving for Emergencies

Think of that contribution as long term savings that you will not get to use until retirement. You still need some emergency savings. Set a goal to save at least ten percent of your take home pay. That is a principle that I learned from the book The Richest Man in Babylon and it's helped me so much.

That is the simplest way to budget. Start with your savings and then enjoy yourself.

Spend some money. You've earned it.

It's all about balance. It's all about what you want to do and what your personal financial goals are.

How did you land your first career position? Do you have any tips on how to budget that first paycheck?

This post was originally published for the PNC Achievement Sessions.

Originally posted 2016-06-01 10:00:41.

Categories
Career

What to Consider Before Accepting a New Job

After analyzing 120 years of research and synthesizing 92 quantitative studies, Harvard Business Review has revealed that “the association between job satisfaction and salary is very weak.” More than a high salary, we want satisfying work. After all, work gives purpose. Being happy at work is really a matter of being happy with life. And even with those that are happy at their current job, a recent study from Fidelity Investments shows that 49 percent, nearly half, of millennial professionals are actively looking or open to a new opportunity.

When comparing a new job offer with an existing position, it is easy to simply compare salary. While salary is still an important consideration; it is not the most important. What are the other non-financial factors to consider before accepting a job?

1) Job Benefits

Before accepting a job, consider the benefits: medical, dental, vision, an employee stock purchase program and/or 401(k) match, etc. How much value do these carry for you? Will you use them? This job offer evaluator tool from Fidelity can help you make the decision as you compare the numbers.

For evaluating benefits, it’s important to think ahead. For instance, medical costs may not be expensive for you right now, but what about in the years ahead? Perhaps you’re paying back student loans now so the 401(k) is not your foremost thought. Consider how enticing a 401(k) match may be in the future. Consider the difference in benefits between the two jobs.

2) Company Culture

Company culture is another important consideration. Ask yourself, “Would I really like it here?” What are the people like as individuals? What are they like as a team? Will they help foster your growth? Or is the culture conceited? People enjoy working with others they enjoy. Just as in college, working with friends makes all the difference.

3) Work Environment

Consider the environment as well. Is the building a pleasant place to be? Would you have good hardware and software? How are the break rooms? How is the parking? If you have allergies or are otherwise sensitive, how is the air quality in the building? These aspects seem relatively small when interviewing. But they are things you’ll need to deal with on a day-to-day basis. It’s best to work in a pleasant environment. If the job is good but the environment is lacking, ask about telecommuting options now or in the future.

4) Future Career Moves

What about your career trajectory? You likely will not be satisfied staying in the same position for decades. So what will the future look like? Does this organization have a clear path for you to follow? It’s often helpful to ask what people who once held this job are currently doing. If you do not get a satisfactory answer, it’s okay to ask an interviewer about attrition rate. It’s not a good sign if past hires don’t last long. Additionally, if you choose a company that has a poor reputation or a reputation for poor hiring practices, you could get typecast negatively and regret it once it’s time to move on.

5) Level of Interest

When examining job specifics, how much do you actually enjoy the work? It’s easy to get so wrapped up in the ancillary considerations, we often forget to think about whether or not the work is exciting! Will you enjoy spending 40+ hours per week doing the work that is involved? If the potential employer hasn’t explained the job in enough detail, ask more questions. You may even inquire if it’s appropriate to shadow a current employee for a day. If you are not able to shadow, be sure to ask about the workload and shared responsibilities. The employer will then have the opportunity to tell you with honesty how many work hours are expected of employees. The same study from Fidelity shows that 58 percent of millennials say quality of work life is more important than financial benefits.

6) Time Spent Commuting

It’s also important to consider the new commute. Are you ready to commit to that each day? According to AAA, the average cost to drive is 60.8 cents per mile. Commuting can be expensive and stressful.

To cut back on the commute, consider living closer to work. How much will your cost of living decrease or increase as a result? Consider housing, utilities, property taxes, schools, nearby stores, etc.

7) Retirement Plan Options

If this isn’t your first job, remember your retirement plan from your past employer. What should you do with it? You have many options. You can cash out, though it’s rarely a wise idea. You’ll miss out on future tax savings and you’ll get hit with fees for cashing out. You can also leave the funds where they are in many cases. A third option is to roll the money over into the new retirement plan or roll it into your personal IRA.

As you can see, there’s more to choosing a job than simply the salary. Apply the above considerations to see if a new job is right for you. And may your new position bring you money, benefits, friendship and satisfaction.
If you do decide to take on the position, don’t be afraid to negotiate. Often, the first offer is a starting point and it is expected that you will at least counter with a higher number or better benefits. How do you know what to counter? Consider the factors above and use the job offer evaluator tool to get your suggested salary.

Need more guidance? Check out this post from Fidelity as you evaluate a job offer.

This post is sponsored by Fidelity Investments®. All thoughts and opinions are my own. Fidelity does not adopt, endorse or sponsor any other content on this website, including links to other third-party websites and is not responsible for any views expressed outside of this sponsored post.

Originally posted 2016-05-20 08:00:04.

Categories
Budgeting & Saving

Combined Finances: To Merge, or Not to Merge?

This post was created in partnership with Credit Sesame.

Whether you have married, moved in with a partner, or are considering the next step in a relationship, one common question couples ask themselves is whether to open up a joint bank account.

A joint account is beneficial if you wish to share expenses like the monthly bills, but a large percentage of couples choose not to go that route. Many couples also find that keeping a separate account along with a joint account helps them keep finances straight. Before taking the plunge on a joint account, consider the good, the bad, and how to make the final decision.

Joint account overview

A joint bank account is a financial account that gives two or more people access to the same funds. These partners can make deposits, withdraw funds, and write checks. Examples of common joint bank account owners are married couples, partners living together and housemates that share bills.

The good

Joint accounts offer several advantages:

Long-term saving is easier. If you and your partner have a long-term purchase in your sights, a joint account is a great way to save for it. You can both deposit funds, and you can both see progress.

Budgeting is simpler. When all of your payments come from account, it’s easier to track money that you spend. Two incomes might also make overdrafts less likely to occur.

Spending patterns are clear. Each person with access to the account can see where the money goes. Some people like the accountability a joint account provides. Knowing that their partner can see the transactions makes them less likely to make unnecessary purchases.

More comfort in finances. If one person prefers not to take the financial reins, the other can lead.

The savvier person can teach. Even though the person with more financial comfort is leading, a joint account can be an ongoing learning opportunity for the partner who is less hands-on with money. Learning and growing together allows a deeper connection in the relationship.

The bad

Opening a bank account with a partner carries some disadvantages, too:

Vulnerabilities are inherent. A joint account allows an irresponsible person to cause credit and financial damage for his or her partner.

Transparency may breed conflict. One partner may become critical of the spending patterns of the other.

Privacy is limited. Your partner knows all of the purchases you make and vice-versa.

Financial management may fall to one partner. The partner holding the reins may resent that the other person doesn’t manage the account. Even the simplest of accounts require review and balancing.

Miscommunications can occur. Overdrawing the account due to miscommunication is possible. On a joint account, each partner must know how much money is in the account and what expenses the money is headed for.

The demise of the relationship can lead to financial confusion. If the relationship ends, there might be issues dividing the funds, or one person may deplete the funds without the other’s permission.

Financial entanglement can lead to financial liability. If one partner has a large debt - a tax lien or child support arrears, for example – the funds may be at risk for seizure.

Learn more: Tax Best Practices for 2016

How to decide

You and your partner must consider all of the advantages and disadvantages and come to an agreement on whether or not it is the best decision for your situation. You have options

You can open a joint account that for day-to-day expenses and keep your own separate savings accounts. This could help you avoid conflict.

A joint savings account is an ideal option if you and your partner want to save for a large purchase together like a vehicle or home. With your own individual separate checking accounts, you can still pay the routine expenses at whatever ratio you’ve agreed upon.

You can skip the joint accounts all together and only share expenses. This is for couples or partners who prefer total financial independence. Each person maintains total control over his or her money.

Your final option is keeping all of your finances divided. You and your partner can take turns paying bills and buying dinner. Having separate accounts doesn’t mean you have to keep all assets separate, but you could do that as well.

Before deciding to merge finances, complete transparency is key. Share your credit history, debt picture and financial goals with one another. You can start the conversation with a free credit report from Credit Sesame and analyze them together.

This goes without saying, but before you open a joint account, be sure you absolutely trust your partner.

 

About Credit Sesame

It’s our mission to be the credit and loan expert and advisor—finding the best way for you to manage your credit and loans to save money and build wealth. Get your credit score, and more from Credit Sesame.

Originally posted 2016-04-13 10:00:49.

Categories
Budgeting & Saving

How Filing Taxes On Your Own Can Make You Smarter

This partner post is part of the TaxAct #DIYtaxes blog tour which empowers you to take ownership of your finances by doing your own taxes. TaxAct provides the tools and guidance to help you confidently file your taxes easy and fast. Do your own taxes today at TaxAct.com. You got this. 

 

Do you do your own taxes? If not, maybe you should start. Filing taxes on your own can make you smarter. You’ll learn new skills and gain a better understanding about your personal financial situation than you ever thought possible. Trust me! I’ve definitely learned a lot about both tax rules and regulations, as well as my own money management style by doing my own taxes in the past.

When I first started doing my taxes, I was using the easy phone system. Because I was eligible for the 1040-EZ filing, all I had to do was call, report my income, confirm, and my refund was in the mail shortly after. As technology improved, I continued to file the 1040-EZ but I started to do so online. Then, I started a business and my taxes got a little more complicated. But I simply used an online filing service that walked me through the questions that I needed to make filing easy. And I learned a lot about credits, deductions, and where to go on IRS.gov to get more information.

Here are some ways that filing your own taxes can make you smarter.

Filing taxes on your own allows you to...

1) Learn About Tax Filing Deductions

As mentioned, one of the benefits of doing your own taxes is learning more about tax rules, regulations, and best of all, deductions. When you walk through doing your own taxes, you may find places to save money that you have never used before. This is especially true if you use a tax software that takes you through several question and answer prompts about events that may have taken place in the last tax year. Once you learn about these deductions and savings tools, you’ll be able to use them for years to come, as long as the tax code doesn’t change in the meantime.

2) Become Aware of Income and Expenses

It’s easy to get caught up on how much money you are bringing home every two weeks when you get paid and forget about the bigger picture of how much you are really earning each year in terms of both salary before taxes and other withholdings for retirement, health insurance, etc. But when you complete your own tax return, you’ll get a chance to see what your earnings and expenses really are.

3) Complete a Financial Check-Up

Again, doing your own taxes means you have to gather up all of your documents for the year, including earnings statements, expenses, etc. It’s also a good time to review the other aspects of your personal finances, like your debt obligations, investment accounts, insurance, and more. While you have all of that out and in front of you anyway, it’s a good idea to also give your budget a once-over to make sure you are saving as much money as you can. You may find that you can put more money toward your savings goals, or that you could lower some of your monthly bills with a little negotiation or leg work.

4) Make Last Minute Adjustments

By doing my own taxes, I’ve also been able to make some last minute adjustments to help my overall financial picture. As an example, you have until April 15th to make retirement contributions for the prior calendar year, which may help you cut down on the amount of income tax you owe to the government. Doing your own taxes means you have the ability to look at your tax status and decide if adding more money to your retirement savings is a good idea to help lower your taxable income.

5) Review and Adjust Withholdings

When you get ready to sign the bottom line, don’t think you are finished just yet. Once you’ve determine how much you owe to the IRS, or how much of a refund you’ll be getting back, you should take the time to adjust your withholding rate too. Although getting a large tax refund may seem like a good idea, it’s actually better to receive more money on every paycheck throughout the year instead. If you consistently receive a large tax refund, it may be time to lower you withholdings so you can receive more of your money throughout the year instead of getting a lump sum during tax time.

Likewise, if you ended up owing a lot of money into the IRS you can adjust your withholdings the other direction to have more withheld from your paychecks to get your estimate as close to $0 as possible for the new year.

Doing your own taxes doesn’t have to be daunting. In fact, it’s easier than ever thanks to many online tax programs that allow you answer simple questions and quickly fill out a few fill-in-the-blank forms. Plus doing your own taxes is a great way to learn new skills and be aware of your own personal financial situation.

Are you doing your own taxes?

 

Beating the tax deadline doesn’t have to be stressful. With TaxAct, everything you need to confidently prepare and e-file your taxes is right at your fingertips. You got this. File your simple federal and state return FREE today with TaxAct. 

Originally posted 2016-04-07 06:00:01.