When it comes time to do your taxes, it is always beneficial to take as many tax deductions as you possibly can.  If you can legally make the deduction, it won’t be considered cheating on your taxes.  You just want to be sure that you are paying the least possible amount on your taxes.  Sometimes people miss deductions they have available and end up paying more taxes than they should.  That is never fun.

When figuring out your gross income, you have to include basically any money that comes in to you.  This includes your ordinary wages, extra income, interest, dividends, etc.  The only money coming in to you that is not included is cash that you get in the form of a loan.  If someone lends you ten thousand dollars, you don’t report that as income.  If someone owes you ten grand and pays you back in full without interest, you don’t have to include any of that income in your taxes.  However, if you have ten grand in your savings account and you accrue five hundred bucks worth of interest in the year, you do have to include that in your taxes.

Now what sort of interest payments can you deduct and use to offset your total tax bill?  Well the only sort of of interest a regular working individual may deduct is the interest on their home loan.  Your mortgage interest is deductible up to a million dollars worth of principle.  So for example, say that your mortgage is 500k and you end up paying 30k worth of interest in a given year.  You may deduct that 30k against your income.  However, if your mortgage balance is 2 Million and you end up paying 120k worth of interest that year, only half of it is deductible.  Also, it is only the interest portion of your payments that are deductible.  You are typically paying back some of the principle with each payment, and that part is not deductible.

So what other types of interest are deductible for an individual?  Well, pretty much none.  You can’t deduct the interest on your car loan, the interest on your credit cards or the interest you are paying on that loan for your new big screen TV.  However, if you owned a business and your business took out a loan to buy a car, your business could deduct the interest on that car loan against the profits for that year.

So what is the morale of the story?  Your home loan is probably the best debt you can have.  If you get the opportunity to roll your credit card debt, car loan, etc. into your home mortgage, do it!  Not only are you going to get a lower interest rate, but you are also going to be able to deduct the interest payments from your ordinary income!

As the economy slows down, everybody is looking for some extra ways to save a few bucks here and there.  Sometimes it seems like you are always trying to save but just need some extra ideas to help you keep that last buck in your pocket.  Here are 10 ways you can save money in a slowing economy:

1. Share a room - For most Americans, their number one expense (after taxes) is their housing cost.  If you are single and living in a two bedroom place, consider renting one of the rooms out or getting a roommate to help you split the costs.  Not only do you save on rent or get a subsidized mortgage, you also split utilities.
2. Share a car - If you and your wife or girlfriend or roommates can swing it, try getting rid of one of your cars.  You will save money on insurance, registration, and maintenance.  Plus, selling a car will put cash in your pocket.
3. Quit smoking - Although there are a million other reasons to quit smoking, maybe the cost will push you over the edge.  Quit smoking because it costs too much, not because you aren’t cool enough to smoke.
4. Don’t get tempted by all the sales - I have seen some pretty incredible discounts offered for some of the stores that are going under.  If you buy a new pair of shoes for $20 that were originally $80, how much are you saving?  You aren’t saving anything, you are spending!
5. Don’t get tempted by the financing offers - No payments for 2 years on this new HDTV!  How do you know if the economy will be back on track in two years?  You don’t, so avoid.
6. Turn your computer and TV off - Turn your computer off especially when you aren’t using it.  There is no reason to leave the darn thing on all the time.
7. Cancel your cable and internet - Let’s face it, you don’t need the TV or internet.  Why not go outside and enjoy the fresh air?  Cancel your cable and internet to save on the monthly subscription cost.  If you need to watch something on TV, go to a friends, go to a sports bar, go to the gym, or skip watching it.  See if you can get free wifi somewhere outside your house, or just use the internet at work.
8. Quit the gym - I don’t mean stop working out, but exercising shouldn’t cost you anything.  Go jogging for cardio.  Get some elastic bands for resistance training.
9. Compare alternatives - You might have a commute where you could drive, walk, ride your bike, take bus or train, and you don’t know which is cheapest.  Keep track of your gas bill or train fare, parking fees, and everything in a spreadsheet.  Eventually you will be able to see which form of commuting is the cheapest.  Put some variables and functions in your spreadsheet so you can see what happens if (when) gas prices go back up.
10. Keep track - Monitor your expenses closely so you can patch up any leaks.

Keep your expenses low and maximize your savings account, and you should be able to whether the storm.

It is a lot easier to buy things when there are very manageable monthly payments involved rather than one lump sum payment.  You can justify a few extra bucks a month a lot easier than you can justify dropping a few hundred or even a few thousand on something before you even take it home with you.  Unfortunately, a lot of people fall victim to this flawed thinking.

Racking up some debt is OK for some instances, mainly when the cost of not having something is greater than the cost of having that desired item.  For example, if you could get a much higher paying job by financing a new car, it would be considered a good investment.  Yes, you would have to me making the monthly payments on your new car, but at the same time, you will be making a lot more money at your new job.  In the end, you will benefit financially by taking on the additional responsibility of the additional monthly payments.

Also, it would make sense to take out a mortgage to buy a house.  You are going to have to make monthly rent payments anyway, so why not be paying down a mortgage on a property that is hopefully increasing in value while you live there?  Makes total sense to buy unless you absolutely cannot afford it.

However, does it make sense to buy that new big-screen plasma HDTV with the surround sound that you always wanted?  You would have to have two thousand in cash to buy it outright at the store today, or you can select the financing option and not pay a dime for 6 months!  After that six-month period ends, you will be paying double for the set through your monthly payments.  How is having the nice TV going to pay off financially?  Unless you were planning on charging people to watch it, this investment won’t be paying off financially.

This is what we call a luxury item.  It is not purchased as an investment in hopes of making extra money.  It is not an living essential that we will need to survive and stay healthy.  It is a toy; it is an unnecessary item that we could live without.  It is a want rather than a need.

So what happens if you rack up a little too much debt and you cannot make your monthly payments?  Well after you get a bunch of nasty letters in the mail, someone is going to come to your house and take your nice new TV away.  Even after they take your TV back, you will probably still owe a considerable amount on the loan.  Don’t think that just because they have the TV that you are off the hook.  They will still come after you for the bad debt.  They might even pass you off to a collection agency who will continue to pester you with letters and nasty phone calls.

If you still don’t make the monthly payments, they will report it on your credit and lower your credit score.  The next time you want to finance a TV, it might be a little more difficult.  Even if you want to use financing to make a good investment (a house), you are still going to look bad for that defaulted TV loan.  What a bummer!

A lot of the time, we are given a couple variables and we want to calculate the payments on a loan.  For example, you are trying to finance a $10,000 car at a 12% interest rate for 5 years.  All you want to find out is how much your monthly payment is going to be and whether or not you can afford that payment.  Just a heads up - you will need a calculator to figure out these payments.  Since you are probably on a computer right now, you can use the calculator on your computer, or you can use excel.

Lets use the example above and try to calculate out your monthly payment.  First, lets set some terms.  PV (Present Value) of the loan is going to be $10,000.  Your interest rate per year is going to be .12.  However, since we are trying to calculate out MONTHLY payments, we are going to want to turn this 12% per year into a monthly rate.  This is as simple as dividing .12 by 12 which gives you .01 or 1%.  Finally, we are going to want to define our number of payments, n.  We know that it will be 5 years, but we need to convert that into months.  Simple as multiplying 5 by 12 which gives you 60 months.

Ok, so here are our variables:

Total number of payments: n=60

Interest: i=0.01

Present Value: pv=10000

The easiest way to calculate payments is to use a spreadsheet on your computer like excel.  Open up the program, select a cell and type in the following exactly (without the quotes): “=PMT(0.01,60,10000)”.  Hit enter.  This will automatically calculate out your monthly payment of “-$222.44″.  This is what your monthly payment on your car loan should be, given those exact variables.  I am sure that the loan you are trying to calculate payments on has different variables, so here is the equation using variables instead of values: “=PMT(i,n,pv)”.  To calculate payments on your loan, just replace the i with interest, n with number of payments and pv with the total loan amount.

Using excel to figure this out is by far the easiest way.  Just plug your variables in and hit enter and you are finished.  If you are deathly afraid of excel, you can use the old-fashioned formula.  Take a look at it and maybe you might want to give excel a shot first:

Monthly Payment = (pv) * (i/(1-(1+i)^(-n)))

Ok, lets solve this using our example:

Monthly Payment = (10000) * (.01/(1-(1.01)^(-60)))

Monthly Payment = (10000) * (.01/(1-0.55045))

Monthly Payment = (10000) * (.01/.44955)

Monthly Payment = (10000) * (0.022244)

Monthly Payment = $222.44

So we get the same answer of your monthly payment being $222.44.  Piece of cake!

What do we learn from this?  You are buying a car for $10k and you only have to make monthly payments of $222.44 for five years to pay the thing off.  Doesn’t sound that unreasonable?  Well if we add up all the monthly payments, we find that you ended up paying a total of $13,346 for a $10,000 car.  And what is your car worth now?  $3,000?  So by the time you pay the car off, you are out a total of over ten grand!

What would have happened if the financing option had not been available to you?  You might have bought something a little more economical, say a car worth $2500.  Even if your car is now worth $500 now, you are still only out two grand instead of being out over ten grand!

Keep this in mind next time you calculate payments on your loan!

If you are looking for a personal, no credit check, loan, you are probably in the market for some sort of payday loan or cash advance.  Unless you want the banker to go through your credit profile and take a look at your credit report, you are going to want to stick to some sort of cash advance.  The only problem with a cash advance is that they are usually very short term.  You are expected to pay the entire balance plus fees back by the time you get your next paycheck.  Of course, you can pay it back in full by taking out another paycheck advance if you want - you just have to pay the fees out of your own pocket.

So, if you are in the market for a personal loan that requires no credit check, you are probably not going to get exactly what you want.  Here are a few options if you need some sort of loan but you don’t have the best credit, or you have flat out bad credit:

1. Start getting your finances straight and find the root of your problem.  If you need to borrow money to pay the bills, buy groceries, make the rent, etc. then there is something not right with your finances.  Spend the 10 or 15 bucks that it takes to buy Personal Finance for Dummies and invest the few hours to read it.  People often make excuses about their financial troubles (my boss is a jerk and won’t give me a raise, my wife spends too much, the landlord keeps raising rent, etc.) but only you have the power to fix your financial issues.
2. Your poor credit is preventing you from borrowing money, or it is making you borrow money at an interest rate that is more than you can afford.  Try contacting a few different credit repair companies and seeing what ideas they have about getting your credit back on track.
3. If you have available credit card balances, see if you can get some credit card checks to hold you over until you have your finances back on track.  If you don’t have any available credit on your credit cards, consider signing up for another card to get at some more credit.  I only recommend doing this as a temporary means to get out of a tight situation.  Once you get through this financial crisis, you should be taking steps to eliminate some of the debt that has accumulated.
4. Use peer-to-peer lending to secure a personal loan.  If you have poor credit, you still run the risk of having an inflated interest rate or not having your loan funded at all.  At least spend the time to check out some different sources online.  It is worth a shot and can get you out of a stick situation.
5. Sell stuff.  If you have items that are of high value, such as baseball cards, a car, nice TV or stereo, you might consider liquidating some of your nicer stuff to pay off immediate expenses.  Who knows, these expensive items might be the things that got you into your financial mess in the first place.

I can’t stress this point enough.  This is really how people end up in debt.  They never intend to end up overwhelmed with debt; it just happens.  It is very easy to get suckered into purchasing something that you cannot afford when the monthly installments seem so manageable.

What if you could finance a meal?  You want to get a good sandwich for lunch, but you only have 5 bucks.  You don’t want a subway footlong, you want that fancy deli sandwich thats ten bucks.  What if the deli said “Ok, you can get our fancy sandwich for nothing down, but 19 cents per month for the next five years.  That doesn’t sound like a bad deal at all.  So you end up paying $11.80 over 5 years for a $10 sandwich.  It seems like you are only paying an extra buck-eighty to get that sandwich upgrade.

Wrong!  Had you not had the financing option available in the first place, you would have had to settle for the $5 footlong, thus the fancy sandwich is costing you $6.80 more.  So not only are you getting dinged with the financing premium, you are buying more expensive stuff than you can afford!

Most people can see extra they are paying for the financing, but they don’t realize it is the fact that they are buying stuff that they can’t afford.  They scapegoat the super high interest rates and blame the credit card companies when they themselves are to blame for their dangerous spending.

So if you are in debt, the best way to get out of debt is to stop spending more than you can afford!  Change your spending habbits - delayed gratification - and your finances will fall right into place.

Here is a list of a few things to avoid if you are trying to save up some money:

1. Do not get a DUI.  It will end up costing you thousands at the very best.  It will also cost you your license, and even worse, could cost peoples’ lives.
2. Drop Starbucks.  Get a coffee machine and brew your own cup of joe.  If you like the fancy drinks, buy an espresso machine and be your own barista.
3. Don’t blow your wallet at the bars.  You can easily rack up a few hundred in a night of drinking.  By being a little thrifty, that same night can cost you under twenty bucks.
4. Don’t leave the lights on.  Turn your computer, lights, TV and everything off when you are not using them.  You can really save a big by not wasting electricity.
5. Don’t leave your wallet on empty.  Always carry cash around in case you need to buy something at a place that either doesn’t accept cards or charges you extra for using your card.  One example I have seen in recent times is gas stations.  Seems like gas is a good 10% more expensive if you want to use your card.  Having cash on hand can save you a few bucks at the pump.

One thing that I see constantly ruin people’s finances is buying a car that is way too expensive for them.  All you really need a car for is to get you from point A to point B in a timely, reliable manner with a side of comfort and safety.  How much time to you actually spend in your car?  An hour a day?  How much do you spend in your office chair?  8 hours a day?  Maybe you should spend thousands on a sweet office chair rather than your sweet car that you only use a little each day.

Your need for speed will quickly eat away at your savings.  Faster cars are usually less gas efficient, and your gas bill will simply increase.  You get a few tickets or accidents, and the expenses quickly add up.  You have to pay a few hundred for the ticket itself, take some time off work for traffic school, and also pay more for your insurance for the next three years.  Start buying some more performance parts and you are really starting to hurt.

If one of your hobbies is cars, and you actually have the spare change to lose on your interests, by all means, enjoy yourself.  However, if you are justifying buying a money-pit because you need a car to get to work, consider buying some used sub-compact.

In these difficult financial times, everyone is looking for a way to save a couple bucks.  Here is a list of 10 ways you can cut some costs by doing things yourself:

1. Bottle your own water - Save a couple bucks by just refilling the same water bottle over and over again.  The quality of bottled water isn’t much better than what is coming from the tap.
2. Fire the gardener - Do all the gardening yourself.  You should have plenty of time to spend in your yard when you lose your job.
3. Fire the house cleaner - Same thing.
4. Be a landlord - Make an extra few hundred bucks a month by bringing in a roommate.  Do you have kids?  Well tell them that they get to share a room now!
5. Be your own car salesman - Are you really driving the most economical car you can drive?  Pull some cash out and slow your depreciation by downgrading.
6. Fire your mechanic - Learn a thing or two about your new junker.  Do the repairs yourself to save a few bucks.
7. Be your own contractor - Some old fashion elbow grease always helps you save.  Chances are that a friend knows a thing or two about construction, so give them a call (they are probably out of work anyway).
8. Be your own cook - Buy ingredients in bulk for your favorite meal, and spend all day making a week’s worth of dinners.  Portion them off and store in your freezer.  Each night, just heat one up and serve.
9. Entertain yourself - You don’t have to blow a wad of cash every time you want to have a night out.  Try planning less expensive nights-in, or at least be frugal when you go out - maybe even bring a flask to the bars instead of ordering expensive drinks.
10. Be your own engine - Ride your bike instead of driving to save money on gas and engine repairs.  Exercise will also end up saving you money on doctor bills later on in life.

Follow these guidelines and help save yourself a buck during these iffy economic times.

It is time to move, and one of the largest factors when determining a place to live is the monthly rent.  Location, house or apartment condition and neighbors play a factor, but when all is said and done, you really want to be saving money on rent.  Afterall, housing is usually your most costly expense on your family’s budget.

Sometimes we forget to add other items into consideration, and just look at rent.  Here are a bunch of costs to consider when trying to determine which place to rent:

1. Location.  If you live in a place that is really removed from everything, you have to consider the extra miles you will have to be driving to go to work, get groceries, see a movie, see friends, etc.  Not only should you tally up the extra gas you will be using, but you should also account for wear and tear on your car, and your own time wasted behind the wheel.  I have looked at places which would have ended up costing me hundreds a month extra just in fuel/car costs based on the location.
2. Utilities.  Sometimes all utilities are included in your lease.  Sometimes it might just be water, sewer or trash.  Sometimes nothing is included and you have to pay them all yourself.  Don’t forget to include water, sewer, trash, gas, electricity, cable, internet, phone, cleaning, etc.
3. Heating/Cooling.  An air conditioner might be nice, but will usually end up costing you more rent and will hit you hard on your electricity bill.  Also, consider the climate in which you are considering living: Will you use the heat and air conditioner a lot?  What about the unit size?  If the place is huge, it will cost more to heat and cool than a smaller place.  Finally, how old/efficient is the building?  Crappy windows and old insulation will cost more to heat or cool than a place with nicer windows and newer insulation.
4. Cost of living adjustments.  If you live right in the center of a wealthy city, expect to pay more for pretty much everything.  If you are living outside the city in a much more affordable neighborhood, you should be able to pay less for everyday items such as groceries.

When you are comparing places to live, be sure to tally all the costs together to come up with a monthly total that the apartment or house will be costing you.  Apply the same procedure for all your prospective places and you will be able to do an apples-to-apples comparison of all the places.  The best way to do it is on a spreadsheet on the computer.