Expensive kids? Not anymore!
School just started. The kids all needed back to school clothes, winter is coming so they are going to need new winter clothes as well since they keep growing. Oh, and they need fuel (food) so they can keep growing. All these expenses can really add up quickly, however, there are ways to keep the costs down.
1. Pack lunch instead of buying lunch.
By taking a few minutes each morning to make your kids a sandwich and throw in some fruit or give them the leftovers from dinner the previous evening, you can know what your kids are eating and save a few dollars in the process.
2. Buy school clothes smart.
Instead of buying clothes at the peak of back to school at the department stores, instead check out the clothes at Target or Wal-Mart. My secret, I buy 95% of my clothes at the outlet malls. But going to the mall alone isn’t enough, ask the mall people about additional discount booklets to save even more at the stores.
3. Start saving for college now.
College is expensive. Maybe your kids will get a full ride, most likely not . . . so start saving now. It isn’t going to get cheaper. Consider putting away that money you save by making your own lunches and shopping for bargain into a college savings account for your kids. It will help save a lot of headaches when your kids are juniors and you realize just how much it will cost when your daughters says she just has to go to Cornell. Believe me, you will be thanking yourself for putting money away for all those years.
Tax Deduction for Business Start-up Expenses
When starting a new business, there are plenty of expenses. You have to file a fictitious name with your state. If the business is going to be a partnership, corporation, s corporation or LLC, you need to file with the state and pay for someone to create articles outlining how ownership is divided, what rights and responsibilities each person has, how you can make changes to the articles, and much more. It takes money to do these things.
Section 195 of the Internal Revenue Code allows businesses to deduct these start-up expenses, up to $50,000, in the initial year of business. However, if the start-up expenses exceed $50,000, the amount the business can deduct in the initial year of business is reduced. The start-up expenses can still be deducted, but instead of deducting them all in the initial year of business they are deducted over a period of 180 months.
Real Estate Market Changes
The real estate market has slowly been changing over the summer months. In Florida things were going quite cheap this summer. Orlando had condos asking $19,000. Prices now are starting to creep back up. Maybe its the $8,000 housing credit or maybe it is the economy and housing market starting to recover. Either way, prices are going back up even though there are plenty of bank owned properties still on the market.
While prices are going up, there are still some good deals available. However, when looking to purchase a bank owned property, be prepared to spend some money in repairs. From what I have seen, these properties are $50,000 to $80,000 off the market value. Be prepared to spend anywhere from $10,000 to $40,000 in repairs though.
Before purchasing a bank owned property, get a home inspection so you know exactly what you are getting yourself into, especially if you are a first time homeowner. Homeowners tend to find a house they love and get so excited about the house that they don’t see the flaws in the property or they don’t know what they should be looking for.
Recession over, what now?
People are starting to say that the recession is over, or finishing up. So if it really is over, what should we do with our finances? Even though consumers are starting to spend some money and again feel comfortable with their money, there is still a long way to go before we are at the employment rates we had before this mess started. So how can we keep something like this from happening again?
The first thing that people need to remember and continue working on is maintaining a small savings. Traditionally Americans have not been savers, however, if we had more savings prior to the economic meltdown, the unemployment troubles and foreclosures would not be as bad.
The second thing to consider is divesting their portfolios. Social security isn’t enough for people to retire on, they need money of their own if they are going to live comfortably during retirement unless they plan on working at least part time for their entire life. Thus, the earlier you start saving for retirement the better. IRAs and 401ks are great ways to start saving towards retirement. However, as we have learned from the financial situation these past few years, nothing is sure. Stocks may go up but they may also go down. Thus, you need to put your money not just in stocks, but also have some in bonds, mutual funds, and other investments such as a family home.