Obama 2009 Economic Stimulus Plan – It’s Gonna Be Big!

Economic Stimulus!

The economic stimulus plan that President-Elect Obama is working is estimated to be between $675 and $775 Billion.  The stimulus plan will be geared towards job growth and infrastructure.  Some have argued that work should be done to increase short-term spending but Obama’s economic stimulus plan looks to have long-term effects.  This sounds reasonable as short-term spending would only be a small band-aid at best.  We have to move away from this idea that we can spend our way out of trouble!

The administration will look to give money to projects that have a plan to move us away from being energy dependent on other countries as well as projects to help build up schools.  If done correctly this could be similar to what was achieved under FDR where many buildings and schools were built during the depression that are in use today.

Getting an economic stimulus package will be the top priority for Obama and his team once they are in office.

But is it enough?

Economics Nobel-Laureate Paul Krugman wonders if we don’t need closer to $1 Trillion.  He says:

“I understand that there’s difficulty in actually spending that much money, and I–they’re also afraid of the–of the T word. They’re afraid of a trillion dollar for the two-year number. But you know, the back of my envelope says it takes roughly 200 billion a year to cut the unemployment rate by 1 percent from what it would otherwise be. In the absence of this program, we could very easily be looking at a 10 percent unemployment rate. So you do the math and you say, you know, even these enormous numbers we’re hearing about are probably enough to mitigate but by no means to reverse the slump we’re heading into. So this is–you know, I–they’re thinking about it straight.”

Wow. That is a lot of money.  According to Obama, any taxes involved would amount to tax cuts for the middle class with many former tax cuts for wealthier folk repealed.

Clearly we are in the middle of a huge economic situation.  Attempts to fix the problem up to now seem to have done little stem the bleeding.  But if the money is used well to grow new industry, create long-term jobs, and develop much needed infrastructure then perhaps this can can work.

How do you feel about Obama’s new economic stimulus plan?  Is it much needed or a waste of resources?

Creative Commons License photo credit: tao_zhyn

Frugal Alternative to Microsoft Office

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So I got a new computer recently. The last one went back to the turn of the century and the screen finally died (the battery had already gone).  Anyway for all of the great programs on my new computer I didn’t have a good spreadsheet or writing program.  Of course the industry standard is Microsoft Office.  Office 2008 for the Mac on Amazon is going for a little over $100.  Pretty good but still expensive after already buying a computer!  I found out I could get a pretty good discount through work but a discount still means I’m paying for it.  That’s when I remembered an article 9 Tips to Save Money on your Next Computer which mentioned OpenOffice.org!

I was a little skeptical of OpenOffice.org at first. I mean, it’s touted as a free alternative to MS Office.  Could it really be as good if it’s free? I’ve used another alternative, Google Docs, a bunch of times.  Google Docs is also free and is nice in that you can access your docs on any computer where you can get Google.  It’s got good programs but falls behind in what MS Office offers.

OpenOffice.org , on the other hand functions almost exactly like MS Office!! So here’s our story: Last week my daughter had a science project due.  In true fashion we all waited to just about the last minute.  I hadn’t bought MS Office and didn’t use OpenOffice.org yet.  We needed to print out her project, titles, and a graph of her research.  Uh-oh!  So I went to the OpenOffice site and downloaded thier suite which includes Writer (Word), Calc (Excell), Impress, Draw, and Base.  I gotta tell you. I was surprised to see that it looked and operated just like MS Office would!  I am sold!  On top of the great programs you can also download templates and extensions to help you further.

Here’s the welcome page when you first open it:

openofficeorg-welcome-page

Here’s what a spreadsheet looks like:

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Looks an awful lot like Excel, no?

Here’s what Writer looks like:

openofficewriter

Very similar to Word!

And here’s the templates and extensions screen:

openoffice-templates-docs

There are a ton of great templates to chose from!

I mean, whats more frugal than free?!?  And with the functionality of MS Office products it’s really a no-brainer!  Although I haven’t gotten to use it too much yet I’m really liking it so far!

If you are looking for a spreadsheet, document, or presentation program I really think you should give OpenOffice.org a shot before you go out and buy anything!

Have you used it?  What do you think?

A Mother’s Struggle Between Work And Kids

Embrace

The following was written by Mrs FFB.  As you may remember, before the school year started we made the decision that my wife wouldn’t return to work (in education) and instead stay home to raise the kids.  Below is her rationale.  Enjoy!

I remember when I was in college and I had this end term goal of having a career, making my own money, buying my own things and being a “professional” woman.  The thing is, ever since I was a little girl, I also always had a dream of being a mom. I never knew or could ever even imagine how these two, opposing aspirations would collide with each other in my future life.

When I was in college I had this assistant teacher position in a nursery/daycare. I remember working the “extended” day which ran until 6pm and feeling so awful for these young children who were still in the daycare center.  I was so judgmental of these mothers: “This is wrong!”, “How could they leave their babies here until 6pm!” “A young child should be in their home during this time of the day!” I was real heated about this topic. ….Little did I know at the young age of 19 years old, that this would be my life one day.

So I graduated college and nabbed myself a teaching position for September. I was so excited about this upcoming career and making “good” money (up until that point, I had made minimum wage working the daycare).  It turns out that I was pregnant and expecting in January but I didn’t care and wasn’t going to let the pregnancy get in the way of working. I didn’t tell the principal during my interview that I was pregnant and just showed up the day after labor day all prego.  Luckily, I wasn’t really showing, but by October there was a buzz going around the school and I finally told the principal but assured him that I would return to work in 6 weeks.

I had no idea what I was in for. When my daughter was born, I fell in love times 1000 and I couldn’t bare the idea of leaving my little baby.  So I took off the rest of the school year and returned to work that following September.

That September became the beginning of a long, hard phase in my life: working mom (and for a few years -single, working mom).  My daughter was 8 months old and I had a stay at home friend of mine babysit my daughter.  The problem with this friend was that she lived really far and out of the way.  So I had this awful drive to her home each morning.  Not to mention that I barely had any sleep.  I remember nights when my daughter would just wake up and stay up- we’d watch Elmopalooza! in the dark wee hours of the morning.  Then I was expected to be a completely functional teacher for a very challenging class.

When my daughter turned two I enrolled her in daycare. So this was my life for a number of years: late to work every morning, trying to get a difficult toddler ready to leave the house, driving haphazardly to the daycare, rushing her into the daycare and then running out to my car and racing to get to the school.  On top of all this stress, I was going to graduate school and because I was a poor single mom, I worked afterschool too.  There were some nights when we didn’t get home until 10 pm.  Then we’d have to get up early and do it all over again.

It was very hard and depressing, so not what I thought motherhood would be like.  So when I was engaged to be married (with the wonderful FFB, edit) and knew that I wanted to have more children, I vowed and proclaimed that I would stay home at least 2 years with my child due to the trauma I experienced with being a working mom with my daughter.

Four months after we were married, I was pregnant.  It was one of the happiest, most pleasant phases of my life.  I actually was ok with going to work at this point.  My daughter was a bit older, in first grade now and I new that I was taking a long leave of absence.  I literally worked up until the day I delivered the baby.

Somewhere during the childcare leave, I started to feel pressured to return to work in September and against my original plans to stay home for at least 2 years, I decided to go back to work… again.  It was the year of hell.  My son was 8 months old and I put him in daycare.  I remember bringing him to the “wobbler” room and thinking about how surreal it all was.  8 babies sitting in little high chairs and wondering about how well a daycare worker, who is paid minimum wage, was going to care for my son.  I felt so bad and guilty.  Not even 2 weeks into daycare, my son got sick.  Then he was sick every single week with some kind of cold virus.  Either he was just getting a cold or getting over a cold.  I was constantly at the pediatrician’s and at one point he was even on a nebulizer for respiratory distress.  It was so horrible to know that I needed to stay home with my sick son but also face the repercussions of being absent from the job.  I felt that my son was more important so I would always stay home with him when he was sick but i still found the whole scenario agonizing and extremely distressing.  I hated having to call into to work, over and over again as it turns out – 17 times! After a while, i just accepted the fact that maybe I would get fired or get written up or something.  I didn’t even care at that point.

I was so spent. I too become sick often and was severely sleep deprived. I sucked at the job cause I was so distraught over my decision to return to work, taking care of a sick baby and lack of sleep.  It was just terrible. One morning I was so tired and in such a rush that I crashed our car in the garage!  I knew that things were really bad at this point.

So I persevered and made it until the end of the school year and had this long summer vacation to look forward to.  I pulled my son out of daycare and enjoyed every second with my children but then we got to the end of August and the anxiety of returning back to work started to over take me.

After a friend of mine made an enlightening comment to me about why wouldn’t I just return to work when my son was older (since my leave permits that), then why wouldn’t I just do that?  So I started to really sit on this idea.  Why was I so afraid to follow my dream of being a  stay at home mom?  There is my whole life to work but only like 4-5 years of a child’s life when they really, really need their mothers.  So why was i doing this to us?  Maybe I wouldn’t have any more kids and I would’ve missed my only chance to do the “right” thing (for us).  I missed out on all those years with my daughter and was doing the same damn thing, 7 years later to my son.  Now when my daughter was little, I was a single mom and didn’t have a choice.  But now I had a husband and our financial situation was solid, so why not just try it?  “I could always go back to work the following year,” I pleaded with my husband.

I have to tell you, I am so happy now.  I can wake up in the morning.  I don’t curse the sun for rising like I used to. I no longer have grim thoughts of despair about the day ahead of me, ” how am I going to make it through the day,” “why can’t it be Saturday,” “I am sooo tired, I can’t do this,” or my favorite –  “what if I just quit and not even call or show up?!?”  Now I wake up get my daughter ready for school and I don’t have to drag my 23 month old son out in the wee hours of the morning.  He gets to bumble around HIS home, eating breakfast at his leisure.  We got to the park, we do errands, we make meals, visit other stay at home moms… Life is truly wonderful now!  I am so happy and so is my son and daughter!  I realize now that when they would give me a hard time in the morning, they were just reacting to being rushed and all the stress I would put on them.  Now things are so pleasant.

We had to make a lot of changes to accommodate to one income and we certainly aren’t living the lifestyle I imagined we would’ve been at this point in my life, but we are happy now!

photo credit: maessive

9 Year End Tax Savings Tips

It’s December and the year will be ending before you know it. Don’t fret, there’s still time to take advantage of some tax saving tips to make your tax burden next April a little less.

Here are 9 year end tax savings tips:

Max Your 401(k)

If you can afford to take the paycheck hit now you can up the percentage of your 401(k) contribution.  Your contributions are tax-free and will lower your taxable salary.

Open or Contribute to a Traditional IRA

For some a traditional IRA may be a better option than a Roth IRA.  With a traditional IRA you get to deduct your contributions from your taxable income.  Have have until April 15th to contribute.

Sell Losing Investments

The sold investment losses can be deducted to offset gains or to reduce your taxable income.  The limit is $3000 though.

Donate to Charity

Donations before Dec. 31st can be deducted on next year’s return.  You have to itemize your deductions to claim this.  Bonus benefit: You might be helping some people out!

Prepay Bills

If you prepay some bills such as mortgage payments or medical bills you can write them off on next year’s return.

Second Chance Economic Stimulus Payments

Some who didn’t qualify for economic stimulus checks earlier in the year may qualify this time due to a life change (marriage, birth, change of income…).

Job Search Expenses

If you searched for a new job (in the same industry you’re in now) you can deduct expenses you incurred such as resume preparation, career counseling, travel, and phone calls.

Tax Relief for Foreclosures

Normally if your home was foreclosed or the mortgage was reduced or restructured you would have to pay taxes on the amount reduced.  Recent legislation has made it so you may not have to pay taxes on the forgiven amount.

Use Up Flexible Spending Plans

You contribute to a flexible spending plan to save on taxes.  But if you don’t use up the contribution amount then you lose the ability to claim it back.  Make sure you claim the full amount before the deadline passes (check with your HR department to see when your company’s deadline to claim is).

Most people don’t like to pay taxes.  You still have some time to take advantage to lower your tax burden.

Bonus Tip (because I thought of it after I first published):

Max out a 529 plan for your kids. Many state plans offer tax advantages for contributing! (check the specific plan for details).

These tips are in part courtesy of our friends at Intuit and TurboTax who were kind enough to provide them.

8 Ways The Economic Crisis Can Be Good For You

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Times are tough out there.  The economy is at the forefront of the news every day.  Companies that were believed to be stalwarts are turning out to be broke.  Many are saying this is the worst the economy as been since the Great Depression.  Is there a silver lining to this economy?!? Yes.

8 Ways The Economic Crisis Can Be Good For You:

  • Lower House Prices and Lower Mortgage Rates – If you don’t already own a home now may be a great time to buy one!  Housing prices have been dropping.  The bloated home prices of the past few years are finally reversing.  If your finances are sound and you can make the payments you might find yourself with a house bargain.  Add to that dropping mortgage rates and this might be the time to buy if you’ve been waiting but couldn’t afford it before.  If you have a variable rate mortgage it could be the right time to lock in your rate.  Mortgages are already low so you figure they have to go up eventually!
  • Buying A New Car – If you have been in the market for a new car then now is a great time to buy!  The big three American car makers are hurting and are basically giving their cars away at cost just to keep their inventory moving.  To compete, foreign car makers are offering deals as well.  Most companies are offering 0% interest for qualified buyers.  That’s a free loan o buy their car.
  • Sales – Just like the car manufacturers many other companies and stores are hurting and are doing whatever they can to sell their products.  Forecast are already low on consumer spending for the holidays.  This means we’re going to see some great sales coming up.  Don’t go out spending just because prices are low but if there was something you were going to get anyway this coming season may be the time to buy it.
  • Low Credit Card RatesLower credit card rates doesn’t mean you should go on a spending spree!  But if you are carrying debt ad making your payments you may be able to negotiate a lower rate with your credit card company.  If your rate is already low you still might be able to find a card offering 0% to transfer your balance to.  Remember, the point is to shrink your debt not increase it!
  • Change Bad Spending Habits – What does it take to break out of the cycle of spending and debt?!?  If this bad economy doesn’t convince you that carrying a lot of debt is bad then what will?  Cash is king in any economy but wen you have a cushion for yourself then bad economies are less stressful.  Let what you see in the news be an eye opener for you if your spending habits aren’t so great.  Make a commitment to put yourself in charge of your finances!
  • Cut the Corporate Fat – Only the strong will survive in this economy (well, except for those that get bailed out).  The companies that come through this will end up with a stronger presence in their industries.  Also, as inefficient companies close up shop they leave open room for newer, smaller companies to take up the market void left over.
  • Cheap Gas – I just filled up the tank on our mini van and it cost us $35.  That would have given us a half tank earlier in the Summer.  Man does it feel good to not pay so much for gas!  One way to take advantage of this is take what the gas would have cost you in the summer and put the difference in what you pay now into a savings account every time you fill up.  Home fuel costs will also be lower this Winter than last Winter.
  • Stocks Are Cheaper – Prices have dropped to where if you invested at the turn of the century you might just have the same amount now; basically a zero return.  Not so good if you’ve lost a lot in stocks but if your starting out investing you could be getting stocks and funds near the bottom when prices are low.  You still need to do your research to find good funds and companies.  If you’re dollar cost averaging your investments you’re getting more stock for your dollar these days.

It’s scary to hear economic news these days.  But if your finances are in good shape then now can be a good time for you!  If your finances aren’t then get working on it now!

What do you think?  What other ways could this bad economy be good for you?

photo credit: kekremsi

Medical Treatment And Your Credit

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It’s a common theme on the news and in the papers, the cost of virtually everything is going up and more and more families are finding it harder to keep up with monthly expenses, let alone what happens in an emergency situation, especially a medical one. As health care costs rise and medical insurance costs increase astoundingly fast, a medical emergency can complicate the finances of any family.  It is especially tough on those who require prolonged medical care and prescription medication.

What happens when you need to seek treatment but do not have the money to cover the costs? For many, a seemingly easy fix is to pay on credit in order to get immediate attention but financially it may not make sense, especially if you do not have a cash plan to cover the monthly costs. In addition to failing health, you may be faced with long-term financial stress. By charging your health care costs to a credit card, you are going to end up forking over much more money than you otherwise would have to thanks to increased costs and potentially over the limit fees for any missed payments.  Credit limits will also take you only so far.  For prolonged treatment, your credit limit may quickly be maxed; not to mention the changes being made by the credit card companies which are reducing credit amounts and increasing interest charges.

If you have a credit card that offers a cash back rewards program based on purchases made, it might be beneficial to use it for the money coming back to your account or your wallet. However, that alone is not a reason to use your credit card for medical treatment. There are more viable alternatives for paying for medical care. If you are unable to come up with the cash for payment, perhaps the following list can help you find other options.

Start An Emergency Fund

Even if you don’t anticipate an illness occurring (who does?), you can make a point to have a small amount of money each month transferred to an interest-bearing savings account, where it can grow and be available for medical emergencies. With insurance, there are many times that the costs not covered can still run high and it can be a great relief to have access to cash in the event a medical situation arises, especially one that requires a hospital stay or long-term medication.

Check In With The Government

There are many medical assistance programs available in communities and on a federal level to help supplement your medical payments. Many people will not consider asking for assistance whether due to pride or just lack of knowledge. There are also many clinics that base payment rates on your income and expenses. You can often get quality medical care for a fraction of the cost if you make the effort to seek out additional help.

Payment Plans With The Treating Facility

Most health care providers will offer some options for a payment plan, depending on your need. Even if you have to make payments for a long period of time, you will likely end up saving money by eliminating interest charges like those tacked on to a credit card. If you don’t have insurance, or find that your insurance does not sufficiently cover all of your costs, the balance amount can be paid down over a period of time without collection action, provided you continue to make regular payments

Medical emergencies and unexpected illness are stressful enough. It is better to be proactive and prepared for the unexpected than to rely on your credit card to get you through your situation. Adding financial stress to physical stress can often be a fatal combination. As health care continues to be a major issue for many in the nation, it may continue to get worse before it gets better. No one can prevent an emergency but by proper planning, one can be prepared for it.

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Tisha Tolar is a freelance writer providing content for CreditCardAssist.com, where she regularly writes about credit cards, rewards programs and general consumer finance issues.

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photo credit: Patrick J. Lynch

Never Mind A New Economic Stimulus Package – Save Yourself!

There’s been a lot of talk in the news about a new economic stimulus package.  Some are talking about a new one being approved this year while others speculate that it won’t happen until President-Elect Obama takes office.  There’s been talk that a new economic stimulus package would be more infrastructure and not checks as the last package was.  And there definitely has been a lot of talk of whether we even need a new economic stimulus package; questioning if it even makes a difference.  Here’s what I say:

Never mind a new economic stimulus package – Save yourself!

Don’t count on the government to come through with legislation to help you make ends meet.   That attitude will never get you ahead.  You need to take matters into your own hands.  If you are in a bad financial situation you need take control and ownership of the problem and fix it yourself.

Here are 12 ways you can take matters in your own hands and save yourself:

  • Make sure you excel at your job.  Unemployment is the highest it’s been in quite a while and I’m sure there will be many more layoffs to come.  Don’t be the robot at work that does just enough to get by.  Get yourself interested and make yourself valuable to your company.  Don’t just get your job done – get it done well!  If layoffs are coming you may be able to save yourself from the chopping block.  Hey, maybe you could even get a promotion?
  • Build networking relationships with friends and co-workers.  Sometimes, as unfair as it seems, it’s not what you know but who you know.  Keep up with co-workers when they move to other jobs.  They can be your foot in the door if you leave your current job.  Stay in contact with friends as well.  Even if they don’t work in your industry they could prove to be a valuable contact.  Network!
  • Pay your bills on time.  Lenders are getting shy about giving out their money these days.  If you pay late you may find your interest skyrocketing.  Universal default allows one credit company to raise your interest rate if you’re late on a different company’s card.  A late payment can make all of your credit cards have high rates.  If you aren’t paying off your balances every month you can find yourself sinking faster into debt.
  • Put money away for emergency savings.  Really you don’t know what the future holds and as the saying goes: “when it rains it pours!”  What happens if you find yourself out of a job?  Then the car breaks?  Then you need a doctor’s appointment?  Hopefully you don’t need your savings but put yourself in good shape by having savings in place.
  • Make sure your credit report is clean.  Errors on your credit report can be costing you in higher interest rates on your credit cards and loans.  Make sure your credit report is accurate.
  • Check you credit score.  Your credit score is like your code of honor among credit agencies.  A low score means higher interest rates and could also mean you won’t get a needed loan or credit.  Credit scores are also used in housing and in job hunting.  Get that score up!
  • Cut costs.  Remember that emergency savings?  A way to help build that up is to cut costs.  Cut a few corners here and there and you can find yourself with significant savings!
  • Analyze your tax withholding.  Are you paying too much?  Pay what you need to and no more.  Many like to get a big tax refund but you’re better off having that money in each of your paychecks instead.  You don’t earn any interest when the government is holding your money!  Adjust your tax withholding so you maximize your paycheck.
  • Re-evaluate your holiday spending.  The holiday spending frenzy is starting.  Don’t get caught up in the current!  You don’t need to spend exorbitant amounts on every person you know this holiday season (here’s a challenge: see if you can keep a $100 holiday).  What really the point in spending so much if it puts you in a bad financial situation?  Budget what you can spend on gifts and don’t go over.  Make sure your budget is within reason of your financial situation (don’t spend more than you have!).
  • Go to school.  Yes, school is an expense.  But taking some extra courses or pursuing/finishing up a degree can help make yourself more marketable to employers.  This can be as simple as taking an advanced Excel course to working on a higher degree.
  • Work on building alternate sources of income.  Try your hand at blogging.  Work on developing a hobby that could earn money such as photography.  Other streams of income are a good thing, especially when money is tight.  And you never know, what you start could develop into something bigger.

It always sounds nice when the government offers to give us money back but we have to remember there’s a price to this.  It could mean less services somewhere else or more taxes down the line.  Remember the money has to come from somewhere!

Don’t hope the government will do something to ease your situation.  Get a hold of your finances and take care of it yourself!

What other ways could we take financial matters in our own hands?