Metanoia Financial

Most of us are not saving enough.  I read a stat recently that almost half of Americans could only pay bills for 1 month if they lost their job today.  Does that sound like you?  If not, how many months could you last?

It’s hard to sleep at night knowing 1 month without income will destroy you financially.  It’s even harder when we’re in a recession and there is 10% unemployment.

The good news is that there is a simple cure to the problem – SAVE MONEY.  I think we all know this so what keeps us from doing it?  Here are a few reasons I see everyday:

1. It’s more fun to spend money

I can’t help you here.  If saving money isn’t a priority in your life, it will never happen.  Your money will find more immediately gratifying destinations and you will always be stuck in the rat race

2. The goal is too big

Cars cost a lot of money.  College education is expensive.  What do we do when a goal seems unattainable?  We give up or we never try.  This is why you have to break your goal down into bite size pieces.  Saving $10,000 sounds impossible, but I bet you can save $200/month for 4 years.  And even without any interest you’ll have close to $10,000.

3. Personal finances and investing are confusing

Unfortunately these are subjects most of us don’t learn in school.  But don’t let the fear of the unknown paralyze you.  Don’t continue saying you’ll do something different and then do nothing.  Find a professional or a friend you trust.  Read a book or take a class.

The bottom line is doing nothing and continuing in the same pattern is not going to fix the problem.  Develop some goals for your financial life and start saving today.  Don’t worry about the amount.  Just start to develop the habit.  You just might find that you like it.

There is only one month left this year so now is the time to take advantage of strategies to minimize your tax liability. I’m going to share a handful of ideas that are timely and beneficial, but there are so many strategies available to taxpayers that I want to start with the one I believe is most important for everybody…

1) Find a good CPA or tax professional:

Hiring a CPA is money well spent.  This is an area where you can potentially save a ton of money and also keep yourself out of hot water with the IRS.

I studied a lot of tax planning for my CFP certification and I have a pretty good understanding of personal income tax, but I still choose to hire a CPA. There are simply too many strategies most of us don’t know, we forget crucial deductions and tax laws are constantly changing.

2) Fund your Retirement:

The government encourages us to save for our retirement by offering tax deductible contributions, tax deferred earnings and/or tax free distributions.

It’s important to take advantage of these benefits by contributing to your 401(k), SEP IRA, Traditional IRA, Roth IRA or other retirement plan.

This is such a simple way to save for later and also save money now.

3) Consider a Roth IRA Conversion:

If you have a Traditional IRA, you can convert all or part of your account to a Roth IRA.  There are no longer any income limitations and you can choose to divide the taxes on the conversion between your 2011 and 2012 federal returns.

This is a one-time opportunity that you need to seriously consider if you have a Traditional IRA or old 401(k).

4) Donate to charity:

This is my favorite tax planning strategy.  Like retirement contributions, the government again encourages “good behavior” by offering tax deductions for charitable donations.

This is a great way to bless others and also minimize your tax liability.  “It is more blessed to give than to receive”

5) Let your budget work for you:

If you are using mint to do your budget, you can keep all of your deductible expenses in a certain category or you can tag transactions as deductible.  You can also download your transactions to an excel spreadsheet that you can send to your accountant.  This saves a lot of time and ensures you don’t miss crucial deductions.  It’s another great reason to budget and track your expenses throughout the year.

I hope these tips are helpful, but again I want to stress the importance of hiring a CPA.  Although there is a larger upfront cost, you stand to save more money and avoid an IRS agent knocking on your door.  Please let me know if you don’t have a CPA or tax professional that you like and trust.

Ok.  First thing I want to point out is that you should NOT be eating out if you are trying to get out of debt.  If you have credit card balances, student loan payments, car payments, etc. you need to be cooking at home and taking brown bags to lunch.  As Dave Ramsey says, “You shouldn’t see the inside of a restaurant unless you’re working there!”

Now if you are debt free or if you just aren’t going to take my advice, here are 2 great ways to save money eating out:

Restaurant.com – this is a really good deal IF you abide by all of the rules.  The best way to save here is to join the email list at www.restaurant.com.  Then you will get offers pretty regularly of 70-80% off that allow you to buy a $25 gift certificate for $2 or $3.  Do NOT pay $10 for the $25 gift certificate.  There are constantly promo codes for $2-3.  So far it sounds great right?

Not quite so fast.  Most of the restaurants have several stipulations.  A typical deal goes something like this:

Minimum purchase of $35. Valid Sun-Thur. Valid for Dinner ONLY. Excludes: Alcohol, Holidays/Special Events.

It still works out to be a good deal but you usually have to spend $35 on food alone (excluding alcohol) and some are not valid on the weekends.  Make sure you read that fine print below the offer before buying.

I like restaurant.com because it causes me to venture out and try new restaurants.  Plus I get to challenge myself to see if I can spend exactly $35 while drinking water.  Hopefully you aren’t that lame.

Scout Mob – this is a great deal too and has MUCH fewer rules, but only really works for iPhone and Droid users.  You have to download an app on your device and then you actually use the app at the restaurant.  It’s pretty wild and will NOT work unless you’re at the restaurant (scary to think those little PDA devices are monitoring our locations at all times).

The deal here is 50% off which is great, but the catch is that the restaurant offers a maximum discount.  It’s usually in line with the average entrée price of the restaurant.  You can expect to save $15-25 on most meals though.

These are both great options and I often leave pretty nice restaurants paying $25 including tip for 2 people.  I’ve found it to be a great way to eat out without breaking the bank, but you have to pay attention to those catches.  Happy eating