How to Save Pennies a Day

Earlier in the newsletter we had spoke about daily habits that cost us dearly. We all justify these expenses because they are relatively small purchases. You will be amazed to see how these “small” daily pennies add up over the weeks, months and years! Take a look at the figures below to see if you can relate.
It’s only a soda!
A can of soda: $0.75
A can of soda per day per work week: $0.75 x $3.75
A can of soda per day per work week per year: $195.00
Make mine a coffee & donut!
A coffee and donut per day: $2.25
A coffee and donut per day per work week: $11.25
A coffee and donut per day per work week per year: $585.00
Let’s do lunch!
1 take-out lunch a day: $6.00
1 take- out lunch per day per work week: $30.00
1 take-out lunch per work week per year: $ 1,500
Total Savings per Year: $ 2,280

Stroke Awareness Month
On May 11, 1989 President George Bush signed Presidential Proclamation 5975, which designated May as National Stroke Awareness Month. This is a very important topic because stroke is the third leading cause of death in the United States. Statistics show that approximately 795,000 Americans suffer a stroke throughout the year, and more than 140,000 of which will die each year.
Keep in mind that even though three quarters of strokes occur in people over the age of 65, strokes can and do occur at any age. There are two types of strokes. The first one is caused by a lack of blood flow to an area of the brain. The second one occurs from a rupture of blood vessels in a specific brain area.
The leading cause of stroke is arterial disease. Arterial disease is usually caused by four lifestyle choices. The choices are diet, tobacco use, lack of exercise and stress. All of these causes are preventable. People can change their habits to decrease their chances of becoming a statistic. It is pretty self explanatory that we need to eat better, avoid tobacco and exercise, but what about stress? How can we reduce the stress of life to reduce our risks of strokes?
Stress is a hard component to change. The top cause for stress for many people is finances. Unfortunately, many Americans are living paycheck to paycheck. It is common for couples to sit at the dinner table and wonder how they are going to pay the bills this month. However, it is imperative to take these matters seriously, yet maintain composure and calm to avoid your health being jeopardized. There is no magic solution that will relieve your financial situation overnight, but there are steps to take to alleviate the stress you feel daily.
Below are some steps to take to get your finances in order.
1. Create a budget to see what funds are going out every month and what is coming in. This budget should include everything from rent to the cup of coffee you bought this morning from Dunkin’ Donuts.

2. Once you have a realistic snap shot of where your funds are going it is time to review it, and make some changes. The changes don’t mean that you have to change your lifestyle, just see what is important. For instance, I have counseled people who went to the coffee shop every morning and spent $3 per day on coffee. Clearly, I am not in the business of telling people to stop drinking coffee, instead I offer the advice of making the coffee trip only on Fridays and Saturdays. The other days make the coffee at home. Doing this will save over $800 per year! It is those pennies a day that add up over time. In this newsletter you will see a breakdown of how much we are spending on daily habits.

3. Pay off or reduce your credit card debt. Yes paying off your credit card debt is ideal, but I understand that is not possible for many people so I say reduce it. Stop charging on the cards and make a habit of paying it down whenever you have the extra money. As the debt reduces your stress level will too. If you pay it off completely do NOT close the card this step can hurt your credit score, because you are reducing your credit history.

4. Establish an emergency fund. It is highly recommended to have 3-6 months of living expenses tucked away, but that is not realistic for millions of Americans. So start putting anything you can away. Each time you get paid take a portion and put into savings. It will psychology make you feel good and you will be amazed how even $10 a week can add up over time.

9 Last Minute Tax Tips
The last day to file your taxes is April 15. If you waited until the home stretch, you’re not alone: The IRS told the Lubbock Avalanche-Journal 20 to 25 percent of Americans wait until the last two weeks to file their return.
That’s not hard to imagine. After all, if you’re getting a refund, you file as soon as you get a W-2. If you owe, you wait till the last minute: No point paying a bill before it’s due.
Then, of course, there are also those of us who procrastinate.
f it’s time for you to get started, here’s some last-minute advice that might help.
1. Contribute to an IRA
One of the few ways you can still lower your 2012 tax bill is contributing to a tax-deductible IRA. You have until April 15 to do it. Contributing has big benefits – a tax deduction, tax-deferred compounding, and the main benefit: survival when you’re retired. The IRS says the max you can contribute for 2012 is $5,000 ($6,000 if you’re 50 or older).
2. Get organized
I once spent three days on the floor of my living room, sorting through a box of crumpled Home Depot receipts because I didn’t organize before I started my taxes. Don’t make my mistake. Get what you need before you sit down, like:
• W-2′s from your employer
• 1099-MISC if you’re self-employed
• 1099-SSA for Social Security benefits
• 1099-INT and 1099-DIV forms
• 1099-G for state unemployment comp or state tax refunds
• 1098-T for paid college tuition
• Summary of paid real estate taxes
• Summary of paid health care costs
• Summary of child care expenses
• Receipts to back up potential deductions
3. Decide if you’ll get help
Before you spend hours struggling with tax forms, decide if you want to DIY or get help. If you made $51,000 or less last year, you can get free tax help from the IRS VITA program. If you’re 60 or older, you might find free help through the Tax Counseling for the Elderly program. If you don’t qualify for either, you can pick up cheap or free software by checking out vendors on the IRS Free File website.
4. Slow and steady wins the race
Some people thrive on deadlines. Others feel rushed and end up overlooking deductions or making mistakes. If you’re more the rushed type, slow down. Mistakes on taxes can be costly: Enter the wrong info and you could end up paying more than you should, or not getting back all you could. When you’re done, double-check your return before you file.
5. Don’t rush past deductions
Don’t feel tempted to take the standard deduction to save time. Hunt down itemized deductions and see if they’d save versus the standard. Here are the basic standard deduction figures for 2012 from TurboTax:
• Standard deduction for single taxpayers – $5,950
• Standard deduction for married taxpayers filing a joint return – $11,900
• Standard deduction for head of household taxpayers – $8,700
Here are some common deductible expenses you might use to beat the standard deduction:
• Charitable donations
• Home mortgage interest and real estate taxes
• Higher education expenses
• State and local income taxes
• Medical expenses (but only what exceeds 7.5 percent of your adjusted gross income)
• State sales taxes
• Job-hunting expenses
• Points paid to refinance a mortgage
6. Go digital
However you choose to do your taxes, be sure to eFile and request direct deposit. If you request direct deposit, the IRS says you’ll get your refund in less than 21 days and you can track the status online. And if you have to pay, you can also pay electronically.
Everyone can file their tax return electronically free through Free File.
7. Prepare for the worst
If you didn’t cheat or make a big mistake, odds are you won’t get audited. But play it safe and make sure you have everything you need if you do get the dreaded IRS letter. Start a file for your 2012 tax return and store anything you might need:
• Copies of your filed form
• Statements backing up the deductions you took
• Copies of receipts
8. Get an extension
If you don’t owe – you’re getting a refund – you don’t have to file an extension, or file by April 15. There’s no deadline when Uncle Sam owes you.
But if you do owe, and can’t get your taxes done by April 15, no sweat. Just file an extension. That will buy you another six months, so your return won’t be due until Oct. 15.
Important: Extensions extend your time to file, not pay. If you’re going to owe, estimate your taxes and send in a check with your extension by April 15.
And if you owe and can’t pay? Send in your form or extension anyway. You’ll be penalized: The failure-to-pay penalty is 0.5 percent of what you owe for every month it’s not paid, with no time limit. So if you owe $5,000, your penalty will be $25 per month. Not fun, but not the end of the world.
The failure-to-file penalty is 10 times worse. The penalty for not filing is 5 percent per month of what you owe, up to 25 percent total. So if you owe $5,000, not filing is going to cost you $250 per month. After five months, you’ll owe the max of $1,250.
Since filling out and filing an extension form only takes a few minutes (you can even file it free electronically with TurboTax’s free extension filer), you’ve got to be either rich, crazy, or both not to.
Source: Money Talks