Smart Money

This blog will re-cap a recent article on handling your money in a manner that is smart, as opposed to handling it like a "drunk debutante".

Ten Sure Fire Smart Starts:

1-Max out the 401(k)
This saves on your overall taxable income, and many companies will match to a cap what you contribute.
2-Loose the Vacation House
Unless that vacation home was dirt cheap, or you go there every weekend year round the costs do not stack up.
3-Put $5,000.00 into your individual retirement plan or Roth IRA
It is suggested that if you are over 50, stick in $6,000.00 annually. Again it is tax sheltered money and it grows. This year starts the new program allowing anyone to contribute to a Roth via the traditional IRA then converting it into a Roth. Check you your tax accountant or CPA for the taxable consequences.
4-Pay off the credit card debt
If you still carry a balance each month this is a huge win. The interest on the balances is most likely way above 15%.
5-Fire your Banker
Yipee, this should be a fun one. Check out the local credit unions, or community banks. They usually charge far less than the big guys and do a better job to boot.
6-Get your tax refund early
How? By not over paying in the first place. I know folks who get really excited that they are getting back thousands every year on their taxes. All that means is that dear ol' Uncle Sam had your money all year long, and you did not. You can then use the additional money you bring home each week to pay off your credit card debt.
7-Inflation protected bond
Treasury inflation-protected securities (TIPS) are issued by the U.S. Goverment and are guaranteed against default. They are protected against inflation because the coupons and principal will adjust to reflect it. Be sure to hold them in a tax sheltered account.
8-Buy a bread machine
You can make your own bread and save $7.00 a week or $350.00 a year. Bread makers are easy to use cost about $50.00 so the return on your investment, about 600% in the first year.
9-Shop the competition
Call the competitors for your house, auto, life insurance and get new quotes. You will be amazed and the different rates and coverage available. Check into raising your deductibles too, that can save you hundreds if you just double your deductible.
10-Bank Freebies
Skip Starbucks and stop by your branch for your coffee, sign up for a free credit card in exchange for the airline voucher- then cancel the card.

As always Contact Me for more additional tips, and a free Santa Cruz Real Estate Update.