Do You Need to Change Your Car Insurance Coverage?

by Miranda Marquit · 0 comments

Insurance is one of those things that you just need to purchase. In many cases, insurance is designed to help you protect your assets. In the case of car insurance, you are expected to purchase it. It’s the law in each of the 50 states.

As you move forward, though, your insurance needs might change. You don’t have to keep the same car insurance coverage year after year. Here are some signs that it might be time to change your car insurance coverage:

Your Car is Old Enough that Liability is all You Need

One of the biggest reasons that people change their car insurance coverage is due to the car’s declining value. In some cases, it might no longer make sense to keep comprehensive coverage on your car, especially as the replacement value drops dramatically. You still need to maintain collision coverage, which helps you manage your liability if you cause an accident, but you might be able to drop some of your other coverage.

If you decide to drop the comprehensive coverage, you can save money on your premiums, but you need to make sure you’re ready for other costs. You might have to be able to replace the car if you total it. Do you have enough money to buy a new or used car or to put a down payment on a car? If you don’t have the money, and you need a vehicle, it can make sense to keep the comprehensive a little longer so you get some sort of help getting a different car if you need one. Building a savings account can help you self-insure to some degree.

You Make Changes that Increase the Value of Your Car or Its Contents

On the flip side is the fact that you might make modifications to your car that make it more valuable. If you add a new stereo and speaker system, you need to change your coverage because you will want the cost of the stereo covered in the event that it is damaged or stolen.

Don’t forget to evaluate your coverage if you have a vintage car or some other vehicle that is worth more money. If you fix up a classic car, you will need to make sure buy the right coverage, and get the right amount since some of these vehicles can be quite valuable.

Your Family Circumstance Changes

Did you add another driver to your family? When your child is old enough to drive, you might need to change your coverage. You might also need to change your coverage if you get divorced or married or make another major change to your life. You want to make sure that the proper drivers are covered on your policy, and that the coverage reflects the risk profiles of the various drivers.

Even if you end up paying more for coverage, it might be worth it in the long run. You’ll have more peace of mind, and you can ensure that you don’t have to break the bank to replace a car or its contents.

3 Things to Consider When Preparing Your Home Business Taxes

by Miranda Marquit · 0 comments

This time of year is always a little stressful for home business owners. It’s tax time, and you need to be ready to prepare your taxes. As you get ready to complete your taxes, here are 3 things to consider:

1. The 1099-K Could Add Headaches

A few years ago, the IRS introduced the 1099-K to its arsenal of forms. The idea is that those who use third-party payment processors like PayPal might be fudging some of their numbers. The new form is issued by third-party processors to those with at least 200 transactions and $20,000 in receipts. The downside for independent contractors is that many of us are paid via PayPal, but our clients don’t realize they don’t have to issue a 1099-MISC anymore. This leads to double-reporting of income, the IRS demanding more money, and a headache as you try to prove that you have reported everything correctly. Keep careful track. If you use PayPal, consider downloading the reconciliation file to help you as your prepare your home business taxes.

2. Don’t Forget All of Your Tax Deductions

As you prepare your home business taxes, don’t forget about the deductions you have coming to you. While some of them, like office supplies and the home office tax deduction are fairly obvious, don’t forget about the following deductions, if they are applicable:

  • Business travel
  • Insurance
  • Memberships in trade associations
  • Costs associated with networking

You might also be able to a dependent care credit if your child is in daycare for part of the time. This can be a good tax break if you qualify since it is a better tax break than a deduction. A deduction reduces your taxable income, while a credit is a dollar for dollar reduction in what you owe — kind of like a gift card you can put toward your taxes.

3. An Accountant Can Be a Big Help

I’ve used an accountant for years to help me get my taxes done. If your tax situation is complex, or if you find yourself spending long hours preparing your return, it can make sense to use an accountant. I find that the time I spend preparing my taxes can be more profitably spent working. I make more during that time than the accountant costs. Plus, if an accountant is preparing your home business taxes, the cost is tax-deductible. Add up how much time you spend preparing your taxes. If it makes sense, you can consider turning to an accountant so that you have better use of your time.

Add up how much time you spend preparing your taxes. If it makes sense, you can consider turning to an accountant so that you have better use of your time. You still need to take care of some paperwork items, such as gathering records and preparing your profit and loss statement, but having an accountant do most of the work can help you stay better organized and save time and effort.

Plan ahead, organize yourself, and prepare. You’ll be glad you did when it comes time to file your home business taxes.

5 Things to Talk About Before Getting Married

by Miranda Marquit · 0 comments

There’s a lot to talk about when you plan to get married. From where you will live to how to raise your children, it helps to be compatible in a number of areas. One of the most important subjects to talk about is money, though. Understanding how your potential partner feels about money, as well as creating a plan for spending, is very important.

Money is an essential part of life, and it’s one of the most important things that we all deal with every day. Your money situation can have a big impact on everything from your mood to your health, and a difficult situation can strain your marriage. Before you get married, it’s a good idea to make sure that you are on the same page financially. According to COUNTRY Financial, there are five main things to talk about before you tie the knot:

1. Spending

One of the biggest things to consider is your spending plan. Determine how much money you will make combined, and get an idea of what your joint expenses will be. Will you be able to meet your needs for housing, food, and other items? You should also talk about your spending priorities and figure out whether or not you are compatible. Do you prefer to spend on experiences or things? How will you handle large purchases? Will you divide up discretionary spending in a way that allows each of you to spend on what you want?

2. Insurance

If you plan to start a family, it makes sense to talk about insurance. You want to make sure that either of you can provide for your family in the event of a death. Figure out how much coverage you will need, what kind of policy makes sense, and what you hope to accomplish with the coverage. Perform an analysis of how much insurance your family will need, and get as much coverage as you can afford.

3. Debt

Have a frank conversation about debt. It can be embarrassing to talk about debt, and reveal what you owe, but it’s important. You need a joint plan for tackling any debt that you both have. You should also talk about credit score and understand where each of you stands in terms of credit and debt situation. Make it a point to address these issues early on — and decide how much you can handle. In some cases, it makes sense to put off a wedding until you are both on the same page.

4. Saving

Talk about what you will put aside each month. What are your short-term and long-term goals? Are the compatible? Make sure that you understand how your potential partner thinks, and be sure to put together a plan that works for both of you.

5. Retirement

Not only do you need to figure out how you will save for retirement, but you also need to talk about what retirement will look like for you. You might not be compatible if one of you wants to stay at home and maybe hit the golf course on occasion, while the other wants to travel the world.

Getting these realities out in the open early on can help you decide if you really are ready to get married, and help you create a plan that you can work on together.

How to Keep Your New Year Resolution to Pay Down Debt

by Miranda Marquit · 0 comments

According to the results of a survey recently published by Student Loan Hero, one of the biggest financial resolutions made by Americans this year is to pay down debt. Many Americans feel saddled with debt, and are concerned by the restriction it represents to their financial freedom.

If you are one of those who resolved to pay down debt this year, here are some ideas for sticking with it, and not becoming discouraged:

Start Small

You might not be in a position to realistically expect to pay off all your debt this year. You might not be able to come up with an extra $500 a month immediately. Don’t let that stop you. Any progress is good progress. Start small. Look for ways to put an extra $50 or $100 toward your debt pay down each month.

Once you get comfortable with that small start, you can increase the amount that you put toward paying down debt. You can increase it by another $25 or $50, depending on what you can handle. You can also use the debt snowball method or some other type of debt reduction plan that works for you.

When you start too big, you set yourself up for failure. Be realistic about the situation and don’t get bent out of shape if you need to change things up a little bit. Tweaking your plan a little, while still moving forward, is better than quitting.

Acknowledge Your Progress

One of the best things you can do is acknowledge your progress. You don’t want to reward yourself by spending money, but you can reward yourself with a relaxing evening in. Or, just look at the progress you’ve made and congratulate yourself. You can also think about what you will enjoy moving forward. What will you do when you have more money because you aren’t paying interest to someone else? Consider these questions, and use them to feel better about your situation. When you look at how far you’ve come, it can provide motivation to stick with it, even if you are moving somewhat slowly. Know that your forward progress is an important step forward and use that to motivate you.

Start Over When You Need To

We all experience setbacks. One of the downsides to getting hung up on New Year resolutions is the idea that once you fail, you’re done for the year. Don’t think like that. While you can use the beginning of a new year to figure out what you want from life, and reflect, don’t get caught up in the idea that you can only make changes at the start of the year. You can set new goals and adjust course anytime. If you need to take a step back and re-evaluate, do so. Start over when you need to. When you need to rethink how much you put toward debt each month, or whether a financial setback means you need to start over in a couple of months, the important thing is that you get back up there and keep working on improving your financial situation.

5 Tips for Better Frugal Living in the New Year

by Miranda Marquit · 0 comments

Every year, many of us resolve to make the most of our money by spending less. Making more money might also be a major goal that many of us have.

No matter your goals, you can help reach them by practicing frugal living. Here are 5 tips that can help you with your frugal living objectives in the coming year:

1. Rethink Your Things

One of the biggest expenses many of us have is things. We buy things, and then we have to pay for the space to store them. Rethink your things this year. Before you buy something new, ask what you’ll actually do with it, and then consider getting rid of something you already have to make room.

At the very least, go through your storage unit and get rid of what you can. You’ll save on monthly storage costs, and if you sell some of the stuff you might even make a little money.

2. Cut the Cord

Finally, it’s time to cut the cord. If you have Internet, you can stream a lot of what you want to watch for much less than cable or satellite. I save about $150 per month since cancelling the satellite and going all-streaming for my TV-related entertainment. It’s amazing how much you can save just in TV costs when you change the way you manage your entertainment.

3. Know Your Priorities

This is an underrated way of saving money. Few of us think seriously about how we want to use our money, and what really matters to us. As a result, it’s difficult to keep more money in our pockets. Once you understand what really matters to you, and you stop spending on things that don’t matter to you, being frugal becomes easier. If you aren’t spending on things that don’t matter, chances are that you are spending much less.

4. Use a Waiting Period

Once again, it’s easy for us to lose track of what really matters to us when we’re in spending mode. Rather than buying something immediately, institute a waiting period. You can decide what works for you, whether it’s 14 days, 30 days, or 60 days. Anytime you want to buy something, put a waiting period on it. Revisit the item at the end of the waiting period. Chances are that you don’t actually want it badly enough to use your hard-earned cash on it. I find that if I can do without something for a month, I really probably don’t need it. It’s a good way to keep from spending more money on things that I don’t really care about.

5. Remind Yourself of Your Long-Term Goals

Finally, keep your mind on what you want to accomplish in the future. Remind yourself of your long-term goals. When you feel like spending on some pointless item, ask yourself what else you could be doing with the money. I find that reminding myself that I could go on a weekend getaway with the money I’d spend on TV keeps me more interested in setting the money aside than buying the TV. Whether you hope to be debt-free or travel the world, reminding yourself of your long-term goals can help you avoid spending money right now.

Have You Thought About Disability Insurance?

by Miranda Marquit · 0 comments

While few of us really like to think about insurance, and paying premiums. However, the reality is that insurance policies can protect your assets, and make it easier for you to manage large costs related to your property.

What many people neglect to think about, however, is disability insurance. Many of us don’t like to think about the possibility, but there is a chance that you could become sick enough or injured in a way that makes it impossible for you to work. In these cases, disability insurance is very helpful.

Short-Term and Long-Term Disability

There are two main types of disability insurance: short-term and long-term. Short-term policies are designed to help you manage conditions that might take you away from work for anywhere between three months and a year. These policies are designed to provide you with a portion of your salary for a short period of time. A short-term policy covers you for non-permanent disabilities, such as injury or major illness, or it can cover you during the waiting period required before your long-term policy kicks in.

Long-term disability is designed for those who measure disability in years. It might not be a permanent situation, but if you will be out of commission for more than six months or more than a year, a long-term disability policy might help provide you with salary replacement.

Policies differ on terms. You should find out what qualifies as short-term and long-term, and be clear about waiting periods involved before you purchase the policy. Your premium will be based on the percentage of income you will be provided, or the total amount that you are eligible to receive from the policy.

Can You Self-Insure?

It’s especially important to make sure that you are prepared for disability issues because if you can’t earn money and your family is relying on you, it can be difficult. Disability insurance can help you get through those tough times without destroying your finances.

However, disability insurance isn’t always necessary. In some cases, you can self-insure. You might be able to self-insure with the help of an emergency fund. If your emergency fund is large enough to cover your living expenses for a long period of time, insurance might not be necessary. Building up passive income can also help you self-insure, since you will have a source of income that doesn’t rely on your ability to work. However, building an adequate emergency fund or passive income stream can take years. If you are suddenly struck with a debilitating disease or injury, you might not have the time to marshall your resources.

Some consumers use an emergency fund as a short-term self-insurance option, and then purchase a long-term policy for the major possibilities. The emergency fund can bridge the waiting period. It’s important to carefully consider your options before you purchase a policy. I have a small disability policy designed to help me cover some of my income if something happens to me and I can’t keep writing. However, I also have other assets I can rely on as well. Consider your situation and decide what works best for you.

Why Thanksgiving is My Favorite Holiday

by Miranda Marquit · 0 comments

My favorite holiday is Thanksgiving. Many people prefer a glittery holiday like Christmas or Halloween, but there is something about Thanksgiving that I love.

While I certainly enjoy Christmas and Halloween, as well as, to some degree, Valentine’s Day and the Fourth of July, Thanksgiving is what I look forward to most.

Focus on Gratitude, Not Things

It’s harder and harder to reduce consumerism during the holiday season. The beautiful thing about Thanksgiving is that we have a chance to focus on gratitude. I love the recent movement by some retailers to remain closed on Thanksgiving. With Black Friday encroaching more and more on Thanksgiving, it’s nice to see some push-back.

The idea of Thanksgiving is that we offer our gratitude, rather than put our focus on things. We don’t (or shouldn’t, IMO) talk about all the things we want and all the stuff we wish we had. Instead, we focus on all that we already enjoy and recognize our blessings. I like this idea. I like the idea of enjoying time with family and sharing what we love most in life. So much of the time, what we love most in life has nothing to do with toys or trinkets. Or even electronics.

Family Togetherness

I’m blessed to have family nearby. There were years at a time where my ex and I hosted Thanksgiving in our home for the benefit of displaced siblings and cousins. I loved having family over. This year, my son and I are celebrating Thanksgiving with my parents for the first time in a long while. I’m excited to spend time with them, as well as my brother and his wife. It’s a great day for family time, games, and love. Even if we sit down to watch football, there’s something about that bond of being together and cheering for the same team that makes me feel good inside.

Sometimes, Thanksgiving is about friends and adopted family. No matter who you celebrate with, try to be with people you love and treasure — or even volunteer and make new friends with strangers. Thanksgiving is a great time to be with people and focus on your loved ones. It’s one of the reasons I love the holiday so much.

Food

Of course, we can’t overlook the food. One of the best things about Thanksgiving is the food. I love traditional favorites, like turkey, mashed potatoes, and gravy. I love apple pie and fluffy dinner rolls. Many other people like sweet potatoes, green bean casserole, and cranberry sauce. Whatever you love about the food, there’s plenty of it — and most of it is comfort food. It’s the perfect complement to the family and friends you spend time with, and the gratitude you cultivate.

All of these are reasons that Thanksgiving is my favorite holiday. I’m glad it’s coming up. It’s something I look forward to. It’s a break from the hustle and bustle of daily life, and it’s a time where you don’t have to worry about presents and things and media. And that makes it my favorite holiday of the year.

Health Care Tax Deductions Available to Business Owners

by Miranda Marquit · 0 comments

Now that it’s open enrollment time, many are thinking about health insurance costs. Business owners and the self-employed have a number of considerations when preparing for open enrollment and deciding how to move forward.

The good news is that business owners and the self-employed can receive some tax deductions related to their health care.

Tax Credits for Employers Who Provide Health Care

If you are a small business owner, you can receive a tax credit when you offer health insurance to your employees. Here are some of the requirements for getting the tax credit as a small business, according to the IRS:

  • Fewer than 25 full-time equivalent employees
  • Average annual wages for employees are less than $50,00o per year (adjusted for inflation since 2014)
  • Uniform percentage must be paid for all employees, equal to at least 50% of the premium cost of employee-only insurance

You can consult with a knowledgeable tax professional or check with the IRS to confirm your eligibility and see if there are other requirements your business needs to meet in order to receive the tax credit.

This is one way to attract high-quality employees to your business while receiving a tax benefit for your cost.

Make sure you understand the ACA requirements if you have a larger business as well since you don’t want to be caught in violation of the law.

Self-Employed Health Insurance: Tax Deduction

Even if you don’t own a business that employees others, you can still receive a tax benefit if you are self-employed. What you pay for your health insurance is tax-deductible to some degree.

Pay attention to your health insurance costs. Every year that I’ve had to pay for my own health insurance as a result of being self-employed, it reduces my business income. It’s not as valuable as a tax credit, which is a dollar-for-dollar reduction in what you owe, but it still can help reduce the sting of paying for it.

Also, if you qualify for a subsidy under the ACA, it can be worth going through your state exchange, or through the federal exchange to see what plans are available. The subsidy can reduce what you owe in premiums, and, in some cases, can result in a tax refund. Make sure you consult with someone knowledgeable who can help you see what you might be able to accomplish under the ACA.

High Out-of-Pocket Health Costs

If you have high out-of-pocket health costs, you might be able to get a tax deduction if you itemize. If your qualified health costs exceed 10% of your income, you can take a tax deduction. Check with a tax professional to plan your deductions and see if it is worth the trouble.

Another consideration if you have a high-deductible plan is to make use of a Health Savings Account. As you go through open enrollment, take a look at what coverage you need, and if a high-deductible plan could work for you. You can receive a tax deduction for your HSA contributions and the money grows tax-free when it’s used for qualified health care costs.

With a little planning, you can reduce the impact of health care costs on your budget with the help of tax benefits.

Why You Should Focus on Your Health

by Miranda Marquit · 0 comments

Lately, I’ve been making a bigger effort to focus on my health. I’ve made daily exercise a priority, and I’m in the process of baby-stepping my way to nutrition. I even make it a point to get adequate sleep and engage in self-care when I need it.

All of these things are combining to provide me with better health. I’ve noticed some benefits from this new focus on health — including learning more about how better health can help my finances.

More Energy

First of all, I feel better overall. Making my health a priority has allowed me more energy to accomplish other tasks in my life. I feel like I can get more done in the day without resorting to a nap. While I do make time for meditation during the day when I feel like I’m lagging a little bit, I no longer sleep away the afternoon.

This means I’m more productive with my work as well. My focus has improved — especially if I sit down to work right after I exercise. I am able to get my work done faster, which leaves time for other fulfilling activities like music practice and community involvement.

Better Mood

My mood has also improved, which is great in terms of the way I interact with my son. I’m more patient with my son, and calmer about other situations as well. It’s easier to maintain my equanimity when I feel more energetic, and when my exercise and nutrition allow me to be more clearheaded and make better decisions.

Exercise provides endorphins, and cutting back on junk food has also been good for my thought processes. I’m in a better place, and better able to cope with difficult situations. Sleep also helps with being able to cope with anxiety.

How Better Health Helps Your Finances

I also see the potential for better health to help my finances in the long-term. First of all, better health means fewer doctor visits and potentially less need for expensive prescriptions. This is a money-saver right there.

Additionally, my low health needs mean that a high-deductible plan is right for me. I can also use a Health Savings Account (HSA) for tax-advantaged health care savings down the road. I have lower monthly insurance costs and a tidy nest egg building because of my low health care needs due to improved health.

When you have good health, you are less likely to miss work due to sick days. This can help you be more productive and earn more money. You might even be able to show yourself ready for a promotion or raise because of how your attitude and abilities at work manifest. In my case, it just means that I am able to write more and receive better pay.

In the future, I expect that my focus on health now will mean a better quality of life. My retirement years will be healthier — and less expensive — because of my decision to work on better health today. I already enjoy the benefits I’ve seen so far, and I truly see my investment in my health as an investment in my future.

How to Decide Which Debts to Pay Off First

by Miranda Marquit · 0 comments

One of the best things you can do for your finances is to be careful about the way you approach debt. While it might make sense to keep some debts around for the entire term, the reality is that all debt is a drain on your resources. If you don’t have a way to more than makeup for that drain, you could run into serious problems with your money.

If you have multiple debts, and you are trying to get your financial house in order, it’s important to pay attention to which debts you should tackle first. Here are some things to consider when deciding which debts to pay off first:

Interest Rate

Your first concern should be the interest you are paying on your debt. Interest represents money that you pay straight into someone else’s pocket in order to keep carrying the debt. It doesn’t benefit you at all. The higher the interest rate, the greater your resources being diverted elsewhere. When deciding which debts to tackle first, those with high rates should be at the top of the list.

If you have high-rate payday loans or car title loans, these are the first loans to tackle. Credit card debt also usually comes with pretty high interest. If you have a lot of credit card debt, begin paying that down if you can. Getting rid of that high-interest debt can free up some of your resources for other uses.

Tax Breaks

You can also consider the tax break you can expect from the debt. Some debts come with tax deductions for the interest you pay. While a tax deduction isn’t a dollar for dollar reduction in what you owe, it can be helpful for you. You’ll reduce your taxable income, lowering your tax bill.

One of the great things about student loan debt is that it is often relatively low-cost, and it is also tax-deductible. However, you don’t need to itemize your deductions to take advantage of your student loan debt. Instead, you can take the deduction “above the line,” which is convenient.

Your mortgage interest might also be tax-deductible, but you have to itemize in order to take advantage of that deduction. In many cases, you’ll need the total of your itemized deductions to exceed your standard deduction to make it “worth it.” If you don’t have enough deductions to make itemizing worth it, you won’t receive a tax break for your mortgage interest.

The interest on business debt can also be tax-deductible. Check with a professional to determine what interest you can deduct.

If you are able to get a low-interest loan and it comes with a tax advantage, that reduces your costs. It might not be worth it to put your resources into repaying that loan fast if you can use the money you would have spent to invest and gain a higher return.

Run the numbers to see what works best for you, and what will help you sleep at night, and then base your debt pay down plan on the best option.

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