College 529 Plans

If you have a child, grandchild, or other family member that will be going to college be sure to look at a 529 plan. There are 529 plans for each state and they all offer a little something different. Usually you will get the best benefit from your current state. Some states offer a tax deduction for your contribution or will not count this money in your financial aide calculation. Other things to consider is the investment choices and fees associated with those investments. They vary widely from .19% to well over 1%. Those fees can really add up over the years. Most states allow you to fund any states plans and those plans can be used for a college in any state, BUT be sure to read up on the plan you are considering and your states requirements to use them.

One aspect that you can take advantage of if you currently have someone in college is to put money in the account and get your tax deduction if your state has one. Then you can turn around and pay your tuition with this money. Most states don't have a waiting time but again be sure to read up on your plan and state rules. Some states have not waiting time and you can put the money in one day and spend it the next and then take your tax deduction at the end of year.

Health Savings Accounts (HSA)

If your company offers a High Deductible Health Plan (HDHP) then they will provide a tax deferred savings account called a Health Savings Account (HSA). This account allows you to save pre-tax dollars for qualified health expenses. These health expenses can be anything health related from prescription drugs, doctor fees, hostpital fees, eye exams, eyeglasses, dental expenses, generic drugs and Over the Counter drugs. Usually this money is placed in a savings account with a bank or other financial establishment. Most of these accounts pay interest on your money as it accumulates but some charge you a fee to hold your money. Let your company know if they don't get an attractive account, better accounts are out there. The money you put in the HSA is yours forever. It doesn't expire at the end of the year like an FSA does. Any amounts leftover at the end of the year are rolled over into the next year. You can keep accumulating money in these accounts year after year. The maximum you can contribute in 2009 is $3000 for an individual or $5950 for a family. An additional contribution of $1000 can be made for any one over 55 by the end of 2009. Some companies match a portion of your contribution into an HSA. Its always good to take advantage of any free matching money that your company offers.

There is an interesting aspect to these accounts in that you can roll them over like an IRA. Doing so keeps this money in a tax deferred state. This allows for another vehicle to save money in a tax deferred manor, even if you have max'd out your other ways of doing this. For example, you are nearing retirement and you want to put more money aside. You have put the maximum in your 401K and you are not eligible to contribute to an IRA. Well put the maximum amount in your HSA. Use it to pay your medical expenses or don't spend any of it and save it for future medical expenses for after your retire.

Free Copy Of Suze Orman's 2009 Action Plan

You can get a free pdf version of Suze Orman's 2009 Action Plan by clicking on the attached link. I haven't had a chance to read it all but it looks like it has some vary good ideas for the new year.

Oprah - Suze Orman's 2009 Action Plan

Brokerage Comparison - Schwab vs Scottrade

I have accounts with both Schwab and Scottrade. They both have features that I like. I use each brokerage differently to take advantage of these features.

Schwab

Better research

Better calculation of gains up to the minute

Better service

Dividend reinvestment can be done on both stocks and mutual funds for free
Better planning tools like Retirement planning
Trades are $12.95 and up
Has Banking services like credit cards, checking accounts, loans, etc.

Scottrade
Cheaper trades $7

Calculation of gains is a day late in their Gainskeeper application

Online market and stock data with minute by minute price and trading info
Scottrade has a graph on the front page that shows your overall account value.

So this is how I use these different brokerages. I buy stocks that I plan to trade more often with Scottrade. The trading is cheaper and I can monitor the stocks for quicker turn arounds with their live data feed. Scottrade also has this simple graph that shows the value of my account by day over the last week, month, 6 months, etc. I like this because it gives me instant feedback on how my decisions have played out over time. This is such a simple, basic thing but I can't find a comparable feature on Schwab. I buy dividend paying stocks at Schwab and reinvest the dividends. I also do all my retirement planning on Schwab to use their very useful tools. I do the majority of my research at Schwab since they have the most different suppliers of analysis including their own, S&P, Argus and others. I also tend to buy all my mutual funds from Schwab since they have a very wide selection of free, no-load funds.

Make 2009 The Year You Get Your Finances In Order

Make this the year that you get your finances in order.

First figure out where your money is coming from and where it is going. If you want to read a good book on how to do this read this book:

Your Money or Your Life - Book Review

Either do this the old fashioned way by writing it all down on paper or use one of the online sites that I have mentioned in earlier posts

Online Money Management sites Compared

and start measuring your finances. They will improve.

Want to Improve Your Finances - Measure them

After doing this you will see where your money is all going. Find places to cut back or start making a conscious effort to not spend money where you don't want to waste it.

Second, spend less than you are making. Until you do this you will never build up any savings and get in a more comfortable financial situation. To help you acutally save some money setup your bank accounts to automatically pay the bills you have to and save the money that's left.

Organize Your Checking Accounts to Better Manage Your Money
Setup Your Automatic Savings Plans

Once you figure out how to free up some money to save then start saving it. The first place you should do with your savings is create a 3 - 6 month emergency fund. Especially in this economy you want to have some cash put away to use if something unforeseen comes along. After you get this established then start putting money in your 401K at work. Then find new ways to save.

Save Money By Not Being Able To Get To It
Fund Your 401K and Then Up the Amount

After you get a good saving plan in place then start looking at investing. I will expand on my thoughts about investing more in 2009. In the meantime here are some ideas.

ING Direct - A Great Place for your Savings
Reinvest Your Stock Dividends - Schwab vs Scottrade
Dick Davis Digest Newsletter Review

Make getting your finances your New Year's resolution.

American Express Blue Cash Back Credit Card

Here is the reason I use the American Express Blue Cash Back Card.

+No Annual fee
+Up to 5% cashback on everyday purchases and 1.5% on everything else (see details below)
+0% interest on first 12 months of purchases (don't plan on taking advantage of this)
+Earn unlimited rewards
+Purchase Protection
+Extended Warranty

Blue Cash from American Express has 1 percent cash back on everyday purchases until you spend $6,500. After that, your rebate jumps to 5 percent cash back. On other purchases, 0.5 percent cash back goes up to 1.5 percent cash back. There are no cap limits on your purchases over the year. You can only get your cash back once every year and it they will only give you the cash back in the form of statement credit. The nice part is they put the credit on your account automatically after your year of use. No call, no worries.

Don't Forget Your Auto Loan - Refinance?

With all the talk about refinancing don't forget about your car loan. I don't recommend rolling your car loan into home mortgage refinance. The reason is you just agreed to pay interest on a car for the next 30 years while you may keep it for only 5 years. Looking at it another way. Instead of paying of a 4 year car loan and paying $2000 in interest if you roll this into your mortgage you will pay about $6000 in interest over 30 years. So, what do you do about your car loan? Well you refinance it. Most of the time you can refinance your car loan for basically no extra money. Most banks and credit unions will gladly take on your car loan for better terms. Call them up or look on Bankrate to see what the rates are and what your payments would be. If it is worth the effort then refinance.