Sunday, December 9, 2012

Review Your Finances -- Count Your Money at the End of the Year

Gorham Etruscan sterling silver flatware pattern from 1913
Sterling Silver Flatware May Be An Asset
End of the Year Calculations Help You Understand Where Your Money Goes
Losing weight and taking control of your finances are two common New Year's resolutions. You may want to see if you've made any financial progress this year, and you can do this without a financial counselor or planner.
If you're interested in handling your money, you may watch Suze Orman, Clark Howard or Gail Vaz-Oxley. In addition to finances, a recurring part of these programs is that the participants seldom realize how much money they spend, and most spend more than they have coming in each month.
Four basic calculations tell you all you need to know -- income, expenses, assets and liabilities.
Calculate your average income for the month from employment and all other sources. Use your gross income so you can see taxes, insurance, 401(k) and any other deductions. If you're not employed, you pay your taxes and insurance from your savings or other income, so it's important to remember that these are expenses whether you see the deduction or not.
Determine your average expenses for a month. If you pay bills online, you may have to refer to the credit card you use or the bank account attached to your bill-paying. Don't miss your automatic withdrawals and quarterly payments.  Divide yearly payments by 12 to get the average monthly payment. Divide a quarterly payment by 3 for the monthly payment. Free services online can help you keep track of your expenses. For example, the Suze Orman Expense Tracker helps you review your expenses without sharing your personal information with the world population.
Subtracting expenses from income should give you money left over. If your expenses exceed your income, you need to make adjustments in your lifestyle so that you don't spend more than you bring in each month. The calculations are all you need to estimate where you are and where you want to be.
Calculate how much you owe by itemizing all of your liabilities -- not for the month, but the total you owe. Determine the amount you owe on your house, car, mobile device contracts, credit cards and any other bills. Include student loans in deferral -- you still owe these even if you aren't currently making payments on them.
Estimate your assets by checking the value of items you own. If your house is valued at $100,000 and you owe $80,000 on the mortgage, you have about $20,000 in equity (unless you have a second mortgage or reverse mortgage.) You can check or to estimate the current value of your automobile. Subtract any amount you owe from the value to calculate your equity. List your savings and bank accounts as assets, along with your retirement accounts. If you have a valuable collection -- coins or sterling flatware, for example -- you may want to list that as an asset as well.
Net Worth
Once you have base assets and liabilities figures for the year, subtract liabilities from your assets to arrive at your net worth. Use this figure at the end of every year to see if you're making financial progress by increasing your assets and decreasing your debts. 
Do a few calculations now to put yourself on the right track for the new year. May your year be blessed with prosperity, and may you use what you have wisely.

Sunday, October 28, 2012

Texas Homestead Exemption Property Taxes for Senior Citizens over 65

Alert red shouldered hawk looking out for himself from a tree
Be a Hawk About Your Money
Texas Property Taxes for Seniors 

Once you arrive at the wise old age of 65, you get a break in Texas on property taxes if you own your residence and are living in it. This is not the same as the homestead exemption that you claim for your residence at any age.

You can also pay your taxes in 4 installments if you choose, once you reach 65. You must pay at least 1/4 of the tax amount before February 1 of the following year, and additional payments by April 1, June 1 and August 1. The penalty is 6 percent plus 1 percent a month if you're late, so if you might forget to make the payment, you're risking extra fees.

Hubby and I turned 65 this year, and we had our birthdates listed with the homestead exemption. When we got our tax notice (arriving about October 15 each year), the discount should have been calculated automatically. We did not see any discount on the form. Of course this prompted me to take the information to the Tax Appraisal District to see what was up. 

Trip number 1: 
The gal indicated that we qualified for a discount and a freeze if we completed an application and proved that the property was our homestead. Proof was to be the remainder of the form for our automobile registration sticker for the current year -- you know, the one everyone throws away as soon as they peel off the sticker. 

Trip number 2: 
I returned to the Tax Appraisal office with auto registration form for my vehicle that I had miraculously saved. (It's good they didn't ask for Hubby's vehicle, too. I didn't locate that one.) The gal made a copy of this and a copy of my driver's license. Now, I was all set to pay the reduced amount. However, she said I would need to pay the entire amount and get a refund in a couple of months.

Waiting for a refund from a government office is one of those things I've probably cautioned you about, so you know I wasn't agreeable to that. The alternative was to turn our "case" in to have the taxes recalculated, and she couldn't guarantee me that it could be done by the end of October. Of course, the end of October is a magic date, since Texans who pay early get a little discount. I decided to take my chances. She took the form, gave me nothing in return and said it would be a week or so. I could come back then. I asked for a copy of the paperwork before leaving the office. You know the importance of having a copy.

Trip number 3:  
Back to the Tax Appraisal office to see if I could pay the newly-calculated property taxes. Well, I couldn't, because they hadn't been calculated yet -- but I could pay the full amount and get a refund.  Ha ha. 

Trip number 4: 
I stopped by the Tax office to pay, since the October window of opportunity is closing fast. She pulled the information up on the computer and it had just been recalculated that day. Of course, the recalculation is done by someone sitting two desks away from the front desk, and when I realized that, I waved to the gal and thanked her for recalculating my taxes before the end of the month. 

Was It Worth It?
Yes, seniors, it's worth it. I drove 12 miles 4 times, so that's 48 miles in gas and about 3 hours of my time. Where else can you make $100 an hour? You must apply the year you're 65 to get the benefit for that first year.

It looks as if the savings is about $300 on $2,000 in property taxes in our area. Plus, it should trigger the freeze on your taxes for the future. You get the advantage of freezing your taxes at the rate you pay when you're 65 so long as you live in the house. Since taxes are high in Texas, this makes living here affordable for senior citizens. If taxes decrease, you get the advantage of the reduction as well. If your spouse dies, you may have to prove your homestead entitlement again under 9.415 of the property tax rules. You can read the Texas property tax rules here: 

Of course, the recalculated form didn't show that our taxes are frozen for next year, so we'll have to check again next year to make certain we get our taxes frozen. Maybe I'll get to see these nice people at the Tax Appraisal Office again next year.

Take care of little paperwork issues as they come up; call and ask questions. You may surprise yourself at the savings you can get from being a savvy consumer. Taxes, banking and insurance are three areas you can understand and make a difference in your annual expenses.

See you next time!



Thursday, September 13, 2012

Understanding Automobile Insurance -- Removing Comprehensive and Collision

Automobile insurance is an unknown for some people who are otherwise savvy with handling money. If you have to rely on your agent to decide what car insurance to buy, you just need a short review to make your own decisions. 

Is it time to remove your comprehensive and collision coverage from your automobile insurance policy? My car is 16 years old, so you might think it's time. I finally got around to having the comp and collision cut, but I was hesitant. Here's what you need to know.

When you get car insurance, you get liability coverage for sure -- that's what every state requires in some form or another. That's to cover the other driver and his car. 

If you want insurance to cover YOUR car and to pay if you have an accident that's your fault, you'll need comprehensive and collision coverage in addition to liability. Collision coverage pays for your car if you hit something; comprehensive insurance pays if a tree falls on your car or if someone steals it. The policy usually says "fire, windstorm, hail, vandalism, theft" etc.

In the scheme of things, comprehensive and collision aren't worth a lot to you because of deductibles and value. Your comprehensive and collision may have a $500 deductible. That means you pay the first $500 before the insurer pays anything. Then, the value of your car is determined by mileage and Kelley Blue Book or value guides. Undoubtedly, your car is worth more to you than it shows in the book, but insurers work from the blue book value to pay if your car is totaled. They also get the salvage value of your car if you accept the figure offered.

So, if you have $25,000 in liability coverage, that's a significant amount, but if your car was worth $20,000 new and blue book price is $8,000 now, the insurer subtracts your deductible and offers you the blue book value. You might get $7,500 if your car is totaled.

What happens if you remove the comprehensive and collision coverage? First, if you have a loan on the car, you probably can't remove comprehensive and collision until the loan is paid in full. That's because the loan company wants to protect its interest in the vehicle. If you can remove the comprehensive and collision coverage and do so, you probably will also remove the towing and labor and rental reimbursement coverage, if you had those. 

Some insurers will let you keep towing and labor if you have other vehicles on the same policy (Geico, maybe) but you won't be able to keep the rental reimbursement coverage. Rental reimbursement pays for a rental car if your car is damaged and in the shop for repairs. This is helpful but not essential.

If the other guy follows the law and has liability insurance, his policy covers YOU if he's at fault. If he doesn't have insurance or has the minimum limits for your state -- and you have no way of knowing until you have an accident -- you may need uninsured motorist coverage.

If you have uninsured motorist and underinsured motorist coverage with your auto policy, that pays medical bills if someone uninsured or without enough insurance injures YOU. If you can't work, you may also get coverage from the uninsured motorist provisions.  This can really make a difference, particularly if you don't have good health insurance. Your policy may have medical payments coverage or PIP -- personal injury protection -- but those coverages are usually $5,000 or less for medical. You need more.

Uninsured motorist coverage usually can't equal more than your liability coverage, so if you have low limits on your liability insurance, you may not be able to get as much uninsured motorist coverage as you really need.  Increasing your liability coverage may cost less than you imagined. If you remove the comp and collision from your policy, ask your agent about increasing your uninsured motorist coverage with the money you save. If you have to increase your liability, that's ok, too, particularly if you own your home or have assets that could be taken if you have an accident and are sued. Use your insurance money where it works for you.

See you next time!


Central Texas bird in natural habitat
The cardinals are in Texas all year.

Thursday, June 21, 2012

Corning Develops Willow Glass

New Willow Glass from Corning is Bendable, Ultra-Thin and Flexible 

When Corning sold Steuben, I thought the best of Corning was behind us. New developments have proved me wrong. Corning is on the cutting edge of research and technology for you, the consumer.
Corning developed Gorilla glass a few years ago, and it is used for thousands of consumer products, including some Samsung smartphones and Apple iPhones. Corning has a new kind of glass in the works that will affect the consumer products we buy.

The new glass from Corning is called Willow glass, according to "Barron's" June 11, 2012 issue and the Corning website. This new glass is thin and bendable and can be wrapped around products. Corning calls it ultra-slim and flexible. Your smartphone or tablet may be thinner in just a couple of years, thanks to Willow glass.

Willow glass is made with a fusion process with a thinness as slight as100 microns or about like a sheet of copy paper. It can seal electrical components and still provide good optical quality. You can read about it here. 

Corning News Release on Willow Glass 

Watch for new uses for this bendable glass as technology picks up on the possibilities!
See you soon! 


Monday, May 21, 2012

Appliances With Electronic Controls Can't Be Left Running

New Appliances Have Electronic Controls 

If you have any new appliance, it probably has an electronic control panel that keeps it functioning. The control panel is the brain to the appliance, so we found out with our Whirlpool electric range. With no brains, the appliance has no sense. 

We returned from a two-mile walk and decided we'd cook a frozen pizza for supper. I turned on the oven and pushed the temperature panel to stop at 400 degrees. When the preheat had less than a minute to go, I popped the pizza in the oven and went to watch television for 15 minutes while the pizza cooked. I heard the buzzer when the preheat completed.

Don't Use Your Appliances When You're Out
I was just in the next room, but smelled something strange. Got up to check on the pizza and saw that the oven no longer showed 400 degrees, but had something that looked like F-3 on the panel. The pizza smelled like it was burning and there was an electrical smell in the air.
I pulled on the oven door. It wouldn't open. I peeped through the glass and could see the coils were hot and continuing to heat. I called Hubby. He ran to the garage to turn the breaker off while the house was filling with smoke and burned-pizza odor. We opened the doors, trying to prevent the smoke alarm from attracting the neighbors.
The door wouldn't open even after the breaker was turned off. The pizza continued to burn because the oven was at a high temperature.
I went to the Internet to check to see if this happened to other people. It appears that it is fairly common, but I couldn't get the oven door open to locate the serial number or style of the oven. Even the 800 number is inside the oven. 
I rifled through the warranty files to locate the owner's manual and installation booklet. There is no information about this problem in the literature.
How the Electronic Controls Work 

After an hour or so, the oven door could be opened and we took the black pizza out and threw it away. The next day, I called Whirlpool and reported the dangers of what happened. They said that was normal and "the way the oven was intended to work." I suggested that the pizza could have caught fire if we hadn't been watching and that serious damage could have resulted.

The repairman replaced the control panel and assured me that it was made to work the way it did. When the control panel goes out, the temperature is uncontrolled and goes up like it does in self-cleaning mode. The oven door locks to avoid human burns -- to heck with the pizza or whatever you have inside. I suggested that a fuse could prevent this and was told that there is a fuse that would probably blow if the pizza had ignited.

The lesson we learned here is not to leave an appliance with an electronic control panel operating while we're out. This goes for the washer, dryer, oven, range or whatever. If the control panel fails, the appliance runs uncontrolled.

We hope our experience helps others realize the perils of electronic controls.  We had never used the self-cleaning feature on the oven and joked that the oven decided it was time for a cleaning -- but this is not a joking matter. A house full of smoke, a pizza in the oven that can't be rescued and an appliance with a locked door creates a scary situation. I'm still a little reluctant to use the oven when I'm home alone.

See you soon!


PS:  On a fun note, we've been seeing the yellow-crowned night heron in Central Texas since we've had some rain.

Monday, April 2, 2012

Spring Cleaning with Natural Products -- Baking Soda, Rubbing Alcohol and White Vinegar

Naturally, You'll Do Spring Cleaning in All the High Places.

Natural products work as well or better around the house than expensive brands you use because they have "in your face" advertising. When you go to the grocery or drugstore, buy only the basics to enjoy safe and practical cleaning at an affordable price. 

Baking Soda

Baking soda is a cheap alternative to spray cleaners to use in almost every room of the house. Baking soda cleans the tub, the sink and the commode in your bathroom. Just sprinkle the powder in areas where you use sprays. Wipe with a wet sponge or brush and rinse with clear water.

Baking soda works in the laundry as well. Sprinkle some baking soda in your wash to eliminate odors such as perfume and body odors. It also gets your clothes cleaner, assisting the detergent. 

Baking soda is useful in the kitchen. It cleans the sink and the pots without scratching. It's also good for odor absorption in the refrigerator. If your ice cubes have a taste, they may be old, or they may have absorbed refrigerator odors. Cover all open containers in your refrigerator with a plastic wrap and place an open box of baking soda in the refrigerator to absorb odors.

White Vinegar

Use white vinegar to clean stubborn stains. It works well in the bathroom to clean around the faucets. Wet a cloth with white vinegar and wrap the area around the faucets. Come back in an hour and scrub the area with an old toothbrush to remove the sediment. Rinse the faucets with clear water. 

White vinegar cleans residue from glass, pottery or porcelain that's caused from standing water. Fill the container with white vinegar and let it sit over night. Scrub with a toothbrush and rinse with clear water. Use white vinegar in the kitchen when you have a stubborn stain or baked-on food. Leave the white vinegar in the item to soak, and rinse with clear water in an hour or so. 

Caution: don't leave vinegar in an aluminum pot or it may eat through the metal.

Rubbing Alcohol

Use rubbing alcohol throughout the house as a disinfectant. You can clean your countertops with rubbing alcohol on a paper towel to remove ballpoint pen ink and sanitize the countertops for cooking or emptying the dishwasher. Rubbing alcohol cleans granite countertops and laminates. Don't get alcohol in the seams as it may dissolve the glue or sealants.

Isopropyl or rubbing alcohol is a good glass cleaner, and cleans mirrors better than purchased spray products. Place a little rubbing alcohol on a paper towel and use it to wipe the bathroom mirrors, fixtures and countertops. Use rubbing alcohol as a prewash to remove ballpoint ink spots on your washable clothing. 

Alcohol is flammable, so don't use it near an open flame.

These three products can help you do most of your spring cleaning. We also use hydrogen peroxide as a mild bleach. It's a disinfectant for countertops and sinks, and is safe enough to use as a disinfectant on your hands, a cleaner for cuts or wounds and a fungicide for plants. 

Inexpensive natural green products that don't harm the environment and don't require a propellant can work for you. At about $1 each, you can get all the cleaning products you need on a $5-dollar bill. 

See you soon!


Sunday, February 5, 2012

Take Charge of Your Federal Income Taxes Including Form 1099-K

W-2 forms and 1099's for filing federal income taxes are in the mail, if yours haven't already arrived. You'll have all the income information to file your federal income taxes soon, but you may still need to add the income figures and make a few calculations.

You DO file your own federal income taxes, don't you? If not, you're paying someone to put figures in the blanks, and you provide the figures. The IRS has free filing through their website at, but if you operate a business, you may need to purchase a tax software program such as TurboTax or TaxAct. The Home and Business version walks you through your Form 1040, Schedule C for your business and Schedule SE for your self-employment taxes -- Social Security and Medicare.

The federal tax laws have changed a little this year, and there is no Making Work Pay credit. The filing date without an extension is April 17, because April 15 falls on a Sunday and Monday is Emancipation Day in DC.

You'll need to break down your mileage from January to June 30 and from July 1 to December 31 if you want to claim mileage for your business activity. Mileage is calculated at 51 cents for the first half of the year and 55.5 cents for July to December.

The IRS has a new Form 8949 for capital gains. Complete this form to transfer your capital gains information to Schedule D. If you got a Form 1099-B, it may have the basis figure you need to complete the Form 8949.

Form 1099-K is new, and comes from merchant payment centers such as PayPal. If you received more than 200 payments through a merchant payment center during the 2011 year totaling more than $20,000, you will likely receive this form. Because you may also receive a Form 1099-MISC for contract work, be aware that there may be duplication of the amounts. You don't want to pay taxes on this income twice. Fortunately, the IRS has waived calculations for this year, and the 2011 Form 1040 tells you to put "0" in the blank.

Don't concern yourself about discrepancies in the Form 1099-K and your actual income for this year. Just put a zero in the blank and move on, because you can't likely reconcile the figures -- and you don't need to. Count all of your income on your federal income tax form, but only count it once.

The IRS requires businesses to send you a 1099-MISC if you work as a contractor and earn more than $600 during the year. If you earn less than $600, you must still count that as income, although you don't get a Form 1099-MISC.

Claim all of the deductions you are allowed, including mileage, advertising and supplies. And Internet expenses, if you work online. It's only with claiming all of your deductions that you can see if you make a profit from your business efforts.  

Do your taxes yourself and treat yourself when you're done. You'll save a significant amount of money and you may learn some tax law along the way. Everything you need is available on the IRS website. Here's the information you need from the IRS about Form 1099-K. 

An article with another perspective on this year's tax changes is Tax Changes to Watch For by Eva Rosenberg.

Sometimes an eagle watches over you, and sometimes it's a hawk. We don't have a picture of an eagle, although my daughter swears she'll get us one. Here's the red shouldered hawk we see in our area often.
Such a stately bird, we enjoy his company. Get your federal income taxes done and soar ahead of the crowd.

We got a new book published. This one is Retirement Living Guide Tips and Recipes for Easy Cooking
You can also read part of the Retirement Living Guide Tips and Recipes for Easy Cooking or download a copy for $2.99 on Kindle at Amazon.

Our previous book, Retirement Living Guide for Senior Citizens, is still available on Smashwords or Kindle.

See you SOON!


Monday, January 16, 2012

Organize with Files for Tax Time and Warranty Claims

Red-bellied Woodpecker in Texas sits on a branch.

Organize for 2012 so you'll be prepared for taxes, broken appliances and warranty work. Start a simple filing system with an expandable folder or file drawer. You don't need much to get started and keep your system up-to-date. Manila file folders work with a file drawer. Here's an easy system that works.

Label your file folders for saving receipts and papers you'll need for taxes or reference. Some labels you might use are 
  • credit cards
  • house
  • income
  • insurance
  • taxes
  • miscellaneous

Date each file for the year.

During the year, stick the receipts in the correct file. Any order will do at this point. You don't have to be a fanatic for this system to work -- just don't throw away receipts or information about the things you might need, especially credit cards and insurance.

When it's tax time, pull the files for the year and sort the receipts. They will all be together for easy retrieval. Use the tax file to write down the items you can deduct from your taxes, such as property tax or maybe even your vehicle renewal fees. Calculate your credit card interest paid and other enlightening figures, so you can see where your money goes. Review the files for taxes and for budget resolutions -- improvements you can make to your spending habits.

You'll also need a warranty file for all of your small equipment. An alphabetical expandable file works well for this. When you purchase anything with a warranty such as electronic, electrical or hand equipment, clip the receipt to the warranty and mark the date of purchase. File your warranty information alphabetically by the name of the item for easy retrieval. This file is ongoing, and doesn't need to be started new each year. Include household items such as water heater, microwave and appliance warranties as well as warranties for toaster and small kitchen appliances. If it has a warranty, you need to save the paperwork to make a warranty claim. Be sure to make a warranty claim if you have an issue with any piece of equipment within the warranty period. This notifies the company of a potential problem as well as assists you in the repair or replacement of the item. 

If your mind doesn't like the thought of organizing, this filing system works with little mental agony. Although the tax deadline isn't here yet, it's time to set  up new files for 2012 so you'll have purchases and expenses for the year all in one place.

See you next time!


P.S. The red-bellied woodpecker is in our backyard, and claims the territory in this area of Texas.