Archive for December, 2011

Is it worth it?

In today’s Boston Globe, Eileen A.J. Connelly discusses Myriad ways to save money raise a question: Are they all worth the time?

Do you save money by washing dishes by hand versus using the dishwasher?  Is it cheaper to print photos at home or at a store?

Rather than trying to figure out the cost of each method yourself, Connelly suggests reading the Saving Pennies or Dollars column from Trent Hamm’s  TheSimpleDollar.com.

Topics vary from whether it is cheaper to roast your own chicken to making your own wedding favors. If you don’t see what you are looking for, post your question on The Simple Dollar Facebook page.

So should you wash your dishes by hand?  Trent says no, it is not worth the savings.  It is important to include the cost of your own labor in the calculation.

Is it worth printing photos at home?  Generally, yes.

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Giving Wisely

December is the time of year when many people feel the desire to contribute to charitable organizations, an act that can be more effective when the financial side is taken into account.

First, the tax considerations. Remember that donating to qualified non-profit organizations is tax-deductible only when itemizing your deductions. What triggers itemizing for most people is the expense of home mortgage interest and property taxes because the combined payments are generally higher than the standard deduction allows.

For the official view of the tax side of charitable giving, read the article on the IRS website called 9 Tips for Charitable Taxpayers.  It details the need to keep good records, get written acknowledgments, pay attention to the special rules for donating property such as cars and used items, and cautions against deducting the cost of  entertainment or food at fund-raising dinners.

Choosing the charity that fits your personal giving ethic can be time consuming.  For some assistance, visit Charity Navigator, a helpful site that uses a four star rating system to evaluate organizational efficiency.

See some of  the Top 10 Lists such as 10 Charities with the Most Consecutive 4-Star Ratings, 10 Highly-Rated Charities with Low Paid CEOs, and 10 Charities in Deep Financial Trouble.

The site has many other resources including the excellent article  Top 10 Best Practices of Savvy Donors which offers several suggestions to increase the effectiveness of your contribution.

One idea: Concentrate your giving. When you make larger gifts to fewer charities rather than small gifts to more charities, your giving has a bigger impact.

Safely Storing Documents

A friend of mine has a small steel box, with a handle, lying in his file cabinet.  He has shown it to his grown kids and talked about its importance.  Several times a year he opens it to get out his passport for a trip or to edit the list of the passwords for his bank accounts.  Otherwise, the box just lies there, and my friend sleeps better at night.

Such a grab-and-go box can serve two purposes.  It’s a convenient place to keep all the essential records you’d need if you lost everything in a disaster, and it’s a compact file of the documents that your family will need when you die.

What to keep in the box? In an article in Real Simple Magazine, Jim Judge of the American Red Cross recommends these documents to help you survive a disaster:

  • Driver’s license
  • Passport
  • Social Security card
  • Health insurance card
  • Insurance policies
  • Mortgage and other loan papers
  • Property deeds
  • Car title and registration
  • Marriage license
  • Your will
  •  Last year’s tax return
  • Bank and brokerage account numbers

Additional papers required to settle an estate include your health care proxy and funeral plans.  See the list here or visit the website tips-to-organize-life.com.

College Essay Workshop

On Thursday, December 15,  at 7:00 pm, the Newton Free Library will be hosting The College Planning Process: Demystifying Essay Writing and Standardized Tests with field experts Debra Berger, Keith Kosierowski M. ED and Steve Elefson.

Topics will include:

  • Test format and content
  • Myths, realities and high-impact test-taking strategies
  • The SAT vs. ACT:  Practical advice for determining which test to take
  • SAT subject tests and score choice

This is a great opportunity to get some expert advice and help make the college application process less painful.

To Rent or To Buy?

The Boston Globe reports a spate of new apartment buildings under construction in greater Boston.  Over 1,145 units are planned in downtown Boston alone.  Boston is the fourth most expensive city for rental apartments, according to the article.

What this means to people looking for shelter — whether to buy a house or rent an apartment – may not be clear at first glance.

One reason rents are high is that there is a shortage of apartments to meet the rising demand. More people are forced to rent because they do not meet the new, stricter requirements imposed by banks in response to the ongoing mortgage crisis.

Another reason for the demand is that some people are choosing to rent instead of buy.  They can more easily pick up and move if a new job beckons.  They realize that housing may not make a good investment after all,  and they would prefer to put more money into retirement savings.

Financial advisors agree with such thinking, at least for those in some U.S. cities.  An article from CBS Money Watch, Buying a Home Beats Renting in Most Markets, says that in cities where there is not a glut of houses for sale, it can make more sense to rent.  In Boston, for example, the cost of buying a house is much higher than the cost of renting, even considering the tax break of ownership.

For an illustrative map of the rent-buy situation, check out this site from Trulia.  New York far surpasses any other city in the country as the place where renting is the most economical option.

For a list of questions to ask yourself when considering which option to choose, read this article from the latest FDIC Consumer News.