My dad used to love watching MacGyver back in the day. So when I saw this classic MasterCard Debit commercial I thought of him.
Happy Friday!
Friday Fun Video: MacGyver Uses MasterCard
This is a fairly old MasterCard Debit commercial, featuring MacGyver. I loved it, though. Always a classic…
Happy Friday!
Choosing a Tax Professional for Your Home Business Taxes
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I prefer to have my home business taxes prepared by a professional. There are lots of reasons for this. But I didn’t just head down to the local chain tax prep place and bring my stuff. Instead, I called around to different tax preparers and accountants. Finally, I chose an accountant that has served me well for the last few years, and who has been a great help to my home business finances. Here are some things to look for a tax professional:
* Services: Make sure that your tax professional offers the services that you need for your home business. It might make sense to have an accountant who can do other things on top of tax prep. Or it might be comforting to know that your tax professional will represent you in case of an audit.
* Fees: While price is important, it isn’t everything. In some cases, you get what you pay for. If the tax prep services are cheap, there might be a reason for that. But, on the other hand, sometimes a really expensive service is just that — really expensive. Shop around and get an idea of what is a reasonable fee.
* Trust: It’s a good idea to work with someone you trust and are comfortable. Meet briefly with your top candidates to determine whether or not you mesh well. You should also get references to double check and make sure that your preferred tax professional comes recommended.
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Continued Labor Market Issues Could Mean More Foreclosures
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Labor market issues continue to plague the economy, slowing recovery and prompting a host of issues. One of the concerns is that the continued high unemployment rate could lead to an increase in foreclosures down the road. This is because as people continue to lose their jobs (or fail to find jobs), they are less able to make their housing payments. And this could result in foreclosure.
Real Estate Pro Articles makes a very interesting point about the rather vicious cycle we’re seeing with regard to unemployment and the economy:
A greater amount of consumer and business confidence is an essential factor in any economic recovery; financial recovery hinges on it. We need more than just incentive programs to prop up businesses and consumer spending; we need an increase in confidence in the economy across the board. Only when the public’s confidence is raised will consumers feel comfortable in investing their money in real estate as well as the rest of the economy; unfortunately, the economy will need to look like it is faring better before more consumers show a higher level of confidence in it.
Until the economy improves, employers will be reluctant to hire. However, the economy can’t improve until employers hire more people, boosting their ability to spend and make mortgage payments. It’s rather circular. But it’s the way things are right now. So it will be interesting to see how things proceed from here.
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5 Suggestions for Starting Your Freelance Business
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One of the most common ways to work from home is to do so a freelancer. Whether you are writing or doing graphic design, you can earn a decent living with a freelancing home business. I know. I’ve been freelance writing for years now, and am lucky enough to be making a good living at it.
Over at the Freelance Folder, Laura Spencer offers her thoughts on 5 things you can do to kickstart your freelance business:
1. Develop an online presence: Start a blog or a web site showcasing your abilities.
2. Social media profile: Make sure your LinkedIn, Facebook, Twitter and other social media includes freelancing availability.
3. Bidding site: Build a profile on a bidding site, just to get started.
4. Apply for jobs at online boards: Look around and apply for jobs you see on the many job boards out there. Just be careful of work from home scams.
5. Offer a freebie: While you don’t want to make it a habit, you can do one or two things for free, just to build your portfolio and maybe garner a reference.
In the end, there are ways to get going with a freelancing home business. While I’m not a fan of the freelance bidding sites, I did get two gigs that way. I’ve had way more success, though, landing jobs through LinkedIn, Twitter and even StumbleUpon.
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Mortgage Applications on the Rise
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After taking a bit of a break for the holidays, it appears that mortgage applications are on the rise again. As one might expect, refinancing is in the lead again. But home purchase applications have risen as well, reports MarketWatch:
Refinancing applications jumped 21.8% in the week ended Jan. 8 compared with the week before, which was shortened for the New Year’s holiday. Applications for mortgages to purchase homes rose a seasonally adjusted 0.8% on a week-to-week basis.
With the home buyer tax credit extended and expanded, it is no surprise that people are starting to consider buying homes again. Of course, some of these mortgage applications will be rejected, without good credit scores, but the increase in applications is heartening for the housing market.
And, of course, it makes sense that refinancing applications are on the rise. With mortgage rates still hovering near historical lows, it is natural that home owners want to take advantage. When you refinance to a lower interest rate, it is possible to save thousands of dollars on your home loan.
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Saving Money on Health Insurance: Higher Deductible
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One of the most difficult things to do is to find ways to save money on health insurance. When you have a home business, it can be even more difficult to do what you need to, since you don’t have the help of an employer who pays part of the health insurance premiums. You can find group rates, though, it you look hard enough.
But another thing you can do is to get a higher deductible. Check the deductible on your health insurance plan. In many cases, you might only have a $500 deductible. If you can afford a higher deductible, like $1,000, $2,500 or even $5,000, you can save on the premiums. Sometimes, you can save as much as $300 a month, just by getting a higher deductible. You will have to pay more out of pocket, but if you plan ahead, and have a savings account for this (maybe a Health Savings Account), you can more easily afford it.
In the end, a lot of things about your home business come down to cash flow. While it’s nice that you can get a tax deduction for what you pay in health insurance premiums when working from home, having something more tangible day to day that helps keep things moving properly in terms of your cash.
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Buying a Home: Saving Up for a Down Payment
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One of the goals many people have, whether it is for this year or for some point in the future, is to buy a home. However, many neglect to save up for a down payment. This is because a couple of years ago, you could buy a home without a down payment. The game has changed, though, and you need to be aware that a down payment is a necessity in the current climate. (In fact, such common sense should never have been abandoned in the first place.)
At any rate, it is wise to plan ahead to save up for a down payment. You should figure out your price range for a home, and then decide on your down payment size. You will need at least 3.5% if you are getting a loan through the FHA. If you want a different loan, though, you may need between 5% and 10% of your home’s purchase price. A mortgage lender or broker can help guide you in some cases.
This means that you will have to save up thousands of dollars. If you are buying a home for $180,000, you will need $6,300 if you go with the FHA loan. For a 10% down payment, it will require $18,000 ($9,000 for 5% down). You can see how planning may be required.
You should save up using some sort of high yield savings account so that you get a little extra in terms of interest. Figure out where you may have to cut back in order to save up a monthly amount of money, depending on your time frame. For instance, if you want to save up a 5% down payment in a year, using our $9,000 scenario, you will need to set aside $750 a month. This can also serve as a good gauge of whether or not you are ready to take on the costs of home ownership.
In the end, buying a home is a big financial commitment. You really should be ready for it.
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Adjusting Your Freelancing Workload
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One of your work from home New Year’s resolutions might be to reduce your freelancing workload, or to find more time for other pursuits. This is important, since you don’t want to be stressed too much about what is happening in your home business, and have it encroach too much on the rest of your life. However, it is important to carefully consider your options before adjusting your freelancing workload. Here are some things to consider as you work on changing things up with your home business:
* Cost efficiency of clients. Consider renegotiating your fee with clients you have had for a long time, giving them a chance to pay what you are worth. Some clients, though, may not be cost efficient at all, and it is time to let them go.
* Stress level associated with clients. Sometimes your relationship with a client is more of a factor. If you don’t like the work, or if the client stresses you out, or you find the work difficult to deal with, it can be a good idea to cut ties with that client, and keep a less stressful client, even if s/he is less cost efficient.
* What you can handle. Consider your quality of life. If you can afford to cut back in order to spend more time with your family, or do something for yourself, it might be a good idea to do so.
For courtesy’s sake, though, it is a good idea to let your clients know at least two weeks in advance, so that they have time to make other arrangements.
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Are You Ready for Inflation?
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With signs of economic recovery showing, there are concerns that inflation could come with economic growth. This is a common thought, since economic growth often means that prices rise as well, eroding the purchasing power of the dollar. And, indeed, an economist at RBS Securities Inc. believes that inflation is on the way, reports BusinessWeek:
“Inflation will start to tick up again as we get stronger growth,” Stanley said today in an interview on Bloomberg Radio. “I don’t think the Fed is ready to own up to that.”
As a result, there are some expectations that the Fed will have no choice but to raise interest rates in order to combat inflation. It is possible that the Fed will raise rates to 3% by the end of 2010, from their current rate at between 0% and 0.25%.
For savers, this is good news, since it means that they will see a higher yield on their cash investments. For borrowers, though, it means that they will have to pay more in interest charges. If you have a variable mortgage rate, it might be time to refinance. If you have credit card debt, it is best to pay down as much as you can before rates move even higher than they already are.
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