Keeping Track of Your Finances

There are all kinds of complicated, expensive and inaccurate information being offered since the economy took a nosedive.  Some is frivolous and wastes your time.  I feel a need to advise others using my experiences with people of all walks of life that are not who they appear to be.  To warn folks to be aware and do their homework before working with anyone they are not familiar with in any aspect of their lives even if they come recommended by people you know and trust.

It is especially important in a bad economy with vultures coming out of the woodwork exploiting those in need.  I am referring to any type of business, online or established locally.  Just because they advertise or have a business phone, does not mean they are legit.  Research any company or individual before you trust yourself, your home, vehicle or finances to them.  This would be any of the following, but not limited to those in the mortgage industry, real estate, debt consolidation, construction, car repair or sales, landscapers, cleaning services, and anyone having anything to do with your banking or taxes.  Be extremely careful when using any type of online dating services or buying and selling online.  It also goes without saying to those who may have this inclination, marketing yourself sexually online always leads to trouble.

There is far too much fraud and incompetence and depending on what problem you incur by their deception, it may be impossible to recover financially or you may actually end up losing your life! 

It is better to be safe than sorry, as the saying goes.  Don’t be afraid to offend someone.  Double checking on someone does not offend the decent, honorable man, only the guilty.  Don’t stand for high pressure sales in any form and never respond to unsolicited emails from people you do not know.  You have to be aware of hackers getting into friends email accounts and sending emails under the guise of being that friend.  They usually do this to request some kind of financial assistance from you or sometimes it is simply to infect your computer if you open the email.  Please immediately delete any suspicious email without opening it.

I see so many people in dire need of help, being taken advantage of at every turn.  The way I see it, there is no better time to drop out of society, buy a fixer-upper or anything you can afford and start living your actual life, however meager, by organic home gardening and doing most things yourself, which is not very hard.  There are artists buying areas of abandoned homes in Detroit for almost nothing and trying to start their own artist community.  Urban farmers can try, but many have ordinances against them for chickens or where to place their gardens.  Research before you make any move because there is always more involved than you are aware of.  Please be especially aware of those that rent out or try to sell property that they don’t even own.  Always check with the cities regarding questions you have about zoning, taxes and verify if you even need a title company to find out who owns the real estate you are interested in.

Budgeting

Always keep track of your finances.  Budgeting will allow you some control over your money.  You have to know how, when, where & why to spend or you will end up broke when you need not be.  I was very blessed to have worked for a bank and the Internal Revenue Service.  I know a little about most of what effects a person’s finances, including investing which can be a big rip off if you do not know what you are doing and are not involved in insider trading.  Most of us are not, since it is supposed to be illegal, but it is a common practice with some of the government elite and the wealthy.  Even before the economy got bad you always risked losing everything, including the principal, depending on how you invested.  Try to diversify and stay with safe investments, which are available.

Most of the poor folks I know never budget. Not having a lot of money is the worst excuse not to be careful of what you do with every last penny! They do not shop sales, do not plan or think things through. I know that most of people’s behavior has a lot to do with how they were brought up, what they learned and didn’t, their intellect, temperament and education. Most in poverty usually only have one income or someone in the home has a bad habit of some kind, drugs, alcohol or tobacco that drains the finances. The higher you are, the worse your judgement, that’s a given. The dumber you make yourself, the more you are unable to do the right thing for anyone. This is why there is so much violence in the poor side of town.  Not just anger and frustration over being poor, but having the behavior and temperament that brought you to and keeps you in poverty. Poor impulse control, immaturity, etc. This is Po’ Girl’s legacy so I know it is not an excuse because I am not the brightest bulb on the Christmas tree but I care and learn from my mistakes the first time. I ask questions and take notes. It is not hard to figure out that you cannot spend more than you take in and actually writing everything down will help you to keep track of your spending and saving so you are able to make adjustments as needed.

Housing

Owning your own home is very tricky at this time and there are many things to consider.  I would love to say that there has never been a better time to buy a home if you can pay cash or have a substantial down-payment and a stable income.  The interest and home prices are both at an all time low.  Usually when the home price was low, the interest was high, then as the home price rose, the interest went down a little.  Purchasing a home for cash or with a low fixed rate is your best option.  You know the longer you take to pay off the home, the more interest you pay, but you can’t take the house with you so if you can work out a monthly payment that is affordable for the time being, you must weigh the pros and cons for these kinds of life changing decisions.  Purchase a home if you plan on living there for a while and you feel that this is a better option to renting because lately purchasing a house for an investment is a bad decision.  Even before everything went south for the mortgage industry, I knew people who had decided to buy a few homes as investments and had them all rented out.  When the economy began to crash, most of the renters could no longer pay the rent, had to be evicted leaving the investors with multiple mortgage payments they could not afford, ending up in foreclosures.  Don’t be afraid to offer less than the asking price from any home that is on the market, even against your realtor’s advice.  The higher the price of the home the larger their commission.  Unless you must have the home, then whatever you wish to offer if up to you.  My advice is solely to save you money and get you a better deal, hence the name Po’ Girl.  Always look at your budget and options and write down worst case scenarios for anything before actually doing it.  Always beware of any additional expenses besides the principal and interest on a mortgage financing.  There will be taxes and insurance as well as association fees for condos and some communities.  You need to be aware of the average utility costs per month if you have never paid them before.  Some go from an apartment with most of the utilities included and don’t take water and heat bills into consideration and that these can be a rather large expense depending on the size of your home, your city and how much you are willing to conserve energy.

Years ago the mortgage company I dealt with unfairly charged higher interest the lower your home price.  In actuality, this is discrimination against the poor.  Just because you can safely afford a $50,000 home does not mean that you should be paying 3% more on your interest then someone who can afford a home 5 times that much.  I was told by my mortgage company that I could afford a home that was much more expensive than I was looking for because of this.  I was told to bring in the prospective home and they would juggle the numbers so they could push the mortgage through affordably for me.  predatory lending in action!  The only way this worked out for me was the fact that the mortgage interest rates are at an all time low and I have kept my mortgage variable and been able to pay them for the time being.  If I would have chosen the fixed rate, I would have been stuck at that rate unless I paid all the additional costs with a re-fi.

You will also need to be financially able to make any repairs or updates as needed so it becomes an investment and does not fall down around your ears.  If you are not willing or able to do most repairs yourself, it could get very expensive.  Have the home inspected by someone reputable before buying to know where you stand on upcoming repairs.  Be sure  the neighborhood and schools that you will be sending your children to are safe and where you want to be.  Walk or drive the neighborhood and see how well the other neighbors keep up their property because it effects yours.  Are there any half-way houses nearby?  They are needed, but realistically do you want to live next door to one if you have children?  What is the level of crime in that neighborhood.  You can’t always tell by the looks of an area.  There is a great website, moving.com that lets you compare two cities and gives you all kinds of statistics as well as crimemapping.com which gives you detailed, up to the minute info in various cities.  Realtors are not allowed to help clients in this manner because they can be accused of steering and it is illegal.  Check out what buildings or businesses are nearby.  Are they convenient or will they be a possible nuisance?  How much pollution is in your area?  Moving.com has that kind of information.  I live in a quiet residential area, but one of the neighbors behind me appears to be running a car repair business from his backyard which is against zoning regulations.  I am especially aware of this when he is painting a vehicle.  I choose to suffer in silence because the guy must need the money, but some neighbors might not be so lenient.

Identity Theft

Identity theft is on the rise.  Never give out any personal information on you or your family to anyone who contacts you by any means, phone, mail, email, etc, unless you are working with someone and you are certain who you are speaking with.  I do know that most government offices never email people for their information or for any kind of claim.  They will always send notices so you have documentation.  This is how most identity is compromised, by phishing.  Know that the Internal Revenue Service never emails taxpayers for any reason.  Never open any unsolicited email from the IRS.  For a time someone was inputting viruses on computers when the person opened it to see what it said.  If you ever receive an email stating it is from the IRS, forward it to phishing@irs.gov and delete it immediately!  Sometimes people will try to contact you by email pretending to be someone you know and that they are needing some kind of financial help.  Anyone you’re close with would call you if they needed your help.  If you don’t know them well enough to know it’s fake right away, delete it.  Any email that states it is from someone you know, but their email address does not look right in the from area or the subject is blank or odd, delete it before opening it and just let them know what you did in case they did send you something.  There are all kinds of lost people looking for something for nothing, even though this is not the way the world works.

Taxes

It goes without saying that most of us pay various taxes.  I am going to do an overview of income tax or Federal tax.

We need to file by the same date every year, April 15th unless it falls on some half-baked holiday that DC cooked up a few years ago just to keep things interesting.  You know someone did this just to Mess With The IRS!  I will do a special post each year to advise you on the current due date.  Even if you decide to file a six month extension, you still have to have your taxes paid in full by that April 15th deadline.

Please be sure to always stay current on your filing or the IRS can file for you and they will not always be accurate, especially if you are self-employed because you will not be given credit for your expenses.  You can also receive various late filing and paying fines and penalties for being delinquent.

If you are self-employed always keep all your receipts and in an orderly fashion.  Some shove them helter skelter so that it would take forever for you or your accountant to file when you finally decide to and if it’s at the last-minute, time is of the essence.  I still know accountants who allow people to “tell” them what their expenses are without ever producing documents.  Be aware, they will file this for you, because you are paying them to do so but you are the one who will be held liable in any audit for coming up with proof of expenses.  A good accountant would not allow you to do this and would never tell you to “just say” you have a certain amount of expenses that you do not.  Some try to risk it, but you will have to pay back any refund received as well as interest and penalties due.

Filing timely and paying timely and sufficiently are the most important things to remember for everyone, wage earners as well.  Please be sure to fill out your W-4’s correctly when you hire on so that enough withholding is being taken out.  I used to purposely do less withholding to get more back at the end of the year as a “forced savings” for myself.  I got a letter from the IRS telling me not to do this.  They do not appreciate sending refunds, if they can avoid it.  You have to remember this was money they withheld on good faith trusting that the employee filled everything out accurately for their withholding.  There are some that claim way more dependents than they really have so that they can receive more of their money during the year and then play hell trying to pay everything they now owe because of it.  Most that pull this have no intention on paying it back.  They are the delusional that think they can hide from the IRS.  But as I explain in my book “Don’t Mess With The IRS” you can run, but you can’t hide!

I am not going over anything for the small business at this time right here and I would prefer that anyone owning their own business with questions refer to all the information and help that is offered at irs.gov for small business self-employed.

If you ever find yourself with any Federal Tax problem or issue “Don’t Mess With The IRS” has all the information you need to resolve any and all tax problems by yourself.  In almost all cases, you seldom if ever need a tax specialist or third-party to do this for you.  They charge a lot of money and cannot do anything that you can do yourself.  In other words, they may know more than you, right now, but they do not have any special jurisdiction or immunity when it comes to tax resolution than anyone else even if they are certified or licensed in their specific occupation.  That two thousand dollars you pay them, at least because they don’t work cheap, will go to them needlessly instead of being applied to your tax due.  Believe me, it is rare to ever qualify for “pennies on the dollar” or what is known as an Offer in Compromise.

This book takes you through what to do before you call the ACS collection area of the IRS, how to secure legitimate legal representation if needed, what to expect to do to resolve the basic problems most taxpayers have with the IRS and find out all the rights you really do have as a taxpayer.  You cannot play games with them and I don’t show you anything that foolish.  I offer the legal way to resolve your tax problems to your benefit and what to do if your problems are not being resolved timely or properly by the agency.