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Archive for August, 2014

Main Four Things To Focus On In Your Financial Life

After talking to some friends of mine I realize that life and finances can be hard to come to grips with for many people. Trying to decide what’s the most important things to concentrate on above everything else can be daunting. Thus, here are our top 4 things, in order, that everyone could concentrate on before moving onto other things.

1. Income. It doesn’t matter if you’re single or have a family, live in a house or a trailer, need food or live paycheck to paycheck, the most important thing overall is income, aka making a living. Whereas there are those people who try to tell you that money isn’t everything, without money there’s no way you can live life the way you want to live it, or even to live life independently.

If you have no income, get some kind of job to start bringing something into the household. If you need to get two jobs. Nothing says you have to do this for the rest of your life but you’ll find that the more you try to do for yourself, the more opportunities you’ll find coming your way so you can improve your lot in life.

2. Living arrangements. You need income so you can address this second one next, that being having a place to live where you know you can come home everyday from work or pleasure, knowing where you’ll be safe and secure and comfortable… or at least have the opportunity to be comfortable.

The more income you have, the safer you can make your home, the better neighborhood you can live in, the more secure the items you might buy later will be, and the more comfortable you can be in your own space. Even if your space is a small studio apartment because that’s all you can afford, along with anything else you might need, it’s your space, and nothing says you have to stay there forever.

3. Independent Transportation. It may be nice to ride with your friend to work everyday or have someone pick you up to go out or to the store, but that also means you’re dependent upon that person or other people having the time to be accessible when you need them.

Independent transportation gives you the freedom to take care of yourself and plan your life accordingly. This doesn’t necessarily mean buying a car that you can’t afford. Taking the bus is a viable option but that means living close to a bus line. Some cities have taxis that provide transportation options but the overwhelming majority don’t offer those services in a cost effective manner for you.

4. Health. This one might seem an odd choice to throw in here but it’s something everyone needs to think about. Health is all encompassing, which means it covers health insurance, conditioning, skin care, dental care, nutrition… and many other things.

Did you know that 61% of all bankruptcies have a significant health care bill on them? Most people don’t think about taking care of themselves, getting physicals, eating better, working out which includes walking or even keeping themselves fairly clean as often as possible. Not only are bad lifestyle actions detrimental to your health, they often cost more than some of the healthier options.

Getting regular physicals costs less than having a doctor tell you that you have cancer and need to start getting treatments for it. Never or quitting smoking is a lot less costly than being told you have emphysema, which can’t be cured, or lung cancer, which is 75% fatal. Diabetes, eye problems, joint pain… you name it, there’s probably a healthy option that can save you money long term and discomfort short term.

Are there any other items you believe you should look at as part of your overall financial health that you think should replace one of the above?
 

Writing Medical Bills Off Next Year’s Taxes

It’s never too early to start looking at expenses that can be written off taxes, and this time around we’re going to look at medical expenses.

One reason medical expenses might be a bit different this year is because of implementation of the Affordable Care Act. While there has been no official notification of changes to last year’s policy, it’s possible that more people will have the ability to write off something this year.

The policy last year was that in order to write off anything on taxes regarding medical expenses you had to have paid at least 10% of your income. This meant that if you earned $50,000 for the year you had to have spent at least $5,000 to get any benefit.

This year, since more people have purchased insurance via government exchanges, more people are probably going to get close to that threshold, if not surpass it, especially if they didn’t qualify or accept any government adjustments. Since most plans across the country started around $425, this means many people will have paid at least $5,100 in premiums alone. Add to that anything paid out of pocket towards medical bills and there could be significant adjustments allowed this year.

That’s if last year’s 10% holds, and right now it seems to still be out there, although it’s possible there could be an adjustment. It’s doubtful the adjustment would go up, so if the percentage amount goes down even more people would qualify for a tax benefit.

Also, if you’re self employed you get to write off health premiums as a business expense, which is a greater benefit even if you paid it out of your personal bank account.

By the way, medical expenses cover a few things you might not have thought of such as long term care insurance premiums, hearing aids, glasses, contact lenses and solutions, costs for prescription drugs and even band-aids. This means you should keep receipts for almost everything you spend, including dental bills. If you want more information on the types of things you might be able to write off, click here.