Monthly Archives: February 2015

Managing Money

How To Evaluate Which Charities Are Real Or Not

Last May we posted an article titled 4 Scams Looking To Take Your Money. We identified one that, on the surface of things, always sounds legitimate but isn’t.

The problem with all the phone calls we get from this or that charity is that many of them are legitimate charities trying to raise money for whatever their purpose is. That’s why it’s so easy for us to be scammed. No matter what the rest of the world thinks about Americans, overall we’re probably one of the most generous countries in the world when it comes to donating our money to good causes.

Few of us are rich enough to give the kind of money all these charities want. We certainly don’t want our money going to fake charities, or charities that don’t really do what we hope they’re doing with the money. In that vein, we’re making some recommendations of what you should do when you’re not sure whether a charity is real or not.

The first thing is recognizing the name of an organization. Ever hear of the American Heart Association? What about the American Heart Foundation? The first is real; the second isn’t. However, when you’re on the phone, sometimes the person on the other line can make it seem like it’s the same thing. If you’re unsure of what you heard ask them to repeat it. If it sounds fake, tell them you’re uncomfortable giving our your credit card information over the phone and ask them for a link you can visit online to donate.

The second recommendation is to tell them you need to verify who they are and see if they can call you the next day. Most of them will hang up. Some of them will try to push you into foregoing all of that and making a payment anyway before they hang up. For the few that are willing to do so, check them out online, but while you’re at it also make sure you put into your search engine their name followed by “review”. Some sites can look really good, making you think they’re legitimate, but reading reviews will help to tell you whether they are or not.

The third recommendation, even if you know the organization but not the person you’re talking to, is to ask if you can pay them online. Not only is that still more secure (although some people are still scared putting their information online like that, it’s actually much safer than it used to be), but you’ll then have an opportunity to do a further search to see just how much of that money goes to the charity and how much of it is eaten up in administrative costs.

The final recommendation… look at this list. It highlights the 50 worst charities to give money to, and was put together by the Tampa Bay Times and The Center for Investigative Reporting. Some of these are legitimate but their administrative costs leaves them little to use for the purposes you’re giving. You’re probably better off giving to a local organization, which uses the money the way you hope it will.

Budgeting

Is It Better To Take A Meal Per Diem?

When you’re working on the road, you’re entitled to a meal per diem. Every once in a while if you’re an independent contractor you might decide that you’d rather not accept that because you’d rather use your receipts to write off for expenses instead. Is that a good move or not?

To get to this question you have to start with the knowledge that you only get to write off half of your meals. So, if you spend $50 a day on meals, you only get to write off $25.

It turns out that, unless you’re working in an area where your meals are very expensive, you can actually benefit by accepting the meal allowance, no matter what the rate is.

For instance, in 2014, the expense rates were $259 as a high rate and $172 as a low rate based on where you’re working. This equates to roughly $35 or $25 a day for meals. Just so you know, this normally includes what’s known as “incidental expenses”, which means tips and things like that.

So, let’s take the lower rate. Basically, by average it’s expected that most people would spend around $4, $7 for lunch and $9 for dinner, which comes to $20. Anything you spend over that, including that extra $5, is on you.

The question to ask yourself if how often you might go over the $50 a day amount while you’re on the road.

Let’s say that you work Monday through Thursday. Most probably you leave on Sundays so you can work Monday morning, and you leave late on Thursday or early Friday morning. You only get paid for meal per diems when you stay overnight, which means you’d get paid for Sunday through Wednesday. That’s about $100.

If you’re flying at least 5 hours in a day your costs might be higher because airport food is expensive; even lunch could cost you $20. So, on a travel day, you might spend closer to $40. That’s still less than the $50.

If you decided to eat out one day a week during 4 days your dinner might cost you $40. If you balanced everything else out for the day your total meal for that day would be over $50.

Even with two travel days in the mix you’d end up slightly better with the meal per diem.

Say you stay two full weeks. With the lower meal per diem, you could possibly come out way ahead. A way of looking at things is that anything not covered by the meal per diem is considered an allowed expense. If you know how to budget your money, and you’re staying in a room where you have at least a refrigerator, you could end up on the positive end because you might spend less than what your per diem gives you, and all your other expenses can be written off your taxes in full.

So, the recommendation overall would be to accept the meal per diem, even if it’s on the low end. Many years ago, when you had to turn in receipts, it wasn’t such a luxury because companies would sometimes balk at paying for meals they felt were extravagant, and that would cause unneeded conflict. These days, where they don’t track anything like that for convenience, you can spend your money however you want to.

Has this been something you’ve wondered about? If so, hopefully we’ve alleviated some of that consternation.