One of the most basic principles of successful money management is knowing the difference between needs and wants. Indeed, nearly everything about successful personal finances hinges on your ability to determine the difference between something you actually need to have, and something you merely want. Being able to draw this line is an important one, and failure to recognize the difference between needs and wants has led many into crushing debt.
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Donating things that you no longer want or need to charity is an excellent way to help those in need while also clearing your house of clutter and perhaps getting a nice deduction on your taxes. However, there are a few things you’ll want to keep in mind before you load up the car to drop off your donations.
Find out if the charity of your choice can accept your donation. If you are donating to a charity that runs a thrift store, such as Goodwill or the Salvation Army, you should be aware that they often decline to accept items that they are unable to sell because of safety concerns or lack of demand such as infant car seats and certain electronics.
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Women in particular purchase a seemingly endless supply of beauty products. Even I, who am generally pretty good about these things, have two types of shampoo, various facial products and two different deodorants. I’ve seen my friend’s bathrooms and they can be filled to the rafters with product after product they bought and didn’t finish. Let’s fix all that, and look at some ways to save money.
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Achieving lasting wealth is easier than most people think. It doesn’t require a big income, and it doesn’t require tremendous financial sophistication. All you need to do is a number of simple things right. Someone who follows this simple, Point #by Point #plan can set themselves on the path to lasting wealth.
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A little over a year ago, my husband and I signed the paperwork to close on our first house. We had hurried up our house-hunting process to make sure that we closed before the First-Time Homebuyer tax credit was set to expire. The deadline was eventually extended, but it was still a major factor in our decision.
We immediately filed an amended tax return so that we could immediately collect the credit. Once that paper work went through, we turned around and spent a hefty chunk of the $8,000 credit on some plumbing work that was necessary to replace that part of our dream home’s plumbing that was original to its construction in 1918. While the tax credit didn’t make a world of difference in helping us to buy a house, it did make a difference in which house we were able to buy. The alternative to using the money we received as a result of the tax credit for that plumbing work was putting it on a credit card — not really a financially-savvy decision when we’d already just taken on a mortgage.
A Year Later
The end of the year is typically a time when we go on a tax deduction rampage, donating to charity and upping retirement plan contributions. But, for those whose income may put them in range for expiring Bush tax cuts, it might be wise to hold off on taking all those deductions this year. It’s tough to try to plan in these uncertain times, but you can only do your best.
Bush Tax Cuts
The so-called Bush tax cuts are expected to expire at the end of this year, so next year, some people could find themselves paying more. There are a number of ideas floating around about what should happen, from making the tax cuts permanent for everyone to letting them expire for everyone. What is likely to happen is something in between. Two of the plans with a decent amount of traction right now are:
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