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Time Running Out On Home Buyer’s Tax Credit

March 10th, 2010 by Matthew C. Keegan | 2 Comments | Filed in Home Buying

April 30, 2010 is a date circled in red on the calendars of some home shoppers. That is the last day when prospective home buyers can enter into an agreement to purchase a home in order to enjoy an extra special benefit: a federal home buyer tax credit of as much as $8000.

Tax Credit

new homeThough home buyers still have until the end of June to close on their homes, a binding sales contract must be in hand on April 30 in order to be eligible for the credit. That credit has limitations including a salary cap of $125,000 for single home buyers or $225,000 for married couples filing joint returns.

Even if you already own a home, you may qualify for a $6500 tax credit. In either case the value of your home, which is to be your primary residence, cannot be above $800,000.

Credit Advice

So, are you ready to take the plunge? Not so fast! At least that is the opinion of some credit counselors who are concerned that potential buyers could be pulled into the market thanks to lower home prices and generous tax credit.

“Many people are able to benefit from this tax credit, but that does not always mean buying is a good option for them,” said Lindsay Alston, a credit counselor with CESI Debt Solutions. “You have to look closely at your income to see if the numbers work.”

Alston went on to say that buyers should make sure that their annual costs including mortgage, insurance, association fees, and property taxes should not exceed more than 30 percent of your gross income. That means if you make $40,000 annually than your home related costs should be no higher than $12,000.

Extra Costs

Lots of home buyers fail to consider other expenses related to owning a home including lawn upkeep; replacement of appliances; roofing and gutters; windows and doors; and other maintenance expenses.

“The tax credit is a great incentive for people who are financially in good shape and planning to buy a new home anyway,” said Alston. “But if you don’t think you can make the numbers work without it, you should probably wait and continue to save, even if it means missing out on the tax credit.”

If you aren’t certain that you should buy a home, ask an objective party such as a financial adviser whether your should buy now or pass on the tax credit. Friends, family members, real estate agents and mortgage brokers may encourage you to jump in, but if you aren’t adequately capitalized you can find yourself battling to keep up down the road.

Adv. — Are you looking for tips on how to control your costs, perhaps how to set up a budget? SayLowerBills.com is your one stop resource center designed to help you gain control over all of your expenses. Don’t let a sour economy hold you down — take charge by learning how to save money and use your resources wisely.


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Thinking of Selling Your Business? Step 1

February 23rd, 2010 by Matthew C. Keegan | 1 Comment | Filed in Business Services

As the economy begins its slow mend Americans are now examining what steps they can and should take to improve their financial position. The past two years have been difficult for most of us including owners of small and medium sized businesses who have been challenged as never before.

Recession Survival

NACBB Business BrokersBut a challenging environment can also work to your advantage if you are a business owner. Specifically, by staying in business you have clearly demonstrated that your enterprise can survive a deep downturn, unlike some of your competitors who closed up shop or curtailed their operations.

If this is your story then kudos to you! Despite losing business, freezing or cutting salaries, laying off employees and watching corporations get bailed out while you struggled, you have managed to keep your head above water. But what if you’re ready to sell? How can you make that work to your advantage as the economy begins to mend?

Sale Preparation

Under normal circumstances the advice you might receive from a business broker could include telling you to reflect a clear “up trend” before offering your business for sale. But if you were to apply that advice to where the economy is today, then you would have to work at least two more years before your business might show some important gains.

Clearly, 2008 and 2009 were not good years perhaps to the point where your balance sheet was completely off balance. If you were to market your business based on recent data, you might find interest to be low and the offers dismal.

Instead, you may want to focus on the following recommendations offered by NACBB Business Brokers when prepping your business for sale:

Get rid of excess inventory – Likely, you already trimmed your inventory significantly over the past 12-24 months. In any event, determine whether your current inventory reflects your business needs over the next 3-6 months.

Dump debt – When your income drops, tackling debt gets pushed to the back burner. However, if your business has shown an uptick over the past few months, then redirecting some of that revenue to paying down debt makes much more sense than hiring new employees at least right now.

Straighten out receivables – Are your customers paying you on time? Attempt to bring people up to date while considering writing off bad debt for those who cannot pay.

Review your credit – How has your company’s credit held up over the past few years? If your credit has been battered, then it may take some time to fix it. Consider making important tweaks first before putting your business on the market immediately.

Take care of complaints – The Better Business Bureau, state office of the Attorney General, or other consumer advocacy group may feature information about your business. Take care of complaints against your company and ask the respective agencies and organizations to update their information accordingly. This may include a note in your file explaining that the matter has been resolved.

Business Marketing

By taking care of business before you sell your business you can ensure that you attract buyers who won’t be looking for you to discount your price further. You’ve put a lot of work into you business and have demonstrated that it can survive a recession, an important intangible asset worth noting.


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7 Resolutions For The New Year

January 1st, 2010 by Matthew C. Keegan | 3 Comments | Filed in Fun Stuff, News

Here's to your success in 2010!

2010 is here and with it comes the promise of new beginnings. At least that is what we like to tell ourselves as we put away the old calendar and bring out the new one.

Have you made resolutions for the coming year? Do they accurately reflect what you believe you can accomplish or were you talked into a pricey gym membership that you will drop in February?

The only reason why you make resolutions is to improve yourself in one or more ways. But most resolutions are made in haste or made without considering what it will take for you to stay the course and reach your goals. To that end, we are offering seven resolutions you can accomplish for 2010 including a few where you won’t have to break a sweat!

To A New You

1. Save Money. You can save money on a regular basis in order to pay for your summer vacation, have money available for a down payment for a new car, send the kids off to college, or reach some other goal. The easiest way to save money is by not seeing it in the first place through deductions to your paycheck with direct deposits to your 401(k) or other account.

In addition, you can save money for next Christmas or some other important event by linking up your checking account with a savings account and having money deposited weekly to it. Even the smallest amount set aside on a regular basis can make a huge difference for you.

2. Quit Smoking. Bad habits die hard and smoking is one of the worst habits imaginable. You probably will not be able to do this alone, so plan on seeing your doctor, tell a close friend that your are quitting, and do not give up even if you fall off the band wagon.

Smoking makes you look better, feel better, and smell better. Besides, you want to live a bit longer, right? Accountability is the key; join a “12 Step” type program if that works best for you.

3. Read More. Thanks to the rise of the internet along with email, people are writing and reading more. Still, our conversations have become more shallow as we use the shortest possible words, embrace slang, and advance other bad habits our high school English Composition teachers warned us about.

Resolve to read at least one book monthly from The New York Times bestseller to the classics. Join a reading group if you enjoy sharing a good story with friends.

4. Eat Right. Snack season is over! Sure, the Super Bowl is still weeks away, but isn’t it time you give your body what it deserves? And it deserves nothing less than balanced, wholesome eating to keep you fit, feeling strong, and healthy.

No, I am not advocating a diet plan, rather for you to come up with some sort of food plan that keeps you from feeling hungry while working with not against your body.

5. Exercise Regularly. Along with a healthy diet, an exercise regimen can work wonders. You do not need to join a gym, nor to you have to take up aerobics. Though these are both good things to do, you can benefit in small ways and large.

Instead of taking the elevator up three stories, why not walk up three flights of stairs? Park further away when you visit the mall, join a mall walkers club, walk around the neighborhood, and consider purchasing a bicycle, stationary bike, jump rope, or other device to help you get moving. Mix it up too: a variety of exercise methods can keep you interested and engaged.

6. Attack Debt. 2009 was a financial disaster for so many families with homes lost to foreclosure, credit card lines maxed out, and money in short supply. Whether you have your debt under control or it is controlling you, there are some things you can do to master it.

Consider reducing your available credit lines, closing unused accounts, increasing your monthly payments, canceling unneeded subscriptions, purchasing generic, selling an extra car, deferring a purchase, and picking up side income in a bid to win the debt battle. You can do it!

7. Reward Yourself. No matter what sort of resolution(s) you have in mind, one of the keys to successfully reaching your goals is to periodically reward yourself. In other words, resolve to be kind to YOU.

If you lose weight, then buy that new dress you have been eying. If you have paid off a credit card, then buy yourself a (small) gift with CASH. If you have quit smoking, invest in a new hair style. Find some way to give yourself a pat on the back and a much needed boost before you press on to your next goal.

Happy new year and may your resolutions ring bright all throughout 2010!

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Photo Credit: Mateusz Stachowski


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I’ll Take A “V” Recovery Any Day!

October 14th, 2009 by Matthew C. Keegan | 3 Comments | Filed in News

When it comes to economic recovery following a recession, a “V” is much better than a “W” in all cases. Who would have ever thought that the economy could be boiled down to alphabetical representations, but that is exactly what V and W portend. Not sure what I mean? Then read on for your economic primer of the day.

economic graphV is for Victory and W is for Woeful. Perhaps not a perfect way to compare two types of economic recoveries, but it is an easy method nonetheless.

V Beats W

Essentially, a V-shaped recovery describes the shape of the market’s performance in a downturn. Going from top to bottom and back to top again, just like the letter V. On the other hand a W-shaped economy describes a market that has plunged, recovered somewhat, but then plunged again before recovery finally takes place. Also known as a double-dip recession, the initial recovery isn’t sustained, sending the economy down a precipice after a brief recovery.

Why are these distinctions important? For a few reasons including: A V-shaped recovery involves hitting bottom and quickly recovering. Essentially, the economy returns to the point where it was previously. A W-shaped recovery offers a similar rebound, but it is cut short as other factors such as increased job loss, national debt, higher taxes and reduced consumer spending short circuit the recovery, leading to a second drop or dip. Eventually, the economy recovers, but the period from when the recession begins until it ends is prolonged due to the secondary drop.

Double-Dip Recession?

The Obama administration is watching the recovery closely for signs of a double dip. The effects of the federal stimulus package will be wearing off by the end of this year and companies will be done rebuilding inventories which were cut back during the worst of the slump. Also weighing in right now is the effect of higher unemployment, which is expected to pass ten percent this year and government spending which has reached levels never seen previously.  Inflation, which has been contained thus far, could re-emerge — a sure sign that the economy is slipping.

Oh, just in case you wonder if “V” and “W” are the only letters used to describe a recession, the letters “U” and “L” are also used. A U-shaped recovery points to a prolonged downturn where the bottom is reached but doesn’t recover right away. Gradually, things improve but not as rapidly as a V-shaped recovery.

Other Letters

Worse, is the L-shaped recession which suggests a sudden sharp drop followed by no recovery, at least for many years. Japan experience an L-shaped recession from the late 1980s until the early years of this century, one that they eventually climbed out of thanks to the internet boom. Still, if you were to chart that recession from its onset to the new millennium, a capital “L” would have been an accurate depiction of what that Asian nation experienced.

Adv. — Money Savers: Kitchen Tables | Faucets | Sinks | Organization


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