Paying Off Holiday Debt
December 28, 2011
We do a lot of overindulging during the holidays. We take an extra day off work, eat an extra piece (or two) of pie, and sometimes charge more than we can afford on our credit cards. With the holidays nearing an end, and post-holiday credit card bills rolling in, it’s time to create a plan to pay off any debt we may have incurred during the holidays.
Cut Back on Spending – The first step in getting out of debt is to stop borrowing. If you overspent during the holidays you need to cut back your post-holiday spending. It may help to cut up your credit cards or lock them away in a safe place.
Make a budget – Cut out any expenses you can and plan to pay off your debt as quickly as possible. While you are making a budget, figure out the most you can afford to pay each month to reduce your debts, then make those payments without fail.
Spend Some, Save Some: Making the Most of Your Tax Refund
New Financial Education Guide for VITA Programs and Their Clients
December 23, 2011
By to Leigh Tivol, Director of Savings & Financial Security at CFED
The Earned Income Tax Credit (EITC) is one of the nation’s largest anti-poverty programs. The EITC reduces the tax burden on workers, supplements wages, helps low-income families build assets and reduces income inequality. Annually, the EITC helps 6.6 million Americans move out of poverty; half of these are children. In 2010, over 26 million workers received nearly $59 billion in EITC. The average credit was $2,100, but can be as much as $5,751, depending on the worker’s income, marital status and whether they have children.
Awareness is critical. Only four out of every five eligible taxpayers claim and receive the EITC. Ideally, all eligible taxpayers would claim their EITC. The IRS, Center on Budget and Policy Priorities (CBPP) and countless other nonprofit and community-based organizations have mounted campaigns to make sure that eligible taxpayers know they can claim this credit.
Making sure that affordable tax assistance is available to these families is equally important. The IRS, numerous foundations and community organizations also support programs that provide free tax assistance to low- and moderate-income families. Volunteer Income Tax Assistance (VITA) programs, for instance, offer a valuable service to working Americans by helping them keep more of their hard earned money, especially if they quality for the EITC.
Five Tips to Make the Most of a Last-Minute Charitable Gift
December 22, 2011
By Vanguard Charitable Endowment Program President Ben Pierce
When deciding which charities to support at year-end, Vanguard Charitable's Ben Pierce recommends that donors look out for five things: Transparency, access, evidence of impact, a long track record, and a sustainable plan for the future.
"Giving money to charity is not necessarily as easy as it might seem," he said. "Before making a last-minute charitable gift, ask questions, research the charity's website, check who is on their board and their financials, call the organization, or simply try out the charity with an initial gift. Ten minutes of analysis may open a door to a lifetime of rewarding giving."
To assist donors in researching, analyzing, and reviewing the health of the organization, good charities will share information about themselves, such as their IRS Form 990. This document provides key financial information, such as the contributions the charity has received and how they spend their money. "If you cannot find an I-990 form on a charity's website, be skeptical," Mr. Pierce cautions.
Last Minute Gift Ideas That Give Back
December 20, 2011
By Katie Bryan, America Saves Communications Manager
Buy a Savings Bond – The U.S. Treasury will end over-the-counter sales of paper savings bonds on December 31, 2011. You will still be able to get savings bonds online through TreasuryDirect.gov but that system makes it difficult to buy savings bonds as a gift. Visit your local financial institution to buy a paper bond for someone you care about before December 31st.
Open a Savings Account – Opening a savings account for a child or teen can instill smart financial habits. Establishing a savings account will introduce them to banking concepts, such as interest and how compounding helps money grow.
Open a 529 – Help someone save for college by opening a 529. Student loan debt now exceeds credit card debt. Saving early (or helping someone save) will reduce the amount of debt a child or friend will take later in life for education. Click here for more information on 529 accounts.
Make a Payment on a Loan – Do you have a friend or family member in debt? Instead of buying them a gift they may not need, give them the gift of a debt payment. Giving them an extra payment will go a long way. Making an extra payment on a debt will reduce the amount of interest paid and the term of the loan.
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