Reduce your Property Taxes

I'm lucky enough to live in the great state of Texas. With no State income tax, Texans already get a tax break and a reduced cost of living compared to other states across the country. I recently became aware of a tax break that many other people may benefit from. As it is in my nature to share good information - here it is:

The Homestead Exemption
You may be thinking - "yeah I've heard of it - what good is it?" or "I don't want to go through all that paperwork for nothing". For those of you who have not heard of the Homestead Exemption, it is a way to protect your home from creditors and prevents them from taking your residence. What you may not know is that you may receive a tax break for filing one (I didn't!). Amounts and procedures vary by state, so check with your local county office for details.

Now, your state may be different, but I found that in Texas all I had to do was mail in the form or drop it off at the County Appraisal District's office. It was a one page form and I chose to drop it off - took 30 minutes out of my time.

The Benefit
Texas allows for a $15,000 reduction in the tax appraisal for your home. What that means is if your home is worth $100,000, you would pay taxes on $85,000. In addition, your overpaid taxes for that tax year will be automatically refunded. I did the math and my tax bill is reduced by $380 with a homestead exception. This is money that I've overpaid and will be receiving back from the appraisal district. Many Appraisal districts have websites, if not check your state website for how to file the Homestead Exception in your state.

The Library - Much more than stuffy old books

In honor of National Library week, I felt an article about the library was in order for the Tip of the Week. As much as I've benefited from my library, the least I can do is share those benefits with others who may not know about them. If you haven't visited the Library in a while, you may be surprised. About 3 years ago I wandered into the library looking for something that I now can not recall. I was surprised at what I found.

The Library has a wealth of services available to you - all for free. Aside from checking out books, some of the programs the Library in my area offers are:

• Computers with productivity software and internet access
• Magazines
• DVD & VCR Movies
• Computer workshops (how to use software programs)
• Various programs for kids for babies to preschool
• Activities & Book clubs for Teenagers & Adults
• Family Game Nights

I'm sure you now see why I'm putting this information in a debt reduction blog. Utilizing your neighborhood library, you may check out movies for a movie night, sign up for Computer Classes, or bring the kids in for game night - All at no cost to you! So head out to your library today, and go ahead and cancel those magazine subscriptions. They have plenty of them for you to read while you're there renting your next movie. Too bad they don't supply the popcorn......

Tax Time - Are you ready?

Well, Tax Day is upon us - and The Debt Assassin will take a moment to discuss those things taxing. I'll also share with you how to file for free.

First off, if you haven't filed yet - get on it. Whatever you do, file by today. Even if you're receiving a refund, or you can't pay the tax bill....No matter what - file file FILE!

See here's the deal with the IRS....they're going to take the money you owe them, but they're not going to hand out refunds unless you tell them. That includes the Tax Rebate - you MUST file a 2007 tax return to receive a tax rebate. The check dates were released, and here's a link to the Payment Schedule on the IRS website. It will tell you when you will receive yours. Those who elected direct deposit will receive their rebates quicker. But I'm getting ahead here - back to April 15th.....

"I need more time!"
There is help for you. If you need more time, you may file an extension. Keep in mind that the extension grants you additional time (up to 6 months) but you will owe interest and late charges on your taxes due. You'll want to pay as soon as you can to minimize and additional costs that you will incur. I would also suggest sending something in to the IRS - even if it's not the entire amount. You would only owe penalties on the amount you underpaid. See Form 4868 for further information. You will need a pdf viewer to read the file.

"What if I can't pay?"
Good news - the IRS has a payment plan. Form 9465 has all the details, but I strongly advise you to find alternative. Though you may pay your taxes in installments, you still incur interest and fees on taxes overdue.

I'm not condoning you do either of these methods. I'd rather see you pay with a credit card than owe the IRS - and you know how I hate credit card companies. You can hang up on the credit card companies when you can't pay them, but Uncle Sam will come knocking.
I'm notifying you of these options as a last resort, and I hope not one of my readers has to use them.

"Enough Already. Where can I file for free?"
Ok - earlier I mentioned filing your tax return for free. Check out this link to the IRS website for their FreeFile program. In order to use the program, your income must not exceed $54,000 for 2007. There is a separate program for filing a return for the sole purpose of receiving the stimulus payment. It is only for those who would otherwise not file a return.

If you are a State Farm customer - you can get a free TurboTax online membership.
If you haven't already, sign up on the State Farm website. You may have to register your current policy with the on-line account you created. When you view the My Accounts page, you should see an ad for free tax filing on the left. It will take you to the TurboTax website where you can file everything - including e-filing - for free.

I'll keep my fingers crossed that you'll get a refund - but only if you use it to pay down debt!

An Apology and a Gift

First, The Debt Assassin would like to apologize to the faithful readers of this blog for the extended absence. Let's just say many irons were in the fire and they all jumped out at once. I am once again back writing to help those of you tackle your debt issues and say goodbye to credit cards. So rest assured I won't disappear again.

On to the "gift" - I've mentioned Redbox before, and every Monday a free rental code is sent out. Here is today's code : JC10LK

It is good for one free movie rental. But what they don't tell you is that you can use it multiple times, as long as you use a different credit or debit card. Therefore, as long as you swipe a different card for each movie you rent, they will all be free. This makes it really easy to do "Movie Night" at home for free. Just be sure to return them tomorrow to avoid being charged for a second day.

Now I know this blog is about reducing debt, but you can use your cards here as long as you return the movies on time. If you planned for a movie expense in your budget, make sure you use your debit card to do it. However, I'd recommend you check out NetFlix, as they have plans that start at $4.99 a month - and you can even watch them on your PC. New memberships come with a free trial period as well.

Stimulating the Economy...

You've probably heard by now that a tax rebate is going to be issued this year. It's also referred to as the 'Economic Stimulus Package'. Single filers will receive $600, Joint filers will receive $1200, and an additional $300 is added to that for each child in the household. These numbers assume you make no more than $75,000 (individual) or $150,000 for joint filers. Low-income filers must make at least $3,000 to receive a rebate, which is $300. Those who make over those limits will receive a rebate, but it will be reduced by 5% for every $1,000 over $150,000 and it is capped at $174,000


So, what do you have to do to receive this money?
You must file a 2007 income tax. If you do not file, you will not receive the rebate.
Then you wait. The rebates are expected to show up as early as May, so it may be beneficial to file early this year instead of waiting until the last minute. Then again, it may not make a difference to file early. Just be sure to file your return and you'll be ok.

"I'm getting a rebate, what should I buy to stimulate the economy?"
Whoa there, cowboy. Not so fast. Let's remember that the politicians in Washington are calling this tax rebate an "Economic Stimulus Package" so that you'll feel inclined to spend it. But that's not your job. This money should be used to help you get out of debt.

Here's some tips on what to do with it:

• Get current on any outstanding debts that you've fallen behind on.
• If you haven't already, build up an emergency fund.
• Pay off those credit cards, or throw as much as you can at them.
• Refinance your house and use the rebate for closing costs.
  

It can also be used to invest in 401K, IRAs, or another investment vehicle. Do this only if you are out of debt, in which case I'm not sure why you're reading this blog!

So while Washington may want you to stimulate the economy, you should use it to stimulate your own household instead.

Strip down your DSL

One of my readers posed a question in the comments of the article "Reduce The Cost of Your Phone Line" and I felt that this would make a good article on it's own.

For the benefit of all the readers, here's a summary of the question:

"Don't you need a hyped-up land line for running your DSL internet connection? I never use my land line other than when solicitors demand a phone number..so I really wouldn't even need that basic package you talk about for emergencies, ect. But, I LIVE by the internet, and I pay about $75 a month for my land line and DSL coverage...HELP!"

To answer the first part of the question, If you decide to keep your phone line, all that is necessary is the most basic line. I am currently running DSL this way. If you wish to keep your line and want to downgrade it to the cheapest possible cost, ask for a POTS line with no frills (POTS is an acronym for Plain Old Telephone Service). It should cost between $6-$9 plus taxes.

As for your question regarding the elimination of the phone line, there is good news for you.

Both AT&T & Verizon offer "Dry-Loop" DSL, commonly referred to as "Naked DSL". This is DSL without a phone line. You probably have not heard of it, as both companies are keeping it very quiet - and for good reason. They stand to lose lots of money if everyone dropped their phone line and did not convert to the naked DSL.

Before the beginning of this year, you could have DSL service without a line, but the cost was $50 a month. Due to the intervention of the FCC both AT&T & Verizon were forced to offer Naked DSL, which comes without the phone line. The Speed is rated at 768KBps, but the cost is only $19.95 a month. It does require a 1-year commitment.

To learn more about high-speed Internet without a voice line, contact your internet provider.

AT&T Customers:
Call 1-800-288-2020

Verizon customers:
1-800-567-6789

This option may not be available in all areas.

Refinancing - Is It For You?

With all the talk about interest rates & refinancing going on, I figured it would be appropriate to discuss it. You may be ready to jump on-board the bandwagon, but let's make sure it's a good fit before you do. Before we start, if you have an ARM (Adjustable Rate Mortgage) or an Interest only loan - refinance immediately. You don't even need to read further, though I hope you will!

Before you do anything, you should investigate your current loan terms. You'll need to know: The length of the loan, the interest rate, and if you have any pre-payment penalties.

Debunking the "Rules"
There is a lot of speculation in regards to "Rules of Refinancing" - the most common being the 1-point differential. If you're not familiar with it, it basically states that you should not refinance a loan unless your interest rate will be lower by 1 or 2 points. Others say that you should recover any costs within two years. While these are good suggestions, they're not set in stone. There are three things you should consider.

How long will you be staying?
The length of time you will remain at your current home should be the major determining factor on whether or not you should refinance. If you're planning to move within the next year or two, re-financing is probably not a good idea. Conversely, if you plan on staying in your home for another ten years, refinancing is most likely for you.

What's the rate?
The new rate is a key piece of information in determining whether or not you should refinance. You'll need to know this to determine your new monthly payment. It's good to know the APR as well, not just the interest rate when considering a loan. What's the difference? The APR (Annual Percentage Rate) includes any fees in addition to interest that are paid over the life of the loan. It is expressed in an interest rate and allows you to compare loans from different lenders equally. A loan with a lower interest rate may cost you more than a higher rated loan with lower closing costs & processing fees.

What additional costs are involved?
The third factor to consider is the additional costs associated with refinancing. You'll want to obtain Good Faith Estimates from any lenders you are considering. Get as many as you want, until you feel you have a good comparison of lenders. It costs you nothing but time to compare lenders - so get as many as you want.

So is it worth it?
Now that you have the necessary info, lets find out if refinancing is indeed right for you. Ignore all the "Rules" you may have heard. In order to determine if you should refinance, calculate how long it will take for you to recoup the additional costs. The simplest way to do this is by taking the total closing costs and dividing them by the difference in your monthly payment. If the montly payment decreased by $75 and your closing costs were $2500, it will take you 34 months to recoup the costs. ($2500 / $75 = 33.33). If you plan to move in two years, refinancing would not make sense here, because you will not recover the expenses by then. Here's a refinancing calculator to help you out from Mortgage-calc.com

Finally, if you're unsure of anything - please don't sign it. If you don't understand, ask questions and/or bring someone with you to closing that does. One other thing - never let the lender say "we'll put that on later" because it will never be added on - after all you've signed the papers by then!

Good Luck!

Getting Started -- Part II - Cutting Costs

Now that you've got your budget, you need to trim it. Hey - I warned you this would be hard. Let's get started. Here's some tips on where to cut your budget expenses.

-No More Dining out
Sorry, but you're not going to remember what the inside of a restaurant looks like by month three. Dining out usually runs $30 minimum for a family of four. At just once a week that's an annual savings of $1,560.

-Pack your lunch
No more dining out with co-workers. Bring your own lunch and you'll not only save money, but you'll be eating healthy too. How much? $6 a day for lunch will run you $1,500 a year. Even eating out once a week will run you $300 annually. That's only if you didn't 'want fries with that'....

-Homemade Java to go
Get that coffee to go - from home. Omit that daily java stop and you'll save $3 a day, and you won't be tempted by those gigantic muffins either. Savings? About $750 a year. Not to mention the trimming you waistline will get from avoiding those muffins....

-Cut the Cable
Time to cancel that Cable or Satellite service. After the introductory rates, you're lucky to pay under $75 a month for this. You could rent a movie at the Redbox every day and still be well under half the cost. Dump this service today and save $900 annually.

-Movie Night on the Couch
Rent a movie and watch it at home instead of going to the theater. The popcorn and soda costs much less at the grocery store, and you're couch is more comfortable anyway. Save about $400 a year.

I'll be posting more tips on cutting costs on a weekly basis. Also keep coming back for the "Free Tip Fridays" - an activity or idea that can be done at no cost.

Part III coming soon.

The Emergency Fund

I can't stress enough how important this is. If you haven't already, it's time to give up that credit card you have "in case of emergency". Why? Well, just ask yourself which credit card was your "emergency card" before this one, and why aren't you still using it for emergencies. Chances are the answer is, "because I reached the credit limit".

So you need an emergency fund, because let's face it - stuff will break on you.

You need to save between $500 and $1000 and toss it in a savings or money market account that doesn't charge you fees. If your bank can't help you, go to a credit union. In my opinion you'll get the best rate without fees. Paying a bank fees for using your money is ridiculous. Keep in mind the idea here isn't so much the rate of return - it's a safety net. This will keep you from reverting back to a credit card to get the car repaired or a broken window replaced.


If you use it, put it back.

Don't forget to replenish your emergency fund after you use it. Go back to paying the minimum on your credit cards until it's replenished. After your emergency fund is back to your set amount, re-attack those credit cards with a vengeance.

Free Tip Friday - Free Movies

Ok, it's Friday. Friday has many meanings to many of us. Friday is "Date Night", "Movie Night", or maybe it's your "Party Night". I've decided that I will reward my blog viewers on Fridays with a freebie of some sort. So here forth Fridays will be known as "Free Tip Friday" (It's more impressive if you hear me say it in a loud booming voice)

So for our first Friday, I'm going to get you a free movie rental - with no strings attached. You may have seen these movie rental kiosks in your neighborhood. If you haven't, they're like ATM machines, but instead of giving you money, they take it. Well, ok, they give you a movie for it. It's $1 per night to rent a movie. There are several kiosk companies, but the one we will be discussing is known as RedBox.

Normally it will cost you $1 a night to rent a movie, but there are ways to get that movie free - here's how you do it. There is a button on the touch screen that mentions a promo code. This button is your friend, and you will get to know him well. Instead of picking your movie, swiping the card and paying the $1 per movie, per night, you're going to press this button, swipe the card, and get the movie for free. The codes work for one movie and only for one night. They can only be used once - BUT - only once per credit card. So you can use the same code on 5 movies if you rent them individually, and use a different credit card on each movie.

Now, I'm sure you'll want to know where to get the codes. There are two places.

The first is at RedBox.com. You'll need to sign up for the newsletter (don't worry, you won't get SPAM from it), and for the free Monday code. Every Monday a different code is sent to you that is good for one free movie rental that is good only on Mondays. Remember you can use it more than once if you rent them individually using a different credit card for each one you rent.

"What if I want to rent for free on a day besides Monday?" Good Question. Another site comes into play here. It's a independent site that specializes in promo codes for the RedBox kiosks. It is called InsideRedBox.com and lists many codes that different people have discovered and are sharing.

Please note I am not affiliated with these sites, and I receive no compensation for sharing this information with you other than the satisfaction of knowing I saved you some money. If you use this and are renting 2 movies a week - you've just saved over $100 a year! Always remember that every dollar adds up, and that's more money that gets you closer to being debt free!

Reduce The Cost of Your Phone Line

Many have rid themselves of the monthly expense of a land-line phone - you know the ones you plug into the wall at home...... If you don't need one, it's a great cost savings to just use your cell phone. Many people still utilize this service, including me. It might be due to your cell not working in your house, or that you want it for emergency - just in case.

I'm provided with a cell phone by the company that employs me, and they pay the bill. Therefore, I like having a land-line - just in case I suddenly become unemployed, or the cell towers go down. Well, I checked my bill and this month all my bonus discounts have expired. What used to be around $15 a month is now $36.75 for the line, plus $4.66 for long distance. That totals up to $41.41 - most of which is Taxes and Fees - but I still have to pay them.

I've decided that's way too much for a phone line that I rarely use so I place a call to AT&T. I explain that I want a POTS line - no frills. (POTS is an acronym for Plain Old Telephone Service) So the line is going to cost between $6 and $9 instead of the original $17.50, plus I dropped the caller ID package that was $7.77. I also killed the long distance plan, saving me another $4.66. So my $40 charge is going to be reduced to around $17. That freed up an additional $20+ a month to pay towards debt!

I had the option to remove the long distance, which would prohibit any long distance call from being made. I decided against this, since I might send a FAX or need it for an emergency. The prices range from 19-35 cents a minute, so a 10 minute call would only be $1.90 or $3.50 - still cheaper than the $4.66 I was paying for a 7 cents a minute plan. You may choose to leave off the long distance if you don't have responsible people in your household, or small children that may dial away on the phone as if it was a toy.

So, call your phone company and downgrade your land-line. That will put an extra $200-$300 a year in your pocket, depending on your situation.

Where do I start? -- Part I - The Budget

Ok, so you pulled out your bills and went into shock. After you regained consciousness, you're scared, frustrated, or maybe just really hacked off. You're overwhelmed. It's OK. Sit down, relax, and let's get started.

First, You can do this! Second - Getting out of debt will be hard.

I'm not going to lie. It's pretty easy to swim in debt, but no one likes to get out of the pool. But let's take it slow - we need a plan. It's time for a budget. I know - I said the "B" word. But it's not as hard as you think. Grab a paper and a pen - I'm not asking you to be an accountant here! If you're married, get your spouse involved.

On the left side of your paper list the total household income. This is everything coming in. No secret stashes, no lying here. You only hurt yourself if you do.

On the right you list your expenses. Start with the necessities first, then list your debts from smallest to largest. The order of the listing is going to be the order these get paid. Example categories are Food, Shelter, Clothing, Gas, Car Payment, Credit Card #1 , etc. Also include a category for yourself - Entertainment or fun money. If you don't reward yourself, you encourage failure. Just make sure you put it in the budget.

Start totaling. If your expenses outweigh your income, you're going to have to trim something, or someone's not getting paid. Make sure your categories aren't out of hand. If you're single - $300 is way too much for food. On the other hand, a family of four will need much more than that. So budget accordingly.

That's it. Now all you do is tweak your categories and see where you can save. I'll post some tips for trimming the budget in the next article.

Introduction

Congrats to being one of the first people to read my blog.

First, this isn't one of those, "Oh crap I'm a bagillion dollars in debt, watch me pay it off" blogs. It going to be more focused on tips and advice to help you pay off your own debt.

Why do you care about my advice? Ha! - Maybe you shouldn't. But seeing as you're here anyway, you might as well read something to stimulate that brain of yours. But I do know a little something about debt.....I graduated from college in debt, and have owed my soul to many a credit card since. I can't even remember what it felt like to be debt free.

So anyway, I decided last year that enough was enough and I've been plowing my way through debt ever since. I'm working hard to pay it off and decided I wanted to help the vast group of others who are swimming in debt. Hopefully you will find this blog helpful, insightful, and maybe a bit encouraging.