So, did you put your tax refund to good use or was it some mad money that you used to stimulate the economy? We received a bit of an unexpected tax refund this year but I have to admit, we had no exciting plans for it. About a third of it went into savings, a third of it paid off the balance on a zero percent financing deal that was coming due on the lawn mower we bought last year, and another third went into our rental property. So, what did you spend yours on?

[poll id="89"]

I was starting to feel a little uneasy myself this weekend as my stack of financial papers on my desk was taunting me for the past month. Even though I have an accountant do my taxes, when you own a business and rental property there is still a lot of information to gather even before you can turn the paperwork over to an accountant. I was also putting it off a bit because I had a feeling we were going to come up owing money this year. Some income was up and some expenses down, and the quick math in my head led me to believe this was going to be the case.

Well, after putting all of my information together and with some rough numbers I ran them through the TurboTax Taxcaster program to see how bad the damage would be and to my surprise, it estimated a modest refund. Not wanting to leave things to chance I ran the tax estimator calculators at H&R Block and eFile.com and they were reporting refunds as well. The numbers were all different, but they were all within the same ballpark so that’s a good sign. I guess I underestimated the impact of having another child and leaving my full-time job to be self-employed would have on things. While I’m not a big fan of getting large tax refunds, it’s obviously better than coming up short and having to write a check. But at least now I’ll know for 2011 I can dial back my estimated tax payments a bit and put more money in my pocket every month.

I’m off to drop my taxes off with the accountant today, but while I’m doing that you can answer in the poll below. Of course, if you haven’t started yet and you’re looking for a way to begin, first see if you qualify for filing your taxes for free.

[poll id="88"]

Here’s the problem. Nobody can predict the future and history is no guarantee of the future, but we shouldn’t be at all surprised by this. It happened in the years following the 1987 crash and after the market bottomed out in 2003. Sharp declines are usually followed up by sharp advances. Of course at the time of a market bottom it’s usually a pretty bleak picture and it seems as if there’s nowhere to go but down, which was certainly the case this time around, but again it hasn’t happened (yet).

And others will be quick to point out that stocks still haven’t returned to their all-time highs in 2007 and the 2000s were basically a lost decade of investing anyway since markets went 10 years without seeing gains. All valid points if you focus on index prices and not real-world performance. As I’ve already discussed here before, even though the major stock indicies may not have gone up over the span of ten years, if you actually invested like a real person does and not like a hypothetical math problem, you turned a negative return in the market to a real positive return in your portfolio. Investing regularly over time, in a balanced portfolio, and rebalancing when necessary can make even a a historically bad investment period a lot better than the data shows.

Buying High and Selling Low

These market swings are bad news for average investors. That’s because most people who get spooked out of stocks do so only after they’ve seen sizable losses. They wait until they’ve lost 10, 20, or even 30 percent before finally calling it quits and moving to safety. Then what usually happens is we see what we’ve had the last few years where the market bounces back, but the losses are still fresh in everyone’s mind so people are unsure about getting back in. So, the market goes on to realize 10, 20, or 30 percent gains before most investors feel confident enough to get back in. Big problem! What you’ve done is taken a loss and sold, therefore locking in that loss, and then you’re on the sidelines while a bulk of the gains are made before deciding to get back in, so you buy back in at a high point. It’s a vicious cycle of buying high and selling low, which is the exact opposite of what you want to be doing. That’s why trying to time the market or investing on emotion never works.

So, where has your money been over the last few years? Were you fortunate enough to stick with your diversified portfolio and keep investing? Did you bail out a long time ago and still aren’t comfortable enough to get back in? Or were you a complete contrarian and dumped even more money into the market while it was still setting record lows?

[poll id="87"]

With each passing year the tax code seems to get even more complicated with new credits, exemptions, and rules. This year a lot of people will be working to figure out the taxes on their Roth IRA conversion. If your tax situation is relatively simple you can probably get away with doing your taxes on your own and even file your taxes for free. But those of you who own homes, a business, taxable investment accounts, or had any major life change occur during the last year may find it better to seek professional help. That’s what I did a few years ago when I finally hired a CPA to help with my taxes. That obviously isn’t the cheapest way to go about it, but the money she saved and strategies she helped put in place amount to thousands in savings.

So that brings me to today’s question. How do you do your taxes? Are you a do-it-yourselfer or do you let somebody else take care of it? Or do you stick to a quick and easy free filing option or are you more comfortable with paid software such as TurboTax? Let’s hear it.

[poll id="86"]

This is where the problem lies. If you have both debt and a need to save money, how do you prioritize? Some people will pay off debt at all costs before saving a penny. Others will be fine getting by with minimum payments while dumping as much money into savings or investments as possible. While others try to do a little bit of both. That’s why the poll today asks how you view this subject.

For me personally, I’m a bit of a hybrid. I hate debt and want to make sure that revolving high-interest debt receives top priority, but at the same time I don’t feel that should completely take away from savings. As important paying off debt is, you still need to have a liquid safety net set aside and you can’t ignore long-term savings such as retirement completely. Time is also money, and every year you don’t put money aside is a year lost. So, I think it’s important to have a plan that allows you to structure your cash flow that will pay off the high-interest debt in a short amount of time while still maintaining the minimum debt payments on everything else, and still saving some money each month towards your emergency savings if you don’t have one, and contribute at least something to your retirement accounts. At the very least, enough to get any employer match in a 401(k) if you have one.

But that’s just me. Where do you stand, and why?

[poll id="85"]

Who is Behind This Technical Indicator?

The Hindenburg Omen (not originally given that name) was dreamed up by Jim Miekka, a blind mathematician who edits a newsletter called the Sudbury Bull & Bear Report. Though Miekka put this out there a number of decades ago, it stems from an indicator called the High Low Logic Index, which Norman Fosback, editor of Fosback’s Fund Forecaster, devised in the 1970s.

Miekka himself likens the appearance of the Hindenburg Omen to a funnel cloud sighting. Not all funnel clouds turn into tornadoes, but all tornadoes come from a funnel cloud. So, if you see a funnel, there’s a strong possibility of a tornado forming. He says the omen is the same, and while it may not mean a devastating market crash is certain, but it’s like an ominous storm cloud that signal a crash is possible.

The market saw the Hindenburg Omen tripped back on August 12, and again just last Friday (August 20). Because of this, Miekka acknowledged he has pulled out of stocks entirely.

How the Hindenburg Omen is Calculated

The Hindenburg Omen is calculated using data from the Wall Street Journal. It makes sense to use one data source so that you’re comparing apples to apples, but other sources can be used. The criteria for the Hindenburg Omen is:

1. The daily number of NYSE new 52 week highs and the daily number of new 52 week lows are both greater than or equal to 2.8 percent (typically, 84) of the sum of NYSE issues that advance or decline that day (typically, around 3000).
2. The NYSE index is greater in value than it was 50 trading days ago. Originally, this was expressed as a rising 10 week moving average, but the new rule is more relevant to the daily data used to look at new highs and lows.
3. The McClellan Oscillator is negative on the same day.
4. New 52 week highs cannot be more than twice the new 52 week lows (though new 52 week lows may be more than double new highs).

What Do You Think?

So, where do you stand? Is this just a fancy way to play with numbers and get the media buzzing, or is there some still unknown science behind this that means we should really buckle up for a rough ride? Personally, I’m a bit torn. On one hand it’s hard to deny the fact that the omen was behind the market crashes in recent history, but at the same time it has only accurately predicted significant crashes 25% of the time. So, this may certainly mean we’re in for a downturn, there’s also a greater possibility based on historical accuracy that it won’t indicate a full-blown crash.

The real problem is that things like this often turn into a self-fulfilling prophecy. A relatively benign technical indicator shows up and people start talking about it. Then more people begin believing what it is predicting, so they start selling off their stock. This creates downward pressure in the market that just reinforces the fears that others might have, so they too sell. Before you know it, a snowball effect has started and in the end people make the omen come true on their own. We all know how irrational most investors can be, so that’s the real danger in my opinion.

[poll id="84"]

Now banks are taking things one step further with mobile banking. Instead of relying on your computer, many banks now have the capabilities to allow you to transact bank business right from your cell phone. In its earliest form this was little more than receiving text alerts regarding account status, but today you can actually send text messages to your bank and instruct it to provide a balance, transfer funds, or even pay a bill. Forget to pay the cable bill before heading out on a camping vacation? Pay it on the road with your phone!

Beyond banking by text, the popularity of powerful web-based phones has also introduced full mobile versions of a bank’s online banking site. With the ability to surf the web from your phone you can essentially get everything in the palm of your hand that used to take a computer. Some banks have even gone as far as creating custom iPhone or Android apps specifically for their banking platform. This makes it incredibly easy to stay on top of your money at any time.

Mobile Banking Risks

Although this can be a useful feature, do you trust that your information is secure? This is one area that is still somewhat up in the air. Granted, banks typically use secure and/or encrypted transmission methods when dealing with information over the web, but given you’re using a cell phone that’s broadcasting packets of information through the air can you be certain that the information isn’t being picked up elsewhere and somehow exposed by someone else? While experts suggest this is unlikely, hackers are always finding ways.

But what’s even more of an issue are phones that utilize WiFi. You may not think twice about it, but if you frequent a coffee shop or something that has an open and free wireless connection and your phone decides to use it, that banking app running in the background could be transmitting data that someone can get their hands on.

Or what about if you just use your mobile browser to login to your bank and have the login/password automatically saved? If you lose your phone or even leave it unattended and don’t have the phone locked down someone could easily pick it up and get into your account, or at the very least get some personal information.

Do You Use Mobile Banking?

Given how convenient mobile banking can be it’s no wonder people are quick to use it. I’ve done some mobile banking myself, but usually it’s just to get a quick balance when I’m not around a computer and don’t feel like waiting on hold. I also like the text alerts that Chase has where you can monitor your accounts and set alerts when they fall below a certain amount. I tested this last week and I set an alert to notify me when a checking account went under $500. I moved money around so that the balance in that account was about $550 and then went grocery shopping. The total came to about $80 so I swiped that debit card so that it would put me under my alert limit. Amazingly enough, my cell phone buzzed with a text alert from Chase before my groceries were even bagged! I thought that was pretty handy.

So, what about you? Are you a fan of mobile banking or are you a little uneasy about conducting financial business wirelessly from the palm of your hand?

[poll id="83"]

I know firsthand. We are stuck with two mortgages right now and it doesn’t make much sense to refinance either one. On our old house that we’re trying to sell we’re paying 6.75%. That sucks, and while a lower rate would certainly trim some money from the monthly payment, the few thousand we’d be paying up-front to do the refinance and/or the points we’d initially be paying would be a waste if the house does sell inside of a couple years before we break even. So, it’s a bit of a gamble. If it takes a long time for the house to sell, we may still come out ahead. If the house sells in the coming months we could lose out on some money.

Then we have our current house which was purchased less than a year ago. Rates were pretty good last year and we got this one for 5.25%. Even though it’s good, I’d love to be paying 70 fewer basis points to be sure. Even if we were able to get one of the lowest rates the savings would only be about $50-60/month, which stretches out the break even point pretty far. But there’s a good chance the numbers wouldn’t work out to show enough equity for a traditional refinance anyway given the wonderful Michigan real estate market.

So, I get to sit on the sidelines while people are taking advantage of these record low rates. What about you? Are these low rates getting you to think about refinancing, or have you already?

[poll id="82"]

So, I went to my favorite financial spending site Bundle and pulled up the latest information on gas spending. To give me a more accurate picture to compare my personal spending data to I set the filters to show data for those who are married and have kids and were in my age group. After loading my location and the entire U.S. here’s what I found (click the image to go directly to the data):

The national average for gas spending is about $220 a month and married couples my age with kids tend to spend about $250. That’s interesting, but how does my personal gas spending stack up? Unfortunately, we’re above average, even for our particular location. We typically spend right around $275-$290 each month on gas. It makes sense that people in our area spend more than the national average because it’s one of the most rural counties in the state. Most people are driving 10-30 miles each way just to get to and from work and most residents will have to drive upwards of a half hour to forty-five minutes away just to find the nearest major shopping center. Combine the long distances with a large population of farming families and the tremendous snow in the winter and you have a lot of four-wheel drive vehicles on the road using up even more gas.

So, that brings me to today’s poll question. How much do you spend on gas each month? The numbers can be interesting, but they are even more useful when you compare them directly to similar households in your specific location. So, I encourage you to head over to Bundle and enter in your location and similar demographics to see how well you compare. But for the sake of the poll below I think it would be interesting just to see the range of gas spending among readers. If you plugged in your own data and found something interesting please share below in the comments!

[poll id="81"]

I’m a fan of statistics and love poking around with numbers to see what people are spending their money on and how I compare, so the other day I was looking at the U.S. average in utility spending. So, I hopped over to Bundle to take a look at the total U.S. average. Here are the results encompassing all age and income groups.

Average U.S. Utility Spending: March 2010

As you can see, there’s quite a range. Low spenders are getting by on just $30 a month while others are spending over $400. The average household is spending around $200 and the median household is at $115 a month. It also reflects that people on average are spending 5% of their monthly budget on utilities.

That’s interesting, but where do I fit? That’s what I was curious about after receiving our latest electric and gas bills. Here’s our average monthly utility breakdown:

• Electricity – $65
• Gas – $40
• Sewer – $23

That brings our total to about $128 a month. Of course the electric and gas numbers are averages and they do fluctuate with the seasons. But for us, in the summer when we run the AC but aren’t running the heat, the electric bill may go up to about $90 and the gas may drop to $20 and in the winter the electric bill drops quite a bit while the gas bill goes up. In the end, it tends to average out as a whole. We also have a well so there’s no bill for city water.

So, given our current utility spending it is comforting to know that we are right in the meaty part of the curve. Considering we have long cold winters, some hot months during the summer, and a reasonably large house to maintain it looks like our energy costs are actually pretty good.

Now it’s your turn. How do your utility bills stack up? Does it seem like you’re paying a lot more than you should be? Once you compare yourself to the national average above, be sure to change the data to compare it with your specific location which can give you a far more accurate pictures and put your costs in perspective with your neighbors. For the sake of the poll below, just try to ballpark an average monthly number since there are obviously extremes from one season to the other. And only include things such as electricity, gas, sewer, water, etc. Don’t include things like cable, internet, phone service, etc.

[poll id="80"]