How to Avoid and Prepare For a Tax Audit by the IRS

Today’s frugal fashionistas know a thing or two about creating an enviable wardrobe at a fraction of the cost of buying retail and they do this in a number of ways.  Some shop deep discount outlet malls to pick up their brand name attire while others dig diligently through the racks of the secondhand store in hopes of acquiring the precise type of apparel that they are looking for.  Other, more creative types, sit down with a sewing machine and a pattern and whip out designs all their own.  College students looking to recycle last season’s fashions, clear out their closet and host clothing swaps where each participant walks away from an evening full of fun with an armload of new attire and accessories to wear.  Families with small children shop yard sales and online auction sites to buy lots of gently used clothing for their little ones to wear. Rather than replace items on a whim, these parents wait to buy new clothes until their children wear them out or outgrow them.

Like past generations, a majority of today’s population works hard to reduce, reuse, and recycle the items that they purchase or acquire for free.  You can learn a thing or two from these individuals by learning how to look like a million bucks for less.  Here are a few secrets that they would like to share with you.

Don’t Overlook the Potential of the Thrift Store

On a regular basis, people find amazing brand name, quality items that are still in the box or have the tags hanging from them while shopping at a thrift store or secondhand shop.  I once purchased a brand new pair of Doc Marten boots for less than a dollar at the Salvation Army. And don’t forget the other side of the coin as well. If you have clothes you no longer wear you can basically put money in your pocket by donating it or even selling it at a second-hand store like Plato’s Closet.

Get Your Hair Cut, Colored, and Styled By a Student

Visiting a school that specializes in Cosmetology has its benefits.  In addition to helping a student acquire the hours that they need to graduate, you can have your hair cut, colored, and styled for next to nothing. Don’t be afraid of a bad haircut. Chances are you’re going to get a great cut or style and pay a fraction of the cost of going to a regular salon.

Join the Do-It-Yourself Bandwagon and Learn How to Alter and Reconstruct Clothing to Make It Look New Again

Ill-fitting or otherwise unattractive clothing can be cut, sewn, embellished, and repurposed into amazing shirts, pants, skirts, belts, handbags, and headbands.  Craft store sell yards of fabric, spools of ribbon, patches, leather fringe, beads, and buttons specifically designed to update the look of old duds.

Buy the Best Items That You Can Afford and Take Advantage of Life-Time Guarantees

Many companies guarantee the items that they sell you.  Take advantage of these policies and buy the best garments that you can afford.  A high quality item purchased from LL Bean carries a lifetime guarantee.  Although the initial cost of a new coat may seem overwhelming, it pales in comparison when you consider the cost of multiple new coats over the course of a few decades.

Familiarize Yourself with Freecycle

Free is the way to be.  Get to know your local Freecycle group.  Post items that you no longer want and request items that you know you will use.  Not only will you reduce costs, you will also help the environment by keeping perfectly good items out of the landfill.

As you can see, you don’t need to blow your budget buying all of the latest designer fashions, getting expensive hair cuts, or buying junk you’ll only use once or twice. Frugal is the new black, and if you’re smart with your money you can look like a million bucks without spending more than a few dollars.

Charissa Arsaoui is a freelance writer for ChickSpeak, Buzzine, DisFUNKshion Magazine, Student Stuff, and a guest contributor for Wisebread.  She loves thrift related topics and can spot a bargain a mile away.

Working Remotely is the Holy Grail for Many Workers

Travel is liberating.  It allows us to experience places and cultural happenings beyond our wildest imaginations.  It puts things in perspective and gives us countless stories to recant to friends and family members who want to know what it feels like to dip their toes in the ocean, live out of a backpack or suitcase, and visit outdoor marketplaces where fruit and vegetables are sold by the bushel and where independent artisans weave rugs, handcraft jewelry, and paint portraits under the watchful eyes of tourists.

Travel lightens our spirits while toughening up our skins.  It teaches us to be patient and resilient and encourages us to live in the moment, a place often void of modern conveniences like BlueTooths and Cheez Whiz.  Travel takes us to new spiritual levels, provides us with fresh sources of inspiration, and forces us to think outside the box and to improvise.

For those that are inexperienced, long-term travel can cause anxiety.  There are a few reasons why people feel apprehensive.  Work and family obligations can limit a person.  Lack of financial resources can also damper an adventurous spirit.

Rather than forgo the trip of a lifetime, why not consider applying the skills and experience that you learned in the workplace to your new life on the road?  You would be surprised at how easy it is to be an excellent employee from any location in the world.

Nora Dunn, a freelance writer and “professional hobo”, enjoys stable income while she treks across the globe.  In addition to creating content for a number of websites and magazines, she has traded skills in order to secure accommodations.  One of her most memorable experiences involved milking goats.  She has also painted murals, led eco-treks, and landscaped yards in exchange for a place to sleep.

She offers this advice to fellow travelers:

Even if you don’t work in trade for accommodation, travel in general is an exercise in flexibility and having an open mind. It may not be a matter of life and death, but it will certainly affect your ability to “survive” the trip and come out the other side feeling fulfilled.

Negotiating a remote work location with your employer is far easier said than done.  It often requires a positive attitude and persistence.  Here are a few arguments to take to the boss:

• Some people double their efficiency by removing distractions.  You happen to be one of them.  Your track record speaks volume.  Not only are you a valued team player, you also know how to work alone.

• Your people skills are exceptional.  You know how to communicate with people from all backgrounds.  You may even know a language or two that will help you with your travels.

• You are irreplaceable.  You know your position inside and out.  There is no sense spending money on recruiting and training another individual when you can do your job from any corner of the globe.

Once you have agreed upon a plan, exceed expectations.  Communicate frequently with your employer.  Meet all deadlines and turn in quality work.  There is no excuse for failed internet connections or downed phone lines.  Have a backup plan just in case you run into any problems while abroad.

Living your travel dreams is possible with some assistance from your employer.  Keep a steady stream of income available to fund your journey by coming up with a plan that allows you to work remotely.  A week’s vacation in an exotic location pales in comparison to years of traveling and living in the country or countries of your choice.

Jeremy’s comment: As Charissa has explained, working remotely can be very rewarding. As you’re reading this I’m doing some remote working of my own. In addition to this blog I’m also a writer for About.com and work with Bundle as an editor, but guess what? I’ve been driving across the country over the past week while still using technology to work remotely regardless of where I am. It’s great! No longer am I bound to the office and I’m able to get all of my work done while enjoying the sights away from home. I know not every job has this type of flexibility, but it is becoming more and more common. At the very least, it might be something worth discussing with your employer if it’s something that interests you. The worst that can happen is they say no.

Charissa Arsaoui is a freelance writer for ChickSpeak, Buzzine, DisFUNKshion Magazine, Student Stuff, and a guest contributor for Wisebread.  She loves thrift related topics and can spot a bargain a mile away.

This is a guest post by The Financial Blogger: I’m working in the financial industry and I am specialized in personal finance. I’m always trying to find way to make money differently than receiving my pay check every two weeks. I recently hit a 6 figure income at the age of 28 and I am currently building my own online business while working 4 days a week at my day job.

Now that the stock market engine seems to be restarted for good (with a lot of volatility!), speculators are already trying to see which bubble will burst first! I am always surprised to see how quickly financial analysts are to predict that the stock market will crash again… I guess it is easier to predict the end of the world as sooner or later, it will happen and they could all say “I was right!”… only I was 5 years late….

So here are some of the bubbles that could burst at one point or another:

Precious metal, oh my so precious….

It’s been more than a year since we have seen gold push up from one record high to another. As many investors have enjoyed tremendous returns, more and more people are jumping on the bandwagon. I’d say that this is probably the first bubble to burst in the upcoming year. As far as historians remember (because the history of gold is way longer than any economic study), gold has always kept pace with inflation (but with much bigger fluctuations). In fact, an ounce of gold was good enough to buy a nice suit back in 2000 BC… and it is still good enough to buy a Hugo Boss today… after all this, the question remains: Do you really want to buy something that has already reached its peak? This is the case of gold in my opinion.

Canadian housing market to collapse?

As previously mentioned last week, the Canadian Government played with Canadian mortgage rules in order to reduce accessibility to the housing market. With these measures, it hopes to slow down the housing market and avoid a 2^nd American nightmare…

Since the housing bubble didn’t burst in Canada back in 2007 and we are still navigating through a low interest environment for a while, the government felt the urge to modify a few mortgage rules. While they ignore the concept of bubble yet, it is very possible that making a few changes over time will slow down the housing market and calm the flurry of first home buyers. If they could threaten to increase rates significantly, this would definitely put an end to this madness. However, economics is not as simple as raising or dropping an interest rate . This is why they opted for other alternatives.

Emerging markets – can they hold it for long?

Since 2009, emerging markets (more importantly the BRIC) has taken the world on their shoulders and are slowly taking most countries out of the recession with their huge appetite for resources. However, they also have started to run into a few speed bumps such as 8% inflation in China and striking employees looking for better working conditions in India.

These countries could experience their own industrial revolutions as well and god knows what will become of it. There is a lot of hope invested in the BRIC but their stock markets are inefficient and not transparent at all. I guess this is why we have such risk of having the bubble burst from the “truth”.

Among the top 3 bubbles to burst, I’d put my 2 cents on gold… I really don’t like this precious metal. In fact, I don’t even like its color… I prefer silver!

This is a guest post from MD of Studenomics. A personal finance blog for 20-somethings that want to kill debt, make some cash, and enjoy life. If you like the article, please consider subscribing for free updates.

In the North American society it’s no secret that owning a home has become apart of life. For many years the adage that, “renting is throwing away money,” was rarely challenged. As young people graduated from college and went through their twenties, buying a home simply became apart of life. Well, that is until the recent mortgage and real estate problems. Now the 20-something crowd is starting to challenge the home ownership axiom. Young people are worried about all of the mortgage crisis and all of the recession talk. Now buying a home doesn’t seem like the greatest idea.

Listen, I know I’m just some random blogger dude behind a computer screen. I can’t make the largest (or one of) decisions in life for you. However, I do feel good knowing that I can at least influence your decision or give you something to think about before you sign over the mortgage papers:

How stable is your job?

Buying a piece of real estate won’t completely kill your flexibility, but it will come pretty close to doing so. I don’t like giving financial advice to friends (you know all the legalities and stuff), but when someone asks me about buying a home, I ask the same question: how steady is your current job?

As a 20-something in today’s economy there’s no telling where you could end up tomorrow, a week from now, or a few months from now. Gone are the days of life long jobs and mega corporations never going down. Anything can happen. I don’t want to scare you. I just want you to open your eyes.

Then there’s your side of the stable job equation. How much longer do you see yourself working in the same company? Perhaps you’re sick of the job and are waiting to get out. You could be looking to leave the company and venture out on your own. You could even be looking to do some long term travel in the near future. The options are endless. Just because you have a job today it doesn’t mean that you’ll have one next week.

Key takeaway point: Consider your job stability before you decide on where you’ll establish home base.

How much money do you really have?

How much money do you really have for a mortgage down payment? Okay you have 30 grand. That’s cool, but do you realize how much of that 30 grand will actually go towards your mortgage down payment? Not a whole lot. Once you factor in the cost of a lawyer, real estate agent, moving costs, and relevant property taxes, you’ll realize that your 30 grand didn’t go all that far.

You need to take a realistic lo0k at your financial situation to decide if buying a home is right for you. Many young people don’t like the fact that they have a large lump sum of cash in the bank, so they feel the need to invest in tangible assets. Unfortunately, many home ownership costs are often overlooked and a decision is based without knowing all of the facts.

Key takeaway point: Don’t assume that all of your savings will go towards the mortgage down payment.

What is the price difference between rent and mortgage?

This is usually the deciding factor for anyone that is on the edge of buying a home. If there’s a minor difference between all home ownerships costs (and I mean ALL) and rent, then the option of buying becomes very attractive. Unfortunately, many potential home-owners only look at the cost of rent and the cost of the monthly mortgage payment. All relevant home ownership costs need to be considered: mortgage, property taxes, maintenance fees, moving costs, potential repair costs, and insurance. Once you have considered all of the proper costs, you make a more educated decision on the largest purchase of your life.

Many of my readers from the Bay Area have made it clear that the difference between renting and buying is astronomically in favor of renting. In my opinion, it really depends on the area you want to live in. Nobody knows about your area better than you do.

Key takeaway point: Keep a close eye on the difference between rent and ownership costs when making your decision.

I hope I’ve provided 20-somethings with some food for thought when it comes to making a decision on home ownership. For further reading on real estate in your twenties check out my 2,00o word post comparing renting to owning a home.