How to Increase the Value of Your Home by 5% to 11% With Little Effort and Little Money

This is a guest post by Tanesha Morgan, writer for Personal Finance Analyst. Personal Finance Analyst is an online community of bloggers dedicated to taking the mystery out of money and helping you to live a happier, more successful life with the money you have.

The Windfall Elimination Provision (WEP) has been around since the Regan Administration, but most people never learn about this provision until it is too late.  The WEP is a provision in the Social Security law that serves to prevent retirees from getting a “windfall” of money from the federal government.  I’ll get back to the term windfall in a moment.  But first… how does this provision work?

The formula used to calculate a person’s social security benefit is based of several factors, but I’ll try to use a simplified scenario.  If a person paid social security taxes for 25 years, then he may be eligible for 90% of his average monthly earning.  However, if that person is subject to the WEP, he’d only be eligible for 40% of his benefits.

Who is Usually Affected by This Provision?

Generally, people who have made career changes will be affected… if that change involves moving from a social security covered position to a non social security covered position.

For example a teacher … public school teachers in many states contribute to a state or local government retirement system and are exempt from paying social security taxes.  But if after 20 years (which is long enough to be eligible for the state or local government retirement benefit), our teacher may decide that he wants a career change.

He moves on to a position which is covered Social Security.  If he stays in that position for about 10 years, then he is eligible for Social Security benefits.

Fast forward to our teacher’s 62nd birthday… he goes down to the Social Security office to apply for his Social Security benefits.  The worker figures out his benefit and then informs him that that benefit is going to be reduced nearly 50% because he is already receiving a retirement pension from another government.

This reduction prevents our teacher from getting a “windfall” of money from the government.  Windfall… I really have an issue with that term.  So instead of him being about to buy 2 loaves of bread with his social security check, he can only buy 2 slices.  **shaking my head**… Windfall?!? Give me a break!

I think this WEP is completely unfair.  If a person has worked long and hard enough to be eligible for two government pensions… then why should he be punished?  He earned the pension… so give it to him.  Two government pension checks do not equate to a windfall… no matter how you add it up.

For those non-Social Security covered state and local government employees, the WEP acts an inhibitor… preventing them from moving into private sector jobs.

Well, I suppose it only inhibits those who are aware.  Most people are not even aware that this provision exists.   Many first learn about it when they apply for their Social Security benefits… which by this time is too late because they have not planned for this benefit reduction.

Just about every year, one or two bills are proposed to Congress that would repeal this WEP… but every year it is either not heard or voted down.

The WEP has been in law more than 20 years, so chances are it will not disappear.  Therefore I thought it was important to alert my fellow financially conscious friends that this provision exists.  Hopefully, you aren’t depending on Social Security to take care of you during retirement, but in case you are… plan ahead and beware of this provision.

This is a guest post by J. Money covering for me while I’m on vacation. J. Money writes for budgetsaresexy.com - A laid back finance blog of a guy just trying to spice things up a bit. He also finds budgets….well…sexy!  You can sign up to his feed here if you like what you see.

Man, thank goodness I didn’t shell out those 10G’s I was planning on sending to one of the political candidates.
But seriously, i had no idea you couldn’t write them off. I bet you used to be able to, but like always, someone (or a bunch of someones) ruined it for all of us.

It’s surely not the end of the world, and definitely shouldn’t be one of the top reasons to donate to a cause, but it did get me thinking. Especially considering i was just about to donate for the first time ever to a campaign! I would have just slapped it right into my “contributions” folder at home, an added it to next year’s tax numbers.

I guess it’s good that I subscribe to Money Magazine then Their brief, and to the point, write up on this caught my eager eyes on my daily commute in this morning. It was titled, “Funding Your Candidate” (June, pg. 23) and shared 3 things to keep in mind:

1. You can give only so much.
There are actually caps on how much you can donate - imagine that! Here are the limits each person can donate for 2008 (they are adjusted every 2 years for inflation):

• $2,300 per candidate, per primary
• $2,300 per candidate, per general election
• $28,500 to a national party
• $10,000 per state or local party
• $5,000 per political action committee (PAC)
• UNLIMITED donations to a 527 - some sort of candidate lobby group. Maybe this is why I hear of people donating $100,000 here, $200,000 there?

2. Your info will go public.
W-O-W, never saw that one coming! (I’m being serious there, although to some of you, it will probably come across sarcastic.) Apparently there were some reforms after Watergate, and every time you make a contribution, you ALSO have to provide the following:

• your name
• your job
• your employer
• your address

Now, if your total donations are UNDER $200, then your info will just stay with the campaign. But, and a very interesting one indeed, if your contributions go OVER $200, your info then gets forwarded to the FEC, who then posts it on their website - FEC.gov !!! And then there is ANOTHER then, where it THEN gets picked up by sites like OpenSecrets.org, and FundRace.org who put them in searchable databases!

3. No Federal tax deductions for any contribution.
We already covered this one, but Money does a good job of pointing another option out for those deductible-hungry citizens. And that is to donate the said money to a charity that your candidate supports. This way, you help them out, the charity out, and yourself out

So, what will I be doing with this new found information? I’m gonna donate directly to my candidate of choice. As I’ve mentioned, I’ve never once done so in my lifetime, and since my budget only allows for amounts UNDER $200, I won’t have to get freaked out about my info all over the net.

This is a guest post by FWP. FWP from the Financial Wellness Project shares her stories, lessons, and progress reports as she attempts to get a handle on her finances and make sense of money while still living a ‘rich’, enjoyable life. Please consider visiting and subscribing to the Financial Wellness Project and share in her endeavors. She writes several times a week from the San Francisco bay area, in California.

This article is part of her ‘Friday Cures.. for a lean purse!‘ series.

I have been reading Dave Ramsey’s famous book, The Total Money Makeover. Being part of the personal finance blogging community, it is difficult to not have been exposed to the famed debt snowball concept.  The idea piqued my interest, thereby prompting me to go out and borrow a copy of his book from the local public library.

In the book, Ramsey discusses his ‘baby steps‘, where he lists 7 steps for achieving freedom from debt.  Over the course of this series, let’s visit each step and evaluate how it pertains to our lives . I hope that you too might find this exercise enlightening and useful.

Today, we visit step #1:

Huzzah! I currently have about $1300 in my emergency fund, an HSBC Direct online savings account opened with a 3.5% interest rate this past summer. (I am actually in the process of moving this money along with a few hundred dollars to a new Everbank account, due to a higher interest rate there.)

Why Should I do Such a Thing?

Before I began, I was skeptical and a bit confused. I had several thousands of dollars in consumer debt, about $7000 at the time. Interest was accruing on whatever was still sitting around at a high 16%. Could I really afford to NOT be putting in as much ’spare change’ as possible towards my debt payments, rather than hoarding a bit aside (for very little interest rate anyway) ? Did this really make any sense?

Online, a fellow PF blogger had put aside $1000 to put his mind at ease. Apparently he had learned the lesson the hard way.  He initially had not, and then suddenly encountered car problems and as a result, immense car expenses. He did not have the funds for this, and so went further into debt, borrowing money for those new expenses. This reaction disrupted his debt-paying rhythm, and troubled him tremendously. In retrospect, he decided that he should have put aside some emergency money, and that he would set aside at least $1000 to avoid such a setback in the future.

This scenario pretty much reflects Ramsey’s reasoning.  He mentions also that some become discouraged from moving forward with their ‘total money makeover’ from encountering such a potentially stressful situation.

What About if I Don’t Have $1000?

Put aside as much as you can today, even if it’s $500.  It is imperative that you make building your emergency fund a top financial priority.

Where Could I Store This Emergency Fund?

Ramsey recommends opening up a regular savings account for this purpose.  Do not set up an account that will impose a penalty for dipping into the fund, such as a certificate of deposit (CD).  We want to be able to access that money when we need to.

Furthermore, he suggests that we put it aside in an account that is NOT linked up to any of our checking accounts.  It would make it too easy and tempting for us to falter and transfer funds for supposed ‘emergencies’ from the savings account to the checking.

Pros & Cons

I can see the advantages of this ‘baby step’:

• I feel better knowing that i have some money — no matter how seemingly small — set aside that is liquid/easy to access, available to me in case of emergencies.
• I would not incur any fees/penalty with the right set up (i.e. not putting funds in a CD) in case of needing to withdraw those emergency funds.
• As long as an emergency didn’t cost me greater than $1000, I may be able to continue to make at least my minimum monthly debt payments without too much disruption, while slowly rebuilding the depleted funds.

Basically, I would feel a little more secure, knowing that I have some sort of backup just in case.

The main disadvantage, of course, is that that $1000 could be helping me to lower my future debt payments, by lowering the balance that the interest is applied to monthly. Using the money in this case instead would help me get closer to reaching $0 in debt.

However, I need to choose one set up or the other. After rationalizing and also consulting my emotions, the cost of not using the funds for a chunk of debt payment may well be worth the price of not having subconscious anxieties about a lack of backup resources.

Additional Resources

• You can learn more about building a savings account
• Check out the latest great interest rates on savings accounts in your area
• A savings calculator to determine when you might reach a particular goal
• Learn about paying yourself first
• Learn how to watch your expenditures in order to save

How about you?  Have you been putting aside money for an emergency fund of your own?  If so, how have you been doing? If not, why not?  What are your thoughts on this baby step?

This is a guest post by John, who writes over at Mighty Bargain Hunter.  John is a father of one and a card-carrying member of Generation X.  If you enjoyed this post, he would just love for you to subscribe to his feed.

Unless you’ve been living under a rock for the past few weeks, you know that the stock market, and the economy, are headed down quickly.  The past two weeks saw $2 trillion evaporate from retirement accounts.  Maybe some of that $2 trillion was yours, and you’re wondering if your retirement plans are derailed.

A while back I listed five ways that you can kill your retirement dreams:

• Count on anyone to provide for you in your old age.
• Make any assumptions about how much you need to save.
• Buy lots of stuff on credit.
• Believe that retirement is about anything except money.
• Believe that working 40 hours a week is enough.

The last point in this list is very important right now.

Unless you saw this crash coming and positioned your investments so that they benefited by the drop in the stock market, your money probably isn’t working as hard for you now as it did last year.  So that means producing at work or in your business and making money to replace what’s lost.  Protecting and diversifying your income streams is a priority.

There are two main areas that you can work in to protect your income streams: (a) your current job or business, and (b) a new job or business.  Doing one is great, but doing both is even better.

Protecting your current job means doing what you need to do (ethically, of course!) to stay off of the “short list” for being laid off.  You want to make yourself too valuable to the business to be fired.  Things like coming into work early, staying late, making and achieving goals (and letting your manager in on the process), taking on new responsibility, and learning new aspects of your job are some good ways to do make yourself more valuable.

Developing a side business, though, is likely what will make the difference between just getting by and being able to retire (or not) enjoyably.  This doesn’t happen by itself.  It means using “leisure time” productively and profitably.  It means investing in yourself and making the time to do so.  It means shutting off the TV, turning on your brain, and greasing up your elbows.  Money might be in short supply these days but time isn’t; cutting out two hours of TV three nights a week and working four hours on Saturday puts twelve and a half work weeks in your lap to focus on securing a future, lifelong income stream.

The market might have taken your money.  Don’t stand by idly and let the economy deliver a blow to your earning power.