Should I Charge It?

I havent' had much time lately to research or write articles for the blog, but now that the ALS budget is complete and the presentation to the board of directors was made last night, I can get back into the swing of things here.

One question that often comes up in life - should I charge it? Or more specifically, should I charge it and pay it off over time?

I ran across an interesting article on Kiplinger.com on this topic, so I'll post the link here.

There was a saying in a book I read, that "Credit cards are like nitroglycerin, handle with care!" The use of credit cards is not necessarily bad, but it is an expensive way to finance your purchases. In other words, if you use a credit card, pay off the balance each month - that way it becomes a convenience to use a card. However, if you charge things but keep a balance, be prepared to pay a steep interest rate. The above referenced article gives an example of the detrimental effect of carrying credit card balances.

Income Tax Withholdings

The filing deadline for federal tax returns was two days ago, April 15. If you received a large refund or owed a lot, you might want to consider adjusting your withholding levels by filing a new IRS Form W-4 with your employer.

If you got a big refund, don’t think of it as a gift from the government – because it isn’t. What has really happened is that you had your employer withhold too much from each paycheck, essentially giving the federal government a free loan for the year. Decreasing your withholdings, in this case, would put more money in each paycheck, rather than getting it all back in one large lump sum at tax time.

If you owed money, don’t think the government is out to get you – because it isn’t. What has really happened is that you had your employer withhold too little from each paycheck, creating a tax liability for you at the end of the year. If you do this too often or end the year with a larger than normal liability, the IRS might start taking a closer look at your tax return and may even charge penalties.

To make an adjustment to your withholding levels, simply complete a new IRS Form W-4 and submit it to your employer’s payroll department. A useful tool provided by the IRS to help determine how much to withhold can be found here.

Should You Refinance Your Mortgage?

For most people, their home will be the biggest investment they make, and the associated mortgage will be the biggest debt they will have. Here's some tips on refinancing (or not) from the American Institute of Certified Public Accountants:

Refinancing Your Mortgage

With interest rates dropping as a result of the Federal Reserve's new program to purchase Treasury bonds and mortgage-backed securities, now may be a great time to refinance your home. Refinancing often benefits the homeowner by providing access to equity and a lower interest rate — which might mean lower monthly payments on your mortgage and more savings in your pocket. Before refinancing, consider the following:

• Reducing the life of your loan may cause your monthly payments to rise, but you will save on interest payments in the long-run.

• Extending the life of your loan can potentially lower your monthly payments, but make sure that your interest rate is simultaneously reduced.

• Refinancing may not be for you if a majority of your loan has already been paid off or your property has decreased in value.

Consult with a CPA or a financial advisor before making financial decisions such as these.