MoneyCafe.com

The new tax credit is being implemented this month through reduced payroll deductions.  It’s equates to about $10 to $15 per person per paycheck.  This tax credit will be worth $400 for individuals and $800 for joint filers.  Most people should have seen a difference in their paychecks by now.

However, next year if you make more than $75,000 as an individual filer or $150,000 as joint filers you will start to be phased out of this credit.  So it’s a good idea to make sure your payroll deduction is appropriate or you may wind up owing an extra $400 or $800 to Uncle Sam this time next year.

CNN Money has a good article that covers some situations where you may need to make adjustments to your payroll deductions.

See:
http://finance.yahoo.com/career-work/article/106831/Here-Comes-Your-Stimulus-Bonus

More and more people will be buying homes for the first time.   Home prices and loan rates are both down considerably thereby making affordability better and better.  Combined with the new first time homebuyer tax credit, this is a great time to consider purchasing a home for the first time.  SmartMoney.com has a really good article for first time homebuyers (and other homebuyers) that explores common mistakes when purchasing real estate.

See:
http://realestate.yahoo.com/promo/10-mistakes-first-time-home-buyers-make.html

See also:
http://www.moneycafe.com/personal/featured/homepurchaseloans.htm
http://www.moneycafe.com/personal/featured/homebuy.htm

SmartMoney.com has a good article about reverse mortgages.  Specifically, they address the pitfalls of this type of financing.  The key point here is that reverse mortgages can be a useful financial vehicle, but clearly are not for everybody.  I have provided some links below to more reverse mortgage information published by the private senior organization AARP, the reverse mortgage industry association and the federal government’s HUD Department.   Hopefully, these publications read together will give a balanced overview of the reverse mortgage and help borrowers make more informed decisions about what’s best for themselves.

Reverse mortgages are like many specialty financial products.  They are a great idea to address special situations, but then they take on a life of their own and tend to get oversold.  Adjustable rate mortgages, option ARMs and negative amortization mortgages are all great financial products.  But they were oversold.  By oversold I mean sold to people who had no business getting them and to people who didn’t understand them, and many who didn’t want to understand them, as long as they got their house.  Throw in the burst in the housing bubble and that was the recipe for disaster for lenders and many borrowers. 

My sense is the explosion in the popularity of this product is creating a situation where people (and lenders) are getting into situations they don’t fully understand.  When you are young and make a mistake, time is on your side to help recover.  Senior citizen’s have a much more difficult path to recover from serious financial mistakes.   Senior citizens should always be cautious with financial decisions and especially cautious with reverse mortgages.  Rightfully so, a home is for many people their largest asset, the roof over their head and a source of stability in their life. 

Borrowers should pursue these mortgages with caution, education and careful planning.  Lenders should embrace customer education, complete and informed disclosure, and an underwriting process that is more than just numbers oriented to help ensure the product is right for its customer.

See:
http://realestate.yahoo.com/promo/the-pitfalls-of-reverse-mortgages.html
http://www.moneycafe.com/personal/featured/reversemortgage.htm
http://www.aarp.org/money/personal/reverse_mortgages/
http://www.reversemortgage.org/ConsumerGuides/tabid/251/Default.aspx
http://www.hud.gov/offices/hsg/sfh/hecm/rmtopten.cfm

Kiplinger.com has a brief article showing real examples of how three different families made financial changes to save real and significant money.  There are so many ways to save significant amounts of money by just making simple changes.  It’s just a matter of everybody sharing ideas and examples of what works for them.

As we previously wrote about here and here, saving money is like giving yourself a raise.   We have also noted how a penny saved is much more than a penny earned, because we pay for things with after tax dollars.   

Most people don’t think it can be that easy to give yourself a raise during this recession, but it really is.  We encourage you to share your money-saving ideas with the community by making a comment below.  Anonymity is okay.

See:
http://finance.yahoo.com/banking-budgeting/article/106839/Save-50-a-Day-How-Three-Super-Savers-Do-It
http://moneycafe.com/blog/2009/01/save-an-extra-500-this-year/
http://moneycafe.com/blog/2009/01/save-an-extra-extra-500/

E*Trade has a newly upgraded retirement planning tool.  It’s free and can help with financial planning whether you are 20 years old and just starting or already well into retirement.  They call it their Retirement QuickPlan and tout that it is 4 steps, 10 minutes and a real plan.  It’s definitely worth spending a few minutes with this tool.

See:
https://us.etrade.com/e/t/plan/retirement/quickplan

On May 11th, the price of a first class stamp will increase by about 5% to 44 cents.  It may a good time to save some money and stock up on the forever stamp which sells for 42 cents but can be used after the May price increase.

Another option for a postage solution is to try Stamps.com.  They have some creative and convenient products that allow you to print postage directly on your PC.  They also have Photo Stamps which are fun and expressive.  Throughout 2009 they are offering some deals.   To receive $45 in Free Postage (the current $25 offer plus an additional $20) use coupon code “COUPON1″.  For Free Shipping on Photo Stamps, use coupon code “CJ2009″.