The 0% introductory offer on balance transfers and purchases is a very common tactic used by credit card issuers to lure new cardholders. Credit card issuers hope that by offering a 0% interest rate, the new cardholders will stick to using the card after the introductory period expires. But rather than looking at this as a marketing ploy, there are ways to make this work to your advantage. We will explore these ways to make use of 0% deals to your advantage.

Transfer High Interest Balances: The most obvious way to take advantage of a 0% interest rate is of course to transfer balances from higher interest rate credit cards. This can save quite a bit in interest payments. This technique will work well for those in credit card debt and are looking for a way to pay it off faster. By combining Dave Ramsey’s snowball method together with temporarily paying 0% interest rates, you can get of out your credit card debt much faster.

0% Interest on Purchases: I am generally against making use of 0% deals for purchases. That is because I always advocate paying your credit card bills in full every month. But sometimes, carry a balance may make sense. For example, if you are starting a new business, you could taking advantage of such deals on a business credit card and get a new computer. You may want to carry a balance simply to build a business credit history (and we assume you have the money to pay it off in full if you choose to).

Earn Rebates and Rewards: As silly as it may seem, some cards reward you for actually doing a balance transfer even though they do not offer any 0% interest rate. For example, if you transfer a balance to the US Airways MasterCard, you will get 10,000 bonus miles! So even if you normally pay your bills in full, transferring a balance to get the bonus miles may actually make sense to folks who play the frequent flier game.

Rules and Guidelines

However, to play this game, you need to follow a few rules and be aware of a few things.

Figure Out What the Rate Will Be: If possible, calculate what your interest rate will be after the introductory period so you can plan accordingly. Either make sure your balance is paid in full by then or decide if it will be cheaper to not take advantage of the 0% interest rate and stay with the current card.

Pay More than the Minimum: This is something that would be beneficial to all credit card users, but especially so if you are using a credit card with a no interest offer. In the end if you still have a balance, at least it will be smaller and not accrue as much interest as if you just paid the minimum payment during the intro offer. The typical minimal payment is between 2% and 4%.

Be Aware of the Rules: Make sure you understand where the 0% interest applies, if it is just on balance transfers or only on certain purchases. Also make sure you are aware of the time period and the exact date the intro offer will be over. If you need to, put the date on a calendar so you won’t be surprised when you have to start paying interest on your credit card.

Pay on Time: Always pay your bills on time (especially when you are on one of these 0% deals. Pay late and you could see your rates go from 0% to perhaps even default rate levels! Sign up for autopay and make sure you have sufficient funds in your bank account.

0% APR Donts

These are things that will sabotage your efforts in taking advantage of a 0% interest rate:

Waiting to Pay Balances: Don’t let the 0% interest rate run out on balance transfers. You could end up paying a higher interest rate after the introductory rate than you were on the card you transferred from. Try to pay off the balance transfer before intro period ends.

Getting into Debt: Don’t use a 0% offer as an opportunity to put yourself further into debt. Make your purchases while the rate is 0% and pay off balances when the introductory period ends.

Summary: – 0% deals offered by credit card issuers can be a great tool in the right hands. You could use it to pay off your credit card debt faster, or manage your cash flows when you get 0% for purchases. Savvy frequent fliers can even earn bonus miles for just temporarily transferring a balance. But the most important thing is to use it wisely and not fall into the trap of getting into debt.

How to Make the Most of 0% APR Offers is a post from: Beating Broke, if you enjoy it, please visit us and subscribe to the Feed.

Reading about all of this brings up the questions.  Could you give it all away?  Would you?  Should you?

At the real bottom of this is a more important question.  Why do we build wealth?  What purpose do we give our lives that we strive to attain wealth.  In Warren Buffetts case, I think you could argue that he has always seen it as a challenge.  Bill Gates saw a technological breakthrough and found a way to improve upon it.  Again, a challenge.  The challenge is not usually about the money though.  Buffett saw the building of the businesses as the challenge.  He wanted to be a better investor than anyone else.  Mission accomplished, I’d say.  Gates’ passion was in geekery.  He wanted to build a better computer.  Also, mission accomplished.

Gates and Buffetts passions made them very rich.  And, since you can’t take it with you, it’s gotta go somewhere.  Both have chosen to give a majority of their wealth away.  Kudos to them.  But, would you?  Could you?

For me, I would like to think that I could and would give most of it away.  Since I don’t have any to speak of, it’s easy to say that.  Ask me again when I’m 50 ish.   Many Christians would say that it’s the right thing to do.  Non-Christians will have a different reason.  Some would say that we have a moral obligation to make someone elses life better and to share the wealth.  Whatever the reason, I think it really comes down to doing good.  Most people are good by nature.  And doing good for others is in our nature.  That doesn’t mean that we all want to be paupers who volunteer all their time, but most of us are happy to share some of our spoils with those less fortunate.

What about you?  Would you give it away?  Why?

Could You Give It All Away? is a post from: Beating Broke, if you enjoy it, please visit us and subscribe to the Feed.

Income Tax Rates

Currently, the proposed budget intends to make some changes to the income tax rates or income tax brackets. President Obama’s 2011 budget will keep the previous tax breaks for single taxpayers making less than $200,000 and married couples making less than $250,000. In fact, the 28% tax bracket is expected to be expanded. However, the 33% tax bracket is expected to rise to 36% and the top 35% tax bracket should end up being 39.6%.

Capital Gains and Dividends

There will no longer be a 15% long term capital gains rate for those in the upper brackets. Their rates will go back to 20%. For individuals in the lower 15% income tax bracket, they might see their long term capital gains rate go to 10%. Under Bush, the lower 15% tax bracket had a 0% capital gains rate. In 2011, dividends (excluding mutual fund capital gain distributions) that were once taxed at a 15% tax rate are set to be taxed as ordinary income for the highest tax bracket. Obama’s proposed budget though only wants to increase the dividends tax rate for the top bracket from 15% to 20%. It remains to be seen what will happen but in any event the top bracket will be paying more taxes on dividends.

Estate Taxes

The estate tax (also known as the death tax) exemption will return to a $1 million exemption and is set to increase to 55% for estates over $1,000,000 dollars. This year (2010) happens to be the best year to die (that sounds horrible but true) because the estate tax was completely phased out this year (unless Congress acts to retroactively change this).

Mortgage Premiums

After December 31, 2010, Americans will no longer be able to deduct mortgage insurance premiums from their taxes if Congress fails to act. This was a special deduction for taxpayers/homeowners who were paying these insurance premiums for mortgage insurance contracts issued after December 31st, 2006. Although this deduction had an eligibility income cap at $100,000 for families (fully phased out at $110,000).

Child Tax Credit

Currently the child tax credit is $1,000 per child, but in the new year it will drop down to $500 and may not be refundable to all taxpayers. The tax credit for married couples (filing jointly) started to phase out at $110,000 (AGI) and for all other taxpayers (except married independent filers) it started to become phased out at $75,000. In the beginning of this year, Obama has proposed increasing this credit for middle-class families but nothing has been approved as of yet.

529 and Coverdell ESA Plan Changes

529 Plans allowed parents to invest after-tax dollars in an account which could grow with withdrawals being tax free if used for qualified education plans. In 2011, 529 plan (college savings plans or higher education plans) withdrawals will not be allowed tax free to pay for internet access or computers. Also, Coverdell ESA Plans will have changes. Coverdell ESA are similar in some ways to 529 Plans, except they are geared for elementary/secondary education expenses and have maximum contribution limits. After 2010, the max contribution limit will fall from $2000 a year to $500 unless Congress acts.

Business Taxes

There will be a few business taxes that will change including the section 179 expense deduction. The maximum expense deduction for 2011, with regards to the 179 expense deduction that applies to small firms and companies, will drop from $250,000 to $125,000 in 2011. There are limitations with this tax deduction as well.

Other Tax Credits

There will be limitations on the tuition credits and the earned income tax credit.

It is a tricky situation for the current Commander-in-Chief. If the cuts are allowed to expire, policymakers will be given gruff for raising taxes. If the cuts are extended for a longer term, the future of the deficit begins getting worse real fast. The situation leaves not much room for compromise between the government and the taxpayers, especially during a time of recession.

This guest post was provided by TaxDebtHelp.com, a company that provides IRS tax debt help through a collection of self-help articles that serve as a guide for taxpayers facing IRS tax problems. Moreover, articles are complimented and backed by a diverse team of tax professionals offering tax relief services for those taxpayers facing serious issues.

Important Changes to Tax Cuts, Credits and Deductions in 2011 is a post from: Beating Broke, if you enjoy it, please visit us and subscribe to the Feed.

The situation is this.  My wife and I have been living in our current home for almost 6 years.  While the interest rate on our mortgage isn’t astronomical (6.75%), it is still a few points higher than what we could get now if we refinanced it.  Also, we have a second mortgage that is at 9%, but is pretty small in comparison to the first mortgage.  With rates as low as they are, I though that it might bear looking into refinancing the loans.  I had an appointment with our loan officer and based on the data I came home with and some other fiddling I’ve done, here’s what I’ve come up with.

If we refinance, we should be able to get in at around 4.375%.  That’s a pretty good drop from the current rates.  Because of closing costs, I estimate that it will take about 2.6 years for the refinance to be a positive thing.  If we were to sell at any time before that, we’d be losing money if we refinance.  Of course, the catch is that we are planning (hoping really) on moving to something a little bit bigger in the next 2 years.  Which, if that happens, would mean that the refi would be a bad idea.

If you’re following closely, you’ll notice that there really isn’t a need for advice there.  Well, here’s the rub.  If we refinance, our overall payment would be reduced by over $100.  If I were to take that $100 and use it to pay down a credit card or any other bill, it would be a great help.  Also, if I use it to pay a credit card that has 12% interest, I’ll be saving that 12% on that $100 which makes the refi pay off quite a bit faster.  *I should note that I am not all that good with math so I don’t know how to figure in the savings on CC interest into the equation.  If you do, feel free to say so in the comments.

So, here’s your call for advice.  What would you do?  Would you not refi and just bear with it since you’re planning on moving in 2 years?  Or would you do the refi so that you could reduce the payment and use the extra to help pay stuff off?  Leave your advice in the comments below!

Mortgage Refinance Advice Requested is a post from: Beating Broke, if you enjoy it, please visit us and subscribe to the Feed.

By J. Steve Miller

Occasionally, authors approach me to read and review their books.  I usually do so, happily.  I enjoy reading, and anytime I can get a book to read for free, it makes my wife happier.  It’s hard for her to argue about my getting more books when they are free.  So, that’s my disclaimer.  J. Steve Miller sent me a copy of this book to read.  He also sent me a copy to give away, which I will be doing in the coming weeks.  Both are autographed too!

So, on to the book.  I’ve never read a finance book that was written in the same way as this book was.  Most of them are so matter of fact that they are beyond dry.  I have to take toothpicks an prop my eyelids open to finish reading them. (I exaggerate, but you get the idea)  But, this book was actually fun to read.  I think the pivotal reason why is that it’s written in a conversational tone.  Very nearly like most of the fiction books you would read.  Instead of just spitting out the facts and information for us to chew through, Miller gives it to us with a story.

Now, I can’t say that it’s an award winning story by any means.  There’s only so much you can do with the topic, after all.  The basics of the story follow a group of high school students (the counterculture club) as they are taken under the mentoring wing of a teacher from their high school.  Over several weeks worth of breakfasts at “Hash Browns” diner, she teaches them some key tenets of personal finance like ways to save your money, smart investing principles, and also ways to enjoy your money once you have it working for you.  There’s several places where the dialogue makes it seem as if the students are the ones feeding the information to us, which breaks the story facade, but if you ignore those, the story is quite good.

Despite the few flaws in the story, I think Miller makes an excellent attempt at making personal finance easy to learn.  The book was great for me, but I think it would be even better as a tool for teaching high school aged children about finances.  I can’t say for sure if that’s what Miller intended, but I would guess it is.  I think it would make an excellent addition to the curriculum of a school.  It would hit a roadblock with some of the religious undertones, so you may have to just buy a copy and gift it to a high schooler you know.

You can pick a copy of it up at Amazon for $15.99.  (Or you can wait for the giveaway and try your chances there.)  For more information, (description, sample chapters, author interviews and reviews) see the press page here: http://jstevemiller.com/blog/?page_id=578

Enjoy Your Money! How to Make it, Save it, Invest it and Give it is a post from: Beating Broke, if you enjoy it, please visit us and subscribe to the Feed.

If I told you, I would give you $5000 for groceries every year, if you’ll spend an extra 30 minutes planning your shopping list, would you do it?

That’s exactly what the stores & manufacturers do every week with sale ads and coupons. Yet, nearly 90% of coupons go unredeemed each year and countless shoppers buy products without ever glancing at the sales ad or price tag. A little extra effort, a bit of advanced planning and mastering the art of couponing can go a long way towards reducing your monthly expenses.

Coupons are a multi-billion dollar industry – last year, over 500 billion dollars worth of coupons were distributed. Most of them landed in the garbage (or, hopefully, the recycle bin!). So, why are consumers throwing all that money away? The answers I hear when I ask readers, friends & family this question typically include “it takes too much time,” “it isn’t worth the effort” and “I can’t find coupons for the things I buy.”

Coupons take too much time.

I spend an average of 20-30 minutes clipping coupons each week. I spend about half an hour in the store doing the actual shopping. I don’t count the time I spend putting together grocery lists for Inexpensively, since there are literally hundreds of blogs dedicated to creating coupon ad matchups. The average shopper can completely skip that step (but, for the record, I spend about 30 minutes per store). Grand total? One hour for coupon clipping & shopping.

How much time do you spend wandering the aisles at the grocery store?

Coupons aren’t worth the effort.

We’ve already discussed the time spent, which I think is the bulk of the “effort” people refer to with a statement like this. Clipping coupons isn’t too taxing – I promise. I typically cut coupons in front of the television. I’ve even let my children help out now & then. If a 7-year-old can handle it, I think most adults could manage as well.

The question becomes one of time again – does the money you save really justify the extra time? My grocery bill typically shows a “total saved” (including sales & coupons) of around 50% – sometimes way more, sometimes less. I once tracked every penny saved & spent in Quicken. My monthly grocery budget was $400 per month. That year, I saved over $3000 in store sales & $2000 in coupons. It breaks down to about $95 per hour.

How much do you make for an hour of your time?

There are no coupons for {insert your favorite product here}.

Maybe not, but I promise it will eventually go on sale. Everything does – even the pricey gluten free foods my own family requires. Even if you don’t use coupons, pay attention to the weekly sale ad, check clearance racks and know where to find manager specials. You can find discounts on meat, produce, bakery goods, deli products and organic foods.

Plus, you’ll be surprised at the wide variety of coupons you can find if you start to look. Contact your favorite companies, and they may add you to their mailing list, send you loyalty offers or tell you where to print their coupons online. The store coupon machine (called a Catalina machine) will frequently spit out coupons for $2 off your next $25 purchase – you can buy anything you want!

Why would you throw away a coupon that’s good on anything in the store?

Getting Started with Coupons

Once you start to see the impact coupons have on your budget, it’s easy to dedicate an extra 30 minutes to planning a shopping trip. Here are a few quick tips to help you make the most of your time:

• Collect multiple coupons so you can really stock up on your favorite products.
• Don’t stress over clipping every coupon or missing an expiration date – it will cycle back around again soon enough.
• A sale is great and a coupon is awesome, but using a coupon on a sale item will cut your costs drastically!
• Google “your favorite store + weekly deals” to find a grocery deal site that covers the stores in your area – they match the weekly sales with coupons so all the hard work is done for you.
• Get into the habit of carrying your coupons everywhere you go – you’ll be prepared for spur of the moment trips and ready to take advantage of unadvertised specials & markdowns.
• Sort the coupons for your weekly grocery trip in order of the store aisle – you’ll save time, using the stack of coupons as your grocery list as you shop.

I have been using coupons for almost 15 years now, and I know they’ll be a part of our life no matter how far from broke we become. Hey – if it’s good enough for Warren Buffet, it’s good enough for me!

Heather Sokol is the married mother of 3 beautiful, active girls. While they do their best to keep her broke, she’s beating it with money saving tips, deals, coupons and grocery lists at Inexpensively.

Coupons: Are They Worth The Hassle? is a post from: Beating Broke, if you enjoy it, please visit us and subscribe to the Feed.

The concept is pretty simple.  Automating your finances can go to far.  It can cause you to “set it and forget it”. And that can lead to expenses getting out of control.  Which is where Baker’s Unautomate Your Finances comes in.  The eBook is 83 pages of wonderful advice for minimizing your financial footprint and living a life of controlled finances.  He’s got a pretty impressive list of bonuses that you can get when you buy the eBook too!  There’s two awesome interviews.  A video one with Leo Babauta, who writes a ton on minimalist living.  And there’s an audio interview with J.D. Roth of GetRichSlowly.com (And author of Your Money: The Missing Manual).  He’s also throwing in the templates that he’s created for the program’s minimalist budgeting system.  One in .pdf for printing and one in excel for use on a computer.  And finally, he’s giving you all the updates you can handle.

And he’s only charging you $17 for the whole shebang.  I know he’s planning on upping the price to $27 eventually (I don’t know when) so I wouldn’t wait too awful long if your interested.  This program could be a great thing for those of you who are feeling out of control of your finances and want a more simple way of getting them back under control.

You can read a bit more on the program and the eBook by visiting: Unautomate Your Finances

Disclaimer: I’m an affiliate of both Amazon and Unautomate Your Finances.  If you click through and end up buying either the books I’ve linked or the eBook from Baker, I will get a portion of that sale.  That didn’t sway my review, I really do believe all those things I said up there.  Affiliate links like those are how I pay to keep this site operating, so I appreciate when you do click through.  Thanks.

Unautomate Your Finances is a post from: Beating Broke, if you enjoy it, please visit us and subscribe to the Feed.

UPDATE: I did some digging and found the following on the community forums on Dave’s site.  It would seem to be a preliminary idea for the Town Hall for Hope.

You know as well as I do that the economy is causing a lot of fear among Americans. We are exploring the possibility of holding a one-time national event called Town Hall for Hope to offer true hope for the future. I would address the nation live, speak briefly about the history of the American economy and provide biblically based answers to the real financial issues facing the average American family. I would then take questions from live audiences gathered all around the country.

Any guesses or theories out there?  Share them in the comments!

If you want to follow some folks that work for Dave Ramsey and have the inside scoop, here’s the list of the twitter accounts that I have been following:

• B_Dubs
• katiecrenshaw
• joeleavitt
• chrismefford
• melissaczech
• christhomas
• lancetosborne

And of course, there’s always DaveRamseyLIVE and TownHallForHope too.  You can also do a search for the hash tag for Town Hall for Hope (#THFH).

UPDATE 2: Dave couldn’t hold it in until tomorrow.  He announced it during the live show today.  You can visit http://www.townhallforhope.com to see further details.  Looks like a pretty cool event.

Big Announcement Coming From Dave Ramsey is a post from: Beating Broke, if you enjoy it, please visit us and subscribe to the Feed.

The book is currently selling on Amazon for $9.99 but used copies are going for about $5, so you won’t be saving yourself a ton of money, but any little bit is better than nothing. And who knows, you might get a tip that will save you thousands.  Free advice isn’t very good usually, but you can bet that any advice that Suze Orman is giving out is pretty good.

Download the book from the Oprah Website through January 15th, 2009.

Or, buy it from Amazon if you’ve missed the deadline!

Thanks to J.D. for pointing this out!

Get Suze Orman’s 2009 Action Plan Free! is a post from: Beating Broke, if you enjoy it, please visit us and subscribe to the Feed.

And really, can you put a value on your freedom?  And are you really free?

You get up at 5 a.m. every morning to hop through the shower, commute to some office somewhere, and sit at a desk for 8 hours so some company can make a few more bucks.  Oh, and they might pay you for it.  Are you really free?  Can you do what you please?  Why not?

We all accept the yoke of the “job” because we want things.  And we need things.  The things we need are relatively minor in most cases.  It’s the things that we want that really drive us to go to work each day.  Part of our goal as Personal Finance students (that’s what we all are) is to realize what wants we really care about acheiving.  An example; As usual, black friday rolled around with lots of great deals.  Several such deals revolved around various sizes of LCD and Plasma HDTV sets.  I really, really want one.  Badly want one.  As a result, I’ve struggled with the issue all week.  Should I go get one? Shouldn’t I?  In the end, I decided against it.  Firstly, it wasn’t in our budget.  I shouldn’t have to go farther than that, but I did.  Secondly, I’ve gotten much better about recognizing and separating wants from needs.  I do want a new fancy tv.  But I don’t need it.  And until I do, it’s going to the bottom of the want list.

Recently, there has been lots of talk about our economy and how bad it is getting.  Along with that has been talk about the thousands upon thousands of layoffs that have been announced.  Luckily, I’m not one of them.  Yet.  I really don’t foresee me joining them.  For that I am thankful.  Or at least I was until I read the Fire Fly Manifesto.  Ok, the thought of losing my job is enough to put my blood pressure into previously unseen heights and give me a stress ulcer.  But that manifesto makes it sound like it’s all gonna be ok.

It’s an incredibly motivating piece.  And I truly came away from it wondering if it wouldn’t be better if I did join the corps of the unemployed.  And then I broke out in sweats.  But I did think about it.  And there is a part of me that wishes I had the freedom of the unemployed to do with my time as I choose.

If you have recently lost your job (especially you) or if you feel that your job is threatened, you need to read this paper.  It’s short and sweet and free.  The author is pushing his site and his upcoming book, but only lightly and the Fire Fly Manifesto really stands on it’s own.  Even if you don’t feel threatened, you should read it.

What is Freedom Worth is a post from: Beating Broke, if you enjoy it, please visit us and subscribe to the Feed.