Monthly Archives: December 2010

A Letter to Frugal Dad Readers: The Last Three Years

Posted on by  at  12:05 pm
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Dear Readers,

Today marks a significant blogging milestone. FrugalDad.com just turned three years-old. In those three years we’ve seen 1,000 posts, 22,480 comments, and over 4 million visitors to the site. Frugal Dad has also attracted over 11,000 subscribers.

It’s been a fun ride, and for those who weren’t around in the beginning (about 10,095 of you), I thought I’d take this opportunity to reflect a bit on how Frugal Dad got started.

Three years ago today, I sat down to build a little blog from scratch. I’d been writing online for several months, but up to that point, I’d been posting on other’s blogs and on article directories.

After stumbling across personal finance blogs like The Simple Dollar and Get Rich Slowly, I thought, hey, if they can do it, I can do it. I just wasn’t sure what “it” was.

Three years ago there wasn’t as much material about blogging readily available. Many newcomers were still using Blogger and other free installations to host their blogs.

I made a decision up front that I would establish my own domain, buy a cheap template, and pay for an inexpensive hosting package. I asked a fellow blogging newcomer, Pete from BibleMoneyMatters.com, to design our first logo.

Over the years, we’ve tweaked the site theme and logo a few times, upgraded hosting, etc. But three years ago we were still deep in debt, and were just beginning our own personal finance turnaround. I certainly couldn’t afford to take on new business expenses.

However, I decided to gamble $100 on the business idea, the latest in a long string of unsuccessful entrepreneurial efforts. For less than $100 I was up and running with a domain, first month’s hosting package, a template and my new logo.

The first couple months were pretty quiet around here. I wrote an article every day, but few were around to read it. That all changed in March of 2008, when on a whim, I decided to document a project my kids and I worked on – building a square foot garden box.

The post got picked up by LifeHacker after getting a mention from another frugal blog (BeingFrugal.net). Then it was mentioned on MSN.com, and Digg, and several other social bookmarking sites. I went from just a handful of subscribers to over 500 in just a couple weeks.

That early success motivated me to stick with it. I also benefited from good timing, as summer and fall of 2008 were tumultuous times, financially. The things I wrote about (living on less, paying off debt, being frugal, etc.) went from being weird to mainstream.

Even national publications began covering frugality, since so many people were now clamoring for ways to save money instead of spend it. Over the years, I’ve been quoted in the Wall Street Journal, The Washington Post, and Smart Money magazine, and the website has appeared in the Chicago Tribune, the Los Angeles Times, Ladies Home Journal, and a number of other national media outlets.

I’ve even given a couple radio interviews. My favorite was for a California-based personal finance radio show whose host was convinced I was up to no good for “hiding money in my home.” I finally convinced him it was only a couple hundred dollars for bug-out money, not $10,000 stashed under a mattress.

Writing About the Highs and the Lows

Early on, I tried to set myself apart from other sites by sharing more personal details about my life. It was something I liked about The Simple Dollar and Get Rich Slowly – I felt like I knew those guys after reading their blogs for a few months.

I wanted readers to be along for the highs and the lows, because for me, it was those experiences that often shaped how I spent money (emotional spending), and what I spent it on. It was my hope that readers could relate to these experiences and follow along, something you couldn’t really do with a “textbook” writing style.

Sadly, I lost my biggest fan, my mom, in September of 2009. She was only 54, and until her final year had been a strong, independent, successful, energetic individual loved and admired by many. She raised me as a single mom, worked insane hours to provide for us, and built her career without a degree in a male-dominated industry. She was an incredible inspiration, and my best friend.

I wrote about her illness and passing, not because it directly related to finances, but because that experience shaped my opinions on things like emergency funds, health care and overall financial preparedness. But I also wrote for selfish reasons. It was therapeutic for me to write.

People often asked how I helped care for my mom, then confined to a wheelchair, worked full-time, continued to be an engaged husband and father AND wrote for the blog. Well, the last part was my therapy. It helped to get those feelings out, and you helped by being there to read and give feedback.

Fortunately, Mom did get to share in the growth of Frugal Dad before she passed away. She always got a kick out of seeing her son’s work featured in those much larger publications.

The attention was exciting for me, too, and a bit nerve-wracking. After all, I’m just a husband and father who works full-time and writes a few articles early in the morning from his “frugal office.”

I didn’t graduate from a prestigious college. I don’t have any certifications or advanced degrees. And I’ve made just about every stupid financial mistake you can make.

This started out as a small post to mention the three-year mark, and as usual, I’ve rambled on longer. Again, I appreciate every single one of you who follow Frugal Dad. In the New Year, I hope to reach even more followers by being more active on our Facebook page, on Twitter, etc. If you happen to a part of those social media networks, I hope you’ll join me, and share the things you like.

I’m excited about moving into a new year, and I hope you’ll make 2011 the year you get out of debt, reach your savings goals, and accomplish your own personal finance turnaround. All signs are pointing to more rocky times ahead, financially, so I can’t stress enough the importance of getting your own household in order. Don’t worry; we’ll do it together. Chat again next year.

Stay Frugal!
Jason

How to Appeal Your Property Taxes

Posted on by  at  5:00 am
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Property taxes are one of the principal means that cities and municipalities use to raise revenue. Property taxes are generally based on two things: the value of the property itself, and the local rate of taxation. Both of these values can fluctuate depending on several different factors, including voter approved tax increases, city or state efforts to raise taxation, and the relative health of the real estate market.

How are Property Values Assessed?

The value of a property is usually “assessed” by a professional property assessor. His evaluation of the property sets the corresponding value of the property, and allows for the determination of the total amount of property taxes that are due.

However, depending on when this process was conducted and subsequent changes in the market, the actual value of the property in comparison to the last assessment may not match. For this reason, the process of property taxes appeals can provide significant legal reductions in the total amount of money owed by any given property owner.

Traditionally, the municipality sends out tax notices at the beginning of each year notifying property owners what the amount of their new taxes will be. Due to the recent economic crisis, cities and municipalities across the nation have increased the amount of property taxes they are collecting in order to bolster their shrinking revenue.

This means that many homeowners are currently paying far more in property taxes than they technically owe. Because of the nature of the government’s collection methods, it is the responsibility of the homeowner to verify that he is not being taxed more than his fair share.

Property Tax Appeals Process

To appeal property taxes, a homeowner should hire a professional assessor to survey the property. Each state and county has its own particular assessment methodology: when hiring the assessor, it is in the best interest of the homeowner to ask if that particular assessor subscribes to the methodology used by the city.

This will save time not only in the preparation of documents, but in the appeals process itself. If the assessor discovers that the property is worth less than what it was initially purchased for, the homeowner is entitled to pay less property tax.

Once the paperwork has been completed, the homeowner should take these papers into the city assessor’s office and ask that the rates on the property be lowered. It is vitally important that the paperwork is completed by an official property assessor in order to successfully appeal property taxes.

A flimsy or ill-constructed assessment will not impress city officials, who have everything to gain and nothing to lose by finding small flaws or bureaucratic inaccuracies that would potentially invalidate the legitimacy of the paperwork. By investing significant amounts of time in the preparation of an irrefutable claim to lowered property value, a property owner will ultimately save himself enormous amounts of stress.

Property taxes appeals can take anywhere from between 45 to 60 days, depending on the process of the individual municipality. Usually, the paperwork is submitted to the County Appraiser, who must then weigh the evidence in a series of fact finding hearings.

To find out precisely how long this process will take, research the policy of the local County Appraiser. At the end of this period of time, the municipality must issue a decision on the validity of property tax appeals. The decision will be reflected in the next year’s tax notice.

Living frugally is often a matter of being vigilant about paying for exactly what is owed, and not being accidentally or purposefully overcharged. By taking careful steps to ensure that everything, including the value of something as significant as a home or other piece of property has been properly calculated, enormous amounts of money can be saved.

Weekly Roundup: Christmas Eve Edition

Posted on by  at  5:00 am
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Just a quick note before the roundup to wish everyone a very Merry Christmas and Happy New Year. If you are like me, you’re probably looking forward to getting this ridiculous season of shopping behind us. I’m looking forward to getting the budget back on track in 2011.

The Frugal Roundup

My buddy J. Money got fired last Friday, which I believe now guarantees he’ll be a huge success down the road.

Here’s a look at the changes to 2011 tax brackets.

Why did I start advocating a one-year emergency fund some time ago? Because the average amount of time to find a new job is 211 days.

It’s a little early for spring cleaning, but I’ve got the itch to reorganize things so I think we’ll start with organizing the pantry. We need to toss the bad stuff and add more basic ingredients.

I’m a big fan of dividend stocks and mutual funds, so it seems natural that dividend mutual funds would make for a potentially good investment.

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10 Last-Minute Tool Gifts for the DIYer

Posted on by  at  9:07 pm
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The following guest post is from Jakob Barry. Jakob writes for Networx.com where you can find more information about DIY home renovation projects.

Tools don’t make easy gifts, unless the do-it-yourself (DIY) friend specifically says “I lost my screwdriver” – or something to that effect.

If that’s not the case, two of the most important considerations that go hand in hand when choosing tool presents are usefulness and price. Will the recipient truly use the tool often enough to justify presenting it and is it affordable?

That’s not to say your loved ones aren’t worth every penny you spend on them, but let’s keep frugality and practicality in mind.

And sometimes the use factor outweighs the price factor because the DIYer ends up fixing things around the house that would have cost more had they hired an outside handyman.

So what will it be? What does the DIYer in your life need that he doesn’t have or what does he have that needs replacing? If you’re wondering which direction to go, here are a few thoughts. Some may seem standard, but are no less important, and most range in prices under $40:

A Hammer

The DIYer needs a good hammer. Low quality hammers can be hazardous to the person using it and others around him. It can also effect how well a job is being done. What to look out for when purchasing a hammer?

  • It needs good balance, which can have long term effects on the arm of the person swinging.
  • A properly crowned face that will give each nail the correct punch
  • A solid handle with a good grip

Diagonal pliers

There’s nothing worse than trying to cut copper, brass, iron or steel wire and instead the teeth of your pliers get dented. The DIYer needs diagonal pliers he can rely on and not waist time searching for something better when his hands are full fixing a pot rack in the galley kitchen .

Knee pads

Categorize them as accessories but I consider them a tool. Many jobs are close to the ground causing extra stress on the knees. These would even work great in crawl space and similar situations.

Handy Pocket Level

For things that need to be straight and things that should be at an angle this is a unique device for any number of jobs and costs very little.

A Good Flashlight

There are flashlights and then there are flashlights. The DIYer needs a reliable one, preferably with an adjustable beam to see in small nooks and crannies and larger spaces like the back wall in the attic when checking for leaks.

Tool Belt

On the job a tool box can be cumbersome. A belt, on the other hand, allows the DIYer to carry many tools at once with easy accessibility.

Tool Box

After all is said and done, the DIYer needs a place to put his tools. The place to keep them clean and out of the way is in a sturdy tool box. Metal can be a very nice choice but unlike plastic, it heats up quickly if left in the sun.

Ok, up until now all items should be under $40. These last three are a bit pricier but great investments.

A Leatherman

it’s the multi-purpose tool that has many versions and will require some research to decide which one is right for your DIYer. Coming with a snug case that fits on a belt he or she will love the fact any number of small jobs from how to fix a running toilet to adjusting hinges on kitchen cabinets can be worked on with just one device.

A Dremel

This hand held tool is a must. It comes with a wide assortment of accessories for drilling, sanding, refinishing, sharpening, engraving, polishing, grinding and more. The DIYer will love it and find numerous ways to improve their home.

Ladder

How many times has your DIYer needed to reach something and stood on an unsteady chair or hopped on the counter? A sturdy ladder is essential to getting anything done beyond reach. When choosing one consider the need for interior and exterior work.

5 Smart End-of-Year Money Moves

Posted on by  at  5:00 am
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Start pondering your resolutions and queue up Auld Lang Syne: 2010 is almost over. Rather than wait for the new year to make changes, take a moment now to focus on a few smart year-end financial moves that can save you big bucks come tax time.

Use it or Lose it: Flex Spending

1. If you have a medical flexible spending account through your employer, check the balance and use it up before the ball drops on 2010 (or by the end of your company’s grace period).

Schedule appointments and/or purchase necessary medical items before the year ends, since you will lose any unused funds. Funds set aside in Flex Spending accounts are pre-tax dollars, so maximize this benefit by spending all set-aside funds.

While you are at it, assess your family’s upcoming medical needs and determine whether your Flex Spending level for 2011 should remain the same or be adjusted up or down. Make the necessary changes at your company’s next open enrollment window.

Here’s a look at other upcoming flexible spending account changes in 2011.

Give a Gift

2. The holidays are a great time to make a charitable cash donation to a cause of your choosing. Donors must be able to produce a receipt or bank/credit card statement for each donation. For cash gifts over $250 donors must have a receipt or written acknowledgment from the qualified organization.

A great way to kill two birds with one stone is to make a charitable contribution in someone else’s name. Most charitable organizations have holiday programs that allow you to make a donation as a gift.

Making a donation to a worthy cause on behalf of someone else is an ideal way to avoid the excess materialism associated with the holidays. A charitable donation can be a wonderful gift for children or parents alike, providing a great lesson for young and old.

Save for the Future

3. Open or contribute to an individual retirement account, such as an IRA, SEP-IRA, Roth 401(k), or Roth-IRA.

Making a year-end contribution to your personal retirement account is, in most cases, a direct way to lower your taxable income. If you are under 50, you can contribute up to $5,000 to a traditional or Roth IRA. The limit is $6,000 for taxpayers over 50. SEP IRA contribution levels are tied to your self-employment income.

Although a Roth IRA contribution does not reduce your Adjusted Gross Income like a traditional IRA, they are an excellent financial vehicle for those who do not plan on taking disbursements from their individual retirement account.

Roth IRA conversions are up sharply this year, since income limits have just been eliminated. If you can manage, make the maximum contribution to your retirement account allowed by law. The immediate tax savings (excluding Roth funds), plus the long-term financial boon, make this move a win-win.

Not sure which retirement plan is right for you? Check out the following comparisons of self-employed retirement plans and other retirement savings accounts.

Whittle Away at the Estate

4. Older investors should consider making a cash gift to children or grandchildren in order to lower their overall estate value.

The goal is to gradually reduce the value of your estate so that at the time of death, estate taxes are reduced or eliminated. Cash gifts of up to $13,000 per recipient ($26,000 if you give as a couple) are permitted annually without requiring a gift tax return. Better that your assets should go directly to your loved ones rather than into the coffers of the IRS.

For the very wealthy, there might be a major loophole in the 2010 tax code: specifically the Generation Skipping Transfer (GST) Tax rates for 2010. Generally speaking, a GST allows a taxpayer to pass assets to grandchildren, or much younger non-relatives. The tax rate, which was 45% in 2009, and predicted to go to 55% in 2011, has lapsed for 2010—meaning 0% GST tax on these gifts. Congress was scrambling to rectify this loophole, but for now, it is still on the books.

Time is Money!

5. I am always amazed at how many people will let the year come to a close with unused vacation days still available to them.

Sometimes if you don’t have holiday travel plans, and don’t have anything special to do, it might seem easier just to head to the office-well think again! Your time is money.

There are many productive ways you can use your hard-earned vacation time. You can work on your side hustle (if you have one), work a seasonal job, make and freeze homemade dinners to save on food bills, sell stuff on eBay or at a garage sale, or tackle a home improvement project.

Letting accrued vacation expire is like giving money back to your boss. Turn your extra vacation days into a financial positive instead of letting them go to waste. Even if you do nothing productive, catching up on rest and recharging your batteries will make you more productive in the new year.