Saving money for your retirement is a very smart investment for your future and the money should be left to compound and grow until you reach retirement age. Sometimes things happen and you may need to tap into your retirement funds earlier than planned. This is not a good option (most of the time), and really should only be done when there are no other options available to you.

Hardship Withdrawals

Due to the current economic conditions, more people are raiding their retirement funds claiming “hardship”, which is only granted for specific reasons, according to the IRS guidelines. Hardship withdrawals of retirement funds may sometimes be taken to prevent foreclosure or for unreimbursed medical expenses. Some companies have tougher limits for these withdrawals than others.

There is also an opportunity cost when you withdraw from your funds for the reason of a hardship. This means that if you withdrew the money in this way, you will be unable to contribute to your 401(k) for six months. Not only can you not contribute to it, but your company won’t be able to either, so that “free” money you may be getting by them matching or giving a percent to you will be gone.

Penalties and Income Tax for Early Withdrawals

You should not use your retirement funds before you reach retirement age, because it can have penalties, you may have to pay taxes on it, can’t contribute to it again for six months, and you’ll lose a big asset for your future.

When you take money out of your retirement funds, depending on the tax bracket you are in, you could have to pay a penalty and income taxes on the whole amount you withdrew. Another major concern is that if you are under 59 and a half years old, you will have to pay a ten percent early withdrawal penalty fee.

Retirement is Protected from Bankruptcy

Another big reason to not withdraw money from your retirement funds is that it is an asset that if you file for bankruptcy, is untouchable by collectors. Federal law is able to protect your 401(k) assets from creditors, so this is one area that you do not want to lose money from, especially if you are possibly thinking about going bankrupt in the future.

With all of the drawbacks and penalties for withdrawing money from your retirement fund, taking money out of this fund is not a good idea, even if you really need it. Before thinking about touching that money, exhaust all other loans and areas of possible help first. Only take money out if you can’t get it anywhere else and see absolutely no other option.

The unemployment rate is higher than it’s been in more than 26 years. If you’re not already laid off, you may be concerned that your job isn’t as stable as you’d like. Most of the time, you can’t prevent being laid off, but there are some things you can do after you get laid off to help you until you find a new job:

Don’t Burn Bridges

You’re probably going to be angry or upset if you lose your job. The stress can sometimes cause people to freak out and maybe even fight or yell with their boss. Don’t burn bridges with your employer – they will be giving you references when you apply for new jobs and you want them to remain on your side. There’s always a possibility circumstances will change and your employer could bring you back to work, too, but you can be sure that won’t happen if you cause a scene when you’re laid off.

File for Unemployment Benefits

Even if you think you won’t be unemployed for long, make sure you file for unemployment benefits. Usually you can do this online or by phone. File as soon as you are laid off, since receiving benefits can take several weeks. If you happen to land a new job before then, even better.

Prepare Your Resume

Make sure your resume is updated to include the skills and experience you’ve gained from your most recent employer. Update the entire resume as it is the key to getting interviews with potential new employers. Make sure it’s a reflection of who you are as a person and your abilities as an employee.

Apply for New Work

Don’t just sit back and collect unemployment, hoping someone will come to you with a job offer. The increased number of people unemployed means higher competition for every job opening. Start applying. Use job search sites like careerbuilder.com, and your local newspaper. Apply to anything you are qualified to do. If there are particular companies you would like to work for, check their website to see if they have any job openings advertised on it. Many times, they will list job openings on their website long before they advertise them on job search sites or the newspaper, so you increase your chances of being hired if you apply to them early.
Reduce Living Expenses

Even with unemployment pay, you’ll want to make every effort to reduce your living expenses until you are employed again. Turn off or reduce your cable television package, avoid eating in restaurants or getting take out, avoid using credit cards or taking on new debt. The more you do to live within your means, the better you’ll be once you’re employed again.

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Tax preparation season is well underway. If you have recently had your taxes prepared and found out you owe money and have no means to pay, what should you do? This is a question many people are faced with every year. First, don’t panic. There are some steps you can take that will help you pay back what you owe.

The most important thing you can do is to still file your taxes by the deadline. When you file your taxes you should include a check for whatever you can pay. Even if you can’t pay one cent however, you still need to file on time to avoid a steep penalty fee for late filing.

After you have filed, in approximately 45 days you will receive a bill from the IRS with calculated interest for the balance of what you owe. For some people this 45 days in enough time for them to come up with the money. Some people just need a few extra pay checks and if that is you, waiting for the bill is an ok option. If you know you will still not have the money in 45 days you will need to determine how you will be able to pay off your balance.

First, determine if you have any means to get the money. Some people will use resources that they normally would not like to. Can you take a loan out of your retirement, cash in sick or paid time off at work, cash in a mutual fund or take a line of equity out on your home? If you truly do not have a resource to get the money, your next best bet is to file an online payment agreement on the IRS website.

According to the IRS website, if you owe $25,000 or less in combined tax, penalties and interest you can apply for an installment payment agreement. Most people can file right on line and will receive information on approval in about 10 days. Sometimes you will need to call the IRS directly to get approved. When you fill out the application you will have two options to apply for. The first is for a 120 day extension. You should use this option if you know that within 120 days you will be able to pay in full.

If you know you will not be able to pay in full within 120 days then you should apply for the second option. The second option will set you up with a monthly payment plan and money can be taken right out of your checking account. There are some fees involved with this option and they do vary by income.

If your situation is dire, you may also be able to qualify for an offer in compromise. These are rarely given, but do allow a tax payer to settle their amount owed for a lesser sum. You will have to show true hardship and the IRS will only accept such a plan if they believe there is no other means for you to pay back what is owed.

Are you trying to save money, but just can’t seem to figure out how? Believe it or not there are some simple things that you can do that will get you saving. Follow these tips to save $100.00 or even more every month.

Your first step to monthly saving is to look at all of your household bills. Are there services you are receiving that you just don’t need? Most of us have several that we really could do without. Simply downgrading your cable package or eliminating extra channels you pay for like HBO can help to start the savings. Could you bundle your phone, cable and internet together to save money. Many people do. You may also want to consider eliminating your land line altogether. Most people have cell phones and find they don’t use their land line enough to warrant keeping it.

You should also look at other bills like your insurance premiums for example. Many times just with a few phone calls you can find a rate that is more favorable than your current one.

Next, look at what you spend on food each month. Do you grab your coffee to go and what about lunch when you are working? Do you pick up take out or head out to dinner frequently? If so, stop. Make your coffee at home and pack your lunch. Plan your meals ahead and save take out and dinners out for special occasions. Fixing it your self can be a fraction of the cost you spend out every day.

How about your grocery bill? Do you buy items that you really don’t need? Most of us do. Make a list before you head to the store of the items you really need and then stick to it. Don’t be tempted to add extras to your cart. You can also clip coupons and plan you meals around store specials that week for additional savings.

Finally, look at what you spend on entertainment. While we all need to have fun, there are ways to still do so and save money at the same time. If you rent movies a lot or purchase books, check out your local library instead. You might be surprised at the selection of items waiting for you that won’t cost a thing. Check your local paper for free or low cost events in your area. There is usually plenty available for people on a budget.

As a final piece of advice, keep in mind that it is only a savings if you save the money and don’t spend it elsewhere during the month. Often people will work hard to lower costs and save the money only to turn around and spend it foolishly somewhere else.

Comparison shopping is when you look at a product that you plan to purchase and compare the price of the same or similar product at different stores or locations. You then purchase the product where you can get the best bargain. You can price compare just about everything from your groceries to a new vehicle, children’s toys to finding a hotel for you next vacation. Avid bargain hunters know just where to look to find the best deals. Here are some tips to get started:

One quick and easy way to comparison shop is to look at the store’s specials. For example ,you can look at several different advertisements for grocery stores in your area before you head out to do your shopping. You can then choose the store that has the best bargains on the items you plan to buy. Many bargain hunters will even stop at multiple locations, picking up the items they need that are on special in each store.

Looking at advertisements is another great way to begin to price compare for bigger ticket items. If you are looking to buy a television set, a washer or lawn mower for example, you will want to seek out ads for the stores that typically carry these products. You can check out the items that are on sale that week, comparing cost to the product features. Many times, with these types of items, it is also a good idea to visit the stores to take a look. Some stores will even haggle with you on the price. As an added tip check to see if there are any other bargains to be had. Sometimes if you open up a store charge account you can get an additional discount.

Purchasing a new vehicle is another place that bargain hunters price compare. In this case it is usually best to visit different dealerships to look at the vehicles, decide on features and price compare. Once you have decided on a particular make and model to purchase you can then make the sale at the dealership that will offer you the best bargain.

Price comparing for vacations is also a great way to find a deal. If you are planning a trip, whether you are looking for a hotel room, a luxury resort or even a cabin on a cruise ship, bargain shopping can save you money. It is very easy to compare prices on the internet for these services and many travel websites compare prices for you.

Bottom line, you don’t need to pay full price. With a little bit of time and effort you can learn to bargain shop and save a bundle.

Regardless of how you feel about the economy, credit card industry or finances in general, we all have one thing in common- we all need money to survive. There is no escaping the fact that you will either need cold hard cash, checks or credit cards to make necessary purchases each day.

Many of these purchases involve transactions that go through your checking account. Unlike in days gone by, writing a check is no longer the only method of making a payment from your bank account. In fact with so many options available today from debit cards to electronic payments it is very easy to lose track of transactions that can result in overdrawing your account. Banks charge customers who do not have enough funds to cover transactions overdraft or insufficient fund fees. These fees can quickly add up to hundreds of dollars making it imperative you stay on top of your finances and manage your account with precision.

The Difference Between Overdraft and Insufficient Fund Fees.

The main difference between the two fees is actually the action your bank takes in response to a transaction that hits your account that is not covered. If your bank offers some form of overdraft protection in most cases they will honor the transaction and charge you a service fee for covering the check or debit to your account. Without overdraft protection, your bank will deny the transaction and return the check or debit to the vendor noting the reason being “insufficient funds”. In 9 out of 10 cases, you will not only face an insufficient fee charge from your bank but also a fee from the vendor for having the transaction denied.

Tips To Avoid These Costly Fees.

It seems that there are fees attached to just about anything these days, some of which are unavoidable. That is not the case with overdraft or insufficient fund fees. Avoiding these fees are completely within your control. Here is how you can make sure you are not losing money paying unnecessary fees.

• Organization is key to avoid situations that could lead to overdrafts on your checking account. You will have to be diligent in keeping track of all transactions such as checks, ATM withdrawals, electronic debits, automated payments and debit card purchases. Missing just one receipt or check payment can have expensive consequences if it causes your account to become overdrawn.
• Most banks offer online services. After creating an account you can log on as frequently as you like to check your account balance. This makes is possible to spot errors before they result in an overdraft or deal with overdrafts quickly to correct your account. If your bank doesn’t offer this, consider opening a new account and get a free checking account bonus for doing so.
• Consider overdraft services that offer real protection, such as linking your checking account to a savings account. In the event your account becomes overdrawn, the bank can draw from the linked account.
• There are many free online management tools that help consumers track the best savings accounts. Consider signing up for one of these accounts which will give you one more tool to keep track of transactions posting to your checking account.

Now that you know what these fees are and how to avoid them, you are in a better position to prevent paying that extra expense.

You do not have to spend a lot of money to have a fun filled day or evening with your family. In fact there are countless activities that you and your family can do together that are free or cost very little. Let’s take a look.

• Visit a local park or playground if you have young children.Let the kids have fun on the playground equipment. Take along a soccer ball, basketball or other sporting equipment to keep you entertained.
• Find a nature area or preserve and take a family hike together.Bring along a picnic lunch and enjoy all that nature has to offer.
• Dig out everyone’s bicycles and head out for a bike ride. Most areas have bike paths that are great to ride on.
• Check out local area beaches. Sometimes there is a small fee for entry. Make it a full fun beach day.
• If it is winter time and there is snow on the ground, pull out the sleds and find a park in your area with a hill. If you have young kids even a small hill will be loads of fun.
• Head out in the snow together as a family and make snow angels and snowmen. After the outside fun head back inside and make hot chocolate together.
• Have a camp out in your back yard.
• Have a family game night. Pull out the games from your game closet, dust them off and take turns choosing which one to play. Your family can have hours of fun playing your favorite games together.
• Head to your local library and check out books to read and movies to watch together. Most libraries carry a nice selection of family movies. Head home, pop some popcorn and watch a movie together.
• Pull out family photos to look at together or take out the home videos. It is always entertaining to take a trip down memory lane.
• Have a family pajama party.
• Take time to make a fun meal together. One idea is to make homemade pizza. It is pretty easy to make and fun to eat.
• Do a jigsaw puzzle together.
• Call your local museums and see what programs they offer. Many times local museums offer free or low cost family programs.
• Keep an eye on your local papers for fun festivals, area events or other family fun activities that may be free of charge.

Many consumers using social media networks are unaware of the potential danger lurking within. Social media networking has grown in popularity in recent years with consumers and businesses alike logging on to share information with others. Facebook, Twitter, MySpace and Linkedin are just a few of the networks popular with people today. Connecting millions of people every day, these networks make it possible to share thoughts, opinions, daily activities and just about any bit of information a person is willing to publish. What many people don’t realize when publishing personal data is the potential damage this information can have on your personal finances. Here we look at three ways social media can cost you.

• Debt collectors- The great thing about social media networks is the ability to connect with people throughout the world. You can catch up with childhood friends or find long lost relatives. This technology can backfire for individuals who are in debt however as debt collectors can also search for delinquent account holders through social media as well. While no one is suggesting a person hide from debt collectors, you certainly don’t want a collection agency viewing your day-to-day activities via a social media network. The Fair Debt Collection Practices Act prevents debt collectors from sharing your financial situation with a third party, but that doesn’t mean all agencies play by the rules.
• Hackers and scams- Criminal looking for an easy mark need to look no further than social media sites. The number of users who accept virtual strangers as “friends” is astounding despite the increased awareness of identity theft. Consider this- many people publish their full name, email address, date of birth and other personal information which opens the door to identity theft. Scams are rampant in social media networks where many users let their guard down in the company of friends.
• Career opportunities- Whether you are currently employed or seeking employment understand that employers can and do search for information about employees on the Internet. Consider the consequences should your boss or potential employer view public information that would have been better left private. If you are harvesting your crops on Farmville when you should be working, your employer might not appreciate your dedication to your plants. Having a bad day and need to vent about your job or worse your boss…think twice before tweeting about it. Inappropriate pictures or documenting less than savory behavior for the world to see can cost you your job and future employment opportunities.

Social media networks can be a great way for people to stay connected. Businesses use social media networking to advertise and connect with consumers. The benefits are clear despite the negative consequences that have come to light. You don’t have to stop networking in order to protect your finances but you will have to take a second look at the information you provide about yourself. The best way to prevent having the wrong person view your profile is simply adjusting your privacy settings to friends only. This of course only works if you accept only friends you actually know, but it is a first step. Avoid publishing personal information that can be used in identity theft. A little caution and discretion can go a long way when using social media networks. Last but not least please remember some things are better left private.

If one of your New Year’s resolutions for 2010 is to cut your spending habit, here are some tips to get you on your way.

Switch to Cash

Leave your credit cards at home and switch to spending only cash. When you can only spend cash you are limited to what you have on hand, helping you to keep your spending under control. When you rely on plastic, it is very easy to add extras to the cart knowing that what you spend can be virtually unlimited. After all you can spend today and not worry about it till later. This can be a deadly habit.

Learn the Difference Between Needs and Wants

Before making purchases stop and determine whether or not what you are going to purchase is a need or a want. Think it through. By all means if it is a necessity and you have the cash, make the purchase. If however, it is just a want weigh the pros and cons. Before making the purchase decide whether or not you can truly afford it and what purpose the item will serve you. It is also a great idea to sleep on any purchases that are not necessities. Sometimes when you have given yourself a chance to think about it, you realize you really can live without the item.

Make a List and Check it Twice

Never shop without making a list first. It is so easy to randomly throw objects into your cart as you go through a store. Before you know it you could have dozens of items that just aren’t necessary. Before heading out to shop, especially for groceries, determine what you need and write it down. Once you are in the store, stick to purchasing only what is on your list.

Keep Better Track of Finances

Keep a Debt Diary. Write down every dollar that you spend. This way you can see where your money is going. Then total it. It can be amazing to see how easy it is to spend hundreds of dollars each month on needless purchases like coffee to go or lunches on the run. When you see it in black and white it is much less tempting to make those purchases.

Don’t Skip Entertainment

Finally, give yourself some play money. Each week or month make a dollar allotment that you can spend how you see fit. Whether it is $10.00 or several hundred, depending on your means, you can blow that money any way you like. Just know that once the money is gone you are done for that time period. Knowing you have this fund will help you to stay away from extra spending.