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Should You Rollover Your TSP Account Into an IRA?

If you have left government or military service in recent years, then there is a good chance you still have a Thrift Savings Plan (TSP) account in your name. Personally, I’m a big fan of consolidating financial accounts to make financial planning and management easier to deal with. But the TSP is in it’s own category of financial accounts due to several factors that separate it from other investment options, namely some of the lowest expense ratios you will ever find. So keeping your assets in the TSP may not be a bad option. But sometimes it’s best to simplify things and roll your investments into fewer accounts.

Should you rollover your Thrift Savings Plan into an IRA?

The first thing you will need to do is determine if your assets are eligible for distribution. The TSP has certain criteria, so contact customer service through the ThriftLine if in doubt.

Deciding to rollover TSP assets into an IRA

Once you determine your funds are eligible for distribution, you need to decide what to do with those funds. We previously discussed options for the TSP when you leave the service in this article: what should you do with your TSP when you leave the military?

This article covers the main options, such as leaving your funds within your TSP account, rolling it into an IRA, roll your assets into a 401k plan at your new employer, withdraw your funds (watch out for early withdrawal penalties), and roll your funds into a qualified annuity.

The TSP has many similar features to a 401k plan, so this article may also be helpful: should you rollover a 401k into an IRA? Let’s look at the pros and cons of rolling over your Thrift Savings Plan funds into an IRA.

Pros and cons of doing an IRA rollover

The TSP has some of the lowest expense ratios in the investment industry and you will be hard pressed to find mutual funds with expense ratios that low. You almost certainly won’t be able to find them in a 401k plan, as most 401k plans have funds with relatively high expense ratios.

An IRA, on the other hand, gives you better control over your investment options, including the ability to invest in a wide variety of stocks, bonds, funds, and other investments that you can’t use with the Thrift Savings Plan or a 401k plan. You can also open an IRA at many locations, including banks, online discount brokers, mutual fund houses, etc.

Advantages of rolling your TSP into an IRA:

  • Full control of investments
  • More investment options
  • Ability to control fees
  • Portability

Advantages of leaving your funds in the TSP: There are two main advantages to leaving your funds in the TSP: the low expense ratios, and the possibility of tax free withdrawals if you made contributions with tax free funds. This last advantage could apply if you contributed to your TSP plan while you were in a tax free combat zone.

To see if you have any tax exempt money in your TSP, look at the bottom of you balance sheet: you will see “Tax Exempt Balance – $xxxx.xx.” You may wish to keep your TSP if you have a large amount of tax free contributions because those contributions would have been made without being taxed and that percentage of your withdrawals would also be tax free – which is virtually impossible to achieve in the civilian world!

Additional benefits to leaving your assets in the TSP. You won’t be charged any additional fees to leave your funds in the Thrift Savings Plan (plan expenses still apply), and it won’t affect any of your other investments, or ability to open other retirement accounts.

Rolling over a TSP Account into an IRA

If you decide to roll your Thrift Savings Plan assets into an IRA, then you have a few options to consider. The first thing you will need to do is open an IRA if you don’t already have one. Here is a list of what to look for when opening an IRA and some of the best brokerages to open an IRA to help you.

Get specific recommendations from Mint.com: Visit Mint.com to find the best rollover IRA for your needs.

Which option is the best?

There is no right or wrong option. If you prefer a hands off approach with low fees, or if you have a large amount of tax free contributions, then you may wish to keep your funds in the Thrift Savings Plan. If, however, you have a hands on investing approach, or simply wish for more investment options, then rolling your TSP assets into an IRA may be a better option for you. Be sure to investigate your options thoroughly and make the best decision based on your investment needs and risk tolerance. Best of luck!

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Traditional and Roth IRA Contribution Limits

Tax season is a great reminder to make retirement account contributions if you don’t do it throughout the year. The good news is that tax laws are written so that you can make contributions for the previous tax year until the tax filing deadline. Even though the calendar year may be over and done with, you can still contribute to your IRA until the tax deadline, which is April 15, in most years. Just take note that if you make IRA contributions between January 2 and April 15th, you may need to specify which tax year you are contributing to because you can also contribute to the current year IRA during these dates.

Traditional IRA and Roth IRA. There are two main types of IRA accounts available to most people – they are the Traditional and Roth IRA. The short and quick explanation is that Traditional IRA contributions are made with pre-tax money, the investments grow tax free, and the money is taxed upon withdrawal. Roth IRA contributions are made with money that has already been taxed. It grows without the drag of taxes and is withdrawn without any additional taxation. There are certain income limits and other rules involved with regarding deductions and eligibility.

Traditional and Roth IRA Contribution Limits

The maximum you can currently invest in a Traditional or Roth IRA is $5,000 if you are under age 50. Those who are age 50 and older are eligible for catch-up contribution of $1,000 and can contribute up to $6,000.

It is important to note that you can only contribute up to the maximum limit across all individual IRA accounts (self-employed retirement plans may have different rules). I am under 50 years old, so I would be able to contribute any combination of $5,000 between any IRAs I decide to open. For example – $2,500 in a Traditional and a $2,500 Roth IRA, or $3,000 in a Roth IRA + $2,000 in a Traditional IRA, etc. so long as it does not exceed $5,000.

Traditional IRA Deductibility and Roth IRA contribution phase out levels

Your ability to make a tax deductible Traditional IRA contribution and Roth IRA qualifications are based on your  modified adjusted gross income (MAGI), which is calculated on your tax form.

Roth IRA phase out. The IRS has specific income restrictions regarding who can contribute to Roth IRAs. The income limits are based on your Roth IRA eligibility begins phasing out for single filers with a MAGI above $105,000, and for married filing jointly above $167,000. Single filers with a MAGI above $120,000 and married filing jointly with a MAGI above $176,000 are not eligible for Roth IRA contributions. See Roth IRA rules, or IRS pub 590 for more information.

Traditional IRA deduction phase out. The Traditional IRA phase out schedule determines whether or not you can deduct your contributions against your taxes. The phase out for Traditional IRA deductions for single filers begins at $55,000 and ends at $65,000. The range for married filing jointly is between $89,000 and $109,000. It is important to note that tax filers with income limits above the deduction levels can still contribute to a Traditional IRA, however, they will not be able to deduct it against their taxes.

Did you contribute too much to your IRA? The deduction and phase out limits may affect your ability to make contributions. Find out what happens if you contribute too much to an IRA.

More information about IRAs

Individual Retirement Arrangements (IRAs) are great investment vehicles, and I highly recommend investing in one if you are able to do so. The benefits you receive from the tax deferrals are a great way to grow your investments without the drag of taxes slowing you down your investments.

Max out your IRAs if possible. It is important to max out IRA investment if possible because you only have one opportunity to do so. Once the window of eligibility closes, it is closed for good.

Compare IRA Providers. If you are looking for another place to compare IRA plans, then visit the Mint.com IRA Center for more insight into different IRA plans. Click here to get started.

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What Happens If You Contribute Too Much to an IRA?

An Individual Retirement Arrangement, or IRA, is one of my favorite vehicles to save for retirement because it offers a wide variety of investment choices and lots of tax savings. But when you don’t follow the rules, an IRA comes with hefty penalties. A common mistake is contributing too much to an IRA.

What Happens If You Contribute Too Much to an IRA?

In this article you’ll learn about traditional and Roth IRA contribution limits, IRA contribution deadlines, and how to correct an excess IRA contribution so it costs you as little as possible. (If you’re interested in learning more about all the different types of retirement accounts that can help you accumulate an impressive nest egg, be sure to read my new book, Money Girl’s Smart Moves to Grow Rich.)

When Is the IRA Contribution Deadline?

The deadline to contribute funds to an IRA for the 2010 tax year is April 18 of 2011. So if you didn’t max out an IRA last year, there’s still time to contribute more money for 2010! The maximum allowable contribution for a traditional or Roth IRA is $5,000 if you’re under age 50 and $6,000 if you’re age 50 or older. If you have more than one IRA, you can contribute to both of them as long as the total amount doesn’t exceed your allowable limit. For example, you could contribute $2,500 to a traditional IRA and $2,500 to a Roth IRA.

What are the Income Limits for Roth IRA Contributions?

If you contribute to a Roth IRA and end up making more money than you expect, you might have to withdraw all your contributions. That’s because contributions to a Roth IRA are allowed only if your modified adjusted gross income doesn’t exceed the following IRA contribution limits:

  • $120,000 for taxpayers who file as Single, Head of Household, or Married Filing Separately (if you didn’t live with your spouse during the year)
  • $10,000 for taxpayers who file as Married Filing Separately (if you did live with your spouse during the year)
  • $177,000 for taxpayers who are Qualifying Widow(er)s or Married Filing Jointly

What If You Contribute Too Much?

But what happens if you overloaded an IRA by mistake? It’s not uncommon for people to realize at the end of the year that they contributed more than their allowable limit. The good news is that excess contributions can be corrected without penalty if handled in a timely manner.

Let’s say Polly is 30 years old, earned $40,000 in 2010, and contributed a total of $6,000 to her traditional IRA. Since her allowable limit is only $5,000, she has an excess of $1,000 in the account. If Polly withdraws the excess plus any earnings it made, on or before the due date of her tax return, it’s like it never happened!

If she can’t complete the necessary paperwork for an IRA withdrawal before taxes are due, she can file for a tax extension using Form 4868, Application for Automatic Extension of Time. Filing for an extension will give Polly until October 17, 2011 to file—plenty of time to correct her IRA goof.

How to Correct an IRA Contribution Mistake

I mentioned that Polly has to withdraw both her excess contribution and the earnings it made. The excess contribution can be withdrawn without any tax or penalty, but that’s not the case for income she made on the excess. Let’s say she made $50 on the additional contribution of $1,000. Because she wasn’t supposed to earn that additional money, withdrawing it is considered an early distribution.

Distributions you take from an IRA before you reach age 59½ are subject to a hefty 10% penalty. So Polly has to make things right with the IRS by paying ordinary income tax plus the 10% penalty on the $50 she made from her excess contribution of $1,000.

What Happens If Excess IRA Contributions Are Not Corrected?

Once you realize that you contributed too much to an IRA, contact your IRA custodian or tax professional right away. An excess contribution that isn’t withdrawn by the deadline is subject to a 6% tax penalty each year that it remains in your IRA. It’s important to try to prevent excess IRA contributions from occurring in the first place, but it’s even more important to get them corrected on time to avoid significant taxes and penalties.

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USAA Deposit@Mobile Easy and Convenient!

I recently bought a new smart phone running on the Android platform. My old cell phone was over 3 years old, and finally starting to wear down. I’m very happy with he upgrade – I went from a cell phone with minimal internet capability (basically enough to check e-mail and sports scores), to what is essentially a mini-computer in my pocket. I got an HTC Evo, which is an awesome phone.

One of the cool features about the Android phones is the ability to download apps, which are basically small programs that run on your phone. USAA offers a free app for Android phones, as well as one each for the iPhone and iPad (read a USAA iPad app review for more info).

USAA Android App

USAA Android App

The Android app is a great way to access your USAA account while at home or on the go. In fact, since I got my new phone, I have found myself using it to access my USAA account more frequently than booting up my computer. It’s faster and the app is streamlined, giving users the ability to access their general account, pay bills, transfer funds, start an insurance claim, access USAA Auto Circle and USAA Home Circle, and my new favorite, USAA Deposit@Mobile, which gives you the ability to deposit a check with your cell phone. Talk about cool!

USAA Deposit@Mobile on Android

USAA already offers this feature for home computers under the name Deposit@Home. The premise is the same. With the home version, you scan the front and back your check (after you endorse it with your signature and account number). Then you send the scanned photo and amount of the check and the USAA software verifies the information on the check and deposits it into your account. The process is quick and much faster than mailing the check in, since the funds are usually available the same day. Check it out on YouTube:

But believe it or not, USAA Deposit@Mobile is even faster and easier than Deposit@Home since it basically removes a step from the process. Instead of having to scan the check, then save and upload the photo to your USAA account, you simply take a picture of the front of your check, then endorse the back of the check, take another picture, then click submit. USAA then informs you whether or not the picture quality was good enough and whether or not it was accepted.

The first time I tried I didn’t have the check on a dark background and I had to take another picture (this was clearly stated in the instructions. I just used a medium color background). I didn’t have any troubles after I switched to a dark background.

Once your deposit is accepted you will receive a confirmation number and your funds will be available to you. Users are also instructed to write VOID across the front of the check in large lettering, or to destroy the check.

Here is the main difference between USAA Deposit@Mobile and Deposit@Home: with Deposit@Home you will have a digital copy of your check. It’s probably a good idea to keep a copy of these for your records. With USAA Deposit@Mobile, your phone doesn’t keep a record of the photo. Since the photo isn’t stored, you need to either take another photo, scan it into your computer, or keep a physical copy if you want to maintain a copy for your records.

Eligibility:

A couple notes about USAA Deposit@Mobile and Deposit@Home: Not all USAA members are eligible for Deposit@Home and Deposit@Mobile. You must have a USAA checking or savings account and:

  • Have an active USAA property and casualty insurance policy and be qualified for a USAA loan or credit card (not a USAA Secured Card), OR
  • Be eligible for USAA property and casualty insurance and have an active USAA loan or credit card (not a USAA Secured Card).

In addition to meeting eligibility requirements, you will need to have an iPhone or iPad running the , or an Android capable phone or tablet with the right hardware. You can download the USAA apps here:

USAA also offers apps for the iPad, Windows 7, Blackberry, and other platforms. The Deposit@Mobile is currently only available for the iPhone and Android platforms, but my guess is the iPad app will be added soon, since the iPad 2 now features a camera.

Overall, I’m more than pleased with the USAA Android App, and I’m seriously loving the Deposit@Mobile feature. It simplifies my banking life and makes my money available to me more quickly. Win-win-win.

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How Much is the Ideal Tax Refund?

With the average tax refund rising to just over $3000, it can seem to many filers that the refund check is a fabulous spring income boost that will help with bills, vacation plans, or that shiny new toy you’ve been eying. But is it really ideal to receive such a large sum back from the government? Don’t forget the fact that the $3000 you happily take back in April is YOUR money, which you have loaned interest-free to the government. So if getting a huge lump sum back is how you make financial ends meet every spring, consider these tips for making the most of your money.

Aim For a Modest Return

In order to reduce your tax return, you will need to reduce the amount of tax withheld from each paycheck. This can feel a little tricky because you do not want to end up owing money at the end of the fiscal year. The IRS provides a withholding calculator that will help you determine how to fill out the W-4 form with your employer. Your goal is to maximize the amount of money you take home every month, and end up with a small tax return—think about $500 or less—at the end of the year. That small return provides you with a safety net in case of miscalculation but does not give the government all the money that could be earning you interest.

Make That Money Work For You

If this will be the first year that you do not plan on a large return, it can be easy to let the extra money in each paycheck simply slip away in thoughtless purchases. If you know that you cannot muster the discipline necessary to put those little amounts of money aside each month, then it might be a good idea to let Uncle Sam hold onto your money for you. However, with the convenience of automatic transfers, even the most savings-averse filer should be able to put aside the money that would have otherwise been collected as tax.

Do some homework to find out where you will be able to earn some interest on that money. ING Direct, Ally, and FNBO Direct are all online banks that offer high yield savings accounts. While the interest from these accounts will not allow you to retire early, they will certainly earn you more money than Uncle Sam will get you for holding onto the same amount of money. With an automatic deduction every month to one of these banks, you won’t even notice the missing money and you’ll be earning, to boot. Here are some more tips on how to use your tax refund.

Don’t Go on Autopilot

After doing the homework to determine how much less you can have withheld, it can be tempting to simply do the same thing next year. But it’s important to reassess your tax circumstances every year, so that you can always maximize your take home pay. That way, you won’t have to wait for April to feel financially fit. You’ll have that “refund” around all the time, earning you interest and giving you a financial cushion. And doesn’t that feel more empowering than a $3000 check from DC?

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US Military Sends Relief to Japan

The US Military has dispatched relief supplies and troops to Japan to help in the earthquake relief efforts. In addition to the troops en route to japan, the US maintains several military installations on Japan. From what I’ve read so far, these bases sustained some damage, but were not destroyed.

The earthquake and subsequent tsunamis and aftershocks were scary to watch and my thoughts and prayers go out to everyone on the island, and to everyone who knows someone who may be affected by this disaster.

How You Can Help with Japan Earthquake Relief

Japan faces a long recovery. Many experts predict this will be the most expensive natural disaster in history, and there is potential for it to also be the largest man made disaster as well, with the damage to the nuclear reactors in the area.

While it isn’t possible for all of us to go over and lend a helping hand, there are still things we can do from here to help the people of Japan. The most basic, and probably most beneficial thing is to give money. Cash is king in these situations because it is portable and easy for relief agencies to use to meet their most immediate needs. When giving, be sure to give only to reputable and well established companies who already have a presence in Japan.

What not to give: Donating, food, water, clothing, batteries, and other items may not be the best thing to do. Even though these items are in need, they are very expensive to transport and may take too long to reach their destination. It is faster, cheaper, and easier for relief agencies to source what they need closer to Japan.

Here is a list published by CNN Money: How you can help Japan. In addition, you can text the following organizations to send them a donation.

To make a $10 donation now to:

  • Japan Earthquake and Pacific Tsunami fund, text REDCROSS to 90999 or go to redcross.org
  • Save the Children’s Japan Earthquake Tsunami Children in Emergency fund, text JAPAN to 20222 or go to savethechildren.org
  • GlobalGiving’s Japan Earthquake and Tsunami Relief fund, text JAPAN to 50555 or go to globalgiving.org
  • International Medical Corps relief efforts, text MED to 80888 or go to internationalmedicalcorps.org.

Recommended articles:

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Netflix Review and Free Trial

When comparing online movie services and DVD rentals, two companies come to mind: Netflix and Blockbuster. Blockbuster had the head start on the home movie rental business, but Netflix came in and flipped the industry upside down. Now, they offer one of the best movie bargains around. For the price of seeing a movie in the theater you can stream an unlimited number of TV shows and movies through the Netflix video streaming service, and have DVDs or Blu-Ray movies delivered to your door postage prepaid. Sounds amazing, doesn’t it?

Netflix Review

There are several features that set Netflix apart from the competition – over 100,000 movies in their library, ensuring you always have something great to watch, and the best prices in the industry. When Netflix began the DVD rental by mail service, many people thought it was a fad, or that it wouldn’t last. Since then Netflix has grown in size, stature, and offerings, all while lowering their prices and toppling competitors. And it’s easy to see why – Netflix offers the customer great value, and few hassles.

How Netflix works

Netflix gives you the power to watch movies at home or on the go. You can receive DVDs and Blu-Ray movies to your doorstep, stream movies online, or even watch movies on the go on your iPhone. Here is a brief overview of how Netflix works:

  • Get unlimited DVDs delivered to your door. DVDs and Blu-Rays are shipped directly to your door in a postage prepaid envelope and you can keep them as long as you like without any late fees. Simply drop them back in the prepaid envelope and send it back after you watch it.
  • Set up your movie queue. You can set up a movie queue to automatically receive the next movie on your list when it becomes available. You can also rate and review movies, making it easy to keep track of which movies you’ve seen and which you haven’t. Netflix also uses technology to recommend movies to you, based on previous rentals and preferences. Overall, it’s a great movie watching experience.
  • Netflix tools and apps make it easy to stay connected. Netflix offers apps for a variety of electronic gadgets, so you can almost always find a way to connect to your Netflix account. You can even stream Netflix on your iPod, iPhone, or iPad.

Watch Netflix Instantly

Netflix is easy to use – simply open a Netflix account and start watching movies (see the Netflix free trial offer to get a free month of service).

I know that sounds too easy, doesn’t it? Like I missed a step? Well, that depends on which plan you choose and your home entertainment setup. But if you have the ability to stream video through your computer or TV, then all you need to do is sign up for a streaming video plan and start watching.

This graphic shows how Netflix streaming video works:

Netflix Streaming Videos

Streaming video works best if you have a fast Internet connection. Of course, you don’t need an Internet connection at all to enjoy Netflix, but most plans come with unlimited online streaming, so the fast Internet connection gives you an additional option for watching movies.

Netflix Price Plans

There are several Netflix plans available to customers. The first is the base plan, which comes in at $7.99 per month offers unlimited online video streaming, but no DVDs delivered to your door. For an additional $2 per month, or a total of $9.99, you can get unlimited streaming video, plus an unlimited number of DVDs delivered to your door – but only 1 DVD at a time. So, assuming 1 or 2 days transit time each way for processing, and you could expect to be able to watch at least 4 or 5 DVDs per month, plus the unlimited streaming. Here are the prices:

  • Streaming Video option: $7.99 – Unlimited streaming video, no DVDs
  • DVD by mail option: $7.99, $11.99, $15.99 – Unlimited DVDs (1, 2, or 3 DVDs at a time)

The unlimited streaming video option is the most popular plan, and it features over 20,000 titles for movies, TV shows, and documentaries, with more being added on a regular basis.

The DVD by mail option is also popular, with over 100,000 titles (with more being added regularly). Shipping the DVDs will never cost you anything and there are no late fees associated with the plan – keep the movie as long as you like. All DVDs are delivered to your door free of charge and come with a postage prepaid envelope to return to Netflix.

Netflix coupon code

You can try Netflix free today – simply click the banner below and sign up for a free one month trial.

Sign up for your free Netflix trial today.

Do you use Netflix? Would you recommend it?

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What To Do with Your Tax Refund

If you’re expecting a tax refund, you obviously want to get it as quickly as possible. That way, you can put it to work for you sooner rather than later. The fastest and safest way to get your tax refund is to submit your return online, using e-file.

There are three ways to file your tax return electronically:

  1. Use your own tax software. Most tax programs include the option to submit your return by e-file.
  2. Use a tax preparer. You can find an authorized e-file tax professional by clicking through a ink on the IRS home page at irs.gov and entering your zip code.
  3. Use “Free File” at the IRS website. You’ll find it at irs.gov/freefile.

If you e-file and request a direct deposit, you’ll probably receive your funds in less than ten days. But if you submit a paper return and request a direct deposit or a paper check it could take several weeks longer. Plus you run the risk that your tax form(s) or refund check could get lost or stolen. If you don’t receive your refund, it’s important that you make an inquiry about it using the IRS Refund Status Tool.

What To Do With Your Tax Refund

Taf Refund

What Should You Do With Your Tax Refund?

Once you receive your refund, there are a gazillion things you can do with it. Taking a vacation or going on a shopping spree immediately come to mind, but I bet you won’t be surprised if I tell you that the best thing you can do with the money is to save it. It might not be as much fun as many other options, but it will certainly go a long way toward improving your personal finances. Here are my recommendations for what to do with your tax refund in the order of priority:

  1. Add it to your emergency fund. One of the most important defenses you have against unexpected expenses or the loss of income is a cushy emergency fund equal to at least six months worth of your living expenses. If you don’t have a reserve fund or if it’s not as big as it should be, make sure that’s the number one priority for your tax refund!
  2. Purchase health insurance. If you don’t have health insurance, consider using your tax refund to pay premiums for an affordable policy, such as a high-deductible plan. That’s the kind of policy that also gives you the ability to open up a tax-advantaged Health Savings Account.
  3. Pay down high-interest debt. If you have at least a few months worth of living expenses saved in an emergency fund, but also have expensive consumer debt like credit cards, retail store cards, or payday loans, use your tax refund to pay them down.
  4. Fund an IRA. If you don’t have an Individual Retirement Arrangement (IRA), use your tax refund to open an IRA. You can contribute up to $5,000 to an IRA in 2011, or $6,000 if you’re age 50 or older. Be aware that there are tax penalties for withdrawing money from a retirement account before the age of 59½. So be sure to put money in an IRA only after you’ve established an emergency fund and are sure you won’t need the money.
  5. Fund a 529 Education Savings Account. If you’re saving money for your own education or that of a child’s, consider putting your tax refund in a 529 plan, where funds can grow completely tax-free if you spend them on qualified education expenses.

You can even opt to split up your refund and have it automatically deposited into multiple financial accounts, like an IRA and a savings account, using IRS Form 8888. If you just want to have the money sent to one account, simply use the direct deposit line that’s on the regular tax form.

An important tip is that if you consistently get big tax refunds each year, you probably need to adjust your withholding so less tax will be deducted from your paychecks. Use the IRS Withholding Calculator to help you complete a new Form W-4 and submit it to your employer. Remember that it’s not a good idea to use a tax return as a forced savings plan—it’s better to pay yourself first with higher paychecks throughout the year. That way you can save the amount you’d otherwise be paying to the government and make interest on it, instead of loaning it to Uncle Sam for free.

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Commit Your Budget to Paper or Pay a High Price

The first rule of personal finance has always been creating a budget. While some people don’t use any budget, others feel they’ve got their budgeting system stored in their head. They are satisfied to know they have a ‘good idea’ of how they spend their money.

It would be nice if we only had one or two financial matters to concern ourselves with each month but unless you are a teenage student with a part-time job, there will be multiple factors influencing your finances. The only tried and true way for developing a successful and useful budget is to commit it to paper.

Why Physical Budgets Matter

A budget is more than a list of numbers. It should be an interactive tool you use faithfully to determine your every money move. A budget spreadsheet is very simple to develop but in order for it to be effective, you must supply it with the right information. It can be easy to overlook certain aspects of your finances so if you are not confident you can map out a proper budget, there are many budgeting worksheets available that provide popular categories of expenses you may forget. By using a template version of a budget, you can customize the information to meet your needs.

By putting all of your financial data on paper, you actually get a true visual picture of the facts of your finances. For some people who are putting the data down for the first time, they actually experience shock at just how much they are spending and how much money they don’t really have.

A physical budget is also an essential part of family finances. Even if just one spouse/partner controls the cash flow each month, everyone in the family old enough to tackle family finances also needs to take an active participation in family budgeting. Without a proper paper or electronic budget spreadsheet, it will become impossible to express how the finances work.

Commitment to Your Budget Matters

It is not enough to fill in the blanks of a budget worksheet once, never to return. A budget should be an interactive and regular part of your week. You should continue to update and rework the numbers of your budget and eventually it will become habit for you to commit to progressive budgeting strategies.

When income changes, when bills increase or decrease, or when cuts need to be made to save more money, a budget that is kept up-to-date will help to accommodate these changes with ease. It will prevent you from having to start over from scratch time and time again. If a major lifestyle change occurs such as job loss or medical issues, a current budget will be able to show at a glance how to plan for the changes necessary.

Numbers in your head will never work. You need to first track where you are spending your income and then get to work on committing to a physical budget. It truly is the only way to stay in the know on all of your financial matters. Guesswork does not make anyone financially savvy or financially stable so it is in your best interest to sit down with your money matters and construct the start of your budgeting life today.

Debbie Dragon is a professional freelance writer, specializing in personal finance. She frequently writes for Vertex42.com which offers a large selection of free spreadsheet templates and financial calculators.

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Netflix Military Discount

My wife and I recently decided to cut the cord on cable. After paying for cable for over 10 years, we decided it was no longer a necessary expense – especially with the inexpensive replacement options available to virtually everyone. The easiest way to replace cable TV is through a combination of an HDTV converter or antenna to pick up over the air TV signals, and a way to watch movies.

I compared many alternatives, including Netflix and Blockbuster, and the best option in my opinion is Netflix, which offers unlimited online streaming videos, and the option of having an unlimited number of DVDs delivered to your door – all for a very reasonable price (more on this in a moment).

Does Netflix Offer a Military Discount?

Does Netflix offer a military discount?I know what you’re thinking – let me see if I can swing a military discount on Netflix. I always asked for a military discount when I was still in the service, and many times, it worked. But military discounts usually work best for one time purchases, or when you buy something in person. Unfortunately, Netflix doesn’t offer a military discount. However, you can get a Netflix free trial code, which is open to all first time customers and gives a free moth of Netflix service. You are eligible for the one month free trial as long as you have never had a Netflix account under your name. And if you have, but have since canceled, then you may be able to get the free one month trial by opening a Netflix account under your spouse’s or roommate’s name.

Netflix Coupon Code

Here is what you need to do to take advantage of the free Netflix trial offer:

That’s it! If you don’t want to pay after your month is up, then be sure to cancel your free trial before the month is up, and return your movies before the first month is over. If you do this, your credit card won’t be charged. If you decide to continue using the plan, then your credit card will be used as your form of payment while you are a Netflix member.

Netflix Pricing:

Netflix offers very reasonable prices, with a budget plan starting as low as $4.99. In my opinion though, the best value is in the three plans which cost $7.99, $9.99, and $11.99. These plans all offer unlimited online movie streaming and the $9.99 and $11.99 plans offer unlimited DVD rentals to and from your door with free shipping and no late fees ($9.99 plan = 1 DVD at a time, $11.99 plan = 2 DVDs are a time). Overall, this is a great offer and makes it easy to drop expensive premium movie channels, or even cut the cord on cable.

Sign up for your free Netflix trial today.

Do you use Netflix? Do you recommend it?

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