January 14, 2009

Resolved: This Year, I'll Keep More Cash

Put more cash in your wallet!!

Given the recent turmoil in the financial markets and the prospect of a continuing economic downturn, 2009 may be the year you finally make good on your resolve to start an emergency fund, pay off credit-card debt or beef up your retirement kitty. Our guidelines on cutting your expenses and saving on taxes are guaranteed to put money in your pocket -- and your savings accounts.

1. Get your spending under control
by using a free online budgeting Web site, such as Mint.com. This secure site tracks your checking, credit-card and investment accounts and offers money-saving tips, such as where you can cut costs or get a better rate on your credit card. Other free sites, including Wesabe and Geezeo, offer similar budgeting tools, but focus more on their online communities where users share strategies.

With the meat and potatoes of your finances laid out, it will be easier to see where you can trim the fat. For example, assuming that you and your significant other pay the average $33 per person for a restaurant meal (according to a recent Zagat survey) and $7 per ticket for a movie, one fewer date night a month will save you a total of $960 per year.

2. Set up a flexible spending account
to help pay for medical expenses. If your employer offers this benefit, you can stash pretax dollars in the account and use the money to pay for out-of-pocket bills, including physician co-payments, prescription drugs, eyeglasses and braces for the kids' teeth. You can even spend the money on over-the-counter medications, such as antacids and pain relievers.

A flex account can save you hundreds of dollars in federal, Social Security and, in most states, state income taxes. For example, if you're in the 25% tax bracket and you put $1,450 in your account -- the average contribution for 2007 -- you'd save $546 for the year, assuming a 5% state income tax and 7.65% for the FICA tax. Plus, you can tap the entire amount at any time, even if you've contributed for only a couple of months.

Under the use-it-or-lose-it rule, you could forfeit any money left in the account at the end of 2009. But many companies now offer a grace period until March 15 of the following year. In fact, if you have money left over from 2008, treat it as a bonus to help pay for a major expenditure in early 2009.

3. File a new Form W-4
. If you got a tax refund for 2008, adjusting your withholding will fatten your paycheck for 2009. With an average refund of about $2,400, you could be entitled to three extra exemptions. In the 25% tax bracket, that could boost your take-home pay by $2,625 per year.

4. Raise your insurance deductibles.
Increasing the deductible on your car insurance from $250 to $1,000 can save up to 15% on your premiums -- or about $125 per year on an average premium of $829. Upping the deductible on your homeowners policy can slice your rate by about 25%, or $191 on an average premium of $764.

5. Cut the cost of credit.
If you tend to carry a monthly credit-card balance, go with a low-interest-rate card, such as Wells Fargo's Prime Rate card, with a 5% interest rate and $19 annual fee. For gasoline or travel perks, try the BP Visa card or >Simmons First Visa Platinum Travel Rewards card.

If you'd rather pocket a cash rebate, consider the American Express Blue Cash card. You'll get a 1% rebate for gas, groceries and drugstore purchases, and you'll get 0.5% back on everything else. Big spenders can bump up those rewards to 5% and 1.5%, respectively, after dropping $6,500 for the year. Charging $15,000 worth of everyday purchases would save you $490.

6. Open an online savings account
, such as the one at www.fnbodirect.com, which was recently paying 3.25%, or about $100 a year on a $3,000 deposit. You can open the account with just $1, and there are no monthly fees or minimum-balance requirements. To avoid the temptation to spend all the money that's now lining your pockets thanks to our first five tips, set up an automatic monthly transfer from your checking account or arrange to have part of your paycheck deposited directly into your new rainy-day fund.

7. Bump up your 401(k) contributions
. Already have an emergency stash? With stocks on sale, now is a great time to build -- or rebuild -- your retirement kitty. For 2009, the contribution limit for 401(k) accounts rises to $16,500, and you can add another $5,500 if you'll be 50 or older by the end of the year. Contributions aren't subject to federal or state taxes, so loading up on the full $16,500 would save you $4,950 in taxes for the year, assuming a 25% federal tax bracket and a 5% state income tax.

Can't afford the maximum contribution or want to use part of your savings for something else? Try to kick in at least enough to capture any employer match.


January 13, 2009

10 Hot Professions for 2009

As the global economy continues to falter, job prospects for 2009 are expected to slow. But if you're lucky enough to be in one of these top fields, your job future is still quite bright. Take a look at this list below and either thank your lucky stars that your job is already on it, or consider seeking the education and experience for the career that most interests you.

Auditor. With all of the economic upheaval, businesses are being watched more carefully than ever. "There is a lot of money flowing into companies right now due to the stimulus package," says Ron Mitchell, CEO and co-founder of GottaMentor, a career coaching service located in New York City. "And, we've all seen some issues with, 'Where is this money going to?'" He adds that auditors are mostly working for the big four [accounting firms] and also as internal auditors. Average Yearly Salary - $64,914

Career Counselor
. More folks than usual are starting off the new year without a job in sight. How can the out-of-work find gainful employment? From outplacement agencies to government programs, career counselors and coaches will be very busy in 2009 helping make things easier. Mitchell encourages those seeking work to get professional help, saying, "Many individuals will need to completely re-engineer their careers. In order to do that, people need personalized guidance and feedback from an expert counselor." Average Yearly Salary - $54,426

Counselor. Besides their bank accounts, people's self-esteem and confidence are getting hit hard these days. "People's self worth is tied up in their job, so you have a huge identity crisis happening. Counseling and mental health services will be in high demand," says Mitchell. Guidance and some soul-searching can result in new and better careers for those in transition. Average Yearly Salary - $40,275

Public Relations Specialist. Rather than promoting a line of sparkly, new products or an exciting initiative, many public relations professionals will spend the upcoming year smoothing over unfortunate events. Mitchell predicts: "Being able to tell a story about major layoffs, reduced sales, and failed mergers, without causing a panic in the market, will become even more important." Average Yearly Salary - $44,334

Factor. A what? Didn't you study those in algebra? While this career is fairly foreign to most folks, now that bank loans are hard to come by, factoring allows small business to get funding based on their current accounts receivable -- the money they expect to have coming in. Factoring works well for retailers and other businesses that have big receivables. Mitchell explains that factoring is a legitimate source of funds in hard times. He says, "It's a huge business and, at a time when people can't get other types of lending, factors are skilled experts at lending against accounts receivables." Average Yearly Salary - $79,846

Health-Care Technician. You may know that nurses are in demand, but what about the folks they work with? "There's never enough of them, like radiology technicians, lab assistants, and home health aides. Health-care is the largest industry in the country, and in the more technical aspects of those careers we have a huge shortage of personnel," says Mitchell. Average Yearly Salary (Pharmacy Technician) - $32,531

Mechanical Engineer (and all engineering fields). With every passing year, more skilled-labor jobs are replaced by complex automation or robotics systems. For example, some hospitals have turned to "robotic pharmacies" to help dispense medication. It's the engineers who help build these automated systems, says Jim Turnquist, director of career services at Michigan Technological University in Houghton, Mich. "In the U.S. we only graduate 70,000 engineers per year, but we're going to need 100,000 per year. The demand is going to go way up." Average Yearly Salary - $71,490

Networking/System Administrator. Since almost all business transactions these days are done with the assistance of a vast computer network, the people who understand how to keep computer networks running smoothly are critically important -- and consequently, in high demand. "Network and system administrators maintain the company's infrastructure. People need people to fix and monitor their infrastructure, keep them updated," Mitchell says. Average Yearly Salary - $54,193

Nurse. The health-care field has been booming for a long time, and all signs indicate it will continue to do so, says Turnquist. He also says college students and people looking for a new job field would be wise to consider physical therapy and similar "exercise science" fields, since aging Baby Boomers will be looking for ways to remain active long into their later years. Average Yearly Salary (Registered Nurse) - $53,840

Software Designer/Developer. Companies from all sectors of the economy are looking for software engineers and programmers, says Turnquist. This is because society in general is becoming more tech-dependent -- just think of how rapidly cell phones change with each passing year -- requiring software developers that can stay abreast of all the changes. Average Yearly Salary - $72,070