Today, I’d like to announce a new project that I’ve been working on and keeping a secret for over a month now. It’s called “365 Letters of Gratitude.”

The concept is simple: every day, I spend a few minutes writing a letter to a different person whom I’m grateful to have in my life. Usually it’s just a few paragraphs detailing why these people mean so much to me and the ways they’ve affected my life, large or small.

It’s been hard, but I’ve kept it going for 45 days now. And I’m so grateful that I’ve done that, too. While reminiscing, I’ve laughed, I’ve cried (a lot), and mostly just been really happy for everyone in 26 years of life.

Here’s more on the project.

Why am I doing this?

There are a few reasons why I created this project:

• I wanted to be and feel more grateful. In the past, despite always feeling like I live an awesome life, I’ve felt like I’ve wanted or expected more from life. This is my way of calling “bullshit” on myself since it makes me think every day about who and what I’m glad to have in my life.
• I’m terrible at expressing my thanks to others. There’s a lot of times I’ve wished I could say something to someone in person, but I just never find the right words to say it. By writing a letter, I can put my true feelings out there. So far, it’s worked as I haven’t really been afraid to say anything in letters I’ve written.
• I wanted to do something challenging yet fun and rewarding for every day for a year. Truth be told, I just thought this would be an interesting project to take on for a bunch of reasons. I’ve already wondered if I could do it every single day (and I have, for 45 days and counting). I’ve also thought: How am I really going to come up 365 people? That’s definitely going to be a creative challenge to tackle. For now, I just wanted to get started and concentrate on taking it a day at a time rather than getting overwhelmed with the details.

Where’d the idea come from?

In September, I caught a talk by Noah Scalin who created the skull-a-day project. He challenged everyone listening to be creative and make something new every day. If you know me, you’ll know I’m much better with words than I am visual art, so 365 Letters of Gratitude was born the next day after hearing Noah’s idea.

What you can do

Just like Noah challenged me, I’d like to challenge all of you to do something like this. It can be really simple and take just a few minutes, but the idea is to do it every single day. Some of the other crazy ideas out there:

•  take a napkin mustache photo
• create a skull each day
• Other cool ideas

If you don’t want to commit to a full year, try doing something for just a month. See how it makes you feel, and maybe you’ll find you enjoy it enough to keep going for another 31 days.

This has been an amazing experience for me so far, and I truly believe I am more grateful and happy with life now. I know I have a long way yet until I’m done, but I’m loving the journey to get there.

If you’re curious about my project, you can read all the letters on 365 Letters of Gratitude. You can read more about why I’m doing this and some of the FAQs by checking out this page, too.

Note: Welcome to those coming over from Yakezie! Glad to have you here! Be sure to check out some of my most popular posts on the right side of the page. Cheers!

With brick-and-mortar banks, credit unions, and online banks, the options for where to open an account are limitless now. You could open dozens of accounts in a day without much effort. But should you?

While there’s no financial penalty for having many accounts, there are pros and cons to having many or having just one or two.

Why have multiple?

Having multiple bank accounts can lead to great organization if you manage it correctly.

For example, you can have different savings accounts for different savings purposes. Right now, I have a bike savings account, a “quit my job” savings account, an investment savings account, and more. ING Direct makes it easy to set up all these different kinds of savings accounts, and it takes only minutes to open a new one. I usually don’t hesitate to do so when I think of a new account I could use. I recent opened another new account (you can read my Ally Bank review here).

By having multiple accounts, it’s always easy to know how much money you have saved for each purpose. For example, I know that I have $170 set aside strictly for bike maintenance and repairs. If I mixed all these accounts together, it would require some other system of accounting to figure out how much money belonged to what purpose.

Since I adopted the Mint app on my iPhone, it’s been a lot easier for me to see balances in each account, too. I check it at least once a day since it literally takes less than a minute to take a look.

Why have only one or two?

While I enjoy having different accounts for different purposes, it’s definitely more confusing at times. This is especially the case with multiple checking accounts for me. I opened a PerkStreet account because of the great rewards, but I didn’t fully commit to choosing that account instead of my USAA one.

As a result, I transfer a limited amount money to PerkStreet to use for general spending when I receive each paycheck, but I still primarily use my USAA checking account for paying bills. While I enjoy the rewards, I find myself constantly checking my balance to avoid over-drafting.

Even having multiple savings accounts can probably be simplified. If I keep numbers simple and say that $5,000 is emergency savings and the rest is just general savings, I could make it work (although this still doesn’t seem preferable to me).

Which is better?

I’m going to stick with the multiple accounts plan for now. I still feel like having different accounts for different purposes keeps me more organized and on top of my current balances. I hate transferring money between checking accounts all the time, so I’ll make a decision on that soon and get rid of one. Overall, I’ll definitely consider switching back to a minimal number of accounts.

What do you think?

How many accounts do you have or do you think is best? Do you find that one system works better for you than another?

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photo by: cote

Congrats to our three winners from the Spruce Up Your Life Giveaway!

First Prize: Kimberly C. gets the $100 prize and picked the Alzheimer’s Association for the donation.

Second Prize: Kyra B. won the $50 prize and has chosen the Autism Society of North Carolina as her charity of choice.

Third Prize: Doreen K. takes home two of my favorite personal finance books.

Thanks to everyone that entered! It was a lot of fun running the contest and getting hundreds of entries!

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In a quest to understand taxes to the best of my ability, I’ve compiled a list of the best posts to help you maximize refunds and minimize stress in the tax season!

To do this, I looked at bookmarked posts, asked friends on Yakezie, and scoured even more of my favorite blogs and  Google. The result – 37 awesome posts (plus this one, which clocks in at ~1,900 words).

Posts cover a wide range of topics. Not all of them are “how-to” in nature, but they’re all helpful in making tax decisions both when you’re filing your return this season and making decisions that have tax implications for 2012′s return.

Before you start reading, here’s the usual disclaimer: I’m not a a tax professional (and neither are most of the bloggers here), and you should seek professional advice before making any tax-related decisions. Also, some posts written in previous tax years and for previous tax years, so make sure to confirm that the information in these posts is still accurate.

Preparing to Do Your Tax Return

1. Getting Ready for Your Tax Return from DollarVersity

Helpful for: Saving time and stress later from dealing with taxes. It helps a great deal (and I’m really learning this now) to keep track of all your tax-related receipts and forms throughout the year rather than trying to gather them up at the end. Eric provides a great guide for making sure nothing slips through the cracks.

Doing Your Own Taxes

2. Should You Do Your Own Taxes? from DollarVersity

Helpful for: Determining if it makes sense to do your own taxes. Eric encourages using having an ongoing relationship with a professional to get your taxes done, and he discourages using storefront tax services.

 

3. Do Your Own Taxes or Hire and Accountant? from Financial Samurai

Helpful for:  Convincing yourself that you can do your own taxes. Sam suggests that in most cases, you should be able to handle your return on your own unless your return is more complicated (i.e. multiple real estate properties, investments, businesses, etc.) He does his own in 2-3 hours each year using software, so no need to make it too complicated or time consuming.

 

Tax Software

4. Five Arguments for Self-Preparing Tax Software by me

Helpful for: Cheaply filing your personal tax return. I’ve always had a fairly simple return, and I’ve always filed it using Tax Slayer, which I’ve found to be cheaper than Turbo Tax yet do just as good as a job (I compared them side by side last year, and each calculated the identical refund). If you haven’t used online tax software, it doesn’t hurt to give it a shot since it’s free to try (it just costs money to file), and it’s definitely faster and more accurate than doing taxes by hand.

 

5. Best Tax Software for Filing Taxes from Money Smart Life

Helpful for: Evaluating the cost and features of several tax software providers. I haven’t used any of these before myself, but there’s several options from a few of the top brands of software presented.

Hiring Someone to Do Your Taxes

6. Ask Questions Before Letting Someone Do Your Taxes from DollarVersity

Helpful for: Choosing the right preparer for your tax return. Eric points out that not all options are equal, and you should ask questions like: what qualifications does s/he have? On what basis is s/he paid? Do your research and don’t pick someone at random.

 

7. Tax Prep Costs – How Much Will it Cost to Get Your Taxes Done from Get Rich Slowly

Helpful for: Determining how much it will cost to prepare your taxes with either software, online software, or an in-person service. This post goes into great depth, and includes various prices from across the US.

 

8. Essential Tips for Hiring a CPA from Budgeting in the Fun Stuff

Helpful for: a script of specific questions to ask your potential CPA, which might go beyond solely tax preparations. YFS suggests finding a CPA that is at least somewhat specialized in dealing with individuals or businesses like yours.

 

Paying Taxes and Understanding Tax Rates and Brackets

9. Tax Rates, Tax Brackets, and Top Tips for Filing Tax Returns in 2012 from One Cent at a Time

Helpful for: A thorough breakdown of tax brackets. Don’t know how they work and what situation applies to you? Check out this post with many easy-to-read tables of information.

 

10. How to Make Quarterly Estimated Income Tax Payments from Good Financial Cents

Helpful for: Information on how to make quarterly tax payments, which is helpful (and sometimes required) if you’re self-employed.

 

11. Understanding Tax Brackets from Money Crush

Helpful for: Demystifying tax brackets. Many people think they pay tax at the same rate on all their income. This post explains how that’s simply not true, and shows how to properly calculate your taxes (just make sure you’re working with the regulations for the right year).

 

General Deductions

12. Commonly Overlooked Tax Deductions from Free From Broke

Helpful for: Not forgetting some significant yet harder-to-remember tax deductions. Did you rack up mileage for charitable work? What about your breastfeeding equipment? You may be able to get a tax break on these things, so don’t forget to look into them.

 

13. Tax Credits vs Tax Deductions from Money Talks Coaching

Helpful for: Understanding the difference between the two. A tax credit is almost always better than a tax deduction of the same amount. Read this post to understand why.

 

(Bonus) Tax Deductions for Charitable Contributions and Donations from Money Crashers

Helpful for: Learning about what can be deducted on your tax return and the rules related to how those deductions can be taken. This post includes some less-common donations other than cash, like stock or physical property

Businesses

14. Tax Tips for the Freelancer from Get Rich Slowly

Helpful for: Getting answers to simple self-employed tax questions. GRS tackles the Schedule C as well as typical deductions (like the good old home office deduction).

 

15. Blogger Tax Breaks and Deductions from Free From Broke

Helpful for: Bloggers wondering what expenses to deduct. Here’s a list from Free From Broke with examples of deductions if you can take as a blogger (and I will definitely be taking some of these).

 

16. Tax Deductions for Your Online Business Expenses from the College Investor

Helpful for: Deductions for online businesses beyond just blogs. Robert provides another great list of the types of supplies, services, and other expenses that may be deductions on your return.

 

17. Home Business Deduction Tax Tips from the Novel Investor

Helpful for: Deductions focused on a home business. This isn’t limited to just online businesses, and includes a few more things in addition to the other posts above.

Home Ownership

18. Why You Shouldn’t Buy a House Just for the Mortgage Deduction from Retire by 40

Helpful for: Considering the mortgage deduction and making a good decision. Since I’m a renter (4-lyf!), this post just talks a bit about the myth of the tax deduction for mortgages. YFS explains that the deduction itself, while it’s great, should never be the sole reason to purchase a house.

 

19. Is the Home Mortgage Interest Tax Deduction a Good Idea? from Five Cent Nickel

Helpful for: Another take on mortgage deductions. This is outside my realm, but I hope you enjoy it.

Investing

20. Sell Your Investment Losers Before 2011 Ends from Retire by 40

Helpful for: Tax strategy with investments. RB40 talks about selling “losers” at the end of 2011 for the tax benefit. It’s too late to take advantage this year, but mark you calendar before the end of 2012.

 

21. Looking for Another Tax Deduction? Open an IRA from Bible Money Matters

Helpful for: Encouraging you to open an IRA for the tax benefit. Perhaps the best you can take advantage of after the tax year is over, this post provides some the math to for late-season tax savings.

 

22. Traditional and Roth IRA Contribution Limits from PT Money

Helpful for: A thorough explanation of IRA contributions for 2012. Philip covers many (and maybe all) of the different contributions scenarios. If you’re unclear on what you can contribute, this post will straighten things out.

 

23. Basics of Investment Taxes from Six-Figure Investor

Helpful for: Learning how taxes on investments work, including capital gains.

 

24. Tax Efficient Investing from Investor Junkie

Helpful for: Investing to your best tax advantage.

 

Filing Late and Extensions

25. What Happens if You Don’t File Your Tax Return? from Good Financial Cents

Helpful for: Convincing yourself that it’s a really bad idea not to file your taxes. Jeff points out the penalties for not filing a return, which can be very harsh.

 

26. How to File a Federal Tax Extension from Moolanomy

Helpful for: Step-by-step for filing an extension. If you can’t get your return in on time, this post will guide you through the extension process.

 

Dealing with the IRS

27. What Should You Do if You Are Audited? from Free From Broke

Helpful for: Facing an IRS audit. I’ve never been audited, but I imagine it can be a stressful experience. This post is a quick guide for what to do, including knowing what your right are.

 

28. Negotiate with the IRS from Financially Consumed

Helpful for: Negotiating down what you owe to the IRS. If you owe money to the IRS, it’s possible that you can negotiate your way out of paying some of it back. Hunter provides a couple options for doing that.

Tax Statistics

29. Uncle Sam the CEO: Visualization of IRS Revenues from DQYDJ

Helpful for: Knowing how much tax is collected, and playing around with graphs. I’ve grown to love DQYDJ for all the cool graphs they make over there. This one is fun, too, as it takes your through a bit of the history of taxes.

Miscellaneous

30/31. 2011 Tax Changes/2012 Tax Changes from Wealth Informatics

Helpful for: Figuring out what changed in 2011 and for 2012 and planning accordingly.

 

32. Evading Tax – Legally from Frugal Confessions

Helpful for: Saving a few bucks on taxes. Amanda shares a story about how she “evades” taxes in her own life in a way that you might not have thought of before.

33. Tax Rates by Country from Squirrelers

Helpful for: Realizing we don’t pay that much in taxes in the US compared to the world. It’s true: the US has pretty low taxes (and we also have a low savings rate, too).

 

34. Explaining a Health Savings Account from Budgeting in the Fun Stuff

Helpful for: Using a Health Savings Account (HSA), which does have tax benefits. HSAs utilize funds not subject to federal tax when they’re deposited into the account, and these funds can then be used to pay for a wide range of qualified medical expenses.

 

35. How to Cheat on Your Taxes – Legally from Get Rich Slowly

Helpful for: A savvy way to look for tax savings in areas where some deductions are prohibited. My favorite: “You can deduct personal legal fees related to contesting, paying, or claiming a refund on your taxes.”

 

36. Tax Forms You Need from Narrow Bridge

Helpful for: Knowing what tax forms to gather up and look for. Eric explains which tax forms will be reading your way before you file your return, so be sure to collect and save all of these!

 

37. 2012 Tax Deadline and Other Important Tax Dates from Novel Investor

Helpful for: Knowing tax dates for 2012. Taxes are due on April 17 (and not April 15) this year. Extended tax returns are due on October 15.

 

(Bonus) Romney, the Election and Double Taxation from Vaerdi Financial

(Bonus) What Tax Deductions Can I Take for Using My Car? from Your Smart Money Moves

Am I missing any other important topics or helpful posts? Let me know if there’s a good post out there that covers anything I omitted and I’ll include it!

p.s. – don’t forget that I’m running my one-year blogiversary giveaway with over $150 in prizes plus donations to charity. Enter now through 1/29/2012.

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photo by: soukup

Welcome, friends, to the Spruce Up Your Life Giveaway!

I’m celebrating one year of blogging on Money Spruce by giving away $150 cash plus another $50 to charity.

The Prizes

First Prize: $100 cash to you + $25 to a charity of your choice*

Second Prize: $50 cash to you + $25 to a charity of your choice*

Third Prize: One copy each of I Will Teach You To Be Rich and Total Money Makeover

IMPORTANT: Don’t forget to add all your entries in the Raffle Copter form below! Only those entered properly can be counted.

Giveaway has ended! Thanks for stopping by!

The giveaway ends on 1/30/2012 at 12:01 am EST. Good luck to all!

* I’m reserving the right to veto charity choices. Sorry, but I’m just not donating to the NRA or political campaigns or anything else that goes against my personal ideals, so we’ll work together to find something we both agree on.

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photo by: 401K

ING Direct is offering $107 in free cash when you sign up for an Electric Orange checking account.

I’m already an Electric Orange checking account holder.  Here are some of my favorite features:

- NO MONTHLY FEES – by far my favorite feature

- free ATM usage at 35,000 ATMs

- easy to link with my ING savings acounts

- Easy P2P payments

- No overdraft fees

This deal is only valid for 2 days, so be sure to sign up by Sunday at 11:59 pm ET.

Even if you don’t make the deadline, you can still get $50 for a new Electric Orange Account.

Click here to check it out.

Happy Saturday!

Frustrating fact: none of the big banks offer completely free checking anymore. Most of them offer free checking, with a catch. This could be something like requiring direct deposit and/or keeping a daily minimum balance through the month. If you don’t follow the rules, you get slapped with a monthly fee. I overheard my roommate on the phone yesterday complaining to a BoA rep. about a $12 fee she was charged on her last statement because she doesn’t have direct deposit anymore. She didn’t get the memo and found out about the fees the hard way. I learned from my parents, who also have BoA, that apparently they keep free checking but aren’t allowed to use bank teller service. Um, what?

Why Are You Punishing Yourself?

Even if there are ways to get “free” checking from the big banks, why does everyone want to work around these rules for fees? I find it annoying to have to monitor certain activity and make sure I hit thresholds every month. Then, when you don’t make it one month for whatever reason, you’re hit with the fee.

Instead, let’s just consider the alternatives. There are some great banks out there that offer free checking and have lots of great options. Here’s my top 3 choices:

1) USAA -  This is what I use for my main checking account. I never get charged any fees. Even ordering more checks is free! My favorite feature is that I can use ANY ATM and can get my fees paid for! USAA is basically an online bank, so checks have to be mailed in for regular users (no military connection). USAA used to only be open only to those affiliated in some way with the armed services, but it’s actually open to anyone now! J. Money at Budgets Are Sexy loves USAA, just like me.

2) ING Direct – ING is my second favorite to USAA, mainly because this is where I create all of my savings accounts. The main difference is that ING doesn’t have free ATMs on all ATMs like USAA does. ING makes it really simple to have multiple accounts for different savings goals. I find the ING interface easy to use, too. ING Direct almost always has promotions for free money, too, when you sign up for new accounts.

3) A local credit union. This is the best option if you need a brick-and-mortar location to do your banking. The credit unions I’m familiar with all have great options for free checking and savings accounts without fees. Since credit unions are often small shops, you might not have as many online banking options, but that’s the tradeoff.

I’ll gives Charles Schwab an honorable mention. I haven’t used them, but they’re Ramit’s favorite option.

Is it tough to switch?

Not really, but it can take a bit of effort depending on what accounts you have linked and if you have direct deposit.

I made the switch from BoA to USAA bank last year (after BoA hit me with a fee), and found it to be a pretty simple process. I just opened my new USAA account, switched everything over to that, and then close my BoA account.

Another reason to switch

Aside from the fees themselves, there are other reasons to “move your money.” Check out the Move Your Money Project to see some of the reasons, or watch the video below:

I think there’s definitely the potential for these big banks to get worse with fees. That’s how they’re making a lot of their money these days. Personally, I don’t want to hold an account at a bank that treats customers like this.

Do you have an account at one of the “big banks”? Have you switched or considered switching”

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photo by: Tumbleweed:-)

I’m not a credit card affiliate, and I’m always shocked/annoyed/disgusted at how many financial bloggers seem to make a living “reviewing” credit cards on their sites. There’s never a shortage of blog posts explaining the latest credit card offers, and I’m really sick of seeing it. Undoubtedly, most of these bloggers are getting a cut for reviewing the cards and getting their readers to sign up for them. While I won’t name names (and I’m sure I don’t have to), I think these bloggers are doing a incredible disservice to their readers. Here’s why (and see my pledge that you can be a part of at the end):

1. Most people suck at managing credit cards. This is not a new revelation. Just look at credit card debt and all the stats that go with it. Here’s a few: the average undergraduate credit card debt is about $3,000. The average credit card debt per household with credit card debt is about $14,000.

There’s nothing encouraging about how credit cards have influenced people’s lives. Even if there are some “success” stories here and there about taking advantage of rewards points, there are many times more stories of financial devastation due to credit cards. While I’ll admit that I own several credit cards, I’m not convinced credit cards are beneficial to my own personal finances. I often feel that I spend more when using credit (like others have reported), and I’ve had several thousand dollars in credit card debt before (when I graduated college). While I’m not 100% on board with Dave Ramsey and cutting out credit cards completely, he does make some great points about why they’re unnecessary. Has anyone ever made their fortune with credit cards? No f’ing way.

2. It’s disingenuous for personal finance blogs to encourage credit cards. There are lots of blogs out there about getting out of debt. While the ones promoting credit card offers aren’t necessarily in the “get out of debt” niche, there’s a lot of overlap on personal finance blogs. I’m a firm believer that anyone trying to get out of debt should not be using credit cards of any kind. There are no rewards or any kind of benefits from credit cards that are going to help them with their debt problems. Don’t tell me that these people can be “disciplined” when using their credit cards; if spending problems are what got them into their debt mess in the first place, credit cards aren’t going to help them get out.

3. Those are able to successfully take advantage of credit cards don’t need to hear about it here. There are plenty of websites already dedicated to finding the “best” credit card offers. Aside from that, repeat posts on financial blogs certainly have all the available credit cards covered many times over anyway. It’s over-covered by financial sites, and it’s boring to me (and maybe you) anyway.

4. It’s not real financial advice; it’s really just hawking a (bad) product. I’m not going to lie: I am trying to make money off of this blog, and I do post affiliate links here, as many of you already know. But I do limit the links to products I believe in and actually use.  Obviously I haven’t used used all the credit cards out there, and I don’t hope to.

5. I care more about my readers than making a buck. This goes with the point above. I’m simply not going to “sell” anything on here that I wouldn’t go for myself, no matter what it brings me in return, if I don’t think it’s in the best interest of my readers. I’d rather run this blog into the ground than have even one of you go into debt or lose money on a poor recommendation I made on here.

With all that in mind, here’s what I’ve wanted to say for a while now:

My pledge: No credit card reviews, ads, or links on Money Spruce. Ever.

If you’re a personal finance blogger, I offer you a challenge: pledge no credit card reviews or ads on your site (in the comments here), tweet this post, and I’ll add your name and link here.

Readers: Whether you agree or disagree with this post, let me know in the comments. I want to know what you think, too.

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photo by: Robert Scoble

As you may or may not know, I am now a  freelancer for adaptu.com!  Adaptu is a similar service to Mint, but with more a community feel to it (I’ll be featuring a review of adaptu on here soon).

You can read my first post on changing banks.

This is really exciting to me, as it’s my first real writing gig! I feel like it’s a great accomplishment for me. It’s definitely a step towards earning more money on the side of my 9-5 job.

I’ll continue to post on adaptu every two weeks or so. Be sure to check out my posts and others on adaptu.