This book, first published in 1992, is still very popular to this date. I waited on hold from the library for two months, and they had 6 copies!

Your Money or Your Life is often cited by personal finance bloggers (affectionately abbreviated as YMOYL) and writers as influential and life-changing. Many highlight it as the best personal finance book they’ve read and one that has shaped a lot of their philosophy.

To have read this book over 4 years of starting a personal finance blog? Blasphemy, I know!

The interesting thing about Your Money or Your Life is that it’s not so much a personal finance book as it is a philosophy book, as I’ll explain.

Onward with the review.

The Basic Premise in Your Money or Your Life

All of the material in Your Money or Your Life revolves around one central concept:

money = life energy

It’s true. We give our time, or life energy, in exchange for money.

Once you absorb this, it allows you to view everything in your world a bit differently. For example:

• What is your real wage, given the amount of time it takes to commute, the cost of work clothes, the cost of eating out for lunch, the cost of child care, etc.? When that $20 per hour becomes $10 in real wage, is that job worth your life energy?
• When you spend $50 a month on video games, how much life energy are you trading for those video games?
• How much life energy are your trading to take a vacation? for a mortgage? for dining out?

When you start viewing money in terms of life you are giving up, suddenly that money takes on a whole different meaning and value.

This is a very solid fundamental concept and I think this world would be better off if everyone realized the importance of this.

Your Money or Your Life goes through 9 fundamental steps that are recommended to follow. I’ll summarize each and give my thoughts:

Step 1: Making Peace with the Past

This step asks you to calculate your total life earnings and then ask yourself what you have to show for your life’s work.

Kind of a depressing exercise, if you don’t have mounds of cash. Is that the intent? Absolutely.

Step 2: Being in the Present – Tracking your Life Energy

Here, the money=life energy concept arises, which is repeated throughout the rest of the book. The authors also emphasize the importance of calculating your real wage and tracking every single cent that you are spending. A very valuable practice that I also recommend.

Step 3: Where is all of your Money Going?

After tracking all of your monthly expenditures, divide the amount you spent on each category by your real wage. This equals the number of hours of life energy you spent for that particular item. Similarly, document all sources of income.

The authors recommend documenting everything and being as granular as possible with the category breakdown so you can find out the true purposes for why you are spending.

Step 4: Three Questions that will Transform your Life

With your spending activity outlined, the authors urge you to ask yourself the following three questions:

1. Did I receive fulfillment, satisfaction, and value in proportion to life energy spent?
2. Is this expenditure of life energy in alignment with my values and life purpose?
3. How might this expenditure change if I didn’t have to work for a living?

Go through each category and assess by marking a +, -, or 0 (neutral).

I’m not sure how effective this step is at accomplishing anything, but it can help you re-evaluate your values.

Step 5: Making Life Energy Visible

It is recommended that you chart out your total monthly expenses and income (y-axis), over time (x-axis) to see the results.

Yes, step 5 could literally take you years to complete. If you can stick with it, this is a highly valuable exercise.

Step 6: Valuing your Life Energy: Minimizing Expenses

This step comes down to taking pleasure in frugality and the simple things in life. It’s also about throwing out the “Joneses” envy and why you should stop trying to impress others. It also discusses the cost to the planet of every purchase we make.

Step 7: Valuing your Life Energy: Maximizing Income

This chapter, to put it simply, asks you to re-consider your relationship with work. Why do we feel like we need to work full-time or we are useless? It’s a great question.

It also urges you to disassociate your job with your identity.

One concept I really like in this chapter is around all of the possible purposes of work. Getting paid is the obvious, but others include success, socializing, power, prestige, personal growth, success, learning, security, etc. Often times, our dissatisfaction with work comes from these needs not being fulfilled. However, all of these needs can be much more easily fulfilled by unpaid activities, so don’t get down on your job if it isn’t meeting those purposes.

In the end, the authors recommend that you value the life energy that you invest in your job and exchange it for the highest pay consistent with your health and integrity.

Step 8: The Crossover Point

The “Crossover Point” is the point in time when your income from investments surpasses your expenses. At this point, you will reach financial independence. You no longer need to work for money. Hooray!

Step 9: Managing your Finances

In this step, the authors highlight the final step of financial independence – investing for the long-term.

This was probably the weakest chapter in the book, as it simply gave definitions of mutual funds, treasury bonds, index funds, and stocks and talked about some of the risk/reward of each.

The reality is that this step is much harder to do than when the authors originally wrote the book. Treasury bonds, CD’s, and other stable forms of investment had much higher return rates than they do today. It can be done, but it takes much more risk these days than previously.

My Overall Thoughts on Your Money or Your Life

Overall, Your Money or Your Life is definitely worth reading. There is a lot of hype around the book in the personal finance world which gave me pretty high expectations coming in. It did not exceed my high expectations, but it did meet them.

Eventually, I came to many of the same conclusions that were found in the book on my own, and I believe the path set forward in the book is fundamentally strong. It took me a lot longer to get there than it would have had I read the book earlier in life. If you’re at an earlier stage in your personal finance development, the book is a must read.

I really liked the money=life energy concept and I think the book is a good blend of life philosophy and strategy technique. Values are emphasized repeatedly. It is not so much a book about personal finance as it is a book on guiding your relationship with money and personal values.

I also think the practice of documenting all of your expenses over time and placing values on each is very effective. It takes a lot of discipline, but it is worth the effort.

A few things I did not like about the book or thought could be improved:

• At times, it was very self-promotional, particularly when talking about the success of participants in their financial seminars.
• It was 303 pages, but probably had about 100 pages of good content. Some of the material took way to long to walk through and was repeated more than necessary.
• Documenting, by its own, is not enough. It’s one thing to talk about the virtues of decreasing your expenses through documenting them, it’s another to talk about the tactics to actually decrease them. This was not covered at all in the book.
• Some of the personal stories were great, but there were too many, and some were very weak and hollow. Had the authors focused repeatedly on the same folks throughout the entire book and their progress in life, it may have had more impact.

Constructive feedback aside, Your Money or Your Life is definitely worth picking up from your library and giving a read.

Your Money or Your Life Discussion:

• What did you think about Your Money or Your Life? Did it live up to your expectations? Was it life changing for you?
• What is your favorite personal finance book?

Related Posts:

• Getting Things Done Book Review
• Winning Job Interviews Review
• 8 Personal Finance Spring Cleaning Ninja Moves!

A Review of the Personal Finance Classic: Your Money or Your Life is copyrighted by 20somethingfinance.com without consent to republish.

That’s right, it’s time to dig in and start thinking about completing your 2011 income tax return.

To help you get started and perhaps give you a little motivation nudge, I have put together a 2011 tax return guide that will cover some of the basics. This isn’t meant to be a comprehensive guide, rather, just a jumpstarter to get you going.

Keep in mind that I am not a tax professional, so don’t rely on me as one. Serious questions should be taken to a tax professional (or at least answered by reader, Natalie H., who I’m sure is critiquing this tax guide).

When can I Start Filing my 2011 Taxes?

You’re free to start anytime, as long as you have your W2′s, 1099′s, and any other tax related forms that you are expecting.

However, when and should are two different matters. I’ve found that there can be a number of updates or last minute changes to tax software that don’t hit until early or mid-February. On top of that, I have received 1099′s after January. So I typically wait until late Feb. or early March before filing.

When are Taxes Due?

There is another tiny quirk this year with the tax deadline date, as there was in 2011. The 2012 tax deadline (for your 2011 taxes) is Tuesday, April 17th vs. the typical April 15th due to Emancipation Day.

What exactly does the tax deadline mean? It is the day you must have your return to the IRS postmarked or submitted electronically (e-filed).

What About a Filing Extension?

If you need an extension to your 2011 tax return, you must file IRS Form 4868 by April 17, 2012. The deadline for extended tax filing is October 15, 2012 (an additional 6 months). This doesn’t mean you can simply get away with not paying your taxes for 6 months, you have to submit your estimated taxes due (if you owe) by April 17, and then submit your paperwork by October 15.

Is there Anything I Can Still do to Impact my 2011 Taxes?

It’s not too late to still have an impact on your 2011 taxes, believe it or not.

The primary impact you can still have comes from contributing to a traditional IRA, Keogh, or SEP IRA.

You will want to check out the 2011 maximum IRA contribution limits and Traditional IRA income phaseout limits for deductions to make sure you are eligible.

You can still contribute up until the tax deadline for the 2011 calendar year, which will lower your overall adjusted gross income (AGI) and potentially bring you a bigger return or cut the taxes you owe.

On top of that, if your income is low enough, you might also qualify for the 2011 Saver’s credit.

To Itemize or Not

Itemizing your deductions, versus taking the standard deduction, may prove fruitful too. If you are self-employed, have a home or mortgage, or have a lot of out-of-pocket medical expenses, you may have a good shot at saving more through itemized deductions than taking the standard deduction. Doing so might even put you into a lower 2011 tax bracket so that some of your income isn’t taxed at the higher rate.

If you did any of the following during 2011, it could impact your return:

• Made home energy efficiency improvements? You could qualify for a 2011 energy tax credit.
• Had a child this year or was guardian for at least half a year? You could claim a child tax credit.
• Had self-employment income? You can deduct business related expenses.
• Have huge out-of-pocket expenses for medical purposes? Deductible, at a certain level.
• Paid tuition? Deductible.
• Paid interest on a mortgage or property tax? They’re deductible.
• Made a 2010 Roth IRA conversion? You can still spread out your income tax liability over the 2011 and 2012 tax calendar years.

E-File your Tax Return

Efiling is the way to go. It allows you to get your return faster and the error rate is much lower than on paper returns. I’ve written about the best and cheapest ways to efile in the past. I’ve used both Turbotax and H&R Block to efile in the past, and they are equally great products. Both offer a free 1040-EZ federal e-file version. Filing state returns electronically will cost you anywhere you go, as will more complicated returns.

I Got a Huge Tax Return! Awesome, Right?

Getting a huge tax return is not something to brag about. Getting a tax return simply means that you gave the federal government an interest-free loan over the previous year.

If you keep getting huge returns, you may need to make some changes to your withholding tax allowances (you do this through your payroll department at work). Even though they might seem cool, huge tax returns are interest free loans to the government that erode in value due to inflation, sorry to say.

A better goal would be to have a slight amount due back to the government, without having to pay a penalty. That way, the government has given YOU the interest-free loan.

How to See your Tax Refund Status

If, after submitting your return and finding out you’re going to be getting a refund, you’d like to check on your tax refund status, do it on this IRS site.

Keep in mind that the IRS never will send you an email with this option, so go to www.irs.gov and go direct to the site. Then click ‘where’s my refund’.

Reader Tax Tips

A few weeks ago I gave away 5 copies of H&R Block to readers, who offered their tax tips as part of the contest. Here are some of my favorite reader tips:

From Crystal:

“My tax tip: Fully review your return prior to signing. Many of us are tempted to just sign away without reading and reviewing what our tax preparer has done because we “trust” them. In the event you are audited (like a family member of mine was) you can’t tell the IRS “I didn’t know my tax preparer put that”.”

From Bob:

“My favorite tip, which may be obvious to some, is that your spouse may NOT be claimed as a dependent. Per the IRS “On a joint return, you may claim one exemption for yourself and one for your spouse. If you’re filing a separate return, you may claim the exemption for your spouse only if they had no gross income, are not filing a joint return, and were not the dependent of another taxpayer.””

From Mike:

“Pay your January mortgage bill, and student loans in December so you can deduct the additional interest when you file!”

From Ron:

“My favorite tax tip is to wait til near the end to file since your software will keep getting tax updates well into April.”

From Danielle:

“My tax tip: For recent grads working in a new state, make sure you read up on what type of state tax forms are appropriate for you to use based on your situation. Take the steps to obtain residency in the new state to avoid grey areas down the road.”

From Melissa:

“This is the first year that I will file “by myself”, for myself… while in college and grad school, my parents had their CPA file my taxes along with theirs. Due to that, I don’t really have a tried and true “tax tip” HOWEVER I did learn my lesson one year… ALWAYS make sure to update your address whenever you move! One year my tax refund was sent to my old address (an address in Phoenix, when I had moved to Denver months before for school) and it took me a YEAR to go through calling the IRS every month to FINALLY have the return sent to my parents address in Tucson! Absolutely crazy!”

From Natalie:

“Turn a personal loss into a business loss. For example, if you have a home underwater and need to sell consider renting for a while (6 mo to a year) before you make the final sale. Make sure to file Schedule E to report the rental income and expenses so the IRS knows you were using it as a business. Then when you sell, you can count the loss against your income. This can make a big difference if you are in a higher income tax bracket. “

Great tips, everyone!

Relax!

Taxes get a bad name, but they are not all that bad.

You can easily do them yourself in an afternoon, and if you don’t have many deductions, within an hour or two.

Put on some good music, have a glass of wine, and just relax.

2011 Tax Discussion:

• What are you dreading or looking forward to with your 2011 taxes?
• What tax tips do you have for the 2011 tax year?

2011 Income Tax Return Guide is copyrighted by 20somethingfinance.com without consent to republish.

I knew it was time to trade her in. And to do so before she died would be wise.

She still had some value in her for someone who wanted to put a little money in to her. And I didn’t want to sink more money in with towing, rental, fixing, and other expenses if she did die (I share a car with my wife and don’t have a backup 2nd vehicle).

That was my situation. On to the search…

New Vs. Used Cars: Which Provided the Best Value?

Should I buy new or used? This was the first thing that entered my mind. I had not purchased a car in 6 years, so I had no idea what the new vs. used car markets looked like.

Many will cite the “it loses 10, 15, 20% (depending on who you ask) of its value as soon as you drive it off the lot” line. And other popular finance wisdom will say you should buy everything used. I wanted to find out for myself.

I started pricing out new vs. used models. What I found was that cars that were within a year old were selling for just slightly less than new cars (about 10-15%). Even cars that were 2-3 years old were selling for just 15-25% less than their new 2012 counterparts.

I did some research into the present used car market and found that this is fairly common in tough economic times – the used car market, as a whole, gets propped up by buyers looking to save some money versus buying new. Typical law of supply and demand. Ironically, the frugal buyer kind of gets screwed.

I’m not a big fan of buying anything new these days, but the current market made me think that if I could find a new car (with incentives to bring the cost down), that had a full warranty and zero wear and tear, and pay roughly the same or less than a car with anywhere from 10,000 to 30,000 miles on it with a shrinking warranty and little knowledge of how the car was treated prior – it might be justified. But I had to find a good deal first.

Looking for the Cheapest New Car

I turned to my list of the cheapest new cars for 2012. I made a spreadsheet of each car, added in a few other cheap favorites, and included their MSRP’s, any current manufacturer discounts and incentives, the annual fuel cost, and average insurance premiums.

Much to my dismay, the only manufacturer incentive on any of the 15 cheapest cars at the present time was $500 on the Ford Fiesta, Chevy Cruze, and Chevy Sonic. I had figured I might run in to this issue, as January is typically a horrible time to buy a new car. Automakers just got done heavily discounting last year’s models in December in an effort to clear them off the lot and to hit their sales goals for the year. January offers them a fresh start and a little flexibility.

The GM Card Earnings

As an aside that plays a key role in my search, I had an old GM card laying around with some cash back earnings on it. It was the first credit card I ever used and I’ve kept it open for it’s favorable impact on my credit history.

It offered 5% cashback on all purchases if applied towards a new GM vehicle. Over the years, I had built up $1,011 in savings, which GM was upping to $2,000 through Feb. 23 through a special promo (they do this about once or twice a year).

This was good on any GM vehicle and is completely separate from any other negotiations with the dealer.

Turning Towards GM

My ideal car (in theory), the Toyota Prius C, has not been released yet. It is the new hatchback hybrid from the Prius line that gets over 50 mpg city and highway and retails for under $19,000. It will reportedly be released in March.

I was not confident my car could last until then without repair, and even if it did there would doubtfully be any incentives on the new Prius C as it would be newly released.

Knowing that I had the $2,000 off in GM card earnings ($1,000 of which expired in a month) and that there was a $500 Auto Show cash bonus for all GM cars, I started to turn to GM.

What I found next was encouraging.

GM was also offering a $500 GM loyalty discount (if you trade in a previous GM model). I also found that they were offering a special $2,500 consumer cash discount on the 2012 Chevy Malibu.

The Malibu had honestly never crossed my mind and it certainly would not be my first pick, all else being equal. It MSRP’ed right below $23,000 for the base model, it’s not the most functional for my outdoor lifestyle (that would go to the hatchbacks), and 33 mpg’s highway is not bad, but it certainly wouldn’t make my list of the most fuel efficient cars – 40 mpg hwy is the new 33 mpg hwy of 3 years ago.

The Best Value on a New Car

Instead of thinking about my “ideal” car, the most fuel efficient car, or even the cheapest new car from an MSRP standpoint, my strategy shifted slightly.

I decided that it would be wisest to go for the best car (within reason) for the best price. The Malibu was that car.

Its pricing, before negotiation or trade-in, looked like this

$22,870 MSRP
- $2,500 Malibu consumer cash
- $500 auto show bonus
- $500 GM loyalty bonus
- $2,000 GM card cashback
= $17,370

$5,500 off MSRP without any dealer incentives! That brought it right down to the bottom of my cheapest new car list at $17,370. The Malibu has way more standard features and is bigger than any of the vehicles on that list, proving it to be the best value I could find.

I wasn’t in love with the car, but I kind of liked that about the choice. My emotions and desires were not leading my purchasing decision. That’s a good place to be in.

Save Now. Swap for a More Ideal Car Later?

If I could get the best car value now, and knowing what I found out about used car prices, it is very possible (if not certain) that I could get the Malibu now and sell it for more than what I bought it for later in the year while it was still under full bumper-to-bumper warranty.

At that point, I could even apply the savings to a different car that had bigger incentives at that moment or was slightly used.

This strategy was not without its drawbacks, but it reasoned to be pretty damn good considering my predicament with Grandy and the lack of new car incentives at the moment.

On to the negotiation stage…

Car Buying Strategy Discussion:

• What strategies have you used when buying a new car?
• What considerations have you had when picking out a car?

Related Posts:

• Cars on Craigslist
• How Old are your Tires?

New Car Strategy: How I Found the Best Value on a New Car is copyrighted by 20somethingfinance.com without consent to republish.

When it comes to budgeting, however, micromanagement should be embraced (don’t let anyone tell you otherwise).

Any time you are able to not only save yourself some money, but also reduce your negative impact on the planet, that’s a beautiful thing.

One of the areas you can do this with is your household electricity consumption.

I decided to do a little experiment around my house with all of my electricity powered devices and share my findings on their electricity usage with you. My main goal was to find out how much electricity I was wasting and cut that down as much as possible.

How Much Does Electricity Cost for Common Household Devices?

For a long time, I have had a pretty general idea of what my electricity bill has been.

Outside of July and August, when the electricity cost of air conditioning inflates my bill (muggy Michigan summers), a typical month for me is right around $50.

I’ve done a lot of things to keep my electricity cost down, which include:

• every bulb in the house is a CFL or LED.
• I unplug devices I rarely use.
• I keep lights turned off when I’m not in the room and during daylight hours.
• I turn my desktop computer off when I’m not using it.

But I’ve always thought that I could do more.

The problem was that I had no idea how much electricity cost each household device was generating.

I had some nagging questions that I wanted answers for:

1. does it cost anything to leave a phone charger plugged in?
2. what about a laptop charger?
3. how much electricity does my desktop computer use in sleep mode vs. awake mode vs. off?
4. how much electricity does my DVR use in sleep mode vs. awake vs. off?
5. is my TV sucking up energy when turned off?
6. which of my appliances are using standby power?

I found answers to all of these questions and a few added surprises…

Electricity Monitoring Device Use

In order to do this test, you will need an electricity monitoring device. There is no getting around that.

Hopefully you can learn from my tests, but your personal devices may vary. In other words, there is little universality in electric use. If you want exact numbers for your situation, you will need to get an electricity monitoring device of your own.

There are two inexpensive and reputable devices on the market that both have great reviews:

Belkin Energy Conserve Electricity Monitor: $29.99 (qualifies for free super saver shipping). The Belkin measures watts, cost per month and year, and CO2 emissions per month and year.

P3 International Kill-A-Watt Electricity Usage Monitor: $19.99 (qualifies for free super saver shipping). Kill-A-Watt calculates volt, watt, amp, hz, kwh, and expenses per day, week, month, and year.

I opted for the Belkin because the company is more familiar to me, the device seemed very simplistic, and it calculates CO2 emissions (the P3 does not), in addition to electricity cost. But either should get you what you’re looking for.

Electricity Use Per Device Test Results

The following data is the result of my tests. Note that I used $0.15 per kWh for my calculations. Your cost may vary per your utility company (the Belkin allows you to customize).

Also note that there are, in many cases, multiple tests for each device based on how it may be used (i.e. laptop fully charged vs. charging).

Data shown is in the format of: device tested: watts drawn, $ to power per year, CO2 emissions per year (in lbs.), and lessons specific to each. I did not test things that I used very randomly and for a specific purpose (i.e. an engaged blender or toaster), rather my goal was to find where electricity was being wasted by keeping things plugged in.

• CFL bulb lamp, off (40W):     0W    $0.00    0 lbs. – there is no need to unplug lamps.
• CFL bulb lamp, on (40W):    41.8W    $54.17    442 lbs. -  I am surprised even CFL’s use this much electricity. Turn your lights off when you don’t need them on.
• Macbook, charger-only:     0W    $0.00    0 lbs. – this is not universal on chargers. Gave me a sigh of relief though, b/c I always leave it plugged in.
• Macbook, charging engaged:    60w   $77.76    650 lbs.
• Macbook, charging closed:    44.7W    $57.93    473 lbs. – not much difference between engaged and closed, when charging.
• Macbook fully charged, closed:    0W   $0.00    0 lbs. – good to know that the adapter shuts down when a Mac is fully charged.
• Macbook fully charged, engaged:    28W   $36.29.00    144 lbs. – not as low as expected.
• Acer laptop, charger-only:    1.1W    $1.43    11.6 lbs. – it’s not much to keep it plugged in, but it’s still wasteful.
• Acer laptop, charging engaged:    43W    $55.73    440 lbs.
• Acer laptop, charging closed:    17W    $22.03    190 lbs.
• Acer laptop, fully charged, engaged:    24W    $31.10    240 lbs.
• Samsung smartphone, charger-only:    0W    $0.00    0 lbs.
• Samsung smartphone charging:    6W    $7.78    57 lbs. – this is much cheaper than expected.
• Samsung smartphone charged:    1.7W    $2.20    17.2 lbs. – also much cheaper than expected.
• 0.5W LED nightlight:    0W    $0.00    0 lbs. – my LED nightlight for my bathroom uses so little electricity, it doesn’t register on the energy monitor.
• Black & Decker toaster, not engaged:    0W    $0.00    0 lbs.
• KitchenAid Blender, not engaged:    1.5W    $1.94    16.8 lbs. – surprising in that my toaster does not use any energy when plugged in. Will keep unplugged. $1.94/yr. saved.
• Vizio 42″ LCD TV, off:      0W    $0.00    0 lbs. – my TV uses so little energy when turned off, it does not register. Surprising, and I’m thankful.
• Vizio 42″ LCD TV, on:    230W    $298.08    2425 lbs. – wow, talk about an energy hog.
• Comcast DVR, on:    32.4W    $41.99    345 lbs.
• Comcast DVR, off:    31.2W    $40.44    330 lbs. – this was the surprise of this test. A Motorola Comcast DVR uses as much energy when turned off as it does on.
• Sony BluRay, off :   1W    $1.30    10.7 lbs.
• Sony BluRay, on:    16W    $20.74    172 lbs. – I had been leaving this on b/c it is so slow to start up. Not anymore. $20/yr. saved.
• Super Nintendo, off:    0.7W    $0.91    7.4 lbs. – awesome that this is the only gaming system listed, no?
• Super Nintendo, on:    6.6W    $8.55    71 lbs. – wow, an energy sipper.
• Printer, off:    2.6W    $3.37    27.1 lbs. – another surprise. I will be unplugging. $3.37/yr. saved.
• Printer, on, not in use:    5.9W    $7.65    63 lbs.
• Cordless phone base, w/phone:    1.6W    $2.07    17.2 lbs. – very cheap!
• Cordless phone base, w/o phone:    0.9W    $1.17    10.2 lbs. – very cheap!
• Paper Shredder, plugged in, off:    0W    $0.00    0 lbs.
• Acer Desktop Computer, off:    1.7W    $2.20    18.6 lbs.
• Acer Desktop computer, on, awake:    45W    $58.32    475 lbs.
• Acer desktop computer, on, sleep:    3.3W    $4.28    35.5 lbs. – I can’t believe how cheap my desktop on while asleep. Only $2 per year vs. off!
• Acer 20″ LCD monitor, off:    0W    $0.00    0 lbs.
• Acer 20″ LCD monitor on, awake:    23.5    $30.46    250 lbs.
• Acer 20″ LCD monitor on, sleep:    0W    $0.00    0 lbs. – just as the TV, a big surprise.
• Ooma VOIP device, on:    6.6W    $8.55    70 lbs.
• Netgear wireless router/modem, on:    7.8W    $10.11    83.6 lbs.
• LED Alarm Clock:    1.6W    $2.07    16.8 lbs. – cheap! Might as well put the phone away unless you want to declutter.
• Refrigerator, closed (no light) and not running:    0W    $0.00    0 lbs.
• Refrigerator, open with light on, not running:    41.7W    $54.75    442 lbs. – that little light in the fridge is not cheap.
• Refrigerator, closed (no light), running:    155W    $206.00    1808 lbs. – this highlights the importance of a good fridge and keeping the fridge door shut.

Here are some general learnings on electricity costs from the above results:

• No need to unplug lamps, but even CFL’s are not cheap to keep on. Turn off the lights when you leave the room! Despite their improvements, light bulbs are still one of the biggest electricity vampires. LED’s are a beautiful thing.
• Change the setting in your computer to have a 3 or 5 minute sleep mode delay versus 30 minutes or never. This could save you dozens of $’s per year.
• If you don’t have your DVR set to record shows, unplug it. It could save you $40+ per year vs. just turning it off!
• Some chargers left plugged in drain energy, but most don’t. If they do, it is not much. Better to not be wasteful though.
• I was not expecting to find my blender using energy when not in use. You never know which appliances are vampires. Better to test and have definitive answers than always wonder and feel doubt or even guilt.
• DVR’s are never really “off”. My DVR essentially adds another $4 to my cost of cable every month.
• Perhaps the most important lesson of all: electricity is still incredibly cheap and incredibly polluting. To think that just $1 of electricity costs equates to about 7.5 lbs. of CO2 emissions is disgusting. If there is any hope for this planet, it lies with solar and other renewable energies.

I estimate that the changes I will make from these learning’s will save me about $75 per year on electricity costs at the $0.15 kWh price. That’s more than 10% of my entire electric bill. As the cost of electricity increases (and it will) that $ amount will only go up every year. I more than made my $30 investment in the Belkin energy monitor back in just the first year, and after I let all of my friends and family borrow it, I can sell it.

If this topic interests you, check out my entire series on eco-friendly cost savings.

Electricity Cost Discussion:

• Which of these findings surprise you?
• How much is your monthly electricity bill, on average?
• Have you run an experiment like this? What were your findings?

Related Posts:

• 2012 Energy Tax Credit
• Electric & Hybrid Tax Credits by State
• The Cost of Bottled Water vs. Tap
• How to Use Watzon to Cut your Energy Use

How Much Electricity Costs to Power Household Devices & How to Cut your Usage is copyrighted by 20somethingfinance.com without consent to republish.

I negotiate with Comcast frequently (most recently saving $200 over 6 months) – and that gives me the justification (or excuse) that I need to keep paying for it. That and I’m still able to maintain an 85% personal savings rate, even with paying for cable.

Why do I do it?

I LOVE live sports. I have ever since I was a child. If it wasn’t for my love of Michigan State basketball and football, the Detroit Tigers, and the Tour de France (all are exclusively on cable), I would have ditched cable long ago, without any regrets.

The Cost of Cable

According to CNN, the average cable bill is $75 per month and has been rising by 5% annually. Over time, the impact can be mind blowing.

When I ran the numbers a month ago on the lifetime investment opportunity cost of cable, I found that it could be anywhere from ~$600K – $4.2M.

If that isn’t incentive to quit the habit, I don’t know what is.

But how does one quit? And what is life like after?

Share Your Life After Cable Story

Many have successfully quit cable. I know you’re out there.

What I, and other struggling cable addicts, would love to hear from you is:

• How long ago did you quit?
• Did you relapse?
• Was withdrawal difficult?
• What alternative forms of entertainment did you turn to?
• What changes have you seen in yourself or your lifestyle since quitting? What is life like on the other side?

It’s OK. This is a safe place.

Related Posts:

• How to Cut your Comcast Bill
• Hey Comcast: Your Customer Service Still Sucks
• How to Get Rid of Cable

Yes, there is Life After Cable TV: Share your Story is copyrighted by 20somethingfinance.com without consent to republish.

We’ve all heard it. Many of us have lived by it. But is it good personal finance advice?

This phrase is often used in the context that personal finance is simple, one only needs to make sure that they are indeed spending less than what they make in income. That is the secret to personal finance. Why over-complicate things?!

Taken Literally…

The unspoken advice with this philosophy is that you can spend away, and as long as you are not spending more than you are making and adding bad debt, all is well.

In my experience, this advice is always seemingly comes from someone who:

1. has an addiction to spending and wants to justify their purchasing behaviors.
2. doesn’t want to spend the time to educate his or herself on a complex topic.
3. wants to appear to be an expert on something they are truly not.

Sadly, I’ve seen a number of personal finance blogger peers cite this advice as one of the top pillars or tenants of personal finance.

Yes, of course, you need to spend less than you make. That’s a given. If you don’t, you’re losing money or increasing debt. In other words, you’re screwed. Your lifestyle is unsustainable. If you’re seriously in debt and your cash outflows on a monthly basis exceed what is coming in, then spending less than you make might be a good starting point for you… but…

For everyone else, this advice, taken to its extreme, could result in said person:

• Going into serious debt if income stops coming in
• Not be able to build an emergency savings
• Not ever reaching financial independence
• Never being able to retire
• Not being able to save up for an occasional vacation
• Not really working towards ANY future goals that are reliant on finances

The reality is that if you take this advice literally, you could simply be spinning your wheels and leaving yourself open for financial disaster.

How many people in your life, perhaps yourself at a current or previous state, have lived by this personal finance commandment?

The American Dream

Imagine this:

The picture-perfect suburban family with two kids, two nice cars, a 3,000 square foot home, and no debt other than their mortgage, car payments, and student loans (that’s all good debt, right?). They spend less than what’s coming in… barely, but bills are being paid, so all is good in the world. Then all of a sudden, BAM!! The economy slows down, the breadwinner gets laid off, they can’t keep up with the home payments because they didn’t have emergency savings, they default on and lose the house, they lose the cars, their credit history is slaughtered, they build serious credit card debt, and they’re moving in with the parents.

How many times have we heard this or some similar variation of this story? It happened to millions of good-intentioned folks who were spending less than they earned during the Great Recession.

I have zero doubt that millions of are living by this advice and being lulled to sleep yet still.

Personal finance is much more complex and important than this cliche gives it credit for.

A Better Strategy

If you’re in debt, stop the bleeding. From there, strive for the highest personal savings rate you can achieve by increasing your income and decreasing your expenses. If you’re simply just keeping your head above water, you’re setting yourself up for failure.

Spend Less than you Earn Discussion:

• Have you or people you know followed this popular personal finance advice?
• Has it worked? Backfired?

Related Posts:

• A Penny Saved is a Penny Earned: Good or Bad Advice?
• Wants Vs. Needs
• How to Buy Glasses Online

Why “Spend Less than you Earn” is Flawed Financial Advice is copyrighted by 20somethingfinance.com without consent to republish.

The remaining vehicle, a 2000 Pontiac Grand Am, or Grandy (whom I have never, until this moment, affectionately called her), had racked up 182,000 miles and started showing signs of fatigue lately.

1. She was burning a quart of oil every other week.

2. She occasionally would vibrate heavily at stops.

3. On a very cold day, her innards would occasionally smell like gas.

All of the signs were there. Grandy was tired. We didn’t know how much longer she had.

As Grandy was a shared car (no second car to back us up) and my wife has been driving a few hundred miles back and forth to nursing school every week, we started getting concerned.

The following thoughts began entering our minds:

“What if the car dies on the middle of the highway in the dead of winter?”

“If the car dies, how much would we have to pay for a rental until we find a new one?” (insurance doesn’t cover)

“There are no good incentives on new cars this time of year, do we roll the dice on the car not dying until there is?”

“If we can trade the vehicle in now, at least we could get something for it. If it dies, we probably will get nothing.”

Then, this past week, Grandy stalled on my wife while she was in stop-and-go traffic on the highway. She had never stalled before.

The shared long summer road trips up north, the time she hydroplaned and spun out in the highway median, the time I fell asleep at the wheel on the highway and Grandy nailed a reflector pole, the squirrel that darted in front of us one summer’s day… wait, most of these memories suck… oh well, Grandy and I had been through a lot together.

She was still serviceable and there could still be good days ahead, but it was time for us to move on. My wife and I jointly decided to take Grandy behind the woodshed (trade her in).

What happens next is another tale for another day… (stay tuned)

Dying Car Chat:

Have you suffered feelings of confusion and sadness over a dying car? Share your old car’s memorial in the comments. You have our support.

Related Posts:

• Cheapest New Cars of 2012
• Most Fuel Efficient Cars of 2012
• Craigslist Cars: How to Get there First

The Tale of Grandy, my Dying Car is copyrighted by 20somethingfinance.com without consent to republish.

I have 5 authorization codes for free copies of H&R Block’s at Home Premium (formerly TaxCut), online tax prep program. This is their highest level of online tax prep support and includes everything in the deluxe level plus self-employment income coverage. You can also get a lower version, if you’d like. It retails for $49.95 and includes 1 free federal e-file.

I ran a similar contest last year that did not include a state efile, but this year’s also includes 1 free state efile on top of that (normally $34.95) for a total value of $84.90 to the 5 winners!

I have used H&R Block the past couple of years and would not hesitate to recommend them.

H&R Block products guarantee free one-on-one audit support with an H&R Block agent, in the event that you get audited – to give you a little peace of mind during tax season.

How to Win the H&R Block Giveaway

Pretty simple stuff, but make sure you follow all of the steps (it should take you 2 minutes tops!):

1. ‘Like’ the 20SomethingFinance page on Facebook (if you already have, you’re covered).

2. Go to the 20somethingfinance.com home page and +1 it.

Just hit the little +1 button in the top right corner on the home page. It looks like this:

3. Add me to your circles on Google+ (if you already have, you’re covered)

4. Add a comment to this post with your favorite tax tip. Include your Facebook name (should be the same as your Google+) as your commenter name and your real email in the email form when you comment (this is private, others can’t see this and I need to be able to contact you if you win). This is how I’ll find you, so don’t miss this step!

That’s all! I’ll cross-reference your comment with your Facebook and Google+ and randomly pick the 5 winners.

Deadline to Enter: 12 PM EST this Sunday, Jan. 22 (at which point no further entries will be counted). I’ll reach out to the winners the following week and email you the confirmation codes so that you can get started on your taxes online and update the post with a comment once I have done so (so you’ll know if you didn’t win as well).

Update: This contest has ended. If you didn’t win and have a simple return, you can always file with the basic edition for free with the H&R Block At Home Online free edition (state costs extra).

Good luck!

H&R Block Online Tax Prep Reader Giveaway! is copyrighted by 20somethingfinance.com without consent to republish.

Keeping up with your credit reports is essential for anyone who is serious about their financial well-being. They may be the only way for you to detect if your identity has been stolen. This post will show you how to get three free credit reports a year (through a government run program) at annualcreditreport.com, with no strings attached.

What is a Credit Report?

Let’s start with the basics on this one. You can get a free credit report from each of the three major credit reporting agencies: Experian, Transunion, and Equifax. Credit reports will show you all of the credit accounts (including loans of any kind) that you have open at any time or have had open and your payment record by month for each.

To fully understand what a credit report is, it is important to differentiate it from a credit score.

What is a Credit Score?

As stated by annualcreditreport.com, “A credit score is a complex mathematical model that evaluates many types of information in a credit file. A credit score is used by a lender to help determine whether a person qualifies for a particular credit card, loan, or service. Most credit scores estimate the risk a company incurs by lending a person money or providing them with a service and determining specifically, the likelihood that the person will make payments on time in the next two to three years. Generally, the higher the score, the less risk the person represents.” The method that I highlight below will be for free credit reports, not credit scores.

You can get your TransUnion credit score for free using Credit Karma. They also give you a free VantageScore, which is increasingly being used by creditors instead of a FICO score.

When Should I Use a Credit Report and when Should I Use a Credit Score?

Credit reports serve two main purposes:

1. To highlight any long-lost open accounts or accounts you didn’t even know you had open (that maybe even were not opened by you). You can then remedy by disputing the information or closing the accounts.
2. To clean up your credit history prior to an event where you will need to apply for credit.

It is best to check your credit reports often – at least a few times per year, just to stay on top of things.

Credit scores should be used in advance of applying for credit. If your score is relatively low, you may not be able to get the best rates when getting credit, and a score may indicate that you need to do some things to remedy that.

Annualcreditreport.com Versus Freecreditreport.com

Remember all those catchy jingles on the commercials for ‘freecreditreport.com’. Just sign up for your “free trial membership” where you submit your credit card. Getting your “free” Experian credit report automatically enrolls you into their credit monitoring service for $16.95 per month, and you hopefully forget about cancelling prior to the end of the membership. Ironically, Credit Karma is now offering free credit monitoring as well, so paying for credit monitoring just got a whole lot less appealing.

The FTC tried to cut down on free credit report scams by offering counter-advertising and the folks at freecreditreport.com have since focused their ads on more profitable territory by promoting freecreditscore.com.

As the FTC’s free credit report disclaimer site says, annualcreditreport.com is the ONLY authorized source to get your free annual credit report under law. It is a website created by Experian, Equifax, and Transunion that allows you to access free credit reports (no strings attached).

Rotate to Get Three Free Credit Reports Per Year

If you plan accordingly, you can get three free reports on annualcreditreport.com via each of the three agencies per year. Here is an example on how I do this:

1. Jan. 1: I get my free Experian Report
2. Tax deadline: I get my free Transunion report.
3. Start of Football season: I get my free report from Equifax.

I suppose adding to a calendar would be easier, but this works for me.

Next, mark one day post those dates on next years calendar with the same agencies, and you’re set.

Free Credit Report Discussion:

• Where do you get your free credit reports?
• Have you caught any discrepancies in your report that you’ve had to dispute?
• Have you been sucked in by the catchy jingles in the past?

Related Posts:

Denied Credit? Now you will Get a Free Credit Score

How to Get 3 Free Credit Reports Per Year (with no Strings Attached) is copyrighted by 20somethingfinance.com without consent to republish.

Why isn’t April 15 the IRS tax deadline for filing, like it is most years?

April 15, 2012 falls on a Sunday. Since there is no mail service to postmark returns on Sunday, it pushes the deadline forward to Monday. However, that Monday is Emancipation Day – an observed holiday in the District of Columbia. Emancipation Day marks the day of the year (April 16) to observe President Lincoln’s signing of the Compensated Emancipation Act – a law that freed 3,000 slaves in the District of Columbia.

D.C. holidays, by law, are treated the same as federal holidays in how they impact tax deadlines, and the tax filing deadline cannot be a holiday. If you remember, Emancipation Day also extended the 2011 tax deadline as well – to the following Monday.

As a result, the 2012 tax deadline falls on Tuesday, April 17, 2012.

When is the Tax Filing Extension Date?

If you need to request a tax filing extension, you must file IRS Form 4868 by April 17, 2012. The deadline for extended tax filing is October 15, 2012.

What is the Tax Deadline?

Remember that the tax filing deadline is simply the date you must either postmark or efile by. It is not the date the IRS must receive your tax return.

The IRS begins accepting efile and freefile returns January 17, so you might as well get started!

If you are a late starter, what should you do? E-File and do your own taxes. The best Efile methods are Turbotax and H&R Block. They both have free federal efiling.

There you hate it, a bit of a history lesson, and some pertinent tax filing information.

Related Posts:

• 2012 Energy Tax Credits
• 2012 IRS Maximum 401K Contribution
• 2012 Tax Brackets

2012 Tax Deadline is copyrighted by 20somethingfinance.com without consent to republish.