Listen Money Matters - Free your inner financial badass. This is not your father's boring personal finance show.

Ever failed hard?  Not stumbled, but lost everything level of failure.  How can you begin to recover when you are at rock bottom? Most of us probably won’t hit homeless on the street levels of rock bottom but some of us will have to start over. A new city, a new job, an entirely new career.  Where do you begin when you’re back at square one? Thomas would start out by cleaning up, finding a place to shower in order to make himself presentable.  Once he had that first $5, he would start to build from there. Andrew would start a can collecting pyramid scheme empire. Creating jobs and saving the planet one can at a time.  I guess I would be one of the girls working at Andrew’s car wash. You can Mechanical Turk which will earn small amounts of money.  Sell plasma to get some start up cash. Or use the 21st Century equivalent of standing in the street with a sign and set up a Kick Starter.  If you want to see the phrase “no shame” defined, spend a few minutes on there looking at shit people think other people should donate cash for them to do or buy. This is obviously a hypothetical discussion but the point is, you start with small, fast steps and build from there.  If you can get that first $5 to shower at the YMCA, you can make yourself presentable enough to get a menial job to generate more cash. Then you can build your “I pulled myself up by my bootstraps” Horatio Alger blog, get a fat book contract, hit the talk show circuit and retire rich.  It’s the American Dream. Everybody loves a good come back story. Show Notes Old Dominion Brewing Company Dominion Lager:  A crisp, light lager. Tallgrass Brewing Company Buffalo Sweat Vanilla Bean:  A creamy oatmeal stout.

College costs have skyrocketed over the last several years.  So unless you want to graduate with crippling debt, you’ll need a college job. Ideally you would spend four years with no obligation other than to study (and party) but not working while in college is not possible for many of us. Thomas is our resident college expert and his first suggestion is to carefully consider the cost of your chosen college.  It’s not longer realistic to attend the best college you can get into.  Not if that college is tens of thousands of dollars more expensive than a second tier choice. A state school may not be your dream school but graduating $80,000 in debt is not a dream situation either. Work study is government funding given to the school to distribute.  If you are eligible, you can get an on campus job and part of your salary comes from that funding.  Not all schools participate so that may be something else to consider when choosing a school. Money isn’t the only reason to work during college.  You have a lot of free time which you can easily mismanage.  A job helps you set a maintain a schedule.  If you can land a job that is related to your major, you can start gaining experience and make connections that will help you after college. To intern or not intern when it’s unpaid?  That’s tough.  If you can afford it and it’s a good opportunity, go for it.  If it’s going to add to your debt, you may need to find an internship that pays or just a regular part time job. College is still in reach for most of us but we will sort of have to cobble together the money from various resources. Show Notes College Info Geek:  Thomas’s site to help you get the most from your college experience. Debt Free College Grad:  Our episode on paying for college with grants and scholarships. Shanice Miller:  Thomas’s interview with the debt free college grad. Earnest:  If you already have student debt, Earnest can help you refinance.

Used properly, a credit card can have all sorts of benefits. Used improperly, it can drag you into bankruptcy.  A credit card can be a blessing or a curse. Some people refuse even to touch one. But if you know how to use one, it is a tool like anything else. Why You Want a Credit Card There are a lot of good reasons to have a credit card. Sign Up Bonuses: Because there are so many credit cards to choose from, there is a lot of competition between them. One of the best ways to attract new customers is with fat sign up bonuses. The points acquired through a sign-up bonus can be cashed in for things like free air travel, free hotel stays, and statement credits. Perks: You accumulate points when you spend on a rewards credit card that can be turned into the same things we listed in the sign-up bonus section but just having a particular card comes with perks. Things like airport lounge access, rebates when you sign up for Global Entry and TSA Pre-Check, free checked bags, and cash back on every dollar you spend. Grace Period: If you pay for something in cash, the money is gone immediately. When you pay with a credit card, you have to the due date to pay for the purchase. You should never spend money you don’t have on a credit card but if you only get paid once a month or your income is sporadic in the case of a small business owner or freelancer, having those few extra weeks for the money to come in can be helpful. Consumer Protections: Many credit cards come with certain consumer protections. If you buy something that is lost, damaged, or stolen, your credit card may ensure it. The dollar amount and amount of time your item is covered for differs by card, but it’s not only the fancy rewards cards that provide this so read your fine print. If you dispute a charge on your card, the credit card company will go to bat for you against the vendor. The burden is on the vendor to prove the charge is legitimate. Until they do, most cards will remove the cost from your account. If you use a debit card, the burden is on you to prove the charge was not legitimate. Fraud Protection: If your credit card is stolen or hacked, you are only responsible for the first $50 in charges. Debit cards offer similar protections but only if you notify the bank within 48 hours. Fail to do that, and you can be held liable for the first $500 in charges. It also takes a few days for the money from those charges to be reimbursed by the bank which means you may have no access to cash. There is no such worry when your credit card is hacked. It’s the bank’s money missing, not your own. Price Protection: If you buy something and see if, for a lower price within a certain amount of time, your credit card will refund the difference in price. Travel Protections: When you pay your travel expenses with a card that offers travel protections you can be compensated for a canceled or interrupted trip, lost or delayed luggage, and even accidental death or dismemberment. Your card may also provide rental car insurance. Pay Over Time: If you have a big purchase that can’t wait, like a new water heater or a car repair but you don’t have the cash, you can “borrow” the money interest-free with a 0% APR credit card. The 0% interest rate won’t last forever, but there are some cards extending it as long as 24 months. Just be sure to pay off the entire balance before the 0% period is over or the remaining balance is subject to the new APR. Emergency Fund: Your credit cards are not meant to be your primary emergency fund. You should ideally have 3-6 months worth of expenses in your checking account for that. But if something catastrophic happens, a natural event causes major damage to your roof, for example, it might cost more to repair it than you have saved. Hopefully,

We talk a lot about side hustles on the show.  Today we’ll discuss if you should start your own side business. A side business can be lucrative and the creative outlet that your 9-5 job isn’t.  But it can be a lot of work and time.  We’ll break it down so you can decide if it’s the right decision for you. Both Andrew and Thomas have had various side hustles.  In fact, Thomas’s site College Info Geek, which is now his full time job, started as a side hustle.  That won’t be the case for all of us, but you can still make some extra cash doing your own thing. Client work side hustles can be lucrative but frustrating.  You have to create someone else’s vision no matter how crappy or ridiculous you think it might be.  Sensitive artist types might want to stay away from client based hustles. A side business shouldn’t be solely about the money.  It should enable you to do something you love doing.  Making money on that is a bonus. It takes about a year and a half to start making money on a side business.  Do you love doing whatever it is enough to do it for free for that long? How much time do you have?  If you’re watching TV for a few hours a night, you could use that time to start building something.  If you work, are in school, and have a family, your side business may have to wait. We want to know what kind of side business you have in mind and what you want to know about starting one.  Leave questions in the comments or send an email to listenmoneymatters@gmail.com. Show Notes Hitachino Nest Beer:  A white ale. Backpocket Brewing Penny Whistle:  A Bavarian ale. College Info Geek:  Thomas’s info on starting a website. Earnest:  Refinance your student loans and save some money.

Looking for a job can be a full time job itself.  Today we interview Adrian Larssen to learn how to take control of the job hunt process. Searching for a job sucks but there are ways to make it easier and to feel like you have some control of the process.  Adrian works for The Muse which can help you in your quest. The Muse has job postings from some 250 companies.  They offer insight about what it’s like to work for a company as well as career advice and even on-line classes.  Knowing what the culture of a company is like is a big deciding factor when job searching but it’s not always easy to learn about before you start.  Muse can give you that information before you decide to take the job. Know what you bring to the table as an applicant.  What are you good at?  Highlight those things on your resume and during interviews.  Once you have some intel on the company culture, tailor your skills to their needs. Get a LinkedIn profile and add everyone you know in a professional context.  Use your alumni directory and see if anyone on it is currently working for the company you want to work for.  They may be able to give you an in. If you’re between jobs, see if you can do some volunteer work in the industry your interested in.  It’s a good way to meet people who may be able to help you with a paying job. Don’t be afraid to take reasonable risks in your hunt.  Train yourself to take small risks often so when a big risk with potentially big payoff comes, you’ll be more ready to make the leap. Go on interviews for jobs you don’t even want.  It’s good practice and helps you get over your nerves when you interview for a job you really do want. Looking for a job isn’t easy, The Muse can provide you with a lot of information to make it easier. Show Notes The Muse:  Let them help with your job hunt. 31 Most Common Interview Questions:  And how to answer them! Betterment:  The smart way to invest.  

 We love answering the questions you all send in. Today we have five questions about IPO stock price, a morning routine, what we wish we knew earlier, where to save a downpayment, and early retirement. Ready to hear what your fellow listeners are wondering about? Today you will find out! 1.  Once a company IPO’s how does the stock price affect day to day operations?  The price doesn’t affect the company initially. However, it affects stockholders.  If the price tanks, the shareholders can affect things like leadership.  But day to day fluctuations don’t have a lot of impact. 2.  How can I establish a morning routine when I work constantly changing shifts?  See if there is any way you can get a more regular schedule.  Failing that, getting enough sleep is more important than getting up early.  A routine doesn’t have to have a fixed time.  If you get up at 6:00 or 10:00, you can follow the same routine as long as you have the same amount of time in which to do it. 3.  What are some things you wish you knew about personal finance when you were young?  Compound interest!  The earlier you start, the longer your money has to grow.  It matters less how much than how early.  Don’t buy dumb shit!  All that stuff you buy as a teenager, early 20’s, is just junk you won’t even remember in five years, let alone still have.  Save and invest that money instead. 4.  I’m saving money for a down payment in about two years.  Because that is short term, should I put it in Betterment or leave it in a savings account?  I’d hate to lose a chunk of that money in the market.  Go with your gut.  Two years is too short to invest; five years should be the minimum.  Leave it in the savings account or put it into a CD or US Treasury Bonds, which will get you slightly more interest than a savings account. 5.  I’m 27 and looking to retire in 15-20 years.  Should I use tax-sheltered investments like IRA’s, 401K’s, and HSA’s when I will need that money before the age of 59 and will incur early withdraw penalties?  It would be a mistake not to use these accounts, but you don’t want to put the majority of your money into them when your goal is early retirement. It’s not entirely true that you can’t access those monies at all.  You can borrow against an IRA and 401K. Thanks for the questions everyone.  Keep sending them in.  Show Notes Boulder Beer Winter IPA:  A full bodied red ale. Buffalo Sweat Oatmeal Cream Stout:  A smooth, dark beer. Mint:  The easy way to manage your money. Betterment:  The smart way to invest. Photo Credit: https://www.flickr.com/photos/f-oxymoron/9647972522

Building habits is important but big changes can be daunting.  Our guest, Stephen Guise will tell us how mini habits can be just as good as big habits. Stephen graduated college in 2010 into a terrible job market.  He started a blog with his free time and after two years, it took off.  He now has 9,000 subscribers. 45% of our total behavior is habitual.  Those can be good habits, paying yourself first, or bad habits, only paying the minimum on your credit cards.  Stephen made a New Year’s resolution to work out thirty minutes a day.  The resolution failed as most do. He read a book, Thinker Toys, that suggested considering the opposite of a goal.  This opens your mind to the whole spectrum of possibilities. Stephen decided the opposite would be one push up.  So he did one.  And since he was in push up position, he did more.  He applied the same thinking to a few more exercises and before he knew it, he had done a thirty minute work out. When a behavior becomes a habit, it’s easier to do it than not to do it. Before you know it, you’re in the gym five days a week. Mini habits are behaviors so small, that you can do them even on your worst day. How mini is mini?  If it sounds stupid, doing one push up for instance, it’s a mini habit.  Reading one page of a book.  It should start the process of what you’re trying to do. Doing something, even if very small, changes your brain over time.  Stick with your small target until you’re sure you can maintain the larger goal. Motivation is a poor starting strategy because it’s based on how you feel at any given moment.  Building habits takes away the need for motivation.  You don’t need to feel motivated to perform something that is a habit. Stephen uses the “why drill.”  You ask yourself why repeatedly until you drill down to the core of the reason you want a behavior to become habit. If your why isn’t good enough, it’s unlikely the related behavior will become a habit. There is nothing wrong with starting small.  If you can’t quite make the big change, make a little change. You’ll get there eventually. Show Notes Boulder Beer Hazed and Infused:  A dry hopped ale. Mini Habits:  Smaller habits, bigger results. Mini Habits Video Course:  Stephen’s video series. Deep Existence:  Stephen’s blog dedicated to personal growth.

Today is Part 2 of our delve into Thomas’s financial life.  There wasn’t much to critique in Part 1.  Will Part 2 also make the rest of us feel like losers? At just 23 Thomas is doing better than many of us a decade or more older.  Let’s see if he’s make any mistakes Andrew can help correct.  (I like Thomas so I’m slightly ashamed of this but I hope he’s made at least one, tiny mistake.) While it’s impressive that Thomas makes about $69,000 a year, he pays more in taxes because he’s self employed than he would if he made the same salary as an employee.  If you want some advice on small business taxes, check out our recent episode with Johnny Horta. Thomas still lives in Ames, Iowa where he attended college.  He has three roommates and pays $320 a month in rent.  He spends a lot on food, both groceries and eating out.  Part of that is just wanting to get out of the house since he works from home. Last year Thomas saved $500 a month into Vanguard and $500 a month into Simple IRA.  His goal is to “retire” by age 40.  He wants to save $900,000 and live off 4% or $36,000 a year.  He needs to save $25,000 a year with 5% growth to reach that number by age 40.  So double what he did last year. Aha!  Investing is where Thomas needs some guidance.  Thomas started with the Vanguard Star fund which has returned about 15% over the last five years.  If he moved to the Total Stock Market Fund, that number would be closer to 20%.  There is the 5% growth he was looking for without doing anything other than switching funds! If Andrew were 23 again, he would put 50% into the Total Stock Market Fund, 10% into REIT’s, 10% into emerging markets, and leave 30% in Betterment with an eye toward using that for “opportunity buys” like when a Tesla caught fire and the stock was cheap. Most of Thomas’s bills are paid automatically.  Rent and Simple are the only things that he has to remember to pay and Simple could be automated once he figures out how to allocate it. Thomas is going really well, especially for one so young.  But he’s proof that we all can use a little help in various areas of our life.  That’s what LMM is here for! Show Notes Mint:  The easy way to track your spending. Betterment:  The smart way to invest.

We are advocates of automating your finances and that includes automating saving money. But we don’t want saving to crimp your style. That’s why we love Digit. You can automate saving using Digit. We interview Ethan Bloch the CEO of Digit to learn how to automate saving without feeling it in your wallet. Pay Yourself First Probably the most important tenet of personal finance is pay yourself first. That means that putting money into savings should always be a priority. Get your essential bills paid and then pay yourself before you start spending on non-essentials. That can be easier said than done. You might have every intention of saving, but at the end of the month, there is no money left over. Or you might be a little too gung-ho like many of us are when we start to try to improve some aspect of our lives. You throw so much money into savings that you come up short in paying your essential bills and have to transfer the money back to your checking account. If that sounds familiar, there is a new service that can help. What is Digit? Digit is an automated saving service that helps you save small amounts of money at a time. It makes paying yourself first easy. Ethan and his partners started the company because they decided to design a product they wished already existed. (We have heard this more than once when we interview tech company founders). How Digit Works To use the service, you connect it to your checking account. More than 2,500 banks and credit unions are supported. This allows monitoring of your checking account. Digit analyzes things like when you get paid, upcoming bills, recent spending patterns and your checking account balance. When it sees money that you aren’t using according to your regular habits, it socks that money away by transferring it to your Digit account. The average transfer is $23 every three days. The money is stored in a custodial account that is FDIC insured for up to $250,000. This might make you nervous. What if they transfer money that you had intended to use to pay your rent? That doesn’t happen.The algorithm knows your earning and spending patterns; it doesn’t transfer money needed for regular expenses. By looking at the patterns in your checking account, only amounts of money you won’t miss are transferred. But what if it does happen? If your account is overdrafted, Digit will cover the fee up to two times per customer. Still nervous?  Text the word “Minimum” to Digit and set a number. If your checking account balance goes below that number, no savings will be harvested. You can manually transfer money to your account anytime by texting the word “Save” followed by the amount you want transferred. You can create different goals within Digit. If you want to save for a vacation or a new phone, you can direct money to those goals. The general pot of money that makes up your account is your “Rainy Day Fund.” If you need the money back in your checking account, you can send a text message to Digit. The money will be transferred back into your checking account the following business day. Digit doesn’t charge you a fee so how do they make money? They collect the interest on the money held in each account. Signing Up Signing up for an account is quick and easy. -Create an account with your name, email address, create a username and password. -Enter your phone number. If anyone out there still uses a landline, don’t provide that number. You and Digit will communicate primarily via text messages, so you need to provide a cell phone number. -You will receive a confirmation code via text immediately. Enter that code. -Choose your bank by clicking on its logo. -Provide your bank account username and password.

Running a small business has many tax benefits, but it has many tax pitfalls too. To make sure none of us get on the wrong side of the IRS, we will discuss small business tax questions with Johnny Horta. LMM’s resident tax expert schools us on small business taxes for all our side hustlers out there. If you run a small business, you’ll have more write-offs than if you are an employee.  The downside is, you have to pay all 15.3% of your FICA and social security taxes rather than paying 7.65% while your employer picks up the other half. If you’re self-employed, it’s a good idea to set up a Simple or SEP IRA.  A Simple allows you to defer up to $12,500 and a SEP, up to $53,000.  This can help lower your tax burden while helping you save for retirement. If you’re just starting out, it’s a good idea to schedule a consultation with an accountant or a tax attorney.  Just ask for a certain amount of time, an hour maybe and ask what they charge for that.  Be sure to have a list of questions to make the most of the time. According to the IRS, you are a business if you make money for three of five years. Otherwise, it’s classified as a hobby. Lots of people want to use a home office deduction.  But to do so, the office has to be “regularly and exclusively used as a home office for the business.”  So if you work on your computer by day and watch Netflix on it by night, sorry, you’re out of luck. When you decide how to set your business up, sole proprietorship, LLC, etc., the most important thing to consider is the likelihood that you’ll be sued.  If it’s small, a sole proprietorship will probably be suitable. Remember, Johnny will answer your questions live via our webinar February 2. Show Notes Horta Tax and Financial Services:  Connect with Johnny on Facebook. IRS:  Get some answers here before spending money on an accountant. LMM Get Involved:  Find out the details for our upcoming tax webinar with Johnny February 2 at 8:30 pm Easter.

Charles Wheelan is a lecturer in economics at Dartmouth and has authored five books.  He joins us to discuss statistics, politics, and the economy. Economics is the study of how we allocate scarce resources.  Poverty, health, education, are all affected by how we allocate resources so understanding that can help us to do a better, more fair job at that allocating. To make money, you have to produce value.  Part of the reason for stagnant middle-class wages is because the value it used to produce is now being produced more cheaply, either through technology or outsourcing to countries where wages are very low. Money is not the only factor in economics.  Sometimes money can stop people from doing something.  Organ donation for example.  Tying it to money makes people less likely to do it. Sometimes altruism is a greater driver than monetary gain. Most people will stay where you put them.  Many people don’t save for retirement.  Some companies now automatically enroll new employees in 401K plans.  The employee is free to exit the plan or change it but most people will just default to what the company chose. Sometimes a small guaranteed incentive is less effective than a larger, but not guaranteed one.  Getting $5 each time you go to the gym is less attractive to people than going to the gym and being entered into a raffle to win a car.  This is why people play the lottery. Statistics are useful because they can be used to infer patterns.  Recognizing and using the patterns can make you more money, or just help you to do things better.  Which will probably earn you more money! Most people are pretty poor at appreciating probability.  So we worry about Ebola but cross against the light.  But the odds of getting Ebola are much smaller than the odds of getting hit by a car. Charles is a passive investor, an Index Fund guy.  So the Dartmouth professor shares the LMM philosophy of buy and hold!  The longer your horizon, the smoother the booms and busts level out for you. Charles is very politically active.  He advocates for a Centrist Party, where people who feel alienated by the Republicans and Democrats can join together.  We need something better in the middle, where most of us dwell. It was great to interview a guest who understands economics and is actively trying to improve the short comings of our current two party system.  Show Notes Amazon:  Charles Wheelan’s books. Mint:  The easy way to track your spending. Betterment:  The smart way to invest.

Are you looking for a way to invest in real estate without all of the hassles of becoming a landlord? Then REIT investing might be just what you’re looking for. But what the f**k is REIT investing? Real estate can be an important addition to your investment portfolio, but it seems out of reach for many of us. We don’t even live in our own house, we rent. So how are we going to ever own real estate? There is a way! What is are REIT Investments? A REIT or Real Estate Investment Trust is a company that owns, manages or bankrolls income-producing real estate. The rent generated from the properties is distributed to shareholders in the form of dividends. REIT is similar to a mutual fund and trade on the major market exchanges. It allows individual investors to pool their money and own real estate that they wouldn’t be able to afford on their own. When you own stock in a REIT, you own a small sliver of the apartment or office buildings they own just like when you own stock in a company you own a tiny piece of that company. Due to the nature of real estate investing, REITs typically do better in low-interest rate environments and when there are higher rates it is usually a bumpy ride for the REIT market. To qualify as a REIT, a company has to adhere to specific guidelines put in place by Congress. These guidelines include: * Is considered a corporation according to the IRS revenue code * Is managed by a board of directors * Has at least 100 shareholders * Have no more than 50% of its shares held by five or fewer individuals * Has at least 75% of its assets in real estate, US Treasurys, or cash * Generates at least 75% of its net income from real estate * 95% of its income must be passive like rent * At least 90% of its taxable income is paid to shareholders via dividends There are two kinds of REITs. Equity REITs About 90% of REITs are equity REITs. Equity REITs buy, manage, build, remodel, and sell real estate. The revenues from these REITs come mainly from rental income. The types of real estate properties include residential, retail, office, industrial, and hotels. Equity REITs often specialize in a specific property types. Residential REIT’s invest in single-family homes or apartment buildings and retail REITs invest in shopping and strip malls. Mortgage REITs Mortgage REITs only make up about 10% of REITs. A mortgage REIT lends money to real estate buyers or buys existing mortgages or mortgage-backed securities. The revenue from these REITs come from the interest paid on the mortgage loans. Mortgage REITs often specialize too, either in residential or commercial mortgages. How to start investing in REITs The ultimate goal of any investment is to make money so how do you make money on a REIT? REIT stocks let investors invest in real estate the same way they invest in any other industry, by purchasing stocks through a mutual fund or ETF on the stock market. When you are a shareholder in a REIT, you earn a portion of the money generated by that investment. REITs are exempt from corporate taxes as long as they adhere to the Congressional guidelines we outlined above. Because a REIT’s income is not taxed, there is more money for shareholders. Shareholders though do have to pay capital gains taxes on the dividends at their ordinary income tax rate. Investors can deduct 20% of REIT dividends though lowering the maximum tax rate from 39.6% to 29.6%. REITs often provide high dividends, and those dividends can increase over time as the REIT’s properties appreciate in asset value. eREIT If a $3,000 minimum, the initial investment is too rich for your blood, there is a company in the REIT arena called

LearnVest is Turbo Tax meets financial planner.  The founder and CEO tells us what they do and why they are the fastest growing financial company in the US. LearnVest will help you create a step by step financial plan right from the comfort of your own home.  We interview Alexa von Tobel to find out how the company works and if it might be right for you. Alexa started the company five years ago after dropping out of Harvard Business School.  It began as a simple newsletter.  It’s morphed into a subscription based business that gives you access to a personal financial planner.  The cost is $299 to join and $19 a month. LearnVest does not sell any products, only their services. LearnVest believes in three steps to financial security, covering the basics, wealth building, and investing.  Many people jump straight to investing which can be a dangerous thing. It takes about twenty minutes to build your account.  You will fill out a profile so the planner has a sense of where you are currently and where you would like to be. LearnVest is open from 7:00 am to midnight seven days a week. They will build a step by step plan for you to help you reach your goals. You are all special snow flakes to me but when it comes to finance, we’re all pretty similar with the same problems and the same goals.  So don’t worry if you think your situation is too complicated to handle through LearnVest.  They’ve seen it ten times already that day. LearnVest has some free tools and advice too.  To set up an account where you can track your money is free, they have free apps and when you set up the account you will get a free 15 minute “health check” call with an adviser.  You can also use the promo code Listen50 to get a $50 credit on your account. At LMM we advocate being your own financial planner.  It takes some time and research but you can do it.  However, if you aren’t willing to put in the time or simply don’t have it, LearnVest will be helpful to you. Show Notes LearnVest: America’s fastest growing financial planning company. Ommegang Three Philosophers:  A Belgian style blend.  

 Tax time is nearly upon us.  Past guest, contributing writing, and tax expert Johnny Horta joins us to explain the vagaries of the US tax system. Until we get a flat tax (which will never happen) taxes will continue to be a monumental pain in the ass.  So we brought on a guest to give us some expert advice. FreeTaxUSA is easy to use but it doesn’t help you understand tax law.  A tax pro can help you interpret the laws to get the most money back you can. According to H&R Block, Americans left $1 billion dollars on the table last year.  Turbo Tax doesn’t seem so cheap now. Putting money into a tax shelter account can drop you a bracket and is a good practice but it won’t save you tons of money.  The IRS will take that into account and use your adjusted gross income to determine your tax bracket. Now you have your AGI and you can deduct standard or itemized deductions and personal exemptions.  Are you married and filing jointly or separately, do you have dependents?  Now we get into itemized deductions, medical expenses, mortgage interest, charitable donations, etc.  Compare that to the standard deductions and see which is higher. Single people with no dependents, claim yourself, so put a 1 on the W4 form.  I always wonder this and no one ever knows the answer!  If you’re getting too big a refund, adjust the W4.  You shouldn’t be giving the US government an interest free loan every year.  I know that big ass check is fun though! Now we get to credits which you can get for a variety of things, child care costs, education costs, earned income.  These credits are then applied to your tax bill. This was a lot of technical information so we’re going to give you some time to digest it for now but we will doing a series of tax based shows in the coming weeks. We are also hosting a webinar where our hosts and Johnny will answer your tax questions live.  Don’t e-mail Andrew tax questions, come to the webinar and ask there.  It will be Monday February 2 at 8:30 Eastern.  Go here to sign up for information about how to join. Show Notes Keegan Ales Mother’s Milk:  A dark, creamy milk stout. Left Hand Brewing Milk Stout:  A creamy, sweet stout. Horta Tax & Financial Services:  Contact Johnny for expert advice. W4 Calculator:  Plug in your numbers to see what your witholdings will be.

Jen McDonough paid off $212,000 in four years.  She works now as a motivational speaker and has authored three books.  Meet The Iron Jen. Jen’s world changed when one of her children developed a chronic medical condition.  As the medical bills piled up, other bills fell behind. Jen found herself unable to afford $20 worth of groceries. That’s the low point that caused Jen and her husband to really tackle their debt and change their relationship with money. The first step is to assess the reality of the situation.  Open every bill, check every account.  Jen and her husband also attended Dave Ramsey’s Peace University to learn how to handle money and pay off debt.  It took them about six months to get on the same page. Jen advises us to be patient when starting a budget.  It takes about three months to get used to it.  That first year, Jen and her husband took on ten jobs between them.  And most of them were $8-10 an hour jobs.  They began to look at every purchase in terms of how many hours of work it would cost. Every extra dollar that came in, went straight to debt payment.  They paid off about $50,000 of debt each year for four years. Once  the stress of debt was removed, Jen and her family were also to focus on more important things.  What direction they wanted to take their lives in. Inspired to help others, Jen shares her story so people who are where she once was won’t feel alone and ashamed.  She particularly enjoys speaking to and working with public servants, like police and firefighters. Jen travels as a motivational speaker, has written three books, and hosts a podcast. If Jen and her husband can work ten jobs, I think you can work one extra job if you have some debt that is hanging over you. Show Notes The Iron Jen:  Leveraging adversity to reach your potential.  You can also find Jen’s books here. Mint: The easy way to budget. Betterment: The smart way to invest.