Money Tips Network

When things are going well, it can be really easy to buy into your own invincibility.

You can’t possibly lose your job. You’re dominating in the workplace and taking care of everything that can be asked of you. Your performance numbers are incredible.

You can’t possibly get sick. You feel great and your health has always been excellent.

You can’t possibly have to worry about extra family costs. You don’t have a child and don’t plan to have one any time soon.

You can’t possibly have to worry about transportation. Your car is as solid as a rock and it starts every time.

Once you start believing such things, it becomes really easy to take financial shortcuts.

If nothing can possibly go wrong, what’s the point of having a cash emergency fund? I’ll just invest it in stocks instead. If something were to happen, I could just use my credit card. It’ll be fine.

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. Father getting out of debt
2. Reporting interest
3. Freedom versus feeling like loser
4. Alcoholism and finances
5. Underwater home – should I care?
6. Dollar sign pros and cons
7. Down payment versus IRA
8. Age and money
9. Beating myself up

I have been working on my taxes and it looks like my wife and I will be getting an income tax refund this year.  That’s good news, because we are in the process of paying off our mortgage and every extra penny counts!

A certain portion of our household income comes through self-employment, so judging withholding can be a bit tricky.  We tend to ere on the conservative-side and over-withhold – which usually leads to a bit of a refund.

Looking to save money when filing your taxes?  Check out this deal – Save 15% on H&R Block Online Tax Software.

Here are a few ideas for what to do with an income refund, including what we are going to do this year -

My favorite type of party is the cocktail party. My parents threw quite a few of them in the '60s and '70s. To me, of course, it wasn't about the cocktails, but rather the dazzling array of interesting snacks. What a reprieve from ordinary dinner! Although I'd love to chow down on a cheese ball or hold down the couch with a bag of chips and some clam dip again, I am trying much harder to eat healthily. Fortunately, our good friends also love cocktail parties, and we have come up with some healthier snacks. (See also: Tasty Two-Ingredient Cocktails)

Soup to Nuts

Especially when it is chilly, a small cup of soup is welcome. This is also fun, because it is an unexpected "party" food.

This article is by staff writer Honey Smith.

For the most part, we think of hobbies as activities that we naturally gravitate toward. The idea of being strategic in our selection of hobbies may seem contradictory to their very nature! However, I think that being strategic in the selection and pursuit of hobbies isn’t mutually exclusive with enjoying yourself. What’s more, you have options in how to strategize.

The hobby-as-side-gig option

If you were one of the 70 million Target customers whose credit card information was compromised this past holiday season, you may have found yourself thinking, "There's got to be a better way!" as you combed through your statements looking for fraudulent activity. (See also: How to Avoid Credit Card Fraud)

As a matter of fact, there is, and it's been in place in Europe for a decade. It's called Chip-and-PIN technology, and it will vastly improve credit card security for in-person transactions.

MasterCard and Visa made headlines recently when they announced that they will be shifting to the Chip-and-PIN system (also known as EuropayMasterCardVisa or EMV), with a deadline of October 2015.

To my way of thinking, putting your money behind the Bitcoin represents a bet rather than an investment. Of course, the distinction can be confusing — outside of sports pages, the place you might most often see people referring to bets is in the financial news. Any large or prominent financial stake in something is likely to be referred to as a bet.

I believe there is an important difference between a reasoned assumption of risk (i.e., an investment) and an all-out win-or-lose gamble (i.e., a bet). With each passing year, I appreciate that distinction more and more because I’ve seen people put their money at undue risk when they mistake a bet for an investment.

Forgetting purchases is my number one personal finance challenge.

How does one “forget” a purchase, you might ask? It’s pretty easy. I’ll buy something, but then I’ll forget to take note of it later on where I keep track of my personal spending. Then, later on in the month, it will appear as though I have more money left to spend than I should.

Recently, when Sarah and I were digging through some bills, we found a recent month where I had clearly exceeded the amount I set aside for free spending, but according to my own recollection and notes, I hadn’t come close to exceeding that limit.

This wasn’t enough of a problem to cause any sort of financial chaos – I don’t spend recklessly. However, it still remains a problem.

Somewhere along the line, my system for keeping track of my purchases is failing me.

So, what’s the next step? How can I figure out how to solve this problem?

Mary writes in:

“I have a son graduating in May and he has a good job lined up making about $60,000 a year. He has no debt and will have about $1000 in credit card debt. He drives a car that we are hoping will last the next 5 months, not in the best of shape. My question is, I tried looking for advice in Simple Dollar that would be geared towards him. I’d love to forward a couple good articles to him that would pull him into reading your blog. The articles I find seem to be geared toward the college grad that has lots of debt and or no good job lined up. He will feel like a millionaire after being so broke for four years but I know $60,000 will go fast. I also know that if managed properly it will be a big advantage to him. Can you direct me?”