John J. Bowman Jr. Accountant, personal finance

How to Stop Overpaying for the Basics

Households across America are struggling to make ends meet. High housing costs plague many cities. In others, stagnant wages offer little prospect for relief. Many people try to work multiple jobs and reach for just a few more billable hours, but even the hardest workers only have so much time and energy. This leaves people feeling pinched every month, concerned that paying basic expenses will tips them over the edge and into debt.

Ben Franklin is famous for the adage, “A penny saved is a penny earned.” With budgets so tight, this adage is truer than ever. The best place to start saving is on the recurring expenses that you resign yourself to paying every month.

Rethink Cable

Do you really need cable? If you have an Internet connection, you can save a bundle by cutting the cord and opting for streaming services like Netflix, Roku, and Hulu. Speaking of electronics, are you overpaying for your cell phone? Unlimited service is available for as low as $35/month via certain retailers; if you are paying more than that, shop around for other options.

Be Sustainable

Energy bills can leave you broke, especially if you live hot or cold climates. Every degree you lower the thermostat in winter and raise it in summer can save you up to 3 percent on your bill. If no one’s home all day, why pay to keep the place at 75 degrees? A programmable thermostat can help you adjust temperatures according to your schedule. When you head to work, are buses and trains an option? Many Millennials find they can do without cars and the payments, insurance, and gas that keep many Americans broke.

Eat In

Dining out can serve up an unnecessary burden on your budget. Avoid high costs and calories by learning some quick recipes to prepare at home. Brown bagging your lunch saves you money and calories. Cook a big dish over the weekend and take the leftover to work. For groceries, forget convenience and shop where you get the best value. Warehouse clubs can save you money if you avoid the temptation to buy more than you use. Be especially careful with perishables. Also, get a coffee maker to make your brew at home. If you like gourmet coffee, you’ll need to invest in gourmet maker, but you’ll make up for the expense over time. If you are stopping by the pharmacy, make sure to get the generic equivalents for both prescription and over the counter medications.

Find Low-Cost Entertainment

Unless you’re a monk, you probably need some entertainment now and then. Big movie theatre chains offer discount plans and second-run movie houses provide big savings. There are also great deals for kids.

These strategies can save you hundreds every month. That can be enough to fund an emergency savings account or retirement plan. Establishing a cost-effective lifestyle takes planning and discipline, but it’s better than being broke.


Originally posted on

John J Bowman Jr Accountant - Personal Finance Mistakes
blog, John J. Bowman Jr. Accountant, personal finance

Are You Making These Common Finance Mistakes?

It happens every month without fail. When payday rolls around on the third Friday of the month, your bank account looks healthy – filled with money to spare, even. With a few easy taps on your banking app, you’ve sent off your rent, covered your electric bill, and paid off a little of your credit card debt. You decide it will be alright if you splurge a little on dinner, a movie, a maybe even a quick weekend trip to the local shopping center. A week or so later, you absentmindedly swipe open your banking app – and stare in disbelief. Your bank balance is practically anemic. Where did all of your money go?

Spending Impulsively

Your morning Starbucks latte could be costing you. Crunch the numbers: a venti latte costs roughly $4 a pop. If you multiply that times the five days in a work week, you find yourself with a coffee bill of $20 a week, or a full $80 a month. In other words, the money you spend on coffee alone could have covered your entire grocery bill for a month. Small expenses add up – so avoid making impulse purchases. If you think you might be splurging just a little too often, check! At the end of the month, compile all of your card charges and assess how much you spent on necessary items or services (i.e., rent, food, gas) versus how much you spent on unnecessary treats or luxuries. You might just find yourself reconsidering your coffee budget afterwards.

Paying Too Many Subscriptions

Do you really need Netflix, Hulu, Amazon Video, and HBO Go? Probably not. Signing onto a service may seem simple and cheap when you’re in the free trial period, but those monthly fees accumulate quickly. Do an inventory of the subscriptions you have and decide which ones you can afford to cut ties with.

Living on Credit

Having a credit card doesn’t give you access to free money! Credit card companies make their enormous profits off of people who make minimum payments and allow interest to accrue. Just think – by leaving the expense of a single small item on your balance, you could end up paying out twice the original price in interest and fees. Believing in the “free money” myth could cost you money; living on credit could leave you bankrupt.

Overspending on Housing

You may want the in-building gym or slickly designed kitchen – but can you afford it? According to a report from Harvard’s Joint Center for Housing Studies, over one-third of all American households spend 30% or more of their take-home pay on housing expenses. Most financial advisors set the expense ceiling for rent at 30% of a person’s take-home pay; however, even this might be too high for someone struggling to pay off hefty student loans or provide for a family. Don’t let a nice apartment or charming home lure you deeper into debt. If you do, you might find yourself needing to sacrifice your personal life and stay home far more than you ever wanted to.

“Keeping Up” With Others

If all of  your friends leapt into crippling debt, would you follow? The answer might not be as easy as you think. Sometimes, it can be difficult to say no to a weekend trip or fancy dinner – even if you know that the expense would eat into your budget for the month. Make a habit of thinking your budget first, and fun second – or risk losing out on a significant chunk of potential savings.


*Originally posted on

personal finance

Tax Breaks for First-Time Home Buyers

Buying your first home is an expensive endeavor. Yet there are a number of tax credits that first-time homebuyers can take advantage of. Sometimes congress changes the available tax breaks or adjusts certain aspects of the law. Therefore, you should keep an eye on the tax law when you get ready to file your taxes. Below are some of the most popular tax credits for first-time homebuyers.

Points Deduction

If you paid points when getting your mortgage, you may be eligible for a deduction. In order to take advantage of this deduction, your settlement contract has to make reference to the points. Plus you will have to itemize when filing your taxes instead of using the standard deduction.

Property Tax Deductions

Property taxes can be deducted when you itemize on your tax return. First-time homebuyers should definitely take advantage of this deduction, but it’s not limited to first-time homebuyers. In order to claim this deduction, the property should be your main residence or a vacation home—not a business property.

Mortgage Interest Credit

Claiming a mortgage interest credit can lower the amount of taxes you owe. If you want to take advantage of this credit, you have to make sure you received a Mortgage Credit Certificate. The certificate is usually sent to you by your local government when you first receive your mortgage, and it lists how much interest the credit is worth. If you take advantage of the mortgage interest credit and the mortgage interest deduction, the credit will be reduced based on how much of a deduction you claim.

Mortgage Interest Deduction

A home mortgage interest deduction is one of the most popular tax credits for new homeowners. When it comes time to file your taxes, the bank or loan provider will mail you a tax form called Form 1098. The form details how much you paid in interest for the previous tax year. New homeowners should definitely take advantage of this deduction since mortgage payments have a higher percentage of interest than principal in the beginning. Keep in mind that in order to deduct home mortgage interest, you will have to itemize. For many homeowners, itemized deductions can add up to be larger than the standard deduction.

IRA Withdrawals

Typically when you make withdrawals from your IRA before you are 59 ½ years old you face a 10% penalty. However, when you use the withdrawals for a home purchase this penalty can be waived. The caveat is that you cannot withdraw more than $10,000.

personal finance

Save Money on Home Energy Costs

Summer is right around the corner, and as the heat rises, so will your energy bill. Yet there are a number of simple ways that you can save money on your energy bill. The more steps you take to cut down on energy costs—no matter how small—the more money you save. Keep reading to learn more about some of the best ways to save money on energy costs.

Eliminate Vampire Power

Vampire power is the name for energy draining devices. For example, if your laptop is fully charged, but you leave it plugged in overnight, you are only wasting your money. Similarly, if you leave your TV plugged in and on standby mode, you only waste money. Microwaves, printers, and cell phone chargers not plugged into any phone are other vampire power culprits. Each device that you have plugged in while not in use unnecessarily increases your monthly energy bill. Before you run through the house unplugging everything, think about which devices you use regularly and which ones you don’t. It probably doesn’t make sense to unplug your computer each day, but there’s no reason for leaving the cell phone charger plugged in all day long.

Use Your Dishwasher

Many people rinse their dishes before loading them into the dishwasher. If you rinse your dishes first, though, you use unnecessary water, and the machine might not do as thorough of a job. Dishwashers with sensors can determine how dirty your dishes are, so it’s best to let the machine do its job and determine how long of a cycle it should run. By just using the dishwasher to clean your dishes, you will use less money and save money as a result.

Review Your Water Heater

Do you know how old your water heater is? If your water heater is older than twenty years, then it might be time to upgrade. A new water heater costs a lot up front, but over time it will save you money. Heat-pump models tend to be more energy efficient than electric models.

Take Advantage of Solar Power

Every year it seems that the cost of solar installation becomes cheaper. At the same time, solar panels seem to get better at collecting and storing power. Tesla, the company famous for its electric cars and self-driving experiments, is currently working on solar panel shingles for homes. In the meantime, though, you can purchase solar panels to install on the roof of your home. Not only will solar help you save money on your electric bill and reduce your impact on the environment, you may also be eligible for tax credits. Take a look at this site to learn more.

personal finance

Finance Tips for Married Couples

Getting married is a life changing event. One of the biggest changes that married couples have to deal with is their financial situation. Combining two incomes has its advantages, but there are also some pitfalls to avoid. While the best time to talk about personal finance is before marriage, it’s never too late to get on the same page and make the right financial decisions. Below are some of the most important finance tips for newlyweds, but any married couple—regardless of how long they have been together—can benefit from the information.

Don’t Hide Spending

The basis of any relationship is honesty. Honesty is especially important when it comes to money. Things like secret credit cards, overspending, or hidden accounts are never a good idea—especially if money is being withdrawn from the account that pays the bills each month. Honesty builds trust in the relationship, and being honest about how you spend money gives married couples a clear picture of their financial situation. If either partner wants “fun money” to spend on personal expenses, this should be discussed out in the open and budgeted for appropriately. On that note…

Discuss Your Financial Goals

You should know each other’s financial goals and reassess them regularly to see if you’re making progress. If one partner wants to save for a home while the other is a spendthrift, then these issues need to be dealt with as soon as possible. When it comes to budgeting, married couples should plan how much they want to save each month, how much money will go toward retirement, etc. By discussing each other’s financial goals there won’t be any surprises or misunderstandings about where the money is going.

Save for Retirement and Getting Older

Retirement is one of the last things that young people think about. Yet the sooner you start saving for retirement, the better off you will be when you are ready to retire. On a related note, many young couples don’t think about what they’ll do as they get older and maintaining health becomes more difficult. It’s important to save money for situations like retirement and health downturns. The last thing you want to worry about during your golden years is not having enough money to enjoy yourself and each other’s company.

Be Smart About Big Purchases

When it comes to making large purchases, married couples should engage in some reflection before draining their account. Do you really need a large home or an expensive new vehicle? Then once you do purchase a home how much remodeling is really necessary? Before making any big purchases you should always ask questions like these.

personal finance

Learn More About These 5 Popular Tax Credits

There are a number of tax credits that you need to be aware of in order to be able to retain more of your income in spite of paying taxes. Such tax credits exist mainly for middle and low-income people and help you to keep most of your annual income from going into paying excessive taxes.

When you are able to identify tax credits that apply to you in particular, then the process of filing taxes at the end of the financial year is likely to become a whole lot easier than usual.

Earned Income Tax Credit

The first credit to consider is the Earned Income Tax Credit or EITC which was established in 1975. It is phased in accordance with filing status and is based on investment income, earned income, and gross income. In order to qualify for this tax credit, you need to be younger than sixty-five years and older than twenty-five years. Learn more here.

American Opportunity Tax Credit

The American Opportunity Tax Credit has been designed to help meet the expenses associated with higher education. The full credit will be available to you if your annual gross income is $80,000 or $160,000 if you have a partner.

Lifetime Learning Credit

The Lifetime Learning Credit is meant to meet expenses that are commonly associated with post-secondary education. It is not just applicable for the first four years of secondary education but rather any stage of post-secondary education. The credit is also made available to you even if you are just pursuing a certification and not a degree.

Child and Dependent Care Credit

As the name suggests, this is a tax credit that applies to you if you are a parent and wish to defray costs associated with daycare or babysitting. You can use this credit if you are a single parent who has a dependent child who is under 13 years of age and you need to be away to look for work or be at work.

Savers Tax Credit

If you are a retired professional then this tax credit applies to you. If you make a contribution to retirement plans in the course of your professional life, then you can also use this tax credit quite easily.

By keeping the above tax credit options in mind, you will be able to save quite a bit in taxes and retain more of your hard earned income.

personal finance

Investment Firms You Should Know

Making any investment has to be done with a lot of care, and the investment firm whose services you use should be one with a good reputation. Choosing the best investment firm for your individual needs is not the easiest thing to do and requires a good deal of consideration before you actually select the firm that’s right for you.

To learn more about the best investment firms out there, I have compiled a list of some of the best firms in the world. Each one is known for providing exceptional service. Remember, though, this list is just a starting point. Make sure to conduct more research before selecting a firm.


Vanguard is one of the best investment firms around. It offers its services to both individual investors and financial institutions. When you opt for the services of Vanguard, you get to access your retirement plans very easily in addition to various other investments like mutual funds, ETF’s and personal IRA’s.


Fidelity is another a well-known investment firm whose services you can opt for if you are an individual investor. The firm provides services in the areas of IRA’s, retirement funds, and mutual funds Fidelity is well known for the fact that its services are inexpensive.

TD Ameritrade

TD Ameritrade is a good firm to invest with if you want to learn how to manage your money properly. This firm gives you an extensive range of investment and fund choices, lots of video guides, commission free ETF’s, and online courses that can be hugely beneficial for your financial needs.


Boglehead is the right firm to invest with if you want individualized or personalized advice in the area of finance. In order to invest with Boglehad, you need to become a part of the Bogle community and allow Bogle officials to help you make smart investments for the long term.

DIY Option

DIY Option is an investment firm where you get to come across investment brokers who tell you how to manage your money for a very low fee. Additionally, there are no huge service fees to dole out, and you get tips on how to manage your funds on your own without any external assistance.

If you keep the above options in mind, you will be in a good position to select the services of the right investment firm for your financial requirements and manage your money in the best possible way.