Do you have a hobby or a business?

Many work at home moms start out with a hobby that can oftentimes turn into a business.

A hobby is an activity that you do simply because you love doing it, but it may also earn you some income.  That income must be reported on your tax return, even if it is just a hobby. 

Some hobbies may actually be businesses, which would allow you to deduct expenses against any income you earn.  On the flipside, some businesses may only be hobbies, in which case you would only be able to deduct expenses up to your earnings. 

Missouri schools will require personal finance class to graduate

From ‘Few young adults are planning for retirement‘, beginning with the class of 2010, all public high school students will be required to take a personal financial course before graduating.

According to the state Department of Elementary and Secondary Education, the course will be organized into four content areas: income and taxes, money management, spending and credit, and saving and investing.

Good for Missouri’s Department of Education!  I would have really benefited from, and enjoyed a personal finance class in high school, so I think this is long overdue. 

Hopefully other states have already implemented similar rules, or will be following suit quickly.

It pays to be a credit union member

Last month, my credit union gave it’s members the largest amount of dividends in the credit union’s history. 

My credit union is not my main bank account, so I don’t keep a whole lot in my credit union account.  So imagine my surprise when I logged into my account a few weeks ago to find an extra $35 in my savings account.

Members received 5% of the interest paid on loans and 5% of the interest earned on deposit accounts in 2006.  So, if you had a mortgage with this credit union, you could have received a dividend of 5% on the interest you paid on your mortgage throughout the year. That’s huge!

Where to find money for your emergency fund

This is the last post in my emergency fund series. 

As I said in my Emergency fund: how much is enough? post, the general rule of thumb is to keep 3 to 6 months of living expenses in your emergency fund.  For ‘baby’ emergency funds, the rule of thumb is $1,000.

Some people see these rules of thumb and think, where am I going to come up with $1,000 (or 3 to 6 months of living expenses)?

Here are five suggestions on how to "find" money for your emergency fund.

Financial aid tips and best value schools

Kiplinger’s Personal Finance has a couple of really good college planning resources in their e-newsletter this week.

Here are some tips for the Early Bird Grabs the Financial Aid article:

1. File early.  You can file as early as January 1.  Even if you don’t have your W-2s yet, you should estimate your income and tax information and correct it later, if necessary.  Check the deadline for the school your child is interested in attending, and see if they require any other forms – many schools have a January or February deadline.

How to establish credit

If you’re just starting out in your financial life, you may not have any established credit.  You need credit for many things – renting an apartment, car rentals, credit cards, buying a car, etc.  Here are some tips on how to build your credit:

1. Become an authorized user on a parent’s, spouse’s or other relative’s credit card account.  Being an authorized user allows you to piggyback off of someone elses’s good credit, because the payment history of the account will be reported on your credit report. 

Jump Start Your Retirement Planning Days

Twice a year Kiplinger’s Personal Finance magazine and the National Association of Personal Financial Advisors (NAPFA) team up to provide consumers with free financial advice during Jump-Start Your Retirement Planning Days.

Jump-Start Your Retirement Planning Days is a chance for consumers to get free financial advice by telephone from some of the nation’s top financial advisors.  Consumers can call from 9 a.m. until 5 p.m. EST on Tuesday, Janaury 16th and Friday, January 26th.  Financial advisors will be standing by to answer people’s most pressing retirement questions.

Where to keep your emergency fund

In the last few weeks, I’ve talked about why you should have an emergency fund, and how much you should have. 

Today I want to talk about where to keep your emergency fund.

If you’ve followed the guidelines (3 to 6 months of living expenses, or $1,000 if you’re working on a ‘baby’ emergency fund), then you may have a substantial amount of cash lying around.

You don’t want this money sitting in a checking account earning no interest, or a savings account that earns less than 1% interest.

Doing Business in your Bathrobe Day

For those of you dreaming of ditching the corporate rat race to work at home, we have good news, "Doing Business in your Bathrobe Day" is coming on February 12, 2007!

Sponsored by International Robes and Webmomz.com, "Doing Business in Your Bathrobe Day" recognizes the hard work and dedication it takes to be an entrepreneur. It’s a national holiday to call attention to the millions of home business owners who have waved goodbye to the corporate rat race and settled into a better quality of life. We felt it was high time to recognize the efforts and dreams of entrepreneurs. “It’s a national day to support entrepreneurs everywhere who are taking their work and paychecks into their own hands,” says Kristie Tamsevicius.

What are your financial goals and dreams?

Money magazine (January ‘07 edition) did a poll on their readers’ biggest goals.  I thought the results were interesting:

69% think it will take $2 million to retire early
66% expect to be millionaires eventually
57% dream of starting a business
56% want a house on the beach
31% think they are saving enough for college

Another interesting point in the article was that you should not try to keep up with Joneses.  The Joneses may not be the best benchmark for you.  Instead find people who have already achieved what you want to achieve, and model them. 

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