What is the deal with $8,000 Tax Credit for First-Time Homebuyers?

The big financial news this week is that the Tax Credit for First-Time Homebuyers that was set to expire on November 30, 2009 has been extended until April 30, 2010. It also has been expanded to include a$6,500 tax credit for current home owners who buy a new house. President Obama is expected to sign the bill this morning.

Do you plan on buying a house?

Eligibility for the First-Time Homebuyer Credit

There are some requirements you have to meet before you can get the First-Time Homebuyers credit.

• You must be a first-time home buyer and you must have a purchase contract by April 30, 2010 and closes by .
• The house you purchase must be your primary residence and is not greater than $800,000.
• The buyer must live in the home for at least three years after the purchase date. You will have to repay the credit on a home only if the home ceases to be your primary residence within 3 years from the date of purchase. The full amount of the credit received becomes due on the return for the year the home ceased being your principal residence.
• The income limits have been raised for singles to $125,000 and married to $225,000.

Eligibility for the Existing Homebuyer Credit

• You must have lived in your current residence for 5 of the last 8 years.
• The house you purchase must be your primary residence and is not greater than $800,000.
• The buyer must live in the home for at least three years after the purchase date. You will have to repay the credit on a home only if the home ceases to be your primary residence within 3 years from the date of purchase. The full amount of the credit received becomes due on the return for the year the home ceased being your principal residence.
• The income limits have been raised for singles to $125,000 and married to $225,000.

Please check out the NY Times for more details and other provisions in the bill.

Your Thoughts

Will you buy a house within the tax credit’s extension? How much did the tax credit factor into your plans?

Photo Credit: roarofthefour

It’s time for another book review. In Good Times and Bad: Strengthening Your Relationship When the Going Gets Tough and the Money Gets Tight is from M. Gary Neuman and Melisa Neuman. This is an interesting one, especially in light of the economic times we live in. Gary Neuman has been on Oprah a few times and discussed this topic earlier this year.

Relationship advice for couples having problems with finances

Like a lot of my other book reviews, I’m going to present a review of some of the chapters.  So you can see if this book would be a good fit for you in your situation.

Chapter 1: Our personal story

The new men’s open up with their personal stories and share the growth and learning.  They’ve received from their struggles.  They had to deal with both financial and family health struggles.  Something I think some readers can identify with is their story of being upside down on a mortgage while balancing a family, raising two small kids, and having little savings. They also shared a serious health crisis with one of their children. I could relate to this as my sister had to be hospitalized many times.  When she was a small child, due to epilepsy.  What I found interesting were the two questions posed in the first chapter, how do we come through an experience of difficult he impact or with a sense of growth?  What makes one couple stronger while other families deteriorate and failed?

I think this first chapter gives readers an idea if this book is for them.  It’s a great personal introduction and sets up how the Neumans’ can cover this topic.

Chapter 2: The decision to fight for your relationship

This chapter, shared many stories from different families struggling in their relationship.  Gary shared how he had helped a couple on the Oprah Winfrey show, with their marriage. Amy and Timothy were in a very difficult situation. Timothy had lost his job and then went into a deep depression.  He was isolating himself and Amy eventually left him and lived with her mother for a bit.

Gary spoke with Amy about her battle with cancer, and she had made the comment that that was easier than this problem her family was facing. besides the couple’s own struggles, Amy’s family added more tension.  Her mother was generously helping Amy out by watching the baby. Timothy made changes in his behavior and along with Amy, they decided to fight for their marriage.

Using the examples, the Neumans pointed out some teachable threads. They emphasize the fighting spirit, give yourself permission to have fun, and find something constructive.  They also shared a little history behind the Nobel Prize story.

Chapters 3: The moment to save (or lose) relationship

From reading this chapter, I gathered that a lack of clear and honest communication can be a huge problem. for one reason or another instead of tackling of the problem as a couple.  Sometimes we want to handle it ourselves. Some of the stories here present different ways that couples decided to communicate and work on their marriage.

Chapter 4: What money really means to you and your partner

This chapter starts off the second part of the book, transform your relationship. For many people, a fight about money isn’t really about the money. As Dave Ramsey likes the point now, personal finance is 80% personal. While we were growing up we were learning what money is or is it from our family, whether right or wrong.

There’s an exercise on page 41 that can quickly let you and your spouse see, what money represents to you.

as with the other chapters, the Neumans gives case study after case study of couples working through their financial and their family problems. Many people have a fear of money and have been paralyzed, allowing their relationship to deteriorate in their finances to dwindle.

Chapter 5: What you learned about money

This chapter gets a little bit deeper about the lessons we learn concerning money.  It tackles topics like:

• the difference is between handling money
• who’s responsible for managing and making the money you sentence,
• how should people discuss money
• What money means to you

The issue of keeping up with the Joneses is discussed here. I think it’s quite easy to be influenced by your friends and neighbors ever so slightly.  But sometimes you don’t even notice.  I also found it interesting that the Neumans looked at, briefly, the American culture of consumption.

My Take

I really enjoyed this book, and while I would’ve preferred more financial topics discussed, I understand that that wasn’t the authors intention in writing the book. I think this is a helpful book specifically for families trying to keep themselves together, while going through hard economic times. I think the biggest message here is the advice:

Attack the problem, not each other.

I enjoyed the exercise is and case studies that the book presented and it definitely made for a good conversation topic with my husband this weekend.

If you are single college student,  you should probably check out the book in the library and just scan and review part two with the book.  It does a pretty good job of covering situations that many people find themselves in when they’re dealing with money in a relationship.

Your Take

Do you think that this economy has added more stress to your marriage? What have you been doing to stay on track with your family and your finances? When you finish reading the book, I’d love to hear your thoughts.

We're working towards our goals slowly, but surely.

The end of the year is coming soon and I’m again amazed at how quickly this year is going. We’ve been busy this month and one of our personal highlights was painting our friends’ new house.  We’re really happy for them and can’t wait to see what they have in store for the new place.

I think a financial highlight this month was socking away 78% of my temporary job’s paycheck. We’re trying to build a bigger buffer for our emergency fund into our joint savings account. Grabbing whatever is quick and easy has been a weakness of mine. I did spend more eating out, but once I planned a bit more, the lunch expenses were lowered.

The other week I signed up for Wachovia’s Way2 Save  program to try and stow away some money at a higher rate than ING Direct.  My husband also wrote Panda Budget,a quick little budgeting tool for GPT readers. It’s beta and it’s completely free.

Our Financial Goals for 2009

We have two goals left until the end of the year and I’m hoping we’ll be able to meet them.

How We Did in September on Our Financial Goals

Spending: We went out a few times this month with friends and discovered two new places with some nice happy hour specials. I enjoyed Brio’s specials and I really think you should try it. We ordered their Brio Burger with chips and pepperoni and sausage flat bread.

I’m looking at something special for my husband for our anniversary next month, so I’m cutting down spending on lunches a bit more to set aside some extra cash.

Savings: I was really happy that we were able to save a big chunk of the temporary job’s paycheck. It was shorter assignment than I expected, but more money is still good.

Your Take

How are you doing with your 2009 goals? Have you had some unexpected changes? What successes have you had so far?

Top Posts This Month

I wanted to share of the most popular posts this month on the blog.

• Quicken 2010 Home and Business Review
• What Comic Book Characters Taught Me About Personal Finance
• How Much Life Insurance Should You Have?
• Eating Out with New Job
• Help a Reader: Raising Credit Score

Thank you all for your support. This blog has grown thanks you telling others about it. Please keep in contact with me through email and Twitter, as I try to make the site better everyday.

Photo Credit: Armando Maynez

If you’ve been following my articles at Five Cent Nickel, you notice this week we starting to pack in anticipation of our big move.  We’re tackling all our out of season clothes and extra dishes and cookware we rarely use. We’re either packing them up or bagging them up to donate them.

It's packing time!

We got some estimates for truck rentals and I’ve been getting some great feedback from Five Cent nickel readers and I’d like to pose it you guys, what’s the best rental truck company, you’ve worked with?

We don’t want to go with the cheapest if they are going to give us a hard time or sneak in some fees. If you have any advice, please leave a comment, I’d love to make this transition go smoothly.

Now that I shared what we’ve done this week, here’s what my fellow personal finance bloggers have been up to.

Personal Finance Carnivals

• Carnival of Personal Finance
• Carnival of Debt Reduction
• Festival of Frugality
• Money Hacks Carnival
• Carnival of Money Stories

Top Personal Finance Posts:

• How To Pay Off More Than One Debt
• Are We Qualified to Invest on Our Own?
• How Much Can You Save By Negotiating On Craigslist?
• Poor Financial Planning For College Will Cost You
• Cheap and Simple Home Decorating
• Netflix Review: Is It Worth It?
• Open Enrollment Time: A Guide to Your Benefits Package
• Are PayDay Loans Cheaper Than Bouncing a Check?
• Are 401k a mistake?

Photo Credit:  Steve Keys

I know a lot of readers are college students and are looking for ways to improve their finances. Some of them may be strapped for cash, but still want to be responsible with their money. My husband was kind enough to write a program to help budget someone’s money. It’s completely free.

Panda Budget: Free Budget Tool for GPT Readers

PandaBudget is a simple budget program that can help you allocate your money.

• Create/edit monthly expenses
• Label expenses as critical (Rent/Food), important (Car payments), or luxuries (Cable TV)
• Note your bills as paid

Who is This For: Anyone wanting a simple budgeting tool for free (like a college student).

Who is This Not For: Someone who is looking for a A-Z program to track their budget, investments, and net worth. I would love to suggest that you try out Quicken or Mint for your needs.

System Requirements

• .NET framework if you’re running Windows XP or
• Windows Vista/ Windows 7
• Use Mono if you’re running Linux or a Mac

Feedback

This is a huge part of the software as my husband would love to make a more useful tool for people. Please send your feedback on what you like and what you would want from the software.

Download Panda Budget