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02/09/16 General

Is it Time to Upgrade Your IT Systems?

technology-785742_640As impressive as IT systems can be, they don’t last forever. Over time, you’ll likely start to notice several signs that your company’s systems are starting to become a little worn down. Unless you want to end up facing potentially expensive repairs, it’s important to pay attention to these little signs and know when it’s time to upgrade.

Noticing a decrease in speed

One of the easiest and fastest ways to determine whether it’s time for an upgrade is when you start to notice the system slowing down. If you’ve been using the system for some time now, you’ll have a good idea of how quickly it usually responds to requests and processes.

It could be that over time your business has added more pressure to the server as it has evolved. For example, there could be more people accessing the server now, or there could be a lot more data on it that the system needs to process. Whilst regular maintenance can help, eventually you will need to upgrade.

It could be that you simply need to upgrade the server’s memory or processor. Or you may need an entire new system.

You’re struggling to keep up with the competition

A sluggish, old system could be costing you in more ways than you realise. For example, if your competitors are using brand new, powerful systems and yours is struggling to keep up, that could have an impact on your business. Customers will go where the fastest, best results are received.

So if you want to keep up with your competitors, you need to make sure you’re using the latest, most effective IT systems.

You find it difficult to get the right support

If you’re working with an older system, you may find it difficult to get support for both the software and hardware. Even if you can manage to find support, it will work out ultimately more expensive than the newer systems.

Obviously finance is going to be a big concern when it comes to upgrading. However, you can actually reduce the cost of a new system by selling your old one.

Overall, the above are just some of the signs that it may be time to upgrade. Your current system doesn’t have to be broken in order to invest in a newer system. Upgrading could save you money and improve performance.

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09/17/15 General

Most Parents Saving for Kids’ College Education in Wrong Places

Most Parents Saving for Kids’ College Education in Wrong Places

With their children facing an average student loan debt of $33,000 when they graduate from college, some parents are helping by saving for their kids’ college education in various accounts.

They mean well, but they may be doing themselves and their children a disservice with less money saved and less tax relief.

Along with the traditional ways of saving for college with a 529 or a Coverdell Education Savings Account, parents are also saving for a college education through savings accounts and their retirement plans.

45% save for college in savings account

A recent study by T. Rowe Price found that 45 percent of parents saving for their kids’ college education are using a regular savings account, and 30 percent are using their 401(k) retirement account.

The study found that 31 percent are using a 529 account that’s designed to give them the most taxable savings when saving for college.

By not using a college savings account, they’re not only losing tax benefits, but may be making a lot less money on the interest rates the accounts make. And even if they’re making more money in a retirement account, that benefit may be lost when it’s time to pay income taxes.

Using a comparison calculator at and researching federal income tax rates and average returns, here are how different savings vehicles would help in saving for a college education:

529 Plan

Federal income tax: Non-deductible contributions; withdrawn earnings excluded from income to extent of qualified higher education expenses.

Rate of return: Returns vary by state, but the Colorado plan, for example, has a return rate of 3.09 percent per year in 2015.

Overall, an average rate of return of 6-7 percent could be expected in a 529 plan for a college education.


Federal income tax: Non-deductible contributions; withdrawn earnings excluded from income to extent of qualified higher education expenses and qualified K-12 expenses also excluded.

Rate of return: One online calculator puts the default return rate for a Coverdell account at 8 percent. A Franklin Templeton guide to Coverdells also puts the average annual return at 8 percent.

Making a $2,000 contribution to a Coverdell account each year for 18 years with an 8 percent average annual return, compounded monthly, would result in $16,448 more in a tax-deferred investment than in a taxable investment, according to the guide. The tax-deferred Coverdell account in this scenario would have $83,524 after 18 years.

Savings account

Federal income tax: Interest earned on savings account is taxed as income.

Rate of return: As of Sept. 10, 2015, the standard rate of return for a money market savings account at Bank of America was 0.03 percent. We only chose BoA because it’s one of the biggest banks in the country.

One-year certificates of deposit are averaging 0.23 percent. That just barely beats the U.S. inflation rate of 0.2 percent.

U.S. savings bonds

Federal income tax: Tax-deferred for federal; tax-free for state; certain post-1989 EE and I bonds may be redeemed federal tax-free for qualified higher education expenses.

Rate of return: Series EE bonds pay 0.30 percent after 20 years, which is almost enough time before a newborn starts college.

Roth IRA

Federal income tax: Non-deductible contributions; withdrawn earnings excluded from income after age 59 1/2 – and five years; 10 percent penalty on early withdrawals waived if used for qualified higher education expenses.

Rate of return: The S&P 500 has an annual rate of return of 8.06 percent for the past 10 years. From January 1970 through December 2014 the S&P 500 has a return of 10.7 percent.

Traditional IRA

Federal income tax: Deductible or non-deductible contributions; withdrawals in excess of basis subject to tax; 10 percent penalty on early withdrawals waived if used for qualified higher education expenses.

Rate of return: Fidelity gives the example of a 7 percent rate of return for an IRA contribution.

401(k) retirement account

Federal income tax: Same as for a traditional IRA, except there isn’t a penalty waiver if the money is used for college expenses. In other words, a 401(k) shouldn’t be used to pay for college.

A loan from a 401(k) retirement plan can be taken out. Plan loans aren’t taxed or penalized if the loan is repaid within a specific period of time, generally within five years.

Rate of return: The Vanguard Wellington mutual fund, which is one of the most common balanced funds found in 401(k) plans, has an average annual five-year return rate of 12.07 percent as of June 30, 2015. Pulling money out through a loan to fund a college education would of course lessen the amount of money earning the return rate.

How to pay for a college education

Among all of these methods, borrowing or withdrawing money from a retirement account to pay for a college education seems like the biggest potential for not making as much money as you would through an education savings accounts. You might get a higher rate of return, but the tax implications could negate it.

But as college appears closer and closer, maybe that’s the best choice for parents who have put off or completely ignored saving for their child’s college education from the day they were born. Thinking seriously about it when high school graduation is only a few years away may help their kid get through college without any debt, but they may be giving up part of their retirement plans in the process.

If that’s the case, make sure your child graduates with a college education in a well-paying major so they can help support you in your old age.

This article by Aaron Crowe first appeared on and was distributed by the Personal Finance Syndication Network.


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09/16/15 General

When to Save Money vs. Attending a Conference

conferenceYears ago when I worked at newspapers, I rarely had the chance to attend a journalism conference, mainly because my employers couldn’t afford to send me. And if they did have the money, it was usually only for a portion of the costs, such as a registration fee. Hotel, transportation and meals were my responsibility.

At one of the few conferences I did attend, I came back with so many ideas that I implemented that I’m sure my work more than paid for the cost of attending the conference.

But this week — as I’m into my seventh year as a freelance writer specializing in personal finance content —  I’m unable to attend a conference that I’ve attended the past two years that caters to my niche. FinCon, a financial conference for personal finance media, starts today, Sept. 16, in Charlotte, N.C., and I won’t be there.

Most people there are freelancers and work for themselves, so taking time off to attend the conference is probably costing them money if they’re not working during FinCon.

It’s breaking my heart not to be there, and for many reasons: meeting other personal finance bloggers, attending seminars, networking, and best of all, finding new clients.

The reason I’m unable to attend is simple — I can’t afford it. Continue reading

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08/21/15 General #

Will 2015 Mark the End of Cheap Mortgages in the UK?

Will 2015 Mark the End of Cheap Mortgages in the UK?

Mortgage interest rates in the UK fluctuate over time. After six years of interest rates being at all-time historic lows, many now predict mortgage rates to edge up.

Many new homeowners will be used to reading about cheap mortgage rates coming from mortgage lenders, but will also be unfamiliar to a steep incline to monthly repayments. Unfortunately for them, the Governor Bank of England’s comments, that the Bank Rate might rise by year end, may soon prompt lenders to raise mortgage rates.

Factors that affect fixed mortgage rates

In the long term a bank’s fixed price mortgage rate relies upon multiple factors. The most important factor being the rate at which the central bank sets the base rate. The base rate is used to form the basis of the interest rates that lenders charge.

With a fixed rate mortgage you’re gambling that you think the base rate might increase in the short term so you are locking in your house purchase for a set amount of time (e.g. two year, five year) at today’s price.

Inflation is a factor that lender’s take into consideration as inflation is where the price of common goods increase every year, this means that the money people borrow today will be worth less when they pay it back in the future and so lender’s always factor in how much they think inflation is going to devalue the mortgage.

The borrower’s credit history will also factor in, so remember you also affect the amount you pay. It is good practice to do some online research into what can affect your mortgage beforehand.

Competitive Mortgage Environment

One of the best ways to determine the competitive market for mortgages is to check published rates. Banks, building societies, the post office, and other financial institutions continue to shout about cheap mortgages. It’s important to act quickly as the rate environment changes direction, however.

Mortgage rates move in step with the economy. Low unemployment, high savings, and greater competition for property causes mortgage rates to increase. As the economy and global liquidity continue to return to health, interest rates bump higher.

As always, buyers beware. Some cheap mortgages arrive hand in hand with expensive arrangement costs. In that event, comparison of the total cost of borrowing is likely to save the buyer money.

Fixed vs. Variable Rate Mortgages

The buyer should also compare fixed and variable mortgage rates regardless of the Bank Rate change. Fixed rate mortgages are most often arranged for two, three, five, or, sometimes, ten years. In a rising interest rate environment, demand for longer term mortgages also rises.

For that reason, buyers should consider their borrowing term. When the fixed rate period ends, the buyer may suffer the consequences of a standard variable-rate mortgage. In a higher rate environment, the costs of borrowing are also higher.

Lock in Today’s Cheap Mortgages

Ask a real property broker: by locking in a low rate today, the buyer’s savings continue to grow as mortgage rates rise with the Bank Rate.

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12/05/14 General # ,

When a Splurge is Worthwhile

When a Splurge is Worthwhile

This goes against the grain of the goal of this website — to use your money wisely — but sometimes you’ve got to live it up a little and reward yourself. That’s what I did recently by splurging on some NHL tickets.

I was initially shocked when I spent $300 on two corner seats in the second row at a San Jose Sharks game. But after the thrilling game (look for me wearing a white Sioux hockey jersey with green lettering in the front row behind a red sign in this video) I was sure it was money well spent.

How is a $150 splurge for a hockey game ticket worthwhile? Because I was buying an experience, which psychology research has shown to bring people more happiness than possessions. Continue reading

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Hi, I'm Aaron Crowe. Welcome to CashSmarter. I'm a personal finance freelance writer who enjoys spending my money wisely and using minimalism to make my money last longer while increasing income.