Blog Posts by Farnoosh Torabi

Andrea Gearllach loves to take vacations with her husband Lee. What she doesn’t love is paying for them.

“My husband and I love to go exploring and we just like to hit the road, throw a few things in the car and bail out of town,” says Gearllach. “I don’t necessarily like to have a budget. A budget seems too restrictive, so I like to just get everything as close to zero as possible.”

After Christmas last year, Gearllach and her husband took a 3,000-mile, 10-day road trip from their home near Seattle to visit friends in Nevada. Their only expenses were gas, a few groceries and a single-night hotel stay. The rest of the time they stayed with friends and family. She estimates they saved about $1,500 by not eating out or staying at hotels.

Also See: 5 Signs You May Be Broke in 10 Years

Along the way, they either dined at friends’ homes or cooked on the road. That’s right, in their car! Gearllach found a crock-pot online that plugs into a car’s cigarette lighter. She packed Christmas leftovers,Read More »from Extreme Travel Savings

Laurie emails: I'm confused about how income tax works when it comes to retirement. If I retire from a job in CA with a state pension program (PERS), but move to a state with no income tax (say, Washington), do I still pay CA income tax or do I get my CA retirement pay sans the tax? Just trying to plan for the future!
 
The simple answer is no, you would not have to pay income tax if you moved to an income tax-free state. In general, accounting experts say, if you earn a pension in one state and then move to one of the country’s nine non-income tax states, the pension becomes tax-sheltered. It’s also non-taxable in the state you lived in previously. That’s a big reason why retirees move to Florida in droves.
 
One caveat: “This applies to full-year residents in non-income tax states,” says Mitchell Freedman, a certified public accountant at MFAC Financial Advisors in Westlake Village, Calif.  “If an individual is a part-year California resident and a part-year resident of a non-income tax

Read More »from Ask Farnoosh: Paying Taxes on a Pension if I Move Out of State

If you had a crystal ball, what would it reveal about your financial future? Curious to find out?

In Glamour magazine’s May issue, I explored some financial predictors and discovered five signs you might be broke in 10 years or less.

Sign #1: Fail to Negotiate Salary

If you’re someone who tends to accept the very first offer at every new job, research shows it’s like leaving a million bucks in lost earnings over a lifetime. Before accepting a deal, head to GetRaised.com to compare salaries in your field and zip code. Then ask for a bump before accepting the job — experts say it’s the best time to ask!

Sign #2: Savings Shortfall

If you had to come up with some quick cash to fix a leaky roof or cover a surprise medical expense, could you? The fact is half of Americans say they’d have a hard time shoring up $2,000 on short notice, according to the National Bureau of Economic Research. But without a savings cushion you’re a prime candidate for financial disaster.

Sign #3: Argumentative Parents

Read More »from 5 Signs You May Be Broke in 10 Years

Tom posts on Facebook: What questions should you ask a loan officer as you work through the mortgage approval process? How do you know if you're getting the best deal? What should you be wary of?
 
With mortgage applications ticking higher in this low-rate environment, it’s important you stay informed throughout the process, which means asking your loan officer lots of questions. And if any answer sounds too good to be true – trust your gut! “If you see offers for prices [or rates] that seem way below everyone else's, your response should be ‘how is this possible,’ not ‘I'll take it,’” says Keith Gumbinger, vice president at HSH Associates, a mortgage information publisher. “Feel free to ask for clarification in writing.”
 
At the least, Gumbinger says, come armed to the first meeting with the following questions:
 

• How long is my commitment period or rate lock?
• How long has it been taking the lender to close loans similar to mine?
• What happens if the loan doesn't close in that time? What’s

Read More »from Ask Farnoosh: Am I Getting a Good Deal on My Mortgage?

First impressions can sometimes be misleading. Take price tags. We assume they reflect the true value of items and services but, as reported recently in Time magazine, some prices are absolutely meaningless and designed to trick us into spending more.
 
While businesses may be quick to employ sneaky pricing strategies to boost their bottom line, here’s some advice to help you protect yours. Learn about four instances when you shouldn’t really take that price tag at face value.
 
Retail Stores
 
Who doesn’t love a sale, especially when we see major price reductions? But are we really saving a bundle? Based on the so-called “full” price it may seem so, but when you consider the fact that the store always planned to mark down those designer jeans and still turn a profit, it’s clear that its advertised “original” price is inflated and nonsense.

Car Dealerships
 
Anyone who’s ever bought a car will tell you the manufacturer’s suggested retail price, or MSRP, is hardly what he or she paid to drive itRead More »from When to Ignore Price Tags

@Kirsten_AD and @thinkyoungmedia tweet: I'm self-employed & am super interested in learning about the best retirement options 4 the self-employed.
 
Hey Kirsten and Courtney,
 
Without the convenience of an employer-sponsored 401(k) or 403(b), planning for retirement can be a challenge. A survey by the Freelancers Union survey found that 27% of freelancers have not saved anything for retirement.
 
Speaking from my own experience, it’s not impossible to save, however. There are a number of options to consider, as long as you’re willing to put in the extra effort. “As your own boss, you have to pull that money out of your paychecks, set up the investment accounts, and monitor them,” says Sara Horowitz, founder and executive director of the Freelancers Union and author of The Freelancer’s Bible. “The good news is, you have access to the same investments employers do, and depending on your income, you might be able to save more in your tax-deferred accounts than the W-2 crowd can in their

Read More »from Ask Farnoosh: Saving for Retirement When You Work for Yourself

Buying used has become the new, well, new. After all, who doesn’t want to save a few bucks? But some previously owned items could require costly repairs down the line or even pose safety risks. Here are seven items you should never buy used.

1. Helmet

On the topic of safety, let’s start with helmets. The American Academy of Orthopedic Surgeons recommends buying a new helmet after any crash, which means that used helmet you’ve got your eye on may no longer be suitable. It may look fine, but the thick layer of interior foam that’s meant to absorb shock can break or tear and fail to protect you. So play it safe and buy a quality new helmet starting at $20.

2. Laptop

Next, do you really know what happened to that used laptop you’re about to buy off Craigslist? Don’t forget because of their portability, laptops are prone to spills, drops, and wear and tear. Plus, important parts—like the motherboard—could go kaput at any time. So skip used and consider buying new from a national retailer,

Read More »from 7 Things to Never Buy Used

Staci on Facebook asks: Love watching your tidbits. Just watched one on tipping. One subject not mentioned -- service fee! Where I work, events are charged a service fee that goes directly to the "house" or business; the staff does not receive any gratuity. How should that be addressed since [patrons] think they have already paid a ‘tip’?
 
This is a really good -- and tricky -- question, so I tapped experts in the fields of catering and event planning, as well as etiquette.
 
To your point, patrons should understand the difference between a tip, a gratuity and a service fee or charge, says Lisa Hopkins, president of the National Association for Catering and Events, “all of which are different.” A tip is completely optional, while a gratuity is automatically added (usually for larger parties), and implies that the entire amount goes to the service staff. “A service charge is neither a tip nor gratuity.  It is automatically added, and is retained by the house and any or all of it used for

Read More »from Ask Farnoosh: Tips, Gratuities, Service Fees — Who Pays What and When?