If you’re still on the fence about acquiring a home, then Uncle Sam has just thrown an extra incentive for those of you that’s still debating on waiting further or buying — a nice fat, $8,000 incentive (it’s not $15,000 but you take what you can get, eh?) via the home tax credit.

Since they’ve been throwing around a bunch of different numbers and qualification scenarios, here’s the fairly-certain low down on the new home buyer tax credit.

To Qualify for the $8,000 “First-Time” Homebuyer Tax Credit:

• Home purchase must be made between January 1, 2009 and November 30, 2009.
• Must be a “first time buyer.” In order to qualify for this status, you must not have owned a home for the past three years.
• You must also live in the purchased house for at least three years, or you’ll be obligated to pay back the tax credit.
• Homebuyers must make less than $75,000 for single tax filers, or $150,000 for couples.
• Higher-income buyers will receive a partial tax credit, but details have not yet been fully released.
• Single family residence purchases (condominiums, townhouses, co-ops) that will be used as a principal residence will qualify.

How to Claim the Homebuyer Tax Credit:

• Simply claim it on your tax return.  You will not have to filed any other forms or papers.  If you’re not a procrastinator like me and you’ve already filed your taxes, you can simply file an amended return for 2008 to claim the credit.
• What type of tax credit is it? It’s one of the better type: a refundable one.  This means that if you don’t owe any taxes, you will get any excess credit in the form of a fat refund check.  Example: If you owe $1,000 in taxes, you’ll get a $7,000 refund check.  If you’ve overpaid $1,000 in taxes, then you’ll get a $9,000 check. You can read more about refundable tax credit in the resource link below.
• If you’ve already claimed last year’s $7,500 tax credit, then you won’t be able to claim the $8,000 credit on next year’s return. It’s one credit or the other, buddy.
• Unlike the previous $7,500 tax credit, there’s no repayment required for this $8,000 tax credit!  (Unless of course you sold your house within three years, as stated earlier).

Other Miscellaneous Notes:

• If you’re buying into a retirement community, unfortunately, the purchase won’t qualify for the $8,000 first-time homebuyer tax credit.

This post will be updated as the IRS release further details upon their interpretation of the just-passed American Recovery and Reinvestment Act.

Regardless if you think the first-time homebuyer tax credit in the stimulus bill is a smart move or that it’s entirely bullsh*t  — the tax credit will certainly be a nice bonus for those that are looking to purchase a home in 2009.

Not to brag or anything, but my discretionary income is rather healthy.  How so?  Well, the main reason is because I live (and look) like a bum.  Hah.  But regardless of how stable my financial life is, I always plan any purchases over $500 ahead of time.

Calling it “lazy budgeting” is sort of misleading, as I don’t really budget — the entire act is more of a reminder for myself.  For example, for the month of November (or whenever), if I’ll be spending an extra X amount on so and so… I make a mental note or jot the dollar amount and the planned purchase date on a sticky note, notepad, or a text document on my desktop.

Holiday gift for the family?  Mental note.  Jewelry for the mistress?  Sticky note.  Monthly payment to the loan shark?  Sharpie-written note on forearm.

What are some of the benefits of making a note on these purchases?

• No surprises when the bill comes the following months.
• Know exactly how much I need to transfer to checking to cover expenses.
• No freak-outs when credit card company calls to verify large purchases.
• Accountability: can’t pretend I didn’t spent the money.

If you’re lazy and you don’t budget like me, you should at the very least consider making a mental or visual note whenever you have a large upcoming expense.  A visual cue to the actual spending can actually be pretty powerful, as I’ve found myself at times changing my mind on a large purchase simply because I got sick of staring at the sticky note on top of the monitor.

“Birthday present for sister? Pff. Forget it.”  *tears off sticky note*

Teehee.

Whew. Good riddance to 2008 eh? What a craptacular year.

Without going into too much details, lets just say yours truly made a series of serious mistakes in 2008, almost on the same level of my previous stupidity of amassing around $10,000 in credit card debt back in 2002.

Yeah, parts of ‘08 was that crappy. Even though they were not exactly financial mistakes, they were costly mistakes.

Having said that, this brings me to the point of this post: dealing with the debt you’ve created from poor spending decisions.

As a very much imperfect person (my parents will attest to this) that’s slowly realizing he’s the harbinger of mistakes, I’ve learned a few things about dealing with poor choices in life.

Whether they are financial mistakes or something else, there are about two choices you have when you’ve made a mistake: 1) Suck it up, learn from your mistake.  2) Continue the fun fest of being stupid.

The Excuses We Make

Geez. Cap is being so negative. He must have gotten rejected by the local bowling team again.

Be that as it may, the truth of the matter is that we will often try to habitually justify our own ill-conceived actions through excuses and poor reasoning.  If you’ve ever made a stupid mistake that you’ve regretted before, you’ll probably know what I’m talking about.

“Its not my fault I spent so much. Work is stressful and I need some occasional relief.”

“Its not my fault I didn’t pass that test.  Chelsy was in a bad situation and she needed me to be there for her.”

“Its not my fault my body weight went uncontrolled.  I’m too busy with work/school/etc. to get a proper meal.”

If any of these sounds familiar — worry not, you’re not the only one that has thought of them.

Understanding the Mistake

When I woke up that one faithful morning six years ago and realized the asshat decisions I’ve made to get myself in the position of owing so much money — all the excuses I’ve been giving to myself suddenly disappeared.  For months, the excuses kept the realization at bay, but at that one brief moment, I had a moment of true clarity and realized that I didn’t want to continue to live a debt-ridden life.

What I’ve just described may sound a bit dramatic, but that morning was a definite eye-opener for me (being scared sh*tless by debt helped too, of course).  And from that eye-opener, I made the frequently mentioned mental attitude change. I decided to spend less than I earn, save money, budget, yada yada — you’ve most likely read it all before (if not on this blog, then on another).

Fixing the Mistake

If you have amassed debt from excessive consumerism (or some equally stupid reason), you should know that combating that particular debt doesn’t require some magic formula or a requirement of being a super genius.  You’ve probably noticed this already, but I’m not exactly a rocket scientist (again, my parents can also attest to this) — if I could paid off debt with an attitude adjustment, you can too.

Thus, suck it up. Realize that you’ve made a mistake and make a plan on how you can fix it.  There are hundreds, if not thousands of articles online with methods and steps you can take to pay off your debt.

Here’s a simple guideline:

1. Earn more money or spend less money.
2. Use excess from earnings/savings to pay off debt.
3. Done.

It’s a New Year. Make it a better one!

You probably know how it is.  Like me, you’ve reached that point where it’s entirely inappropriate to consider yourself a “kid” since it’s been years you’ve finished college (or should have finished) and you’ve ought to be a contributing member to society by now.

Damn.

Besides the added waistline, the unflattering effects of gravity, there are a few (financial) advantages as you get older:

1. Car rental will no longer be a rip off after the magical age of 25
2. Car insurance premium will slowly become cheaper
3. Your credit history should be steadily improving as financial accounts adds age
4. As you reach a certain age, you’ll get to join AARP (et al) and get senior discounts

Yeah, I know it’s a pretty weak sauce list but that’s about the only four things I can come up with.  There are a few other financial situations that should improve as you get older, such as your savings, your retirement accounts, etc. — but they’re not really a direct benefit that you get as you become older.

If you know some financial advantages to getting old, throw me some bones because there’s got to be something to look forward to — this quarter-life crisis is driving me nuts!

Haha. I kid, I kid.

You know all those generic personal finance advice about how you should just invest in index funds and not bother with individual stocks?

Yeah well, I guess they were onto something.  Here’s a snapshot from the current stock holdings in my TradeKing account:

Hey sweet. The holdings are only down 69.29%.  I believe a month ago it was down 78%, in which case the title for this post would have been “19,711 Reasons Not to Buy Individual Stocks.”

These are of course unrealized losses.  I don’t expect to sell any of these three holdings anytime soon, nor do I expect them to recover within any short time frame.

I’m fairly confident about two of the company above.  One’s a telecommunication company paying out a steady dividend (knock on wood)… and the other is in the semiconductor industry and has enough cash to weather the storm (hell, with current prices, it has 41% of its market capitalization in cash).

There’s only one holding that I’m iffy about and that company is in the buildings material industry.  That description alone should be self explanatory. Heh.  The company did however receive additional funding from one of its major institutional investor, but whether or not those fundings can get the company through hard times is another story.

Despite the fact that I’m still fairly young and will most likely be able to ride all of this out, there were a few moments a month ago when I realized I was reaching my risk tolerance levels. Let me tell you something, that was a very fun experience (if you consider feeling scared and anxious fun, then yeah it was super fun).

So yeah. Don’t buy individual stocks unless you can do the proper homework and tolerate the risk involved.  I would plainly suggest against investing in individual stocks on the whole, but you know… hard to give that suggestion when I don’t follow it myself.  Hah!

P.S. These individual stock holdings are of course not the majority of my investment, or else I’ll be freaking out and crying (a lot more anyway).  Most of my other long term investments are in my retirement accounts, and they’re happily down only about 30-40%. Haha. Good times.

You might be wondering why your pal Cap is so corny these days.  Truth be told, as I get older, it becomes harder to be a wise-cracking, sarcastic moron poking fun at all things in life (although being an ass means I’ll keep trying). One thing is for sure, my goal in reaching financial independence is the same now as it was years ago, and will remain the same years later:  to provide for my family and loved ones.

You’ve read hundreds, if not thousands, of financial tips from personal finance blogs.  Don’t just read them, take some action. If most of us average-Joe personal finance bloggers can pay off our debt, fund our retirements, and reach our financial goals or dreams — you can too. Print out these reminders or write your own today.

Have a reminder to share? Please leave a comment.

Consumer Reports took out an ad space on Monday’s USA Today, reminding us all to be a little bit wiser with our credit cards during this difficult holiday season:

From [Money & Shopping Blog] and [Adrants].

This may come as a surprise to you, but Stop Buying Crap is NOT the only personal finance blog on the web. Shocker, huh?

If you’re getting tired of reading financial ramblings from Joe-Just-Like-You, how about some literary genius from the experts, the real journalists, the pro-bloggers, the big kahuna…

What? I’m artificially inflating your expectations so you can be sorely disappointed and resort back to mediocre awesome blogs such as mine?

I have no idea what you’re talking about.

Self-talks aside, each of the blogs below are worthy of a place in your feed readers. As with what you do with your children, you may pick and choose a favorite at your discretion:

1.  The Wallet from The Wall Street Journal by Mary Pilon

Launched just a few months ago in September, The Wallet has already amassed more post counts than Stop Buying Crap (then again, which blog on the web hasn’t).  Updated by Mary Pilon, The Wallet covers investing, retirement, credit cards, mortgages — anything that impacts your wallet.  Check out their video series In Your Wallet, which provides more financial voyeurism goodness by highlighting wallets from some famous and not-so-famous people.

2.  Tightwad Tod from Consumer Reports

Even more of a newborn than The Wallet would be Tightwad Tod from Consumer Reports.  Launched last month, Tightwad Tod is far from a newbie in the world of consumer finance, having been covering all aspect of a consumer life at Consumer Reports for nearly 20 years.  You’ll find daily news and tips on ever aspect that’ll affect your pocketbooks at Tightwad Tod.

3.  Alpha Consumer from US News by Kimberly Palmer

Unlike the other two new comers above, The Alpha Consumer has been around for little over a year now.  Written by Kimberly Palmer, a senior editor at U.S. News & World Report, The Alpha Consumer dishes out tips on saving money, avoiding scams, managing debt, and overall being a savvy shopper.

4.  Smart Spending Blog from MSN by Karen Datko & Donna Freedman

Whether you’re a PC or a Mac (urgh), you’re sure to like MSN Money’s Smart Spending blog.  Co-hosted by Karen Datko and Donna Feredman, the Smart Spending blog will find you the best money saving tips from around the web while frequently highlighting post from the personal finance blogging community.  If you’re visiting the blog, don’t forget to check out the Smart Spending message board!

5.  Money and Shopping Blog from Consumer Reports

Topping off this round-up is another blog from the good folks at Consumer Reports.  Slight bias for the independent, non-profit organization?  Hey why not?  Getting its contribution from the money reporters, editors, and testers at Consumer Reports, the Consumer Reports Money and Shopping Blog hammers out frequent quick doses of financial tips.

Got other blogs on your readers that I may have missed mentioning?

Sorry, they weren’t awesome enough.

Alright just kidding.  Chime in and I’ll add them to the list.