A friend of mine recently realized his mother needed help managing her finances when he found her closets filled with oddball purchases like jalapeno jelly beans and Betty Boop bobblehead dolls. "It was pretty clear that telemarketers were taking advantage of her friendly nature to sell her junk she didn't want or need," he said.

Fortunately, his mom welcomed assistance; but not all families are so lucky. Some parents are fiercely independent and fear relinquishing control over any aspect of their lives; others may be in over their heads and too embarrassed to ask for help.

Postponing uncomfortable financial conversations with your parents may do them - and you – a serious disservice. Chances are, if you're helping your parents financially, your own retirement savings probably are suffering.

It's never too soon to become familiar with your parents' financial, medical and legal records so you can step in if needed. If possible, start those conversations while they're still in good health so you'll be able to spot any warning signals that something may be amiss.

Signs to watch for might include:

• Unpaid bills, late payment notices or utility shut-off warnings.
• Calls from creditors or collection agencies.
• Indications they've had to choose between filling prescriptions and buying food, heating or other necessities.
• Overabundant junk mail, magazine subscriptions or cheap prizes – signs they may be targets of telemarketing or get-rich-quick schemes.
• Seemingly unnecessary home improvements; or conversely, signs that they can't afford needed repairs.
• Uncharacteristically lavish spending on vacations, new cars, etc.

• Details of all major possessions and relevant paperwork (such as property deeds, car registration, jewerly, etc.).
• Outstanding and recurring debts (mortgage, car loan, medical bills, utilities, etc.)
• All income sources, including Social Security, retirement and investment accounts and savings.
• Bank accounts, credit cards, safe deposit box contents and insurance policies, including password, agent and beneficiary information.
• Will, trust, power of attorney, health care proxy and other documents showing how they want their affairs handled.
• Contact information for lawyer, accountant, broker, financial planner, insurance agent and other advisors.

• Help your folks set up and follow a detailed budget so they always know how much money is coming in and going out. Numerous free budgeting tools are available at such sites as www.mymoney.gov, the National Foundation for Credit Counseling (www.nfcc.org), www.mint.com, and Practical Money Skills for Life (www.practicalmoneyskills.com/budgeting).
• Set up automatic bill payment for monthly bills to avoid late payment fees. Just make sure the account is always sufficiently funded.
• Schedule a session with a financial planner to help everyone understand retirement's impact on taxes, income and expenses. If you don't have one, the Financial Planning Association (www.fpaforfinancialplanning.org) is a good resource.

One of the most effective ways to lower your income tax bill is to claim tax credits and tax deductions for which you are eligible. Although some expense categories may qualify for credits and deductions (for example, certain education and dependent care expenses), the two tax-reduction methods are fundamentally different and not interchangeable.

Basically, tax credits lower your tax amount, dollar for dollar; whereas tax deductions reduce your taxable income – and their ultimate value depends on your tax bracket. For example, if you're in the 25 percent bracket, a $1,000 deduction lowers your tax bill by $250 (25 percent); but a $1,000 credit can lower your tax bill by up to the full $1,000, no matter your tax bracket.

Here's a more detailed breakdown:

Tax Credits. There are two basic types of tax credits: refundable and non-refundable.

With refundable tax credits, if the amount of income tax you owe is less than the tax credit for which you are eligible, not only do you pay no tax, but you actually get a refund for the difference. So, for example, if you owe $750 in tax but have $1,000 in refundable credits, you will receive a $250 refund.

Among the more common refundable credits are:

• Earned Income Credit for low-income workers – amounts vary based on family size and income. (Click HERE to see if you are eligible.)
• Additional Child Tax Credit – for certain people who get less than the full amount of the regular Child Tax Credit. (See IRS Publication 972 for details.)
• Excess Social Security Withheld Credit – for people who had more than one employer during the year and too much Social Security tax was withheld. (Click HERE for details.)

• Child tax credit
• Child and Dependent Care Credit
• Elderly and Disabled Credit
• American Opportunity Tax Credit - an enhanced version of the Hope Scholarship (note: up to 40 percent refundable for most people)
• Lifetime Learning Credit
• Adoption Credit
• Residential energy efficiency credits
• Retirement savings contributions for low-income families

• Medical and dental expenses that exceed 7.5 percent of your adjusted gross income
• Deductible taxes you paid elsewhere (including state, local and foreign income tax, property tax, sales tax, etc.)
• Home mortgage points
• Charitable contributions
• Casualty and theft losses
• Certain education and work-related expenses
• Miscellaneous deductions - some, like unreimbursed employee expenses, professional dues, job search expenses and tax preparation fees, must exceed a combined 2 percent of adjusted gross income to be claimed; others, like gambling losses up to the amount of winnings or casualty/theft losses from income-producing property, are not subject to that limit.
• Click here for a more complete list.

If you're like many people, you're cutting corners and saving wherever you can. You might be fearing – or facing – unemployment in a challenging job market, or struggling to meet the rising costs of health care, gas and groceries. With today's focus on the essentials, fitness expenses like a gym membership or athletic trainer might not be a priority.

Yet, now can actually be a key time to invest in your health. People who live a healthy lifestyle tend to be more productive and better at handling stress, making them more valuable employees. It turns out being fit can even save you on health insurance — many companies factor in height and weight when determining rates for consumers.

Here are seven tips for improving your health while saving money:

Skip the gym.
Take your workouts outdoors or set up a workout space at home. Americans spend many billions of dollars on health and fitness club memberships each year. What's more, 80 percent of the 40 million Americans paying for gym memberships aren't using them (Medical News Today). Invest in athletic shoes and make every nearby street, trail and park your workout space — for free.

Gear up for less.
Working out at home can save you the $50 to $100 a month you'd pay for a gym membership. Stock up on weights or other used athletic equipment by hitting a garage sale or browsing Craigslist.com. Water bottles, laundry detergent containers and all kinds of household items can double as weights. And if you're short on inspiration, check out workout tapes or DVDs from your local library.

Revisit your rate.
If you're more gym fanatic than park fan, there's still no need to pay top dollar. Shop around for deals elsewhere and see if your gym can match them, or tell the sales rep times are tight and see what they can offer you. If you're not a member but want to be, visit your local YMCA for monthly memberships that cost just $30 to $50 per month. If you're looking for a gym, the trick is to shop around — watch out for specials, negotiate with sales reps and avoid large initiation fees.

Bike to work.
Your health – and wallet – will thank you. Commuters who drive 20 work-related miles per workday drive over 5,200 miles annually. If fuel is $2.80 per gallon, they're paying over $700 for gas alone. Add in bridge tolls and car maintenance and you're probably looking at over $1,000. Why not hop on your bike instead? Now you can even map your route online by selecting the bicycle option at http://maps.google.com/

Dine in.
The average American family of four eats out approximately three times a week at a cost of $300 or $400 per month or more. You can eat more healthfully for less by reserving meals out for special occasions. For even bigger savings, make large batches of soups, lasagnas and other dishes, and then freeze some for work lunches and future meals. You can find a wealth of healthy recipes online, like the ones here: http://www.mayoclinic.com/health/healthy-recipes/RecipeIndex

Get supermarket savvy.
Smart grocery shopping is a critical part of eating healthfully and keeping costs down. Before going, make a list and determine a budget to avoid splurges. On your trip, opt for the store brand instead of name-brand items. Other money savers are buying frozen veggies instead of fresh, avoiding prepackaged foods and grabbing oatmeal instead of packaged cereals. Use store savings cards and stock up during sales. Visit your local farmer's market to get in-season, organic produce on your table for less.

Vanish your vices.
We all have our habits. But if you smoke or drink regularly, there's never been a better time to cut back or quit. Instead of an after-work glass of wine or beer, take a walk, have some tea or pick up a book. If you're a smoker, try to quit. If you smoke 20 cigarettes a day, you can save as much as $1,500 a year by quitting. The real perk is that you'll seriously reduce major risks to your health.

In the end, investing in your health won't just save you money; it will improve your lifestyle and outlook, as well.

Article courtesy of www.practicalmoneyskills.com
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