Don’t Get Audited: The IRS’s Dirty Dozen Red Flags (AOL DailyFinance).  I recently described generosity as An Irrational Financial Act.  Unfortunately, the IRS seems to agree.

Claiming an Adult Child as a Dependent on Your Taxes (USA TODAY).  Got an unemployed adult child living in your basement?  Here’s what you need to know about the tax implications.

Ensure Those References Help You Land a Job (MSNBC).  They’ve agreed to serve as a reference for you, but do you know what they’ll say?

When Is It Bad to Kill a Credit Card? (Bankrate.com).  There are a lot of misconceptions about the pros and cons of closing a credit card account.  This article does a good job of helping you make the right decision.

Retirement in America is “Endangered” (MarketWatch).  Not exactly a feel-good story, but perhaps a helpful wake-up call.

And from the blogosphere…

Kids & Money: Teach Your Kids About Credit Cards (Bargaineering). Better to have them learn how to use credit cards while they’re still at home than after they leave.

Focus on Reliability and Fuel Efficiency (The Simple Dollar).  Good advice for those in the market for a car.  For more help comparing the ongoing costs of cars, check out this True Cost to Own tool.

Future of Shopping (Wealth Informatics).  Interesting review of retail trends, some of which may actually benefit shoppers, not just the retailers!

5 Kids Expenses to Budget For – Apart From College (Parenting Family Money).  All the more reason to get in the habit of living well within your means before you have kids.

10 Ways to Protect Your Financial and Personal Information When Shopping Online (Bible Money Matters).  Great ideas for staying safe when traveling in cyberspace.

Got a question or a response to any of the above?  Be sure to leave a comment.

Who else would benefit from this post?  Why not forward a link to my site? And if you haven’t done so already, you can subscribe to this blog by clicking here.  Two or three times a week, you’ll receive ideas and encouragement for using money well.

If you’re not familiar with a blog carnival, it’s a showcase of some of the best writing from throughout the blogosphere, with bloggers submitting one of their best recent posts.  This particular carnival, which features rotating hosts, has been in operation since the summer of 2005.

I thought it would be fitting to intersperse this week’s picks with quotes that feature additional words of wisdom or points to ponder.

Editor’s Picks

“The ancient Greek definition of happiness was the full use of your powers along lines of excellence.” – John F. Kennedy

There were lots of great entries in this week’s carnival, but I thought the following two were especially good.

Bob at ChristianPF shares an important idea he calls Get Your Financial Life on One Page, which recasts what can be a tiresome financial chore into an act of love.

Roshawn Watson at Watson Inc asks Do You Have the Courage to be Wealthy?, pointing to a key character trait that can either hold us back in so many areas of life or propel us forward.

Money Management

“Action expresses priorities.” –Mahatma Gandhi

Laura Edgar from NerdWallet offers some good guidance for Sticking to Your Resolutions, along with a quiz to see which of two approaches may be best for you.

SB at One Cent at a Time says resolutions aren’t enough; you need to become obsessed with what you want.  Read more at 5 Obsessions Towards Financial Freedom and Becoming Rich.

Sustainable PF offers rational ways for Beating Irrational Financial Behavior.

Jon the Saver from Free $ Wisdom shares 3 Financial Lessons I’ve Learned From Angry Birds.  Don’t worry, you don’t need to have played the game to get the lessons.

Jeffrey at Saving Advice provides Money Lessons Learned From “The Firm,” a movie that demonstrates in many ways the old adage: money changes people.

Investing

“October:  This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Diva at Diva in Debt covers the latest personal finance controversy with More Bad News for Suze Orman.

Div Guy at The Dividend Guy Blog helps clear the fog from our economic binoculars with If You Want to Know Where the Stock Market is Heading, Read the Following.

Philip at PT Money brings us up to date on 2012 Traditional and Roth IRA Contribution Limits.

FIRE Finance offers Three Good Habits of Successful Retirees, reviewing the traits of successful long-term investors.

Economy

“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” – Ronald Reagan

PK at Don’t Quit Your Day Job submitted Another Salary By Major Chart, which may help those headed for college choose a productive path.

Taxes

“Did you ever notice that when you put the words ‘The’ and ‘IRS’ together, it spells ‘THEIRS?’”  – Author Unknown

Glen Craig at Free From Broke encourages us not to pay more in taxes than we have to with 10 Common Overlooked Tax Deductions.

Career

“Work while you have the light. You are responsible for the talent that has been entrusted to you.” – Henri-Frederic Amiel

Mike at The Financial Blogger shows other bloggers what’s made a big difference in his success with This Image Will Make You a Believer.

For business owners, Peter at Bible Money Matters has a helpful reminder on How to Prepare and File A 1099 For Contract and Freelance Workers.

Credit

“Before borrowing money from a friend, decide which you need most.” – American Proverb

Erik at DollarVersity opens up a bit of a debate with Are Credit Scores Still Relevant?

Real Estate

“A man builds a fine house, and now he has a master, and a task for life.” – Ralph Waldo Emerson

Martin at Passive Income Now has advice for landlords in Maintaining Your Rental Property Once You Hand the Keys Over.

Frugality

“Economy is half the battle of life; it is not so hard to earn money as to spend it well.” – C.H. Spurgeon

Squirrelers offers 12 Expenses to Cut, reminding us of some discretionary spending that we may have re-categorized as essential.

Finance

“Money is better than poverty, if only for financial reasons.”  – Woody Allen

Roger Wohlner at Chicago Financial Planner offers The Similarities Between Buying Coffee and Choosing a Financial Planner.  A key to choosing well in both cases is knowing what you’re getting for your money.

Budgeting

“Planning is bringing the future into the present so that you can do something about it now.” –Alan Lakein

Dan Meyers from Your Life, Their Life explains Why We Use a Cash Budget, backing up lots of research that shows people tend to spend less when they pitch the plastic.

Saving

“In the old days a man who saved money was a miser; nowadays he’s a wonder.” –Author Unknown

Martin at Studenomics reminds us of a classic way to start building savings in What’s the Best Way to Start Saving Money Right Now?

Other

“Plans are worthless.  Planning is essential.” – Dwight D. Eisenhower

Money Beagle has ambitions to get lots of stuff done this year.  Hence, My List of 500 Things To Do This Year.  It may sound overwhelming, but when you break the idea down month by month, it may just help you stay organized, reduce clutter, and avoid buying things you don’t need.

Thanks to everyone who submitted posts for this week’s carnival.

1. Long-term unemployment.  For those who have jobs, my hope is that one new normal will be continuous learning.  That means everything from taking classes to keeping up with the latest books in our field.  While there’s no such thing as guaranteed employment, there’s much we can do to stay as employable as possible.  A good starting point is to be the absolute best at what we do.

2.    Renting over owning.  I believe the appeal of home ownership will persist, but I hope the new normal will be that homebuyers make smarter decisions about how much house they can afford.  I advocate a 20 percent down payment and a monthly housing payment (mortgage, taxes, and insurance) that requires no more than 25 percent of household gross income.

3.    Saving over spending.  I have my doubts as to whether this one will stick.  I sense that when the jobs picture finally improves, people’s pent up desire to spend will be unleashed.  In order to spur savings, my hope is that automatic enrollment will become part of the new normal for workplace retirement plans.

4.    Staycations over vacations.  See point three.

5.    Higher taxes for the rich.  My guess is we’ll see higher taxes for everyone in one form or another.

A sixth new normal I’d add to the list is the use of a household budget.  Online programs and mobile apps have made budgets easier to use than ever before.  If household budgets become common, that will be one of the best long-term impacts of the recession.

What do you think about the new normals listed above?  What others would you add to the list?

If you typically get a refund of $500 or more, consider having your withholding adjusted by talking to someone in your employer’s human resources office.  You can estimate how much you should be paying in federal taxes by going to the IRS web site and searching for the withholding calculator.

If you are in line for a big refund this year, my first recommendation is to make sure your emergency fund is properly stocked.  If you have any type of debt other than a reasonable mortgage, that means having one month’s worth of essential living expenses in savings and then getting your debts wiped out.  If you don’t have debt, make sure you have six months’ worth of living expenses in savings.  People with that much money in reserve (just 18 percent of U.S. households) are the ones who weathered the recession with the least amount of financial stress.

For those who have been diligent about saving and avoiding debt, the recession has brought about some good bargains–one of which is real estate. Prices have fallen, mortgage rates are low, and this first-time homebuyer’s credit is a great deal. I still encourage making a 20 percent down payment (made easier now that the tax credit can be used for part of that) and keeping your monthly payment for the combination of your mortgage, taxes, and insurance to a maximum of 25% of your monthly gross income.

There is more information about the first-time home buyer’s tax credit, and specifically on how to  access the money for closing costs or down payment assistance on the National Association of Home Builders’ web site.

This is just the latest in a long series of cautionary tales about the debt settlement industry. If you’re facing overwhelming credit card bills, call your credit card companies and ask about their hardship programs. You may be able to settle your debts for less than the full amount due without the “help” of a debt settlement company. Just be aware that you will likely owe income taxes on any amounts that are forgiven. Another good alternative is to work with a credit counseling agency affiliated with the National Foundation for Credit Counseling.

If you don’t qualify for Free File, you still have two electronic filing options. First, if you want to use tax preparation software, some programs are now free even for those with higher incomes. Or, if you know exactly which forms you need and don’t need help filling them out, use the free fillable forms.

About 80 percent of taxpayers receive a refund each year and the average refund totals over $2,400. If that’s your situation, and you’d like to stop giving the government a free loan, use the IRS withholding calculator to estimate how much you should be having withheld for federal taxes and then talk with your human resources department about making the appropriate adjustment.

The Kroger offer is good at any of its nearly 2,500 grocery stores nationwide that operate under a variety of names. See the above Kroger link for the names of all of its stores. Kmart and Lands’ End, both owned by Sears Holdings, are also offering the 10 percent incentive.

This is a value-added twist on the more common practice of retailers offering to cash your tax refund check in the hope that you’ll spend the money in their store before getting back to your car. The 10 percent bonus may be worth it if you don’t already have other plans for the money (like paying down debt or building savings) and if you would spend the money in such stores anyway. But keep in mind that spending on plastic – even gift cards – tends to make us spend more than we would otherwise. So, if you’re going to use your tax rebate to buy groceries at Kroger, just be sure to stick to your normal shopping practices such as using a list, using coupons (you do use a list and coupons, don’t you?), and buy what you would normally buy.

Apparently, a successful appeal of your property taxes would have no impact on your homeowner’s insurance. My agent told me they do not go by assessed value. They have their own computer models and use different inputs. In addition, assessed value includes the land, whereas insurance covers the structure and its contents. As for the other story, I agree about the need for both spouses to be on the same page financially. I encourage couples to hold monthly “board of directors” meetings to go over the family’s finances–looking at how actual spending from the past month compares with planned spending, discussing any needed changes, deciding on goals, and more.

As you might have guessed, I like the idea of using the money to reduce debts or increase savings. If you have children and have been thinking you’ll get around to saving for their future college expenses some day one day, that day may be right around the corner. Assuming you have an emergency fund and are saving for your later years, check out the options for college savings at SavingForCollege.com. No matter what you plan to save for or which debts you plan to pay down, an important step is to commit to using the money that way before it shows up in your mailbox.