7 money-saving moves that can backfire

4:30 PM backfire, moneysaving, moves No Comments

| By April Dykman, Get Rich Slowly

Sometimes, a move that seems like a good idea ends up being a bad idea. Here's how that can apply to your finances.

I’m renovating a house, a project that started in January 2013 and will end — well, who knows when it will end? We have a lot of plans for this house.

Truly, the only reason we’re able to afford this project is because we’re doing the work ourselves. And the only reason that DIY is saving us money is because we have my dad on the job, who is a stonemason by trade but can do everything from laying tile to rewiring ceiling fixtures. Without him, we would either have had to hire a remodeling company, which we can’t really afford, or try to do everything ourselves.

Not that we’re completely inept, mind you. I’m pretty proud of my circular saw know-how and painting skills. But I know enough to know what I don’t know and that DIY-rookie mistakes can end up costing you quite a bit in the long run. For instance, one of the big things we did was to shorten the wall between the kitchen and the living room. No, it wasn’t load-bearing (everyone asks that), but can you imagine if it was and we tried to take it out?

Going DIY is one of many ways that people try to save money, but can end up paying more in the long run. Here are six more.

A great example of this scenario is Groupon or LivingSocial. The deals hit your inbox, and one piques your interest. Sure, you’ve never been stand-up paddleboarding in your life, but you’ve thought about doing it. And it looks cool in the picture. And it’s half-off your first lesson!

So you buy it, and then you forget about it. The expiration date comes and goes. This has happened to me a couple of times, so my new rule is to only buy Groupons for services that I’d use anyway or places that I already love. For instance, when I’ve bought Groupons to my favorite restaurant, I’ve always redeemed them. I don’t think I could forget I owned that coupon even if I tried!

A lot of online retailers will coax you into buying just a little bit more with their discount offers. For instance, if I just purchase $20 more, I can get 15 percent off or free shipping. I’d like to be immune to those offers, but the truth is, I hate paying for shipping and will do just about anything to avoid it, including scouring the ‘net for coupon codes and having items shipped to my local store for pickup. (I don’t claim that this is rational behavior on my part.)

But the problem is that you can spend more money than you would’ve spent without the coupon. For instance, if I need $20 more in my cart to get free shipping, and shipping costs $8, then I’m paying $20 to save $8, which is $12 more than I would’ve paid without the coupon. In fact, I didn’t save; I spent more.

Other times, though, it is a good deal. Last week I needed just $5 more to get free shipping on an order I was placing, and shipping was $6. So as long as I could find something I could really use for under $6, it was worthwhile to buy more.

More expensive doesn’t always mean higher quality.

For instance, I take my chef’s knife pretty seriously. I cook every day, and that thing is a workhorse. So it might make sense to buy a really nice one that will last for years and years. Maybe something pretty too, like this $200 beauty from Williams Sonoma.

But it turns out that one of the best knives out there costs only $30, and it outperformed the $100+ knives. From Cool Tools:

“A really great chef’s knife is insanely sharp, yet retains its edge easily and feels well-balanced and welcoming in your hand. These days, a decent high-grade chef’s knife can cost $100 to $200. Several cooking publications, including Cook’s Illustrated, recently tested a bargain $30 chef’s knife that rated just about as good as the $100-plus knives. It’s the Victorinox Chef’s Knife; the one we use.”

I actually bought that knife five years ago based off of Cook’s Illustrated’s recommendation, and I’m about to buy another because we need a second chef’s knife in our kitchen.

Expensive isn’t always better. Unless you do a bit of research, you might think you’re paying more to invest in quality, when really, you’re just paying more.

Sometimes it does make sense to pay more. If you’re trying to save money by going with the cheapest item, that can cost more in the long run.

For instance, when I started painting my house, I needed a lot of supplies, like brushes, rollers, and trays. The paint salesperson at Home Depot suggested a kit that contained all of these items and was a “good value.” Unfortunately, the brush lost its shape after a couple of uses and the roller didn’t roll so smoothly. It also made a loud squeaking noise. That might not be a big deal if I wasn’t painting every single room and ceiling in my house. I ended up replacing all of those items with better-quality (and more expensive) models.

Buying in bulk is a good way to save money, but only if you actually use it.

“A few months ago I went to Costco and bought a bunch of stuff in bulk to save money,” says Christina Collazo of Austin, Tex., “things like Annie’s Crackers and muffins.” When she got home, she realized there wasn’t enough pantry space to store everything. “So we stored all of it in the garage,” she says, “but because it was in the garage, we forgot about it and it expired.”

Costco has gotten me, too. The last time I was there, I bought a brick of cheese that went blue and moldy (and wasn’t supposed to be blue and moldy). If you do want to buy in bulk, consider splitting bulk buys with someone else, especially for perishable goods that you may not consume before the expiration date.

Sales and clearance racks can be deceptive.

“My husband loves to shop the clearance racks,” says Collazo. “He’ll even stock up on multiples if it’s a really good deal, like the three pairs of running shoes he bought.” The problem was that by the time he wore out the first pair, he needed a different kind of shoe. “It was $120 down the drain,” she says.

I can relate. Finding a designer item at Old Navy prices used to be pretty exciting to me. Actually, it still is; but there was a time when big-enough “savings” would make me overlook things like it’s not exactly my style, I have nothing else to wear with it, and it looks okay on me, from the right angle.

Even though I got a great discount, I wasn’t saving money. Those items would hang in my closet, unworn and unloved. Eventually, I ruthlessly cleaned out my closet and got rid of those sad reminders of how much I’d spent on those great “deals.”

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Timeless moves for a successful retirement

12:00 PM moves, Retirement, successful, Timeless No Comments

| By David Ning, U.S. News & World Report

Times change, markets go up and down, and new innovations come along all the time. Still, some financial moves always make sense.

A comfortable retirement may seem harder to reach than ever before. But those with the right attitude will still make out OK. Here are a few ways to prepare for retirement that never go out of style.

Throughout your life you will be faced with many financial decisions: Do you pay off the mortgage early or do you invest that extra sum of money? Do you pay off high interest debt or do you pay off the smallest balance first? Many people opt to follow what the math says, but the right approach is always the one that will give you the best results.

For example, will you actually invest the extra money if you don't use it to pay off your mortgage or will you spend it? And we all know we'll pay more in interest if we don't pay off the debt with the highest interest rate first, but some people are more motivated when they pay the smallest balance off first because it gets them excited to think of new ways to save. Sometimes emotions win over math because personal finance is all about persistence and discipline. If you decide to follow the math, then make sure your behavior tightly follows the model you envisioned in your calculation.

This debate will probably rage on forever, but a dollar is a dollar whether you saved it or earned it. Rather than trying to figure this out or spending time defending your position, why not spend time maximizing whichever comes more naturally to you? Some people find it easier to find ways to make more money while others love saving money. When you are done perfecting one strategy, give the other side a try too. It's actually better to work on both than to concentrate on just one of the two ways of building wealth.

If a comfortable retirement is your goal, then make tax deferral a priority. There are all kinds of reasons you haven't put the maximum amount possible into tax-advantaged accounts every year. But every one of those excuses is leaving money on the table. Tax deferral will ultimately allow you to pay a lower tax rate on all or part of your withdrawals, especially if you drop into a lower tax bracket in retirement. Plus, you won't have to pay taxes on gains, dividends and interest year in and year out. That's money you could spend on necessities, traveling, food, toys for your grandkids and whatever else you fancy in retirement.

The compounding effect is powerful, but that's just the beginning of why starting to save early is great. It's so much easier to learn frugal habits when you aren't used to an expensive lifestyle, because you already know you can live happily on Ramen every day. When you begin to save at an early age you won’t have to play catch-up later in life. And you'll never let accidents wipe you out because you will always have a savings cushion.

Investing can be simple and effective, but there are also many sub-optimal ways to go about it. Many people waste too much money and countless working hours making investing mistakes. Even if you have a money manager who handles your nest egg for you, it's imperative that you learn how markets and investing work so you can guide your adviser to make the most prudent decisions for you at all times.

A comfortable retirement is still possible for people who save consistently throughout their careers. Use these time-tested strategies to build wealth for the future.

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10 year-end tax moves to make

11:30 AM moves, yearend No Comments

| By Kay Bell, Bankrate.com

The year is winding down, but it's not too late to make some money-saving tax moves.

April 15 is the target date for taxes, but to ensure that you pay the Internal Revenue Service the least possible amount on that date, you need to make some tax moves before the tax year ends.

The good news this year is that the federal tax laws are in place, unlike at the end of 2012, when Congress was still fighting over legislation.

The bad news is that if you earn a lot of money, you could face some new taxes.

The best news, regardless of your income level, is that you still have time -- until Dec. 31 -- to reduce your tax bill.

Some tax moves will take a little planning. Others are very easy to accomplish. But all are worth checking out to see if they can reduce your tax bill.

Following are 10 year-end tax moves to make before New Year's Day.

The top tax rate is 39.6 percent on taxable income of more than $400,000 for single taxpayers; $450,000 for married couples filing joint returns ($225,000 if filing separately); and $425,000 for head-of-household taxpayers. If your remaining pay will push you into the top tax bracket, defer receipt of money where you can.

Ask your boss to hold your bonus until January. Put more money into your tax-deferred workplace retirement plan. Hold off on selling assets that will produce a capital gain. If you're self-employed, don't send out invoices for year-end jobs until early 2014.

This strategy works even if you're not in the top tax bracket, but just about to cross into the next higher one.

Even if you're nowhere near the top tax bracket, putting as much money as you can into your company's 401k or similar workplace retirement savings plan is a good idea. Since most plan contributions are made before taxes are taken out, you'll have a bit less income that the Internal Revenue Service can touch. (Exceptions are contributions to Roth 401k plans, where you put away after-tax money and get tax-free growth.) Plus, the sooner you put the money into the account, the longer the earnings will grow tax-deferred.

Few of us will reach the maximum $17,500 that employees can stash in a 401k, but any amount you can contribute is good. If you are age 50 or older, you can put in an extra $5,500.

In most cases, you can modify your 401k contributions at any time, but double check with your benefits office to be sureof your plan's rules.

Another workplace benefit, the medical flexible spending account, or FSA, also requires year-end attention so you don't waste it. You can contribute up to $2,500 to an FSA via paycheck withdrawals. If that limit seems lower, you're right. As part of the Affordable Care Act the maximum contribution amount was set at $2,500; before the health care law change there was no statutory limit.

As with 401k plans, money goes into an FSA before your taxes are calculated, saving you some tax dollars. But if you leave any money in your FSA, you lose it. Some companies allow a grace period into the next year to use the untouched FSA funds, but not all. And though the U.S. Treasury recently announced a change in the use-it-or-lose-it rule, allowing account holders to carry over up to $500 in excess money into the next benefit year, your company has to take steps to adopt it.

Be sure to check with your employer, and if you must use your FSA money by Dec. 31, make sure you do.

If you have assets in your portfolio that have lost value, they could be a valuable tax tool. Capital losses can be used to offset any capital gains. If you have more losses than gains, you can use up to $3,000 to reduce your ordinary income amount. More than $3,000 can be carried forward to future tax years.

Capital losses could be especially helpful to higher income taxpayers facing the 3.8 percent Net Investment Income Tax. This surtax, part of the Affordable Care Act, applies to the unearned income of taxpayers with modified adjusted gross incomes of more than $200,000 if they are single or head of the household; $250,000 if married and filing jointly; and $125,000 if married and filing separately. High earners with investment income can reduce this new tax burden by using capital losses to reduce their taxable amount.

If you do face the 3.8 percent surtax, consult with your financial adviser and tax professional. In addition to figuring your modified adjusted gross income, you must take into account the different types of investment earnings that are subject to the tax and how to appropriately calculate losses within each category.

Homeownership provides a variety of tax breaks, some of which you can use by year-end to reduce your current year's tax bill. Make your January mortgage payment by Dec. 31 and deduct the mortgage interest on your coming tax return. The same is true for early property tax payments.

You also might be able to get some tax savings from upgrades to your primary residence. The residential energy efficient property credit is available for such things as added insulation, new windows and whole house fans.

The maximum credit amount is $500, and you must count any previous years' tax credit claims against that limit. But even if you can only claim $50 or $100, it is a credit, meaning it will reduce your final tax bill by that amount. Just make sure the home improvements are in place by Dec. 31.

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7 money moves to become a stay-at-home parent

8:30 AM become, money, moves, parent, stayathome No Comments

| By Gary Foreman, U.S. News & World Report

If you're planning on staying at home with the kid and becoming a one-income family, here are some pointers to clear up your financial picture.

So you want to be a stay-at-home mom or dad, but you're afraid that you won't be able to swing the finances?

If that's you, follow these seven steps for altering your budget and making your new job as a stay-at-home parent a financial success.

1. Make sure both parents are on board. Becoming a stay-at-home parent isn't something you can do without your partner's support. It's a major decision for any family. So make sure that you're in agreement. Discuss the advantages and disadvantages of having a parent stay home with your kids, and consider the financial and emotional issues, since both partner's roles and responsibilities will change.

One big challenge you'll face is the trap of thinking your job is harder than your partner's. When finances are tight and tempers are short it's easy to forget each of you has a job that's equally important. Now is the time to talk about how you'll handle those feelings.

2. Review your spending. It's important to know where your paycheck goes each month. No one likes to budget, but you won't be successful unless you know how much you spend and where you spend it. Between your credit card, debit card and bank statements, you should have a pretty good idea. You don't need to track down every penny, but your miscellaneous category shouldn't be more than 10 percent of your expenses.

3. Adjust your spending habits. Any worthwhile goal requires some sacrifice. The same is true of being a stay-at-home parent. You'll need to adjust your spending, and you don't need to wait until you quit your job to start.

Begin with luxury items and conveniences. Now is the time to find out whether you're willing to live without premium TV channels and daily trips to Starbucks. Don't be afraid to make cuts that seem a little painful.

Set aside any money you save, and put it in a savings account. You'll find it handy when you face an unexpected bill after you quit your job.

4. Put together a stay-at-home budget. You're probably well aware of how much income you'll lose. Take the figures from your expenses and form a hypothetical budget.

Look for areas where staying at home can save you money. For instance, your grocery budget should come down when you do more food prep and cooking at home. The cost of commuting, business lunches and clothing will also all be reduced or eliminated. Your taxes will be lower, too. Talk with your accountant or HR representative to see if you should change the number of dependents you claim.

Don't expect your estimates to be right on the money.You'll probably be a little high on some areas and low on others. But make every effort not to tilt the numbers in one direction to get the answer you want. That won't help you if you decide to stay at home – you'll just become frustrated when your budget proves unrealistic.

The stay-at-home budget should give you an idea of how close you are to your financial goal. You may find that you need to squeeze expenses more than you thought or even take a part-time job to bring in a little income.

5. Test your budget. As much as you can, see how close to your stay-at-home numbers you can get while you're still working. For some items, like commuting, you won't be able to make any changes before you stay home. But for others, you can see how realistic your budget estimates are.

6. Make the decision and switch. After a few months, review your budget performance with your spouse. You should have a good idea of whether your finances will support a stay-at-home lifestyle.

When it's time to become a stay-at-home parent, your change should be less stressful. You've eliminated most financial uncertainty, and you know what's required of both of you to make staying at home successful.

7. Adjust your plan. Some parts of your plan will work exactly as expected. But others won't. Be prepared to make adjustments both in terms of how you spend your time and your money.

Becoming a family with a stay-at-home parent isn't easy. But if you decide that's what you want to do, taking an organized, thoughtful approach will increase your chances of success.

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10 midyear tax moves to make now

9:30 AM midyear, moves No Comments

| By Kay Bell, Bankrate.com
Ah, summertime -- the beach, vacations, hot days and cool drinks, tax forms . . . wait, what? That's right: It's a great time to get a jump on next year's taxes.

It's summer, the best time of the year to think about your taxes. Really.

A lot of people wait until December to start thinking about their tax bills. True, you can and should make some year-end moves by Dec. 31. Bankrate will be back with recommendations at that time.

But now, halfway through the tax year, is even better for tax planning.

You have a good idea of what your earnings will be. And there's still plenty of time to take steps that could cut the taxes you'll owe on that money.

So put down your putter or tennis racket. Step away from the pool. Take a quick break to check out these 10 midyear tax moves.

Then you can get back to your leisure pursuits and really enjoy them, knowing you're in better tax shape.

First things first. If you received an extension to file back in April, finish up your 2012 tax return now.

Sure, you have until Oct. 15 to get the forms to the Internal Revenue Service, but you don't have to wait until the last minute. Finishing up your taxes in a rush, whether in April or October, is a recipe for disaster.

At best, you could overlook a deduction or credit that could cut your tax bill. At worst, you could make a filing mistake that could undo all the tax work you got around to completing.

Remember, too, that the IRS' Free File program is still operational. If your adjusted gross income last year was $57,000 or less, you can use the online system to prepare and file your taxes for, as the name says, free.

Did you get a big refund? Are your work and tax circumstances about the same this year as last?

Then you probably should adjust your withholding so that you won't get a big tax refund next filing season.

Some people view tax refunds as forced savings accounts. That's not necessarily a good idea. It means Uncle Sam, not you, has control of your money for a year.

The ideal payroll withholding situation is to have just enough tax -- not too much, not too little -- withheld from your paychecks to meet your eventual annual tax bill.

In this way, you'll avoid writing the U.S. Treasury a check for tax due if you under-withheld. And if you over-withheld, you won't be waiting for a refund check.

Changing your withholding is easy. Just stop by your payroll office and submit a new W-4.

Estimated tax payments are required if you get income that isn't subject to withholding. It's the IRS' way of ensuring that you're paying as you earn on all your income.

By making the four extra tax payments a year, you'll help ensure you don't underpay your taxes. That's important because if you owe too much at filing time, you could face a tax penalty. But you don't want to overpay your estimated taxes.

Summer's a great time to reassess your estimated tax situation. Look at what you've paid via your April and June 1040-ES filings and see whether your schedule is still on track. If not, you can adjust your upcoming September and January estimated tax payments.

Most working parents are well aware they can claim the child and dependent care credit to help cover day care expenses for the kids. But don't forget about day camp costs during summer.

When school's out, day camps are a good substitute for or supplement to regular child care options. The IRS thinks so, too. It allows you to count the day camp costs toward your child care credit claim.

Remember, only day camps qualify, no overnight kiddie retreats at the lake. But if you did take advantage of this short-term child care help, hang on to those receipts so you can count them when you file your taxes next year.

Is your 2012 tax-filing material still in an unsorted stack? Straighten it out now. If the IRS has questions about your return, you'll be glad you put it in an easily accessible order.

Do the same for your 2013 taxes. It will make filing your return next year that much easier.

Your tax organization system doesn't have to be elaborate. An accordion file works wonders for many folks. But if you want a full file cabinet for your tax documents, go for it.

The key is to pick a system in which you can easily file and then find documentation such as business expense receipts, medical bills, charitable deduction substantiation and the like. And once you get it set up, stick with it.

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3 moves to rising prices

2:00 PM moves, prices, rising No Comments

| By Beth Braverman, tax

These steps make the most of rising interest rates and protect yourself from potential financial dangers.

The days of cheap money are counted. How the economy lukewarm recovery continues, signaled U.S. Federal Reserve Chairman Ben Bernanke at a press conference last week that the Central Bank would begin, to the monetary stimulus does not subside, the prices on a close to record lows has held for the last few years. These low prices you were instructed for pensioners particularly difficult on fixed-income investments such as bonds and CDs.

Although Bernanke end stimulus gradually and quota on a decline which would be unemployment said, the market reacted immediately. Mortgage rates in the amount of shot, and the yield on ten-year bonds to a 15-month high. (Move bond prices and yields in opposite directions.)

So what should consumers in a rising rate environment? Firstly, don't panic. Even if the rates move upward, they remain at historically low levels and economists expect that they customs-rather than adequacy - upward, regardless of the last movement. PNC Bank economists said in a note that await them, that the 10-year Treasury yields to remain in the range of 1.85 to 2.35% until summer and then gradually tapers the impetus to rise as the Fed.

These three steps to make sure that the most of rising prices and protection against potential financial dangers are doing.

Yes, you may have missed already low sub - 4% rates for much of this year the window for the record. But in today's prices, that, on average, could produce considerable savings locks 4.6% according to Bankrate.com. "You could a somewhat higher rate than you had a month ago, but it is still not too late," says Marc Schindler, owner of the daily pivot point advisors in Bellaire, Texas.

A savings of more than $350 per month and nearly $130,000 over the term of the loan is refinancing a mortgage of $300,000 by 6.5% to 4.6%. Since an average of 45 days to refinance, borrow, if you have already started the process, you should protect locks in a rate you before any more interest rate hikes.

Given the fees in connection with the refinancing, is remain generally useful if more than 1.5 percentage points above the new tariff is at the current rate and if you plan to refinance in your home for at least a few years. Refinancing is also a big step for homeowners, the adjustable rate mortgages. Borrowers have benefited in recent years from the low rates, but she could have serious payment shock, because these sets start reset to reflect current prices.

Bonds have traditionally been perceived by investors as a safe haven has been, but since the value of those holdings rising bond yields a heavy hit. Investors note that rising interest rates have this vulnerability in recently means to flee. Bond funds have seen a huge exodus of investors since the year began. For many investors, the damage has been done already.

"A lot of bond investors, who thought that they were making safe investments, are to be not happy when they open their second quarter statements," says finance Greg McBride, a senior analyst at Bankrate.com.

Consultants say that small investors should completely abandon not bonds, but they should they invest a hard look at the types of bonds in, focus on bonds and bond funds with shorter terms or protection against inflation. 'I would just now be really careful with bonds', says Wayne Copelin, founder and President of Copelin financial consultant in Sugar Land, Texas. "Everything should be shorter in duration - three years or less."

It is a place that rising interest rates have had more impact on traditional forms of savings, such as money market accounts, savings accounts or certificates of deposit. CD is on average less than 1 percent for a year or six months CDs, and less than 1.5% for five years.

In comparison to typical savings account for less than half a percent to GoBankingRates.com.

As the prices for savers what are bad, no matter, it is better to keep cash in a money market account or a very short-term CD, so that you can access it, if rising interest rates finally catch up with forms of savings, too, says Copelin. "As inflation starts to bite, finally this CD prices are going to rise, and you can make them an important role in your portfolio then."

In the meantime, it is worth to ensure that you get the best possible price on your savings with savings banks and regional banks. "They do to slightly better around by shopping, but in this environment, it will be lower much than people have expected," says McBride.

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G20 moves to line up huge rescue deal for April

10:18 AM April, moves, rescue No Comments

MEXICO CITY — The world's leading economies worked on Sunday to line up a deal in April on a second global rescue package worth nearly $2 trillion to stop the euro-zone sovereign debt crisis from spreading and putting at risk the tentative recovery.

Germany said it would make a decision sometime in March on strengthening Europe's bailout fund, a move other Group of 20 countries say is essential to clear the way for throwing extra funds into the International Monetary Fund.

The twin proposals would build up massive international resources by the end of April — when the G20 group next meets — and convince financial markets they can stem the euro-zone's deep problems.

It would mark their boldest effort since 2008, when the G20 mustered $1 trillion to help rescue the world economy.

British finance minister George Osborne said there would be no additional resources committed to the IMF until euro zone countries bolstered their own efforts to stop contagion.

"We are prepared to consider IMF resources but only once we see the color of the euro zone money and we have not seen the color of the euro zone money," he told Sky TV. "I think that quid pro quo will be clearly established here in Mexico City."

German Finance Minister Wolfgang Schaeuble, whose government has taken a tough public line on aid for Greece, said European leaders will tackle the adequacy of the region's firewall during March. The issue will be debated at a European Union summit next week.

Germany's willingness to discuss the size of Europe's firewall appears to mark an important shift, although Berlin clearly hopes the extra funding will not be necessary and may stick to its guns if financial markets continue to improve.

"The month of March goes from March 1 to March 31. It will be reviewed again, also in the light of the developments that have since occurred, whether the stated dimension of the (European bailout) mechanism is enough or not," Schaeuble told reporters on Saturday.

A government official close to Chancellor Angela Merkel on Sunday took an even firmer line than Schaeuble's, insisting that there is enough money in the euro zone's rescue fund, known as the European Stability Mechanism.

"The German government's position is unchanged: we see no need to increase the upper limit of the ESM," the official said.

Still, some G20 negotiators are optimistic that Germany will be on board.

"Everyone in the euro zone and even in European Union is reasonably happy with combining the ESM and the EFSF, even Germany, but it is too early to say if this will be decided at the EU summit at the beginning of March," said Margrethe Vestager, economy minister of current EU president Denmark.

The German government faces public opposition to a second Greek bailout, and has balked at enlarging Europe's rescue fund on the grounds that it would undermine efforts to impose fiscal discipline on indebted countries.

The second Greek bailout package, recently agreed in principle, needs the approval of Germany's parliament, the Bundestag. Lawmakers will vote on Monday and it is expected to pass with opposition support but a poll in the Bild am Sonntag newspaper on Sunday showed 62 percent of Germans oppose further aid for Greece.

An agreement by Europe to merge its temporary and permanent bailout vehicles would create a $1 trillion war chest and open the door for other G20 countries to meet the IMF's request for $500-$600 billion in new resources, on top of its current $358 billion in funds.

Put together, this would total around $1.95 trillion in firepower.

But the G20 has no intention of easing its pressure on Europe by giving it a strong signal now that new IMF money is in the bag. Its communique when two days of ministerial meetings end on Sunday will merely state that the world's leading economies will review the resources of the IMF in April without setting a date for a deal, G20 officials said.

Another official said there was debate between the United States and Europe over whether the communique should say an increase in the firewall was "essential" or just "important" to secure an increase in IMF resources.

U.S. Treasury Secretary Timothy Geithner said on Saturday Europe had come a long way in laying the foundations for a "credible" crisis response but could not rest there.

"It's important not to rest on that progress... That progress is in part based on expectations of more progress to come," he said.

Others also left no doubt the cash is needed to calm markets and secure economic growth. "In order to overcome the crisis, you have to get ahead of the curve and have a big enough bazooka," said Olli Rehn, European Commissioner for Economic and Monetary Affairs.

Japan's Finance Minister, Jun Azumi, said his country stood ready to contribute IMF funds once Europe has acted.

"I expect debate on strengthening of the IMF lending capacity will progress on condition that the problem of Europe's debt crisis is put to an end by the G20 meeting in Washington in April," he said.

Finance chiefs in their communique on Sunday will also cite rising oil prices driven by geopolitical risks as a threat to a tentative world recovery that is showing signs of strength, diplomatic sources said.

The price of oil vaulted over $125 a barrel on Friday, the highest level in nearly 10 months on concerns over Iran's nuclear ambitions.

Oil-producing members of the G20 said on Saturday they would take measures to avoid a rise in petroleum prices from hurting the world economy, Italy's deputy economy minister said.

Copyright 2012 Thomson Reuters.

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