Last Minute Tax Moves for 2007/Retirement Resolutions

The year in nearly done but it isn’t too late to make several moves that can give you relief on your 2007 taxes. Leonard Wiener writes in U.S. News and World Report 6 Last-Minute Tax Moves for 2007. Most of them are doable regardless of what income bracket you fall under and all of them should at least be considered.

More New Year Resolutions

As if we didn’t have enough suggestions for New Year’s Resolutions Emily Brandon comes along with 10 Retirement Resolutions for 2008. I don’t really want to start thinking about retirement but I know that I need to plan for it. That’s why I’m so determined to have all of my debt paid off in the near future.

Make 08 Financially Great!

I came across this tidbit written by Chuck Jaffe about getting ahead financially in 2008. In it he suggests that we should set goals instead of resolutions for the New Year when it comes to managing our money. He then gives nine financial goals to aim for in 08.

Here’s why this is a great idea, because we are lazy when it comes to money. I don’t know about you but if I have cash in my pocket then it is going to be spent and not saved. If I don’t pay my bills first then I’ll spend on things that most definitely aren’t priorities. I’ve said over and over again on this site that discipline in the key requirement for being debt free and building wealth. Setting attainable goals and then making a concentrated effort to reach them is a huge step in the right direction.

Good luck in 08!

Dos and Don’ts for Budgeting

I’ve mentioned the value of budgeting a few times here in this site and I can personally testify that living on a budget has allowed me to pay off thousands of dollars in debt. People often get frustrated with their budgets just because they don’t fully understand them and the discipline it takes to live on one. Here are a few dos and don’ts of finding your financial freedom by living on a budget.

Plan your budget together – Many marriages end over financial disagreements. Budgets require discipline and planning. If you fail to work as a team, with your spouse, then it literally could turn into a nightmare.

Define your financial goals – Are you looking to get out of debt or build wealth? Being debt free is the key to being wealthy so if you have any debt budget to take care of it first. Should you already be debt free, know that I’m jealous, plan to build up your wealth. If your goals aren’t clearly defined you’ll never reach them.

Don’t rush into a budget before you know how much you now spend for what – Know your spending patterns and habits are before you start allocating money for specific budget line items. For budgets to be successful they have to be carefully planned.

Do not think up countless budget headings – Budget for entertainment but don’t put subcategories with it. When planning out your budget don’t think of all the things that you could spend money on and focus on the things you need to spend money on.

Divvy up your dollars according to your family’s needs and wants – It should go without saying that needs come before wants. Take care of financially securing your needs first before budgeting for your wants.

Think first! When allocating, trimming, or adjusting budget amounts, do not jump to conclusions – Only make informed decisions when making adjustments to your budget. Guessing will only throw you off of your budget and put you behind.

Take all credit cards – except one for emergencies – out of your wallet – Credit cards will lead you further into debt! Keep only one and use it only if there is an emergency. If you have multiple credit card balances then budget to pay off the lowest one and then work your way up from there.

Plan for big expenses – You have to understand that financing expensive purchases adds to your debt and must be absorbed into your budget. Set financial goals and reach them before taking on any new debt and save up to make a sizeable down payment.

Do not cheat your budget – If you do it once it will become easier to do it again and again. Remember budgeting requires discipline but the payoff of financial freedom is worth it.

Don’t carry around too much cash because you will tend to spend it – You can’t save or allocate your money if you are carrying it in your pockets.

PayPal’s Money Market Account

I have some business transactions that are done through PayPal and most bloggers do as well. Until recently I have withdrawn my money on a monthly basis to put it my bank’s savings account. That is until I enrolled in PayPal’s money market account! The last two months PayPal has more than doubled the interest that I am getting from my bank’s savings account and my PayPal account had less money in it.

I deposit a little money from each of my paychecks into my savings account to go towards my debt retirement and had been trying to use the money in my PayPal account to establish a savings account for emergencies, vacation or to buy something for the family later on down the road. The problem had been that when that money hit my savings account it became immediately accessible for whatever I wanted. This isn’t the case with PayPal. A withdrawal takes 3-4 days so I can’t immediately spend the PayPal money.

Currently the PayPal money market account has a 4.70% yield. My goal now is to keep that account growing by not withdrawing unless absolutely necessary. I usually have between $50 and $200 a month deposited into my PayPal account so my goal is simply to see how much money I can build up in the next sixth months. I’ll decide what to do with it over the summer.

Break the Pay Check to Paycheck Slump

Holy cow! Where does the time go? I mentioned in my last post that I had been busy but I hadn’t realized that almost two full months had gone by since I posted. I’ve been working on a house that I purchased for resale and we’ve just about got it done. I’ll be posting more about it later but I thought would at least try and explain my absence.

Let’s get back to the task at hand. I read this article on the difficulty of living from paycheck to paycheck in today’s society and made me realize, even more, the importance of getting out of the paycheck to paycheck cycle.

With the rising cost of fuel leading to $80.00 tanks of gas and enormous heating bills to come this winter building a little cushion in the checkbook becomes even more crucial as we head into 2008.

While I still maintain that the key to extra cash flow is eliminating debt there are still many other things a person can do each month to reduce spending. While many of them have been discussed already on this site here are few ways you give your pocketbook some relief at the grocery store.

I’ve said it before on this site and its worth saying again. Buy your groceries for the month and not just for a week or two. Every time you go to the grocery store you are tempted to buy some things we don’t need. The fewer trips we make per month the less we spend on things that aren’t a necessity.

Make a grocery list. Go to the grocery store with a plan and stick to it! Having a list helps keep you focused and away from the impulse stuff. Also if you’ll sacrifice things like soda drinks for Kool Aid and cut back on junk food for two or three months you’ll be shocked to see the savings it brings you.

Compare and use coupons. Buying your groceries at the convenience store/gas station is a bad idea. While the local 7-11 may be “convenient” you are going to pay more for just about every food and beverage item then you would at the local supermarket.

Do your homework, find out where the deals are and shop there. Every city in America has the mega supermarket with the mega savings that pride themselves in putting the smaller stores out of business. Shop there! Take advantage of their “Rock Bottom Prices.” Sure, they’re going to put Ted’s Corner Mart out of business but Ted isn’t feeding your family and paying your bills. Always, always, always take advantage of savings.

Speaking of savings, why do so many people throw away coupons? If I walked up to you on the street and gave you a quarter or a dollar or anywhere in between you wouldn’t just throw it away would you? Clipping coupons from the newspaper or the mail leads to dollars upon dollars of savings.

Like so many other financial areas of life you can build a plan for your grocery needs that works for you and saves you money. It only requires some thought and discipline and the result will lead to extra cash left over at the end of the month.

Almost There!

Things have been so busy lately that I had actually forgotten about this little blog project. I actually am so close to being debt free that I can taste it! I even beginning to think of names to rename this blog (should I decide to do so) once I am done with debt.

Here’s where I stand. My inheritance money from my grandma came in and it was enough for me to make a down payment on a new house, payoff the loan to my 403(b) account and then payoff an 8,461.29 credit card debt.

Here’s the rest of the news and the final part of my plan. To make sure all the taxes were covered one third of my inheritance was held back and will be released to me in April of 2008. I only have one more credit card balance to payoff and will once again borrow from myself using my 403(b) retirement to pay off that balance. Once the last portion of my inheritance comes in I will then pay back the 403(b) and be debt free!

Well, ok I’ll still have a mortgage and a car payment to deal with but that is smooth sailing compared to where I’ve been. My target goal to be totally free from bad spending debt is June 2, 2008. My 34th birthday.

Thanks Grandma!

My grandmother was one of the most influential people in my life. She had strong moral convictions and guided me through several stages of life from childhood to adolescence to adulthood. In fact, the first person I was ever in debt to was my grandmother. She loaned me $500 to buy my first car, a 1981 Chevy Chevette.

In 2001 my grandma was diagnosed with Alzheimer’s and she succumbed to the disease last month at the age of 83. While saddened by her loss the fact that she had a disease that robbed her of her dignity, intelligence, and the knowledge of the great family that surrounded and loved her made her passing a little more acceptable but not necessarily easier.

Then I found out last week that I am getting a percentage of the inheritance she left behind. This totally blew my mind because I fully expected it all to go to my dad but it turns out that the small percentage that I am going to receive will be more than enough to pay off my debt.

Suddenly I find my quest to become debt free coming to an abrupt halt and my grandmother still watching out for me even in her passing.

My grandparents had a farm so while growing up I certainly learned first hand not to count my chickens before they hatch. So, I’ll continue moving on with my own personal debt reduction plan until the money arrives and then we’ll see what happens from there.