Money Management
No matter how old we are, sound money management always come in handy. It’s about keeping an eye on our budget and making sure that we keep more, get more and ultimately enjoy more! It’s not always how much resources we have but our efficiently we use what’s available!
- How to be a Millionaire
- 7 Reasons Why We Need to Start Budget Tracking Right Now
- Learn from Watching Two Families Go Through Their Housing Problems
Mindset
- 5 Surefire Ways to Think That Your Paycheck is Never Enough
- Toilet Train Yourself to Become a Personal Finance Expert
- Maybe We Spend Too Much Time on Money Management and Saving Money
- Our Thinking of Money Matters is Way Too Complicated
{ 7 comments… read them below or add one }
my wife was laid off from her job should I increase my w4 allowances from 2 to 4 to cover some expenses that could hurt us financially?
cornell: It really depends. You should lower the amount that your employer is withholding from each paycheck until you absolutely get no refunds nor need to pay taxes when you file them. If going from 2 to 4 does that, then do it. Otherwise, don’t. It really depends on your unique situation since too many factors play into this.
Cornell, MoneyNing’s advice is in general good. However, a good place to go to see if you should change your W-4 allowances is the IRS website, http://www.irs.gov. There, you can locate the instructions for both the W-4 form and the important Estimated Taxes (1040-ES) form. The latter is like a would-be mini-tax form for the current year (2009).
As MoneyNing wrote, you should ideally target a small amount of tax owed or due (i.e. refund) for the tax year when you files your tax return next April. If you get too large of a refund, then you were paying too much during the year and lending the government money interest-free (and not using the money yourself for things such as paying down debt or meeting other expenses). If you owe too much, you may end up paying tax penalties for underwithholding. If you owe in April (without penalties), then you were effectively borrowing money from the government interest-free!
I always targeted owing some, but not a lot of money in April. This balanced both objectives.
Some other points for you to consider:
(1) You may have some sources of income which had zero withholding. Unemployment insurance benefits do not usually have any taxes withheld, but are taxable as income. Same for unearned income such as dividends and capital gains.
(2) If you now have to pay your own health insurance premiums (i.e. your H.I. coverage was from her plan), those are at least partially tax deductible. Be sure to factor that into your 2009 Estimated Taxes.
(3) It is possible to have a different number of withholding exemptions for state tax purposes than for federal purposes. You should check your state’s tax website to find the form you can file with your employer to adjust your state exemptions without changing your federal exemptions. Otherwise, whatever you file on your W-4 will apply to both.
(4) If you itemize your deductions on your federal return, you should try to pay most of your state income taxes as possible by the end of the year so you can deduct them on the following April’s federal return. Otherwise, you will have to wait another 9-12 months before you can deduct them. Your state’s tax website will have information about how to determine and file Estimated Taxes. [And you will avoid penalties for underpaying state income taxes.]
With the dollar on a steady decline relative to several foreign currencies, predicted for continued decline, possibly severe, what’s your suggestion for protection of savings used for fixed income earnings…..and for future fixed income.
Most people will suggest commodities and you can certainly buy ETFs like GLD (for gold) or USO (for oil). These are becoming good investments as the dollar decline and USO is especially good since it gets consumed, unlike gold.
Another approach you may take is to buy foreign currencies, or even foreign currency but beware that foreign currencies have principal risk. Another alternative is CDs like the MarketSafe CD from EverBank that offers CD type protection and some upside if the dollar keeps declining. This way, if the dollar goes up against the BRIC currencies, you won’t lost any money but if the dollar declines relatively to those countries, you get some upside.
But no matter which specific option you choose, commodities and currencies seem to be the best bet against dollar declines.
Really nice compilation of articles. Good job
I especially like the one on paycheck perception — it never does seem enough for a lot of people, does it?
hey nice info..really liked it..money management is always handy no matter how old we are it is convenient for us only.