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.
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
Practical Advice
- On Groceries and Food Towards Our Financial and Physical Well Being
- Tips on Budget Planning and Saving Money
- How to Not Sleep in a Bear Market
Money Saving Tip:
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{ 21 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.]
If you’ve got any debt remember to contact your lenders asap, you’ll generally able to get 3months of suspended payments and interest that might help you out until your wife gets back to work.
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.
Thoughtful advice. As a boomer, I seem to be hitting retirement at just the right time — when the market drops and no real value in fixed income. I do agree with commodities and certain CDs as investment tools. There is value and protection in certain types of real estate also. Keep sharing your insight.
Scotty Neal
You should seriously consider taking charge of your own investments. read “Trend Following” by Michael Covel, it will be a real eye opener for you and how you approach investments
How do I go about buying foreign bonds or CDs? My target countries are:
Canada, Australia, China.
I’d like enough detail to carry out a complete transaction – buy and sell (redeem).
I agree with Mary. Nice articles, and I enjoy this website.
We should all keep in mind that our health is our most important financial commodity. With our health we have the ability, if we choose, to produce income.
i guess i should be learning to live within my means before it’s too late
I just picked up a 2nd job that is per diem and ended up owing the government more after I filed my taxes. Someone mentioned that I should increase my 401K in my 1st job so that I would be taxed less. Is this true? Any comments…short or long is welcomed =)
This is partly true, as contributing to a 401k means that you don’t have to pay for taxes on that contributed amount until you withdraw from the retirement account. But keep in mind that a 401k is meant for retirement savings. Each dollar you put in today means more money in the future, but less money to spend now.
Here are a couple of money related quotes:
It is better to have a hen tomorrow, than an egg today.
When you combine ignorance and borrowed money, the consequences can be disastrous.
When prepaying a mortgage, or auto loan, you should write 2 checks, 1 for the actual payment, and 1 for the overpayment. And on the overpayment, is it also required to write “For Principle Only” on the check, along with the account number.
I have been a stay home for the past 15 years, only now that my children are going to school Fultime I feel comfortable enough to consider having mu own business from home. But I have no clue how to come up with any business ideas. Do you have any idea? I have a few ideas on inventions , again , do you have any ideas how to start making my ideas become a reality.
My husband is about to recived his mother state , is about 200,000 , where is the best place to invest this money? thank you.
Dora- this is a situation that you and your husband need to evaluate closely in terms of your current financial position. Do you have any debt that could be paid off? Credit Cards, Mortgage, Car Payments, etc.? Do you have some money set aside incase of job loss of health emergencies? If you have your basics covered you can now explore investment options for the future. Take a look a your short vs. long term financial goals and set up a plan that is right for you. Research CD’s, Bonds, or maybe property investment. The options really are endless about where to invest the money- the questions to ask yourself are what risk am I willing to take? And when might I need/want access to these funds? Hope this helps. Would love to hear what you decided to do!
Less is more. Thanks for guiding us to some really helpful resources, personally I really enjoyed reading; “5 Surefire Ways to Think That Your Paycheck is Never Enough” I also love the picture at the top of your post