Speaking about different sales tax, I also remember an interesting experience I had one time when I bought something from Macys’ (department store) from another state and returned the product in Orange County that I want to share.
I don’t quite remember what it was that I bought, but when I returned the product to Macys’, the cashier actually gave me more money than I’ve bought it for. I remember asking why there was a discrepancy and the manager came over to explain that they had to return the product in their own state’s tax laws. Since I bought the merchandise at a lower sales tax state, I was making money off this purchase as I paid a lower sales tax originally and got more money back on the return.
So if every store does this, I can theoretically make money because I can always buy something from a lower sales tax state and return it when I’m back in Southern California. I could call this side business and the only problem I would need to figure out was how I was going to report the income to the IRS. J
Now, I have a bit of a moral issue with doing this of course, because I feel like it’s a little bit like cheating. This is obviously a loophole in the system that I would be exploiting, and I’m sure that it was never addressed because there aren’t that many people that will do something like this. On the other hand however, how is this different than buying a product at a lower price and selling it on Ebay?
At the end of the day, I don’t think I’m going to be doing this (I would already be doing this for the past few years if I thought it was morally right and probably be rich by now) but what does everyone think? Now that you’ve heard about this borderline scam type of business idea, would you pursue it? What if someone you know is doing this? What do you think of that person?
While I was traveling in Raleigh, North Carolina, I bought a wireless mouse at the Apple Store to work with my Macbook Pro. It wasn’t until I heard the cashier tell me the total did I realized the sales tax was different than where I live (Southern California). I checked the receipt, and there in big letters were Tax@6.75%: $4.66.
I used to live in the border of Orange County and Los Angeles County, where the sales tax was 7.75% and 8.25% respectively. I remember thinking about our geographic location before we purchased anything because it was possible that we can pay less if we went to another location close by.
Now you might be thinking that 7.75% and 6.75% is only a difference of 1%, but if I bought my Macbook Pro in North Carolina, I could’ve saved myself $20. Sure it still wasn’t much but I would be saving much money if I consistently buy in a low sales tax state.
I’m not sure why different states are allowed to dictate different sales tax, but I remember the simple times when I was in Hong Kong and there wasn’t any sales tax added on top of the merchandise price. In Hong Kong, the sales tax is included in other taxes for the merchants which make much more sense to me. When we go shopping and it was advertised for $100, we paid $100 and not $106.75 at checkout.
Of course, I shouldn’t complain too much because when I was in Toronto (Canada), the sales tax was 15% (it has gone down to 14% now I heard). Why the government needs 14-15% to keep themselves from losing money managing everything is beyond me but I certainly never had the choice of not paying.
No matter where we are, there will probably be a place that will charge less sales tax than the most convenient location. Would you go out of your way just to save that extra 1%? If you were me, would you wait to buy all the larger purchases until I was on a business trip? What do you think?
I just realized that I never balanced a checkbook nor do I even know what balancing a checkbook is. I always heard that it was very important to balance my checkbook but I never bothered to figure out what the difference was between my checking account and my credit card transaction list since I can log onto both online and see all the transactions.
Therefore, I did a bit of research on the topic and here’s what I found:
- Balancing a checkbook is to make sure our records matches the banks since they can make mistakes
- It is to also make sure our records are correct so we don’t write a check with money we don’t have as bounced checks means a $25 or more fee from the bank
So, the next question is – How do I write one? Here’s the answer.
- Record all deposits and checks (the accounting term is reconcile but let’s just keep it in simple terms)
- Make sure to do the same with ATM and debit card purchases as well as ACH and wire transfers. Basically, record all transactions related to the checking account including interest payments if there are any.
- Calculate the balance.
Note: When I was reading different articles, I also saw authors mention about outstanding checks, ATM and debit card purchases. In this day and age, all we need to worry about is the outstanding checks since all electronic transactions are recorded to our accounts instantaneously.
Okay, I’ve never done any of this but everything has been fine. Here’s my version of balancing my checkbook and explains why I don’t need to balance my checkbook.
- Stop writing so many checks. There’s almost no more reasons to write checks anymore with electronic bill pay. The less paper is used, the easier it is to keep track of our accounts.
- Look up the transaction history and make sure the records are correct. Look at every transaction and make sure it is accounted for.
- I control my checking balance extremely tight because it doesn’t provide any interest. Therefore, it almost forces me to look at the balance and transactions on a regular basis so I don’t fall behind.
So, now I know what balancing a checkbook is and so do you.
(Photo from Shea Homes)
In a surprising move, my boss made a offer on a single family home in Aliso Viejo, CA today. In fact, he is interested in two homes in the same “new development tracts” and he told the sales lady that he is willing to buy any of the two depending on the deal that he gets. Although I feel like this is bad money management because we are far from the bottom of the current housing downturn, I can’t stop myself from thinking twice because I highly respect his judgement.
The offers my boss put in the houses listed at $1.6 million and $1.2 million were $1.35 million and $1 million respectively. He went in with his bank statements and told the sales lady that he can pay cash, and that he is ready and able to purchase by this month. The sales lady told him that she needs approval from management but my boss is quite confident that he will get the deal because those houses are already built and the builder is just sitting on them and losing money everyday that it sits unsold.
As I discussed numerous times before, I believe the housing market will be in a correction for at least another 6-12 months. I will eventually get a house, but I do not believe it is the right time yet. I feel that I will be able to get a better deal in 2009, which is why I haven’t pulled the trigger. In fact, we haven’t even looked at houses for a few months now.
However, after speaking to my boss and knowing what he’s done, it really puts doubts of my thesis. If the houses he put his offer in were listed at $1.8 million a year ago and he ends up getting it at $1 million, it is already a 44% decline from peak which is something I’d be happy with.
I know I shouldn’t see my house as an investment but it is going to be my single biggest purchase by far. I’m not trying to time the absolute bottom of the market but I’d hate to see myself paying for possibly $100,000 more than I need to pay as it will take me years to make up the difference.
What do you think? Fire away at the comments section, I really appreciate it.
Deciding to consolidate your debts is an excellent choice for many individuals, but making that decision is only the first step, learning how to manage your finances is the next step in ultimately becoming debt
free. Budget planning can help you identify how you spend your money and where you may be over spending. The goal in preparing a budget is to insure that your monthly expenses do not exceed your monthly income.
Below are some tips to assist you in starting off the New year on the right financial foot:
Tips on Budgeting
- Write down your total monthly net income. Include all sources of income such as, salary, child support, pension, etc. Next, list all your monthly expenses, including your house or rent payment, food, gas, utilities, credit card payments, etc. Then subtract your monthly expenses from your total monthly income.
- Look for areas where you can cut back and save some money.
- Use the information to set a budget for yourself. Include approximately 5% to 10% for savings.
- Review your budget on a monthly basis to determine how things are going. You may discover an area where your are overspending and can then adjust it accordingly.
Tips on Saving Money
- Cut back home energy consumption by turning off lights when you are not using them and placing an air conditioner on a timer. You can also remove unnecessary phone options to cut down costs. Contact your local utility service providers and ask about their budgeting plans and programs to help you manage these expenses.
- Shop at outlet or wholesale clubs. When you do shop, use lists to avoid impulse purchases.
- Try bringing your lunch to work instead of having to buy every day.
Money Ning thoughts: Great advice. How many of these do you do already? I think I will implement the “list” advice for my wife so we don’t buy too much immediately.
When we try to cut our expenses and be a little more frugal, most people start with the bigger ticket items. The theory is simple and logical. Cut one big expense and it can cover 10 different ones. While this is great, the problem is that we almost always stop thinking about the little expenses because we pay way too much attention to the large ones.
If we look closely, we will realize that we shouldn’t be thinking about spending less on big expenses but rather on small expenses that just keep repeating.
I actually never realized this until recently, when my wife all of a sudden added eating frozen yogurt to her favorite activity of all time. Every night nowadays, she is wondering whether we can go out to buy a cup of frozen yogurt. At $5 USD, it’s really not that much money but if we just think about it, we could be spending $150 a month translating to $1800 a year. This means that without 1 year of frozen yogurt (which should be quite easy because we’ve never had any for the last 30 years), we could buy a TV and still have money left over.
Look. I’m not saying that we should stop all daily, smaller expenses. I just want to make everyone realize that the small, repeatable expenses add up really quick. Watch those expenses, or we might as well forget about being frugal.
