“Traditional IRA. An IRA that is not a Roth IRA or a Simple IRA. Individual taxpayers are allowed to contribute 100% of compensation (Self-employment income for Sole proprietors and partners) up to a specified maximum dollar amount to their Traditional IRA. Contributions to the Traditional IRA may be tax-deductible depending on the taxpayer’s income, tax filing status, and coverage by an employer-sponsored retirement plan.”
Keep on learnin’. Keep on growin’.
—Andrea
Source: www.investopedia.com
Although I earnestly intended to get away from the topic of saving for a while, it seems that just about everywhere I turn, I find some great new insight on how to conserve cash. And no wonder. Just about every major news outlet in the country seems to be talking about money these days—especially how to save it. So here we are again. Learning more and more about how to turn the money that you earn into the fortune of your dreams.
During May, Kiplinger.com ran a story entitled “Turn $451 a Month Into $1 Million Bucks.” In it, they outlined eight steps that could net readers $451 each month and pave the way to a much wealthier future. Here they are:
- If you are in the 25% federal tax bracket and a new parent or homeowner, you may be eligible for three extra exemptions that would net you $219 monthly. If you are, massage your exemptions, and then take the money and run.
- Dine in for lunch and snacks. Save $100 each month (and maybe a lot more).
- Cut out one date-night (dinner and a movie) per month. Savings? $80.
- Use pre-tax flexible spending account dollars to pay health care expenses and save $28 monthly.
- “The average consumer pays $829 annually for car insurance, according to the National Association of Insurance Commissioners. Raising your deductible from $250 to $1,000 can save you 15% or more.”
- Tune your car and inflate your tires. Save $8 on gas per month—$100 annually.
- Buy generic prescription drugs instead of name brands to conserve $6 a month.
- Make The Deposit. Dump that $451 into a retirement account averaging 8% a year over the next 35 and enjoy!
For guidance on how to find just such an account—or to view the slide-show for this story—visit www.kiplinger.com.
Happy Saving!
—Andrea
save - v. 1. a. to rescue from harm, danger, or loss. b. to set free from the consequences of sin; redeem. 2. to keep in a safe condition; safeguard. 3. to prevent waste or loss of; conserve. 4. to set aside for future use; store. 5. to treat with care by avoiding fatigue, wear, or damage; spare.
Keep on learnin’. Keep on growin’.
—Andrea
Source: www.thefreedictionary.com
Posted on July 5th, 2008 in
Uncategorized | Author:
andreasmith |
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Make The Deposit.
Spending this week serving up a full-menu of Creative Saving strategies has been a truly joyful experience for me. If it is not already obvious, I love to save money. Even so, it occurs to me that it wouldn’t be right to close out this week’s series without spending at least a few moments rounding out our discussion with a word of caution. And the word goes like this:
Make The Deposit.
So what do you mean by that Andrea? Well, just this. I have found over the last few years that as fun as it can be to “save” money by shopping for the best deals, auditing expenses, and clearly delineating the difference between wants and needs, all of the “saving activity” in the world will ultimately add up to zero dollars if the person holding the money bag fails to take the final and most important step in the overall saving process. Specifically, MAKING THE DEPOSIT.
I mean seriously, think of it. What good will it do you to unplug your appliances, cut your trips to the grocery store, and install a low-flow showerhead if you never actually add up the amount of money that your saving strategy has netted you, set-aside the physical dollars and cents saved, and deposit that money in an account somewhere?
Allow me to answer that for you. Very little. (Trust me, I know, because that’s the chief savings deception that I myself have fallen prey to…)
So if you will, please consider making a commitment along with me. And what’s the commitment? Just this.
“No longer will I allow myself to be busied or satisfied with a wide variety of ’savings activities’ that I fail to cash in on. Instead, when I save money—by catching a great deal on a needed item, or trimming the fat on my monthly budget, or maybe by simply passing on a purchase that I don’t really need—I will, instead, ’step up to the financial plate’ and actualize those savings by converting the theoretical dollars and cents into cold, hard cash and doing something responsible with it. ‘Something responsible’ could mean stashing the money in a tin can until I can make a physical deposit at the end of the week. ‘Something responsible’ could mean visiting a broker and adding that little fortune to the money that I’ve already put to work. Or ’something responsible’ could mean donating the money to a person or organization that I believe in. No matter what the case, the bottom line is this—I will no longer allow myself to be deceived by nebulous ’savings activities.’ From here on out, I will conduct all of my financial matters, including my savings, with my eyes wide open and a heart that’s fully conscious. From here on out, I will control my money. My money will not control me.”
Happy Saving!
—Andrea
Posted on July 5th, 2008 in
Budgeting,
Saving,
Spending | Author:
andreasmith |
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independence - n. 1. The state or quality of being independent. 2. Archaic Sufficient income for comfortable self-support; a competence.
Posted on July 3rd, 2008 in
General | Author:
andreasmith |
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How Do You Define Financial Independence?
Now is as good a time as any to begin thinking the matter through. To help get your juices flowing, consider what a few others have to say.
“What is Financial Independence? Why is it a worthy goal?
To me, Financial Independence means ‘getting out of the rat-race.’
Your Money or Your Life — still my favorite book on frugality and personal finance — defines Financial Independence as “having an income sufficient for your basic needs and comforts from [sources] other than paid employment”. Passive Income is money that you earn without having to work for it. When you earn interest on a savings account, you are earning money passively; it accrues whether you’re working or not.”
—J.D., getrichslowly.org
“What is Financial Independence?
What is your definition of Financial Independence?
-Having tons of money and living off the ‘interest’?
-Never having to work again?
-Never having to look at price tags?
-Alternating between your Mediterranean yacht and your Aspen chalet?
Let me offer you a different definition. Financial Independence is the attainment of freedom, peace of mind, and flexibility, built on a sound financial foundation. It includes:
-Not being a slave to poverty, but also not being a slave to a high income
-A sense of resourcefulness, even in the face of circumstantial setbacks, a sense that you can survive the setback and get back to where you were -Independence from consumerism -Having a need that falls below what you bring in”
—Jane Herman, WITI.com
“Financial Independence. What exactly does it mean? Well, Webster’s Dictionary defines the terms this way:
Financial:
Pertaining to the science of managing money.
Independence:
Freedom from assistance by others.
So financial independence means the ability to manage your money in such a way that you have sufficient funds to live your chosen lifestyle without assistance from others. In other words, enough money to meet all your needs whether you work or not, because a job is really assistance from someone else — your employer.”
—John Cummuta, nightingale.com
Posted on July 3rd, 2008 in
General | Author:
andreasmith |
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Loan Consolidation. The process of combining multiple student or parent loans into one new loan with a new repayment term, interest rate and monthly payment. In general, federal loans may be consolidated only with other federal loans (and not with private or alternative loans).
Source: www.clarku.edu/admissions/financialaid/pdfdocs/glossary.
Posted on July 2nd, 2008 in
Debt,
Saving | Author:
andreasmith |
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Jean Chatzky does it again.
In this week’s earlier posts, we referenced Ms. Chatzky’s work in the June issue of Reader’s Digest, “Mind Over Money.” Her ability to help the committed to trim the fat from their spending profiles in order to make way for greener pastures—and checking accounts—is impressive.
Today, we recommend a close read of her piece, “Repay Your College Debt Without Breaking A Sweat,” to anyone who is laboring under a load—-light, medium, or heavy—of student loan debt.
Below, we’ve posted a short and critically important excerpt from that article which contains information that every student loan holder should be aware of:
“If your loans are variable, rates reset annually on July 1, but you can only consolidate once. This July is a great time to consolidate if you haven’t already. Consolidating will bring Stafford loans that are in repayment to an interest rate of 4.25 percent, and PLUS loans to 5.125 percent. If you’re still in school, or under the grace period after graduation, your Stafford Loan rate will be 3.625 percent. This is not only the biggest drop ever in the interest rates on variable rate loans, but according to [Mark] Kantrowitz [publisher of FinAid.org], they are the lowest rates in the history of the student loan program. So take advantage, and you could save several thousand dollars over the life of the loan, depending on how much you borrowed in the first place.”
In addition to reporting on this truly historic rate reduction, Chatzky goes on to treat a number of other important issues including the pros and cons associated with fixed-rate loan consolidation and how to find a lender.
To read the full article (which was last updated on June 13th), visit www.msnbc.com.
Happy Saving!
—Andrea
Source: www.msnbc.com, Technology & Money/Money Matters
Certificate of Deposit - “A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate and can be issued in any denomination. CDs are generally issued by commercial banks and are insured by the FDIC. The term of a CD generally ranges from one month to five years.”
Keep on learnin’. Keep on growin’.
—Andrea
Source: www.investopedia.com
Posted on July 1st, 2008 in
Saving,
income | Author:
andreasmith |
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Being conscientious about the environment can do more than benefit the world around you. It can also fatten up your bank account.
Below, find five “green” lifestyle tips that can help you to trim costs, boost savings, and be good to yourself and your neighbors—all at the same time.
Green Lifestyle Tip #1 - Commute.
Cut harmful emissions and gas expenses by swapping your lone drive to the office for participation in a local carpool or a bike, bus, or train ride. Better yet, why not pitch a one-day-a-week telecommute from home to your supervisor?
Total Savings? At $4 per gallon, if you cut your fuel consumption by just 5 gallons a week, you’d save $1,040 annually.
Green Lifestyle Tip #2 - Go Electronic.
Save trees and the cost of paper envelopes, checks, stamps, and late fees by paying your bills online.
Total Savings? According to author Lee Brookman and The Electronic Payments AssociationTM, $140 annually.
Green Lifestyle Tip #3 - Flow Low.
Install a low-flow showerhead that limits water usage.
Total Savings? If you go with a 2.5 gallon per minute model, Energy Star estimates that you can save as much as $145 per year.
Green Lifestyle Tip #4 - Set Your ‘Stat.
A programmable thermostat allows you to control the temperature in your home even when you’re not there (e.g., at work or on vacation).
Total Savings? Approximately $150 per year.
Green Lifestyle Tip #5 - Eat More Vegetables.
If you’re a regular meat-eater, cutting it out once each week could improve your health and your bottom-line (pun intended).
Total Savings? According to a June 12 Dow Jones news report on US retail meat, the average price of beef was approximately $3.80 per pound. At that price, cutting red meat once a week would yield about $200 annually.
Happy Saving!
—Andrea
Sources: “Go Green and Save Money,” by Lee Brookman @ www.usaa.com
“US Retail Meat: Mostly Beef, Pork Featured For Father’s Day” by Curt Thacker of www.DowJones.com @ www.cattlenetwork.com
Posted on July 1st, 2008 in
Budgeting,
Saving,
Spending | Author:
andreasmith |
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