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‘Money and Finance’ Category

  1. Little Saver

    June 11, 2014 by admin

    We’ve been teaching our young Bluey the value of saving his money.

    We recently got a bank account for Bluey and Plum when our bank opened a branch within walking distance of our home. So we periodically take a walk to the bank and deposit a few dollars that we hope will pile up into something big in their future.IMG_6330

    But we’ve also been tackling the other end of the saving spectrum: purchasing. We’re trying to help our Bluey learn not to blow through all of his spending money every time he has a few beans in his pocket.

    What if, instead of buying a thing you don’t really want so much, you saved your money until another time? Then you could buy yourself one of the bigger ticket items that has caught your eye.

    So far, the process is working pretty well. Bluey has a piggy bank allocated for short-term savings goals.  When he skips buying a small toy, he puts his money in there. He’s starting to see that if he foregoes a few purchases, he can later afford something really, really cool.

    It’s a start. We know Bluey will still be attracted to nifty little things at various gift shops and stores we visit.  But our hope is that with each purchase deferred, he’ll learn more clearly the value of saving up for the things that really matter to him.

  2. Allowances

    September 20, 2013 by admin

    piggy-bank-on-moneyThere are arguments for and against giving a child an allowance every month.  We made the decision to give our Plum $10 a month because we were downright tired of hearing, “can I get this…or can I have that…”  And we wanted her to develop the necessary skills involved when handling money:  budgeting, accounting, responsibility, safe keeping, etc.

    But once we executed this decision, we didn’t do much else-  until recently.

    We discussed with Plum that we would make a change to the way we provide her allowance.  We were inspired, in part, by a discussion heard on NPR.

    Now 20% of Plum’s allowance will automatically go into a savings account, 20% will go to a charitable cause of her choice, and 60% will go directly to Plum for her own spending on her own terms.  We will not control her withdrawals from the savings account.  But we will engage in a discussion over whether or not she really wants, or needs, to us those funds.

    Plum is excited as she loves supporting non profits, she has been struggling to save for larger purchases, and she gets to open her very first bank account.  It certainly feels like a move in the right direction for this TR family!

  3. Talking to the Taxman About Poetry

    March 12, 2013 by admin

    tax-clip-artIt’s tax time again.  We don’t mind paying our fair share of taxes, but we do mind being billed too much to have them prepared.

    We have a pretty simple financial situation, and it typically takes less than an hour for an accountant to prepare our taxes.  Last year, we found ourselves paying over 25% the value of our refund to a nationally branded tax preparer.  And that didn’t sit well with us.  This year, we set out to find a new, cheaper way to file our return.

    We realize that we could do our taxes ourselves.  We know that tax software is cheap, or even free.  We also realize that many people have great success independently preparing their returns.   In the past, we’ve made errors on our forms and we’ve found ourselves completely frustrated by the entire process when attempting to file everything on our own.  We don’t wish to revisit that situation.  We are much more comfortable having a professional complete our taxes.

    So we began our research on local accountants.  We checked internet reviews and we asked a few friends for their opinions.  When we narrowed our list down to four contenders, we made phone calls to inquire about their rates.   We were pleased to see that 3 of the four offered estimates that came in well below the price we had paid last year.

    We set up an appointment with the company that seemed the most friendly, and most straightforward, during our initial inquiry.  Beckett Tax and Accounting ending up doing a great job on our taxes.  They were quick, efficient, and put us at ease.  They were happy to talk to our Bluey and to offer him fun things to play with (Alligator vs. T-Rex go!) while the adults talked.  The whole process took less than an hour, and our refund was similar to last year’s filing.

    And the clincher– Beckett’s bill for their service?  It was about a third the cost of what the nationally known tax preparers charged!

    Take a minute to shop around and to make sure that you are getting the best deal from your tax preparer.  It is well worth your research time.  If you are in the Madison area, we recommend you try Beckett Tax and Accounting.


  4. Cash and Carry: Cut The Cards!

    January 1, 2013 by admin

    With a New Year beginning, many of us take a fresh look at personal finances and we consider how to improve the standing of our families.  This a great time to eliminate (or at least reduce!)  credit cards in your life.

    Part of our continuing series on worry-free cash management.

    It is so easy to run into money problems in our Credit or Debit world.   If you are trying to maintain a tighter money ship, you probably already know that you should avoid credit cards. If not, let’s be clear:

    Avoid Credit Cards!

    Yes, this can be harder than it sounds.  We know there are times when expenses must end up on credit.  But it should happen only in an Emergency.  Ultimately, credit cards are a trap.  They suck away the money that you could be spending on cool adventures with your family.  So you need to stop using plastic for average purchases.

    If you are in the habit of using credit cards, or if you have “Emergencies” more than once a month, then you are hooked on plastic!!  You need to find a way to break this habit.  We suggest you begin by immediately creating a Monthly Budget.

    You won’t get much of a handle on your credit cards unless you understand where you are wasting money and then figure out a way to stop it.  A budget will help you find a balance between your income and expenses. It will also help you spot places to cut back on your expenditures.

    We recommend that you itemize each purchase that you put on credit.  Start by keeping your receipts and/or go through a recent bank statement very carefully.  Sort your purchases into categories, like “Real Emergency”, “Snacks”, “Splurge At Target” etc, to understand the expenses that you should try to find a way to pay with in cash.

    This is an eye-opening experience for many people.  We all tend to pull out the credit cards thinking something like, “Well, I’ll send in an extra big payment this month, and that will even things out.”  But if you are living on a tight income, you might not be able to send out much over the minimum payment.  Then the interest kicks in on your bill– and that is the start of major trouble.  Or you send that extra big payment, but now you have to pay a different bill late.  And the fees kick in on that late bill– and you are again in trouble!

    If you discover that you over-use your credit cards, try the following:

    > Figure out how much money you really make each month.  Many people over-estimate their income by neglecting to consider taxes and insurance plans that reduce their take-home pay.

    > Figure out a realistic budget for your groceries and other household expenses.   Pay careful attention to snack foods (including coffee) and lunches.  These are common areas where people most often over-spend.

    > Find places in your budget where you can lower expenses, like Car Insurance, Cable TV and Cell Phone plans.  These are all expenses that can often be lowered just by getting in touch with customer service and saying that you want a package that lowers your bill.  And if these providers can’t lower a bill, you can often rework a package so that you get more bang for you buck: more channels, lower deductibles, etc.

    > Create a plan to pay down and ultimately pay off your existing credit card debt.  Start with concentrating on one card and when you reach a ZERO balance, cut it up and move on to the next card.

    We’ll help you fine tune these steps in a future post, but you need to get started on the basics now.  A great tip is to simply stop carrying your credit cards around in your wallet.  If the tempting plastic isn’t with you, at least you will have to think about your purchases more carefully.

  5. College and Retirement

    November 17, 2012 by admin

    The other day, a fellow employee was shocked that someone could approach retirement with just $75,000 stashed away.  S/He questioned why anyone would choose not to utilize a company’s 401K plan to the fullest.  We TR parents will be lucky if we get to retirement age with anywhere near $75,000 in our 401k.

    A sizeable savings, when you live pay check to pay check, is an incredibly hard thing to accomplish.

    And it is something that presses on us.  We have 3 kids that will aim for college, one within the next few years.  There is little college savings for them to draw upon.  And although we participate in a 401K, it isn’t at the level that affords a company match.  We need 99.9% of our paycheck to survive now. So our 401k is a slow crawl to saving for eventual retirement, which will probably occur well beyond the age that most people stop working.  And our kids will have to confront student loans, or scholarships if they’re lucky, to pay for college.

    Tip:  Make savings automatic by setting up a recurring pull, of even a very small amount, from your paycheck.

    We do manage to snip off around $30 from each paycheck to put into savings.  But it never stays there very long.  There is always an emergency to handle that requires a pull from savings:  a car repair, a surprise cavity at a dental check, or a school trip.  But we continue to make the effort.

    Pulling from savings is a better move than using a credit card for an ’emergency.’  We hope that eventually our small savings will grow to become something of use to us later.

    What are your tricks or tips for saving money?

  6. Cash Out The Joy Money

    September 17, 2012 by admin

    Part of our continuing series on worry-free cash management.

    We live by a budget.  We would spin into financial chaos without meticulous planning.  We know- we’ve been there.  Keeping to a budget is the ONLY way we can afford to live on essentially one income.  We build our budget carefully and factor everything into our calculations:  groceries, gas, rent, utilities, swim lessons, recreation, etc.  As a result, we rarely use credit cards for anything beyond true emergencies.

    Even with this insanely tight planning, we found our weekend expenses hard to track.  In these days of electronic banking, it can be easy to think you have more money that you actually hold.  We’d find ourselves in a tight spot on a non payday week having overspent the previous weekend.  And we’d argue over how it happened.  We just couldn’t accurately account for our debit card purchases.

    The solution was simple, though hard to circle around to since we’d become so dependent on our debit cards:  CASH.  It seems old school in this day and age to use cash for purchases.  But it is the only thing that works for us.

    We budget for $50 of free spending on the weekends.  This means that anything beyond gas that is purchased on the weekend must come from the $50.  If you want an ice cream cone or a pair of socks, it is out of the $50.  When that money is gone, the free for all is over for the weekend.  Anything that isn’t spent just carries over into the following weekend.  Or it can be used for emergency fun during the week.

    Our family of 4 does just fine on our allotted $50.  In fact, most weekends we have about $10 left over.  And we aren’t sitting at home.  We’re eating ice cream, travelling to our favorite places (like the Milwaukee Public Museum), and shopping.  Most importantly, we’re now functioning within our budget and not fighting over where the money went come Monday.

    It works great for kids too- nothing can better teach them the value of their money.

    If you’ve struggled to keep your recreational spending in check, we suggest you go a cash route.  Or if you’ve developed a different method to keep your budget in order, we’d love to hear what it is.

  7. Coupons Pay For The Printer (And Ink!)

    July 18, 2012 by admin

    “I never print out coupons at home.  I’d spend more on paper and ink than I’d save on the coupons.”  One of our friends said this to us, and we know others would nod their heads knowingly, if they overheard it.

    But it’s not true.  Not if you pay attention to what coupons you are printing out, and make sure you actually carry them to the store with you and use them.

    We’ll help you crunch some numbers.  First, let’s look at paper.

    We get our paper from Target for about $3 a ream.  A ream is 500 sheets.  So even if you print just one coupon per page (when many print 3 to a page) and use just one side of the paper (many of our coupons get printed on pages that have driving directions, maps, or school assignments on the other side), you are paying less than a penny per sheet. The paper is a minor fraction of the cost of printing your own coupons.

    Ah, but Printer ink—that’s where you lose out!  Nope.

    Our HP printer uses cartridges that average about $10 a tank.  Our cartridges tend last about 6 months or so, since we print mostly coupons, directions, and homework with them.  They are rated at a 300-page yield.  It’s maybe 3 cents a page at the most.

    Tip:  Each page of coupons costs less than 4 cents a page to print, while producing between 50 cents and $3 (or more) of savings.

    Even when you factor the $80 for the printer, over its 2 or 3 year expected life span, the savings pretty quickly out-pace the cost of home printing.

    So get a printer, find some good couponing sites, and start saving money!

    We look at it this way: the money we save by using the coupons we print more than pays for the printer, ink, and paper that we use for other purposes- like sending family photos to computer-phobic relatives!