Where do you keep your money?

I posted a poll to see where people that read this blog put the bulk of their money. From what I understand, nobody will be able to see who chose what option, so don't worry about that.

Just a little bit of information on the interest rates. These are the highest I've been able to find:

Cash: no interest earned
Checking: 1.75% APY
Savings: 1.80% APY
Money Market Account: 1.60% APY
CDs: 6 month 1.65% APY
Investments: Depends on how risky you want to get!

Work Ethic

I think that it's important for people to realize that life just takes hard work. If we motivate ourselves and do an excellent job, we will normally reap the benefits.

So let's not be like this guy at work!

http://www.youtube.com/watch?v=FM3r7nbG9M8

Taxes Part 3

I've been looking into doing work as a Spanish-English translator, and that means I would be self employed (or a free-lancer). That means that the people that pay me do not withhold income for taxes (including Social Security and Medicare). So who has to take care of that? Me! I would have to pay my taxes quarterly (four times a year). There are, however, some really good benefits for being self-employed. For example, I would be able to deduct my Health Insurance premiums! If you have any questions about that, there is lots of information on www.irs.org

Taxes Part 2

If you're married, have at least one kid, and don't make a lot of money, then there is a way to get some really nice tax credit! It's called the EIC (Earned Income Credit). You should go to their website and see how much money you can qualify for. You'd be surprised at how much. Also, you should read up on taxes and find out all of the tax deductions and adjustments you are allowed to make.

If you find out that you could have qualified for the EIC last year, but didn't know, you can download a form called the 1040X and amend your taxes for last year. That means that you might be able to get it after all!

Well, I hope that helps!

Taxes

I've been learning a little about taxes, and I was told something from my professor that I didn't know before. I'm sure those who are experienced in paying taxes know this already, but for someone just starting out, this is interesting.

We have right now what is called a marginal tax system. That means that the amount you get taxed increases as your income increases. I knew this already, but what I didn't know is this: Lets say that if you make between $20,000 and 29,999 a year, you get taxed 10% (this is just arbitrary). And lets also say that if you make $30,000 to 39,999 a year you get taxed 20%. What I thought before was that if you were to make $30,000 a year, that ALL of your income (that is $30,000) is taxed at the higher (20%) rate, but that is not true. In our marginal system, what would happen is that the first $29,999 is taxed at 10% and only the last $1 is taxed at 20%. Did that make sense? Your money stays within its respective tax bracket. I was pretty happy to hear that! Not that I have to worry about that any time soon...

Automatic Payment

We signed up for the Automatic Payment option for our gas bill, which means that they withdraw money from our Checking Account automatically when the payment is due. It's a pretty convenient way to do it as long as you know you'll always have enough in your account at the end of the month.

One warning, though. Signing up for Automatic Payment, we didn't realize that it wouldn't come into effect until next month, so we looked today and saw that the payment was never made! We called the gas company and explained what happened. They'll most likely waive the late fee, but we were worried!

So when signing up for Automatic Payment, always check the first month and see that the payment is made!

Always Checking Paperwork

Laura did a great job today and saved us (actually our landlord) $70 dollars. We had a repairman come and see our broken microwave the other day and he made an estimate and gave us a copy. He came over today and after installing a new door to the microwave, he tried to charge us more. Laura went and found the paperwork and showed it to him, so he agreed to charge us the original estimate. Pretty cool, huh!

So always keep paperwork like that in your filing system until you don't need it anymore. It can come in handy!

Banking

Today Laura and I have been talking a lot about banking and where to put our money so we can have the best return. The two things you want to think about when managing money is the Potential Return and the Potential Risk. In other words, you want to put your money somewhere where you can make the most money possible with the least amount of chance that you're going to lose it. An example of a High Return and High Risk investment is buying stock from small businesses.

Anyway, we were looking at CD's to put some money in for 6 months, but we are finding out that interest for CD's isn't very impressive. We've been told to look into Money Market Accounts. Apparently, the interest is a lot better right now. We'll keep you posted if we learn something interesting.

Oh, we've also seen that Credit Unions have much more attractive rates than regular Banks. It might be a good idea to look into those as well. Maybe having an account in both places would be smart.

Victory!

We went back to Walmart tonight and did our shopping for the week. We brought back one of the pears and had them charge us the right price for them. It so happens that the pears we had bought are now on sale for about .20 a pound! She couldn't figure out how to change the price to .97 a pound (which is what we should have paid in the first place), so we ended up getting a lot more money back. We saved more than $5 by checking our receipt! Not bad.

Laura and I also did something super useful today. We used an Excel spreadsheet that we plugged numbers into to figure out what our budget for the year would roughly look like. That way we know if we can afford the way we are living over an extended period of time without losing money. We actually end up in the positives, so we're good!

By the way, if you want me to e-mail you a blank template of a yearly budget, just let me know.

Good Deals

My mom posted a comment on this blog telling me that my dad just bought two pairs of Nike shoes for $12. Now that's a deal! It got me thinking about finding good deals in general. My dad has an advantage because there isn't much demand for size 16 shoes, so he can get them at a bargain. There are other ways to save money on purchases, though. Laura looks through our mail and finds good deals for different food items.

One thing we've done is get a good amount of chicken and fish when they were on a good sale and we put them in the freezer for later. The idea is that by the time we're running out of chicken or fish, there will be another sale and we could buy in "bulk" again (when I say bulk, I mean those bags that have about 9 or so servings). That way we're never paying full price for those items.

It's working well for us, so try and see if you like it!

Filing System

We've decided on what kind of filing system we're going to have. We want to be able to organize and keep important documents that we'll need later, such as tax information, warranties, medical documents, etc. The system we figured out works for us, and we're happy to have a plan. What we've noticed is that, without a filing system, papers get scattered everywhere and you end up throwing away things to make room.

As a side note, we were at Target and about to buy some folders for our filing system when I thought, 'I bet my dad has a ton of these!'. I called him up and, sure enough, apparently he has a bunch at home. We could of bought our own, but I hate it when we buy something new and then a family member says the next day, "Oh, we have one of those! You could have used ours."

So now I call and check.

A cool saying from the pioneers

Today at church we heard a motto pioneers used to have that developed because they did not have many material possessions. Their motto was:

Fix it up, wear it out, make it do, or do without!

I think that's a pretty good motto and I'm looking around to see if there are things I can patch up and fix before throwing them out. Laura noticed that I have a hole in my pants, but maybe we'll just have to sew it up! Nothing too exciting to report today, but there you have it.

I'm excited to get started!

I'll be writing little comments about things that go on in our financial life and hopefully it will be of interest to you.

For today: Laura and I went to Walmart yesterday to buy food for the week (we really like to go there because we've been spending less than $25 a week! And we eat well). We saw later that the pears we bought were way too expensive and we realized that we had been charged for a different, more expensive kind of pear. They had charged us .97 a piece instead of .97 a pound.

We decided to call Walmart because I was curious as to whether or not they would do something about it. They were very accommodating and they said we could take our receipt back and get it all settled. We have to have at least one of the pears with us so they can weigh it and sell them back to us at the right price.

So there you go! Check your receipts for any mistakes. It might be worth it!