Tag Archives: Mindful about Money

Tax tip – read the instructions!

Pile of coins

Copyright 2016 Sweet Doll Designs

I know by writing this post, I will be revealing myself as a major dorko, but here goes, anyway 😉

While Accounting is my profession, I am not, nor do I ever have the desire to be, a tax accountant.  Having said that, I always prepare my taxes by hand, check my work on Turbo Tax, then I file my tax return through the mail.  I do this partly so that I fully understand how my taxes are being calculated and partly because I don’t want to pay Turbo Tax to file my returns for me.

Over the years of filling out my 1040 form myself, I’ve discovered that the IRS includes really helpful line-by-line information in the form’s accompanying instructions.  With that in mind, here’s my big tax tip that will only take a few minutes, but has the potential to save you money:

Read the 1040 form instructions!

Specifically the section on Adjusted Gross Income, which can be found if you scroll down to page 31 of this pdf document: https://www.irs.gov/pub/irs-pdf/i1040gi.pdf.  Dorko alert: I read through each of these potential deductions carefully to see if I qualify for any of them.  By doing so, I found that I qualified for one – you may be pleasantly surprised that you do, too!

There are only 13 possible deductions in this section, so it won’t take you long to read the instructions.  Examples of popular deductions are: student loan interest, tuition and fees, IRA, HSA, moving expenses, and alimony paid, to name a few.

It is also worth your time to read the Tax and Credits section found on page 38 of the same pdf document: https://www.irs.gov/pub/irs-pdf/i1040gi.pdf.  There are only 7 credits to read about, so again, it won’t take much time.  In this section are credits such as: retirement savings contributions credit, residential energy credit, child tax credit, and education credits, to name a few.

I have always found that reading the IRS-provided instructions while filling out my taxes has been very helpful and well worth my time.  Also, if I have any questions when reading the instructions or am not familiar with a referenced form, I just quickly look it up on the IRS website.  I know it may seem scary, but the IRS website is really very easy to use and understand, helpful, and informative!

Good luck with your tax returns this year!  Remember to file by April 18, 2016.

Happy Decoding!

Fun fact for today: Have you ever wondered what the difference is between a tax deduction and a tax credit?  A deduction is taken before calculating your Adjusted Gross Income (otherwise known as your AGI).  Your taxes are calculated on your AGI less the itemized or standard deduction and less your exemptions.  On the other hand, credit provides a dollar-for-dollar reduction of your tax due, since any credits are subtracted from the tax amount due.  A deduction isn’t better than a credit and vice versa, but it’s important to be sure you claim all available deductions and credits if you qualify for them! (Source: https://www.irs.com/articles/tax-credits-vs-tax-deductions)

Disclaimer: This blog post is not intended to be tax advice.  For answers to your specific tax questions, please consult a tax professional.

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Car Tips: Buying a Car? Do Your Homework!

Left – Ruby Sparkler and right – Shirley Temple Copyright 2015 – Sweet Doll Designs
Left – Ruby Sparkler and right – Shirley Temple
Copyright 2015 – Sweet Doll Designs

So you want to buy a new car.  It’s an exciting and daunting task!  I was reminded of that when I bought a car last weekend.  Not only is the actual car buying process in the dealership a long one, but the research it takes to get to that point is long and involved as well.  However, a well-researched purchase will make you happy for years to come.

Here are a few car buying tips to help you get on your way:

  1. Decide what type of car you’re interested in buying. By that I mean to ask yourself – do you want to buy a sports car, a small car, small SUV, regular SUV, truck, motorcycle, moped…you get the idea.
  2. Once you’ve decided on the size car you want to buy, look at the makes and models in that particular class. Do you like the look of any specific one?  Try to narrow down your search to just the few that you’re interested in investigating.
  3. Not to be forgotten is your budget! You probably have an idea of how much you can afford to pay for a car payment each month.  Go online to a site like bankrate.com to get a rough estimate of how much that means you’d be able to afford to finance.  That will tell you the top price you can pay for a car.  Then it’s up to you to determine if you have enough in savings to put a down payment on the car.  Also remember your current car that you may consider trading in – check out what a fair price may be for the trade-in value on Kelly Blue Book.
  4. Purchase a membership to Consumer Reports. It costs $30 a year and it will be well worth the money.  Once you’re a member, you can research the reliability, satisfaction, and safety ratings of the cars you’re investigating.  If you’re buying a used car, pay particular attention to the reliability ratings of each model year – you may find there are certain model years that you should avoid.
  5. Search for the car model and year in Edmunds.com to see what a fair price to pay is for that particular car.
  6. Make a note of all the features you’re looking for in a car. You may not find a car with all those features, but if will be a good starting point.
  7. Now you’re ready to start looking for available vehicles to test drive. You can find available cars by searching local dealership websites, checking cars.com, searching Consumer Reports online, and searching Edmunds.com, to name a few. Look at the mileage on each car, year, and color.  Investigate each listing to determine if you’re interested in the car.
  8. Have fun test driving the cars you’ve found! After you’ve test driven a few, you’ll be able to decide which model you like best.
  9. When you go to the dealership, know your budget and stick to it! They are great at trying to upsell you on features you don’t need.  Stand firm in your budget and know the fair price that you should pay for the car and insist you get it!
  10. It’s helpful if you don’t fall in love with any of the cars you’re interested in – your greatest negotiation tool is being able to walk away.

This process can be overwhelming, especially in the dealership.  Consider bringing a friend who can help keep you on track with your budget or any other aspect you feel may be helpful.  And most of all, enjoy your new car!

Optional: Come up with a fun name for your car.  Here are the names of my cars so far: The Beast, Black Beauty, Esmerelda, Shirley Temple, and Ruby Sparkler! 🙂

Happy Decoding!

Fun fact for today: An estimated 16.9 million cars were sold in the US in 2014! (Source: http://www.nytimes.com/2015/01/06/business/us-auto-sales-jump-for-2014.html)

Changing Your Routine

Copyright 2015 – Sweet Doll Designs
Copyright 2015 – Sweet Doll Designs

I am not a huge fan of change.  I’ll wager a guess that most people share my sentiments.  But, as they say, the only constant in life is change…so I guess we’ll have to get used to it!

As I mentioned in a recent post, I had to find a new job a few months ago.  The process was scary, exhausting, exciting, and ultimately, rewarding since I love my new job!  One thing that I didn’t consider until after my first full month of working at my new job was that I’d also have to change my routine when it came to paying my bills.

For nearly 10 years, I was used to receiving my paycheck on the 10th and the 26th of the month.  At my new job, I get paid on the 15th and the 30th/31st of the month.  At first, this may seem like no big deal.  However, I took a while to think about how to organize my bill paying routine going forward so that I could make sure I was paying my bills on time each month.

In the past, I paid bills on the 10th and the 26th.  That seemed to work out with the due dates of my bills.  Even though I get paid about 5 days later than I used to, the new schedule really doesn’t jive with my bill due dates.  From what I could tell, I had three options:

  1. Stop paying bills – who needs them, anyway?!
  2. Call my providers and request new due dates for my bills
  3. Change my well-established bill paying routine and – gasp – come up with a new one!

We’d all love the first option, but being realistic, I struck that one off my list.  While the second option was a valid one, it felt like too much work.  That left me with option #3 and I thought I could be brave and make a change, and that’s just what I did.

Now I sit down at the beginning of the month and write all my checks and schedule all my bill payments.  I know how much money to expect will arrive in each paycheck and by the beginning of the month, I know how much I will spend on bills and savings that month.  I can also be sure that I leave enough money in my checking account to pay the rent due on the 1st of the following month.  If I’ve written a check, I will put a reminder in my phone calendar to mail the check on a certain date so that it will arrive at the provider by the due date.

So far, organizing my bill paying at the beginning of each month is working out well for me.  It gives me a feeling of control over my finances and peace of mind that I won’t miss any due dates.

Have you come across an instance where you’ve had to make an unanticipated change with organizing your finances?  Post in the comments below!

Happy Decoding!

Fun fact for today: The current design of the penny with Lincoln’s face on it has been in circulation since 1909.  Previous penny designs featured Lady Liberty on the front of the coin.  (Source: http://www.ehow.com/about_5278127_lincoln-penny.html)

Budgeting 101 – tweak your attitude

Copyright 2015 – Sweet Doll Designs
Copyright 2015 – Sweet Doll Designs

How do you feel when you hear the word “budget”?  Does it feel limiting and no fun?  Do you want to tap into your inner child and say “budget, don’t tell me what to do!”…and then you defiantly visit Amazon.com and buy 3 CDs you didn’t need, just because you can?  Do you think you can just kinda “wing it” instead of really looking at the numbers on paper?  Maybe you don’t want to admit it, but perhaps it feels a little scary?

If you’re nodding “yes” to any of these descriptions, consider this quote I recently found:

“When I made the shift from seeing decreasing my expenses as deprivation to seeing it as keeping money for myself and taking great care of myself, everything changed.”  ~Kate Northrop

When I read that quote, I thought: oh my goodness, she’s totally right!  A budget isn’t supposed to be some sort of straight jacket, there to make your life unpleasant…it’s just the opposite!  A budget will free you to live a fuller, more expansive life!

So what do you think about trying out this new tweak in attitude?  Take it out for a spin and see how you like it!

A big part of this process is to think of the overall picture.  What do you want your money to help you achieve?  You work hard to earn this money, so make it work hard for you.

Consider your hopes and dreams.  Budgeting is a way of funneling your money into things that matter to you – a way to make your hopes and dreams come true.  For instance, you may want to save up for a beautiful new house, bringing a baby into the world, excellent educations for your kids, travel to lovely and relaxing destinations with your family, comfortable retirement, or whatever else you daydream about.  Remember to work saving for these occasions into your budget.  In this way, your money can help you live the life of your dreams.

Here’s a place to start: instead of thinking of a budget as this big, intimidating project, commit to keeping your receipts for one month.  Either as you go along or at the end of the month, enter the amount of each receipt in the general category where it belongs in the resource I’ve created for you (request it using the form below).  Then take a step back and evaluate what you see.

You may be surprised to find that you eat out a lot more often than you thought.  For example, if you find that you’re spending $60 each week in eating out and you think you should only be spending $40, make $40 your spending goal for next week and see how you do.  Or maybe you’re not spending enough in the “FUN!” category.  Regardless of what you find, take note and tweak where necessary.

It make take a few tries, but I’ll bet you know what’s reasonable to expect that you spend in each category.  Keep in mind that “reasonable” may end up between what you’re actually spending and what you’d ideally like to spend.  For example, you may prefer to only spend $20 each week in gas, but the reality is your commute is really long, so it’s more realistic to expect to spend $40.  That’s a bummer, but not the end of the world.

So, try tweaking your attitude about budgeting to focus on how it will help you live the life of your dreams.  Good luck, have fun, and let me know how it goes in the comment section below.

Happy Decoding!

Fun fact for today: Did you know that paper currency can be folded back & forth 4,000 before it wears out?  (Source: http://www.cnbc.com/2011/02/01/10-Things-You-Probably-Dont-Know-About-Money.html?slide=6)

Practicing what I preach – don’t panic about job loss!

Copyright 2015 Sweet Doll Designs
Copyright 2015 Sweet Doll Designs

On St. Patrick’s Day this year, I went in to work as I did every day.  I’d been working in the finance department of this company for almost 10 years and the routine was comfortable.  The CFO from the California office was unexpectedly in the Maryland office for the day and asked to meet with our department around 11am.  Dreading the meeting, I went to it and found my fears were true – our department was to be relocated to California.  In two months, we in Maryland would no longer receive a paycheck.

I remember my emotions that day: shock, disbelief…and panic.  How could this be happening?  How would I support myself?  I’d been casually looking for a job and hadn’t found anything – would I actually find something?  When? Would I like the job I found?  I didn’t want to be desperate about it, but I didn’t have much time to spare – my paycheck is pretty important to our family.

Then I remembered the blog post I wrote last year: Regrouping after a job loss – Don’t Panic!  I decided to practice what I preached.

After a few days, the shock started to wear off and I was able to sit down and assess my situation.  This is what I found:

  1. I did have two months to find a new job, though I still had to go in to work every day during that period.
  2. Thankfully, I’ve always been a good saver, so I had enough money in savings to tide us over for several months, if necessary.
  3. My husband was still working and bringing home a paycheck.

Knowing that I would be fine financially for several months and reminding myself that there was no need to panic, I set to work on creating a clear set of goals for my next position. Not only did I define the responsibilities that I wanted, I also determined where I wanted to work, narrowed down the titles I was searching for, and made a goal for my salary range.

These are the steps I decided to take with my finances:

  1. We had saved up for a new bed and were preparing to buy it when I got this news. We put that large purchase on hold because, even though I hoped it wouldn’t take that long to find a new job, I knew the landlord wouldn’t take a piece of the new mattress as rent payment!
  2. I had been considering buying a new car, but since mine was still in great shape, I was able to put that purchase on hold as well.
  3. I was contributing 12% of my paycheck to my 401k account. I decided to drop that percentage back down to 5% in order to still take advantage of the full company match, and put the extra money in my paycheck in a savings account earmarked as money to contribute to my IRA (to learn more about a 401k company match, visit this post).  This action increased my readily available funds, and if I didn’t have to use them, I would then move the money I’d saved to my IRA account as planned.
  4. I paid very close attention to how I was spending my money and made sure that I didn’t spend more than was absolutely necessary. No luxury items, no impulse purchases – ultimately, no money going out of my wallet for anything that wasn’t absolutely essential.
  5. I realized this was my chance to find a job that really made me happy! Truth be told, I wasn’t happy in my position anymore and was in need of a change.  But you know how that goes– it can sometimes seem easier to stay with the devil you know than take a chance on the devil you don’t know.

I spent hours on the phone and in person, speaking with recruiters and discussing with each of them what I was looking for in my next position.  The potential opportunities were exciting, but the process was exhausting at times.  On top of that, not everyone was enthusiastic about the goals I had set for myself – some said I would never be able to get the titles I aspired to, others said I’d never be able to find a job in the area I wanted, and still others said I’d never earn the salary I wanted.  When that happened, I thanked them and moved on, because I realized that I needed to work with people who believed in me!

It took me a month, but I’m happy to say that I found a job that’s perfect for me – I now have more responsibility, I’m closer to home, and I got the salary that I asked for!  An added bonus: the environment of my new company is wonderful and my coworkers are fantastic!

Now that I’ve been in my new position for four months, I can look back and sincerely say that I’m glad I was forced to look for a new job.  I am so much happier now and I’m learning a lot!  Events perhaps didn’t start the way I’d expected, but they ended up better than I’d hoped.

We also purchased our new bed and we’re getting a better night’s sleep – thank goodness!  And I’m restarting my search for the perfect new car for me.

The moral of the story is – don’t panic when you lose your job!  Take stock of where you are and know that right here and now, in this moment, you are fine.  Organize your thoughts, have a clear set of goals in mind, and then go for it!  Things often work out better than you can imagine!

Happy Decoding!

Fun fact for today: The Department of Treasury first issued paper currency in 1862 to make up for the shortage of coins after the Civil War.  The first denominations of paper currency printed were 1 cent, 5 cents, 25 cents, and 50 cents.  Source: http://www.factmonster.com/ipka/A0774850.html

Financial Goals

First of all, let me thank you for your patience in my absence from writing this blog.  My beloved grandfather passed away the same day I posted my last entry, October 18th.  I found that I needed to take a break from posting for a while, and I appreciate your understanding.

Now, I’d like to talk about your Financial Goals for 2015.  When the clock turned over to 1/1/15, perhaps you made some resolutions – eat healthier, go to the gym, or get a new job.  Did you make any financial resolutions or goals, too?

A few examples of financial goals could be: get out of debt, increase your emergency fund, pay off your car or school loans, or create a realistic budget that you’ll stick to this year.  Of course there are many other financial goals you could choose, but it’s important to choose at least one.  You might even consider choosing two – one short term goal that can be achieved within the year, and one long term goal that may take a year or more to achieve.  As in other areas in your life, having financial goals will help you focus your energy.

My husband and I have gotten into the habit of saving a little bit each month toward our financial goals.  This year, our short term goal is saving for a new bed, and our long term goal is saving for a down payment on our first home.  We will easily save enough money to buy a new bed long before we have enough money saved for a down payment on a home.  But it’s important to recognize that saving a little money each month toward your financial goals is very helpful, no matter how big or small the goals may be.

What are your financial goals for 2015?  Please share them in the comment section below!

Happy decoding!

Fun fact for today – “You can hold a Ferris wheel in the palm of your hand.  How?  It’s easier than you might think.  So is turning cartwheels with your fingers.  Both “Ferris wheel” and “cartwheel” are nicknames for silver dollars!” (Source: http://www.usmint.gov/kids/coinnews/funfacts.cfm?group=1)

PS I know I usually post on Saturdays, but I decided to post today in honor of Grandpa’s birthday, when he would’ve turned 88.  Happy Birthday, Grandpa!  Thanks for all the wonderful advice on money and life you gave me throughout the years.  I love you!

Photo credit: Axente Productions, LLC Nanny & Grandpa performing the Flower Girl honors at my wedding: August 17, 2013
Photo credit: Axente Productions, LLC
Nanny & Grandpa performing the Flower Girl honors at my wedding: August 17, 2013

Regrouping after a job loss – Don’t Panic!

Copyright 2014 - Sweet Doll Designs
Copyright 2014 – Sweet Doll Designs

A good friend of mine asked for my advice on a financial issue her family is facing.

She, her husband, and their baby girl had been living in a town that they loved, surrounded by lots of family and friends.  They built a beautiful house, and thought they would stay in this area forever.

Until her husband got an offer to move to a different state to pursue an exciting career opportunity.

Even though they hated to leave their family, friends, and beloved town, they made the leap.  That was 6 months ago.

Then he was laid off.

Naturally, they are upset that this opportunity didn’t pan out, and that they are now far away from the support of their family and friends.

They’re scared, which is very understandable!  They need to take care of their family while he’s looking for a new job.

In order to help my friend, I came up with a number of suggestions for her and her family.

Here are my first 5 tips for regrouping after a job loss:

1) DON’T PANIC!

When my husband and I were vacationing along the East Coast this summer, we saw many warning signs about rip currents.  The signs taught us that in order to escape a rip current, the first step is: DON’T PANIC!  The next step is to swim parallel to the shore until you’re out of this fairly narrow current.

Losing your job is shocking, scary, and may seem like the end of the world.  It’s like you’ve suddenly realized you’re in a rip current – your 5 year plan for your career seems to be quickly getting further away.

DON’T PANIC!

Take a deep breath and realize others have been here before you and have come out the other side just fine – sometimes even better for the experience because they’ve had to get creative.

Now, start swimming parallel to the shore.  Start re-visioning ways you can get paid to do what you had been doing.  Can you become a consultant in your field instead of working in the same office each day?  Or can you think about your field upside down or backwards and come up with a new service you can offer?

This also might be a great opportunity to start that business you’ve been dreaming about! 

2) Fiscal Fitness

Examine your monthly expenses to see what you can cut.  You’re looking for “luxury items” that you pay for each month that might seem like necessities but aren’t.  You may consider cutting out cable, large cell phone plans, magazine subscriptions, gym membership, daily coffee runs, eating out, music subscriptions, clothes shopping, and dry cleaning (most items can be dry cleaned at home using special kits available for sale in Walmart), to name a few.  Just stick to essential expenses for right now, and try to avoid large expenses, if possible.

An important point to note is that this cutting back is just temporary!

Don’t get discouraged thinking that you’ll never be able to watch your favorite cooking shows on the Food Network ever again!  Once you’re back on your feet, you can add back in expenses that you missed.

Don’t be surprised, though, if you find that while you may miss cable when you first cut it, after a while you may find a peace in your life without it.  You may have extra time in your day to read, pick up a favorite craft, or spend time with your family.  When you get a new job, you may make the decision not to get cable again – and that’s ok!

3) Don’t seclude yourself in your house!

Don’t completely cut out your entertainment budget.  This may seem like a complete contradiction of the tip directly above, but hear me out.  This time is probably scary and frustrating, and you can’t job search 24/7 – you need to keep your sanity!

Maybe you don’t buy the expensive concert tickets, go out to fancy dinners, or go to the movies every week.  Your entertainment budget will be much smaller right now, but that just means that you have the opportunity to get creative so that your money goes further!

Here are some ideas to use with your new entertainment budget: enjoy a picnic dinner with your family at a local park, find discount movie tickets, rent a $1 movie from Redbox, eat dinner at home and go out to ice cream, find discount meal coupons to a favorite restaurant, look for free activities in your area (like outdoor movies during the summer, festivals, etc.) and frequent those, and suggest a pot luck game night with your friends.

4) Your local public library

When you’re cutting expenses, if you find that you have to cut out the internet, remember that there are lots of places that offer free Wi-Fi these days.

Even though Starbucks, Panera, and Barnes & Noble offer free Wi-Fi, I recommend checking out your local library.  They will not only provide you with free Wi-Fi for your job searching needs, but tell them about your situation, and a librarian will be able to direct you to other resources to help with your search.

5) Your health is your most important asset

Maintaining your family’s health is so important!  I know it may be tempting to buy only noodles and beans & rice for your family, but you don’t want to run the risk of lowering your resistance to colds and other ailments.  You need to bring your A game – staying healthy will help you do that.

Buy good quality food on sale!  Look at the sale flyers that the grocery store sends around each week and find the healthy and nutritious items on sale.  Build a menu for the week around those sale items, and write down your shopping list.  When you go to the store only buy the items on your shopping list!

Stay tuned for more tips on regrouping after a job loss.  In the meantime, try to keep a positive attitude – everything is working out.  You may not see how right now, but one day soon you’ll look back on this experience and see that the path worked perfectly.

Have you or someone you know ever been in a job loss situation?  If so, what did you do that helped you recover?  Share your thoughts in the comment section below!

Happy decoding!

Fun fact for today – The Bureau of Engraving and Printing has two facilities – one in Washington, DC and the other in Fort Worth, TX.  Together, they use 9.7 tons of ink each day! (Source: http://www.federalreserveeducation.org/about-the-fed/structure-and-functions/financial-services/fun_facts.cfm)

PS My friend just told me that her husband accepted a new job today!  How exciting!