Tag: Personal Finances

Green Bean Casserole

According to the report, the foods include a 16-pound turkey, a gallon of milk, a 30-ounce can of pumpkin pie mix, a half pint of whipped cream, 14 oz. of cubed stuffing, a pound of green beans, 12 rolls, three pounds of sweet potatoes, 12 ounces of fresh cranberries, 2 pie shells, a 1-pound relish tray (carrots and celery) and various other ingredients.

Read more: The Ten Foods Making Thanksgiving Much More Expensive – 24/7 Wall St. http://247wallst.com/2011/11/10/the-eleven-foods-making-thanksgiving-more-expensive-this-year/#ixzz1di2XbAao

 

How about Mama Stamberg’s  cranberry relish?

 

What, me budget?

Yes, you.   We all should.  Some expressions:  failure to plan is planning to fail or without a goal, wherever you end up is your goal.

My favorite budget guidelines have always been Larry Burketts, Money Matters , financial planning guidebooks.  In the referenced tribute to Larry, his philosophy of money is reflected:

One of the central principles Larry taught is that we don’t really own things; we are simply stewards and managers of what God has entrusted to us.

There are many budget preparation guidelines, but I’ve always liked the ones provided by what is now Crown Financial Ministries.  Here is a link to Crown’s Suggested Percentage Guidelines for a Family of 4 (High Housing Cost Areas) (since I live in Austin!).  There are also guidelines for singles, single parent, couples, etc.

Important to note is that these budget guidelines start with gross income so that a tithe comes off of gross.  No funny business about giving on net or gross.  I’ve heard other financial planners say that wherever you give your money, if you can’t live on 90% of your income, you have a problem.

The next reduction is for taxes.  If you are an employee, you can use the amount withheld for taxes from your paycheck.  Be careful not to have too much income tax withheld.  It’s better to pay a $1 than to let Uncle keep your money for up to 16 months!  If you are self-employed, you can look at the total tax paid on your prior year return.  Taxpayers think that they are saving money, but in fact, saving a little money each month in a savings account generates more savings than the “income tax withheld” savings account.  The tendency is to spend that tax refund impulsively rather than putting it into savings for planned spending.

After the reductions for both giving and taxes, then you compute your budget percentages.  Your budget is based on your spendable income.

As you complete your budget, remember that many employees have additional reductions in their pay that need to be considered as you budget:  health insurance premiums, 401(K) contributions,  day care tuition, etc.

I started a 30-Day Diary to really check in with how I spend money on a daily basis.  My dad (the first Newby CPA) used to keep a notebook in which he recorded all cash expenditures for the day.  What discipline!  Join me in the goal of tracking out of pocket expenditures (so to speak!) for 30 days.  Let me know how you do.

 

 

 

 

 

 

Inspirational Financial Quotes

From a great blog called:  Pick the Brain.

“Worry, like a rocking chair will give you something to do, but it won’t get you anywhere.” – Vance Havner

Most of us are guilty of worrying about money, and whilst it might be justified in some circumstances, the actual worrying won’t solve any problems – and worse still, it can be bad for your physical and mental health.

 

Another rule that I have:  Be kind to yourself.  It’s hard to get out of debt faster than you got into debt.

 

 

 

States’ Busted Budgets Not Caused by Union Pay

This is what David Lenohardt wrote in the NYT on March 1. His major points:

Government workers receive compensation that is similar–with somewhat lower salaries and somewhat better benefits on average–to that of private sector workers with similar qualifications.

Government pay is skewed too heavily toward pensions and health insurance.

Health plans for union workers and retirees are much more likely to require little or no co-payment, which leads to lots of medical treatments that don’t make people any healthier, and to huge costs.

Many government workers receive pensions that start at age 55 and still let retirees draw a full salary elsewhere.

Only recently have teachers’ unions started to cooperate with serious efforts at teacher evaluation, and they are still not giving their full cooperation.

The cause of our looming federal and state deficits . . .is Americans’ collective desire for low taxes and generous government benefits. . . Eventually we will have to pay for the government we want.

I have a friend that retired from the state, receives his pension, and was rehired as a contract employee by the same agency:  working full time and receiving his pension from the same agency.  Texas has a defined benefit retirement plan so that retired employees receive a guaranteed benefit rather than a value based account as in a typical 401K account. Steven Greenhouse discusses the differences between retirement plans.

In Texas, the Margin Tax and a cigarette tax were supposed to make up income deficits created from reducing the property tax , and to date, the Margin Tax has  increased revenues modestly but not at the levels expected at enactment.   (David Gilliland, Texas Margin Tax).

One result for Austin has been the expected layoff of 1000 teachers and the expected closure of exemplary inner city, low income schools. ( AISD News Release)

Moolala: Ooo La La?

Moolala is the most recent opportunity that I have been offered that operates like Grupon or LivingSocial Deals.  Businesses offer reduced rates on services or goods;  I am offered the opportunity to purchase them.  Grupon offers me $10 if I refer friends.  From Grupon’s website:

We’re giving $10 in Groupon Bucks for every friend you refer when they make their first purchase. It’s our way of saying “thanks” for spreading the word and increasing our collective buying power! Groupon Bucks can be used toward any Groupon purchase, and they never expire.

LivingSocial offers my deal for free if I share my purchase and at least three people buy it:

Share for a Free Deal
After you buy the deal, you’ll get a unique link to share. If three people buy the deal using your link, then your deal is free.

Here’s Moolala’s pitch:

There’s more – we want to help you make money, too!
We will give you 2% back on each deal you buy. And for each friend you refer to Moolala, you will earn 2% of every deal they buy. And that’s not all: we’ll pay you 2% for each friend they refer, and again for your friends’ friends’ friends and your friends’ friends’ friends’ friends. It’s a 2% five-level reward system. That adds up to lots of rewards for you and your friends.
Use your rewards to buy the Moolala deals you love or even redeem them for cash. It’s up to you.
So start inviting friends and earning rewards now.

There’s more – we want to help you make money, too! We will give you 2% back on each deal you buy. And for each friend you refer to Moolala, you will earn 2% of every deal they buy. And that’s not all: we’ll pay you 2% for each friend they refer, and again for your friends’ friends’ friends and your friends’ friends’ friends’ friends. It’s a 2% five-level reward system. That adds up to lots of rewards for you and your friends.

Use your rewards to buy the Moolala deals you love or even redeem them for cash. It’s up to you.
So start inviting friends and earning rewards now.

Whenever I see “we’ll pay you based on your friends’ friends” ,  I immediately think,  “pyramid selling and chain letters.”  It appears Moolala is an Austin based business that was formed in 2010.  Here’s the LinkedIn reference. I joined Moolala to help  my missionary, traveler friend receive his 2% should I make a purchase.

My least favorite is the LivingSocial offer.  I’m not sure I know three people that would make the same purchases as I would make.  My choice is between the immediate $10 of Grupon or a potentional stream of 2% commissions of Moolala.  The Grupon offer seems more bird in the hand to me, so I would choose Grupon.  Except, what if all of my friends have already signed up?  Then I think that there’s “no soup for me.”

It will be interesting to see which company is most rewarded by the market place.

Paying for Health Care

On December 31, 2010, many of the products currently eligible for reimbursement through Flexible Spending Accounts will no longer be covered unless your physician provides you with a prescription.    That’s important to note since you can get your physician to write a prescription for the expensive OTC drugs that you use, and you will be eligible for reimbursement.  You will need to send in your prescription with your receipts for reimbursement, and you will not be able to use an FSA debit card.  That may be a good thing since many of the those debit cards are a nightmare to use.

Here’s a handy list of qualified and nonqualified expenditures post 12/31

heb.com/fsa

The Joint Committee on Taxation estimates that this will generate revenue in excess of $5 billion in the first ten years.

Here’s  a website that you can use to calculate your share of the $5 billion: Save Flexible Spending Plans.

Tracking Travel & Entertainment

Capturing expenses on the road is important  for completing expense reports for your employer or for creating complete and accurate records for your federal tax return.

Credit network processors like Visa and MasterCard and banks have been developing new tools for corporate customers in anticipation of a rebound in business travel, reported Martha C. White  (NYTimes).

Concur Breeze was developed with American Express.  There is an app for all three smart phone platforms.  Take note small business:  the first two users are always free and the software integrates into Quickbooks.  Here are reviews.  To use the mobile app, you need to set up account at www.ConcurBreeze.com, then return to the app store with a mobile PIN.

Fyi, in fall of 2009, Intuit, the maker of Quicken, acquired Mint.com for personal finance and budgeting.  Free apps are available.    Searching for Quicken iPhone apps returns Quicken Online Mobile, but an iPhone  app store search does not return that app.  Mint has a blog that reviews financial apps.

Don’t throw good money after bad

Austin Talk Radio Batters Metrorail

Not a real headline but the discussion was a good reminder of how to NOT make a decision to abandon a project.

Investors are notoriously emotionally involved in decisions that they have made.  It is almost impossible to divorce ourselves from the consequences of important decisions that we have made.  This is called  Loss Aversion.

When we have made a decision such as investing $65 million  in a Metrorail or $5000 in WholeFoods and watch the trains operate at a loss or our stock decline by half of its value, our loss aversion and emotions keep us from correctly considering our original investment as a sunk cost.  Sunk costs are non recoverable costs that force us to admit that we have made a bad decision.

Some decisions require that we abandon our prior investment and invest additional funds that will correct the decision.  One example is abandoning a website that is too expense to maintain but that cost $15,000 for a $1000 out of the box website that works great.

Other decisions require that we look at future operations but on a cash flow basis.  If an operation, perhaps a commuter train, is cash flowing, consideration of the original investment is irrelevant to the decision as to whether to continue or stop the train.  The relevant costs to compare with income from the project are the costs that will end if operations are ceased.

Finally, we might need to consider selling assets that we can’t afford to pay for even though we would lose our investment, especially if we can pay off any debt associated with the property.  Continuing to own an asset with operating losses due to mortagage payments that could be sold is also an example of loss aversion.