Posts Tagged ‘Money & Finance’

5 Ideas for Offsetting The 2% Tax Increase

Thursday, February 21st, 2013

 

With the new year in full swing, you may be noticing that your paychecks are a little smaller than they were last year.  Social Security taxes were raised by 2% which may not sound like a lot, but this can truly impact families who are already financially strained or striving to build their savings & retirement. Today I want to share with you 5 ways to offset that 2% tax increase so that your family can prepare for this adjustment to your budget.

Let’s break down what a 2% tax increase might look like:

If you earn $30,000 per year, you will pay $50 more per month in taxes.

If you earn the national average of $41,000 per year, you will pay $64 more per month in taxes.

If you earn $50,000 per year, you will pay $83 more per month in taxes.

For the families that are already struggling, $50-64 a month is a huge chunk out of their budget that could go towards food, utilities, and housing.

Here are five easy ways to offset that 2% tax increase. These are all relatively painless, but yield an incredible amount of savings over the course of your year. 

 

Ditch Your Cable Bill

Last year our family gave up cable television and it is has truly been one of the most financially rewarding and best things I have ever done for our family. We now rely upon Hulu & Netflix for our television watching, reducing our bill from almost $100 a month to under $20 monthly. We are still able to watch all of the shows we want, but we don’t find ourselves wasting hours and hours of our day consumed with the television. The other financial bonus is that we are not exposed to endless commercials, which can send you running to the stores to pick up the latest and greatest things. To learn more about alternative options to cable, be sure to read my article on ditching your cable bill.

(Monthly Savings: $80 or more)

 

Calculate Your Personal Latte Factor

David Bach, author of Debt-Free for Life coined the term “Latte Factor,” to describe the way small indulgences and expenses add up to a lot of money down the drain. Consider the example of a three-day-a-week Starbucks habit. At $3.80 a latte you will spend $11.40 a week, $45.60 a month, $547.20 a year, and $5, 472 over a ten-year period on JUST take out coffee.

You may think, “I don’t buy takeout coffee,” BUT we all have small drains on our budget that can add up over time. That dinner that you pick up at the drive-through each week because your kids have sports activities, the trip to the store for one item that turns into a cart full of junk, even our thrifty endeavors (like thrift and garage sale shopping) can cost us $10 or more a week.

Figure out what that drain is on your budget and stop the leak. One little change like whipping up your latte at home, setting your slow cooker in the morning on busy days, or allocating time towards organizing items you already have instead of buying more can easily save you $10 or more weekly!

Be sure to visit my article on 7 apps to get your family organized to help get your finances back on track this year!

(Monthly Savings: $45 or more)

Get Savvy About Grocery Shopping

When families ask me how to save their family money, the first thing I talk to them about is rethinking their grocery shopping. We all get in habits and ruts when it comes to grocery shopping. Do you buy the same box of cornflakes you grew up on? Do you refuse to try a generic ketchup because you truly believe a certain company is the only one who can make ketchup? Do you have a habit of shopping without a list? Do you find yourself making multiple trips because you didn’t execute your menu plan well for the week?

I highly recommend downloading the free Grocery IQ app for your phone to effortlessly make a grocery list for your family. It pulls the coupon savings for you and you can use your lists from week to week instead of starting a fresh list each time.

Instead of shopping multiple stores, search fliers from all of the grocery stores and jot down the best deals of the week. Take this list with you to Walmart, for example, and have them price match the items for you. You will not only be able to cherry pick the best of the best, but you also will experience the savings of not spending on gas to shop at multiple stores.

To make effortless menu plans to go along with the savings, be sure to visit our Take Five Fridays each Friday on the Facebook group to get 5 budget-friendly meals to create in your kitchen!

(Monthly Savings: $40 or more)

Declutter Your Way to Savings

Clutter not only weighs us down physically, but clutter causes us to spend money when we don’t need to. One look at a cluttered pantry or bathroom closet and you know exactly what I am talking about. Duplicate purchases occur when we don’t have a strong grasp on our inventory in our home and clutter hides us from the real treasures that are in our lives.

Think of clutter not only as the items that fill our home, but also the items that fill our fridges. Do you constantly throw food out because you have “too much” food in your fridge or pantry? Is your freezer full, but you still run to the store because you have, “nothing to eat.” I can raise my hand to these scenarios too and there is a sickening feeling in my stomach when I know that I haven’t done a good job managing this aspect of managing the family finances.

Accountability of our items brings enormous savings and satisfaction. Being a good steward of the stuff that fills your life forces you to edit your belongings and keeps you from  buying as much. I try to live my life by the infamous quote from William Morris, “Have nothing in your home that you do not know to be useful and believe to be beautiful.” If it is not bringing beauty or usefulness to my space, then I can feel good about passing those items on to someone else in need.

I often hear that people think their home is “too small,” but I also often wonder if the excess from their lives was removed if that space wouldn’t feel spacious once again.  When my home is decluttered, suddenly, my kitchen counters feel spacious, the basement really does have a spot for everything in storage, and the house really does have enough space for us all.

I honestly consider cutting the clutter as, not only a way to decrease buying duplicate purchases, but as a project to devote my time to rather than spending it out in the stores spending money. When that boredom spending starts to hit me, I focus on a spot in our home that needs to be reclaimed. Even in a smaller home, there are MANY corners to devote my efforts to.

To learn more about our commitment to our smaller home, read this article on the power of living small.

(Monthly Savings: $30 or more)

Get the Good Life For Less

The entire focus of my first book, “The Good Life for Less,” is truly about achieving good times and a happy home on a budget. The book is filled with make-your-own recipes for commonly purchased items like food mixes and cleaners, as well as outlining simple ways any family can save money on their family budget each week.

In it, I outline how our family paid over $13,000 in credit card debt from unemployment and are on the road to financial freedom.  Our family is living proof that any family can pay down their debt with small switches.

The switches I outlined above, are switches that we worked towards and have freed our family of credit card usage and have allowed us to have a beautiful life that is well within our means.  You can find my book on the shelves of your local Walmart store or purchase it online!

Check out our Debt-Free party we threw for our family when we paid off our $13,000 in credit card debt and how we are living our version of the American dream.

(Monthly Savings: $50 or more)

 

What are some small switches you have made to be able to offset the 2% Social Security tax increase this year?

 

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New Ways to Save in the New Year

Thursday, February 21st, 2013

Are you looking for new ways to save in the new year? I have you covered! Today you will find me over on The Goodwill Tips Blog sharing some strategies for ways to save your family in the new year.

There is something so renewing to know that a new year is beginning and that you have a whole new year ahead of you to start fresh. In February, our New Year’s goals may have already been forgotten, but today I want to encourage you to dust those goals back off and start anew again with a goal that is very dear to my heart… being wise with our funds. The goal that I have each year is to continue to reduce our spending and find creative ways to live our beautiful life on a small budget.

Perhaps it is a goal of yours too? Let’s explore some new ways to save in this new year!
Head on over to the article to read more!

 

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We Lived Thrifty So We Could Do This…

Monday, February 1st, 2010

I feel like a confession today. Over six years ago we purchased our first home and  have been steadily making progress on the house ever since. We have done everything from painting kitchen cabinets, painting walls, more painting, renovating our patio, and getting our children situated in their rooms. We have also outsourced things like getting a new roof, knocking out walls, landscaping, new furnace, and new air conditioner that were all desperately required updates on our late-sixties home.

We are coming to the end of the DIY road and now moving into uncharted territory…a major home renovation. We will be knocking out a wall to create an updated family room complete with built-in storage and fresh new drywall with crown molding. We are finishing our basement to create a private home office that will be away from the family chaos so I can write my first book (editor’s note- let’s see if anyone actually picks up on what I just said). We will also be creating a walk-in pantry with a cubby for our kitchen computer. To top it off, we are getting new flooring throughout our home.

We will be doing all of these home improvements and paying for them with cash that we have been saving. Truth be told, we are paying for all of our home renovations with the money that I earned from my site. Although we don’t do “his” and “hers” accounts, we keep my income in a separate account to track income earned and business expenses. That account is where we will be withdrawing the funds from to complete the project.

I have gotten some criticism from family and friends that we should just move into a new house and skip renovating this home.  If the housing market was better, if there were better houses on the market that fit in our budget, and if I had a desire to get out my neighborhood, I would…but I just don’t. I didn’t pour all of this money, blood, sweat, and tears into this home to abandon it because it is lacking two rooms that I would like. It makes more sense to me to invest in the home that I have learned to love so much and make the most of it. These renovations offer a long term solution for making the most of our space as our children get older.

When I think about it, it makes my heart beat really fast and I find my hands getting sweaty. Spending money makes me do that. Spending this will greatly diminish the financial cushion that I love so much. It doesn’t mean we will be eating beans and rice every night, but it will mean careful management and hard work to restore the cushion again.

You just can’t be a frugal blogger and not address something major like pouring money into a home renovation. I am very proud that we can pay cash for it, that we continue to live in a home that is within our family’s budget, and that we will be able to renovate our home to accommodate our family’s long term needs.

I look forward to sharing with you what is happening in our house, how we saved on our projects, and why these renovations will offer long-term living space for our family.

Why am I telling you this? Because I want you to know that we are still living within our means. Still paying cash. And still committed to a life of no debt. I want you to know that we even bartered my husband’s web design services to save on the project. I want you to know that the reason this blog works is because I am authentic and committed to the goal of living my life on a budget.

Basically, it feels good to share it with someone who understands the beating heart, the constant questioning of yourself that you are making the best choices, that even though you save so you can spend on what is important that it is so incredibly hard to part with your money, and that is still cheaper in the long run to update your home then to move and start paying on a new mortgage, and I am absolutely making the right choice.  Can you tell me that?

Are you saving for a long term goal in your family? What is a dream project, trip, or family experience that you have been saving for?