Mid-Year 2014 Financial Goals Check-In and Progress Update

Happy first few official days of Fall 2014 everyone! I hope you’ve been enjoying the milder temperatures, some pumpkin and Octoberfest beers, and have been able to get outside every once in a while!

The past few months have been very much action-packed, hence the reason I am about 2 months late getting this “mid year” financial goal check-in post up!

I finished up my PhD in Chemical Engineering on August 25th (also involved losing my health insurance coverage, but that is a whole separate post in itself), got married on September 20th, have been knee-deep in the post-PhD job hunting/interviewing process, and am currently on my honeymoon in Belize until October 2nd. The picture to the right is one of the wife and I on our wedding day.

Back in January of this year, I set my financial goals for 2014. Since the year is now more than half finished, I figured it would be a good time to sit down and take a few minutes to review how I’ve been doing thus far in reaching or NOT reaching (in some cases) the various targets I set for myself. 

Overall, I would rate the 1st 3/4 of the 2014 year as being top-notch from a personal perspective, but a great deal of mixed feelings from a financial and professional perspective.

The financial markets have done pretty well, the wife and I executed our wedding on September 20th perfectly, I was able to finish my PhD in exactly 4 years, and I was able to max out my Roth IRA contributions for the 2014 year already.

On the other hand, even though I started the job hunting process last September, it has taken longer than I expected this time around to solidify. Couple this with us being very busy preparing for the wedding in September, we are currently living on my cash savings until I secure a job. Additionally, both the wife and I are having to pay for our own health insurance – mine being through healthcare.gov marketplace, and hers being a COBRA extension from her job she discontinued at the end of August, which in total between the two of us is around $850 per month. All of this, plus paying lawyers around $2000 (at least initially, we may get some of this trust account/deposit money back) for our pre-nuptial agreement, has caused me to be in a more “reactionary” personal finance mode versus what I am used to in saving a substantial portion of my income. In addition, since I am not currently receiving a paycheck, I have had to temporarily pause all non-essential savings and charity donation initiatives.

So, here goes, a progress update (in bold below) on how I’ve been doing so far in 2014 reaching my financial goals. Enjoy, and I look forward to reading any comments you all have!

 

Short Term (Less Than 1 Year) Goals

• Continue building, optimizing, and balancing a Three-Legged Stool for Retirement.
  • On Track. 
    • Currently, I am at a 34%, 37%, 28% split of my assets between tax-deferred (regular IRA / 401k), taxable, and tax-free (Roth IRA / 401k) account types. The goal is to try to keep each category’s allocation close to 33%.
• 1) Contribute maximum allowed for 2013 Roth Individual 401k.
  • Complete.
• 2) Contribute $5500 (or ~$458 per month) to my Roth IRA with Vanguard this year (maximum allowed)
  • Complete.
• 3) After maxing out Roth IRA for 2014, contribute equivalent amount ($5,500) in taxable Vanguard mutual fund account.
  • Not On Track / On Hold.
    • With me currently being “unemployed” and all of the financial changes mentioned above surrounding the wedding and honeymoon, I have placed this goal on hold until things stabilize and I find a job.
• 4) If have additional funds available after completing #3 above, contribute >=20% of blogging income to Individual Roth 401(k) with Vanguard.
  • Not On Track / On Hold.
    • This is on hold for reasons similar to #3 above.
• Reach short-term net worth target for this year.
  • Achieved/complete.
• Maintain target 6-9 months of expenses in cash reserve emergency fund in Dollar Savings Direct account.
  • On Track.
• Put together Purpose-Focused Financial Plan together with wife, including long-term and short-term financial goals. Also read up on marriage/couples/family finance books as well.
  • On Track, looking to finalize in 4Q2014.
• Organize new joint / individual financial accounts for wife and I. Integrate our two finances together.
  • On Track. 
    • So far, we have successfully set up and are using a joint checking account and joint savings account with Ally Bank. The way our pre-nuptial agreement is configured is that when we get back to a position to save money again, we will contribute money to each of our retirement accounts.
    • Another part of integrating our two finances is that I am tracking every penny/dollar we are spending for the next few months to get a complete picture of all of our recurring financial commitments and patterns.
• Evaluate whether or not to rollover some of tax deferred retirement accounts to Roth status since tax bracket low.
  • On Hold since excess cash for taxes is not available right now for this type of rollover. 
• Rebalance mutual fund portfolio to meet asset allocation target %’s (70% equity, 30% fixed income overall).
  • On Track. 
• Keep maintaining zero-based budget that I have set up to strategically manage my personal finances.
  
  • On Hold. 
    • Since we are not currently receiving any income, there is not much of a need for zero-based budgeting since we are in “get by” mode.
    • Once we start receiving income again, we will resume the use of this budget system to help us achieve our short and long term savings goals while still keeping the bills paid.
    • One intriguing piece of this budget system we are working on now is creating our joint zero-based budget now that I am married.
• Towards end of 2014/after get married, evaluate if need to obtain life, disability, and long-term care insurance.
  • On Track. 
• Have draft of my will + wife’s will (which she needs to draft) reviewed by a lawyer. Also try to use same lawyer to create wedding contract for our wedding in September 2014.
  • On Track. 
    • We are in the stages of finalizing our wedding contract. Once that is signed and finalized, we will use one of our 2 lawyers for drafting wills, but that would likely take place after I land a job.
• Create and keep updated a Google Document listing out all of wife and I’s account types/locations in event either of us is injured.
  • On Track. 
    • We currently updated this with my wife’s asset accounts as well.
• Continue to save $50 per month for trip to Grand Canyon or Niagara Falls as part of freedom life values account.
  • On Track for most of year, but currently On Hold since am currently unemployed. 
• Invest $500 in Microloans with Microplace.com to support Latin American micro entrepreneurship. This equates to $42 to invest per month.
  • On Track for most of year, but currently On Hold since am currently unemployed.
  • Since Microplace.com stopped accepting new investments in January of 2014, I have had to find other alternatives for this goal. Two good ones I have found are Kiva.org and now Vested.org. Vested.org is currently my preferred provider since they offer return of principal as well as some level of interest rate of return. Kiva.org only provides return of principal. Both seem to be dependable so far!
• Invest $25 each month ($300 total for year) in Lending Club A Safety Grade Person-2-Person loans.
  • On Track for most of year, but currently On Hold since am currently unemployed.
• Donate $1,500 to Multiple Sclerosis Foundation in 2014 (5% of take-home pay in my graduate school research assistantship job).
  • Complete.
• Fund raise $5000 for MS 150 bike event in June 2014.
  • Complete. raised $5,571 (approximately). 
• Save 3% of take home pay each month (after taxes) for Dream Account.
  • On Track for most of year, but currently On Hold since am currently unemployed.
• $30 per month save for doing running races / bike rides as part of health life values account.
  • On Track for most of year, but currently On Hold since am currently unemployed.
• $20 per month save for buying fresh vegetables as part of health life values account.
  • On Track for most of year, but currently On Hold since am currently unemployed.
• Save ~20% of (blogging income minus amount of income deferred to Individual 401k with Vanguard plus untaxed graduate fellowship income from my research job) in a DollarSavingsDirect.com online savings account in preparation for 2014 taxes and to pay quarterly estimated taxes.
  • On Track. 
    • So far this year, my quarterly tax payments have been above 20% of my blogging income, so I have mostly just been focusing on paying those.
• $30 per month save for trips to visit friends/family in other states as part of friends/family and freedom life values account.
  • On Track for most of year, but currently On Hold since am currently unemployed.
• $10 per month save for purchasing food for backpacking trips in the Blue Ridge Mountains once a month as part of health life values account.
  • On Track for most of year, but currently On Hold since am currently unemployed.
• Execute any business tax deductions I can for 2013 taxes.
  • Complete. 
• Send out 1099-MISC for staff writers for 2013-2014 taxes.
  • Complete. 
  • This was an interesting process since not all of the staff writers were a) living in the United States and b) received over the $600 threshold limit for needing a 1099-MISC.
• Use 1% home value home maintenance fund to fix various small things that are broken around my condo after 3.5 years of use. These things include a closet door off the hinges, the light-switch in the bathroom not working all the time, the bathroom towel rack holder coming unscrewed, and some pipes under the sink that need to be re-caulked. This will especially be important if we sell our condo this year in the event of a move. Once I get these things repaired, I will then need to replenish the depleted funds in the home maintenance account.
  • On Track. 
  • We had the bathroom light fixed, the hot water heater replaced, and the pipe under the kitchen sink fixed. However, there are still some other minor items that require attention if we are to sell the condo.
• Execute 4 estimated tax payments for blogging + graduate research fellowship income on the following dates – 1) April 15, 2014, 2) June 16, 2014, 3) Sept. 15, 2014, and 4) Jan. 15, 2015.
  • On Track. 
• Maintain a total of $1600 for health expenses for dogs we adopted (for annual health checkup, Frontline/Interceptor, and miscellaneous health emergencies/treatments needed.
  • On Track. 
  • In some sad news, we received word that our greyhound, Coaty, had to be put to sleep while we have been on our honeymoon due to bone cancer causing his humerus to shatter.
• Help friends become debt-free.
  • On Track. 
• Continue investing in long-term content growth of blog.
  • On Track. 
• Determine if it is more efficient to file taxes jointly or separately once wife and I get married in September 2014. Also optimize (minimize) tax bracket by balancing tax-free and tax-deductible/deferred retirement savings.
  • On Track. 
  • Since the 2014 tax earning year is not yet over, this will be something to evaluate in December. However, my initial calculations reveal that it will be more tax efficient for us to file jointly.
• Save >50% of after-tax / take-home income.
  • Was On Track until finished graduate school. 
• Save $1 per day in Making Future Child a Millionaire Account, invested in the Vanguard Total World Stock Market ETF.
  • On Track. 
  • Currently this account’s value is $243! Nice.
• Save $10 per day as a sneaky trick to stash away even more money.
  • Completed. 
  • This worked really nicely to save up some extra cash for the current unemployment period I am going through. The total that I was able to save in this way was $2400 between January and end of August.

 

Mid-Term (3-5 years out) Goals:

• Continue contributing maximum allowed to Roth IRA and Individual Roth/Traditional 401k each year using dollar cost averaging.
• Reach intermediate net worth target (~2X my current net worth).
• Own a rental property by 2018.

 

Long-Term (greater than 5 years out) Goals:

• Obtain a net worth of $1,000,000.
• Own a home free of mortgage payments.
• Own a vacation home in the mountains or a ski resort.
• Accumulate enough funds not have to work, but will probably anyways because I would get bored. 

How about you all? How have you been doing on the goals you laid out for yourself in 2014? What technique have you found is most effective in holding yourself accountable for your goals you set?  

Share your experiences by commenting below!

How I Am Financially Motivating My Children

The following post is by MPFJ staff writer, Melissa Batai.  Melissa is a freelance writer who covers topics ranging from personal finance to business to organics to food.  She blogs at Mom’s Plans where she shares her family’s journey to healthier living and paying down debt.

Do your kids get an allowance?  If you’re like most parents, they probably do.  According to a study by the American Institute of CPAs, “61 percent of parents pay an allowance” with the average allowance totaling “$65 a month, or $780 a year.”  I was a bit surprised by how much kids receive on average every month.  Even more surprising, “only 1 percent of parents say their kids save any of their allowance.”  That’s a lot of dough to blow through every month.

One of my desires as a parent is to teach my kids to be smart money managers.  I do use a chore system to pay their allowance and have them save a portion.  Over the years we’ve experimented with different chore/allowance systems, but finally, I’ve found one that works perfectly for our family.

 

What We Used to Do and Why It Didn’t Work

For years, we’ve had a chore chart for our ten year old son.  We decided on a mix of chores he does because he’s part of the family (i.e., these are unpaid) like clearing the table when he’s done eating to chores like cleaning the bathroom that are paid.

We used to have a chore chart where he earned money based on the difficulty of the chore–making his bed paid 25 cents, while cleaning the bathroom paid $3.00.  I never forced him to do chores.  If he didn’t want to do his chores one week, he wasn’t paid.

Let me tell you, there were quite a few weeks when he didn’t do many chores and only earned a dollar or less.  When he wanted to buy something, he’d suddenly diligently do his chores.

While this system saved us money on paying out for chores, the fact is that he is a part of our family; he’s one of five people in our family making a mess every day, and if I didn’t want to live in a messy house or didn’t want to do all the household chores myself, I needed him to share some of the household burden.

We needed a new system.

 

The New Chore/Allowance System We Love

This summer I reread America’s Cheapest Family Gets You Right on the Money by Steve and Annette Economides.  I took particular interest in their chore system.  For their children, each child had the potential to earn 4 allowance points a day.

I modified their system a bit.  This is what I came up with for our kids:

Morning Point–The kids get this point if they make their beds, get dressed, brush their teeth, put the dirty clothes in the laundry, etc.

School Point–The Economides homeschool like we do, so their kids got this point for doing their schoolwork without having to be nagged and having a good attitude.  If a child isn’t homeschooled, he could get this point for completing homework and working hard in school.

Chore Point–Depending on age, a child has to complete a set number of chores every day.  For instance, my 10 year-old has to complete 3 chores while my 4.5 and 6 year-olds only need to complete 2 chores a day.

Round Up Point–At the end of the day, everyone finds 3 things that have been left out to put away.

In addition to these basic points, the kids also have the opportunity to earn a bonus point each day.  I give these bonus points if the kids treat one another nicely, help out if they see someone needs help, or choose to do an extra chore or two.

If kids get at least two bonus points a week in addition to earning all of their regular points a day, their earnings are doubled.  The Economides compare it to an employee who goes above and beyond at her job and is rewarded with a bonus or a pay raise.  The lesson here is that hard work is noticed and rewarded.

For chore point, they can choose between age appropriate activities that I’ve written out for them.  For instance, my 10 year old can choose three chores for the day from a list that includes:

• Clean, sweep and mop bathroom
• Sweep the front sidewalk
• Change the cat litter
• Empty the dishwasher
• Vacuum the living room, etc.

 

Why This System Is Working

I was initially surprised this system works because the pay is much less than I was paying with my other chore system.  My son gets 15 cents per point, so if he gets two bonus points in a week and can double his money, the maximum he can earn is $9.00.  Yet, he’s much more motivated with this system.  I think it’s because he knows he has to get all of his points each day if he wants the chance to double his money.  (He loves having the chance to double his money.)

Another key to his motivation is that he can choose his three daily chores from a list of 8 to 10 chores.  With the old chore system, I think he got bored doing the same chores over and over.  He can switch his chores up every day now.  (In fact, I encourage him to switch them up.  So Monday he might vacuum the bedrooms, but he won’t do that again until later in the week.)

 

Motivating Him to Save For College

The possibility to double his money is working so well that I decided to experiment.  If I offered to double his money for college savings would it work?

My husband and I, for the last few years, have been in no position to save for college.  Our plan is that our kids will go to college at the university where my husband is employed so they will get greatly reduced tuition.  Yet, we still should be saving in case they don’t want to go to the college where my husband works.

I told my son that whatever he saved for college each week, my husband and I would match.  I didn’t know how much this would motivate him since for a 10 year old, 18 is a lifetime away.  However, it’s worked better than we had planned.

 

Opening the Door to Financial Discussions

Now that he has the match in his mind, my son is frequently asking me financial questions.  Where will his money go when he’s saving for college?  This allowed me to talk to him about investing and earning interest on investments.

We also discussed saving for retirement and that the younger you start saving the more you can have in your retirement fund thanks to compound interest.  He finds it fascinating that he can save for retirement at a young age with less money and have more in his retirement fund then someone who puts large amounts of money in a retirement fund starting in her forties.

I can see the wheels turning in his head.  Yesterday, he asked me if he put $50 in his college fund, would I still match that?  If he put in $250, would I match that?  Of course I will.  I’m delighted that he’s thinking like this, and I hope we are putting him on a path to financial independence.

How about you all? What have been your best strategies to teach your kids about money and educating them on smart financial decisions?

Share your experiences by commenting below! 

***Photo courtesy of I’d Pin That

How Much Money Do You Need to Be Happy?

The following is a post by MPFJ staff writer, Derek Sall. Derek is the owner of the blog, LifeAndMyFinances.com, where he teaches people how to get out of debt, save money, and become wealthy.

In our society today, there is always a wanting for more. You may live in a house that is perfectly fine for your current needs, but that house up the road that has 500 extra square feet with a pool in the back just looks so much better! Surely everyone would be happier with more amenities and more space, right? Well, not necessarily.

 

The Research Regarding Money

According to the research of Forbes magazine, the standard amount for happiness is around $75,000. Those that earn more than this really don’t gain much from their extra income. They still have a nice house, but maybe it’s just a little bigger. They might still own a boat, but it has a few extra feet on the front. And, they still receive (and can afford) a valuable education. Extra money beyond the $75,000 amount is merely spent on extras that truly don’t provide much more in the way of happiness.

 

Why Is It That We Always Think We Need More?

So for those of us that have read this Forbes article, we can buy the fact that happiness does not increase greatly after that $75,000 mark, but why then do all of us continually strive for more?  Why are we all spending our precious time to acquire more and more money, which in turn buys us an increasing supply of stuff?

This is the question I have been asking myself lately, and I think that it’s an important question for all of us. Sure, it might be nice to earn more money than we have right now, but how much money do each of us really need to be happy? And how do we decide what this amount is for us?

 

The Quest for Understanding Your Happiness

It is easy to think that additional money would make you happy. Instead of going out to eat once a month, you could eat out every weekend. Surely, this would increase your happiness right? Or what about that new car that you have always wanted? If you were able to buy those new wheels, life sure would be sweet wouldn’t it? Then you would be happy! Honestly, I really doubt it. An increase in stuff will not make you happy, and the earlier you realize this the better.

If you are anything like me, when you talk to others, you are not talking about your recent money-making quest or about your big raise at work. No, you are talking about your wife, your kids, your experiences, and the fun things you have done in life. Relationships and experiences are what creates happiness, not money.

So how much does it cost to have these relationships and to create memories through experiences? Honestly, it doesn’t cost that much at all. I currently earn quite a lot of money (in comparison to the average family), but I only find myself spending about $25,000 a year. I travel, I give, and most importantly, I spend a large part of my time with those that I love. In the grand scheme of life, money does not play that large of a role in my overall happiness. As long as I am able to buy the necessities without stress or worry, and I have a little extra to have some fun once in a while, I can really be quite happy.

What about you? Do you always feel like you need more money to be happy? Perhaps you just need to change your perspective!

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/marinadelcastell/8916590367

Re-Energize Your Marriage Without Spending a Dime

The following post is by MPFJ staff writer, Catherine Alford. Cat is a freelance personal finance writer who blogs at www.BudgetBlonde.com. 

If you want a way to pep up your marriage but don’t have a lot of extra cash at the moment, here are some ideas for getting back on track without breaking the bank.

 

Learn Something New Together

We often get bogged down in a routine, and I find the older people get, the less inclined they are to learn something completely different and new. Sometimes we get stuck in our ways or stick to what we know, but the truth is, there are so many things out there that you can do with your spouse that will enhance your own life and each others. For example, maybe you can learn a language together. Practice together and quiz each other. Then you can promise each other that if you get really good at it, perhaps plan a trip to France or Spain or Costa Rica and try out whatever language you learned.

You could also learn to play tennis or golf or scuba dive. When my husband and I learned to scuba dive, I was absolutely terrified. He went down in the water first and I just couldn’t do it. I started crying with the instructor on the surface of the water.  The instructor then went down to get my husband to ask him to come back up and help me. He calmed me down, told me it would be okay, and then held my hand so we could go down in the water together. Sometimes overcoming fears together is a great way to reemphasize the trust and compassion you feel for each other.

 

Watch Your Wedding Video

The last time we watched our wedding video, it was so sweet and romantic. I want to start a tradition where we watch our video every year on our anniversary with our kids. I think it would be fun to have our kids see us so young. It’s only been a few years, but I feel like both my husband and I look so different. Anyway, there’s just something sweet about watching the moment when you got married again. I’m so glad I got the video. It’s actually one of the best things we purchased in all of our wedding expenses.

 

Take a Long Walk

Fall is the perfect time to get outdoors. It’s hard for my husband and I to go anywhere because it literally looks like we’re packing for a three day trip with the amount of things we have to bring for our infant twins. Still, we always feel good when we get out the house and get some fresh air.  It’s a great way to work out arguments or have tough conversations because usually when you’re outdoors, you tend to remain more level in your conversation, and you feel a little better being surrounded by nature.

 

Try to Date

Dates are still expensive when you’re married! I see a lot of couples trying to commit to a date night, and while that seems really nice to me, it also seems really out of my budget. So, one way to still have date night without the expense is just to have it at home. You can plan an entire date with a movie and a certain dinner that you can make for your spouse or together. If you have kids, you can do all of this after they go to sleep. It takes a little bit of thought, but it’s something they will really appreciate. There are even entire websites devoted to thinking of fun date ideas you can do at home with your spouse. I love anything that means re-energizing a relationship without having to pay a huge expense.

 

Talk It Out With Friends

I think sometimes we often think our frustrations or issues with relationships are unique to us. Just the other day, my husband and I were hanging out with friends, and we realized that the men and women had a lot of the same issues. We were joking and teasing each other about it, and it was a fun, relaxed conversation about how my friend and I always want to talk to our husbands the second they get home because we both work from home all day. However our husbands, after long days of talking to patients at the hospital, kind of want downtime and want to be left alone. So, by talking it out with friends in a way that was fun and joking, we were able to get past a small hurdle. I find a lot of times it’s good to bounce ideas off of friends when you need an unbiased opinion about something!

Ultimately, there are tons of ways to re-energize your marriage than just the tips listed above. It just takes a little bit of thought, a little bit of advanced planning, and a lot of initiative and motivation to add a positive change to your life. However, once you do, I think you’ll start reaping the rewards right away.

How about you all? Do you have any other ideas on ways to improve or re-energize a marriage while on a budget?

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/dlytle/10334814055/in/

How To Sprint Up The Corporate Ladder

The following is a post by MPFJ staff writer, Derek Sall. Derek is the owner of the blog, LifeAndMyFinances.com, where he teaches people how to get out of debt, save money, and become wealthy.

Have you just started working in Corporate America and are wondering how to get ahead? Or, perhaps you have been stuck in the same job for a number of years and are interested in climbing the next rung of the ladder? Wherever you currently are in your corporate walk, I assume that you would like to get to the next level. Take this advice and you will not only get to the next rung of the corporate ladder, but will be on a sprint to the top.

 

1) Dress to Impress

This step is incredibly basic, but if you dress like your boss’s boss instead of like a fry cook, people will notice and they will be more prone to respect you and your opinions at work. If your boss wears a tie, then you should wear a tie. If your boss wears a suit jacket, then you might want to follow suit as well (pun intended). Not only will your coworkers respect you, but you begin to respect yourself a little bit more as well.

 

2) Speak with Confidence

Nobody promotes a mousy employee. If you cannot speak up in meetings or give your differing opinion to your boss, then you will simply not reach the next rung of that ladder. Confident speakers may not always be right, but everyone is aware that they are in the room. And, in order to get promoted, people first need to know that you exist, and then they need to know that you have the confidence to lead others.

 

3) Take any Leadership Experience You Can Get

When you first start working in Corporate America, it is incredibly rare that you will be gifted a manager’s job. Chances are, you will start at the bottom of the ladder and then will need to prove yourself worthy before moving the next level up.

In order to make a move into a manager position, you likely need to have some sort of leadership experience under your belt. This could be accomplished by volunteering as a Board of Director for a local non-profit. You might also get some leadership experience by taking on projects at work and leading a team of coworkers. If you succeed enough as a leader in these roles, your bosses will begin to notice and will feel comfortable in giving you that promotion.

 

4) Continue to Educate Yourself

If you want to move up at work, never stop educating yourself. If your employers value a bachelor’s degree, then earn one. If they think an MBA is important, head back to school and earn this degree as well. Also, without their coaxing, continually learn about areas that interest you. If you work in accounting, but are interested in credit instead, ask those that are working in credit if you can help them with some of their work. Do this for enough areas in your work and you will suddenly be the knowledge source for many leaders within the company. If they know that you have the knowledge, they will not even hesitate to promote you when the time comes.

 

5) Apply to Open Positions When Appropriate

If you have a good handle on your current job and feel that you can take on a more challenging role, don’t be afraid to look at the open jobs that are available in your company. If you have truly been working hard and have been getting the attention of the leadership team of the company, then you will almost be expected to apply for the job. Even if you do not get awarded the position, this action still lets them know that you are interested in advancing within the company. The next time another job opens up, you might not even need to interview for it. They’ll just give it to you since they know you have earned it and are interested in advancement.

If you take action on these five items, you will almost certainly find yourself advancing up that corporate ladder.

How about you all? Have you climbed the corporate ladder? What did you do to succeed?

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/chefranden/155267057/in/

Five Advantages of Renting a Car for a Long Trip

The following is a post by MPFJ staff writer, Kevin Mercadante, who is a freelance professional personal finance blogger for hire, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry.

The next time you’re considering taking a long trip, put renting a car on your list of options for that trip. There are at least five advantages to renting a car for a long trip, rather than flying or driving.

1. Saving Air Fare on Short- to Mid-Range Trips

If you typically fly to a destination that is in the 250 to 500 mile range, renting a car and driving it direct to the location can save you a substantial amount of money.

Up to 500 miles, you’re basically talking about flight time of about an hour. But it can easily take you at least two hours on each side of that flight – two hours driving to the airport and going through security, then another two hours getting off the plane and booking a rental car. You’re looking at a time investment of at least five hours should you fly.

If you decided instead to rent a car and drive the distance, you can probably get there in about eight or nine hours. Yes that is longer than the five hours we just discussed for a flight. But as we all know, flights can be delayed, or you could be bumped to another flight, which can quickly get you up to eight or nine hours – or even more.

If you rent a car instead of flying for short- to mid-range trips, you have the following advantages:

• Your time of arrival at your destination is likely to be more predictable, since you will not have to rely on the airlines or conditions at the airport.
• You will already have your car rented upon arriving at your destination.
• You will save a substantial amount of money on round-trip airline tickets, especially if you would need to rent a car at the destination.

You certainly don’t want to do the car rental option much beyond 500 miles. But if it is within that range, you can save yourself a lot of money, as well as a lot of hassle, by avoiding the airport experience entirely.

The advantages of renting a car for a trip can be even more substantial if the other option is to drive your own car there.

2. Avoid Wear-and-Tear on Your Own Car

People often choose to drive their own car on a short- to mid-range trips as a way of saving money. But on deeper analysis, the savings are not as clear as it seems at first glance.

While it is true that you will save money by not renting a car, you are in fact adding deferred expenses to the cost of using your own car as a result of putting more mileage on it.

Let’s say that you decide to take your car to a destination that’s 500 miles away – that’s 1,000 miles round-trip. Adding that many miles will not only accelerate the need for certain car repairs, but it will also cause the resale value of your vehicle drop. According to some sources, it could be as much as 10 cents per mile, or about $100 for a 1,000 mile trip.

You can generally rent a car for as little as $200 for up to seven days. If you count the decline in resale value of your car, as well as potential deferred repair costs, it may actually cost more to drive your own car than it would to use a rental.

 

3. Dealing With Mechanical Breakdowns is a Snap With Car Rentals

If you are driving your car and it breaks down along way from home, not only will you have to pay the cost of having it repaired in a remote location, but your trip will also be delayed, possibly by as much as two or three days.

However, if you rent a car for the trip, and the car breaks down, you simply need to call the car rental company, and they will typically replaced it within an hour or two. You’ll then be able to resume your trip, having experienced only a slight delay as a result of mechanical breakdown.

It should also be worth noting that if your own car breaks down far from home, you’ll probably pay a lot more for the repair than you would if you were on your own home turf. This is because not only will you lack access to your preferred mechanic, but you may be forced into getting the job done as quickly as possible in order to maintain your travel schedule.

 

4. A Rental Car May Be Newer Than Your Own Car

If your own car is more than a few years old, you could be at substantial risk of a breakdown while you’re on a long-distance trip. This is more relevant than ever since the average age if a car in the US is now at a record 11.4 years.

That being the case, you can rent a car that is typically somewhere between brand-new and no more than two years old. Such a car would likely be much more reliable on a long-distance trip, not the least of which because the car rental company maintains a regular maintenance schedule on the vehicle.

In short, the rental car may be better able to weather a long-distance trip than your own car.

 

5. Choosing the Vehicle That You Need

Still another issue may be that your own car is not well suited to the trip that you want to take. For example, if you have a subcompact car, and a family of four, it may get more than a little uncomfortable on a long trip, particularly if you are packing luggage.

In that situation, you may be able to rent a larger vehicle, that will be better suited to the needs of your particular trip. Though the price will be significantly higher, you can even rent a van or a large SUV, if that’s what you happen to need.

If you do have to take a trip is not more than 500 miles away, give some serious consideration to renting a car for the purpose. It’s generally both less expensive and more flexible than driving your own car, and certainly than flying. And if the car can be rented with no mileage charge, it may be more cost effective even on much longer trips.

How about you all? Have you ever rented a car for a trip instead of flying or taking your own car?

Share your experiences by commenting below! 

***PHOTO: https://www.flickr.com/photos/pauliospictures/13455468185/sizes/n/

5 Free Ways to Show Your Spouse You Love Them

The following post is by MPFJ staff writer, Catherine Alford. Cat is a freelance personal finance writer who blogs at www.BudgetBlonde.com. 

People always told me that marriage gets really tough when you have kids. I never knew what they meant until now of course. At first I thought, shouldn’t having children bring you closer together as you both soak in the amazing miracle of raising a little human (or two)? Well the answer is both yes and no, but at this point, mostly no!

With so many demands on both of us, the most time we spend together is when we’re side by side in the kitchen at 11 p.m. washing bottles and trying to squeeze in as many chores as possible before we both collapse in bed out of exhaustion. It’s a really hectic and crazy time for us, and sometimes we love it and sometimes we really miss sleeping in on Saturday mornings.

We know we’re lucky beyond belief to have two healthy and beautiful children, but I think it’s completely normal to go through a rollercoaster of emotions as a new parent. At least, that’s what I always tell myself.

So, whether you’re elbow deep in diapers like us, empty nesters, or blissful newlyweds, here are some ways you can show your spouse you love them for free and keep the love alive even when things get busy or downright crazy.

 

Let Them Sleep In

If there are tasks to do in the morning like taking the dog out, making breakfast, feeding tiny humans, or other chores in general, let your spouse sleep!

Whether you have kids or not, chances are as soon as you wake up, you probably have to at least make coffee right? Well, I can tell you from experience that it’s pretty much the best surprise ever to wake up and have all of these things already finished.

If you do this for your spouse I can promise you that when 9:00 rolls around, they’ll wake up so confused wondering how they were able to sleep so long. The bonus for you is that they’ll likely be in a good mood for the rest of the day. I know I always am when I can sleep a little more.

 

Write a Love Note

It doesn’t have to be sappy. It doesn’t have to be long. Just jot a quick, “I love you” on a scrap piece of paper and put it on the kitchen counter. It only takes a minute. You can even be funny or silly or witty. Write a joke or put down a funny memory. Just do it because it’s free and it will make them smile.

 

Make Them Their Favorite Meal

We tend to save favorite meals for birthdays or special occasions, but I think we should make our spouse’s favorite meal randomly and surprise them. Frankly my husband would be so happy and impressed if I planned and made dinner at all because I absolutely hate to cook. So, he’d probably love me forever if he walked in to steaks or a Thanksgiving style dinner. Actually, he’d probably think an alien spaceship came and took me and replaced me with some evil-yet-awesome-cook twin. Still, as I write this, I realize I should probably do this more!

 

Print Out a Picture

We never print out pictures anymore. Gone are the days when grandparents would take out a whole roll of pictures from their wallets. Now we have smart phones that we let people flip through. However, one of the best gifts I ever got from my husband was tiny little magnets that he had made from my Instagram feed. He picked several different photos that were taken during my pregnancy and with friends. They are all up on my fridge now and are actually a nice, flat, clutter free way to hold up important things on the fridge.

 

Give Them Some Affection

I was walking through the mall with my husband and twins, and suddenly it felt like every single couple was holding hands. Didn’t we used to hold hands all the time I thought. It took me about two seconds to grab his hand, but then we had to hold hands one on top of each other while we pushed the stroller. Ah, young married love when you have kids! Still, a little affection and attention goes a long way!

Ultimately, it doesn’t matter how busy you are. The above tips prove that you can easily show your spouse you love them in small ways that don’t cost a dime. There’s no need to buy a dozen roses or even make reservations at expensive restaurants. Just a little attention, a few thoughtful notes, or even a simple hug can go a very long way in the midst of our busy and chaotic lives.

How about you all? How do you show your spouse you care?

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/epsos/6943704482/in/

5 Reasons Why You Should NEVER Own A Storage Unit

The following is a post by MPFJ staff writer, Derek Sall. Derek is the owner of the blog, LifeAndMyFinances.com, where he teaches people how to get out of debt, save money, and become wealthy.

Do you realize how incredibly huge the self-storage industry is?

While it seems that no one talks about it, many of us own storage units to store stuff that doesn’t fit in our house very well. It seems logical until you begin to understand the mass of storage that is being funded each month. Believe it or not, there are over 2 billion square feet of storage units currently rented out in America, which is enough to fit each one of its citizens if they simply stood shoulder to shoulder in those very same units! Isn’t that just sick? Why on earth do we need so much storage space outside of what can fit in our house?

Here are my five top reasons why you should NEVER own a storage unit.

 

1) You’re wasting your money on rent

So what is the typical cost of one of these storage units? In my area (where everything seems to cost much less when compared to other parts of the country), a simple 5’ x 10’ space can cost $47 a month. This initially doesn’t sound like too much, but what if we extrapolated that out to a year? The yearly cost of this small storage space is $564. Over the course of a few years, this expense really starts to add up!

 

2) You’re wasting your money on stuff

A very small fraction of people are using storage units temporarily (many think their unit is temporary, but they soon become lifers as their stuff begins to pile up), which means that they simply have more stuff than they have room to put it! How is this even possible? How can we possibly accumulate more stuff than a typical house can hold? The very notion of this is ludicrous.

Did you know there is a movement going on called, “The Tiny House movement?” This is where people sell the majority of their stuff and scale down to a 150 square foot living space. Oddly enough, many people seem happier to live in that tighter space with less stuff than they did with their large house and storage units full of stuff.

You simply do not need all of that stuff and are therefore wasting your money.

 

3) You could be infesting your home

Supposedly, storage units are completely clean and you should have no worries when it comes to bringing those boxes back into your home. In my opinion, bugs are everywhere, and I am sure that there are plenty of people that brought some crazy stuff back into their homes when they opened up their storage box. You could be releasing spiders into your home, or maybe even mice or snakes. I think I’d rather just limit my stuff and reduce the odds of this from happening!

 

4) You’re wasting money on fuel

Storage units aren’t typically right around the corner. When you need something out of your unit, you have to hop in your car, drive a number of miles, and then return home. Each time you do this, you are burning fuel which is taking money right out of your pocket. If you could fit all of your stuff in your home like a normal human being, you wouldn’t waste any fuel at all! By renting a storage unit, you are increasing your expenses by more than just the unit rental fee.

 

5) You are wasting your precious time

I saved this reason for last, but it is (in my opinion) the most important reason to avoid renting out a storage unit. Do you realize how much time is wasted at these places? You first need to load up your stuff, then drive it over there, and then unload it. Then, at times you need to drive back to the unit to try to find something that you decided you actually need, and then good luck finding it amongst your boxes!

Each moment of our lives is valuable because once those minutes and hours are gone, there is no getting them back! Which would you prefer doing? Rummaging through boxes in a cold, damp, garage or hiking through the mountains, enjoying the beautiful scenery that will be etched in your mind for life? I could make a list of 1,000,000 things that I would like to do with my time, and sifting through a storage unit would still not make the list.

Before you go out and waste your money, fuel, and time on a storage unit, be sure to ask yourself if you really need it. Perhaps instead, it’s time to sell some of your stuff.

How about you all? Have you ever spent your money on a storage unit?

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/jeepersmedia/14950689245/in/

Which Job Hunting Expenses Are Tax Deductible?

The following is a post by MPFJ staff writer, Kevin Mercadante, who is a freelance professional personal finance blogger for hire, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry.

Job hunting expenses are one of those tax deductions that are often forgotten, even at tax time. The problem is often either that the expenses are not particularly high, or that they’re not high enough to reach and exceed the IRS threshold beyond which they become tax-deductible. That’s why it’s good to review the tax deductibility of job hunting expenses from time to time.

Job hunting expenses can only be deducted if you itemize expenses on your income tax return. They are reported on Form 1040, Schedule A as a miscellaneous deduction (yes, you must itemize to deduct most job hunting expenses). You can deduct them even for jobs you don’t actually land.

If you have particularly large job hunting expenses, such as those related to an out-of-state job search, they could be significant and rise to the level of an important tax deduction.

Which job hunting expenses are tax-deductible?

Administrative Job Hunting Expenses

These are the more typical job hunting expenses, and can include:

• Third party resume preparation
• Printing and postage
• Paid phone calls
• Career counseling costs

As a rule, you will only be able to deduct expenses that are paid directly to a third-party provider. Unfortunately, this means that you will also be unable to deduct expenses for the pro-rata cost of making phone calls on your cell phone plan.

As is always the case with income tax deductions, make sure that you keep copies of invoices and payments for any expenses you incur. You can only deduct what you can prove, and that will require a paper trail.

Third Party Fees

Third-party fees are also deductible under job hunting expenses, although it is pretty rare for an employee to pay these. They would include job placement fees paid to recruiting firms, however these are customarily paid by employers, and not by employees. Though for the record, for my first job taken out of college, I did get stuck paying half of a placement fee due to the fact that I graduated into the middle of a wicked recession. So it is possible under certain circumstances you may end up paying for it.

There are also instances in which you as the employee will pay the placement fee, however it will be reimbursed by the employer if you remain employed with them for a certain minimum amount of time. If the employer does reimburse you, the fee will not be deductible by you. And if you do deduct payment of the fee one year, any reimbursement coming in subsequent years will need to be reported as income.

Travel and Transportation Expenses Related to the Job Search

This is where you are most likely to see the most significant – and deductible – job hunting expenses. You can deduct expenses related to the cost of travel, whether you are doing so locally or for out of town interviews.

Deductible expenses include:

• Travel expenses, like air fare
• Car rental fees
• Auto mileage (56 cents per mile for 2014)
• Baggage fees
• Hotel and lodging costs
• Connecting and local transportation (trains, subways, buses, cabs, etc)

When deducting these expenses, you must be sure that they are incurred primarily for job hunting purposes. If you travel to Orlando to go to a job interview, and then end up spending the rest of the week at Disney World, it is entirely possible that the IRS will overturn your deduction on audit based on the fact that the trip was primarily taken for pleasure and not for job hunting purposes.

 

Relocation Costs

Relocation costs can be the most significant income tax deduction that you can get as a result of a job search. In order to deduct moving expenses on your tax return you must meet three tests:

Your move is closely related to the start of work. Per the IRS, the move must be “incurred within 1 year from the date you first reported to work at the new location.”

Time. If you are an employee, you must work full time for at least 39 weeks during the first 12 months after moving to the new location. The requirement for self-employed persons is 78 weeks.

Distance. There is a 50 mile rule in order for you to be able to deduct relocation costs. The new location must be at least 50 miles farther from your former home than your old main job location was from your former home. For example, if you lived 20 miles from your old job, you will have to move at least 70 miles from your current home in order for the cost of the move to be deductible.

The advantage with moving costs is that you don’t have to itemize in order to deduct them, nor are they subject to the 2% of AGI reduction (that we’ll discuss below). You can actually deduct them on Page 1 of Form 1040, which will also lower your AGI for other deduction purposes.

Relocation costs can be a lot more complicated than time permits us to present here. Please see IRS Publication 521 for a more in depth description of what relocation expenses are allowed, as well as consideration of the many special provisions within the allowance.

Your Job Hunting Expenses Are Subject to Reduction!

According to IRS regulations, you can only deduct job hunting expenses to the degree that they exceed 2% of your adjusted gross income (AGI). If your AGI was $100,000 for the tax year, you will only be able to deduct job hunting expenses to the degree that they exceed $2,000, or 2% of your AGI.

The good news is that there other expenses that count toward the 2% threshold, including tax preparation fees, investment related expenses, and un-reimbursed employee business expenses. You may find yourself exceeding the threshold very easily if you have other such expenses, or if you are unemployed for much of the tax year, so the threshold will be an extremely low number.

Per the IRS:

You cannot deduct these expenses if:

• You are looking for a job in a new occupation (more on this in the next section),
• There was a substantial break between the ending of your last job and your looking for a new one, or
• You are looking for a job for the first time

Sources: IRS Publication 529, and Job Search Expenses Can be Tax Deductible

And that isn’t the only limit either…

 

You Can Only Deduct Job Hunting Expenses Related to a Job in the Same Career Field You’re Already In

If the 2% of AGI limit doesn’t seem fair, it gets even worse. You cannot deduct job hunting expenses if they are for the purpose of moving into a different career. The deduction applies only if you are moving to a job within the same career field.

This doesn’t make a whole life sense, considering you are more likely to occur large job hunting expenses if you are looking to move into a different field. After all, that would likely involve sending out more resumes, going on more interviews, and a greater likelihood of extending the job search to other states.

But perhaps that’s the reason why this restriction exists – the government is looking to minimize the loss of tax revenues related to the more costly job hunt that would be involved if you are moving into an entirely different career.

It gets worse still. If you are a recent graduate searching for your first job, the expenses you incur will not be considered deductible because – technically speaking – you are moving into a new career.

Despite the limitations, job hunting expenses may be worth paying close attention to in the event that you have a very low income in the year that you’re claiming them, or they are mostly comprised of moving expenses, or if the total amount is substantial.

How about you all? Have you ever been able to deduct job hunting expenses in the past?

Share your experiences by commenting below! 

***PHOTO: https://www.flickr.com/photos/ftmeade/14675342103/sizes/n/

Lazy Guide to Building Credit

The following post is by Amanda Green. Enjoy! 

It is easy to end up with poor credit. Far easier than people realize. The good news is, even if you are lazy you can still build up and repair your credit.

Don’t know where to start? That’s okay. I’m here to give you a few good tips on reviving your poor credit score and scoring those awesome credit cards no matter how lazy you are.

1) Address Outstanding Debt

I think we all know I’m not talking about wonderful debt, because there is no such thing. Hey, we’re all a little lazy when it comes to this, especially if we have a lot of outstanding debt. The truth is, if you have a lot of outstanding debt (particularly from medical bills or credit cards) you have to address those debts to have any hope of improving your credit score.

If you don’t feel like dealing with this yourself (and it can be overwhelming), don’t worry. You can hire out a company who specializes in reducing debt and credit repair services. It takes the trouble and puts it in someone else’s hands. It’s the perfect solution if you know you can’t (or won’t) deal with it on your own.

2) Get Secured Credit Cards

Whoever came up with this idea was brilliant. A secured credit card is a card for people who have poor credit and are looking to build their score back up again. The idea is pretty simple.

• You apply for the secured card and establish a credit limit.
• You put down the deposit based on the credit limit (usually 50-100% of the limit).
• You use the card with the deposited balance.
• You reload the card just like any other pre-paid card.

The bank that holds the account reports to balance to the credit bureaus to establish a stable credit card that is controlled. There can be a fee associated with these cards, so find out for sure and read the fine print.

3) Join a Credit Union

Credit unions are like banks, but they are owned by the customers. That means that the credit unions aren’t out for profits like regular banks. As a result, they are able to offer higher return on interest, and lower interest rates on their credit cards and loans. The beauty is that credit unions still report to the credit bureaus, so you can build your credit and increase your chances at getting better rates at the same time.

Once you have established yourself with the credit union, find out if you can qualify for a low interest personal loan or a home refinance. By using a personal loan through the credit union to pay off credit card debt, you are ensuring that you will have it all paid off by a certain date.

4) Budget

Sounds like a no-brainer. The truth is a lack of budget is one of the main reasons people find themselves in this mess to begin with. If you ever want to climb out of debt you have to create a budget and stick with it. Make it reasonable and effortless, and you are more likely to succeed at sticking to it.

Try to avoid using credit cards as much as possible. They will only throw you further into debt.