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Archive for August, 2006

To prosper, or not to prosper, that is the question.

August 26th, 2006 at 08:25 pm

Ok on that silly change of a phrase, I can assume some of you know what I am going to mention. For those that don't, there is a site I have read up on based on some finance blogs. It is propser.com. It is a very interesting site where you loan money directly to borrowers (or borrow directly from lenders based on your point of view) and the rates are better for both sides of the equation. The idea is to cut out the middle man (ie. the bank).

I have been extremely wary of trying this type of setup, the risk just seemed too great to me. But as I have read more about it, I'm beginning to think putting a small amount in to try increase my return from my investments might be worth doing. At least I could learn the real worth of this activity wihtout too much risk. And if I lose some money I'll learn my lesson.

Sorry, this was just some out loud musing on my part. If anyone has suggestions or wants to pass along their experience, please lets hear it.

Electric bill analysis

August 24th, 2006 at 08:09 pm

Well, this isn't really an analysis, but yesterday the electric bill came in. Now understand I live in the DC area, in a 4 bedroom house. This area is muggy, and can certainly get steamy. And this bill is for mid July to mid August, which should be the worst electric month of the year. And the bill was... $72. (Last month was about $54) I know most people here have bills over $150, often over $200 at this time of year. And I don't feel like I suffered with heat either.

As I mentioned in a prior post, I use only window ac units in bedrooms, and one downstairs. No central AC for me. When I leave for the day, if its not going to be extremely hot I will leave the AC off. If it is going to be hot, I leave the downstairs AC on. The upstairs can be cooled after I get home. I let it cool while I eat downstairs. By only cooling rooms as needed my electric bill is much less than other people with matching homes to mine. And I don't worry what I set the temperature at, I just put it at whatever I feel comfortable with.

I just thought if anyone read how I cool my house and wondered if it worked, this is my results for this year.

The good, the bad, and the ugly

August 23rd, 2006 at 07:40 pm

(I don't care if anyone has this phrase trademarked, I'm using it anyway!)

Just a quickie on some of my financial doings of late:

The Good:

Got another $5.5K in 0% BT funds for 19 months. Ok, it won't get me rich, but given I can get a 6% CD right now, that means I can make another $27 / mo. I think this puts me up close to $175/mo. free money on those things right now. The first one I did runs out next April, but this one runs out April 2008!

Last weekend's yard sales were another odd set. Mostly nothing, yet I came up with two train sets (my weakness) on the same day (I rarely find one all year). A small scale one for $3, and a big scale set for $15. Not fabulous deals, but not bad. That and a few toys for kids was it. Hey, its better than buying junk that you find out you didn't really want anyway.

The Bad:

I've gotten a few credit card offers this week, every one ranks as an "ugh". Each one offers some special thing like you can get rebates on purchases and free airline lounge availability. Of course there is a yearly fee on each card, so you have to do a lot of work to break even, and much more to make it come even close to a cash back card. Noooooooooooo thanks. Unless my job requires me to fly 20 times a year (ain't happening), these cards definitely aren't worth it to me.

Last weekend I went to the book store to use some store credits to buy a DVD set. The computer went haywire (I think) and said that the card I used had so much money on it, it paid for the set, and now had more on it then when I gave it to the cashier. I was honest and told the guy at the register that can't be right, and I would use another store credit to pay for it. He insisted that it said it was paid for and I shouldn't worry. ~shrug~ Well that was different anyway. (OK, this is good, but its sorta disconforting when the system can screw up that way. The next time might go against me.)

The Ugly:

And then I get a letter from the IRS saying I wasn't eligible for a "damaged spouse" portion of last year's IRS refund. The letter made no sense, as it only told me I wasn't eligible as I didn't withhold more taxes than I owed. Well they did take my refund (meaning I did pay more), so I don't know WTF they're talking about. I used the form exactly as they described, showing I should get about $200 back. The letter said I could appeal for up to 6 years. I dunno, but I am considering it. Maybe I really shouldn't get the money, but it would be nice if they sent along a real explanation as to why!

The above is my 2nd argument with the IRS. The first was maybe 20 years ago. They came back months after I filed and said I did not include earnings from so-&-so, so my taxes should have been $X more, and now I needed to $X more plus another % again. Turned out they were right, though I never got the paperwork from the employer, and had forgotten about it. However they couldn't be bothered to notice that meant I also under reported my withholdings. I had to write back to point out their mistake now. Finally they agreed and I sent in money, but only about 25% of what they were originally looking for. Gotta luv that superior IRS work. :P

Now that felt strange

August 21st, 2006 at 08:31 pm

I went into a store today and bought something (other than food, gas, and dental) for more than $10 for (I believe) the first time this year. Don't fret for me, it was only a new set of sheets for the bed, and with a 30% clearance, and a discount coupon as well. It still came to almost $40. I had no idea how expensive those things had become. Its not that I can't afford it, its just when you don't shop in a store for over half a year, it feels strange doing it again.

This may be a crazy idea...

August 18th, 2006 at 06:45 pm

... but its all mine. Smile

I had read on a blog where someone was maxing out their 401k, but to maximize it they were hitting the maximum contribution ($15K) by about the middle of March. Whew, that's really putting everything in right away. The idea is that you can put your money into conservative investments early in the year and guarantee an ok return. I think maxing out early only to put the money into conservative funds wastes the effort.

So I was thinking... Next year I should be able to max out my 457 plan (a 401k clone) and have a little money to spare. Should I try this - at least put the money in early to get more time for it to grow? Well I started thinking on how I could make it easier on me. And then it hit me (not too hard). I can let the government help me.

How? Here is my idea (and I have yet to find a problem with this plan). Unlike being self employed, when you work for an employer, all you need to worry about is did I get enough taxes taken out by the end of the year to not have some penalty. Nothing says (that I know of) that the money needs to be taken out evenly the whole year. So why don't I pay myself early, then pay Uncle Sugar later? I'll put into retirement at a rate I will max out the plan at about the half-way point of the year. I can change my tax form to have 2 (or maybe 3) personal deductions for the first half of the year, then 0 deductions for the second half. It wouldn't hurt me much, because I would take net more money home the first half of the year (and I'll be putting it into retirement), then in the second half I won't be putting into retirement, but instead will be catching up on my taxes for the year. In the end the tax man gets what he wants, but I get to use the money earlier. Done right, this could mean an average of 6 more months earning on $15K - depending on the market I could get an aditional $0 to maybe $1.5K in the best of years. OK, I could lose money on this technique, but more years than not it should work in my favor (more up years than down).

OK, any problem with this idea? The only one I can think of is if I were to lose my job mid-year, but if that happened, my taxes would be lower for the year anyway, so it might be a wash.

ADDED: I want to point out that after searching I find that the IRS frowns on this sort of thing. However, there is also the point that if you are not too greedy it'll probably not be an issue (at least what I read on some forums). So as someone said on a TV show once, "let's all be safe out there." My point, be careful and don't use me as any source, I'll disown any knowledge of this. YMMV

What do you do ...?

August 17th, 2006 at 08:39 pm

...when you have everything running smoothly? That is, once you have cut your wasteful expenses, maximized your earnings on savings, fine tuned other expenses, and so on. That seems to be the point I am at. I can only think of two things I can cut back on, the cell phone (I'm thinking of going to a pre-paid plan), and the car insurance (I really should comparison shop when its time to renew).

I'm not upset, but the past few weeks have been nothing special (OK, I did get a few great deals at yard sales), but I am running out of ideas for making things work better. I guess this is not such a bad thing, I'm saving money, and not having to worry about my finances.

Actually I have one idea, but it will need to wait until the end of the year. I hope to post it here in a few days.