Andy Hough

March Income – $4745.32

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Here is a breakdown of my income for March.

Online Income $46.66
Interest $3.89
Cash Back $21.14
Amazon FBA $12.43
Jobs $2503.35
Tax Refund $2057.85
Motif Bonus $100
Total $4745.32

 

March was a great month for income.  The tax refund of over $2000 was the biggest boost to income. My job income was pretty good too since I had two full paychecks. I also received a $100 referral bonus from Motif which was a nice bonus. If you want to sign up for Motif to get a $100 bonus of your own I have a referral link at the top of the left sidebar.  You read my Motif bonus post if you want some more information before you sign up.

Online income was pretty low, but at least I made a profit. It is hard to predict when I’m going to have a good or bad month for online income. There doesn’t seem to be any correlation between the effort I put into this and my other blogs and the income I receive at the end of the month. Since I haven’t been doing much on my blogs while working my tax job I am happy with any online income that still comes in.

My Amazon FBA income of $12.43 was disappointing. I sold about $2000 of stuff on Amazon in March. Most of it was sold for about what I paid or a loss though. The $12.43 profit isn’t much of a return on the time and money I invested in FBA. I spent about five hours (I’m guessing since I didn’t track this at all) on FBA so my FBA hourly wage was crappy in March. It isn’t quite as bad as it seems since I did also earn credit card cashback and/or airline miles and/or Staples rewards on my purchases. This summer I’d like to make FBA my main source of income so I’ve got to get a lot better at FBA if that is going to happen.

I usually have a referral link to Mr. Rebates in this post to get some more referrals. And this post does too! This month I also have a Top Cashback referral link since you currently can get a $10 bonus for signing up and I’ll get a $10 bonus for referring you as well. They usually only offer a $10 bonus to the member who makes the referral so this deal is obviously a better deal for you.

April income will be a lot less than March since I won’t have a $2000 tax refund. I will still have two full paychecks in April so it should still be a solid month for income.

March Expenses – $1016.70

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Here is a breakdown of my expenses for March.

Household $414.54
Entertainment $79.78
Transportation $90.53
Food $103.38
Student Loan $106.00
Travel $78.30
Phone $26.81
Health $117.36
Total $1016.70

 

My streak of below $1000 monthly expenses came to an end in March. The total was just barely above $1000 so I’m still happy with my level of spending. The $1000 level of spending doesn’t allow me much leeway in my expenses. Our trip to Las Vegas at the end of the month increased my travel and entertainment expense and put me over the $1000 target. The total cost of the Vegas trip was just a bit over $100 which was a great bargain. I actually won enough gambling to cover most of that cost. My credit card allows me to erase past travel purchases so the cost of the vacation could get even lower. I might break down the cost of the trip in a later post if I’m not too lazy this month.

Meeting the $1000 target will be tough to do this month. We have a vacation to Niagara Falls planned. Airfare and hotel will be free, but there will still be a rental car and other expenses. My student loan payment has also gone up to $183 a month. This increases my fixed expenses and doesn’t leave me with much for discretionary expenses. I’m not complaining though. I get a lot of value for the money I spend.  Even if I don’t meet the $1000 target I think I’m doing pretty well at keeping my expenses under control.

Lower Your Adjusted Gross Income

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Lowering your adjusted gross income (AGI) can save you a lot of money. The most obvious way it saves you money is by lowering your taxable income, thus lowering the amount of tax you have to pay.  Having a lower AGI also saves me money since it increases the amount of my premium tax credit making my health insurance bill less. Since my student loan is on income-based repayment a lower AGI also reduces the amount of my monthly student loan payment. For higher income earners lowering their AGI can allow them to be able to contribute to a Roth IRA. Also, many itemized deductions are tied to your AGI. For instance, medical expenses are deductible to the extent that they exceed 10% of your AGI.

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There are several ways to lower your AGI. To find different ways to reduce your AGI all you need to do is look at the Adjusted Gross Income section at the bottom of the front page of Form 1040.  It is unlikely you will qualify for all of the different ways to reduce your AGI but you most likely qualify for a few of them. For 2014 I managed to reduce my AGI from $30,000 to $20,000.  I did this by maxing out my traditional IRA, contributing $2200 to my health savings account, getting a student loan interest deduction, getting a self-employment tax deduction, and the self-employed health insurance deduction. Moving expenses, educator expenses, and the tuition and fees deduction are some of the other common ways to lower AGI.

Contributing to a 401k is another great way to lower your AGI. The 401k doesn’t show up on the Form 1040 because these contributions go straight to the 401k account and aren’t included in taxable income or reported on the 1040. Unfortunately, I don’t have access to an employer 401k plan since my employment is seasonal or temporary. I’m considering opening a solo 401k, but I’m not sure I will have enough money to contribute to make it worth opening an account.

Although I managed to reduce my AGI by almost a third last year I could have done even better. If I would have maxed out my HSA, paid more on my student loans, and opened and contributed to solo 401k it is possible I could have reduced my federal income tax to zero.  Of course, you do need some money to live on and all of these ways to lower your AGI reduce your spendable income so there is a limit to how low you can go on your AGI.

Has anyone else managed to lower their AGI by a large percentage? If you have any other suggestions for lowering AGI I would love to hear them.

Easy Money from Staples Gift Card Deal

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Until 3-21-15 Staples is offering a $20 rebate in the form of a Visa gift card when you buy $250 or more of Visa gift cards. The purchase fee for a $200 gift card is $6.95. If you buy 2 $200 gift cards you will have a profit of $6.10. That doesn’t sound like much but when  you combine it with the credit card rewards you can get for purchasing the cards it is a good deal. I know at least one of my readers has a Chase Ink card that pays 5x at Staples which would mean they would get 2000 Chase Ultimate Rewards points in addition to the $6.10. I only have a 2% cash back card so my profit will be $14.10. That is a pretty good deal for just a few minutes of my time to buy the cards and submit the rebate.  In addition to making a little money this is also helpful if you need to meet a minimum spend requirement to get a credit card bonus. There is a limit of one rebate per household for this deal.

Next week, 3-22-15 to 3-28-15, Staples is offering a $20 rebate in the form of a Staples gift card when you buy $250 or more of Mastercard gift cards. The math for this deal works the same.  The big difference in this deal is that the rebate is for a Staples gift card which can only be used at Staples rather than for a Visa gift card which can be used anywhere that accepts Visa. This isn’t a big deal to me since I buy stuff at Staples on a regular basis.  I’m in Staples at least once a month to get free stuff from recycling ink and they frequently have free after rebate items so using the Staples gift card will not be a problem.

February FIRE Numbers – 33.20 Months of Expenses Saved

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My February FIRE (financial independence retire early) numbers were down slightly from the month before. This was disappointing since this is the time of year I am supposed to make the best progress on my numbers. Part of the reason for the poor performance was that I didn’t get some money moved from checking to savings. That money will get moved this month which will make this month look better.

My safe withdrawal rate declined slightly from 35.89% in January to 36.13% in February. Either way it is a long way to my goal of 4%.

I have 33.20 months of expenses saved which is slightly less than the 33.43 months of expenses I had saved in January. My goal is to have 300 months of expenses saved.

March should be a much better month financially and I expect to see significant improvement in both of these numbers.