Saving Money in Tough Times

by

The following is a guest post from my wife, Carrie, who is launching her own blog titled Online Advice Columns. Her blog is also part of my niche site experiment and I’ll update you later on how that is progressing. To help promote her blog you can get an additional entry to my book and $5 Amazon gift card giveaway by leaving a comment on the latest post at Online Advice Columns. It would also be nice if you leave a comment here but it won’t count as an entry to the book giveaway.

What does the year 2011 have in store for American Families? If you were to ask that question many people would say, “Tougher Times”.

As many families live paycheck to paycheck trying to figure out what bill can wait until the next time, or how they are going to feed their family on what little money they have left and how they can afford to put gas in the car.

Saving money is hard for all types of families, and with the way prices of gas, food and taxes are rising I see it becoming even tougher. So what and how can we as Americans do to help ourselves save money and provide a better life for our kids?

My husband and I are simple people. We do not live above our means, and we don’t just go out and buy things because everyone else has it.

We save money by watching what we buy, looking at store sales and cutting coupons, and not buying everything. People shop everyday for things they don’t HAVE to have. Spending hundreds and thousands of dollars on things that in a few years they will throw away or put in a garage sale.

If you watch store sales, or even go to websites of the grocery stores they offer great deals and sometimes you can even print their coupon off and save even more. Also, don’t buy name brands all the time. Off brands are sometimes just as good, and I am just as careful about brand names as my coupons, because there are some off brands that are just the same as name brands and the name brands will have a coupon so you are saving more.

Driving is becoming more and more of a huge expense than we all know it. In another year, we could be seeing gas prices as high as 5.00 per gallon! When I stop and think about that, it is awful.

This is one area where I believe we can help each other. Carpooling is one way to help save on gas. Take turns riding to work with coworkers and split the gas cost. You can do this with taking children to school as well. If you live in an area where you have to drive your children to school, find a neighbor that is going to the same school and take turns driving the kids. Another idea is plan your driving trips each week. Don’t do extra driving and stay home more.

If you stay home more you are saving money, and you are spending quality time with your family,which is something else that more and more families need to do. Almost everyone can save at least 50.00-100.00 a month if they really try and put the effort into it and stick to a plan.

Times are getting to the point that we are going to end up with more and more homeless people, kids without food and clothing, and businesses shutting down because people can’t afford to drive. We need to stop and think before we drive, go to the store, or purchase that bigger TV, and ask ourselves “Do I really need to do this?”

Tax School Update

by

Calculating Financial Figures Video
photo credit: Rentvine.com

I have officially finished tax school and will be starting work as a tax preparer in the next couple of weeks.  The first week of tax school was focused on learning some basic tax topics and I found it to mostly be a waste of time.  Especially since I wasn’t getting paid.  Other tax schools charge you to attend so I guess going for free was a good deal.  There wasn’t anything covered in the first week of school you couldn’t have learned from a Pub 17 and 1040 instruction book. Still  about half the class apparently found it too difficult and dropped out.  Of course,  I have been doing my own and other family member’s taxes for years and had several tax classes in law school so I should know at least the basics of taxes.

The second week was a little better since it involved learning the computer software and it was paid.  I’m a little uncomfortable with the products and fees.  They seem rather high to me but I guess they are in line with other tax companies.  I’d never pay that much to get my taxes done but I do know a lot of people aren’t capable (or at least don’t think they are capable) of preparing their own taxes and consider the tax preparation fees reasonable in relation to the big refund they receive.  Getting a big refund isn’t smart from a personal finance perspective but I suppose the clientele see it as a good deal.

I’m considering starting my own tax preparation business.  The  experienced preparers don’t seem to have much more, if any, tax knowledge than I do. I’ve done a little research and it doesn’t look like it would be too difficult to start.  I’ve already got a PTIN, I’d just need to get an EFIN and the proper tax software.  The hard part would be getting customers.  Since I need to concentrate on studying for the bar the next couple of months I might wait until next year before starting my own business.  I’ll make up my mind in the next couple of weeks.

December Expenses – $1443.16

by

Here is a breakdown of my expenses for December.

Household

$755.86

Entertainment

$127.53

Transportation

 $243.23

Food

$51.69
Medical/Dental

$57.44

Utilities

$102.41
Debt $95

Total

$1443.16

My expenses for December were up a little but that mainly was because of Christmas.  My food total only includes meals I eat out by myself, that is why it is low.  Transportation was up a little because I paid my personal property tax and drove more.  I need to buy tires this month so my transportation expense will probably be high again.  My household expenses should be down significantly and everything else should be about the same.  January expenses should not be much more than my $1000 goal.

November Investment Income – $95.71

by

I’m really behind on getting my posts out. This should have been posted in early December but I’m posting it now. I’ll try to get posts up quicker and more often this month.

My November investment income declined slightly to $95.71 from $96.04 the month before. Until I am able to make further contributions to my investment portfolio any gains or losses will be due to market fluctuations. I’m hoping I’ll be able to add some money in the next few months.

This is not my actual investment income. To get this figure I first add up my retirement savings, emergency fund, and any other money I consider permanent savings. What the total of my savings would earn at 6% interest for a month is my monthly investment income. My goal is to get this amount to $1000 a month. If I have $1000 in monthly passive investment income I will be able to retire early. You can see what my actual investment income for the month was by looking at my monthly income report and adding the interest and dividend amounts.

2011 Goals

by

I once again didn’t meet my goals in December. Part of the reason is because I was busy at my job and doing mystery shops so I don’t feel too bad about not getting them done. I’m not going to set any goals for January since I will be busy with my job and studying for the bar. I suppose you could call passing the bar a goal but I’m somewhat ambivalent about it.

I’m not setting any goals for 2011 at this time either. A couple of things I would like to accomplish this year are losing weight and writing a book. Until I come up with a specific plan for achieving those though they will remain wishes rather than goals. Another wish is that both my wife and I will make enough self-employment income to support ourselves, pay off debts, and build up our savings. These wishes are achievable and I will make them goals later this year.