You certainly did the right thing. I wish I didn't learn the hard way like I did. I moved out of my parents house as soon as I was legal and as a result, I suffered for many long months. I was short on cash, constantly trying to find creative ways to make a quick buck, and burnt out. I wish my parents had taught me the value of money and I wish I would have stayed home a little while longer so I could have saved my money instead of having to buy everything myself out of pocket. I would have a had a vehicle and everything that I wanted and needed a lot sooner. It's never wrong to educate your children. You're doing a wonderful job!
I think one of the most useful skills to teach a young one is a resistance to marketing. They try and get you to buy with emotion rather than reason. Rather all purchasing decisions should be made by a careful question "Will this be a good life improvement to cost ratio". Sales people, Ads, Slogans, and sales are designed to adjust this subconscious ratio, but being mindful of it will lead to a more balanced life.
I love this article! I am owned by one cat and would not have it any other way. I am absolutely guilty of spoiling him rotten, but he adds so much to my life that it does not even matter. I cannot understand how people treat pets as a thing rather than an opportunity to take care of one of God's creatures.
They really do just take over your heart, your life, and your home :)
Margaret - I totally dig the tips about car tune-ups! They are essential to maintaining a healthy and fuel efficient vehicle. Two driving suggestions I can share off hand are 1) Ease up on the gas pedal. Jack Rabbit starts and doing over 60mph on the freeway will eat up your fuel economy like nothing else. And, every 5mph above 60mph that you drive will cost you about an extra quarter PER gallon of gas! 2) Properly inflate your tires before the road trip. This can improve your fuel economy by about 3%.
I'm actually interning on the Drive Smarter Challenge campaign, we're working on providing the public with gas and cash saving info. Check out www.drivesmarterchallenge.org for more info.
I go to the IRS website and use their withholding calculator (with my latest pay stub) to see if I'm on track or not. Last year, I checked it out right after getting married and adjusted my withholding so that it was dead-on (instead of having to owe).
I did have to run the numbers several times (because I was leaving things out) and the calculator was showing one more paycheck than I actually had coming (which I could adjust), but in the end, it was great to know about how much my taxes would be and where I stood.
I strive not to get a refund (unless it is soley from a credit) but pay as little extra as possible. A tax refund is basically an interest free loan to the government. I like to put that money in an interest bearing savings account instead and budget for a payment every year come April.
It's relatively cheap, simple to use, maximizes the potential refund you get back, and (I think) it's fun to use.
I try to get the best of both worlds -- claim some exemptions on my payroll, but not the maximum I think I'm due because I like getting at least a little refund in April.
Pets often can be a lot of work but so worth it. Our 2 cats mean the world to us and pretty much run the house. :-) New pet owners though need to be warned of what life changes come with becoming a pet owner. Great article.
For your short-term cash, having separate accounts is mostly harmless. The only harm it does is to obscure the essential fact that all your money needs to work together to support all your goals.
For example, what do you do if you have a major financial emergency and need to go beyond what's in your emergency fund to keep a roof over your head and the electricity turned on? Obviously, you dip into your other short-term savings. If you've just got one savings account, that's all there is to it--all your various short-term wants need to be deferred a bit, but that's just the nature of a major financial emergency. If you've got all your money divided into little sub-accounts targeted for specific goals, though, you have to start picking and choosing among them--raiding the "vacation" account to pay the mortgage, the "new guitar" account to pay the sewer tax, the "college savings" account to cover the property taxes, and so on. That's both extra depressing and (more to the point) not an accurate reflection of what's going on: You're not really sacrificing your kids' college dreams to keep your house; you're allocating your short-term money to your short-term needs and adapting your plans to fit the current circumstances. That's why I think it's best to manage your money in one account and your plans in the form of a plan.
For long-term money, though, it makes a real difference. If you try to divide your long-term investments up along the lines of your goals--retirement money in this account, money to start a business in that account, college savings in another account--you're unable to take maximum advantage of the tax savings that certain kinds of accounts offer. That can cost you a fortune over 20 or 30 years. It's the topic of my next post.
You were right in teaching her how the "real world" really operates. Great sales people always seem to suck more out of you then you ever expected. Luckily you got the opportunity to teach you daughter a life lesson.
I got my federal refund by direct deposit and promptly spent it on dental work. Texas doesn't have state income tax, so technically I never got a state tax refund :)
When I was about 14, my church Sunday school class did a section on advertisement analysis, asking what the ads were really trying to say and sell. We talked about "The American Dream" and what society says is really important. There wasn't a lot of gospel content in the lessons, but it was an incredibly useful set of lessons for me. It really opened up my eyes to advertisements and marketing and such. These are lessons that need to be learned by everyone and at a young age. I don't know what that age is as I don't have kids, but it seems like the daughter in the story was at the right age to start learning about this.
I really think that you did. I began introducing our son to the realities of the marketplace at about that age (much to my wife's chagrin). It wasn't a popular position for a while to inject such notions into his life. Now at 18, almost 19 (where did the years go?) he is far more savvy that I was at even 25. He has learned that money is a finite resource(unless you are the US Tresury) and that salespeople are there to take some of that resource.
Taxes for me swings wildly. One year I could end up owing $5000, the next year, I could get $2000 back. It is almost impossible to predict and I do not own a business!
For 2010, I am letting the government get their free loan, hopefull, as I am Head of Household and 2, but with hold at single and 2, and I own a home, so get the interest/taxes deduction. I do make a good income, and could save a lot of it, but I am tired of writing $4K and $5K checks.
I live in Missouri and had to pay a little bit of taxes this year to them. 4 months after filing, they mailed me a letter saying that they had received my return in March, but not the money, and now I had penalties and interest. I called them. They looked it up, said they had received the check, but not YET credited it to my taxes account!
This is yet more incompetence at the highest levels.
I have one solution for this mess: The FAIR TAX. There will be no more with holdings on a federal level, NONE. I say get rid of this mess and go to a consumption based system.
I was reading a few weeks ago that 75% of the legislation that goes through our federal government is TAX related! A FAIR TAX would eliminate all this work.
Don't you love the ability to connect with other people in other places in the world by virtue of the internet? @Yasmine - I hope that even if you don't end up connecting with @danager, that you can take comfort in knowing that you are not alone in life. In times when I have felt isolated geographically, I have always found friends in similar positions online. Cheers!
My husband is steadily self-employed and uses Turbo Tax. TT includes a federal worksheet that allows you to estimate taxes for the following year. We budget accordingly and try to keep it pretty close to avoid a big refund or payment due. This allows us the freedom to save more and gain a bit of interest.
This year I'm trying something different. At the beginning of the year, I changed my payroll deductions to most closely achieve a zero-owed-zero-refunded tax balance at the end of the year. I fully expect to have to tweak my deductions in the second half of the year as the deduction calculations are not precise enough to hit exact, desired ending amounts without adjustments.
These monies are helping to ease day-to-day financial pressures of work furloughs, no raises, the dissolution of my company's public transit subsidy and higher consumer prices on almost everything. For the first time in many years I have been able to establish an emergency fund. It is still modest but gives me enormous peace of mind.
Better for her to learn that lesson now before she tries to buy friendships. Unfortunately, it's not just salesclerks that will be nice to you if they think they'll get something from you.
I don't have kids either, but I have many years working in customer service and I think you did the right thing. It's the job of the sales person to be friendly and helpful and to please the customer, not for the customer to please the sales clerk. It's funny how often these two roles get reversed.
We usually get a refund each year. I know and agree with the arguement that you need to manage your withholding so that any refund/payment is as close to zero as possible. That said, there is some psychological effect about getting that refund. It's a forced savings account(albeit with a lousy 0% rate). For some folks it's the only savings that can accumulate.
I have seen how many people do not know they are entitled to so much money... Money or offers that may be waiting in the goverment to do so many things in people´s lives.
I think it is not a question of if you are going to get taxes returned, I think it is a question of you spending half an hour this year, and every year actually, doing the research you need in order to know if you had someone stealing your identity, someone who gave you money in their will and you do not know, research about getting your house for a minimun price (such as the cases in which the people who did not pay their taxes, or their morgages), research about how is your credit report, research about how to do the things you need to accomplish your dream...
People worry about money, and they forget what they need the money for, meaning, you focus so much in ONE method of getting there, you forget there are so many other ways... This is why, many people do the research for you, and make money out of it... It could even present itself as an opportunity to get what you need, and in the way, collect the information others need, and either sell it, or share it...
Our minds are our own limitation, and we need to get the eyes on the ball again, not just on the field...
You certainly did the right thing. I wish I didn't learn the hard way like I did. I moved out of my parents house as soon as I was legal and as a result, I suffered for many long months. I was short on cash, constantly trying to find creative ways to make a quick buck, and burnt out. I wish my parents had taught me the value of money and I wish I would have stayed home a little while longer so I could have saved my money instead of having to buy everything myself out of pocket. I would have a had a vehicle and everything that I wanted and needed a lot sooner. It's never wrong to educate your children. You're doing a wonderful job!
I'm planning to get a refund on Federal Taxes, and probably on state, although I cut that closer. Can't seem to get it just right...
I think one of the most useful skills to teach a young one is a resistance to marketing. They try and get you to buy with emotion rather than reason. Rather all purchasing decisions should be made by a careful question "Will this be a good life improvement to cost ratio". Sales people, Ads, Slogans, and sales are designed to adjust this subconscious ratio, but being mindful of it will lead to a more balanced life.
I love this article! I am owned by one cat and would not have it any other way. I am absolutely guilty of spoiling him rotten, but he adds so much to my life that it does not even matter. I cannot understand how people treat pets as a thing rather than an opportunity to take care of one of God's creatures.
They really do just take over your heart, your life, and your home :)
"I highly recommend pet ownership. It's a great way to forget yourself and celebrate life." - I love that =)
Margaret - I totally dig the tips about car tune-ups! They are essential to maintaining a healthy and fuel efficient vehicle. Two driving suggestions I can share off hand are 1) Ease up on the gas pedal. Jack Rabbit starts and doing over 60mph on the freeway will eat up your fuel economy like nothing else. And, every 5mph above 60mph that you drive will cost you about an extra quarter PER gallon of gas! 2) Properly inflate your tires before the road trip. This can improve your fuel economy by about 3%.
I'm actually interning on the Drive Smarter Challenge campaign, we're working on providing the public with gas and cash saving info. Check out www.drivesmarterchallenge.org for more info.
Safe and Happy travels everyone!
I go to the IRS website and use their withholding calculator (with my latest pay stub) to see if I'm on track or not. Last year, I checked it out right after getting married and adjusted my withholding so that it was dead-on (instead of having to owe).
http://www.irs.gov/individuals/article/0,,id=96196,00.html
I did have to run the numbers several times (because I was leaving things out) and the calculator was showing one more paycheck than I actually had coming (which I could adjust), but in the end, it was great to know about how much my taxes would be and where I stood.
I filed in early March and got my refund within a week of filing before the state ran out of money. File early and file online.
I strive not to get a refund (unless it is soley from a credit) but pay as little extra as possible. A tax refund is basically an interest free loan to the government. I like to put that money in an interest bearing savings account instead and budget for a payment every year come April.
It's relatively cheap, simple to use, maximizes the potential refund you get back, and (I think) it's fun to use.
I try to get the best of both worlds -- claim some exemptions on my payroll, but not the maximum I think I'm due because I like getting at least a little refund in April.
Pets often can be a lot of work but so worth it. Our 2 cats mean the world to us and pretty much run the house. :-) New pet owners though need to be warned of what life changes come with becoming a pet owner. Great article.
For your short-term cash, having separate accounts is mostly harmless. The only harm it does is to obscure the essential fact that all your money needs to work together to support all your goals.
For example, what do you do if you have a major financial emergency and need to go beyond what's in your emergency fund to keep a roof over your head and the electricity turned on? Obviously, you dip into your other short-term savings. If you've just got one savings account, that's all there is to it--all your various short-term wants need to be deferred a bit, but that's just the nature of a major financial emergency. If you've got all your money divided into little sub-accounts targeted for specific goals, though, you have to start picking and choosing among them--raiding the "vacation" account to pay the mortgage, the "new guitar" account to pay the sewer tax, the "college savings" account to cover the property taxes, and so on. That's both extra depressing and (more to the point) not an accurate reflection of what's going on: You're not really sacrificing your kids' college dreams to keep your house; you're allocating your short-term money to your short-term needs and adapting your plans to fit the current circumstances. That's why I think it's best to manage your money in one account and your plans in the form of a plan.
For long-term money, though, it makes a real difference. If you try to divide your long-term investments up along the lines of your goals--retirement money in this account, money to start a business in that account, college savings in another account--you're unable to take maximum advantage of the tax savings that certain kinds of accounts offer. That can cost you a fortune over 20 or 30 years. It's the topic of my next post.
You were right in teaching her how the "real world" really operates. Great sales people always seem to suck more out of you then you ever expected. Luckily you got the opportunity to teach you daughter a life lesson.
I got my federal refund by direct deposit and promptly spent it on dental work. Texas doesn't have state income tax, so technically I never got a state tax refund :)
We aren't getting a refund this year, we adjusted our tax form so we paid a little bit and got more money to use during the year.
When I was about 14, my church Sunday school class did a section on advertisement analysis, asking what the ads were really trying to say and sell. We talked about "The American Dream" and what society says is really important. There wasn't a lot of gospel content in the lessons, but it was an incredibly useful set of lessons for me. It really opened up my eyes to advertisements and marketing and such. These are lessons that need to be learned by everyone and at a young age. I don't know what that age is as I don't have kids, but it seems like the daughter in the story was at the right age to start learning about this.
I really think that you did. I began introducing our son to the realities of the marketplace at about that age (much to my wife's chagrin). It wasn't a popular position for a while to inject such notions into his life. Now at 18, almost 19 (where did the years go?) he is far more savvy that I was at even 25. He has learned that money is a finite resource(unless you are the US Tresury) and that salespeople are there to take some of that resource.
Taxes for me swings wildly. One year I could end up owing $5000, the next year, I could get $2000 back. It is almost impossible to predict and I do not own a business!
For 2010, I am letting the government get their free loan, hopefull, as I am Head of Household and 2, but with hold at single and 2, and I own a home, so get the interest/taxes deduction. I do make a good income, and could save a lot of it, but I am tired of writing $4K and $5K checks.
I live in Missouri and had to pay a little bit of taxes this year to them. 4 months after filing, they mailed me a letter saying that they had received my return in March, but not the money, and now I had penalties and interest. I called them. They looked it up, said they had received the check, but not YET credited it to my taxes account!
This is yet more incompetence at the highest levels.
I have one solution for this mess: The FAIR TAX. There will be no more with holdings on a federal level, NONE. I say get rid of this mess and go to a consumption based system.
I was reading a few weeks ago that 75% of the legislation that goes through our federal government is TAX related! A FAIR TAX would eliminate all this work.
Don't you love the ability to connect with other people in other places in the world by virtue of the internet? @Yasmine - I hope that even if you don't end up connecting with @danager, that you can take comfort in knowing that you are not alone in life. In times when I have felt isolated geographically, I have always found friends in similar positions online. Cheers!
My husband is steadily self-employed and uses Turbo Tax. TT includes a federal worksheet that allows you to estimate taxes for the following year. We budget accordingly and try to keep it pretty close to avoid a big refund or payment due. This allows us the freedom to save more and gain a bit of interest.
This year I'm trying something different. At the beginning of the year, I changed my payroll deductions to most closely achieve a zero-owed-zero-refunded tax balance at the end of the year. I fully expect to have to tweak my deductions in the second half of the year as the deduction calculations are not precise enough to hit exact, desired ending amounts without adjustments.
These monies are helping to ease day-to-day financial pressures of work furloughs, no raises, the dissolution of my company's public transit subsidy and higher consumer prices on almost everything. For the first time in many years I have been able to establish an emergency fund. It is still modest but gives me enormous peace of mind.
Better for her to learn that lesson now before she tries to buy friendships. Unfortunately, it's not just salesclerks that will be nice to you if they think they'll get something from you.
I don't have kids either, but I have many years working in customer service and I think you did the right thing. It's the job of the sales person to be friendly and helpful and to please the customer, not for the customer to please the sales clerk. It's funny how often these two roles get reversed.
We usually get a refund each year. I know and agree with the arguement that you need to manage your withholding so that any refund/payment is as close to zero as possible. That said, there is some psychological effect about getting that refund. It's a forced savings account(albeit with a lousy 0% rate). For some folks it's the only savings that can accumulate.
I have seen how many people do not know they are entitled to so much money... Money or offers that may be waiting in the goverment to do so many things in people´s lives.
I think it is not a question of if you are going to get taxes returned, I think it is a question of you spending half an hour this year, and every year actually, doing the research you need in order to know if you had someone stealing your identity, someone who gave you money in their will and you do not know, research about getting your house for a minimun price (such as the cases in which the people who did not pay their taxes, or their morgages), research about how is your credit report, research about how to do the things you need to accomplish your dream...
People worry about money, and they forget what they need the money for, meaning, you focus so much in ONE method of getting there, you forget there are so many other ways... This is why, many people do the research for you, and make money out of it... It could even present itself as an opportunity to get what you need, and in the way, collect the information others need, and either sell it, or share it...
Our minds are our own limitation, and we need to get the eyes on the ball again, not just on the field...