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Giving: Do You Give Too Little?

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When I calculate how much I give to charities and donations, I feel downright miserly. And maybe I am.

Meg of World of Wealth is a blogger whom I have read for a long time. Though I don’t agree with all of her positions, she seems to be very smart and is certainly well-written, and I think she always adds an interesting perspective to the mix. She left this comment on my Personal Finance Confessions post:

I don’t want to be judgemental, but for somebody who is saving and earning as much as you, I’m a little bit shocked that you say you are trying to “work up” to giving $1000 a year. There’s no working about it – you can easily afford to give but choose not to.

My first reaction was to feel defensive (I donate my time! I help out people I know! I don’t have a trust fund!).

But after a few seconds I decided to reflect on that comment, because, Meg is right. I can afford to give $1,000 a year (or the equivalent of 10% of my income for 2010 edit: sorry, my math was completely off! $1,000 is around 4-5% of my net income for 2010, I was freelancing/unemployed for part of the year), but I don’t.

If I believe personal finance is about choices (which I do), then the reason why I don’t give is because I choose not to. For right or wrong, in accordance to or apart from my belief that I am a reasonably compassionate person, I have decided that other goals and items are a higher priority right now.

I choose to max out my 401K than donate that money.
I choose to buy nice clothes from Banana Republic than donate that money.
I choose to save for Galapagos than donate that money.
I choose to eat really expensive wild Atlantic salmon than donate that money.

These are choices that I’ve made, and I don’t think I like what that says about me.

Let me tell you, there’s nothing like a little blogosphere-induced self-reflection to make one feel mightily uncomfortable. (But that’s why I love it, you guys make me think).

What percentage of your income (gross or net) do you give to charities each year? What helped you to make that commitment? Can you reconcile the lack of monetary giving with the belief that you are a good person?

You Tell Me: How Can I Do Better at Negotiating A Lower Credit Card APR

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There’s no better way to get better at negotiating than… negotiating, right?  Today I called up my credit card company to ask for a lower APR. My current rate is 19%, which is extremely high. Now, I have very good credit, I pay off my balance in full every month, and I have been a customer in good standing for the past 3 years.

Here’s how the conversation went, and please, tell me what I could have done better and how I can improve next time.

With representative

I said to the first representative, “I’d like to get a lower APR, please. My current rate is really high and I’ve been a great customer la de da… “  He told me that my rate at 19% is the lowest rate the company offers and there’s nothing he can do. I remained calm and said that since I am such a good customer, I really want to work something out. I asked him to transfer me to his account manager / supervisor.

With the account manager

The account manager also said that the rate I have is the lowest rate he can offer me. I reiterated everything I’ve said before: customer in good standing, I enjoy being with this company, I have gotten offers for lower APRs from other companies, I just want a rate that is more competitive.

He reminded me that since I pay my bill in full every month, my APR doesn’t matter (which is true. And which I knew.) But it’s the principle of the matter. I said that I understand, but the APR is still too high for my liking.

Finally he said that he can offer me a promotional rate of 14% for 6 months, but there is nothing else he can offer me. So I took that rate and felt like a chump.

I KNOW he has lower rates. But even though this exercise wasn’t the success I had hoped for, I learned a few very important things: I have a tendency to ask for permission at the end of asking – as in, “I’d like a lower APR, if that’s possible.” Or, “I’d like a lower APR, if that’s okay.” Not. Good.

Readers, please tell me how I can negotiate a lower credit card APR next time.

7 Personal Finance Confessions: I Know I Should, But I Don’t

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1. Check my credit report once every four months

I think the last time I checked my report was a year ago. And I only checked Experian. Oops.

2. Return library books on time

For some reason, I am terrible at returning books. I borrow mostly nonfiction new releases (the ones that have the most expensive late fees), read them, and then forget about the due date until a week later. With all the fines I’ve paid to the library through the years, I’d be half way to a Kindle.

3. Donate more of my income

This is a work in progress. Right now I donate $250 a year to Central Asia Institute (run by the author of Three Cups of Tea) and another hundred or so to my college. Over time I’d like to work that up to $1,000 a year for CAI – when $1 provides a month of schooling for a girl, it really gives you perspective.

4. Pay bills ahead of time

Even when I have the money in the bank, paying bills is not an activity I enjoy. I almost never pay my rent early, even though it doesn’t matter if I send out the check on the 28th or the 29th instead of the 1st.

5. Send my invoices every two weeks

You’d think I’d be invoicing every chance I get, since if I don’t invoice, my freelance assignments won’t be paid. But I’ve gone for a few months before I finally sent in a really, big, invoice. I’ve also forgotten to invoice an assignment for 4 months.

6. Negotiate

This is an area in which I am actively trying to improve. In fact, I will be devoting significant financial investment and time in negotiation coaching, online resources, and of course, good old-fashioned practice. At a previous job, another lady who started the same time as I did made $5,000 more simply because she negotiated, and negotiated well. From that moment on, I vowed to advocate for myself and for what I’m worth, and I try to remember that conviction even during the most stressful of times.

Did you know that I’ve checked my car insurance rate maybe once in the past three years?! I’m almost embarrassed to admit that. But yesterday I spent just 2 hours getting all my policy information together, and made 3 calls to competing car insurers. My quotes came in $50-$250 cheaper, per year, than my current premiums. Not bad for 2 hours of work. (True, that’s not much “negotiating” in there, per se, but I’m learning to ask, and these Quick Wins will help me press forward with negotiating in other areas of life).

7. Stop comparing myself to other people

This is not exclusive to personal finance, but it’s probably the greatest barrier to my own happiness. It’s something I’ve struggled with in the past and continue to struggle with. After all, to compare is be human, and we are our own harshest, most unrelenting critics. It’s that balance I am searching for – how to be content without being complacent, and how to look forward to the future but still enjoy the successes of today, and learn from – but not dwell on – the failures of days past.

If you don’t mind sharing your confessions, I’d love to hear.

Power of Numbers: Quantify Your Way to a More Effective Resume

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It’s always important to keep a current and effective resume, even more so in challenging times such as these. (By the way, unemployment hit a new record in California – 12.5% for the not-so-golden state). A few weeks ago a friend asked me to help update her resume for a job fair. There are a lot of helpful books on resumes out there, so I won’t rehash all of the suggestions, but working with her resume helped me refresh my resume-writing skills. It has reminded me that 90% of the resumes I’ve seen (mine included) can be improved with more numbers and statistics.

Which of these do you think sound more impressive?

A. Awarded Commendation of Excellence
or
B. Awarded Commendation of Excellence, an annual prize given to the top 5% of employees in the company

A. Exceeded sales goals and improved company’s revenue
or
B. Exceeded sales goals by 25%, generating an additional $200,000 in revenue

A. Complied customer database to increase follow-up dental visits
or
B. Complied database of 3,000 client records, which helped increase follow-up visits by 15%

Numbers automatically jump out in a sea of words. Quantify your achievements whenever you can.

Here are the three types of numbers to include:

1. Figures: This is the quantity of number of assignments you have done, people you worked with, length of assignment, etc. For example, an editor may have managed a team of 3 freelancers, a project manager might oversee a territory with 12 locations, a public relations executive may be responsible for 5 accounts. These types of numbers give context and are useful, but I’d say the truly big hitters are the Dollars and the Percentages.

2. Dollars: This is how much your work helped the company increase revenue or cut expenses (both actions that benefit the bottom-line). Your work is valuable, and adding dollar signs help others understand exactly how much your work benefited your employer. This is the answer to the so what? question.

Example: Ann implemented a new IT system. Great, so what? The scenario changes when we find out that Ann implemented a new IT system that saved her client $100,000 in 12 months. That’s what. Or, Ben retained the client for an extra 6 months because Ben expanded the scope of the project. So what? How about the expansion of the project added an additional $30,000 in net income for the company?

3. Percentages: This is a way you can quantify your performance compared to your performance objectives or your peers. It’s also another way to relate to the amount of revenue increase or expense decrease, especially if the dollar amount might seem small.

Example: Jill received an Exceed Expectations rating on her performance review or Jill received a review in the top 10% of her group? The first one tells me nothing about how good Jill actually is compared to everyone else; the second one does. Or, let’s say John saved his department $1,000, which doesn’t sound like a lot of money. But what if the department’s previous expense was $3,000? Then John has actually decreased expenses by 33% – a very big deal!

Business Insurance Experts Premierline Direct

When It Comes to Housing, What Does Gen Y Want?

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Big house? Big garage? Big yard? According to two surveys reported in the Wall Street Journal, the answer is a Big No. Apparently, Generation Y values convenience and culture over size. No McMansions for us, at least for now.

Check out my new LendingTree Blog article here:

What Generation Y Wants for Their Homes

Banana Republic Shopping Spree: My 3 Items for $100

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Just two days after I wrote about how I want to want less, I end up with a big Banana Republic haul. (I did just drop off a big bag of old clothes and shoes at the local Goodwill, so I have followed the 1-in, 1-out rule… technically).

Most BR sales run out of the small and petite sizes first. Fortunately, this sale seemed to have bucked that trend. Most of the XXSP, XSP, 0′s and 00′s are still available. So if you are a petite lady like I am, you might see something you like.

To get the most bang for your buck:

  • Use Ebates to get 6% cash back from Banana Republic. If you are new to Ebates, please consider signing up using my referral code, I’d appreciate it.
  • Use the code BRWINTER30 for an additional 30% off until January 23.
  • Remember, there’s free ground shipping for orders over $50.

Here are the 3 items I picked up for a total of just about $100 including tax. Add in the 6% cash back, I’ve “only” spent $94 for three solid quality, workplace appropriate pieces. How’s that for rationalizing? icon wink Banana Republic Shopping Spree: My 3 Items for $100

Petite ruffle pencil skirt

($29.99 sale, $20.99 with 30% off)

I have two Banana Republic pencil skirts (one in black and one in gray), and they are both workhorses in my professional wardrobe. I think this piece will be too – I like the zipper and ruffle detailing, it’s a stylish twist on the usual pencil skirt silhouette, but not too edgy for a day at the office. Last I checked, sizes 00P, 0P, and 2P are still available. I think there was a 10P as well.

BR ruffle zip skirt 225x300 Banana Republic Shopping Spree: My 3 Items for $100

via bananarepublic.com

Petite Priscilla sweater jacket

(sale $49.99, $34.99 with 30% off)

One reviewer said this sweater reminded her of Chanel. I don’t know if I’d go that far, but I think this is a good piece for the price. Sweaters with structure = comfortable wear + polished appearance. This sweater is 100% merino wool with ribbon trim. Sizes XXSP, XSP, and SP are available.

BR Priscilla sweater jacket 225x300 Banana Republic Shopping Spree: My 3 Items for $100

via bananarepublic.com

Petite Martin fit winter wool trouser

(sale $49.99, $34.99 after 30% off)

My favorite pair of work pants is a pair of Martin fit pants that I purchased back in 2006. It has held up remarkably well through almost 5 years of wear, two run-ins with guacamole, and a few loose hems. I bought my first Martin fit for the full $98 price, but I think I’ve certainly gotten my money’s worth. I hope this pair will serve me just as well. Plus, it’s fully lined (as wool pants always should be).

BR Martin winter wool trouser 225x300 Banana Republic Shopping Spree: My 3 Items for $100

via bananarepublic.com

So… tell me, did I make you want to shop? Hmm? icon biggrin Banana Republic Shopping Spree: My 3 Items for $100

A Beginner’s Stab at Minimalism

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***By “stab” I mean “attempt to streamline and curate my possessions”, not “attack minimalism with a fork.”

My complicated relationship with minimalism

Minimalism has been big topic in the blogosphere for the past year or so, coexisting nicely with other Generation-Y phrases such as “lifestyle design,” “location independence,” and “my life rocks and if you buy my ebook your life will too!” (okay, I made up the last one. That was a wee bit tongue-in-cheek! icon wink A Beginners Stab at Minimalism ). There are many people I admire in the minimalism blogger space, such as Miss Minimalist, and Everyday Minimalist (aka FB!). Still, in certain circles the formula seem to be minimalism = empty rooms + lots of Apple toys.

Now, having said all of that, I might have to take a big swig of the humble juice, because I’ve realized that gosh, stuff takes up time and energy and space, and many times it’s stuff that I don’t really like or use. Yes, this is something I have realized in the past, and although I’ve been slowly decluttering, for some reason I seem to add just as much as I’ve cleared out.

Maybe, instead of looking at minimalism with a skeptical eye, I should see what I can learn from these minimalists who have whittled down their things and have more time and money to do thing. So humble juice ingested, I present to you:

My 8 Steps to Semi-Minimalism

1. No more buying clothes without donating or selling an existing piece. I am using the 1-to-1 rule: one piece in, one piece out.
2. I am allowed to keep 20 copies of paper magazines (what can I say, I love flipping through magazines), but they must stay in their magazine holder when they are not being read.
3. No more buying kitchen appliances, cookware, or dishware. We have everything we need, and some we don’t (and never use).
4. No more buying accessories (I will make allowances for 3-4 pairs of stylish and comfortable shoes this year).
5. I will shred all the papers that I don’t need anymore, and file the rest away.
6. No more buying skincare products or makeup unless I run out of an item that I’ve used up.
7. No buying home decor items – we’d only have to lug whatever we buy in a few years anyway.
8. Maintain a collection of 30 books. Everything else I can borrow from the library.

I don’t want to set up “The Year of No Spending” or something of that sort. I also know that I don’t find particular pride in having 100 or 85 or 50 items that I own (even though I read with interest the accounting of some cool people). I would like to save money, and I think I should, if I am able to resist from buying things that don’t add much value to my life. But money – gasp – isn’t the primary reason of this little experiment.

I just want to want less, be happy and appreciate what I have, and focus more of my limited time and resources on what matters instead of what doesn’t. If minimalism will help me get there, why not?

Don’t Forget Taxes for Freelance Earnings / Side Income

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Who doesn’t love extra earnings from the side hustle? My side income allows me the chance to save a little extra for retirement and make the occasional, frivolous (yet so enjoyable) purchase. Before I started making a little bit of money from self-employment income, however, I never realized that freelancers are responsible for 100% of their taxes.

When you are a W2 employee, your payroll taxes (normally 6.2%, 4.2% for 2011) are automatically taken out of your paycheck. The employer pays another 6.2% payroll tax. The difference between 1099 vs. W-2 is that as a 1099 employee (i.e. you make freelance income), you are responsible for the full employer and employee portion of the payroll tax. So while I am happy whenever I see a freelance check, I have to caution myself that my net earnings is significantly lower than the gross number.

If I don’t remember to set aside some money for taxes, I will be in for a rude surprise come spring time. For now I’ve been putting 25% from every check into a special account I’ve earmarked just for taxes (I believe I’ve named this account The Tax Man Commeth. I crack myself up!). I think this is enough, but I won’t know how much taxes I need to pay until I file. To err on the side oversaving for taxes, I know freelancers who put away 30% to 40% of their income for tax time.

Do you have a special account for freelance taxes? What percentage of your gross do you put away for taxes?

Fabulous Weddings for MUCH LESS Than $10,000? 4 Examples Of How It’s Possible

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When my boyfriend and I first started talking about weddings, we were both relieved to find out that our expectations are, well, quite low achievable. Last night, CB mentioned to me that he’d rather have a small wedding and spend most of our money on traveling. “Is that okay?” he asked. “That is (absolutely and fantastically) okay,” I replied.  I am glad that we are in sync on this, at least on the big-picture stuff. (But seriously, if he doesn’t ask me to marry him, I am going to stop talking to him about weddings!)

We will figure out a budget when we come to that point, but I know neither of us want to go into debt for the wedding. Not only that, I don’t even think we want to spend a lot of money on it. Of course, “a lot of money” is subjective in wedding parlance.

The average wedding in the U.S. costs around $20,000-$30,000,

according to the various reports and websites that I’ve came upon. See Cost of a Wedding, The Knot, WE TV’s Wedding Report for more information. If you want to have a traditional wedding with a sit-down dinner, dancing, live music, etc., at an in-demand venue in a big city, then the costs can go up even higher.

Fortunately, the web provides much inspiration for more budget-friendly events. After just a quick google, I found many blogs that talk about keeping the wedding budget under $10,000. That’s quite an achievement, especially in metropolitan areas, but what if I can keep that budget solidly in the four-figure range? I found a few bloggers who talked about how to throw lovely, memorable affairs for around $5,000 or $6,000! Granted, a few of these posts are several years old, so of course $5K in 2005 isn’t the same as $5K in 2011, but the philosophy and the guidelines still ring true.

Fabulous Weddings For Under $6,000

Friday Night Cocktail Wedding for just $5,000 – Canada, 2009

Jen, Monica, G and myself went to some local flower shops the morning of our wedding and bought what we needed. I deliberately didn’t have a set flower in mind, so that I wouldn’t end up making an emotional decision to get overpriced flowers- I opted for whatever looked good, fit the scheme, and was well priced. We brought them to my kitchen and put together our bouquets and all the center pieces. Both Jen and Monica each carried a single stunning hydrangea bloom- it was perfect. Flowers are way easier than any florist will ever let on.

Doing a $4,722 Wedding in Style (and They Had a Violinist!) – Brooklyn, 2008

Out of curiosity, I went to the Filene’s Basement‘s chaotic “Running of the Brides” sale, but none of the countless dresses tempted me to part with $250. It was a deal for some, but more than I wanted to spend. So I did the next best thing – I checked eBay. And there it was, a simple yet elegant, sleeveless, satiny, ivory sheath with only one bidder and 40 minutes left on the auction. I won the dress for $27. The seller said she’d purchased it from Saks‘ Off 5th outlet but didn’t lose weight in time for her wedding. Fortunately, her diet disaster was my happy ending.

Man Plans $6,000 Wedding for Friend, Including Night at Mandarin Oriental – Manhattan, 2005

Restaurants in Manhattan spend way too much time competing with each other. The mistake that most couples make is going for the popular places that are listed on registries like The Knot. The key is to find an accommodating restaurant, offer them the chance to attract forty new clients with their food, and negotiate something that doesn’t affect their daily business. Incremental business is always welcome at these smaller restaurants. Their average margins are in the low single digits, and cash-flow is king.

Grad Student Throws $6,000 Wedding and Pays for Bridesmaids’ Dresses – Atlanta, 2008

I was able to get my photographer and deejay for free. I found the photographer, another graduate student, on Craigslist.com. He was trying to get his name out as a wedding photographer. Our engagement and wedding pictures were free. The deejay was the boyfriend of a friend and he was also trying to get into weddings. A lot of people don’t realize that most vendors will work for free when they’re just starting out as long as they’re able to reference you. A friend of mine is a makeup artist and she did my makeup for free that day as my wedding present.

If you are a bride- or groom-to-be who is looking to keep your special day in the four-figure range, you will love the stories I linked to. Read and be inspired! Edit: Girl with a Red Balloon pulled off a fun, festive wedding for under $10,000, in less than a MONTH!

On that note, can I confess to you, my dear readers, that one of the reasons why I want to get engaged is so I can finally start blogging about a wedding budget? I am not sure if that makes me a particularly dedicated personal finance blogger or just really strange. Of course I also want to marry the man I love, make a commitment, build our lives together, etc. But the wedding budget? The allure is immense.

If CB ever reads this, I hope he is not freaked out.

How Laziness Help My Finances

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Most people think that laziness is a detriment to accumulating wealth. In certain situations, though, it can help! Laziness is how I am on track to max out my 401K in 7 months.

After getting my first paycheck of 2011, I realized two things:
1. The payroll tax deduction IS real! Yes for extra cash (small amounts they might be).
2. I forgot to adjust my 401K deduction.

When I became eligible to contribute to a 401K last July, I decided to put away $2,500 a month so I can make my $15,000 contribution goal for 2010. I was going to decrease my monthly contribution levels at the start of this year because I will have the whole year to put away $16,500 instead of 6 months.

But I forgot, and by the time I remembered, I realized that I was too lazy to adjust my deductions. It was just easier to let the contributions continue as before. At this rate, I should max out my 401K in 6.6 months. Then I will max out the Roth IRA and say bye bye to 2011 Goal #3.

This is an example of how laziness can work in my favor… or, positive automation. icon smile How Laziness Help My Finances   An employer-sponsored plan like a 401K or a 403b is THE BEST WAY to practice positive automation. It’s really easy to let yourself go the path of least resistance as long as you set up that path to be good for you.

In another bit of exciting news, I now have over $60,000 in my retirement accounts. My goal is to break the $100,000 balance before I go to graduate school in a few years. I might take out a bunch of debt for school, but by golly I am going to have a nice little nest egg going in first! Maybe with a few more instances of positive laziness, I can get there.

Have your finances ever benefited from your laziness?

Diamond Ring Spammers

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My musings on nontraditional / non-diamond engagement rings got many comments from ladies who have gorgeous rings that were meaningful, a little unusual, or budget-conscious (or all of the above!). A few gents also chimed in. Thank you so much for offering your thoughts.

I also got a few spam comments about rings, including one from an UK diamond store that I found hilarious. I guess my post is keyword rich in “diamond” and “engagement rings”! icon smile Diamond Ring Spammers

If you are searching gift for presenting on the day of engagement, then no gift would be better engagement rings so present a attractive and alluring diamond engagement to impress your beloved

Here is something interesting about engagement rings (diamond or otherwise): an engagement is a conditional gift, which means that if the engagement is broken, the ring’s ownership reverts back to the buyer – in most cases it would be to the gentleman. It doesn’t matter who was at fault for breaking up the engagement. If, however, an engagement ring is given on a nationally-recognized holiday (Christmas, Valentine’s Day), or the recipient’s birthday, then an argument can be made that the ring is a gift and not a conditional gift.

So.. forewarned is forearmed! Don’t ask on a holiday if you worry about rings / ownership / broken engagements.

Yakezie Carnival: 2011 Fortune Cookie Edition

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When I cracked open my fortune cookie tonight, I found the world’s longest fortune…

It’s a brand new year and resolutions [Frugal Zeitgeist] abound
Personal finance, health and fitness [Little House], they all can be found

2011 is the year
To kick up your finances [Bucksome Boomer], it’s loud and clear

Credit card roulette [Find Best Car Price] is a loser’s game
Paying 20% APR is kind of lame

If you come too close to your debt ceiling a la Uncle Sam [Darwin's Money]
Your good credit (and more!) will be on the lam [My Personal Finance Journey]

Walmart [Narrow Bridge] has rollback prices galore
Forever Stamps [Money Help for Christians], frozen waffles, and more

Need to save but still want to party on?
Social buying sites to the rescue: try Groupon [Millionaire Nurse]

In conclusion to this short ditty
The truth is clear (is the delivery witty?)
The role of money in our life [Squirrelers]
Should be freedom and harmony, not strife

Get started now and may you see
A year of goals [Sustainable Life] going swimmingly!

Non-Traditional Engagement Rings

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Nope, I’m not engaged! But I will be.. sometime. icon wink Non Traditional Engagement Rings When we do get engaged, we will be picking out the ring together. Like many women, I always thought of a colorless diamond solitaire as THE default / traditional engagement ring.

I’ve mentioned before that I’d rather have a great trip than an engagement ring. Then my friends started getting engaged (one in particular has an especially gorgeous ring!) and I was surrounded by diamonds. What’s wrong with having a great trip AND a ring, right? In a moment of bling-induced weakness, I told CB that, er, perhaps I DO want a diamond. I believe my exact words were: “I know I am a sucker for all the marketing, but they are so shiny…”

Say what you will about the diamond industry and its many problems (and let’s be honest, I don’t think mining for any type of gemstone is sunshine and roses), DeBeers is a branding genius and market maker and credit must be given where credit is due. Diamonds are fiery, precious, and hard enough for every day wear, and just beautiful from an aesthetic perspective.

Upon closer reflection, however, I realized that while I like and appreciate diamonds, I just don’t want a diamond enough to spend $5,000 or $6,000 it will take to get something that we like or to spend $1,000 and get a diamond of lower quality. A little voice inside me says, “$6,000 amortized over 50 years of marriage (optimistic one, aren’t I?) will be just a little more than $100 a year! So if you really want a diamond, go for it.” Then another little voice chimes in, “but do you really, really truly deeply do want a diamond?”

Once I started to move beyond the “diamond = engagement ring” paradigm, I started thinking about something a little bit more nontraditional. For example, how about something colored AND not a diamond? When I was growing up, ruby was my favorite gemstone. Red is my favorite color, and is, conveniently for me, also the color associated with love. When started googling ruby rings. I’ve found a picture of the ring I really like (see above): a large ruby surrounded by a halo of smaller diamonds. Best part is, many gemstones can be created in labs, which means they are cheaper than mined stones and free from the ethical issues that might arise with mining.

I am not 100% confident, but it’s looking more and more likely that I will be sporting a nontraditional engagement ring.

Do any of you have a nontraditional engagement ring? (i.e, a color gemstone or a non-diamond engagement ring?) How did you come to that decision? Have you regretted not getting a diamond?

Cost of a Sprained Ankle (Ouch!)

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I injured my ankle over the holidays and it started to get better after I mostly stayed off of my feet for a week and a half. Recently, though, I re-injured it because of a bad judgment call: somehow I thought it was a good idea to start working out again and wearing high heels to work. Really smart.

how to treat a sprained ankle Cost of a Sprained Ankle (Ouch!)

howtodothings.com

Don’t worry, I have learned the ERROR of my ways. And now I am paying for them. icon sad Cost of a Sprained Ankle (Ouch!) I didn’t go to a doctor because I thought it was a minor sprain that should heal on its own. At the advice of my mom, though, I will make an appointment with an orthopedic specialist to get my ankle checked out and get an X-Ray.

  • The good thing is that I have a PPO health plan, which means that I don’t need a primary physician’s referral to see a specialist, and that I have my choice of specialists within the network.
  • The not-so-good thing is that my PPO deductible is quite high, I believe it’s somewhere in the range of $500 or $1,000. Must check my insurance paperwork to confirm.

Based on my degree from the esteemed Internet School of Medicine (I graduated with honors), it’s quite unlikely that I have dislocated my ankle. I could, however, have a hairline fracture and not know it’s there.

Now, I might be a bit of a wuss, in all probability, it’s a sprain and it will heal on its own. But this not-knowing is driving me a bit nuts. I suppose it doesn’t work to be penny smart and pound foolish – if I need to see a doctor, I should see one.

So far, this sprained ankle has caused me quite a bit of pain, somewhat a loss of mobility, and soon it will cost me a good deal of money! I just hope that with some time and TLC, it will fully recover.

2011 Payroll Tax Deduction = You’re Getting a Raise

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The economy is supposed to pick up this year (wait, isn’t that what they said about 2010?) One thing is for certain, even if you don’t get a raise in 2011, you will get a raise. How? The federal government has decided to cut our 2011 payroll tax deduction and try to get us to spend just a little bit more.

Payroll tax is normally set at 12.4%, split at 6.2% between employer & employee. But for one year only, it will drop down to 10.4%, with the 2% deduction going to the employee. If you have self-employment income, you will also benefit from the 2% drop on your “employee” side income.

Sounds pretty great, right? 2% isn’t much a fortune- it works out to about an extra $83 a month for someone making $50,000 and $125 a month for someone making $75,000. But those little bit extras add up.

Bottom line: more money? I’ll take it! Now, the trick is to use this small windfall wisely and not to let it fritter away. For more, please take a look at my BlogHer article:

2011 Payroll Tax Deduction is a Small Windfall

When Homelessness is Imminent

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homelessness When Homelessness is Imminent

thedailytell.com

Most personal finance writing centers around increasing your income or decreasing your expenses. Most assumes that you have a place to live, a permanent address, a mode of transportation, a way to communicate.

But what do you do when homelessness is knocking on your door?

When I read this BlogHer article, How to Prepare for Homeless, what struck me was the matter-of-fact tone that the author, Dorid, adopted to such a difficult topic. It could well be How to Save Money on Food, or How to Look for a New Job, or How to Write a Budget. Except it’s not.

The 15 tips that Dorid listed most dealt with practical considerations (for example, make sure you have a cell phone to keep your means of communication), but she also has words of encouragement for others in the same situation:

15. Remember to pack your self esteem. Being homeless can happen to anyone, especially in this economy. And yes, it’s going to be crushing and painful and stressful and ugly. But if you go into it feeling defeated than you’re beaten, and it’ll be harder to get back up. Remember, you do NOT deserve this, and you’re worth better. Keeping that in mind will help you get through this, and will be invaluable when it comes to negotiating homeless services or acquiring a new home.

Homeless, to put it mildly, is frightening. And the people who are able to stay off the streets (get themselves into a shelter, stay with relatives, stay in a car, etc.) are those with more education, more resources, and better health than the folks who sleep by the side of an alley. Even so, I don’t know how people survive losing a place of their own, a place of security and comfort.

I hope that if I ever fall to homelessness, I can face it with courage and dignity that Dorid seems to. But more than that, I hope I never have to find out how I would act that situation.

SEP IRA: Have Side Income? Save For Retirement

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Happy 2011 everyone! I hope this year is one filled with financial success, friends and family, and good health for all of you.

One of the last financial tasks I accomplished for 2010 was to open a SEP IRA, a plan available to those with self-employment income. Please note that I am not a tax professional or a small-business adviser, and the information offered here is just what I have been able to gather based on a few hours of online research.

Why the SEP IRA?

Many of you out there have a side hustle, if you will – blog income, an Etsy business, a few hours of consulting work, etc. My small stream of side income help out with expensive fitness classes or saving for vacations, but I also want to put some of it away for retirement. The more the merrier, right?

Freelancers have several options when it comes to saving for retirement, such as the Solo 401K, SIMPLE IRA, or SEP IRA. There are pluses and minuses to all of these plans. Why did I chose SEP IRA? I am not too concerned about maximizing my contribution levels for the freelance income, because I am not making all that much, and because my primary retirement vehicles are an employer-sponsored 401K plan and the Roth IRA. If you bring in a lot of self-employment income, or you have employees other than yourself, then this post may not be that helpful to you.

SEP IRA allows people with self-employment income to defer their income. Like money contributed to 401K or a traditional IRA, money put into a SEP IRA will lower your taxable income and can grow, tax-free, until distribution. Be aware, thought, that you will be penalized if you try to withdraw money before you are 59 and 1/2. From what I’ve researched, the SEP IRA is the easiest plan to set up and minimizes administrative burdens of maintaining the plan, especially for solo proprietorships. (A huge plus for me).

As a solo proprietor, you are in essence wearing two hats: that of the employer and the employee. The SEP IRA is a vehicle that only the employer can contribute to, but that’s fine in this case because if you are a freelancer, you are you’re own employer. The SEP IRA allows you to defer up to 20% of your net income (less the employer’s portion of the self-employment tax).

Can I contribute to a 401K, a Roth IRA, and a SEP IRA?

That’s one of my questions when I was looking into the SEP IRA option, as I plan to max out my 401K and Roth IRA. I wanted to make sure that I am following all the rules and won’t inadvertently bump up against some limit and have the IRS come after me. From what I understand, an individual can contribute to 401K, a Roth IRA, and a SEP IRA up to a $49,000 Defined Contribution Limit. I am not anywhere near that limit, so this SEP IRA will just be another way for me to put a little bit more away for retirement. (Again, this is based on my very limited understanding… please seek professional advice before you do anything).

A few more words about this plan: you can only defer your freelance income to the SEP IRA. If you also have access to a 401K through an employer, you cannot use your day job earnings to contribute to a SEP IRA. You have until April 15, 2011 to set up and contribute money to SEP IRA for 2010.

For more information on SEP IRA, contribution limits, eligible compensation, etc., please see Self-Employed Individuals on IRS Publication 560.

Do you have any experience with a SEP IRA?