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Site Changes: New Design Coming
If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
We've been hard at work coming up with a new look and feel for the blog, which will hopefully launch Wednesday or Thursday.
There's still a few things left to be done, but stick around — there're some changes coming!
Thanks for your continued support.
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Gas Rebate Credit Card: Which One Should I Get?
For our trip to California, we're going to be doing a lot of driving — which, thanks to high gas prices, is going to make it expensive.
So in order to cut down on our costs, we're looking to get a gas rebate credit card.
We're not big credit card mavens — in fact, we only have one that we pay off every month — but it seems like it could be to our advantage to get a new card for paying gas.
I've looked over the Gas Rebate Credit Cards at cardratings.com, but really am not sure which one to go with.
I need your help. Which gas rebate card should I get?
Let me know what you think in the comments.
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Economic Stimulus Payment Arrives
Our economic stimulus payment has arrived!
Even though the original pay days were supposed to start next week, they began going out today. As you can see, we've already received ours.
For a married couple of two with no kids, that's a $1200 direct deposit into our checking account. Add in the returns we got for our taxes (both have arrived), we've got a bit more money for our trip to California.
Did you get your economic stimulus payment yet? Let us know in the comments.
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Taxes and Your Love Life: Why it Matters
The federal income tax used to have what came to be known as the marriage tax. If two single people earned $25,000 each and then got married, they paid more tax on $50,000 of combined income than they paid as two single people.
Quite a few years ago, Congress began tinkering with the tax rate schedules to eliminate the marriage tax. In 2007, a couple with two $25,000 incomes and the standard deduction will pay $4,092.50 in tax by filing jointly as a married couple with $50,000 of joint income. If they file separately as a married couple, they will each pay $2,046.25, which combined also equals $4,092.25. If they were both single they still pay the same combined tax.
The numbers tell the story. Congress decided that two single people who get married should pay the same tax on their combined income. But should a single person pay the same tax as a married couple with the same income?
If a single person earns the same $50,000 dollars as the couple above, he or she pays $6,736.25. The single person pays $2,643.75 more tax than the married couple with the same income.
Congress seems to be telling us that it is right that married couples keep more income since they have more expenses for food, medicine and so on. One difference of the tax comes with the personal exemption and the size of the standard deduction. The single person gets $3,400 exemption and $5,350 deduction for $8,750, but a married couple gets double that at $17,500. The single person has taxable income of $41,250 compared to $32,500 for the couple.
However, if we eliminate the difference in exemptions and deductions for the single person so that both have taxable incomes of $32,500, the single person still pays more: $456.25 more. The single person pays additional tax because they encounter the 25% tax rate much sooner than the married couple.
The difference gets more important at more modest incomes. A single person earning $25,000 pays $2,046.25 in federal tax while a couple filing jointly would pay only $750.00.
Those are critical dollars that might take the rent money, especially when both have $1,912.50 social security taxes on top of their income taxes. Now Congress seems to be telling us that people of modest incomes must scrimp and save: maybe double up and share living quarters.
Maybe now there is a single person tax? You be the judge.
Fred Siegmund covers America's jobs as part of work doing labor market analysis and projections for a client base of recruiters, trainers and counselors. Visit him at www.americanjobmarket.blogspot.com
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Using SmartyPig As a Honeymoon Fund
As you may have read, I'm planning on getting married next year. We'll be paying for this all by ourselves, so we have to be cost-conscious.
My fiancée has already started thinking about what to put on her bridal registry, and she told me some of her married friends had signed on with travel agents so they can collect contributions to a honeymoon.
This sounded like a great idea to me, as a honeymoon will not be in our budget most likely. But, I've never dealt with a travel agent, as I like to plan things myself. So signing up with one of them is out of the question for us.
I searched for a similar type of site that collects money for a honeymoon, and I found many (Google "honeymoon fund"). But all of them had exorbitant fees just to donate to the fund, which I found unacceptable.
Then I came across SmartyPig, which is in a beta phase. With this, you can set up a savings account (that currently gives you 4.30% APY) and establish a goal for it (the amount you want to save and the deadline).
Friends can contribute to your goal for just a 2.9% processing fee, which is reasonable. It also requires the owner of the account to make systematic deposits. When the goal is reached, you can take the money saved in the form of a gift card or check.
I set up my account last week. I had a couple of questions, and the customer service has been great so far (the co-founder actually resolved one for me).
Some functionality has been not been available when I needed it, but this is understandable since it's a new company in a beta phase.
Tom Valenti is a marketer and project manager who currently works for a financial institution in New Jersey. Read Tom's blog at http://thriftyhomeowner.blogspot.com or learn more about him at http://tomvalenti.com.
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Credit Card Activation Fails Over VoIP
Debbie and I just got our new credit cards yesterday (the old ones are expiring in May) and, like with all new cards, they needed to be activated.
So I called up the 866 number on the front of the card, listened to the automated voice, put in the card number and found out I couldn't activate my card.
The prompt told me it couldn't verify my location — even though I was on my home phone. And then it hung up.
I tried the international number on the card, but even the real people couldn't help me — they kept on forwarding me around with no success.
Turns out, it's my use of Vonage for my home phone that prevented me from activating my card. Since Vonage is a VoIP service (it runs over the Internet), you're not locked down to one location like with a plain old telephone service (think of it like your cell phone).
Automated systems can't determine your location, and for some reason the credit card company needs to know where you are to activate the card. Pain in the ass, right?
Long story short, I had to call up our credit union (which issue the card) and, thankfully, they've run into the situation before. They were able to activate it with no problem.
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Money Saving Links: 4/23/08
I have to apologize for the lack of posts recently — I've been out of town and away from my computer for a few days! We'll be back on track this week.
A quick roundup of from the 148th Carnival of Personal Finance, hosted by Gather Little by Little.
How Money Challenges Prevent You From Building The Life You Love - The Digerati Life
Money can bring you a lot and get you far, but it can never buy one of the most important things in life. You can’t buy love. You can buy a lot of imitations — but never the real thing! So don’t waste money, years, or even moments trying.
Netflix vs. Redbox: Which is the better DVD rental service? - Money & Fitness Blog
Is the money that you are saving going to Redbox worth it? Is the hassle worth it? Or you going to watch enough movies to make it feel like you are getting your $13.99 worth with Netflix? With Redbox becoming more and more available, I would try both out.
$4,000 Now, Nothing Later: the Beauty of the Roth IRA - Uncommon Cents
I wrote a $4,000 check this week. That hurt, but it’ll end up helping in the end. You see, the $4,000 was bound for my Roth IRA–my 2007 contribution.
There are very few investment accounts I think of more highly than the Roth IRA.
The Financial Generation Gap - Working for Rachel
Even in the generally youth-friendly blogosphere, I sometimes see people asking questions like, "Why do young people have such a tough time managing their money?" They assume the answers have to do with too much personal spending and not enough self-control. People who urge 22-year-olds to max out their 401(k)s are also operating on some of the same false assumptions.
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Do It Yourself and Save Big Bucks
In today's economy, we need to remind ourselves we can save without saving by using do-it-yourself production.
Suburban homeowners might employ a lawn service to take care of their yard or join a health club or gym with a personal trainer to take up a program of planned exercise. Do-it-yourselfers will get their exercise mowing the grass and avoid the lawn service and the health club altogether.
One of the often overlooked advantages of owning a home over renting an apartment is the opportunity to save with do-it-yourself production. Apartment renters lose the tax deductions for property taxes and home mortgage interest, but their rent has to cover all of the landlord's landscaping and maintenance costs.
Renters pay out of pocket each month while the homeowner can choose a few, or many, do-it-yourself savings from lawn care, painting the shutters, replacing faucet washers, or flashing the roof vents.
Condominium owners get property and home mortgage tax deductions, but lose some do-it-yourself opportunities since condominiums often provide landscaping and exterior maintenance in common as part of a monthly fee paid with after tax dollars.
Take just $60 a month out of a condo fee for landscaping and the savings are $8,835 for 10 years at just 4 percent interest.
Remember too that cost of living increases come as a percentage of gross income. If you have a $50,000 salary and a 3 percent cost of living increase, it will be $1,500 more in gross income. Before you get a dime, 7.65 percent goes to social security, at least 15 percent goes to the federal income tax and probably 5 to 8 percent goes to a state income tax. That's before you buy anything, which will also be taxed.
With heavy taxation and the loss of at least a third of gross income, do-it-yourself savings of only $800 or $900 will be equal to $1,500 of gross income. It is something to think about in a stagnant economy.
In the United States, nearly every transaction that can be recorded is recorded, then it's counted and taxed. In the mayor's office, or the county commissioner, or the state legislature, or the federal Congress, they want transactions. It is their bread and butter, so to speak.
Do-it-yourselfers have another idea.
Fred Siegmund covers America's jobs as part of work doing labor market analysis and projections for a client base of recruiters, trainers and counselors. Visit him at www.americanjobmarket.blogspot.com
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