In last month’s newsletter, I took a break from my usual “Save, invest, repeat” mantra to talk about spending. In particular, spending for joy. I asked for reader responses to the question “What did you spend money on in the last year that brought you joy?” And wow, I was surprised and delighted by the number of responses. For some, it was a tough question. One reader said “Joy, what is that?” Another said the question “stopped me in my tracks”. One very common answer was travel: Another common answer was gifts to others: Other responses: One of the most surprising answers: My favorite answer: And lastly, an interesting take and word of …
Spending for Joy: A Poll
If you are a regular reader, you know I talk a lot about saving money. A lot! “Save, invest, repeat, save, invest, repeat” is one of my mantras. It is also the key to reaching financial independence. Another of my mantras is “Capture those dollars”, so much so that clients KNOW what I’m going to say when they share news such as getting a raise. One client recently emailed: “You make me laugh with your wonderful enthusiasm about all things savings.” But I came across two items recently that made me wonder if I should talk a bit more about spending. The first was a post from Mike Piper, one of my favorite bloggers, reviewing the book “My Money Journey, How 30 …
Do You Know How Much Your Employer-Provided Health Insurance Actually Costs?
So yes, it’s true that COBRA is expensive…. because your insurance is expensive. Recently, I was talking with a friend who is planning to leave the workforce and take some time off before looking for a new job. I asked what she would do for health insurance and mentioned COBRA. Her immediate response was “Oh, no, COBRA is expensive”. * It is true, COBRA is expensive, because her health insurance is expensive!* What is COBRA? The acronym comes from the Consolidated Omnibus Budget Reconciliation Act. COBRA gives employees the right to continue their job’s group health insurance in certain circumstances such as voluntary or involuntary job loss. …
How Much Income Tax Do You Actually Pay?
Last year, a new client and I were reviewing her expenses. I pointed out that her largest expense (by far) was her Federal/State income tax liability at nearly $20,000 a year. In fact for many people, their largest lifetime expense is income taxes. She looked at me quizzically and exclaimed “But I always get big refunds!” I wanted to weep. Generally when you get a refund, it is because you paid in more than you actually owe. Most taxpayers pay their tax liability throughout the year in the form of tax withholdings. Your employer withholds tax from your paycheck and sends it to the government during your working years. In retirement tax can be withheld from …
Capture Those Dollars!
Recently, in a meeting with clients, we realized their car loan would be paid off in two months. I rang the and said “That’s terrific and now I recommend you…” and they finished my sentence shouting in unison, “capture those dollars!” I guess they’ve heard me say that before….probably many times! It’s my standard response to increased cash flow. Why am I so fixated on capturing dollars? Because unless you win the lottery or inherit a big pile of money* you must spend less than you earn in order to build wealth. *Note: I don’t recommend playing the lottery and inheritances don’t always materialize…. Capturing …