Heathly Eating, Costs and Benefits

People may have notice that I have not kept up on my food budget updates and their is a reason for this. I am changing my eating habits and that has thrown my budget completely out of whack. I expected that we would have to spend more this year just because of inflation but adding in eating better we are now consistently spending about $65/week. Part the reason for that is food I do not eat. I am not used to eating healthy so some fresh veggies have gone to waste or the meal ended up not tasting good and I threw it out. However, I truly believe that once I get accustomed to cooking and eating well, our cost will go down. Making a change means I am not perfect at it, or even good at it.

This is true of any change, food, financial, anything. However, often we try to change and because we make mistakes we give up and that is the real mistake. Is being over my budget by $10/week going to kill my budget? Kinda, I won't be able to save the amount I need but is going over by $10/week for a small time going to kill my budget, probably not. In the end, being healthy will mean less medical expenses, it may even mean less food costs once I know what I am doing. I also think that over the summer our food bills will decrease even more, because we will be eating out of the garden and used to eating fresh fruits and veggies. Does anyone have cheap healthy meals that I can try? What ways have you kept your grocery bill low while still eating healthy?

How to fill out a W-4 and how that connects to paying your taxes in April

Right now people are talking about how much they are getting back in taxes or complaining how much they owe but honestly, you have total control over your refund or lack there of, if you do a little planning and fill out a simple form from your employer.  That form is called a W-4.  Normally filling out a W-4 is easy, you let them know if you are married or not, then add how many people you support.  If you have one job, it truly is that simple and easy.  The problems occur when there are multiple incomes (like spouses who each earn income) or someone working two jobs. Or you could have a problem if you take advantage of tax credits like the HOPE credit, EITC, child tax credit OR your parents still claim you as a dependent.  If your parents still claim you, you put 0 as the exemptions because you cannot claim yourself.  If you have additional credits, that requires math.  Figure out how much the credit is and if it is more than  $3650 times your highest tax bracket, claim an additional person.  If you and your spouse both work, each should claim themselves, or one person claims two and the other claims 0.

If you have a lot of income that is not from your regular job, like our rental make sure to set money aside for it.   You can get penalized if you do not pay enough over the year but as long as you did not owe over $1000 or did not owe the year before you should be fine.  Keep in mind, if you do get a large refund, most of the time that is just your own money returned to you.  It is not "free money" or money to blow.  It is part of your wage and should be counted as such when you make your budget.

Update on the millionaire goal- January 2012

For once the market has helped us along on our goal, instead of hindering us.  We now have $11,134 set aside for retirement.  Right now we are not putting money into retirement because of not having our duplex rented but hopefully that will change in March and we can get back to piling money in our Roth.  Still deciding how much, if any of the $225 (money set aside for taxes, see last post), I will be putting into the Roth.  Our next mini-goal still remains at $25,000 but unless the market really comes through, it will probably take another four years before we reach it.

Decisions to make:Debt vs Retirement

I've mentioned before that we use our rental income to save for retirement but since we have not had tenants since October there has been no retirement savings.  For the 2011 year we have put aside $3600 which is $300 short of our 15% goal.  However, we do also set aside $25/month of our rental income towards taxes.  This year we owe no taxes (actually according to the government we have a loss of $600 on the rental) and therefore we need to decide what to do with the $225 of tax money.  I originally thought to just put it in the Roth IRA because we are not making the retirement goal however, we do have a lot of student loan debt and paying extra on that would make me happy.  Granted most of it is deferred and not earning any interest but about $5450 is accruing interest at 5.75%.  I am still leaning towards just putting the money in the Roth IRA but I have till April 15th to decide.

Financial Advice

When I first started figuring out my finances I found the msn money boards which were great for beginners and support. The MSN board is now gone, however there is a private board that many from that group have moved to (http://notmsnmoney.proboards.com/index.cgi).  However, it is hard to find, if you do not already know it is there.  Also, many people really are not as interested as I am in personal finance.  I know my husband prefers me to figure out the financial picture and then give him options.  I looked into financial advisers but they are either fee only and cost about $500 to set up or just salesmen.  Neither really help beginners or young people.  I think it would be great to have someone who helps make you a budget, helps you set up a retirement account (leads people to the right ones, such as Vanguard, Fidelity and T Rowe Price), help people understand credit and basically set young people's financial affairs in order.  This would not be a long process, if there was a list of information for the person to collect before the meeting.  It could be done with a half hour phone call, an hour of prep work by the person and an hour meeting at the end.  Even if you expect the person to get paid $25/hour that would only be $62.50, no where near $500.  I wonder what it would take to set up a program for young people, maybe have it at colleges?  It seems like a program that would be great for college students either freshman year (if they are putting themselves through school on their own) or Senior year before they go off to the "real world".  Does anything else think this is a good idea? Do you think young people would go for it?