It’s that time once again when I determine my resolutions for the year. So here goes. Let’s see how I do by the end of the year.
Bump My Retirement Savings to 5% of Income
This will be my personal 401K, not a joint goal. I think since I’m getting the extra 2% back from the government, I can turn around and give it to myself without noticing. It’s a small step, but my husband’s student loan payments are rising by $500/month this year, so our usual surplus will be a bit lower.
Add Another $5000 to the Emergency Fund
We did well last year, but between our FSA contributions, my 401K contributions, and his higher loan payments, I don’t want to guarantee more than an additional $5000 in case other expenses arise.
Replace Our French Doors
I’m actually iffy on this one. We wanted to do it this year, but had a plumbing emergency. We were considering it for 2011, but I just learned the tax deal eliminated most of the tax credit for replacing windows. On the other hand, the doors open into the house and limit our ability to place furniture. They also were cut wrong and have a ¼ inch gap at the base that bugs crawl through, in addition to wasting energy. So, if we have the money, we’ll replace them with vinyl sliders that look like French doors.
Plant My Yard
This one is definitely going to happen. We’ve already decided who we’re going to hire to build our steps and plant grass at the top. I know where my vegetable garden is going. We just need the rain to stop so we can actually start preparing the yard!
Take Care of Miscellaneous Household Improvements
There are several minor things I’ve been wanting to do since we moved in a year and a half ago, like install a motion-sensitive porch light next to the front door and build shelves for the closet. Now that I have a circular saw, the latter will definitely happen. If I can get my act together, the former will happen, too.
Take a Vacation
This is an easy one. My husband and I haven’t taken a vacation since December, 2008. After last year, we really need one. We won’t do anything as extravagant as that Belize trip (although that trip was actually pretty cheap). We’re keeping it simple with a drive up the coast and maybe a trip to Vegas.
So there it is, that’s six. It was a bit of a stretch, but I think it’s a good start. What are your resolutions for 2011?
Last January, I set seven resolutions. Three were financial, and four were personal. Let’s see how I did.
Boost Our Emergency Fund: I wanted to boost our emergency fund to at least $15,000. We actually got there, even though my husband didn’t work for four months. We managed not to dip into savings for our home repairs, insurance and tax bills, or regular bills while he was on disability. It’s amazing how much less you spend when one of you can’t leave the house!
Increase Our Retirement Savings to 10%: Once again, this didn’t happen. My husband received a defined contribution that totals about 7% of his salary, and my personal contribution still stands at 3%. However, we also contribute $2500 to an FSA, which ate up most of the money I would have used for the 401K. Given our medical bills last year, and expected bills this year, it was a good option. So, total, I guess we did get to 10%, but we can’t rely on that defined contribution every year and my employer still doesn’t offer a match.
Buy a New Car: I did this! I’d planned to wait until December, but my car needed all its engine mounts replaced in August. I made the decision to save the $500 I would have spent on the repairs and move my purchase date up by four months. It was model-year-end deal time, so I still got a good price. (Really, anytime is a good time now because car sales are still depressed.) We did dip into our savings account for the down payment, but the money was already ear-marked for the car, not for an emergency.
Furnish Our House: We did this, mostly. The whole house is now furnished. We shopped carefully and scored some good deals on nice furniture. We’ve now entered the replacement phase, where some of the old pieces have to be replaced because they’ve worn out. That includes a bed, coffee table, end tables, media stand, and computer desk. We also need to buy rugs, because the new couches slide every time we sit down.
Finish Painting My House: I’ll say this is 90% done. In theory I still need to paint one bathroom, but the current paint is actually in good condition. It’s just a boring “swiss coffee” color. I do still need to paint the baseboards, window frames, and door jambs. Honestly, except for the room where I dripped red paint on the baseboards, the rest may never get painted. It’s not what you’d call a high priority. Plus, I hate doing it.
Fix Up the Backyard: Big fail here. But it’s not my fault! Between taking care of my husband and working full time, I didn’t have time to do anything in the yard except tend to my tomatoes. However, I did start thinking about plants for the back and we have a solid plan to fix up the yard in 2011.
Lose Five Pounds: I came close, but I wasn’t really trying. I actually put on five pounds while taking care of my husband. He lost 25 pounds while recovering. Where’s the justice in that? I’ve now lost most of that, but not because I was trying. It turns out I have a thyroid disorder and the pounds started to melt off once I started the medication. So, I’ve lost most of the five pounds I gained taking care of him, and may just stick there. My clothes fit better and my cholesterol levels, blood pressure, heart rate, etc. are all low.
2010 is nearly over, and I am thrilled. 2010 was easily one of the worst years of my life. I’m eagerly looking forward to 2011. With that in mind, I’ve outlined six things I need to do prepare for the new year.
Set New Goals
Because this year went so badly, I don’t think I met any of my goals for 2010. I’ll check tomorrow. So, it’s time to set new goals for 2011. Most of them will carry over from 2010. I will also determine the steps I need to take to reach each goal. I did that last year, but life interfered and I couldn’t do any of them.
Gather Financial Documents
I like to do my taxes early in February. It gets them out of the way and I’m expecting a sizable refund because my husband was on disability (non-taxable income in California) for so long that our tax bracket dropped! So, I started by making a list of all the financial documents I need to have in hand before I can prepare our taxes. I keep the list in my notebook and mark the items off as they come in. They must all arrive by January 31, 2011, but I’ve already received one of them.
Assess Personal Finances
While you’re gathering your financial documents, this is a good time to review your assets. Review your portfolio to see if you need to do any rebalancing. Review your savings account balance to see if you need to shift any of it into higher-return options like CDs. Review your emergency fund to see if it needs to be replenished. Review your spending to see if you need to cut back in certain areas.
Say Goodbye to 2010
Whether your year was horrible or happy, it’s time to say goodbye to 2010. I do this by thinking back on the year and writing down everything important that happened and how I felt about it. It’s a nice record of the year that was, so you’ll know what it was really like twenty years from now when you’re telling the grandkids about the blizzard of 2010. It only takes about thirty minutes, but it lasts forever.
Make a 2011 To Do List
I make a major to do list of all the projects I need to do around the house or in my personal life at the start of each year. Things like organize the shed, build closet shelves, etc. By the end of the year, my list is marked up and scribbled all over. Start fresh by making a new list, with all the incomplete tasks copied over. You don’t have to put dates on them, but remember to bring the list with you when you’re going to the hardware store so you can pick up some of the small items on the list, like push lights for the dark closets. (Are you sensing a theme?)
Buy Some Champagne
Be sure to grab a bottle of champagne to toast the new year. It’s the best way to get the year off to a good start, and then hope things only get better from there. Make sure to buy a decent bottle. This isn’t the time to go for the cheap stuff.
Tomorrow I’ll assess my achievements for 2010, and then the next day I’ll review my 2011 goals.
So, Congress has passed the tax deal and Obama has signed it. In case you weren’t paying attention to all the whining and cajoling that’s been going on for the last month, here’s what you need to do know about the “tax cut” as it’s being called.
Your Tax Bracket Won’t Change
The Bush-era tax cuts have been extended for another two years, which means your tax bracket won’t change, regardless of your income. Of course, if you receive a raise that pushes you into a new tax bracket, that will still happen. However, you don’t need to adjust your withholding or massively adjust your budget if you haven’t received a year-end raise.
Your Social Security Taxes Will Go Down
This is actually a significant change that could put real money back in your pocket. The current social security tax of 6.2% (the employee’s share) has been reduced by 2%. If you earn less than $106,000, you can expect to get an extra $20 per $1000 salary. So, if you make $50,000, you should receive $1,000 over the course of the year, or about $41 per paycheck if you get paid twice a month. You may not see the change in your first paycheck because it usually takes employers a few weeks to implement payroll changes, but it must all be straightened out by the end of the first quarter of 2011. The Making Work Pay credit is going away, however, so your total pay increase for the year will be $600 more than last year, or roughly $25 per pay period.
If your individual salary is more than $106,000, then you’ll receive an extra $2120 this year. Once you exceed that level, social security taxes will stop being withheld as usual. You’ll receive the full increase over last year because you didn’t qualify for the Making Work Pay credit.
If you earn less than $20,000 (or $40,000 for a family), then you will actually receive less money this year. That’s because the Making Work Pay credit is going away, and it was worth more to you than the social security tax reduction.
Unemployment Insurance Will Continue
If you’re unemployed and have not yet received a full 99 weeks of benefits (or reached the cap for your state if it’s lower than 99 weeks), then the tax deal extends your eligibility for another year. However, if you’ve reached the 99 week cap, you will not qualify for additional benefits.
The Estate Tax Is Reinstated
2010 was unique in that there was no estate tax, even for the very, very wealthy like George Steinbrenner. Starting in 2011, the estate tax will be reinstated at 35% for estates valued at more than $10 million. If the tax deal hadn’t been negotiated, the tax rate would have been 55% of estates valued at more than $1 million. While the lower rate would have significantly impacted many families, it’s estimated that the new limit will result in taxes for just 6,600 families. If you’re among those 6,600, speak to your financial advisor about strategies to
reduce your estate over time. Having a trust will not shield those assets from the estate tax. It will shield them from the probate process, which can be costly and time-consuming.
For most people, the new deal will result in more money in your pocket, and more money for your heirs when you die. However, this deal is only good for two years, so you can expect more wrangling in 2012. If Congress holds true to form, they won’t do a thing until after the election. It’s just too juicy a campaign issue, so you may want to make plans to avoid your televisions for most of 2012.
My tomatoes did pretty good last year, but I’m already making plans for a better location and more plant varieties this year. I just received my first of three seed orders, and am busily preparing my garden.
Last summer, I planted my tomatoes at the top of my yard on the north fence where they had plenty of space. I ran them up a grid, and they came to about seven feet high. I think I overpruned them, so there weren’t enough leaves to prevent sunburn. We had an unusually mild summer, which helped protect them, but most of them had some degree of sunburn or blossom rot, even late in the summer. I partly blame my soil, which is sand. My yard used to be riverbottom and the soil is horrendous. It doesn’t hold water or nutrients. I had dug a trench with compost and garden soil, but the tap root went much deeper than my trench.
This year, I’ll be moving all of my plants into a pre-existing planter on the north side of the yard. In the heat of summer, it will receive some shade from the lemon tree and the adjacent retaining wall. It currently houses two shrubs that look terrible when pruned to a manageable size, so I have no problem taking those out. It already has a sprinkler, so I should able to convert that to a drip system.
What I’m Planting
Last year I only planted three small tomato seedlings. I attempted strawberries from seedlings in a strawberry pot, but they died.
This year, I’m planting one or two varieties of tomatoes at the most. I won’t do paste tomatoes again – they don’t ripen in batches large enough to sauce when you only grow one paste tomato plant. So, I’ll just go with heirloom tomatoes good for eating fresh. I may also try a late season tomato, a Russian or Hungarian variety, because we don’t usually have freezes and our climate is apparently suited to them.
I will try another strawberry seedling, but plant it properly.
I also ordered seeds for the following:
four lettuce varieties (two green, two red in one seed packet)
red bell peppers
green bell peppers
I missed the shipping date for garlic, and my yard isn’t ready for it yet, so I’m skipping garlic this year. I do plan to order yellow onion sets.
Potatoes in Buckets
I’ve also decided to attempt potatoes in buckets, rather than growing them in the ground. I plan to grow red potatoes and Yukon gold potatoes. I might try Russets, too. The advantage of the buckets is that I can move them around the yard as the weather changes so they get sun in spring and some heat protection once the peak of summer sets in. Potatoes are best grown from seed potatoes, which I’ll order from the same California grower as the onion sets.
I’m currently debating what sort of buckets I want to use. If I can find free/cheap food grade buckets at a bakery, I might use those. I could also get some cheap plastic bins from the dollar store, but they wouldn’t be food grade. I’m not sure that’s as important for growing something in soil as it is when storing grains or brewing beer that will touch the plastic directly. I could also visit our local garden store and buy some cheap five gallon plant containers.
Herbs in Individual Containers
Some herbs must be in their own containers. Mint and rosemary in particular don’t play well with others. Mint will overrun everything else in the planter. Rosemary grows so large that it will also take over. My parents have a rosemary plant that has grown to fill a 4×8 brick planter. In fact, it broke the mortar! So, I will start them both in smallish pots and hope to contain their size.
When to Plant
My garden books recommend planting six to eight weeks before the last frost, but the first frost in Los Angeles is typically early December and the last frost is typically late January or early February, if we have a frost at all. If you plan to plant, check your frost dates at Victory Seeds. I will start my seeds indoors in January and then transplant them a few weeks later as seedlings. So, that means I’ll have a lot of garden work to do in January. I’m up for it.
It’s rare that I write a check these days. Partly, that’s because my husband is in charge of paying the daily bills, so I only write a check when he’s sick or I need to reimburse someone. I decided to total up how many checks we give and receive each year, as an experiment. We’re not quite to the end of the year yet, so I’ll guesstimate through the end. So far, we’ve written a total of 40 checks. By year-end, I anticipate we’ll write 5 more and receive 6 at the most.
What We Write Checks For
There are a few items that must be paid by check, still.
Property tax – two checks a year. Our county isn’t up on the electronic payments thing yet! This year, it was three checks because they billed us, sent a partial refund for excess billing, and then sent another bill for an excess in the refund amount.
Mortgage refinance payments – we refinanced and had to pay the interest for the month by check.
Insurance renewals – online bill pay and insurance companies don’t always get along, so we don’t take chances and just mail a check. We learned that one the hard way when Mercury cancelled our insurance for non-payment, even though they’d received the online payment! It took half an hour and a call from our bank to their agent to get it sorted out. So, this is five checks a year – auto (split in two), home, earthquake, and flood.
Medical bills – most of these do offer the credit card option, but it’s just as easy to write a check as it is to fill in the little bubbles with our credit card number. This was probably about half the checks we wrote this year.
Gardener – one check per month, he’s old-fashioned.
Auto registration – I actually could pay online, but the California DMV’s website is unfriendly, so we send checks.
Driver’s license renewal – I tried to pay online, but it said I didn’t exist, so I had to mail a check.
Home service calls – a lot of service people prefer checks or cash, so we have to write a check a few times a year for that.
Magazine renewal – I still get a few magazines for reading at the gym, and have one that doesn’t auto-renew on my credit card.
State taxes – I think I could actually pay this online, but again, the California processing system is wonky and I don’t trust it, so I mail a check on April 14th.
Personal reimbursements/gifts – most of the checks we’ll be writing for the rest of the year are either gifts or reimbursements. For example, two of my cousins want spending money for a big trip, so I’m sending each of them a check for Christmas. Another cousin’s mom is getting a check so she can buy him a group gift from several of us. Another cousin is getting a check because she buys our adopt-a-family gifts. A guy at work was collecting for his charity walk-a-thon, so he got a check.
Checks We Receive
We also receive several checks a year, although we never actually see the bulk of them. These are, of course, our paychecks, which are direct-deposited. However, there are other checks we receive:
Gifts/reimbursements – This is still the simplest way for people to give each other financial gifts or reimburse each other for joint expenses. Paypal is actually a bit more cumbersome and may have fees. Checks are usually free to receive. Cash is simplest, but not everyone carries that much on them.
Expense reimbursements – My husband gets mileage and expense reimbursements, which come by check. They’re paid separately from the paychecks because they’re not taxable.
Refunds – Occasionally we’ll get a refund for an overpayment, which arrives as a surprise check.
Rebates – Some businesses send gift cards, which I hate. Just send me a check I can take to the bank!
Before we bought a home, we wrote fewer checks a year, even though we paid the rent by check. Now we write more checks, but it’s not as many as either of us wrote ten years ago. Experts have been predicting the demise of the check for at least a decade. While they’re not as commonly used in stores, they’re still the simplest way for two people to exchange money, to pay infrequent bills, or to receive infrequent payments. I certainly don’t want to give out my electronic funds transfer information every time I want to receive money, and I’m sure you don’t either.
The UK plans to stop processing checks for its citizens by 2018, but I wonder about the feasibility of this. What about senior citizens who don’t understand computers or online payments? Should they be forced into money orders and visits to the utility to pay their bills? Getting rid of checks is a lofty goal, but sometimes it’s still the best way to pay and the government’s goal alone won’t change that.
So, you may have noticed that I’ve been absent a few weeks. I’ve been very busy, both at work and in my personal life. However, that’s given me plenty of time to get stabby about a whole bunch of things!
Last year we bought a magazine subscription as a Christmas gift. I received noticed earlier this week that it had been automatically renewed, even though I specifically opted out of auto-renewal when I placed the order last year. We decided to let it ride, but I called to have auto-renew removed from the account for next year. They were nice about it, but it shouldn’t have happened in the first place. If a customer opts out, then that’s that!
McDonald’s Happy Meal Toy Ban
These nanny state tactics have gone too far, San Francisco. Sure, happy meals are bad for kids and most kids want them just for the toy, but guess what? Buying a happy meal is the parent’s choice, not yours. If you don’t like them, don’t buy them for your kids. Sometimes a parent opts to reward their child with a Happy Meal and toy, sometimes they say no. If parents can’t say no to their children, that’s a parenting issue, not a McDonald’s issue. Stay out of it, city council!
When Exactly Does Black Friday Start Now?
I’ve seriously been seeing Black Friday ads since late October. No, scratch that, they started in July. It’s gotten ridiculous. Retailers, just admit your desperate and stop calling every damn sale leading up to Christmas a “black Friday” special. If it’s a Tuesday in October, it’s not Black Friday.
The funny thing is, the deals weren’t even that awesome, including those offered on the official Black Friday. My husband and I were already planning to buy a new TV during a Black Friday sale, especially given our awesome laptop score last Thanksgiving. So, I started doing my research about a week beforehand. We wound up at Costco the Saturday before Black Friday buying a better TV at almost the same price as one of the lesser Black Friday models that would have required us to get to the store at 4AM. Sorry, I’ll pay the extra $50 for the convenience and free extended warranty. (Costco extends electronics warranties to two years, so take that into consideration when shopping.)
When Will the Politicians Stop Fighting?
The election blessedly ended a month ago, and the Democrats and Republicans are still bickering out of one side of their mouths while vowing to work together out the other. STOP! Clearly the people aren’t happy, but continuing to fight and get nothing done isn’t going to solve that. Start working together. Preschoolers cooperate better than Congresspeople these days!
Claims about Frugal Fatigue
This fall’s news stories are all about people getting “frugal fatigue” and starting to spend big again. They were spouting the same stories last fall. It wasn’t true then, and it’s not true now. Sure, people are buying more now. They’re a little more comfortable spending, but they’re not buying just for the sake of buying and they’re not mortgaging their homes to do it. Most people aren’t so burned out on being frugal that they’re rushing out to buy fur coats and diamond rings! Instead, they’ve learned how to save money and shop based on value – that’s pretty frugal!
You could say that my husband and I went on a buying spree the last half of this year. We bought six dining chairs, one dining table, three sofas, two club chairs, and one TV. We had the cash to cover all of it because we saved up and shopped carefully to ensure we got a good deal. And even though we were planning to buy a new TV anyway, it just so happens that the sound on our old TV started to go out just three weeks before our target date, so we hit the replacement schedule right on the head!
Chase Airport Commercial
This commercial ticks me off every time I see it. In case you’re not familiar, it depicts a family going to the airport. The husband hands the wife his credit card and tells her to visit the shops while he parks. Then there is a montage of her going on a shopping spree while he’s held up at security. Is this the 1950s again? First of all, why does he have to give her a credit card? Is she not responsible enough to have one of her own? Second, who goes on a shopping spree at an airport? Third, why does he have to give her permission to go shopping? This whole commercial is so 1950s “aw, that little woman” that it makes me glad I don’t have a Chase card anymore.
So there you go, six things that make me stabby. I’ll try not to be absent again for three weeks!