Comments on: Four Money Mistakes You Might Not Realize You’re Making

By: daemondust

daemondust — Sun, 04 Oct 2009 00:03:08 +0000

Amazingly, I managed to get my withholding almost perfect last year. It was spot on for federal, and I got a $1 refund from the state because of a rounding error I made.

By: Debra

Debra — Tue, 22 Sep 2009 21:44:29 +0000

You were so right-on to include Analysis Paralysis, from which I suffer in many more matters than just financial, but certainly there. For example, I’ve wanted to buy a little gold since it was in the $950 range several months ago, but felt like I needed to research it first as an investment. My research led me to several so-far unresolvable questions: how much to invest? Recommendations I’ve read range from “5% or less” all the way to 30%. What sort to buy? Numismatics for greater appreciation and in case of confiscation? Since our government thinks it can do whatever it wants, why would I expect numismatics to continue to be exempt if we again face confiscation? Where to store it once I have it? Was inclined toward a safe deposit box (rather than a gold storage facility, foreign bank, or underground). Then I saw a video of a Calif. woman whose bank box was declared abandoned (accidentally or arbitrarily?), her valuable family heirlooms seized and auctioned w/proceeds to the general fund – all while she had an active checking account at the bank, paid her box rental regularly, and had her name & address on many documents inside the box.

The cumulative effect on me of all the recent economic and financial news is that I feel like I can’t trust ANYONE — in banking, financial advising, fund management or government.

So, as you noted, the dollar cost of my analysis of this investment will be somewhere upwards of $60/oz. IF I can ever make up my mind as to what course of action is the least risky. I’d like to add that the emotional cost is also huge, from the anxiety of KNOWING this is an investment I MUST make if I’m to have a financial future, fearing that I’m running out of time, and still not being able to decide. Thank God I have a therapist!

Thanks for your good article. Glad to know I’m not alone in my paralysis.

Debra

By: TN.Flash

TN.Flash — Fri, 18 Sep 2009 04:08:54 +0000

Want to save some money? Most homes today have a single lever water faucet. When people turn the water on to rise something like a glass or their hands they do not first move the lever to the right to use only cold water. People that leave the handle in the middle are using hot and cold water but guess what, unless there is a water recirculating line, only cold water comes out because of the length of the hot water pipe to the faucet is full of cold water because the hot water has cooled off.

By: DDFD at DivorcedDadFrugalDad

DDFD at DivorcedDadFrugalDad — Tue, 15 Sep 2009 12:21:11 +0000

Great post! The interest free loans to the government is a disgrace . . .

By: Jazz

Jazz — Sat, 12 Sep 2009 17:14:10 +0000

…………what Jake said. Pay very close attention to the expense ratios and get the lowest one that meets your needs.

By: Michael

Michael — Thu, 10 Sep 2009 13:30:15 +0000

The federal government does not pay interest on income tax refunds, hence a 0% loan to the IRS from you.

By: Tom @ Canadian Finance Blog

Tom @ Canadian Finance Blog — Wed, 09 Sep 2009 21:56:48 +0000

Over analysis is something I do often, then again my career is as a financial analyst so I guess it comes with the profession.

Big fan of not over paying taxes up front. Much rather owe the government at the end of the year than get a refund.

By: Trevor

Trevor — Wed, 09 Sep 2009 21:15:08 +0000

The one thing not thought of is using a checking account that actually pays you interest. These are smaller banks a lot of the times like Arizona Bank and trust that pays me 4% for the money in my checking acount. A lot better then the .3% in a savings account.

By: RON

RON — Wed, 09 Sep 2009 20:52:58 +0000

HOW CAN YOU SAY THAT PAYING IN TOO MUCH TAXES VIA ESTIMATED TAXES OR GIVING THE GOVERNMENT A LOAN VIA WITHOLDING TAXES IS A MISTAKE? THE MORE MONEY IN TAXES PAID TO THE IRS DURING THE YEAR AND RECIEVING AN EVENTUAL TAX REFUND, IS POSITIVE PLANNING SINCE YOU RECEIVE 4% INTEREST ON YOUR REFUND. WHERE CAN YOU GET A RETURN OF 4% RISK FREE TODAY IN A CD OR MONEY MARKET ACCOUNT?
WOULD APPRECIATE RECEIVING YOUR COMMENTS VIA E-MAIL ON THIS.
THANK YOU

By: Ryan

Ryan — Wed, 09 Sep 2009 17:35:44 +0000

As long as we are talking about taxes, learning about all your tax deductions is just free money. For example, if you have a hobby that requires a lot of money (knitting, or painting) the IRS allows you to deduct those hobby costs as long as it fits certain guidelines. You could take it one step further and turn that hobby into a business venture. A qualified business is able to deduct so many things that it can be worth your time to run a small business, like selling your knitted hats or teaching someone to paint. The best part of owning a business is that you can withhold paying taxes much longer than you can as an employee. If you deduct enough, perhaps there will be no taxes to pay.

However, I like the comment above about being penny wise and pound foolish. If it takes 2 hours of your time to save 6 bucks on a purchase, that is the equivalent of working $3/hour. Was it really worth the time and effort to drive 1 hour each way to that store that is having a sale when you could have paid the extra 6 bucks at the store near you and had the extra two hours to do something more enjoyable?

By: My Journey

My Journey — Wed, 09 Sep 2009 15:48:30 +0000

Cents,

I am with you! I have to make myself feel poor in order to live my life the way I want. I can’t have more than 2K in my checking or I start spending on STUPID stuff!

By: Strick

Strick — Wed, 09 Sep 2009 14:07:35 +0000

If you get a $2600 refund (fairly average), then you have overwithheld $50/wk. If you are paid weekly and (to maintain the “forced savings effect”, which I agree is important) at the same time you decrease your withholding by $50/week you increase some automatic retirement contribution by that same $50/week, you have sped up your investing over waiting for the return and investing then. Running a calculator comparing the difference of investing averaging 8% over 40 years at $50/wk versus investing the same $2600 but just yearly, I get:
weekly contrib: $104K contributions + $623K gain
Yearly contrib: $104K contributions + $596K gain

Sure the assumptions and final numbers can vary greatly, but thats a fairly significant difference for something that is just a single trip to HR. Now figuring out when you have the right amount withheld (especially when congress is comfortable with changing the tax laws well into the tax year and applying them retroactively) is a different story.

By: centsandthecity

centsandthecity — Tue, 08 Sep 2009 20:22:18 +0000

I’m definitely guilty of the first one. I just really fear making a mistake with my withholding and then having to pay. The checking account is definitely not a problem for me. After I pay my bills and transfer money to savings, I usually have less than $100 in my checking account.

By: Jim

Jim — Tue, 08 Sep 2009 19:16:17 +0000

You can usually find fees listed anywhere information about the index fund itself is located.

By: Don Chouinard

Don Chouinard — Tue, 08 Sep 2009 18:34:10 +0000

I am new at this,and elderly.Why are your e mails,cut off on the right hand side? Am I doing somthing wrong?I get a lot of free e mails and yours is the only one like this? Don.