I moved (again) and downsized (again)

Finally done with the move and settled into the new apartment. I could not believe all the stuff we accumulated during the 5 years we lived in the previous apartment.

And that was after having a moving sale when moving from the huge house we lived in during the 5 years previous to that. (What’s up with this 5 year thing?)

In all fairness (to me), it is not all of my stuff. There are three of us moving but one is heading off to college.

imag1387
Seriously?

This is what was left after having yet another moving sale- sans the furniture.

Do I really need all of this stuff??

Putting things into the moving sale, packing up the remaining ‘essentials’ and then unpacking it all again caused me to reflect on just what is essential and what is not.

One of the criteria I came up with in selecting what to keep and what to sell is whether the item is single-purpose or multi-purpose.

For example, this has one purpose:

cheese-slicer

It slices cheese.

 

 

But this does the same thing, plus more!

knife

So, I gave the cheese slicer to my daughter.

Did I really need this?

kitchen-step-stool   or this  computer-chair

when I have four of these?

kitchen-chair

 

 

 

 

 

So, looking at pretty much everything I owned, I got rid of anything that had just one purpose.

Single-purpose items. I thought they saved time or worked better but now I realize that I wasted my money on a lot of things when I already have something that could do the job just as well.

 

Budgeting for Your Health Care

One of the most difficult things, well, really two of the most difficult things in setting my monthly budget is

  1. Being able to predict the costs of the health expenses of my family for the month/year
  2. Not putting the right priority on including health care in my budget.

Both of these things together have resulted in getting blindsided every year with unexpected medical bills.

Perhaps blindsided isn’t the correct term. I actually kept my eyes closed to the possibility that someone in the family would need to go to the doctor/get sick or injured/have surgery. Then getting that bill after the insurance covered its bit was like having a cold washcloth slap me in the face when I am sound asleep. Not pleasant and it tends to piss me off.

It really pissed me off this year when my family’s medical/dental expenses were just below the allowed deductible and I ended up paying more for my federal income tax. How stupid is that.

All because I did not know how to plan.

After reading today’s post at Quinn’s Commentary, I realized he hit the nail on the head when it comes to planning for health care costs. Folks, it’s more than just paying for health insurance.

Here is that post….

I began managing health benefits in 1961. I have done everything from process claims, design and communicate health benefits, negotiate insurance and TPA contracts to serving on boards of directors of health plans and negotiating physician contracts. I am convinced of one thing with absolute certainty. From the perspective of virtually all Americans health care […]

via Any scheme we contrive will not make health care “affordable.” — QUINNSCOMMENTARY 😇 the facts about lots of stuff

The author links to this post INSURE AGAINST DISASTER, PAY FOR WANTS OUT OF POCKET, SAVE FOR THE END GAME which is another essential read, imho.

After reading these and the linked Forbes article, it is no wonder that unexpected costs of illness or injury leads too many of us to bankruptcy.

To avoid being caught unprepared this year,  I am including fully funding my HSA into my monthly expenses. And eating rice and beans all year.

 

 

Lowering My Taxable Income

I am definitely naive (read: stupid) financially. I never realized that I could do anything to adjust my taxable income beyond completing a W-4 Employee’s Withholding Allowance Certificate. In researching ways to lower my taxable income and avoid paying additional tax for the 2016, I am learning a lot.

When I complete the W-4, I know that the more exemptions I claim, the bigger my take-home check is. And I cross my fingers hoping that I don’t have to pay more income tax at the end of the year. Oops, that sure didn’t work this year!

On the other hand, the fewer exemptions I claim, my take-home pay is less but my tax refund could be more. But, as we have been warned, it is best NOT to use the federal government as a savings account for your hard-earned money. The IRS pays no interest on your money.

So, Goldilocks, how do we figure out what is ‘just right’?

I am going to start with tweaking the W-4. Currently, I have a total of 7 ‘allowances’. I failed to update this apparently because my allowances actually work out to 5. Costly mistake!

W4 allowances

According to taxact.com, ‘the size of a withholding allowance is based on the annual value of a dependency exemption. For 2016, that amount is $4,050’.

I used the  IRS withholding calculator app at to calculate my anticipated income tax for 2016 . With my daughter heading off to college, I should be able to use the American Opportunity Tax Credit of $2500.

Here are the results of using the IRS app for calculating the exemptions I should claim this year:

2016 anticipated income tax

According to this, if I clam the American Opportunity Tax Credit of $2500, I can actually increase my allowances to 11 and have a refund of $150.

Hmm, now isn’t that interesting?

Off to plan my next step.

I Need to Figure Out How to Pay Less in Taxes

Obviously, by the debt load I carry, I am definitely not a financial wizard. And this year (and I am sure as a result of dumb decisions in the past) I made some stupid mistakes that resulted in my having to pay over a $1,000 to Uncle Sam on April 16th. That money would have come in handy for reducing my debt.

Arrghhh! Enough of this! Something needs to change.

I am taking time to examine my past mistakes with the goal of learning not to repeat them. Repeat after me- do not repeat them. And I am researching how to not only pay down my debt but also ways to lower my taxable income.

My annual gross pay is $66200. I will file as head of household in 2016 because I am not married, I will have paid more than half the cost of keeping up my home for the year and both my daughter and my mother can be a ‘qualifying person’. Only need one, though.

According to this table from taxfoundation.org , the estimate income tax brackets and rates for 2016 are:

2016 TAX BRACKETS
In 2015 I did not have enough deductions and credits to lower my taxable income to the 15% bracket. Over $8266 fell into the 25% tax bracket. I thought I had plenty of medical deductions but I did not have enough to exceed 10% of my adjusted gross income. Dang it. Thanks, Obamacare!

So, the goal is to work to bring my adjusted gross income down for 2016. How can I do that?

Off to research!

P.S. I realize I am divulging some pretty private info but, if it helps others learn and avoid making the same mistakes, it is all worth it.

Saving on Groceries

I know that the ‘experts’ advise that, to avoid overspending at the grocery store, we should shop weekly or monthly. I tried that and it just doesn’t work for me.

I have spent hours creating a beautiful menu for the week based on what’s on sale at the stores, shopping on a Saturday and buying all that I need for the week.

And I end up wasting so much food! I am talking about fresh vegetables, like lettuce, tomatoes and salad greens.If I buy enough to last the week, I don’t have room in my smaller fridge and we don’t eat it all or it rots before we do eat it.

I have to drive to the store ( I walk the three miles in nice weather) everyday to buy my mother’s daily newspaper (don’t get me started on that!) so I pick up the fresh food for the day when I am there.

I buy only what is on sale in the produce section and enough for the day, sometimes for the next day or two. I stick to my daily budget of $20 or less using the spending tracker.

When the farmer’s market is in full swing, I do go there and buy almost a week’s worth- whatever will fit in my fridge. The produce I buy there is fresher and lasts longer.

I keep our meals simple- the evening meal is usually a type of meat/seafood and a generous serving of vegetables.

It’s been working for me so far.

 

Minimalism in the Closet

There is certainly no one way to minimize and simplify one’s life but, for me, it means simplifying whatever I can to minimize the number of decisions I need to make.

So here’s what I did to simplify my clothing- I got rid of all the clothes that were too big now that I lost 50+ lbs. (go me!).

As I replace what I wear out or size out of,  I will stick with a few basic colors. I opted to go with black, white, jeans and khaki.

I went to the local St. Vinny’s and was lucky enough to hit a day where everything in the store was half-price! I scored 4 black shirts- 3 long-sleeved and one 3/4 sleeves. I think I paid $3.50 for all of them and each top was in excellent shape.

Still in my closet after the purge are a couple of pair of jeans, a couple of khaki slacks, some black pants and some shirts. Some of these don’t fit me yet but I promise I will get into them after the Biggest Loser challenge that starts tomorrow at work.

What will I wear? I don’t even need to ask myself that anymore.

 

I Will Not Commit

Ok, I will admit it. I am a very slow learner.

And I am very impulsive. I make rash decisions.

The combination of my slow learning and my impulsiveness have led me into a lot of trouble financially.

I need to stop making decisions. I need to stop and just think.

I think that a lot of my problem is the headfirst dive I take into the trapping of commitments.

I have trapped myself into apartment leases, cable subscriptions, Netflix and Amazon Prime subscriptions, cell phone contracts, iPhone leasing, credit card debt, and tuition payments. I also have a commitment to sponsor a child in Thailand at the tune of $38 per month.

Now that I finally realized this, I am making a commitment to no longer commit.

When my apartment lease is up, I am moving to a rental that will let me go month to month.

I cancelled my cable.

I am going to let my cell phone contract expire and I will find a much cheaper cell service that requires no commitment.

No further iPhone leasing.

No more charges to my credit cards. And that should translate into no more online ordering. Man, that is fast and dangerous!

Finish the tuition payments.

Cancel the Netflix and Amazon.

I will continue to sponsor the child because I do have a heart.

oh, yes, the internet. Unfortunately, I am committed to providing my own internet service so that I can have the honor of working for a multi-BILLION dollar company in this work at home position. Cheap bastard-corporation no longer provides the internet service.