Hope for your financial life and beyond

How We Are Paying For Summer Vacations With Cash

summer vacations

Niagara Falls

Our school is out for the year, so for me that means summer has arrived. I know the official start date of summer here in North America isn’t until June 21st. The astronomers and weathermen can push that date all they want. Once the kids start sleeping until 9 am or later, I know something has changed.

Summer brings with it summer vacations, which our family thoroughly enjoys. We usually take one big trip (a week+) and one short trip (3-4 days) each summer. This year will be no different as we will be embarking on a week long trek from Atlanta to Niagara Falls and back, followed later in the summer by a weekend cruise to the Bahamas.

Neither of those trips will be cheap, although we did get an incredible deal on the cruise (more on that in a moment). Nevertheless, we won’t be going into debt for either of them. All our vacation expenditures will be paid for in cash (through using our debit card).

How are we doing that?

Two words: “planning” and “saving.”

Summer Vacations With Cash

Here’s how we pay for all our summer vacations with cash:

Early Planning Leads to Deals

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18 Ways to Reduce College Costs, Plus One Huge Bonus Tip

In case you missed it, in Part I of this series covering college costs, I talked about the five most popular ways students pay for college.

college costsThe focus today will be on reducing the total college costs in whatever way possible. Of course things like scholarships, grants and military funding are all givens as I discussed in Part I. But what other practical things can a student do to bring down college costs?

I’ve divided the cost cutting topics into three categories: things that can be done in high school, things that can be done in the preparation phase and things that can be done while enrolled in college.

And at the end I’ll provide one bonus tip on how to dramatically reduce the cost of college.

Cut College Costs While in High School

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Why I Value the Advantages of a Debit Card

advantages of a debit cardDebit or credit?

It’s a passionate debate in the personal finance world as to which type of card people are better served carrying.

I’m of the mind that both can be used responsibly to assist people with their money management and achieve their financial goals. The key word in that last sentence though was “responsibly” and of these two options, credit cards are by far the tool with the most potential for spending abuse.

I was one of those who succumbed to that potential for abuse. Consequently, my wife and I closed all our credit card accounts years ago and moved strictly to cash and debit cards. That little decision did more to change our spending habits and boost our success with money than anything else.

Advantages of a Debit Card

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How to Love Paying Bills and Going Christmas Shopping

paying billsThree weeks ago I’m standing in Target crossing off the list Christmas gifts we had already purchased. My wife, who had been looking at some kid clothes, comes up to me and says, “I’m having so much fun Christmas shopping this year!”

Amazed at her enthusiasm I said, “Who are you and what have you done with my wife?”

After giving me the duck face, she replied to my quip, “It’s just so much more fun when you use cash when paying bills and purchasing the.”

That comment was in my top 5 moments from this past Christmas. Knowing our money management system was enhancing our relationship and making such an emotional impact on my wife was priceless.

If you are wondering how we had the cash to pay for all our gifts, it’s not because we allocated that much more in our December budget than normal. We started saving for Christmas in January, using a tried but true concept known as a sinking fund.

The Sinking Fund Theory to Paying Bills

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Getting An Electric Car For Free Through Tax Credits

Welcome to a Q & A tax session at Luke1428. Today we are discussing how to fund the purchase of an electric car with tax credits. Some states offer tax credits as incentives for many transactions, including purchasing or leasing an electric car.

To answer your tax credit questions I’ve pulled in none other than Mrs. Luke 1428, who just happens to be a CPA. So here we go.

Electric Car

The Nissan Leaf – source of a nice little state tax credit

Q: What are tax credits and how can I use them?

A: Great question. First, I’d like to make sure that we’re clear on the difference between a tax credit and a tax deduction. As an example, let’s assume you have $50,000 of taxable income, and your tax rate is 10%. Let’s compare the difference between a $1,000 tax credit and a $1,000 tax deduction.

A tax deduction lowers your taxable income. Without any deductions, your tax would be 10% of $50,000, which is $5,000. So, a $1,000 tax deduction lowers your taxable income to $49,000. Then we apply the 10% tax rate and come up with a tax of $4,900.

Tax Deduction Savings: $100.

Now, instead of the tax deduction, let’s try a tax credit.

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Dealing With My Daughter’s BIG Milestone

Growth AheadMy oldest daughter, Miss LukeTeen28 (MLT28), is quickly approaching a major milestone. To be honest I’m having difficulty believing my wife and I have reached this point. It seems like only yesterday we were meticulously buckling her into the car seat at the hospital (as only newbie parents can), readying her for the first car ride home.

Boy, did I take that trip carefully.

Now 12 ½ years later, we are about to cross that invisible yet unmistakable line that serves as a right of passage for kids as they grow towards young adulthood. Most parents dread this moment because it signals their child is becoming capable of deciding his or her own path. While I will admit to a certain level of anxiety, I’m really looking forward to it. I want to see how all these years of teaching, training and modeling will play out as she makes decisions.

The right of passage to which I refer has nothing to do with my daughter becoming a teenager though. It’s a much greater issue that will provide her with great lessons as she matures into adulthood. What could possibly be this big a deal for an almost 13 year old?

Making her first BIG purchase with her own money. Here is what she wants:

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I’m Saving Thousands in 60 Seconds or Less

60 seconds or lessPersonal finance bloggers love to help people develop sound money habits that will yield positive results if consistently applied over time. Many of these habits are hard to develop especially when they require great amounts of sacrifice. It took me a long time to realize I had issues with spending and an even greater length of time to bring that habit under control.

But success with finances doesn’t have to be difficult or take years of intense work learning how to budget or invest properly. In fact, there are some simple, everyday activities that take 60 seconds or less that could greatly impact a person’s future financial well-being. These require only minor preparation and even less time to execute.

Four 60 Seconds or Less Activities

Here are the four, everyday money-saving activities I’m doing right now that take me 60 seconds or less to accomplish:

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Students Comparison Shop for Generics and Save Big!

comparison shopDoes your child ever groan when you buy generic brands at the grocery store? That’s what happened recently on one of my shopping trips. I was trying to comparison shop when I reached for the generic brand peanut butter.

“Dad, do we have to get that?” whined my 12-year-old daughter. “We always get Jif.”

“You don’t even eat a lot of peanut butter,” I replied. “Besides, your sister is the peanut butter connoisseur of the house. Let’s test it out and see what she thinks.”

Much to her chagrin, her five-year old sister loved it! Oh, did I mention our food budget also liked it?  There’s a $1.80 difference between comparable jars of Publix peanut butter and Jif and a $2.50 difference between the Publix brand and Skippy or Peter Pan.

This led me to do some field research on food prices, using my high school personal finance class as data collectors. I gave them a list of about 20 items and asked them to comparison shop the difference between name brands and generics at their local grocery store. They were then to calculate the difference they would save by buying the generic brand.

The result was a real eye opener for them.

Comparison Shop Data: Name Brands vs. Generics

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2 HUGE Reasons We Need to Save to Build Wealth

build wealthIf you have been following my posts recently, I have been discussing why it is important to save money. I talked about saving for emergencies and then outlined saving for purchases and bills. These serve as a solid foundation for our financial health and to build wealth for the long-term.

They are foundational because we have to work through a lot of emotional baggage. We have to re-wire years of incorrect thinking about our saving habits. That’s not easy because we have to admit our mistakes. But once we have succeeded in changing our mindset about saving, we’ve conquered a giant obstacle. As I’ve said before most people aren’t thinking this way.

These saving concepts are foundational because they allow us to move on to the next phase of money management – to build wealth.

What Does It Mean to Build Wealth?

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The Un-American Way: Saving for Purchases

Light bulb penniesSeveral weeks ago I wrote about the #1 reason why saving money is important. In “O Lord Jesus, It’s a Fire!” I discussed how saving is vital because we are guaranteed to face emergencies in our life. Having some cash set aside reduces most emergencies to minor inconveniences.

The coolest part about having an emergency fund is that it causes us to emotionally and mentally relax. We realize, with some money reserves in place, that we will be able to move through the crisis with relative ease.  We no longer have to stress out as we scramble to come up with cash or go into debt to fix whatever problem has come about.

I’ve believed my whole life saving money was important, especially for a “rainy day.” But in my saving money belief structure, I was missing a vital element. To incorporate this missing link it into my life, I would have to do something very un-American. I would have to come face to face with what I really didn’t want to do…

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“O Lord Jesus It’s a Fire!” – Saving For Emergencies

o lord jesus its a fireEver walk to the refrigerator, maybe to get you a cold pop, and when you opened the door the light did not come on and there was no cold air? Or maybe you’ve been BBQ-ing, the fire got too hot and you burnt the chicken. Guess we are going out for dinner.

Maybe you’ve had an unexpected bout with bronchitis that required expensive medicine. Or you suddenly remembered it’s back to school time and the kids had no shoes to wear for PE class. Perhaps something bigger has happened like a house fire where you were displaced from your home and possessions for a time.

Our reaction when crazy life events happen is basically to say, “O Lord Jesus, it’s a fire!” and then we do our best to put the fire out. Usually that requires the spending of money to make the situation right or normal again. The question for us then is “How can we be prepared when the fire comes?”

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