Hope for your financial life and beyond

Back to School Savings I Don’t Care About

August 6, 2014 by 33 Comments

Back to school shopping at TargetI don’t know the schedule in your neck of the woods but in five short days my kids go back to school. Oddly enough, for the most part they are looking forward to it. In a way so am I as it will mark the first time that I will be home alone as a stay at home dad. It’s going to be eerily quiet around the house but I’m anticipating that will benefit my writing.

Of course back to school means shopping. Ugh! That dreaded time when you realize the kids have grown two inches over the summer and the school pants that fit in May are now riding up their shins. And of course, the mile long supply list the school sent with all it’s specialty items has your mind spinning. What in the world is “Mod Podge” and where can I buy it?

Helping Consumers Save on Back to School

Some retail stores do a great job this time of year revamping and organizing their floor space to make it easier on the back to school shopper. Our two destinations – Target and Office Depot – had school specific zones where we could easily shop and pick up our items. And naturally they got the word out through advertisements on how we could save on back to school items at their store. Amazon does a great job of this as well, offering specials discounts on school items and free shipping for college students if you purchase items on their site.

Local and state governments also get involved to help consumers save a little bit of money during the back to school season.

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Guess Which Age Group Is Starting To Save?

June 30, 2014 by 30 Comments
Young woman with broken down car

Will you have enough saved if this emergency happens?

You may have seen this article last week in the Wall Street Journal that detailed the current status of Americans and their emergency savings. I probably don’t have to describe to you the article’s tone. Your intuition tells you it was filled with negative statistics.

The study from Bankrate.com showed that:

26% of Americans have no emergency savings…

66% of Americans don’t have the recommended six months of expenses saved…

Those with enough saved to cover expenses for three months shrank to 40% in 2014, compared to 45% in 2013 and…

Only 46% of those earning $75,000 or above have six months of expenses saved.

That last one is especially disturbing. $75,000 is a fine yearly income. That equates to 300k earned in 4 years time, assuming no raises or bonuses. Throw a tax refund or two in there and you are telling me 54% of the people in this situation can’t save six months of expenses in four years? That’s fascinating.

Of particular note, guess who the most likely savers are turning out to be according to the study?

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How We Are Paying For Summer Vacations With Cash

May 27, 2014 by 32 Comments
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

February 12, 2014 by 20 Comments

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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Filed Under: College, Saving Tagged With: , , ,

How to Love Paying Bills and Going Christmas Shopping

January 8, 2014 by 41 Comments

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

October 30, 2013 by 11 Comments

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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Filed Under: Saving, Taxes Tagged With: , ,

Dealing With My Daughter’s BIG Milestone

October 23, 2013 by 34 Comments

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

July 24, 2013 by 22 Comments

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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Filed Under: Saving, Travel & Health Tagged With: ,

Students Comparison Shop for Generics and Save Big!

April 30, 2013 by 17 Comments

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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Filed Under: Kids and Money, Saving Tagged With: , ,

2 HUGE Reasons We Need to Save to Build Wealth

February 26, 2013 by 24 Comments

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

February 19, 2013 by 20 Comments

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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