Archive for January 10, 2007
In 2007 the cost of my medical and dental plans increased. I also signed up for employer-sponsored life insurance, (when I realized no other insurance company would approve me). I knew the costs would take a bite out of my paycheck, but I didn’t want to see my bi-weekly number dwindle.
In an effort to keep my paychecks the same size I simply increased the number of allowances on my W-4 form, (Employee’s Withholding Allowance Certificate), and faxed it off to payroll. Each allowance ensures approximately $3,300 will remain free from withholding. I only added one extra allowance. But that one allowance enabled me to pay off my rising health care costs and still get more money in each paycheck. In essence, pushing down your tax withholdings, pushes up your take home pay.
According to the IRS, 98.9 million Americans received refunds averaging $2,202. Why let Uncle Sam hold on to your money, when you could be earning interest on it?
Kiplinger’s has created a nifty little tool to help you determine just how much many allowances you should claim. To check out the calculator click here.
The following is a list of financial questions that my husband and I regularly discuss. These questions help us focus on our goals and ensure that we are both on the same financial page.
- What is our monthly take home income?
- This can differ for my husband who gets paid by the hour.
- We discuss everything from property taxes, mortgage payments, repair bills, to IRA contributions and charitable contributions.
- This may be a specific dollar amount or a percentage of our income. It also differs depending on the expenses discussed above.
- Watching over these details ensures we don’t overextend ourselves and that we stay on target with our financial goals.
- We currently strive to keep six months of assets in a semi-liquid or easy to liquidate form.
- Over the years we’ve decided that all home and car purchases must be discussed. Personal items like clothes and food usually don’t require discussion.
- Usually anything over $200. For us this is really more about the type of purchase than the amount of money.
- My husband, God bless him. He has a great attention to detail and journals all of our monthly expenses. Most of our bills are paid automatically or through online banking services.
- I do, although I have thought of getting one-time financial advice from an expert. As we add new retirement accounts it’s difficult to ensure our investments are still diverse.