My Way to Save

I have had a lot of conversations lately about saving money. I usually equate saving to putting away whatever money is left at the end of the month after all of my debts and giving have been satisfied. There are many other ways to cut costs and stash some cash.

For example, several of my friends and family are really into the clipping coupons. I have witnessed some serious savings going on here! I have yet to get on this bandwagon, but it appears that the folks who are doing this are saving money and having fun while they do it.

This post is for you to share innovative, creative, even crazy ways you save. Have fun!!

Bird Baths and Big Money

In our thirty years of marriage, we have made some foolish money decisions. I remember what was probably our first really, really dumb purchase – satellite television.

It was in the early 80s - probably 1982. At the time, we had one of those really attractive metal antennas attached to the house that allowed us to pick up three local channels – 6, 12 and 13 - on a good day. So when the new technology of satellite TV was made “affordable” to consumers, we just had to jump on board. Let me further explain. At that time, an “affordable” dish meant about $3500. That was quite a deal, right? Wrong!

At the time we were young, had been married only months, and our income probably landed us smack dab in the middle of the poverty level. We didn’t have $35 in our checking account - much less $3500. But we deserved to be able to watch decent TV - right? So we did what we thought any sensible young couple would do - we borrowed the money!

Let me remind you again when we made this purchase – 1982 or maybe early 1983. Do you recall anything special about 1982? Let me refresh your memory. In the early 80s, the US was experiencing a severe economic recession. The recession peaked somewhere around November of 1982 with a nationwide unemployment rate of 10.1% - the highest since the Great Depression. Some southern states were experiencing unemployment rates upwards of 16%. Banks were failing left and right, Savings & Loans were disappearing at a unheard of rate, and by 1982, the prime interest rate reached 21.5%.  Doesn’t this sound like an opportune time to shell out $3500 on a monstrosity that would allow us to watch 20 more TV stations?

A Taxing Situation

Income Tax Filing Deadline - April 17, 2012

Again this year, we will be filing for an extension on our income tax return. Before we had a business we always filed on time – even early.  Business complicates the process.

In honor of T-Day, I thought I would provide some tips and info that I have accumulated on taxes. This is not new stuff – I didn’t create it; but I thought it might be helpful nonetheless.

An audit is an IRS investigation that the government uses to determine if taxpayer returns are accurate. There are three types of audits: the mail audit, the interview audit, and the field audit. The mail audit is the most common and is usually the result of a calculation error. For the interview audit, the taxpayer takes all relevant material to an IRS regional office. In a field audit, an IRS representative visits your home or business.

Each year, the IRS audits 2-3% of individual tax returns. This equates to about 4 million returns. There are several different methods the IRS uses to determine who to audit. Although you can’t avoid the random selection method, there are other things that you can do to help minimize the possibility that your return will be flagged for audit.

Oh no...not a BUDGET!

Keith and I been attending Dave Ramsey's Financial Peace University at our church. First, let me say that if you are ever given the opportunity to join one of these classes, you should. You should dispel the notion that only broke people take FPU and similar classes. Yes - there are certainly members of the class that are struggling financially. There are others, however that take the class to learn to be better stewards of their finances; to learn to help others, etc. Keith and I want to learn how we can apply these principles to business finances. Whatever your reason, the knowledge gained and the camaraderie of others with similar intentions is invaluable.

About five years ago, after reading one of Dave Ramsey's books and hearing him speak on talk radio, I was inspired to start to chip away at our personal debt. The first thing I did was to create a budget. Amazingly, this was the first budget we ever had. What a difference this budget made on our finances and our lives! I managed to pay off several thousand dollars of debt in a short period of time and even started to save! Wow, what a notion!

I have lived religiously by my budget all these years; I can't imagine not having it. It was a special blessing to me when I was able to set up a budget for my daughter and her husband and to see how it immediately transformed their finances and their impression of their financial situation.