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Pondering the Mustache and Taxes

September 23rd, 2012 at 07:18 pm

So ... I ended up not going anywhere at all yesterday and spent most of the day reading Mr. Money Mustache. I barely got through two months worth of blog entries/comments. Yikes.

I've mentioned previously that some of what I've read there has gotten me to do some hard thinking. My reading yesterday just increased the hard thinking triply.

I've been pondering the possibility of riding my bike to big G for grocery/errand trips. It's 35+ miles one-way, and the majority of that distance is a major freeway with very few exits and little population - but LOTS of semi-trucks. It is definitely not something I'm physically capable of doing right now - it is something I would need to work up to doing.

So ... what can I do in the meantime? Try to limit my car trips into town. I've already been trying to do that, but I think I may be able to do even better. I think I will start going to church purposefully only 3 x a month. That would eliminate 1 - 2 trips. Then I think I will also talk to the other staff here and see if any of them are interested in doing a rotating carpool to town for grocery shopping 2x a month. I would then limit my grocery shopping to those trips. Depending on how many people I can get to do this - it would mean that I might only drive my car 1x every other month for a shopping trip.

Also, I need to check into getting my monthly prescription through mail-order. That would eliminate my Wal-greens stop, and possibly save a few dollars on the prescription.

All of the above I think would make it possible for me to only fill up my gas 1x a month. Some months I'm already able to come pretty close to that - but if I reduce my driving, I definitely will.

Also, I think I'm going to ask the 8th grade homeroom teacher who is really into biking to teach me the basic maintenance/care of my bike and how to shift gears properly. Then I may start riding my bike to school and back each day. The school is less than a mile from my house, so I could technically walk it easily - but there are a lot of stray/loose dogs - I'd feel safer (somewhat) on a bike.

*I'm really debating on the above though - I don't have a raincoat or rain pants, so if it was raining I'd be a mess by the time I got to school. I could just do it on days when it is not raining or wet/muddy out. Of course that eliminates a lot of days ..

My grocery category .. although I have managed to reduce it from where it was most of last year, it is still way too high. Part of the problem is that I'm still buying convenience type items, as well as buying things that I think I should buy, but end up going to rot. By reducing my grocery budget to $100/mo (from it's current $160) as well as reducing my Fun Money budget to $20 (from $40), and then putting that money directly into my Car Replacement fund, it grows exponentially faster.

My first step towards reducing the grocery budget is that I'm going to eat ONLY what I already have in the house for the remainder of September. No stops for Blimpies or for egg salad sandwiches at the local grocers/gas station. No more soda. I have lots of food in my pantry and freezer - it's just not food that is easy peasy heat and eat - which is why it has sat in the freezer/pantry.

My second step will be getting my slow cooker cleaned up and making sure it is still in good working condition. (If you remember, it was on the floor of my storage unit in TX which got partially flooded.)
If I'm able to get that working, then I will be able to use it to cook up a big batch of pinto beans - and make up a bunch of burritos to freeze, and also make refried beans - which I could use on my salads/lunch.
If I can't get it to work, then I do have a pressure cooker you can use in the microwave - so I would need to figure out how to use that.

I think sticking with canned or frozen veggies for the most part is most cost effective for me. The salad bar at school has started to have spinach as well as lettuce - so as long as that holds true, I have no need to purchase my own salad greens.

I need to make sure I take a copy of the breakfast/lunch menu for each month home with me so I can see what free foods from there I can make work for me.
---
I'm reducing my fun money to an amount where I can still go to a movie/out to eat once a month, if I really want to. Or I can use it for something else I might really want.
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By reducing my grocery, auto fuel, and fun money categories, I will have an approximate 55% net savings of my income. In the savings categories of course is Car Replacement, ROTH, Vacation, and EF. The largest percentage going to Car Replacement right now.

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Taxes

The stock fund which I have a sizable amount of in a non-tax sheltered account has again swung near the point it was on June 6. I am thinking that I would like to set a sell option if it reaches $.50 less than that price point - enough to get $3,000. Then I would put that money in my brokerage IRA account, and when the price point reached $.25 less than my selling point, I would purchase as much as I could. (With the way this stock has been going up and down within a few dollars, I think it is highly likely this could happen.)

If I understand how this all works correctly ...
a. I would be able to claim a capital gains loss of $.50/per stock from my initial sale.

b. Then, because I place $3,000 into a brokerage/traditional IRA account, I would get a portion of that back in taxes.

c. Plus, since my income is well below the level for receiving a tax savers credit for contributing to any IRA fund, I would get a portion of the money contributed to both my ROTH and Traditional back as a refund.

Or, would b and c be essentially the same thing? I'm just remembering what happened in 1998 when I put $2k in a Traditional IRA (a bank CD really, but I didn't know what I was doing back then ...) I got a refund of $500 *just* from that. My income that year was quite a bit higher as well.

I don't plan on *really* selling any of the stocks I own right now anytime soon, but I'm just thinking that I should take advantage of selling some at a small loss and moving them into a tax-sheltered vehicle - which will at the same time help me to actually have my IRA fully funded this year.

Does this all make sense, or am I missing something really big? (The taxable stock account is an inherited account if that makes any difference. This is also why I want to repurchase the same stock with the funds - to keep the money invested the same way, but just moved into a place that is more tax advantaged.)

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I earned another $5 AGC from SBs yesterday. That makes 2 for September.

7 Responses to “Pondering the Mustache and Taxes”

  1. starfishy Says:
    1348425654

    too funny - i did that a few weeks ago - read a bunch of the mustache posts. very interesting!

  2. crazyliblady Says:
    1348428744

    Good deal reducing expenses, especially with the idea of limiting your trips into town. Depending on what kind of stuff you need to buy, you may be able to buy some things online and have them shipped to you with no shipping charge.

    Because I live in a smaller town with virtually no easy to access health food, I have to either drive a few hours to get to one or order online. I usually choose to order online for things like health food, vitamins, special toothpaste, etc. from drugstore dot come. That site also a variety of non-prescription drug type items, coffee, tea, cleaning products, personal care, and pet food to name a few things. I first log into mrrebates and choose drugstore as the merchant I want to order from. This gets me a 6% rebate and sometimes special deals. If I spend over $25.00, I get free shipping. I think amazon does something similar and amazon is a merchant listed in mrrebates.

    Every few months, I cash out my mrrebates and get money that I put towards debt. Woo-hoo!

  3. FrugalTexan75 Says:
    1348429210

    Crazyliblady,

    I'm signed up with ebates (I think) but have only used it once. I will have to look into the one you mentioned, especially since I use Amazon a lot. I have Amazon Prime, so I rarely have to pay shipping. (And for food items, I try to use subscribe and save whenever possible - if buying from Amazon.)

    In my town we have a Family Dollar, two gas stations, and a very small/expensive mom and pop store. So I can definitely relate to not having a lot of health food selection nearby. Smile

  4. FrugalTexan75 Says:
    1348430335

    Crazyliblady,

    Oh, if you get any kind of referral credit, please let me know how I can give you credit for mr rebates.

  5. Blessed Says:
    1348435484

    Sounds like you have some terrific ideas to reduce expenses planned.

  6. crazyliblady Says:
    1348442418

    Here is the referral link for you or anyone else here who would like to join mrrebates that will give me credit for referring you. It won't let me put in a real link, so I had to do it this kooky way. Just type in the first part and then copy and paste the rest. I am not sure of the rebate for amazon, though, since I don't buy from them. Full disclosure: For each purchase you make, I get a small percentage of that. I cannot see what you bought or who you bought it from, though.

    http://www dot mrrebates dot com?refid=144278

  7. FrugalTexan75 Says:
    1348444283

    Thanks Blessed Smile
    CLL,

    I looked at Mr Rebates, and they actually don't offer percentages for Amazon - only coupons for specific items, and if you're getting prescriptions from drugstore . com it also doesn't count. I'll still sign up for it, in case one of the stores someday is a place I purchase something from ... Smile

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