Archive for January, 2011:
Earlier this month, I outlined some goals for 2011. I’m already ticking along, so I thought I’d share a quick recap:
– 529 plans for the kids. As I discussed in my series earlier this month on college savings, we went ahead and opened 529 accounts for Jonathan and Vivienne.
– Open Roth IRA. We had been saving for awhile to have enough for an IRA with Vanguard, and we set up an account there and transferred the money. Pretty simple, and now we’ll just need to deposit money each month into the account and watch it grow.
– House savings. Working on it!
– Run a 5k this year. I haven’t run a single step. It’s been really cold and snowy and I’m not going outside for that. We bought a compact exercise bike and Shane and I have been using that as a way to build up our cardio and leg muscles. I like it well enough and I hope that it’ll give me at least a little benefit, and once the weather warms up I hope to hit the road and start running for real.
– Complete the Bible by June 9. I’m about a third of the way through and I think I’ll hit my target date. I’m almost exclusively reading on my iPod Touch using the free Bible app from YouVersion. Love it!
– I’ve read 5 books this month. The last time I read that many in a month…I don’t even know. I read two on my iPod using the free Kindle app. Those titles were free during a limited-time promotion. I’m keeping track of what I’ve read and I’ll share the “best of” at the end of the year.
Congress has decided to give many Americans a 2% “raise,” but for 2011 only.
The Tax Relief Act of 2011 is reducing the amount of Social Security tax withheld from paychecks, for the first $106,800 in wages. Previously, it was 6.4% and for this year it will be 4.4%. Essentially, your net paycheck will be 2% more.
At first, I thought only my husband’s paycheck would be affected, but turns out freelancers have a tax break, too.
The self-employment tax will see a temporary reduction from 15.3% to 13.3%.
Since these tax breaks are temporary, I think it’s a good idea to have a plan for that spare 2% rather than absorb it into your regular budget. Otherwise, come 2012, it’ll be harder to adjust to a smaller paycheck.
This could be a good opportunity to boost your debt snowball, pad your savings account, contribute to a college savings account, or contribute a bit more to your retirement account.
Calculate the exact dollar figure you’ll be getting extra this year, and put it as an item in your budget. Pay yourself that amount with each paycheck and allocate it however works best for your family. Just don’t fritter it away!
How will you use your 2% raise this year? We’re putting ours in savings.
For more: The Tax Relief Act of 2011 provisions on About.com
Ideas for your Social Security Tax Break at PTMoney