Scratching that gambling itch without losing money

Don’t play the lottery.  You will lose and it seems it is primarily a tax on the lower incomes.

 

However:

 

If you have to have the excitement of the possibility of winning millions of dollars, there is a better way to satisfy your desire while at the same time benefiting yourself.

 

I recently discovered Long Game.  They seem to be within a classification of a “prize linked savings” program. 

https://www.longgame.co

 

You can download the app, link your checking account, and you can setup periodic savings deposits.  As you deposit money you earn “coins”.  With enough coins you can enter a weekly lottery for $1M.  So you can get that excitement but at the same time save for your own future.  The savings account earns next to nothing, however there are games you can play along the way as you earn more coins.  You can win money or digital currency while playing these games.

 

If you want the excitement you can still dream about what you will do with that $1M but at the same time benefit yourself.

 

Hope this helps. 

Flying Squirrel

Savings money on day to day purchases

Until Tesla completes world domination, we will be buying gasoline for our cars for a while yet.  You might as well save some money with almost zero effort.

Shell has a fuel rewards program.

https://www.fuelrewards.com/fuelrewards/shellfuelrewards.html

At a minimum you will save $.05 on every gallon of fuel you purchase (up to 20 gallons).  I also have T-Mobile and T-Mobile Tuesdays has typically offered a extra reward of an additional $.10 per gallon every week.   There are other ways of earning discounts by using your cards in certain dining establishments, etc.

The other nice thing is you can link your most frequently used credit cards to your fuel rewards account and you don’t even need to insert the additional fuel rewards card at the pump.  The system automatically recognizes a linked credit card and it tells you how many cents per gallon you have in rewards and asks you if you want to use them at this fill-up.

So once the account is setup and the cards are linked you have to do nothing extra to get the savings.  I know it isn’t very much but over time it starts to add up.

Since I have joined the program my lifetime savings  is nearly $311. 

Better in your pockets.  I know it isn’t much but hope it helps.  Thanks.

Wood duck in the Bay

Reducing Taxes by paying estimated taxes via Credit cards

In general I put everything on a credit card that has benefits and then just pay off the balance in full each month.  My current favorite card is the Citi Double Cash back card.  Essentially this card gives you a 2% discount off everything you buy.

 

Early on in my working career, I had not cared much about the taxes on interest and dividends, since my payroll tax withholdings have covered the small extra income without triggering the penalty of underpayment of taxes.  However the closer I have come to retirement the more important paying estimated taxes has become so that I don’t penalty of not paying enough taxes.

 

Taxes are actually due quarterly.  If the bulk of your income comes from investments, there isn’t someone else paying your quarterly taxes on your behalf (think employer) and you have to pay your estimated taxes.

 

For information on the estimated quarterly tax payments and dates they are due you can go here:

https://www.irs.gov/faqs/estimated-tax/individuals/individuals-2

 

So I have to pay quarterly estimated taxes on the income coming from dividends and interest.  In the past I had always paid by taking the money electronically directly out of my checking account.  Although they do offer an option to pay via credit card the “convenience fee” was always too high for it to makes sense to pay that way.

 

Well now with the Citi double back cash card I have started making estimated payments with that card.  With that I receive the following benefits.

 

The approved payment processors can be found here::

https://www.irs.gov/payments/pay-taxes-by-credit-or-debit-card

In particular Pay1040.com has a 1.87% fee when using a credit card.

 

You can pay your estimated taxes here:

https://www.pay1040.com/

 

So let’s say I have to make an estimated payment of $5000 per quarter.  The fee for using a credit card will be $93.50.  The nice thing is the cash back card will give you $100 in cash back which automatically saves you $6.50 per quarter.  The other nice thing is that you can charge it to the card and don’t have to pay for at least 30 days, and possibly nearly 60 days depending on when your closing statement date of the card is.  Son that $5000 can be sitting in a Money Market fund getting 2.1% interest (at the time of this writing) so you can get AT LEAST another $8 in interest while you are waiting for the credit card bill to come.

 

So by using the Citi double cash card I can “reduce” my bill by at least $15 per quarter or $60 per year by using this strategy.  Since I have to pay estimated taxes anyhow you might as well reduce your bill a bit by using a credit card.  It actually comes to a bit more than that, since I believe the last estimated payment you can hold off on and not do in January but pay it in April anyhow.

 

Hope this information helps.  Thanks.

Fawn and Cranes get into it in the back yard

Making sure you are getting the best rates on services you enjoy/use

Reducing our spending is a key planning aspect I have been working on in preparation for retirement.  We have many subscriptions for things we enjoy.  Sirius XM, Direct TV, Comcast, phone, etc.  Since I'm busy much of the time, keeping on top of these things to ensure that I am paying the least for the services, has not been a priority for me.

I was reviewing the ChooseFI website a while back and saw they were recommending Trim and I was intrigued.  btw ChooseFI is starting to become my favorite Podcast.
https://www.choosefi.com/

Anyhow:

I will say this service has been phenomenal for me.

I have a couple houses and each has a TV subscription as well as high speed Internet.  I use Sirius XM in the cars, etc.

Now certainly you probably can take it upon yourself to call these services and negotiate a better rate yourself, but in my case I never found the time to do it.  Doing it yourself would potentially save you even more, however for me I thought if they can save me some money that their fee would be justified.

I created an account, uploaded my statements and forgot about it since they took over.  Within a couple weeks the end result is Trim saved me approx. $2000 per year between DirectTV, Comcast, Sirius, and Centurylink.

They charge 33% of what they saved (which in my opinion is a bit high), but they saved me a significant amount of money and deserve to get paid.  For the amount of effort I had to put into saving that amount of money I am quite pleased with this.

I am super happy with this service and hope you find my example as something you can use the service to replicate.  Thanks.

Bear still working on the "bear proof" bird feeder

Thoughts on maximizing the companies 401K matching contributions

I was a bit late in life, until I realized how valuable tax deferred investments were.  I always assumed that I didn’t want to put money into a tax sheltered account since I was always planning on retiring early.  However I now realize that was such a poor idea.  What I didn’t really think about is that there is a portion of your early retirement also includes the period where you can access those tax deferred accounts.  Oh well live and learn.  So in the last few years I have made sure I maximize the programs that are available such as my 401k contributions.

I suspect many companies provide some matching dollars to your 401K contributions.  For example, my company matches 100% of the first 4.5% contributed.

The first year I maxed my yearly contribution to the 401k, I encountered a situation that I really didn’t think about.  So if you desire to max out your 401k, you might be tempted to do it as quickly as possible.  I guess it is obvious, but it wasn’t apparent to me the first time this happened, that once you stop contributing to your 401k, the matching contributions also stop. 

So if you are planning on maxing out the contribution and you also plan on working the full year it would be advisable (in my opinion) to space out the contributions so that you continue to get the company matching dollars to get as much “free” money as you can.

You will want to contribute at least as much as the employer match.  In my case you would want to contribute at least 4.5% of your salary.  But let’s say you contribute 10%.  Depending on your income you might max out the limit earlier in the year and still have some paychecks to go.  As a result of that you wouldn’t maximize the employee contributions.

So it is my opinion that you want to keep track of how much you have contributed and adjust throughout the year to maximize this wonderful benefit.

Here is a calculator that you can use to help identify the optimal percent you should contribute that will both maximize your contribution as well as fully utilize the employer match percentage.

https://www.calcxml.com/do/qua09?skn=

This gives you a good feel as to how much to contribute, to reach the yearly maximum contribution, near the end of the year, however if you have a compensation plan that has bonus’s, you may want to either not contribute a percentage of your bonus or just keep an eye on it throughout the year so that you can maximize this benefit.

Fidelity 401k allows you to specify what percent of your regular income you want to contribute and independently how much of your bonus income you want to contribute.

Hope this helps you think about some things that I had to learn the hard way.