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Credit Card Debt...Be Gone! This post will be brief...I just wanted to share some good news.  This week we paid off the last $500 balance on our Visa credit card.  We had carried a balance on a number of 0% rollover cards since 2009.  At its peak, the balance was $10,000.  By rolling our credit card debt to 0% rollover cards, we were able to avoid most credit card expenses:  interest and late payment fees.  Every month we automatically sent in payments using our bank's Bill Pay service.  However, owing anything to a credit card company is NOT good; thinking and worrying about credit card debt definitely affects your psyche. In the future, we plan on using our credit cards sparingly.  That shouldn't be so hard since we make most of our purchases these days with our debit cards.  We prefer debit cards because they seem to moderate our spending and encourage us to be thrifty.  (Watching our checking account balance steadily diminish over the course of the month seems to keep our s...

Happy New Year to all; may 2014 be your year!  Okay, it’s time to see how we did with our 2013 goals .  Let me start by saying my wife and I only worked five months each this year, so we came up short on most of our financial goals.  Nonetheless, 2013 was still a great year for us. Savings Goals Our 2013 savings goal was to save $102,050 in our various retirement and education accounts:  IRA, 403b, 457, HSA, Coverdell ESA, and 529 plans.   Unfortunately, we did not hit our goal; we actually came up $23,328 short!  However, we still managed to save $78,722 in our five months of work. Result:   We missed our goal, but we're not ready to call saving over $78,000 a failure.       2013 Savings Results Accounts Self Wife Total 457  $15,512   $17,500   $33,012  403b $11,200 $13,460  $24,660  IRAs $6,500 $5,500 $12,000 Health Savings $6,450 $6,450 Total Retirement  and Health Savings $76,122  Educational Savings  Son Others Total Coverdell ESA $2,000 $0 $2,000 529 Plan $300 $300 $600 Total...

  Swayback #1 December 26th, 2013 marked the 10-year anniversary of a very special relationship.  The old girl in question has been so good to me and my family.  She's reliable, hard-working, and still a little pretty in spite of her advanced age.  Sure, she often has a "rode-hard-and-put-up-wet" look to her, but I don't mind.  Even though at times she feels unsteady and rickety, she still delivers one heck of a ride.  While I don't really "love" this aging wench, she does have a special place in my heart. Yeah, my 2002 Mitsubishi Galant has been very good to me!  Ten years ago we paid $10,500 for this "sweet" ride.  Since then, I have replaced the tires thrice, the timing belt twice, and the air condition once.  (I might have changed the tires four times, but I wanted to use the word "thrice.")  When I bought her, she had 46,000 miles on her; today she has over 257,000 miles!  Here she is:           The Chick Magnet Earlier this year...

Coming to a Tent Near You In mid-October we attended our niece's wedding in Tifton, Georgia.   We all enjoyed ourselves at the wedding, and since we're not working these days, we decided to spend a few days catching up with friends and relatives.  My wife and I really enjoyed the fact that we didn't have to hurry home to plan for a busy school week.  Instead, we were able to have some fun on our own schedule.  To build on that fun we decided to go for a camping trip to Jekyll Island, Georgia.  Not working* sure has its advantages!   Our Home for 4 Days   Now, I won't lie...I don't know much about camping, so I wasn't sure how the trip would go.  My wife has more camping experience than me, so I followed her lead as we set up camp.  All in all, there was nothing to it:  the tent went up in five minutes and the chairs were unfolded in five seconds.  We then graced our tent's entrance with a car floor mat and boom...home sweet home!   All throughout the night w...

It's almost 2014, so it's time to start planning for next year's taxes.  There are a few tax changes for 2014 that will affect our " free money ."  Here they are:   The  Standard Deduction  (married filing jointly)  will rise from $12,200 to  $12,400   The  Personal Exemption  will increase from $3,900 to  $3,950   The  10% Tax Bracket   will increase from $17,850 to  $18,150      The  Health Savings Account  maximum for a family will increase from $6,450 to  $6,550     *Use this   source  to create  YOUR  tax plan.   Here is our 2014 tax plan.  As you can see, the first $34,250 of income should be tax-free thanks to our standard deduction, 3 personal exemptions and 1 child tax credit.  We then add in the remaining 10% tax bracket ($18,150 - $10,000 = $8,150) since our goal is to limit our taxable income to the 10% bracket.   Ideally, our AGI for 2014 will be $42,400 since it will result in a federal income tax of $815 ($8,150 * 10%).  Finally, we ...

Melanie writes:     "Hi! I discovered your blog thru a comment you left on another blog. I have been crunching numbers and reading for the past day. I love your concept of never exceeding the 10% tax bracket! I had never heard of that. I do have a question though. I know you have been at this for years. But if I am not at a point where I would want to withdraw from my IRA/tax-deferred savings, would you still suggest doing it the way you have outlined here? I notice you said that your family didn't start the 72(t) withdrawals until this year. I wanted to know what your strategy was up to this point to maximize savings and minimize taxes. My thought was to contribute enough so that my income doesn't exceed the $52k  $42K* . (I use that number because my family structure is like yours, married filing jointly + 1 child.) Any input would be appreciated. I am in awe! "        My response:       Thanks for the questions and the kind words.  I have to agree with you in that ...

Alright, questions from readers!  The first set of questions come from Laura: 1.)  How in the world do you live on $1,500 a month? (I thought I read that you pulled $18k from your $457.) At this point, we don't live on $1,500 a month ($18,000 a year).  Our goal this year is to live on  $51,750...I'll explain that figure later in my answer to question #4.  The $18,000 figure (actually $18,375) is the amount that we are pulling from our IRA accounts using the substantially equal periodic payments ( 72T ) provision of the tax code.  We started doing this in January of 2013 and we will continue taking these withdrawals until we turn 59.5.   Let's look at the numbers:  $51,750 - $18,375 = $33,375.  To get to our $51,750 figure we withdraw $33,375 from our 457 accounts.  For income, we withdraw from  our 457 accounts as needed; however, we will make sure that we will not surpass $52,000.  When you pull from a 457 account, be aware that there is a 20%  withholding required by la...