Couple Money

Our Plans for Our Tax Refund This Year

Elle — Thu, 23 Feb 2012 13:52:59 +0000

After getting the last 1099, finding an important document, and finally getting just a bit of time to review it, we’re finished with our taxes. I’m so relieved to get that done and now I can get caught up with some other financial paperwork.

Tackling 2 Goals with the Our Tax Refund

It looks like we’re getting a modest refund (thank baby girl!) and like we’ve done before, we have a plan for the money. Last year it went towards the paying down the mortgage. The year before that, we also sent the money to our mortgage company. I’m happy we did as we’ve not only shorten the mortgage, but we’ve also cut down on interest payments.

This year, though, we’re doing something different. When we sat down in December to come up with family goals for 2012, 2 things we wanted to do were:

get a family vehicle
pay down the student loan

Whenever we receive the refund, we’re going to divide the federal money as 70% towards the car replacement fund and 30% for paying down the student loan. We haven’t decide what we’ll do with the state refund (didn’t expect that), but I’m hoping to use that little bit of cash for the student loan.

We already have a small start with the student loan project so the refund can be a big boost and help us reach our 2012 goals. We’re hoping to get the loan paid off sooner so we can lower our monthly expenses a bit more in the long run.

How Others are Using Their Refunds

Last year, Betterment ran a survey to see how people planned on spending their tax refunds. The choices were:

Spend it
Save for a big purchase (new car, new home, etc)
Invest in stocks & bonds
Save with no specific purchase in mind
Save for retirement
Pay off debt

The majority of them decided that paying down their debts is a priority. I agree that getting rid of debt can be a great financial move. It can also be empowering as you have pressures on your monthly cash flow.

Thoughts on Tax Refunds

I’d love to hear from you about your plans. H0w many of you have received or are expecting a refund this year? What are your plans for it?

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Betterment Just Got Better

Elle — Wed, 22 Feb 2012 13:30:07 +0000

Today is a beautiful day; not only has the weather been quite mild here and will continue for the rest of the week, but today Betterment announces a couple of big changes. Both of them are huge pluses for investors.

Before I get into the details of their new IRA offerings and the lower fees, let me give a quick review of Betterment and how they can be an easy and effective way to handle your investments.

Betterment – Simple, Effective Investing

Put simply, Betterment makes investing as easy as depositing money into a savings account. I think it’s one of their main strengths and a great way for investors to get started.

Betterment uses exchange-traded funds (ETFs) for their portfolios and users choose how much of their portfolios they want invested in stocks and bonds. ETFs track a particular index (like a index fund), but they’re traded like stocks.

Why Automating Investments and Re-balancing Works

Betterment offers you automatic rebalancing every quarter and whenever your assets allocation changes dramatically from your plan. This means that you don’t have to worry about buying and selling to keep your portfolio on target.

Automation can be really beneficial because it can help us overcome our tendency to tinker with our investments when we shouldn’t. Investor returns don’t always match investment returns – people tend to get emotional and buy/sell at wrong times.

Asset allocation is about maximizing your portfolio’s return while minimizing your risk. While maximizing returns seems fairly clear and measurable, risk is subjective and differs person to person.

Betterment Offer IRAs

The big news for Betterment is that they are offering both Traditional and Roth IRAs for new customers. If you don’t have an IRA started for your retirement you now have a new option.

Rollover Your 401(k) – Get More and Pay Less

According to Hewitt Associates Inc, almost half of employees with balances of $100,000 or more leave their 401(k) money with their old employer, which may not offer that many selection and have funds with higher than typical fees.

Even if you don’t have $100,000 in your old 401(k), you could do better by rolling it over to a lower cost IRA. You can streamline your finances by setting up your preferred asset allocation and contributions easily.

Betterment Now Has Lower Fees => Happy Investors

While I’m excited about IRAs being available at Betterment, I’m much more delighted that Betterment is lowering their annual fees even further. That means lower pricing for everyone, ranging from 0.15% to 0.35%!

I’ve included below the details below:

Even better, all new customers will get their first 30 days of Betterment for free! This is a great opportunity to open account and start investing for your retirement.

Current customers have the option to stay with the old pricing plans if they prefer.

If you’re an investor looking for a simple, no hassle option, then I think Betterment could be a good fit for you. Try

out the demo today to see if Betterment is right for you.

Thoughts on Betterment

I think this is great news for investors looking at ways to lower their investment costs. How many of you are thinking of taking advantage of Betterment’s lower fees? I’m glad that fees are getting lowered – it’s better for the investor, both now and in the long run.

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Choosing Legal Guardians for Our Baby

Elle — Mon, 20 Feb 2012 13:53:57 +0000

One of big goals this year is getting our finances and other important items taken care of should something unforeseen happens to us. That means updating our wills, getting our life insurance policy adjusted, and choosing legal guardians for our baby girl.

I will say that coming up with possible candidates and then asking them (and praying they accept) was much harder than I imagined. It wasn’t that we had no one we could think of, instead it was coming up with someone and then getting up the nerve to ask.

Tips on Choosing a Guardian

If you need a few tips on how to get started on choosing a guardian, here are some tips that I found helpful:

Make a list. Go ahead and write down all the people you know who you would trust to take care of your child(ren). Both of you should create a list and then compare notes to see if any names popped up on both lists. Happily all of the people on our list love our baby girl and vice versa.
Talk about what is most important to you. The big discussion between the two of you is defining what you’re looking for with your guardian(s):
- Religious/moral beliefs – Would you like to have your values passed down? To us this was extremely important. Our child will have to make her own decision as to who she wants to be; we just want her to have a solid foundation and be raised with love.
- Child-rearing philosophy- Does the guardian have similar ideas when it comes to raising kids? We were looking for those with a generally patient and reasonable disposition. Kids can get on your nerves and we didn’t want someone with a short fuse.
- Personality – Is your child familiar with them and get along with them? Will there be constant clashes or will they be able to work it out? She’s a baby so no personality clashes right now;) However we were looking for fairly balanced personalities that work with our own (she is our baby after all!).
- Location – Will your child have to move? Will family be able to visit them or will the distance be a burden? Right now our family is only a car ride away and we’d like them to be able to easily visit her.
- Health – Will the guardian(s) be physically able to handle the responsibilities? Are they in reasonably good health now?
Sleep on it: We mulled over our decision for a few weeks before asking. It’s such a huge decision we didn’t want to jump the gun.

This is not a comprehensive list, just some things we considered when looking at possible candidates. We’re extremely grateful that our dilemma was whittling the list down. To have a wonderful family and a supportive network of friends is a blessing; that said, it also meant it took some time to make this decision. We prayed over the matter along with asking and answering many questions about what we wanted for our baby girl.

We’re extremely happy with who we picked and we were even more elated that they accepted (whew!). Should they have not, we would’ve not had any hard feelings – being guardians is a big responsibility and we didn’t want them to feel pressured into saying yes.

By the way, we’re not experts, so please talk this over as a couple and consult a legal professional to make sure you get the proper documents created.

Next Steps – Life Insurance

We’re far from over with this project, but for me the hardest part is over. We now have to get the paperwork done and call our life insurance agent today. I’ve also requested some quotes from other insurance companies to see if we can find the best value.

I’d love to get your feedback on ideas on how much life insurance is reasonable. We’re running the numbers and seeing what we’re comfortable with and I’d like to see if we’ve missed anything.

Thoughts on Choosing a Guardian

How many of you parents have already chosen a legal guardian for your child(ren)? How was the process for you? How did you ask the potential candidate? Did they accept?

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Small Start to Student Loan Project

Elle — Sat, 18 Feb 2012 19:25:54 +0000

As one of our goals for 2012, we’d like to pay down the student loan principal by at least $2,000 this year (in addition to our regular monthly payments). I’ll be using any after tax revenue generated from My Financial Reviews to reach this goal.

About a month has passed by and I wanted to share our progress. Being a new site I didn’t expect money to just fall from the sky, so I’m happy to announce that an extra $85 is scheduled for payment on the loan. It’s a small start for sure, but it’s a start.

Couple Money Around the Web

Besides writing here on Couple Money I contribute at other sites as well:

TurboTax ->How Do I Deduct Points Paid on My Mortgage?: Besides the financial benefits of owning property with some equity, there are some tax advantages, including deducting points on your mortgage.
TurboTax->How Social Security Income is Taxed: Not everyone has to pay taxes on their Social Security benefits. To see if your Social Security will be taxed, you have to look at your *combined income and your marital status.
Green Panda Treehouse-> Alternative Investments – Going Online to Get a Better Return: The final post in the series is out and I mention how you can build a solid income stream with buying and selling websites if you’re willing to invest the time and effort.

Personal Finance Posts to Catch Up On

If you have some free time this weekend and want some tips and information for your finances, be sure to read some of these wonderful posts.

How a Lie is Helping Me Save for Retirement via So Over Debt: To me this post was a great example of trying to teach a valuable lesson without losing your cool.
Most Retirement Advice is Worse than Useless — Part I via Renewable Wealth: The title of course caught my attention, but the numbers and information in this entire series has definitely given me some serious food for thought. Once we get the car situation squared away, I’ll be re-examining our retirement contributions and investment plans.
Using a Credit Card to Buy a Car via Financial Samurai: I never thought of buying a car with a credit card, but the reasoning behind why you can’t pique my interest.
The Generation Gap via Canadian Finance Blog: Sometimes you can try to explain finances to people and it just doesn’t get through.
Quick Cash Solutions: A Dangerous Game via Boomer & Echo: I’ve seen family and neighbors run into emergencies recently and some have dug themselves into a deeper whole by going with the ‘quick & easy’ solution.
Should You Buy Life Insurance for Your Child?Should You Buy Life Insurance for Your Child? via Parenting Family Money: It may uncomfortable to think about, but Glenn covers some reason why you might want to consider getting a policy for your child(ren).

Please have a wonderful weekend with your family!

Photo Credit: Simon_sees

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Narrowing the List: Reliable Used Family Sedans on Our List

Elle — Fri, 17 Feb 2012 13:41:58 +0000

Well at least some good came out of the refinance that didn’t happen.The money we were going to use for closing can now be allocated towards the car replacement fund.

That means we’re starting to hunt for our next family car. I was expecting to shop for a vehicle some time this summer, but we may get our next car this spring.

Our goal for this next car is make sure it gets gas mileage as least as good as my husband’s car gets (30 mpg) and has a bit more space than our Jetta has now.

Reliable Used Sedans - Making a List, Checking It Twice

Before we spend a our very hard earned savings, we want to make sure the car is a smart buy. Not only are we looking at the upfront cots, we are calculating possible total cost ownership.

For that we turned to a dependable source – Consumer Reports. We checked their online site and found a list of the most reliable used sedans. Here’s what was on it:

Acura TSX
Ford Fusion
Honda Accord
Honda Civic
Hyundai Sonata
Lincoln Zephyr, MKZ
Mazda6
Mercury Milan
Nissan Altima
Subaru Impreza
Toyota Camry
Toyota Corolla
Toyota Prius

There are a few here on the list that I never thought of, such as the Ford Fusion. We’ll be digging around Consumer Reports and seeing what years have gotten the best ratings.

Looking at Our Family Budget

It’s quite a list, but it’s time to whittle it down a bit – we’re going to factor in our budget. That means I need to see how much these models are being sold for in our area.

I’ll also look at the gas mileage of all of these cars and share what I find next week. Hopefully we have 5 models to consider.

Thoughts on Reliable Used Cars

I’d really like to get your opinions and thoughts about possible contenders. Do you own any of the above models? How has it been doing for you? How long have you owned it?

Photo: Bidgee

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