Tag Archives: growingup

Going to Israel – For Free!

One of the benefits that comes along with being born Jewish (besides being, uh, one of The Chosen People) is a free trip to Israel.

The program, called Birthright Israel, provides free trips to Israel for Jewish youth under the age of 26. They send a lot of us kids to Israel each year… trying to get us to feel connected to our past and perhaps carry on the religion for a few more years of history.

I’m not a Zionist by any means – I’m pretty much agnostic on the issue of Israel (and religion in general).

So the trip actually is FREE. It requires a $250 deposit but as long as you go on the trip you get your money back. When the deposit was do my checking account was way low so my parents spotted me the deposit money but they’ll be getting it back.

However – small costs for the trip that’s free can and will quickly add up. I don’t exactly have all of the suggested packing items. I still have to pay for a roundtrip ticket from California to New York to get to the flight to Israel (though I’m going to make the trip a vacation home to New Jersey for a week or so as well as long as I can work from New Jersey for a week or two.) There are other costs as well… (not counting souvenirs and such) so my free trip costs…

$100 passport (I lost my old one. At a bar. Don’t ask.)
$350 round trip flight to New York
$30 water shoes “teva shoes” (from suggested packing list)
$60 sleeping bag (I’m going to try to get one used? Or borrow one?)

and then the big cost that I’ve promised myself (If I can be good and save for it…)
$600-$2000: A DSLR Camera – either Nikon or Canon.

For the past few years I told myself if I get on the Birthright Israel trip (or ever travel abroad again) I will be bringing a nice DSLR camera to take pictures. Last time I was in Europe I had a film SLR camera that broke a few weeks into the trip… but seemed to be working. So I wasted tons of film and lost dozens upon dozens of pictures. My digital camera that I brought was kind of crappy and while it took a few good shots, the quality was not that high.

I want to get more into digital photography anyway and I can’t think of a better excuse then to save up and splurge on a nice DSLR.

That’s coming last, though. First I need to pay my estimated quarterly taxes!!! But it’s a good excuse to try to work extra hard over the coming months.

Freelance Life: Estimated Quarterly Taxes

I may be way off on this… but my calculations amount to an:

Estimated Quarterly Tax: $6,706

Without the help of a CPA, I’m trying to figure out my estimated quarterly tax payment. My calculations, while likely closer to accurate than I’d like to believe, are definitely more than I have in my “for taxes” saving account.

The good news is that for this year at least, I’m allowed to put 90% of my previous year’s taxes into my estimated tax payments each quarter. And last year, since I was working full time and making much less money, my tax payments for the year were not that huge. I think… and please correct me if I’m wrong… that as long as I pay 90% of last year’s taxes (divided by four) then at the very least the government won’t be charging me any penalty fees.

Regardless, I probably should try to just pay 100% of my estimated tax to avoid a really awful April 2009.

That said… I’m trying to understand these calculations, without figuring out my deductions (since any deductions I can take will just mean that I can get a refund. And I’d rather just get a refund than deal with sorting out deductions each quarter. It’s hard enough to do it once a year!)

—-

Tax Guestimates

Assuming I make $5500 a month for the entire year (I’m overestimating given that I’m making about $5000-$5300 now in any given month… some months I make more.)

TOTAL TAXES = $26,821.362 (or 40.6% of $66k yearly income)

FEDERAL
[$8025 at 10%] $0 – $8025 = $802.50
[$24524 at 15%] $8026-$32550 = $3678.50
[$33,449 at 25%] $32,551 – ($78,850) $66,000 = $8,362.25

Total Federal Tax: $12,843.25

STATE

0% $0 – $6828 = $0
[$9357 at 2% ] $6829 – $16186 = $187.14
[$9358 at 4%] $16187 – 25545 = $374.32
[$10,005 at 6%] $25456 – 35461 = $600.30
[$9353 at 8%] $35462 – 44,815 = $748.24
[$21,184 at 9.3%] $44816 – 66,000 = $1970.112

Total State Tax: $3880.112

SELF EMPLOYMENT TAX

[$66,000 at 15.3%] = $10,098

Total Self Employment Tax: $10,098



Estimated Quarterly Tax: $6706

Eeks!!! $6,706?

I’ve only saved about $4,500 for this quarter’s taxes. Well, I’ll really be saving more like $6,500, but I don’t get paid until the end of the month, so the next $2,000 I’d put away, which would be for my March-April “month” of work ending April 20, will not be paid until the end of the month. So how am I supposed to pay that in advance?

I’m so, so, so confused.

State Income Taxes: Why California Sucks

When I headed west and moved to California a little over two years ago, I was fresh out of college and not at all worried about taxes. All I wanted was to move away from Chicago’s bitter cold and into the Cali sun. At that point in my life I figured I’d be lucky to ever make $20k a year, and being in such a low income bracket, the income tax amount from state to state didn’t make much difference.

Actually, at the time I didn’t even realize that there was a difference per state in terms of income tax levels. I just thought that everyone in any state paid the same amount for state and federal taxes, just that the state taxes went to the state you lived in and federal went to Bush and his war.

Apparently – that’s not correct at all. (Duh, me.) Each state has its own state income tax. Just my luck, California is the worst for income tax rates at my level of earnings.

Even New York and my home state of New Jersey would be cheaper when it comes to state taxes (although they’re both ranked highly in the list of “expensive income taxes.”)

For a yearly income of $50k – $60k (which is about what I expect to bring in over 2008)…

My state income tax rate & fee,
assuming an annual income of $55k:

California — 9.3% or $5115
New York — 6.85% or $3767.50
New Jersey — 5.525% or $3038.75

I’m surprised at how expensive it is to live in Maine. 8.5% for anyone making $17k or more. Yikes. Who really wants to live in Maine anyway?

Talking Taxes

My taxes for 2007 are going to be a total nightmare. I tried to figure them out on TurboTax a few months ago before getting my official W2s, but I’m afraid I’m missing major deductions that I should be taking (or taking deductions I shouldn’t be taking).

That has led me to seek out a CPA. So far the one who has written back to me charges $155 an hour with a two hour minimum. Eeks. And I thought $80 for TurboTax was pricey.

While $310 for an accountant to do my taxes won’t be the end of the world, it still sucks. I feel like I should be able to figure out taxes for myself given that my overall earnings for the year was less than $35k. Unfortunately that $35k came from a bunch of different places.

Meanwhile, my uncle – who I do some small amounts of freelance work for – told me that while he’s not sending me a 1099 form I have to report the earnings. Of course I have to report the income, but I thought that he also had to report the earnings. So I’m a bit confused about this – if he doesn’t report the earnings will I get him in trouble if I report them?

Do you guys think it’s worth $310+ to have someone prepare my tax returns? Or should I just do TurboTax and hope that I don’t majorly mess anything up?

The Cost of Having Pretty Hair

I just read a post over at Saving for a Home of My Own that details the $$$ Saving Diva has spent over the years to perfect her coif en route to her currently frugal lifestyle. Her post is so great! She breaks down, by hair style, how much it has cost her to maintain over the years. $2225 a year for the bleach blond hair, $1374 for dyed brunette locks, and now $104 per year for the low-cost, low-maintenance version.

It’s amazing how much money us girls spend on our hair. Even without going to fancy salons, the costs quickly add up if you follow the recommended “get your hair cut every 6 week” myth of the salon saleswomen.

When I was younger and my parents were paying for my hair maintenance, I would get my hair cut every six weeks. From middle school on, I got my hair highlighted and dyed. It must have cost my parents a small fortune! Sometimes I’d dye my hair myself with drug-store bought brands, but it would usually come out shitty and I’d have to get it redone at the salon.

After graduating college – now that I’m paying for my own hair care – I fall somewhere between “spending way too much money on my hair” and “frugal.” I admit I like to splurge on my hair, when I get it done. But I just get it done about two to three times a year. $200 three times a year or so is not going to break the bank, but every three weeks would be awful!

I think it’s important to have a good hair cut and style. Makeup you can buy cheap and you can go w/ just some concealer and maybe basic lipstick to look professional. But hair is so key in your look. It doesn’t need to be dyed at all – I think the cut is what’s worth spending the money on.

I used to go to supercuts for a while and spend $20 on each cut, but half the time I’d end up with crooked, messed up hair. I like my hair stylist now and she knows what would look good with my face shape. Sure, it costs $60 (plus tip) to get my hair cut. Then the dye is another $100. I don’t do highlights anymore, they are way too expensive. And right now my hair is dyed my natural color, almost, so I may just let it grow out and stick to cuts until I go gray and need to start coloring again.

Speaking of tips (not roots) I wonder how many people actually tip their hairdressers. I always tip 20% if someone does a good job and usually tip about 10% if I don’t like what they did and don’t plan on coming back. If they really mess something up I won’t leave a tip at all, but that’s very, very rare.

My friend – who comes from a lower-income family (not poor or anything, just not upper middle class like my family) apparently never tips her hairdresser. She goes back over and over again and her hairdresser, who has been cutting her hair since she was a kid, doesn’t seem to mind much at this point.

I just wonder… how many people tip their hairdressers and how much? It seems like the tipping cost alone adds up fast. But I am very cautious of tipping poorly to people who do things like cut my hair, etc, because I want to go back to them and I don’t want them to make it awful the next time around.

How much do you tip your hair dresser?

It’s None of My Business, But… Part 2.

So that friend I wrote about the other day… the one who is maxed out on her credit cards, works a part-time job and earns less than she spends more often than not… ended up accidentally chipping her tooth today. Besides it sucking that she now has a small chip in her tooth, the biggest problem is figuring how to pay to get it fixed. With no dental insurance, no room left on her credit card, and no emergency fund… well, I’m not sure how she’ll figure this one out.

As a friend, I really want to lend her the money to get it fixed. But I realize friendships can end badly the second money gets involved. So I’ll stay out of it. I figure her well-to-do boyfriend can help her out if worst came to worst.
Still, it’s times like these when I wish I could say “you know, if you put the money you spend on your 2-day trip to Los Angeles, and the shoes and sunglasses you got there, into an emergency fund, these awful accidents wouldn’t have to be that bad.”
Of course, I just hold my tongue. It’s not polite to say such things to friends.
It’s one thing if you are trying hard to be frugal and you’re in debt, its another if you’re just over spending when you’re making enough to live a comfortable life on your income. I don’t understand how people can do the latter. 

"It’s None of My Business, But…"

My good friend has a problem with money. I want so desperately to help her get on the right path, but anything I say would come off as judgmental.

My friend, let’s call her Lisa, is an intelligent 20-something gal. She has a high school degree but dropped out of college because it wasn’t for her.

Her parents own two smallish houses in an area where real estate costs an arm, a leg, and a gold mine. She lives in one of them. She doesn’t pay anything for rent, etc.

Her parents also own a small business. She works for them part time. Since I’ve known her, the business has been struggling a bit. They’ve kept it going, but her paycheck of something like $1000 a month doesn’t always come in on time.

Lisa is knee deep in credit card debt.

Lisa owns a few pets. She recently bought a dog. She loves her dog. But the dog costs a lot of money. She’s already paying to take care of a cat and a bunny rabbit.

Recently, Lisa went on a trip with a friend who was auditioning for a show down in Los Angeles. While they didn’t stay in a luxury hotel, Lisa did pay for airfare and half of the rental car. According to her blog, her friend didn’t plan in advance, so she had to put the rental car on her credit card, which just happens to already be maxed out. Lisa took the trip just for her friend, and she’s only staying for two days, basically to wait for her friend to audition, and then return home.

It’s none of my business, but I just want to understand why someone so deep in credit card debt would buy a dog and take an unneeded trip. These purchases add up fast.

I guess some people live their lives just accepting credit card debt as the norm. But I don’t understand how they do this.

I want to help Lisa get out of credit card debt. The friend side of me wants to lend her money to pay of her credit card bills so she can not be taking on such high interest rates. But I couldn’t do that because the likelihood of that scenerio ending pretty is rather low.

Do any of you have friends who just spend, spend, spend without thinking about their credit card debt? Have you ever tried to step in and help?

Forbes Billionaire’s List and How Rich is Rich Enough to Give to Charity?

A few days ago Forbes posted its annual list of the world’s richest people. While the billionaires gracing the normal list were mostly obvious — Warren Buffett, Bill Gates, etc, the list that I found more interesting was the sidebar “World’s Youngest Billionaires.”

Many of the world’s youngest rich inherited their wealth. Some, like Facebook’s Mark Zuckerberg, are self-made billionaires. At just 23 (he’s only a year younger than me) he’s set for life. And a few other lives, as long as he can reincarnate and claim his savings on his return to earth.

As I’ve been figuring out my budget upon my upcoming raise, I noted that I feel like I’m almost making too much money, and I don’t know what to do with it all.

Of course, that’s not true. Now that I actually have money to put into savings, I can start seriously saving for things I want, like for the down payment on a house.

The other day as I was driving I was thinking about how nice it would be to make enough money that I could donate a substantial chunk of it to charity. Then greed clouded my head and I thought – why donate money when I can save the money? My Roth IRA isn’t maxed out yet, and even then the extra cash put into a SEP Ira, a high interest savings account for the house down payment, a CD or some other saving mechanism would probably be a wiser move.

I always thought that charity should be given in time, not money. If you’re going to be charitable, go do some volunteer work, help build a house with Habitat for Humanity, or volunteer to mentor in-need kids in a local town.

Then I got into the “real world” where I realized time is money and I have more money than time. Yet I still don’t feel like I have enough money to donate yet.

Obviously, given my pay bump I could donate $100 a month instead of putting that to my investments and just pretend it never happened. It would probably make me feel all warm and fuzzy inside, but I don’t know how warm and fuzzy I’ll feel when I retire and the government has run out of money for social security.

At what point in one’s wealth-building career does charity become a necessity? Does everyone donate to charity? How much is the proper amount to donate, percentage wise, of one’s income? What if one’s job is unstable and while he or she is making a good amount of money now (in the $55-$70k range, dependent on how many freelance projects are completed), but in a few months she might be unemployed? What if, as a freelancer, my entire life is lived like that? And then what if I have kids and more than just myself to worry about one day, financially speaking? When do I give to charity and when do I just be selfish and keep all my money?

The Best Things in Life Are Free

There’s a song from the musical Good News that goes “the moon belongs to everyone, the best things in life are free.” That’s absolutely true.

I spent today rollerblading on a paved path by a beautiful reservoir. My skates cost me a pretty penny once upon a time (and they’re about ready for an upgrade), but other than once pricey cost of my blades, the lovely outdoor excursion was entirely free.

The view, fresh air, and overall good vibe created by other walkers, bladers and bikers was much more valuable than any “paid” activity I could have chosen to do for the day.

While the cost of living in The Bay Area is ridiculously high, when I actually get outdoors and experience the beauty of my town and the surrounding area, I am quickly reminded why living here is worth every penny.