WSJ: The Do-It-Yourself Tax Cut
Papadillos
R.O.I.
By BRETT ARENDS
The Do-It-Yourself Tax Cut
April 21, 2008
Nobody likes paying taxes, but the way we Americans complain about them
you'd think they were the only way we're getting skinned.
Reality: We're getting nickel-and-dimed all the time, and in lots of ways we
don't even notice. And yes, it really adds up. If we counted the cost, most
people would be stunned.
OK, tax is center stage right now. Last week was April 15. This week will
come "tax freedom day," the notional point in the year when the average
citizen starts working for themselves. Many people are eagerly awaiting
their rebates and their $600 stimulus checks. (Note: Thanks to the deficit,
these aren't really rebates. They're just loans from your kids. Something to
think about before you blow the money on a flat-screen TV.) And the
presidential campaign may very well hinge on taxes and how to balance the
budget.
So here's a radical idea: A do-it-yourself tax cut.
Don't wait for the politicians to pass a law or some bureaucrat to mail you
a check. Don't wait for Uncle Sam to put more money in your pocket. Here are
14 ways to do it that you do tomorrow on your own.
1. Change bank accounts. You could be earning at least 3% interest on the
balance in your checking account. Instead you're probably earning virtually
nothing -- and maybe paying a "relationship" or "account maintenance" fee
while the bank has free use of your money. Bankrate.com tracks the best
deals around. Savings: An easy $100 a year. At least.
2. Stop using other banks' ATMs. Sure it's a pain to have to remember to go
your own bank and get enough cash. But you'll live. If you use other banks'
ATMs you may be getting dinged for fees twice -- once by that bank, and one
by your own. It adds up. Do it three times a week and it could easily cost
you $300 a year.
3. Brown bag it to work. No, I'm not kidding. Just look at the sandwich
shops near your office every lunch hour. They're probably packed, recession
or not. But if you spend just $8 a day extra eating lunch, that costs $2,100
over a year. Do the math. Just brown bagging once a week, at an $8 saving,
saves $416 a year. That's from making your own sandwich once a week.
4. Change your household and car insurance. Shop for a better deal. And
raise your deductibles. Savings: Maybe $200.
5. Sign up for rewards credit cards. Outraged at what you're paying for
groceries and gasoline? You can often get 3% back on a lot of purchases by
signing up for the right cards. It sounds trivial, but these are real
savings. Savings: Maybe $200 a year.
6. Get rid of your POTS. That's "Plain Old Telephone Service." If you
already have high-speed Internet at home, why are you also paying $40 a
month or more for a phone? Switch to a Voice Over Internet Protocol provider
like Skype. It costs a few cents a call. Easy saving: At least $400 a year.
7. Change your cell phone plan, or your provider -- or both. You're almost
certainly paying too much. If you don't believe me, call your provider and
threaten to leave. I'll bet they offer you real savings to stay. What does
that say about your current bill? Some companies -- like T Mobile -- are
competing aggressively on price. There are plans that can stop you getting
skinned when you go over your monthly minutes. Most people can probably save
a couple of hundred bucks a year on their bill. And while we're on the
subject, do you want the latest phone with all the bells and whistles? Fine,
that will be $200. Alternatively you could keep your old phone, and sell the
subsidized new one to some other sucker on eBay. That's worth another $100 a
year. Total savings: Maybe $300.
8. You pay how much for TV? When you count the cable or satellite service,
often in several rooms, premium channels, and TiVo, some people spend well
over $100 a month. Basic cable, a Netflix account and a DVD recorder can
easily save $600 a year. And DVDs come with an amazing new technology that
lets you watch them on any room in the house at no extra fee. You pick the
disc up and carry it."
9. The biggest waste of money for most people? "No. 1 on the list is eating
out and drinking out," says Jan Geiger, a veteran financial planner in
Atlanta, Ga. "That's absolutely, by far, No. 1." She says most people never
add it all up. When she makes her clients do just that, "They usually freak
out. It can easily be $400, $500 or $600 a month." No, you don't have to
live on noodles. Just cutting one $100 meal, or two $50 meals, a month will
save you $1,200 a year.
10. Buy a cheaper car and pay cash. Yes, that brand new luxury car says
"smart and rich." Unfortunately, it only says that about your car dealer.
About you it says "pretentious, and probably in debt."
11. Change your investments. If you're like most Americans, a lot of your
money is invested poorly. That means you're not maximizing your investment
in tax-free vehicles like 401(k)s and IRAs. And it means you're paying
rip-off fees for mediocre mutual funds. Few are worth them: Most of the time
you're better off in index funds. Savings: maybe $500 a year.
12. Shop online. When you see something in the stores, don't buy it. Go home
and check out the price online. I'll bet it's a lot cheaper, even when you
include the shipping. You may also skip state sales tax. Sometimes the
savings can be staggering. And if you get an online loyalty credit card,
such as the one offered by Amazon, you can save an extra 3%. If you just
save 10% this way on a mere $2,000 worth of spending a year,
congratulations: You have just made $200.
13. Cutting out crap. Remember before we paid for "iced tea" and water? And
half of what people buy has no obvious purpose or merit. If you don't
believe me, go to the mall and look around. And most gifts are a total waste
of money. I'll bet the typical household could save $500 a year just cutting
out crap.
14. Stop wasting energy. No, you don't have to shiver through the winter or
swelter in the height of summer. But a handful of simple steps can probably
save you $200 a year. Among them: Switching off electronics at the socket
overnight so they don't keep draining power.
These are only ballpark figures. The actual savings will vary enormously by
household. But just the steps above can save a household thousands a year.
That is, for most, a far bigger number than any tax proposals you will hear
about in the campaign.
This is not a political column. The debate about higher taxes or lower
spending can be carried on elsewhere. But it does seem to make sense to
tackle costs everywhere we find it, and not just in our tax bills.
URL for this article:
http://online.wsj.com/article/SB120857773599028553.html
AllEmailDeletedImmediately
news:C434BF89.D8CF%papad...@hotmail.com...
> The Wall Street Journal
> R.O.I.
> By BRETT ARENDS
>
> The Do-It-Yourself Tax Cut
>
> 6. Get rid of your POTS. That's "Plain Old Telephone Service." If you
> already have high-speed Internet at home, why are you also paying $40 a
> month or more for a phone? Switch to a Voice Over Internet Protocol
> provider
> like Skype. It costs a few cents a call. Easy saving: At least $400 a
> year.
911 service?
> 14. Stop wasting energy. No, you don't have to shiver through the winter
> or
> swelter in the height of summer. But a handful of simple steps can
> probably
> save you $200 a year. Among them: Switching off electronics at the socket
> overnight so they don't keep draining power.
how will this affect your vcr/dvd recorder settings?
Cheapo Groovo
papad...@hotmail.com says...
> The Wall Street Journal
> R.O.I.
> By BRETT ARENDS
>
> The Do-It-Yourself Tax Cut
>
> April 21, 2008
> Nobody likes paying taxes, but the way we Americans complain about them
> you'd think they were the only way we're getting skinned.
>
> Reality: We're getting nickel-and-dimed all the time, and in lots of ways we
> don't even notice. And yes, it really adds up. If we counted the cost, most
> people would be stunned.
>
> OK, tax is center stage right now. Last week was April 15. This week will
> come "tax freedom day," the notional point in the year when the average
> citizen starts working for themselves. Many people are eagerly awaiting
> their rebates and their $600 stimulus checks. (Note: Thanks to the deficit,
> these aren't really rebates. They're just loans from your kids. Something to
In my seminars, I have the 3 PHAT frugal ideas that save thousands.
The WSJ forgets a lot of great ideas like biking/walking, growing your
own food, and making your own beer/wine.
larry
> 911 service?
>
I must ask, how many times a year are you calling 911?
I've been paying $12 a year PER LINE since 1988 for "911"
service. (most of that time $36 a year for the 3 lines)
I've made 2 911 calls in the first five years it was active
and both times hung up after 1/2 minute waiting for it to
start ringing. Called the old 7444 number and was answered
before the first ring.
Now, 911 isn't very useful, police have the twenty question
quiz before you can start the crime report. You can empty a
house in that time, not that they'll get there within an
hour. Fire apparently has to fill out risk management
reports before it's safe to pull a hose. $3000 is a bargain
for a home sprinkler fire suppression system. I think
ambulance is still working well, once they are dispatched.
At least we're not paying $21 a year for 911 like friends on
the east coast. I still don't understand the per line
charge, like I'll make 3 times the 911 calls with three
lines ;-) It's just one of the other 11 "hidden" taxes on
the phone bill.
-- larry/dallas
AllEmailDeletedImmediately
"larry" <f...@foobar.com> wrote in message
news:SxPPj.10619$2g1....@nlpi068.nbdc.sbc.com...
> AllEmailDeletedImmediately wrote:
>
>> 911 service?
>>
>
> I must ask, how many times a year are you calling 911?
i've never called 911, but if i should have to, i'll be happy
to have it.
Dennis
Sure, like they say, "When seconds count, 911 is only minutes away."
(Just kidding. I'm glad to have 911 service too. ;-)
Dennis (evil)
--
"There is a fine line between participation and mockery" - Wally
SMS
> "Papadillos" <papad...@hotmail.com> wrote in message
> news:C434BF89.D8CF%papad...@hotmail.com...
>> The Wall Street Journal
>> R.O.I.
>> By BRETT ARENDS
>>
>> The Do-It-Yourself Tax Cut
>>
>
>> 6. Get rid of your POTS. That's "Plain Old Telephone Service." If you
>> already have high-speed Internet at home, why are you also paying $40 a
>> month or more for a phone? Switch to a Voice Over Internet Protocol
>> provider
>> like Skype. It costs a few cents a call. Easy saving: At least $400 a
>> year.
>
> 911 service?
See "http://slate.msn.com/id/2106424"
911 service is a real problem with VOIP, with no easy solution. If you
call 911 from a cell phone, it usually goes to a different call center
than 911 from a landline, i.e. in my area it goes to the highway patrol,
which puts you on hold for long periods of time (I've experienced 10
minutes, others have reported 30 minutes).
You can have a list of regular 7 digit numbers for emergencies, but
you'd better be sure that these numbers are answered during off-hours
like 911.
See "http://slate.msn.com/id/2106424"
And of course that article is wrong in another way, since POTS is not
$40 or more per month. In my area, unmetered POTS is about $17 per
month, and you can get metered service for about $12 per month which is
all you need for 911. I doubt if any place in the U.S. charges $40/month
for basic POTS. Sure if you add all the crap to your POTS service like
caller ID, 3 way calling, call return, call blocking, ring tone caller
identification, call waiting caller ID, call forwarding, etc. to your
POTS service you can get to $40/month pretty easily.
George
> AllEmailDeletedImmediately wrote:
>> "Papadillos" <papad...@hotmail.com> wrote in message
>> news:C434BF89.D8CF%papad...@hotmail.com...
>>> The Wall Street Journal
>>> R.O.I.
>>> By BRETT ARENDS
>>>
>>> The Do-It-Yourself Tax Cut
>>>
>>
>>> 6. Get rid of your POTS. That's "Plain Old Telephone Service." If you
>>> already have high-speed Internet at home, why are you also paying $40 a
>>> month or more for a phone? Switch to a Voice Over Internet Protocol
>>> provider
>>> like Skype. It costs a few cents a call. Easy saving: At least $400 a
>>> year.
>>
>> 911 service?
>
> See "http://slate.msn.com/id/2106424"
>
> 911 service is a real problem with VOIP, with no easy solution. If you
> call 911 from a cell phone, it usually goes to a different call center
> than 911 from a landline, i.e. in my area it goes to the highway patrol,
> which puts you on hold for long periods of time (I've experienced 10
> minutes, others have reported 30 minutes).
In my area VoIP "911" calls into into the "backdoor" number of the call
center that is used by police and firemen. There is no automation
involved like normal 911 which displays your location to the operator.
So unless you can clearly identify where you are it is useless. This
really limits the usefulness if a child is involved or someone is under
duress.
I know someone who is alive because of 911. He came home one day and his
wife was out on an errand so he was the only one there. He said he felt
everything spinning around and the last thing he remembers was dialing
911 and dropping the phone. He died and the paramedics showed up because
911 dispatches both the police and the paramedics when they get such
calls and they restarted his heart. If he had VoIP such as Vonage/Skype
etc he would be dead.