There’s been some discussion on this site recently regarding disclosure of charitable donations. I can understand why some might wish to keep this information private but I’m not at all shy about telling you which organizations I choose to support.
This year, I made donations to the following charities:
* Oceana – The largest international ocean environmental advocacy group dedicated to protecting and restoring the world’s oceans and its sea turtles, sharks, dolphins, whales, endangered species, and marine ecosystems.
* Union of Concerned Scientists – The leading science-based nonprofit working for a healthy environment and a safer world. UCS combines independent scientific research and citizen action to develop innovative, practical solutions and to secure responsible changes in government policy, corporate practices, and consumer choices.
* Conservation International – Applies innovations in science, economics, policy, and community participation to protect the Earth’s richest regions of plant and animal diversity and demonstrate that human societies can live harmoniously with nature. Works in more than 40 countries on four continents to help people find economic alternatives without harming their natural environments.
* The Raptor Trust – Provides care and assistance for injured wild birds and aims to educate the public about conservation issues related to birds, especially birds of prey.
I also made material donations to the Military Order of the Purple Heart Service Foundation, which benefits wounded, disabled, and handicapped veterans.
But there are a number of other types of donations I’ve made which may not count for tax purposes but count in myriad ways to me:
I’m an avid Freecycler, and donated over 35 items this year to those who needed them, including a giant standing freezer I gave to a local school for underprivileged children. Apparently this donation will be keeping them in ice cream parties for a long time to come.
I also save all my egg cartons for a local independent chicken farmer, and have brought over at least 100 cartons this year (I do a lot of baking). Since farmers in my area have a lot to contend with, this bit of recycling helps to keep at least one of the expenses down for a farm which appears to be barely breaking even.
And then, as always, there’s the active practice of channeling my spending towards organizations and businesses I believe in, using my purchasing power to support their continued growth. For instance, in 2007, 71 percent of my total grocery budget went to support local agriculture and small businesses. I hope to grow this percentage even further in 2008.
Today’s the last day to donate for the 2007 tax year; did you reach your giving goals?
On December 30, 2006 I officially announced my financial goals for 2007. Before I set new goals for 2008, I should take a look at my progress this year. Below, I’ll cite the goals I set a year ago and evaluate my progress.
Income: Generate $40,000 in revenue outside of my day job. I think this is attainable. My side income has seen fairly consistently growing and as long as I keep working hard, I should be able to reach this amount. One challenge related to the environment becoming increasingly competitive. Stretch goal: $60,000.
Income results: Passed with flying colors. Preliminary numbers show that I significantly exceeded my stretch goal. I’ll still have to make some adjustments as I received income for some other individuals that still needs to be distributed, but I should clear $70,000 in income related to internet publishing. Most of that comes from advertising on Consumerism Commentary, but an increasing portion comes from affiliate sales. While I am grateful for my success thus far, I am still blogging because I enjoy writing and building online communities. The satisfaction in blogging is generated by regular readers, but the income comes generally from passers-by who are generally looking for something else.
Spending: I’ve managed to keep my spending fairly low over the last few years, except for gift season and food expenses, like dining out and groceries. I’m fine with the spending on gifts but my goal for 2007 will be to create a budget for food and stick to it. This will involve buying smarter and healthier groceries, cooking more, and eating out less. If I can stick to $100 a month for groceries and $100 a month for dining out, it would be a big improvement. Stretch goal: $80 and $80.
Spending results: Failed. On average, I spent $117 per month on groceries and $167 per month on dining out. Both numbers are slightly up from last year, probably reflecting a higher cost of food rather than a change in behavior. If anything, I shopped more efficiently and ate out at restaurants less this year. Including both the “dining out” category and “convenience food” category (which includes lunch at work and snacks), I spent $190 per month this year compared with $230 last year.
However, spending in general has increased. Earlier this year, I moved into a new apartment that is larger, more comfortable, and more inviting than my old location. Over the last few months, I’ve purchased some things that make my time in said apartment more enjoyable, including a high-definition television, an HD DVD player, and an XBOX 360 game system. I don’t expect this type of spending to continue, however.
Investing in 401(k): I’m currently investing 12% of my day-job income into the 401(k) my company offers. The only reason I can afford this is through the help of my side business income. My goal for 2007 is to increase this to 15% by July. This should be possible with a little income bump. Stretch goal: max out the 401(k) with an investment of $15,000. That will be a significant stretch.
401(k) results: Exceeded my goal. In May this year, I increased my 401(k) deferral from to 25% after an earlier increase from 12% to 16%. That’s not quite enough to max out the 401(k) in my low-paying job. According to my last pay stub of the year, I contributed about $10,000 to the 401(k). My employer matched some of that contribution, as well. Investing this much for retirement is only possible due to the additional income mentioned above.
Investing in Roth IRA: I already max out my Roth IRA investment. My goal for this is for nothing to change.
Roth IRA results: As expected. It’s no surprise, but I fully contributed to my Roth IRA this year. Doing so may have some unintended consequences, unfortunately. I’ll have to check after preparing my 2007 tax return, but I may have to withdraw a portio of my Roth IRA contributions. For 2007, if modified adjusted gross income exceeds $99,000 then the IRS won’t allow a full contribution to a Roth IRA. With an income above $114,000, the Roth IRA is completely unavailable. At this point, it’s too early for me to tell whether I’ll have to withdraw funds from my 2007 Roth IRA at the last minute.
Saving: The account I have marked for emergencies would cover one month of my current expenses. If I were to be in an emergency situation (i.e., no job) for longer than a month, I still have other cash I could use before resorting to credit, but that would involve borrowing from other savings goals. I’d like to double the size of my emergency fund by the end of the year. I’d also like to double the percentages of my day-job income I devote to long term savings goals, like relocation (a house, hopefully). Stretch goal: triple the percentages.
Saving results: Succeeded. I have doubled the balance in the savings account earmarked for emergencies, which now would last about two months without income from either my day job or my side business. I still have various savings accounts earmarked for other goals that can be tapped if necessary. Unfortunately, with income coming from various sources and going to various accounts, it’s been a bit difficult for me to track the percentages. It’s safe to say that on average throughout the year, I saved or invested a larger percentage of my total income than I spent.
Debt: If I follow my schedule, I will pay off my car loan (at 2% interest from a relative) by September. The interest rate is favorable enough I’d rather keep the money in savings, so I’m not going to speed this up. On the other hand, I have about $18,000 in student loans remaining to be paid. The interest rate isn’t as favorable at 4.25%, but the interest paid is tax-deductible.
Debt results: Achieved the goal ahead of time. I paid the remaining balance of my car loan off in July. While 2% interest wasn’t hurting, and I was earning more from interest in savings than paying in interest on the loan, I still wanted to rid myself of that debt as soon as possible. The money to buy the car was lent to me by a family member, so I felt like the right thing to do was pay it off as soon as possible. He could have been earning higher interest with that money in a savings account.
I still have a balance on student loans, a combination of money used for undergraduate studies and my MBA. My masters degree was 90% paid for by my employer, but I didn’t always use the reimbursements to pay down the loan. When I originally started the MBA, the financial adviser for the university suggested I get a loan anyway and use reimbursements to pay back the loan. Looking back, I probably should have used the reimbursements to pay the school directly, avoiding any involvement of debt.
Charity: The non-profit organizations I’ve worked with in the past appreciate volunteers who give their time, and this is the approach I generally take. I like that 100% of the time I give affects the organization. When you give money, a portion is kept by the organization for administrative expenses and will never make it to the programs sponsored by that organization. While I understand that administrative expenses need to be paid for, I believe I have more of an effect by directly involving myself. Despite this, my goal for 2007 is to select an organization that means something to me, one that I cannot spend time with and one I know the money will be put directly to its purpose, and donate $1,000. Stretch goal: $2,000.
In the interest of further consolidating my finances, this past week I cashed in a small collection of 1988 series EE bonds which I’d kept hidden away ever since. All had reached and surpassed their maturity dates long ago, so they were worth their face value and then some.
Here’s what mine were worth, which should give you an idea of what to expect if you’ve got some series EE bonds of that vintage hidden away as well:
1 $500 bond = $684.00 1 $100 bond = $131.52 3 $50 bonds = $68.40 each
All in all, I had $1,020.72 in cash, which I put directly into my savings account to reinvest. This does mean I’ll have to account for $645.72 in interest when I do my 2007 taxes, but I’ve got lots of charitable donations this year to offset this so I think it’ll be okay.
I might have saved cashing these until after I retired to gain a better tax advantage, but was eager to consolidate these gift monies into the rest of my savings to better leverage them for other, more immediate investments.
Do you own bonds? What’s your savings bond strategy?
I played Rock Band last night at a friend’s house for the first time, and everyone is still talking about my vocal rendition of Roxanne by The Police. I’m not sure whether that is a good thing or not. For those who have no interest in video games and who may not know, Rock Band is a game that allows you to form a band and compete by “covering” classic rock songs with simplified musical instruments. It’s a great game.
Here are a few articles from around the web that readers might enjoy.
Did you receive unwanted gift cards this holiday season? If so, Mrs. Micah has some tips for you. Like Mrs. Micah, all the gift cards I received were for places I normally shop. Now my challenge is to make the best use of them by finding good deals and discounts for things that I’d like to have.
How Much House Can You Afford? The Digerati Life has ten steps to determine how much you should spend when buying a house. The ten steps seem to focus on the entire process leading up to purchasing a house. The process is much simpler if all you’re looking to determine is how much you should spend on a house. There are some rules of thumb about mortgage payments as a certain percentage of after-tax income (no more than 35%) and total home value as a multiple of your income (perhaps three times your annual gross income). Of course, regional differences and personal preferences mean that rules of thumb are nothing more than guidelines. Here’s a helpful affordability calculator.
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Last week, I mentioned I met my goal for charitable giving for 2007. The modest goal, which I set for myself at the end of last year, was to provide $1,000 in support of an organization meaningful to me. This year, I decided to separate myself further from the organization I normally support, which also ... Continue reading this article…
It’s no secret that I share a lot of personal information on Consumerism Commentary, including very detailed balance sheets and income/expense reports. Most of that publishing bravery is based on the fact very few of my readers know my real name. My biggest concern with this anonymity is the ability for people to research my ... Continue reading this article…
In the next few days, I plan on reviewing my 2007 progress against my goals. However, I need to start thinking about 2008 before I have a chance to compile all the data. One of my biggest plans is to save a higher portion of my income. 2007 was a spend-heavy year for me, and ... Continue reading this article…
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For anyone looking to apply for a new credit card there are a few offers from American Express with sign-up bonuses. American Express® Premier Rewards Gold Card The American Express Premier Rewards Gold Card is offering 25,000 Membership Rewards® Points after you spend $2,000 in your first 3 months of Card Membership. Other card features ... Continue reading this article…
In the course of my holiday shopping, I happened into my local pet shop for some supplies and a catnip-filled stocking or two. While there, I couldn’t help but wander towards the wall full of wriggling puppies, each more adorable than the last. As usual, there were a few display tanks full of kittens, generally ... Continue reading this article…
The last contribution to my 2007 Roth IRA was invested last Monday. Ever since my first Roth IRA several years ago, I’ve been maximizing the contribution each year by automatically investing equal amounts twice each month. One reason for using that technique, usually known as “dollar cost averaging” was to reduce risk. With the market ... Continue reading this article…
In October, I mentioned that time was running out for achieving the goals I set for charitable giving. Last year, I set a goal to give $1,000 or $2,000 to charity in 2007. I was having some trouble choosing the organization to which I’d contribute, and ended up sending support to a few programs identified ... Continue reading this article…
Another day, another interest rate change. Consumerism Commentary reader Brian wrote in to let us know that Presidential Bank lowered its interest offered on the savings account to 4.4 percent APY and 3.5 percent APY on the checking account.
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Andrew Horowitz is the author of The Disciplined Investor and creator of the podcast that accompanies the book. He has also created the annual “BESPy” awards, to celebrate blogs, education, sofware/sites, and podcasts focusing on personal finance and investing. Andrew’s latest podcast announces the winners of the first BESPy awards. Consumerism Commentary was presented with ... Continue reading this article…
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