Thursday, January 25, 2007

2007 To-Do List

Ok, enough about shopping and Seinfeld! Let's go back to thinking about ways to keep that net worth growing. Here's a few things that are on my to-do list for the next few months:

Contribute maximum to Roth IRA for 2006: I held off on making my Roth IRA contribution until after closing on my condo... and since then, I've procrastinated. Luckily I have until April 15th to make my 2006 contribution. I'm planning to just transfer the maximum contribution of $4,000 from my E*Trade money market account into my E*Trade Roth IRA account. Then I need to do a little research on what mutual fund to buy. I may sell a couple other mutual funds in that account and try something else, as I think I have some laggards and could be getting better returns.

Adjust withholding: despite Jim's "devil's advocate" post, I think I'll adjust my withholding a little bit so I will have more of my paycheck to invest each month rather than just getting it all back next year as a tax refund. Part of me likes the idea of the enforced savings of higher withholding, and as Jim's post shows, giving Uncle Sam a free loan doesn't necessarily cost you all that much in lost interest. But then again, if I'm going to pick up change on the street, I might as well get every penny of interest I can, and just make sure I am disciplined enough not to spend the extra paycheck cash. I'll be using this calculator to help me figure it out.

Prepare for March 13 appointment with accountant: This year's taxes are going to be more complicated. I've already collected some 1099s and all my condo closing paperwork. I still need to get my W2 and a few other things together. Then I need to go over my E*Trade transaction records, as I sold some stocks and mutual funds and I have to be sure I know the cost basis for calculating capital gains taxes. And then I have to go over all my expense records to identify all my itemized deductions, which can include groceries for business entertaining done at home, movies I saw that related to books, magazines and newspapers I bought, internet access, business gifts, job-search expenses, etc.-- all those weird little things that my company doesn't reimburse, but which legitimately relate to my career and can therefore be tax-deductible. Fortunately I work in a profession where a lot of things can fit that definition-- when I started going to my accountant, I was amazed at all the things she found for me!

Those are some concrete things I want to do right away. Then there are all my vague goals, which include:

Figure out if and how I might want to make extra principal payments on my mortgage.
Rebalance 401K portfolio for more aggressive performance?
Strategy for the next few years' career moves: I need to have one.
Sell a few things on Ebay, or at least give them to the Salvation Army
Write a book?
Be more conscious of buying things on sale, looking for bargains on groceries
Entertain at home instead of going to restaurants
And stop shopping so much!


DivineMsN said...

Ohh! What kind of book would you write?

Debbie said...

Re: deciding whether to pay extra principal. When I first got my house, I requested an amortization schedule (you can also create one yourself) to see how much of my payment was going toward principal and how much toward interest.

The bad news was that out of my $505 P&I, only about $30 was going toward principal at first. The good news was that this means it only took $30 to cut a month off the end of the loan. For two years I paid an extra $100 per month toward my mortgage, gleefully checking off the months I had paid off (by comparing my actual amount paid to the projected amount paid).

Then interest rates started going down and I refinanced from a 30-year mortgage to a 15-year mortgage with a lower PMI payment for an overall very minor increase in monthly payment.

Nowadays (9 years later) it's not so easy to pay off an extra month--over $300 is going toward principal--but the whole thing will be paid off when I'm fifty even though I'm making the minimum payment the whole time, so it's all good.

Now I'd rather save extra for renovations. I'd like a laundry room (currently I have a washer in the kitchen and dryer lines) and a screened-in porch across the back of the house.

Anonymous said...

you have so much to it!

striving for financial success said...

In this post under: Prepare for March 13 appointment with accountant you mentioned a few ways to legally make out better during tax season (work-related expenses) and I was hoping you could elaborate or direct me to another blog that might give good tips for getting more money back during the tax season (i.e. what things should be mentioned to your accountant, etc). Any direction would be appreciated.

moneymonk said...

Write a Book???????? cool

mOOm said...

Of course, unless you have Schedule C income (consulting, business etc. i.e. non-employee) of some sort you can only claim work-related expenses that exceed 2% of your income - so if you say earn $50k a year its only worth digging for work related expenses if you think they'll add up to more than $1000. But if you can relate expenses to side income you can deduct all of them... I can usually come up with enough to do the Schedule A deduction and don't have much Schedule C income at the moment.