Without fail, at the beginning of each year, the office buzz is about 401ks and Roth IRAs. The reason here is simple – it’s performance review/bonus time. The conversations are always interesting. I’m all too happy to give my opinion, but what interests me even more is I get insight into how others prioritize their savings. I hear a little bit of everything – “I saw what happened to Enron, it’s not going to happen to me!” or “I put my money into my online savings before my 401k”. There is a lot of discussion around where to put your money first, so you may not share my opinion. I try to look at this as objectively as I can.

My company’s 401k provides a 100% company match up to 3%, so I prioritize my savings with that 3% first. There’s no place around you can get that kind of return on your investment. Anything more I can come up with to save gets funneled into my Roth IRA. My thinking is that the Roth IRA provides tax free growth, no required minimum distributions, and if you’re in a real bind, you can take out the money you originally contributed without penalty.

This is also the time of year where most companies hand out performance reviews, and if you’re lucky, a raise. It’s the perfect time to increase your 401k contributions. If you receive a 3% raise you can drop an extra 1% into your 401k and still see an increase in your paycheck. It’s a great way to build up your 401k contribution level. Before you know it you’ll be with the company for 10 years and have a nice nest egg building in your 401k. And don’t forget to look at it once in a year to determine if you need to re-balance your investments, but that’s a whole other post.



Are you the type who stresses over taxes or one who enjoys the annual task? Whichever type you are, you can benefit from the options these days we all have for filing our returns. Remember the days where e-filing and tax software seemed to cost a pretty penny? Well, depending on your income and some basic math, you can file without the need for expensive software or tax prepares. The Federal and State websites have a wealth of good info about completing your taxes. After all, they want their money!

Free Filing
If your income is $57k or less, there are a number of tax software companies who make their software available for use, for free! Some even support State returns.

If you’re comfortable completing the forms yourself, you can complete and submit for free regardless of your income. This way assumes you kind of know what you’re doing so there’s only filling in numbers and basic calculations are done. No State returns here though, just Federal.

Cheap Filing
This is the route we go. I like the H&R Block Basic Tax Prep Software. We usually end up paying $14.99. Sure, I’ve done this enough over the years that I feel pretty comfortable doing my own taxes. But the way I look at it is for $14.99 it buys me the comfort of knowing I didn’t miss anything. For this price, you can file multiple Federal returns and even long forms. It’s fast too – I can import my info from the previous year and then just enter some data from my W2.

State Returns
And my .02$ on State returns. Whatever method you’ve used to knock out the the Federal return, the majority of the work for the State return is done.

I’ll be honest, I always do the State the old fashioned way on paper and mail it. Once I have my Federal return done, the State form is as easy as filling out some information using the info from the Federal return.

For Illinois, using the MyTax website, after registering you can print, complete, and e-file your return according to their website. Maybe this year, I’ll give this way a go.

Of course since we live where we do, the State info is for Illinois. If you live in another state, simply Google-ize (yes, I made that up and have been using it for years) search your State along with the words “Department of Revenue”, and you’ll find your info.

By now everyone knows you can get your money back pretty quickly when you e-file by having it electronically deposited into a checking/savings account. Take advantage of getting your money quicker!



Tis the season. Not that season! I’m talking about open enrollment time. The time of year where workers across the country go through the process of signing up for the next year’s benefits by reviewing health plan options (especially with the Affordable Care Act), life insurance, dental and vision plans. I mean, who doesn’t like talking about accidental death and dismemberment?

There are also the flexible spending accounts. Where I work I’m always surprised of the number of employees who do not take advantage of the flexible spending accounts my company offers. Nicole and I have taken advantage of medical flex spending for years. No, it won’t make you rich, but it will certainly save you money. You like money, don’t you? I’m going to speak to the medical/health flexible spending account since this is the one we take advantage of. There are other accounts such as dependent care FSA (yearly contribution max, $5k) and a commuter FSA (contribution max varies).

First, to give you an idea of what it can save you let’s use a yearly contribution of $1k to your flex spending account. The money is deducted from your paycheck over the course of the year. And the $1k comes out of your paycheck pre-tax. So if you’re in the 25% tax bracket you’re saving $250!

There’s a couple catches, but they’re easy to deal with so don’t let this stop you! First catch, you’re limited on what you can use that money to pay for. They need to be qualified medical expenses. This link covers the other types of flexible accounts depending on what your employer offers. The biggest use for a medical flex spending account is to use it for expenses such as co-pays, medical bills left after the insurance portion, contacts/glasses, and prescriptions. For those with kids, this can add up quickly.

The second catch is that it’s a “use it or lose it” account. Expenses need to be incurred during the plan year. You can submit receipts (as long as they’re in the plan year) up until March 15th of the following plan year. Using 2013 as an example, if you have an expense from November 2013, you have until March 15th of 2014 to submit that expense against your 2013 account.

There have been some recent changes allowing up to $500 to “roll over” into the following plan year. Employers also have that as an option along with extending a grace period. They can opt for either but not both. Check your plan for your details.


Target Redcard

I’m not a big proponent of store credit cards. In fact, until last year I only had two in my lifetime, and both were obtained when I was younger and have since been closed. That being said, I think signing up for a Target REDcard is a great idea IF 1) you shop there often and 2) you can trust yourself not to go over your budgeted amount and 3) you pay off the card in full every month. If #1 applies but #2 and #3 do not, you can also consider getting the debit version of the card. In either case you get 5% off every purchase every day, 30 extra days for returns, and free shipping if you order from Target.com.

Considering the fact that our local Super Target is where we purchase a good 80% of our groceries, not to mention all sorts of other stuff, it was a no-brainer to sign up. In fact the only thing I regret is not doing it sooner. Last year we saved nearly $200 using the card and shopping like we normally would. The only difference now is that if I’m comparing prices between stores I have to remember to factor in the 5% discount.

As an added bonus, once you’re signed up you can log into your account online and choose a school to which Target will donate 1% of all your purchases. If you’re interested in learning more, visit Target’s REDcard rewards and benefits page.

Note: I am in no way affiliated with Target other than the fact that I love shopping there.