Cutting Out Waste to Save on Costs

Something that was truly understood by our ancestors, and is still appreciated in many countries around the world today, is the value of cutting out waste to save on costs.  Human nature is such that the more money we have, the more wasteful we tend to be.  We throw away perfectly serviceable items, only to go out and spend money on things that will do the job no better.  Only when we find ourselves struggling to make ends meet do we start to take more care in spending.  In the normal course of events, however, we could be saving a little bit here and a little bit there, which, at the end of the day, all adds up.

How many times have you thrown away an empty container and then picked up a plastic freezer box the next time you went to the store?  How many times have you printed a page from your computer, read it once and thrown it away without using the reverse side of the paper and then gone out to buy more printer paper or a new notebook?  How many times have you trashed things that could have earned you a few dollars if you had sold them in a yard sale? 

It might only seem like a few cents, but should you ever find yourself hard up in the future, you might wish you had been more careful when you had the chance.

Check Before You Check the Dependant Box

You can reduce the amount of your taxes or increase your tax refunds by claiming an additional personal exemption for each of your dependents. You may also save thousands of dollars by claiming the child tax credit, the child and dependent care tax credit, and the earned income tax credit.

However, the IRS rules for claiming a dependent – child or relative – aren’t as easy as picking a name off your family tree. Many possible scenarios make it hard to determine qualified dependents for your tax return. Here are the general tests to help you determine a qualified child dependent.

He or she can be a biological, step-, adopted or foster child; a full, half or stepsibling; or a grandchild, nephew or niece – but only if the person lives with you for at least six months and one day of the year.

Only one taxpayer can claim a child as a dependent. If the child is under shared custody, the household where he or she spends the most prescribed time gets the prize. If the child spends equal time between the two parents, the one with the bigger adjusted gross income (AGI) can claim the child as a dependent.

The child dependent must be under age 19 by Dec. 31 of the tax year. If the person is a full-time student for at least five months out of the year, he or she can be a dependent until the age of 24. There is no age limit for dependents who are totally and permanently disabled.

Generally, you cannot claim a married person who lived with you for a year as a dependent, unless the married person does not file a joint tax return.

If the child dependent is employed, he or she must have a gross income of less than $3,400 or be unable to provide more than half of his or her own support for the tax year. For instance, 17-year old Miley Cyrus would not qualify as Billy Ray’s dependent since she made something like $25 million last year.

The other category, qualifying relative, applies to individuals related to you in ways specified in the qualifying child dependent section. It also includes parents and stepparents, aunts, uncles, grandparents and other direct ancestors. You can also add your in-laws: father, mother, brother and sister. The relative must have lived with you the whole year and meet some of the requirements that apply to the child dependent.

Why Women Need to Save & Invest More

Men and women are not equal when it comes to retirement risk. Women face a higher chance of outliving their assets and experiencing poverty in old age because they have longer life expectancy, exhibit lower risk tolerance and make less income than men.

On average, a woman’s life expectancy is three years longer than a man’s, and 30 percent of women now age 65 can expect to reach age 90. That means women need to save more to fund a longer retirement.

Women are more likely to spend some of their retirement years on their own as they outlive their spouses or because of divorce. This makes retirement more expensive. Almost 40 percent of older women living alone depend on Social Security for almost all their income. If their Social Security benefits were taken away, more than 50 percent of older women living alone would be living in poverty.

Some of the challenges that women face in retirement can be traced back to their working years. Women have less income than men, earning an average of 77 cents for every $1 earned by men. This translates to a loss of more than $300,000 over a lifetime.

Women also spend fewer years working than men. In a 15-year time frame, women spend twice as much time as men outside the work force because they interrupt their careers, says management expert Marcus Buckingham. This leads to lower employer-based retirement plan benefits.

In fact, 50 percent of women workers hold relatively low paying jobs without pensions. Those who do have pension benefits receive just 50 percent of the average pension benefits received by their male counterparts, the Women’s Institute for a Secure Retirement reported.

Because the odds are stacked against women, WISER recommends the following strategy to help address gender-based retirement risk:

Consider a guaranteed source of retirement income that cannot be outlived, such as lifetime annuities.

Delay claiming Social Security benefits to increase the level of both spousal and widow’s benefits.

Purchase long-term care insurance.

Plan now for an income stream that will continue in the event of a spouse’s death, through life insurance, joint and survivor annuities.