Generation X Finance » Polls

Poll: Do You Use Coupons?

Jeremy — Tue, 17 Nov 2009 23:36:46 +0000

Coupons have been around forever, but it sometimes takes a economic crisis like we have today to get people to start using them. On the other hand, many people have been using coupons long before we entered a recession. So, where do you stand? Have you been a coupon user all along or has the recession led you to begin using them? Or do you simply find them not worth the trouble and don’t use them at all?

For me, I use coupons if I stumble across one that is for something I know I’ll need but rarely do I actively sit down and cut out coupons on a regular basis. For one, the only daily newspaper that we have delivered is the Wall Street Journal and you won’t find any coupons in there. Another prohibiting factor is that our grocery store doesn’t print their own in-store coupons. Instead, they just have some killer weekly sales and I typically just base my shopping around the sales. But one area we have really took to coupons is with baby items. Baby food, formula, diapers, etc. You just can’t go without coupons for those things, and most of the time you get those coupons sent directly to you in the mail.

That being said, I wonder where people go for coupons if they don’t get them in their weekly newspaper? Surely there are some online sites that have some, but I’ve never really paid much attention. So, if you want to share your coupon experiences in the poll and comments it could help people like me who wouldn’t mind using more coupons but just doesn’t know where to look.

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About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

Poll: Do You Use Coupons?

Poll: How Much Money Do You Feel You’ll Need to Save For Retirement?

Jeremy — Wed, 04 Nov 2009 15:27:38 +0000

In the discussion about income for life and annuities earlier this week a lot of interesting points were brought up. We all know that we need to save something for retirement, but just how much are people expecting to save? You hear all sorts of numbers thrown out there saying you need to have a million dollars by retirement, or save up ten times your annual pre-retirement income, and so on. But these are just broad assumptions and most people’s true needs are going to vary significantly.

So, have you thought about how much money you should have saved up by the time you retire? One way to figure this out is to work backwards. Instead of just shooting for a big number, start with the amount of income you’ll likely need to receive from your investments in retirement. From there, you can then calculate how much you need to have saved up so that you can sustain that income without depleting your nest egg. Here’s an interesting calculator that can do just that. It will take into account your age, expected retirement, expected rate of return and rate of inflation, and then ask you for how much money you’d like to receive each month from your investments. Then, it calculates how much you should try to save by retirement, both adjusted and non-adjusted for inflation.

According to my numbers, after factoring in inflation I need to save up between $5 and $6 million to reach my monthly income goal. Of course, this is based on an early retirement, assuming no pension, no Social Security, and high income since I plan on doing a lot of things in retirement that cost money instead of just sitting at home. It seems like a lot, but it could be doable. Granted, we’re not able to save enough each year to hit that target yet but it gives me a number to shoot for.

So, how much money do you need to retire? Were you shocked at the results?

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The Dow at 10,000 – Where Do We Go From Here?

Jeremy — Thu, 22 Oct 2009 18:19:41 +0000

The Dow is at 10,000. Big deal, right? After all, it is just a number, but there has been a lot of emphasis placed on this milestone recently. Why is the media obsessed over this number? It has been over a year since we’ve seen the market at these levels, so whether it is an indication of good things to come or not, it’s welcome relief.

But why all of the hype and predictions? Is it just something for people on TV and the newspapers to talk about? Besides, the Dow isn’t even a very good representation of the market as it consists of only 30 companies. Most investors follow (or should) the S&P 500 for a better gauge of what’s going on in the market. Where was the fanfare when the S&P cracked 1,000 again?

Regardless of the Dow milestone I think we can all agree that it’s nice to see our investment account statements going up instead of down. That being said, we still have a ways to go. We’re still down around 40% from the highs in 2007 so we haven’t come completely back around yet, but it’s a good start.

So, what do you think about this milestone? Does it mean anything, even if it’s just at a psychological level? Do the markets continue to improve or are we just delaying the inevitable and we’re headed back to test the recent lows once again?

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Poll: 47% of Households Will Not Owe Taxes in 2009 – Is That Fair?

Jeremy — Mon, 05 Oct 2009 14:43:09 +0000

I don’t think you can find a single person out there who enjoys paying taxes, but I encountered an interesting article on CNN this morning that said nearly half of all U.S. households will not owe any federal income tax for 2009. At first I thought I was reading it wrong or that they were using a provocative headline to grab attention, but after reading the story it seems as if it’s true.

While it doesn’t come as a surprise that lower income households make up the bulk of the households that don’t pay taxes, it was a bit shocking to see that over 25% of those who don’t pay taxes earned more than $50,000 a year, and even 7% came from the $100,000 a year or more group. That means there is a lot of money being left on the table in terms of tax revenue. To be more specific, that’s over 70 million households.

Obviously, we have a progressive tax system that ensures those with lower incomes pay fewer taxes and may even get some tax credits back, but it also looks like there is a lot of money out there that isn’t getting taxed even by some with higher incomes. Now, I’m not suggesting we need to tax people more to make up the lost revenue, because frankly, I hate paying taxes and feel I pay way more than I should. But, as we continue to operate at such a deficit and people want to spend even more money and expand government programs I have to wonder where this money is going to come from.

Is it fair that roughly half of all households earning an income are getting away without paying Uncle Sam? I’m just curious to see where you guys stand on this issue. Has the tax system become too progressive and it’s leaving a wider tax gap between the rich and the poor? Or are things not progressive enough and we should tax those who earn more money at an even higher rate to recover tax revenue?

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Poll: Should the 401(k) Contribution Limit be Reduced in 2010?

Jeremy — Tue, 01 Sep 2009 13:54:51 +0000

Not long ago we heard that for the first time in years Social Security beneficiaries won’t be receiving their annual cost of living adjustment. This means those who draw a monthly Social Security check won’t see an increase in 2010. A lot of people are understandably upset about this. While the cost of living adjustment is based on inflation, we have a situation right now where there is no inflation. So, in theory it makes sense to eliminate the increase since the actual cost of living should be staying the same or going down.

The problem is that inflation is measured on very broad terms. While a gallon of milk or a pair of jeans might not be going up in price, many item that seniors do spend their money on are still increasing–namely health care. So, the government says that there’s no inflation to base the cost of living adjustment to, therefore there is just no adjustment. While it’s a big story, as members of Generation X we aren’t too concerned. That doesn’t mean we’re out of the woods.

There has been some discussion about the 401(k) contribution limit in 2010. As you probably know, right now the annual limit is $16,500 a year, or $22,000 if you’re over 50 years old. In the past this limit has slowly increased over time to keep up with inflation. But guess what? We have the same problem as with Social Security. The government reports that there is no inflation or possibly even deflation, so they are considering actually reducing the 401(k) contribution limit. Right now it is proposed to drop it by $500 and make the 2010 limit an even $16,000.

Is This Good or Bad?

Personally, I think it sends the wrong message to savers. Without pensions and dwindling Social Security the message has always been that we need to save as much as we can on our own so that we can have enough money in retirement. Now the government wants to say that we should save less just because we’ve had a year where inflation wasn’t that bad. The government is stingy enough and has very few incentives to get people to save, so cutting the contribution limit won’t help that. Instead, they should be finding more ways to encourage people to save even more.

Although, the main argument is that very few people actually max out their 401(k)s as it is so very few people would even be affected. That’s true, but I have to argue that this same argument also backs up the idea of leaving the limit the same or actually increasing it. If the government doesn’t want to lose additional tax revenue by people saving a little more and think they can curb that by decreasing the limit, I’d argue that since very few people do reach the max anyway they would see very few changes to tax revenue loss while still promoting the message of saving.

What Do You Think?

I’m curious to see what others think about this idea. I know a lot of people might not personally be affected since they might not be maxing out anyway, but it will be interesting to see where people stand on this. I’m not even allowed to max out my 401(k) because my employer has a limit set at 25% of my pay, which also stinks. I should be entitled to whatever the IRS allows, but that is another discussion for a different day. So for now, what do you think about the proposed 401(k) contribution drop?

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Poll: Are You Looking to Buy or Sell a House Right Now?

Jeremy — Wed, 12 Aug 2009 13:51:47 +0000

If you spend any time listening to the news, it’s no surprise that we’re still in the midst of a real estate slump. Certainly, some areas have fared worse than others, but as a whole, most real estate values have dropped over the past few years. While this is bad news for those who are trying to sell a house in this market, it also presents an opportunity for those looking to buy.

People who are considering a new home purchase right now have a wide selection of homes to choose from on the market, and in most cases, very attractive prices. Those who have their home on the market and are trying to sell are faced with just the opposite problem. They are competing with a flooded market and lower prices, so it’s increasingly difficult to unload the property for what it was worth just a year or two ago.

So, I’m just curious to see what others are doing right now. Have you been trying to sell? Or are you looking to buy something? If you’re a renter and have considered buying a first home, is this market luring you in? We have actually been looking a bit at new homes and could use an upgrade, but the idea of trying to sell our existing home right now isn’t very attractive. At this point we’d be lucky to break even. At the same time, we’ve thought about possibly buying a new home without putting the existing one up for sale yet. This would allow some time to make some minor improvements and wait a little longer for the market around here to recover. Obviously, the downside to that would be having two mortgage payments for a while.

But I’m just interested in seeing what others are doing out there and whether this real estate market is luring in new buyers or simply giving sellers a lot of grief.

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Poll: Is the Economy Finally Recovering?

Jeremy — Wed, 29 Jul 2009 14:25:37 +0000

I think it’s funny how just a few months ago the media was still talking about how we’re on the brink of the next great depression and we’re setting the stage for the equivalent of an economic apocalypse, but fast-forward to today and all the news is glowing and painting a rosy picture. It’s amazing what just a few good weeks in the market can do. Then again, they are more focused on grabbing your attention and gaining readers, not actually providing any intelligent insight.

That being said, there is some encouraging news out there. I’m not an optimist or a pessimist, but more of a realist. I won’t ignore some of the bad news that’s still out there just to get excited by a recovery that may or may not happen yet. At the same time, I’m not going to dismiss the good news and continue to proclaim doom and gloom. Instead, I think there’s some valuable information out there that is starting to paint a different picture of the economy, but the jury is still out on what will come of it.

We still have a long way to go in the housing market. While there might have been some headlines this past week or two that sounded quite encouraging, there’s still a lot of inventory out there and prices in many places still have a ways to come down yet. The same goes for unemployment. Jobs aren’t created overnight and companies won’t go on a hiring spree at the first sign of improving conditions, so those who are unemployed may still have a long way to go. The good news is that a lot of economic indicators aren’t dropping like a rock month after month any more, so at the very least, things are at least starting to hold up. This could very well be the sign of better things to come sooner rather than later, but we’ll just have to see.

So, I’m curious as to what the readers think about the economy right now. Have you ignored all of the glowing news completely and still hunkered down preparing for the worst, or are you starting to feel as if things really are improving and the worst is behind us?

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Poll: How Are You Coping With the Recession?

Jeremy — Wed, 15 Jul 2009 14:53:17 +0000

We’ve all known for a while now that we’re in a recession. It doesn’t matter if you want to follow the exact definition of a recession or not, most of us are feeling the pain in this economy. From a struggling job market to poor investment returns, we’ve no doubt felt part of this recession even if we haven’t experienced something as drastic as losing a job.

With the recession in full swing, many people have had to make changes in their life to cope. It might mean simply cutting back on frivilous expenses, or it could mean going out and trying to find another job just to make ends meet. Others may view this as an opportunity to try something new or take their life in a new direction.

So, what have you been doing to help you and your family get through these economic times? I know the poll can’t list every possible answer so I’ve created a few general categories and provided an “other” option where you can explain in more detail in the comments if you want. I think it will be interesting to see the diverse actions taken by everyone.

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Poll: How Are You Saving For Your Child’s Education?

Jeremy — Wed, 01 Jul 2009 14:46:59 +0000

If you have, or plan on having kids, how are you preparing for their education? College tuition continues to rise faster than the rate of inflation so parents need to plan ahead more than ever. How are you preparing to pay for their college education? Are you saving any money to help them out or will you let them rely on student loans and working to pay for school? If you are saving, are you using a special college savings vehicle or just setting money aside at the bank?

College savings was never a major priority for us for the longest time because we didn’t have children. But with the birth of our daughter, an 18 year clock started ticking. It may seem like a long time, but when you think about what college might cost 20 years from now and the many changes that are bound to happen to borrowing money for college, it makes you stop and think about how important it might be to try and set some money aside.

While our daughter is only a few months old, I made sure to get a 529 plan established right out of the gate. So far we aren’t aggressively funding it or reducing our retirement contributions or anything, I know that the sooner we can start putting some money to work, the better off we’ll be.

So, that brings us to today’s poll. How are you saving for your child’s education, if at all? Even if you don’t have children yet, have you thought about whether or not you’ll save?

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Poll: How Much of Your Net Monthly Income Goes Toward Vehicle Expenses?

Jeremy — Mon, 22 Jun 2009 14:05:21 +0000

Last week I wrote about how your car is making you poor. It has generated a good discussion so I wanted to expand on it a bit more and give everyone an opportunity to talk about how much they pay for their vehicles on a monthly basis relative to their income. It should be interesting to see how the answers vary and see what people are doing to help keep their vehicle costs down.

I’ll start with my own situation to kick things off. Right now our total monthly vehicle costs total about 9% of our monthly net income. This includes car payments, insurance, and gas. I added about $25/month to that to account for regular maintenance such as oil changes and annual registration fees. I feel that 9% is pretty good, but I was actually shocked it came out that high. When I started to factor in everything in addition to just the car payments it added up pretty quick.

Even so, there were a few key things we did to help keep our overall costs down. First, we had to buy two vehicles a few years ago. My clunker at the time finally died and my wife needed something a little more practical for getting around. So, the biggest thing we did was bought two used cars. Just gently used and only a year or two old, but it still saved thousands over buying new.

Next, we picked vehicles based on our needs. I have a long commute so a car that gets reasonable gas mileage. My wife on the other hand only has a 5 minute commute to work. So in her case we didn’t have to focus so much on gas mileage so we got something a little bigger that could handle the tremendous snow we can get and accomodate hauling an occasional trailer or kids. So while I might burn through $100/month in gas, my wife can go weeks at a time without filling up.

Finally, we make sure to shop around for the best insurance. In addition to just finding good overall insurance we also knew better than to get a policy with a low deductible since that adds significantly to the premium. So by finding a good policy with a reasonable deductible and coverage options we can keep our premiums down to a reasonable level.

So, what about you? How much of your income goes toward vehicle costs? Did it come as a surprise when you figured it out? And how do you keep your costs down?

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