Raise your hand if you’re still waiting on a response from the IRS about your refund. With the now 21.3 million returns piled up in the IRS’s inbox, it’s no wonder. Know that you’re not the only Centralia, IL taxpayer in that group.

And I wish there was more my office could do to get you answers and get things rolling. Be confident – we’re doing everything in our power.

Just last week, the IRS got an earful from the Taxpayer Advocate for the growing backlog of unprocessed returns. So, there are also people representing your interests there.

Now, though my team and I may not be able to get a faster response from the IRS right now (along with everyone else), we’re happy to sit down with you and start taking a look at how to save some money on your tax bill next year. Ready for that or know any Centralia, IL friends looking for that kind of help? Grab a time here:
618-532-7223

Now, speaking of savings… 

If you’re in the boat where you’re depending on your tax refund to save you financially, well, that’s a problem. The current IRS situation is making that painfully obvious, no doubt.

As inflation heats up the economic waters, if you’re not building savings and making a plan for your money, you’re going to find yourself in even hotter water. So, let’s take a look at some timely habits you can institute in your life (or you can encourage any of your Centralia, IL friends to do), starting today…

Alan Newcomb’s Saving Tips – More Than Not Spending
“Don’t save what is left after spending; spend what is left after saving.” – Warren Buffett

When was the last time you heard somebody say, “I just went shopping and spent a hundred bucks but saved so much money…” 

These people truly do think they saved money. Maybe they did – depends on what they bought and how much they needed it – but we’re willing to bet they didn’t come home and put the money that they saved right to work. 

Saving means more than just not spending. Especially in these days of runaway inflation, it means using tools and strategies to intentionally set aside funds and then use them rightly.

Habitual behavior

A lot of Centralia, IL people have bad spending habits and don’t even realize it, like dropping $5 every morning for an expensive coffee. If I brought my own coffee or used the Keurig in the break room, I’d pocket an extra 30 bucks a week. 

And what would happen to that cash? Even if you bank it, you might pick up another bad habit: balance spending or checking your account too often and, the minute you spot extra money, just assuming it’s there for you to have fun with. What about that mortgage or car payment due in a few weeks? Balances can be illusions. 

Why not practice good spending habits instead?

Write down what you spend. At the end of the month, take a look. If you’re like most people, you’ll be surprised at some of your spending – and you’ll quickly see places where you can save, even among recurring expenses such as TV and cell phone service. 

Plan your shopping. Shop only specific stores and set the number of your shopping stops beforehand. Use a list and stick with it, avoiding items that just catch your eye. Do you always need the pricier name brand? Buy food and household items in bulk. 

Carry only cash. Don’t spend what you don’t have. 

By the way, why do you shop? Do you have targeted purchases or are you just bored? How much do you buy just because you’re rushed? Consider establishing absolute “no buy” days. 

And put that surplus cash to use…  

Best strategies

We mentioned “tools.” One tool is a budget; budgeting becomes easier if you have a plan.

Try this for a starting formula: half of your take-home pay for essentials, 15% of pretax income for retirement savings, and 5% of your take-home for short-term savings.

What’s “essential?” Food and a place to live, for starters. (We know that those just seem to get more and more expensive these days, but that’s where the good spending habits above come in.) Costs here include mortgage/rent, property taxes, utilities, insurance, and the like. “Food” should include only groceries and usually not takeout or restaurant meals. Outstanding debt, health insurance, childcare, and those painful trips to the pump to get yourself to and from work round out the essentials list.

You must save for your future, and 15 cents out of every take-home dollar will get you solidly started. Generally, you’re looking to bulk up a 401(k) or some IRA. If you can’t make 15%, shoot for at least enough to secure a matching employer contribution if your boss offers one.

Did you know that more than half of Americans couldn’t pay for three months of expenses if they had to (that includes one in every four who have no emergency fund at all)? Short-term savings are liquid funds you don’t touch unless there’s an emergency. It’d be great to start by socking away three or six months’ expenses, but not everybody can do that these days. Don’t knock yourself if you can’t – and don’t give up.  

What you shouldn’t skimp on

Savings pundits would have you believe you’re supposed to save money on everything, no exceptions. Wrong. Using money wisely is a balance. Sometimes it is actually better to spend. 

Good health. Better insurance, a gym, organic groceries: All are examples of times when it can be better to not pinch pennies. Life insurance can be a particularly thrifty way to protect your loved ones financially. 

A long-term goal. If you’ve been saving for a big purchase – a home, a car, a major vacation – and you’ve stuck to your budget until you have the money, consider it your reward for hard work. 

Get pro help with your money. Opinions about the worth of financial advisors range from giddy to dubious, but it’s a fair bet that an objective, knowledgeable opinion about how to hit your money goals can’t be a bad thing.

Investing. Real estate often speaks for itself in terms of appreciation. And despite all the headlines and scares, Wall Street has generally gone in only one direction over the past several decades. Time in the market is also time in the market when you want to grow your money.

 

Now, I’m by no means an expert when it comes to financial decisions, but one thing I’m here to do is help save you money when it comes to your taxes. Want to start looking at how to reduce your 2022 tax bill? Let’s get a time scheduled:
618-532-7223

My team and I are ready to get you on track. 

Here for you,

Alan Newcomb