Author Archives: Money Reasons

About Money Reasons

A offbeat personal finance blogger that comes from the tech world.

Reducing The Maximum 401k Contribution Limit To Help The Economy

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Okay, yes this title isn’t a preferred route for the government to take, but there is a good chance a small decrease in 401(k) limits would help both the government and the economy.

Currently in 2012, the cap for the 401(k) contributions is set to $17,000.  But what if we reduce the contribution limit down to $15,500?

Such a decrease in the contribution limit would mean that those (like me) that were contributing that extra $1,500 would be a direct impact on tax collection for the government and there is a good chance it would help business too.  With respect to business, it would help because when people get that little extra money per pay period they most likely would spend that money.  After all it’s only about $30 if you are paid weekly ($60 if you are paid biweekly).  It might not seem like a lot, but it would give business a big boost really.  Actually the $30 and $60 figures would need to have taxes taken out of the amount received, so it would be less that those figures, but for simplicity I’m going to keep it as I state above.

And the government would be the biggest boost of all.  Most of the people who are contributing that extra $1,500 are in the 25% or 28% tax bracket.  Most of us will be millionaires some day (or so I hope).  So if we go with the lower percentage bracket (25%), that would mean that the government would get an injection of $375 extra per year per person.  So if there were just a mere million that were in the $1,500 camp, that would mean that the government would receive an extra 375 million injected into the economy.

Now that just a mere $1,500 decrease in the contributions limit.  If the reduction was more, the impact would be greater…  The problem is that the government would also increase their spending too.  They wouldn’t keep their spending in check, and this would mean that in about 5 to 10 years, we would be back in the same condition that we are currently in.

So even though it seems like a good solution to fix some of our problems from a mathematical sense, we would be in the same position in a few short years.  Change need to be in the way that government runs, not in the amount of taxes that they receive.

What are your thoughts on the matter and the idea of reducing the 401(k) contribution limit?  I know personally I’m not in favor of it, even if it would help.  I would rather the government cut out some of their more wasteful programs, but this is an option that should be considered.

Bests,
MR

Buying Black Friday Sales Online

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Well, I took the plunge spending $574 on Black Friday online purchases this year.

I’ve decided to buy a new hosting service for my websites.  Now on the surface, this might seem odd since I can have unlimited domains on my site with my current host.  The primary reasons I decided to make this purchase are because of speed and reliability.  While my current host has been decent, I think that the jump to the HostGator could provide more speed and stability.  I’m keeping my current host too, but if the jump to my new host pans out, I might move everything over.

My next two purchases were SEO software, but that’s boring and nobody gets into that so I’ll skip it.

My final purchase was a new Canon PowerShot SX150 Camera!

Canon SX150 Camera

Canon SX150 Camera

This particular Camera was $100 off the original price of $250, but the real selling point was the 12x optical zoom (we all know that digital zoom sucks)!  That means I’ll be able to take pictures of things that normally would be very difficult for me to capture!

You may have noticed that everything I mentioned above is for my blog site!  I didn’t really spend anything on myself or for my family.  My family shopping was done a long time ago.

Well, this Black Friday has been the most I have ever spend on Black Friday.  In fact, if you add the amount that I spent on all of the previous Black Fridays days, this day tops them!  The funny thing is I expect to spend more next year, if all goes well!

Regards,

Don

The Cost of Thanksgiving

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We all know that the obvious cost are for the food, but I’m finding that a lot of people travel far during Thanksgiving, and those people are the ones that incur the real costs.

jet landing

flying

I’m fortunate in that the expense for gas as I drive on two separate days to both my of our parents isn’t really that bad.  I estimate that the cost runs close to $25.  For my sister it runs at least double that number.  She lives 2 hours from my parents and a good distance from her in-laws…

I don’t have the stats., but it would be interesting to see how much the cost of traveling is overtaking the cost of the food and preparation.  Just in my little example, it’s obvious that the expense of traveling can cost as much as the food itself.  Then again, perhaps Thanksgiving has always been about traveling far to meet family?  I’ve always lived close to my family, so while I still enjoy Thanksgiving, it’s really not a rare event since my sister and I meet our parents often.

I have to admit, it is fun watching football on TV, and having “The Christmas Story” play in the background as we all eat.  These are what I call soft traditions in our family.  They are soft because some years we do them, while other we don’t.

Here’s wish everybody in the US a Happy Thanksgiving!

MR

Frugally Saving Money By Taking Advantage Of A Very Unusual Opportunity

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Roadkill is not what I consider a treasure, but this was not the case with a guy I use to work with!

The Frugal Practice of Eating Roadkill

Over decade ago, when I was working as an unskilled construction laborer, I was riding in the truck with my more skilled counterpart going to a remote job when all of a sudden, he slammed on the brakes.  This sudden stop broke me from my half sleep-like state (It was round 6:30am), and I asked what up.  But my more skill counterpart didn’t say anything and was already out of his driver door.  I watched in the mirrors to see what he was going.

I was shocked when he started checking out a deer, and hoisted it into the cab of his truck.  I had no idea why he was doing this.  He then got into the truck and told me that we are going to make a side trip on our way to the job site that we were suppose to work at.  He then proceeded to drive me another 10 minutes until we got to his house (I could hear the violin and banjo playing from the movie Deliverance the entire time), then he took the somewhat freshly killed deer out of his truck and up to his house.  He went into the house for a few minutes, then returned back and we were back on the road heading to the construction job that we supposed to go to.

It turns out that the area that we were in was very close to his house, and seeing the freshly killed deer alongside the road was an opportunity that my co-worker didn’t want to pass up.  While I didn’t want to criticize him, I posed the question of how safe it would be to eat the animal.  He that’s when he told me his logic:

The hunting season was almost over and he didn’t fulfill his quota that he was allowed to get, so he saw this as an opportunity to get one more “kill” that he could claim.  Apparently his family loves deer meat.

He then told me that he drove up this road earlier to pick me up, and the deer wasn’t on the road at that point.  This means that the deer was freshly killed, and not necessarily by a car.  Sometimes a hunter will shoot a deer, but it will continue to live running away for sometimes miles before falling.  He then told me that this was the case in this example (although, I don’t know if I believe though, nor the quota explanation either for that matter).

The Reasons this was Frugal:

While I wouldn’t have done the same as my older construction co-worker, throughout the day I found myself thinking back to his actions, and I started to see the logic and benefit of what he did.  Here are the key points to consider:

  • Had the older construction hunter not stopped and picked up the deer, it would have been wasted and possible rotting along side the road for weeks.
  • Since his family would both prepare and eat the meat, it was probably equivalent to finding a couple of hundred dollars or more laying along side of the road.  If I saw $300 laying along the side of the road, I would definitely have stopped to pick it up.
  • Since the kill  was fresh, he was able to get it back to his family where they could clean and dress the meat.  He told me that they also had grinders at his home and they would ground up the meat effectively fully utilizing the deer meat (or venison if you will).
  • He explained to me how they have a freezer and would freeze the meat for later consumption over the next month or so.

Honestly, at first I was quite repulsed by his actions, especially considering he had a crazy look in his eyes as he was going so, but now I realize how unconventionally frugal his actions were.  I didn’t know of the word frugal or frugality back then but his actions were definitely in that money saving camp.

So now, today I look back and applaud him instead of look down on his activities.  And I think both frugal and green folks would do the same.

What do you think of the older worker’s frugal and unconventional method to save money?

MR