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I've been meaning to reply for a couple of days and there are a lot of pages to go through, so my apologies if I mess something up.
1) Taxes - Personally, I have always filed my own taxes. TurboTax, TaxAct, they make the process simple. You can use TaxAct without paying until you actually file. It does all of the calculations for you and it is easy to find deductions. Having an accountant do your taxes as suggested here probably isn't a terrible idea, but a lot of them just use the software anyway. $20 for the software vs $200 for an accountant - when you are on a tight budget, I think the answer here is obvious. Put some time into learning the tax code (plenty of online resources and forums for this) and it will save you a bunch.
2) An IRA could actually be a really helpful tool to put you in a lower tax bracket if you are on the cusp. Remember, that $5,000 maximum annual contribution is fully tax deductible. Once you get the hang of the software tax programs, you can test out what a full or partial contribution would do to your deductions and tax bill before filling. You still have time to make a 2011 contribution if it ends up making sense.
3) You are spending $3,000/year on car repairs, $4,200/year on car payments, and at least another $3,500/year on gas on a very conservative calculation ($3.25/gallon, 40 miles/gallon, 40,000 miles/year work related), that is $11,000/year you spend for the $96,000/year job. You never mentioned what your job is, but can you find another one? If you got a job that pays $85,000 and didn't require ridiculous car expenses, you'd net the same amount pre-tax and likely be better off post-tax.
I'm in the process of trying to transfer(I'm an Rn). But even Rn jobs are hard to come by.
If the deduction from an IRA contribution gives her access to additional tax breaks on dependents, she could get a better return via lower taxes than paying off credit card debt. But she's got to know her options and where the tipping points are in terms of AGI.
Georgia is ranked 41st in the nation for education.
New Jersey is ranked 3rd.
By whom? The NJEA? The last time I looked it up, NJ was spending second highest per student per year and ranked 39th in SAT scores. I'm not disputing your figures, just questioning the methodology used by the source of those figures. Lies, damned lies, and statistics? Personally, I don't believe NJ is third in anything unless there are only three possible rankings.
DF- SAT is not a proper method of ranking. But your claim of NJ being 39th seems strange since to qualify as a national merit scholar in NJ you need a very high score- higher than most other States.
By whom? The NJEA? The last time I looked it up, NJ was spending second highest per student per year and ranked 39th in SAT scores. I'm not disputing your figures, just questioning the methodology used by the source of those figures. Lies, damned lies, and statistics? Personally, I don't believe NJ is third in anything unless there are only three possible rankings.
And what kind of expert are you to disagree with anything? I like your last sentence though. Completely invalidates anything you have to say on the subject right off the bat.
has jerseygal acknowledged that she must pay off any credit card debt before considering any type of savings including IRA or 401k? dont save money while paying credit card interest, you cant win because the interest on your credit card will be significantly higher than your return on savings.
That's the point I was trying to make. Repay all debt first, save afterwards. Even if it's "only" 5,000 US-$. Furthermore, I would save in some form of tangible asset. The inflation numbers are cooked (ever been to the grocery store lately?), the IRA might protect you from the cooked inflation number but definetely not from the real inflation number.
All these "advisors" out there have never been through any type of currency devaluation, therefore I consider their advice useless considering what the situation in the US will be through this decade (2010-2020).
By whom? The NJEA? The last time I looked it up, NJ was spending second highest per student per year and ranked 39th in SAT scores. I'm not disputing your figures, just questioning the methodology used by the source of those figures. Lies, damned lies, and statistics? Personally, I don't believe NJ is third in anything unless there are only three possible rankings.
NJ ranks 36th in SAT scores as of 2011. But it's rather misleading as the high-ranking states all have very low participation rates. New Jersey does much better in ACT scores where it has a low participation rate.
(NJ has a 78% participation rate in SATs; the highest-ranking state with a participation rate above 50% is #25, Washington State.)
has jerseygal acknowledged that she must pay off any credit card debt before considering any type of savings including IRA or 401k? dont save money while paying credit card interest, you cant win because the interest on your credit card will be significantly higher than your return on savings.
I cannot tell you how much I agree with you.
You pay so much interest on loans and it's like throwing money down the toilet. Pay all your loans off as soon as possible. Do NOT incur any new debt. Save for everything you need. Save more for a rainy day. Invest because it's the only way you will be able to make money, but read a lot of financial magazines before investing. Do your homework. I never had a financial advisor because they sometimes give bad advice and I would rather learn from my own mistakes than theirs.
Never be in a position to take a loan to buy a car. You end up actually paying for 3 cars when it is over. Save while you have a car that runs well.
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