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Author Archives: Kristina Tahnyak

Avatar photo About Kristina Tahnyak

Tahnya is a Certified Financial Planner and former Investment Advisor turned marketing and communications professional She holds a degree from Concordia University, is debt free and currently works in the field of digital marketing.

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The Tax Question: Save, Spend, or Pay Off Debt?

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taxes, tax tips, tax advice

If you are getting a tax refund, how will you use it? This year I am receiving a $3512 tax refund.  I know that it is better to receive a tax refund rather than owe money to the government, however this year’s refund was very small compared to my tax refunds in previous years. Considering the average tax refund this year is just over $3000, I guess that according to my annual personal income taxes I am an average tax payer.  This year the deadline to file our personal income taxes is April 18.

This is the lowest tax refund that I have received in several years.  I know that I should be happy that I don’t owe money to the government, but in all honesty (and a little bit of greed) I miss having an above average tax refund.

Last year I received $8600 in a tax refund. I used a small portion to pay off accumulated debt; I used some of it to prepay my rent for 3 months, and the rest I spend on materialistic goods.  The year before that I received an $11,000 tax refund which I used to buy a new television and take a trip. In 2007 I received a tax refund of approximately $5900 which I used to refurnish our bedroom.  I have never saved any money from any of my tax refunds over the years.  I consider it as extra money, and therefore I don’t feel the need to save it.

According to CNN this year people will not be spending their tax refund, and they will not be using their tax refund to pay off debt; this year people will be saving their tax refund.  How will you use your tax refund this year? Will you spend it, save it, or use it to pay off debt?

This year I will use $500 from my tax refund to pay off some accumulated debt, and the other $3000 I will keep in cash savings.  I may use it to take a trip in the fall, or I may use it to refurnish/redecorate our living room, but for the time being I am just going to save it.

Once again, I am an average tax refund recipient because I am not spending my tax refund on materialistic goods.  Just like the majority of tax payers, I will be saving the majority of my tax refund.  This year I am within the 43% of people who confirm they will be saving their tax refund.

I have learned firsthand over the last few years that we should not take money for granted.  This may be why I have decided to save my tax refund this year, as opposed to spending it.  I know how quickly a dark financial cloud can move in, and I know how quickly a rainy day can come.  My rainy day account is mostly invested in short term fixed income investments, this $3000 cash will be a nice addition into the mix.

Photo by Jeff Sandquist

A Dollar and A Dream

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win

What would you do if you won your state lottery? Why do we even have a state lottery? In my opinion those millions of dollars could be put towards better use such as feeding the homeless, paying off national debt, and feeding hungry children with morning breakfast programs.

I personally feel that playing the lottery is a total waste of time.  If you play the lottery, do you play the same numbers every week?If we spend a little $20 a week on the lottery, it adds up to a major expense over the year.  If we put that $20 into a high interest savings account each week (or even a cookie jar) we would have at least $1040 saved up at the end of every year.

If you won the lottery would you still work?

Lisa Kudrow (Friends) starred in a movie called Lucky Numbers with John Travolta and Tim Roth.  They created a scam for which they would be the lucky winners of the lottery.  This story just proves that people will do anything for money.  People will beg, borrow, and steal for money.  Hey, I have an idea…How about you earn it?

I come from a family of hustlers.  My father never received a receipt for anything that he bought. He never accumulated debt, because he paid for everything in cash.  I have worked two jobs, and sometimes three, since I was 16 years old.

My younger sister has also always worked two jobs.  She does it because she likes to be productive with her time.  My sister Tara would rather work and make money, than sit around her couch doing nothing.  My sister feels that personal time is counterproductive. She recently left her second job because her primary job in real estate has been taking up way too much of her time.

In my family when we need money, we find a way to get it. We never rely on other people to make our dreams come true, and we never live on hopes for our dreams to come true.  However, not everyone is like this and this is why the lottery still exists today.

What would you do if you won the lottery?

I recently found out that there is a man at my work who won $2 million with a lottery ticket that he purchased with his father 4 years ago.  He still comes to work every day at 9 am, and he leaves at 5 pm to go home to his wife; they do not have any kids.  He dresses very well in Burberry and Prada, and he takes his wife on lavish vacations; but other than that he is a normal 9 to 5 bank employee.  In my opinion he has a lot of fun at work, and he really seems to enjoy his job.  I guess it is easier to enjoy our work life when there is no pressure of losing your primary income.

Photo by Robert Donovan

Are You Cheap, Frugal, or Smart With Your Money?

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frugal, saving money, cheap living

Being Frugal can mean something different for different people.  For some of us being frugal means getting the most out of a product for the price that we paid, for some of us being frugal means getting the best discount on an item that we are buying, and for some of us being frugal means saving every dollar that we earn that we don’t use to pay for our basic living expenses.

What does being frugal mean to you?

According to Yahoo Finance being too frugal can hurt our finances more than it can help us.  They discuss the different myths about being frugal in their video titled Top 5 Ways Being Too Frugal Can Cost You.  There is a fine line between being frugal and being cheap; there is also a fine line between being frugal and simply managing our money wisely.

Here are 5 Major Myths about Being Frugal:

Price Trumps All. Just because an item is cheaper doesn’t mean it is a better deal.  If we cut price corners we could also be cutting quality corners.  If we buy something just because the cost is lower it could break sooner or malfunction quicker.  Therefore, we will have to pay more to buy a better model or get the item repaired later.  As the old saying goes, we get what we paid for.

Outlet and Discount Stores Sell Identical Merchandise. To my understanding outlet stores sell old models of merchandise that hasn’t been sold from previous collections or seasons. Discount stores sell merchandise that they need to liquidate get rid of to make room for new merchandise.  There may not be a difference in quality, but there may be a difference in trends, age, and warranties.

It’s Always Cheaper to Fix it Yourself. I completely and totally agree with this myth.  I am also living proof that it is true.  However, that is probably because I couldn’t change a light bulb, and I prefer to order take out than cook and clean dishes.  I definitely believe in paying someone to get the job done right…the first time.

Dollar Menus Offer Great Bang for Your Buck. As a vegetarian, I am not a big believer in the dollar menu.  I believe the portions are small and the quality is low.  We end up paying more money later for another meal when we get hungry.  Once again, we get what we pay for.  Low cost also means low quality.

Bulk is Better. I love shopping in bulk, but I also believe that it can be an unnecessary waste. Our great bulk purchase actually makes us spend money that we would otherwise not have spent.  It may be a good deal, but if we don’t use it and throw it out, it is just wasted money.

Friday Roundup: Donations, Good Deeds, and Charitable Causes!

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Happy Friday DINKS.  With the recent destruction in Japan I decided to look around the web and see what good deeds other financial bloggers are doing, and what charitable causes they are supporting.  Giving to those who are less fortunate than us is a good cause that never goes bad.  Even if we are only donating money for the tax benefits, we are still helping people in need.

Here are some great causes and organizations that personal finance bloggers are supporting:

DINKS Finance is a member of the Love Drop Network.  Once a month we post an article on our blog about the people and families that Love Drop is helping.  Love Drop accumulates goods and collections money all month long for a family in need.  The items and donations are then hand delivered to the family by Nate St. Pierre and J. Money.

The Financial Blogger discusses his views about giving money to the homeless and how he chooses a charity in his post My Point of View on Charity.  The Financial Bloggers charity of choice is The Children’s Dream Foundation.  As a father of 2 young kids, he chooses to give to charities that help out children in need.

My Open Wallet got her readers involved when she was choosing her charities.  Her post Your Charity Choices lists the 10 charities that she contributed to from reader suggestions.  My Open Wallet discusses the financial life of a 40 something year old woman who lives in New York. L thought this post was a great idea because it lets us see the great causes that readers are supporting.  On her list were The New York Public Library, Planned Parenthood, and Doctors Without Borders.

My Personal Finance Journey discusses the process of donating to charities. The gives a step by step guide on how to choose a charity and how much to donate, the tax benefits of charitable donations, and the best way to donate money such as with employer matching donations. Jacob feels the programs at his local church are a great charitable cause.  He prefers to attend fundraising benefits and support his friends who support good causes.

Why Do You Have Insurance?

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insurance advice, insurance tips, insurance

There are several reasons people have insurance.  We can buy life insurance to make sure that our loved ones maintain their lifestyle after we have passed away, we buy home and auto insurance to protect our most valuable assets, and we buy medical and dental insurance to protect us in case of any unexpected life events.

Why do you have insurance?

Insurance is definitely an important part of financial planning.  We want to have enough insurance to make sure that all of our needs are covered, but we definitely don’t want to be over-insured because the monthly insurance premiums can be costly.

There is an unwritten rule in financial planning that people should never benefit from insurance proceeds.  Insurance should be purchased strictly for protection purposes. We purchase insurance to protect our assets and protect ourselves against potential losses.  However, the value of an asset is in the eye of the beholder.

What do you insure?

MSN recently published an article about crazy things that people have insured. Would you pay a monthly premium to insure your most unusual assets?

Shirley MacLaine has a $25 million dollar insurance policy in case her fortune is ever abducted by aliens.  I was unaware that we could protect ourselves against something that we are not even sure exists.  My home insurance policy doesn’t even protect me against natural disasters such as hurricanes and other storms, but apparently we can protect ourselves against unnatural beings.

Gene Simmons insured his tongue for $1 million dollars.  His tongue was a money maker for Kiss.  Gene Simmons bought insurance to protect himself against any potential income loss in case his tongue ever becomes “unusable”.

Tom Jones allegedly insured his chest hair for $7 million dollars. I was unaware that we could insure something that is self sustainable.  I thought that insurance was used to replace our losses.  Apparently we can insure something that can replace itself.  Tom Jones believes that his chest hair is crucial in his sex symbol status; he believes that he will be less sexy without it.  Is Tom Jones sexy?

Dolly Parton insured her breasts for $300,000…each.  I thought it was funny that she didn’t insure her vocal cords, being that she is a singer and all.

Keith Richards the lead guitarist for The Rolling Stones has reportedly insured the middle finger on his left hand for over $1 million dollars.  I am assuming that he plays the guitar with his left hand but the article doesn’t specify.  Since he earns his living as a guitarist, it makes sense that he protects himself against a potential loss of income.

David Lee Roth has insured his sperm for over $1 million dollars to protect himself against any potential paternity suits.  Maybe he should stop having sex with groupies; then he could save money on unnecessary monthly insurance premiums.

America Ferrara’s teeth were insured by Aquafresh for $10 million dollars.  I must admit, she does have a gorgeous smile.  The insurance premiums are paid by the company and not by America Ferrara directly.

Japan Needs Our Help!

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helping out Japan, Japan assistance, assisting Japan

Japan was recently hit with a devastating 8.9 earthquake that also triggered a tsunami wave that has claimed thousands of lives and ruined even more households.  Natural disasters can be destructive and very costly for nations, economies, and residents.  People in Japan have been left without water, food, power, and shelter.

Japan is a nation that is already in debt, and now the cost to rebuild an already fragile economy could lead to a financial crisis that cannot be fixed.  Most personal insurance policies do not cover residents in the case of natural disasters such as earthquakes and tsunamis.  Therefore residents are left with no personal possessions, along with the financial burden of having to rebuild their lives without any financial means.

Some insurance companies have also added a clause to protect residents against terrorism.  Natural disasters can be a financial burden for governments but they can also be devastating for residents.  Many people cannot afford to rebuild their homes and replace the personal possessions that they have lost in a destructive event that is beyond their control.

Some of us may have experienced the destruction that a natural disaster can cause with Hurricane Katrina in 2005, the Tsunami in Samoa in 2009, as well as the 2010 earthquakes in Haiti and Chile.  It costs millions and even billions of dollars to rebuild a city back to life from total destruction. However, with support and a lot of funding New Orleans is a prime example of how a city can be rebuilt back to life.

The Japanese Market closed down on Monday in the wake of Japan’s earthquake and tsunami disasters.  To make matters worse, there has been a nuclear emergency at a local power plant.  The damage in Japan has been estimated at over $150 billion dollars although nothing has officially been released.

The initial damage is not only catastrophic but the aftermath of natural disasters can also be very harmful.  The aftershocks from an earthquake are unpredictable; this causes a lot of uncertainty for local businesses, residents, and government officials.  Although everyone wants to start repairing the damage, the uncertainty of aftershocks leaves everyone uneasy. Manufacturing plants that were not destroyed in the earthquake or by the tsunami wave have shut down production.  This includes major automobile and electronic exporters such as Sony, Toyota, and Panasonic.

As DINKS with disposable monthly incomes we are in a position to give to those who are less fortunate than ourselves, and to help out people who are in need of things that we have and can afford to donate.  The American Red Cross is assisting in the effort for relief of victims in Japan.   Please visit your local charities to find out ways that we can give back and help residents, tourists, and the nation of Japan.

Photo by IvanWalsh

Do you shop on a deals website?

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deals website, deal site shopping, website shopping

Everyone wants to save a few dollars here and there and the best way to do so is while we are shopping.

I have been a fan of online shopping for several years; and I recently became a fan of deals websites such as Groupon,  Shopbop, and Beyond the Rack.  I have always used travel deal websites such as Travelocity or Expedia to book my vacations; and I have recently discovered HotWire.com.  I have to be honest that the uncertainty of HotWire.com makes me a bit nervous because in my world, a deal without planning is total chaos.  Today we are going to do some comparisons to see if using a deals website is really cheaper.

Beyond The Rack prides itself as “North America’s Premier Online Shopping Club.  I have to admit that although I have never bought anything from Beyond The Rack, I do often browse the website.  It is great for buying designer goods at discount prices. I love Beyond The Rack because the website is user friendly and it lists upcoming events (sales).  The events on Beyond The Rack are for a limited time which can be anywhere from 2 days up to a week.  All sales are while quantities last; very often a sale can still be going on while certain items are sold out.

To compare prices we will use an example of the popular British design house Burberry.  The Medium Haymarket Luggage Bowling Bag  is listed on the Burberry website for $1895.00.  A very similar bag called the Ladies Hernville Small Hobo in Haymarket And King Fisher bag is listed on Beyond The Rack for only $699.99.

Last year I bought my sister a Marc Jacobs makeup bag from Shopbop.com for only $40.60, including shipping. She absolutely loved it, and I didn’t have to pay the regular retail price of $48 plus tax (for a similar item) on the Marc Jacobs website, they actually don’t even ship to Canada.  Unfortunately I couldn’t find any pictures of the makeup bag.

I believe that the best deals come from travel websites. Whenever I travel I usually book my hotel and flight using Expedia.com.  This year I will be in New York City from Friday May 6 to Monday May 9.  The Doubletree by Hilton in the NYC Financial District is listed on Expedia for $178 per night.  The exact same stay is listed on the Doubletree website for $209 per night.

The best travel deals website may be Hotwire.com, I learned about Hotwire.com from watching the Regis and Kelly Show.  After asking around I discovered that many of my colleagues also use Hotwire.com to book their travel deals.

For those of you who are unfamiliar with Hotwire.com it is a travel website that guarantees a price but not a location.  We have to book our trip in advance based only on price and location.  We don’t find out the exact location of our hotel until after our hotel is already booked and paid for in full.  For the exact same weekend in May Hotwire.com guarantees a 4 star hotel in the Midtown East area for only $164 per night.

The difference between using a travel deal website to book our hotel as opposed to reserving our hotel stay directly on the hotel website is that travel deal websites must be paid for in full at the time of booking, whereas hotel websites only need a credit card to reserve our stay.

(Photo by PriceMinister)

The 6 most ridiculous lawsuits I’ve ever seen.

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lawsuits, ridiculous lawsuits, crazy lawsuits

It seems that every time we turn on the television there is a commercial for lawyers who want to help us sue someone for something. There is also the ever growing trend of court reality shows such as The Peoples Court and Judge Judy. As consumers we can sue someone for everything from a slip and fall accident to a medical malpractice.

MSN recently published an article titled Tribulations and Trials: The weirdest lawsuits in music. After reading this article I thought it was important to share some of the most ridiculous lawsuits I have ever seen.

  1. American Idol’s Fantasia was sued for being a home wrecker, “alienation of affection” was the exact term quoted by the wife of Fantasia’s boyfriend. Alienation of affection is a law in Southern states which allows spouses to sue “the other woman”.
  2. Rock Goddess/Hot Mess Courtney Love was sued for Tweeting. Ms. Courtney Love is the first person in the US to be sued for defamation by a Tweet. As social media is a form of personal expression I feel that it is unjust to be sued for our personal thoughts and feelings; but I don’t make the laws.
  3. This may be no surprise but the toy giant Mattel sued the pop band Aqua over their song Barbie Girl. Mattel is the creator and manufacturer of the Barbie Doll. It is interesting to know that Mattel lost the law suit and later used the Aqua song Barbie Girl in one of their advertisements. You know what they say…If you can’t beat them, join them.
  4. Damon Dash (better known as the co founder of Roc A Fella Records and rap mogul Jay-Z’s former best friend.) was sued by a woman who met him at a nightclub and then claimed to be schizophrenic months later when she started to hear his voice in her head. HELLO?!?!?!? Every woman who is dumped by a man replays his last words in her head. Does that make all women schizophrenic?
  5. The Rapper Ja Rule was sued for a violent music video. Ja Rule’s music video for the song I Cry was shot in a Baltimore neighbourhood. It tells the sad story of Ja Rule mourning the death of his friend who was shot in a nightclub. Apparently this video came to life for a Baltimore resident and he claims that it was the fault of Ja Rule’s video.
  6. P. Diddy, Puff Daddy, Sean Combs, and Diddy (all the same person) was sued by a woman for a trillion dollars for knocking down the twin towers in New York City. Among other things, the woman sued P. Diddy for $900 billion in child support payments and another $100 billion for loss of income. I’m sorry, but in what world does an average (and possibly crazy) person earn $100 billion dollars a year?

We have to be careful what we do on a daily basis because you never know, you just might get sued ;)

(Photo by bsabarnowl)

401k Friday Roundup

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Happy Friday DINKS.  It’s that time of the year again…time to file our taxes.  One savings strategy for both our taxes and our retirement is investing into our 401k, or our RRSP for our Canadian DINKS.

There are several types of 401k plans available to investors.  The most common type of 401k is a company sponsored 401k which is offered by employers to employees.  Employees contribute a percentage of our salary through a payroll deduction, and our employer makes matching contributions on our behalf.  The contributions are usually matched on a 2:1 ratio. Meaning for every $1.00 we contribute, our employer contributes $0.50.  Contributions into traditional 401k plans are from pre tax money which means that our contributions are not taxed, but our withdrawals will be.

We can also have an Independent 401k. This type of 401k plan is available for people who are self employed and are operating a sole proprietorship or a small business.  In this case the employer is also the employee and therefore they make both types of contributions into an Independent 401k.

A Roth 401k is another type of employer sponsored investment savings account. However, this type of account is funded with after tax money which means that money on our contributions is taxed, but our withdrawals will be tax free.  This type of plan is good for investors who think their retirement income will be higher than their current salary.  They will pay tax now on their investments, and save on tax in retirement.

Here are some posts from around the web about 401k plans:

50 Plus Finance discusses the benefits and myths of a 401k for small and mid size businesses in his post Is My Business to Small for a 401k? I am totally in love with Dave from 50 Plus Finance; well, as in love as a 30 year old can be with a 50 plus year old man.  I am in love with his writing. His posts are always informative and come from personal experiences.

Financial Samurai states his opinion on the low contribution limits of 401k plans in his post View Your 401k Like Social Security And Write It Off.  He stresses the importance of investing in a 401k plan, but admits that investing in a 401k alone is not enough to save for a comfortable retirement.  He stresses that must make other investments to ensure a financially comfortable retirement.

Frugal Dad suggests that we forget everything we know about saving for retirement and make a new plan in his post Saving With Purpose: Retirement Phase II.  He admits that 401k plans and Roth IRAs still play a big part in our retirement savings strategy.  However, the idea of employees working with the same employer for 40 years is unrealistic.  That was our parents, it’s not us.

Wealth Pilgrim warns us about 401k fraud and various 401k scams in his post Keep Your 401k Safe From Employer Fraud and 401k Fraud.

20 Something Finance says that investing in a 401k is a smart idea for our financial future, but we must be aware of the fees associated with 401k plans in the post The Hidden 401k Fees that Can Crack your Nest Egg.

Happy Investing and Good Luck with Your Taxes DINKS.  Have a great weekend.

March Love Drop: Katie Needs Our Love

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Last month the Love Drop Team made their goal for Ethan and Alex.  They raised over $13,000 and 3 iPads to help two little boys with autism receive a service dog and be able to communicate with their family. They were beyond touched and grateful. If you were a part of it, THANK YOU!  You can check out the final video of us showing up to their house here – it’s pretty cool.

This month we are starting all over again to help a new family.  Love Drop helps one family each month of the year.  This month we are helping Katie.  She is a single mom who lives in Dallas Texas.  Katie is currently battling a brain tumor as well as hydrocephalus. Love Drop is teaming up with Blissdom to drop some love and assist Katie with her medical bills.

Come join the team and be a part of it with me!

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