AskDong

So after finishing my taxes, the only prudent thing for me to do was to assess how I did. I manged to save at a 20% clip which certainly isn’t bad. However to achieve some of my goals for the next couple years, I may have to bump my rate into the 25-30 range. This is doable. My fixed expenses should remain about the same, and I imagine I should be able to trim my variable expenses.

I find at least for myself doing this kind cash flow analysis not very useful on month to month basis. There are just too many variable expenes month to month that prevent me from obtaining an accurate picture of how I’m saving or spending. I may attemtp to this same analysis at the end of the 1st Quarter (March 31st), and see if that proves useful.

I just finished my taxes recently.  Haven’t filed yet as I’m still waiting on TurboTax to obtain some forms.  I am getting a refund, mostly because I don’t have enough exemptions on my W-4 to account for my mortgage.  I know I’m giving the Government a free loan, and professionals will advise that it’s best to get no refund or even better to pay the Government come tax time.  If you’re disciplined enough to that then by all means do that.  Even though I think I’m fairly disciplined, I’m also aware of the limits of my discipline.  I’m disciplined enough to save and invest my refund (instead of putting it towards a TV for instance), but I’m not disciplined enough not be swayed by the wealth effect of having a slightly bigger pay check.   One of the more important things in saving, and life in general is to know thyself.  When it comes to saving sometimes, it’s best not to be too ambitious.  Someone who attempts to lose 40 pounds in 6 months will most likely fail and give up on dieting.  Another person who sets a goal of losing 10 pounds in 6 months is more likely to succeed and continue dieting (losing 40 pounds over a longer period of time).  I rather be the latter.  Next week I’ll post my State of Dong - a personal financial snapshot of 2005.