The Saver’s Credit: An overlooked tax boost.

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Need help saving for retirement? The Saver’s Credit can be a big help. Millions of taxpayers are eligible for this tax credit. Far too few of them know it.

According to a new survey from the Transamerica Center for Retirement Studies, just 48 percent of us know about the Saver’s Credit, also known as the Retirement Savings Contributions Credit.

“The Saver’s Credit may help make it easier for people to save because it lowers their federal income tax,” says Catherine Collison, the CEO and president of the Transamerica Institute.

It’s a non-refundable tax credit that could be applied up to the first $2,000 of contributions made to a traditional or Roth IRA, an ABLE account (for people with disabilities), or a 401(k), 403(b) or similar employer-sponsored plan.

“Non-refundable” means that the credit can’t be more than a filer’s federal income tax that year.  The maximum is $1,000 for individual filers and $2,000 for married couples if they file jointly. 

Eligibility is based on age, dependency status and income. More people might be eligible for the Saver’s Credit this year due to pandemic-related employment issues. Here’s how to find out if you’re eligible. 

 

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Support the reader economy: A giveaway series.

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For some time now, my giveaway scheme has been “support the local economy.” As in, giving away stuff made in Alaska or produced by Alaskans.

While one or two books, pieces of jewelry, soaps or chocolates won’t exactly enrich the local company, it helps publicize what we do up here. Someone who wins (or doesn’t win) might say, “I want more of that” or “I want to buy that as a gift for someone.” (And it’s been confirmed that this has happened.)

Lately, I’ve been very concerned about the effect inflation is having on people living on tight margins. It doesn’t take much to send the whole house of cards tumbling. I learned this from painful personal experience.

Inflation also injures those who were middle-class stable until prices went sky-high. They’ll probably be all right, but will have to retool their budgets and make some tough decisions (especially as regards what they can no longer afford to do for their children).

Thus I’ve decided to do a “support the reader economy” giveaway series. This week it’ll be a $15 Walmart gift card, because that’s what I have on hand; if Walmart isn’t their brand, I would be willing to switch out a different kind of card. In subsequent weeks, the card will be whatever the winner wants.

I’m not foolish enough to think these modest prizes will fix someone’s money woes all better. Instead, I’m thinking of it more as a small boost or a special treat.

Then again, even a “small” boost might have a big impact.

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No/low-spend February: Week 3.

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I’m running a little behind on the no- or low-spend February updates. Sorry about that. Sure am enjoying everyone’s frugal hacking, though. Shall we begin?

A reader named Ruby trimmed her own hair, to extend the current cut a little longer before her next salon visit. My own recent version of that: I let the beautician-school student cut my hair a little shorter than I’m accustomed to, in order to go longer between trips. 

Ruby has been hanging up her work clothes and smoothing out any wrinkles, which means she can wear them again another day. Doing so means just one load of laundry per week, which saves not just time but also the cost of detergent, water and utilities.

She also noticed a small rip in her husband’s suede house slippers, so she mended it with thread a neighbor once gave her – and that neighbor had inherited the thread from her grandmother. Now her husband’s slippers have a little history behind them, and kudos to Ruby for dealing with the problem while it was still small. 

Ruby reports that her freezer “continues to provide wonderful dividends.” Frozen strawberries (and canned peaches) went into baked oatmeal. Homemade pizza was brightened by chopped red and yellow bell peppers. 

She combined more of those peppers, along with frozen cherry tomatoes, canned organic mushrooms (left over from pizza night), fresh onions and on-sale-plus-coupon sausage to make a skillet meal served with rice. And for bonus frugal points: Ruby turned leftovers into brown bag lunches.

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The frugal sybarite.

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(As promised during this no- or low-spend February, I have run a Throwback Thursday post to encourage frugal pursuits. This week’s choice is designed to remind us to take care of ourselves – without breaking the bank. The piece originally ran on July 15, 2015.)

Some habits that I consider opulent would make other people sneer. To each her own, I suppose. Myself, I happen to think taking a long, hot bath with a good book in (dry) hand is a tremendous luxury – especially if there’s a glass of iced tea or a Diet Coke handy.

(Hint: Even if the soft drink is already cold, put it in the freezer for 15 minutes or so before you run the bath. The contrast of the hot-as-you-can-stand water and the icy beverage is delightful.)

Hanging our laundry to dry in the sun leads to another luxury: falling asleep surrounded by the fragrance of the sun and the wind. Some people would say the sun has no odor. I beg to differ.

DF and I sometimes joke about being “frugal sybarites.” The fact is, a sumptuous lifestyle doesn’t necessarily require a lot of dollar signs.

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Honey mustard cereal.

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No, not with milk and sugar. (Ew.) This is a reworking of the honey mustard pretzels that I wrote about a few years ago.

(Three years?!? Dang. How time flies.)

Recently DF made a batch of honey mustard pretzels and on a whim, tossed in some generic Rice Chex. He modified the recipe in another way, too, since we are nearly out of honey. (More on that later.)

The result was savory and sweet-spicy and pure fun – and the cereal bits were the best part. We rapidly cherry-picked all those little crunchy bits out before we started in on the pretzels.

“Next time I’m doing only cereal,” he vowed.

And he did. Reader, they are great. They’re even frugal. I predict the bowl (pictured above) will be empty by the end of the day tomorrow, even if we try to behave ourselves.

It takes a little bit of fussing to make them, but not that much. The new recipe he came up with today is even better than his first revision.

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How to avoid overdrafting.

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It can be surprisingly simple to bounce a check – and overdrafting can put a serious hurt on your finances, especially if you’re living on a tight budget. That’s because banks and credit unions can legally charge non-sufficient funds and/or overdraft fees multiple times per day. The Consumer Financial Protection Bureau recently reported that bank … Read more

The frugal medicine cabinet.

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(Happy Throwback Thursday! Now that the no- or low-spend February is underway, I have decided to run a throwback frugality post every Thursday this month. This post originally ran on Oct. 4, 2021. Its topic is timely due to COVID-19, flu-rona, and the usual sniffles being passed around at this time of year.)

What makes a medicine cabinet frugal? I’ll explain some tactics a little later. Right off, though, I would like to gently nag you to do an inventory of your own. Here’s why.

You might get sick. If it’s COVID, then it could be possible to fight this at home. (You might have to if you’re living in a place where they’re rationing healthcare. They’re doing it right now in Alaska.) And if it’s not COVID, then you’ll feel a little more comfortable – or at least a little less horrible – if you have certain OTC items on hand.

You might get stuck. Again, no one can say whether another lockdown will happen. If it does, or if case numbers were scary enough in your area to make you want to stay home, then you’re at the mercy of delivery services. Sure, you could look at their ads and find out whether generic Theraflu is cheaper at CVS than at Kroger. But will you do that? Also, being unable to watch for deals and pick them off, one or two at a time, means you’ll likely pay full retail. Bonus: Not being in-store means not seeing “manager’s special” or “clearance” tags.

You might be strapped. Suppose two members of your household get whatever bug is going around. You’ll be so busy putting cold cloths on foreheads and emptying puke pails that you won’t exactly have time/inclination to rush off to Rite Aid. (Stay home anyway, ya Typhoid Mary!)

What will you need, and how should you acquire it? Let’s get started.

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The $0 home makeover.

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Ever get tired of the way your place looks? That song lyric “I sit here staring at the same old walls” comes to mind, especially during the winter – or, lately, during lockdowns and quarantine.

While we should all be grateful to have places to live, there’s nothing wrong with wanting a little variety. My daughter worked at home long before COVID made it commonplace. Stuck in the house pretty much 24/7 due to work, chronic health issues and a now-ex who complicated her life in many ways, Abby had neither the energy nor the finances to change those same old walls.

Until one day she decided to redecorate for free.

All she did was rearrange the living-room furniture and bring in a lamp from elsewhere in the house. The effect? Pretty much a brand-new room, without spending a cent.

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Need something? Buy Nothing.

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(Happy Throwback Thursday! Now that the no- or low-spend February is underway, I thought this post could help some of you avoid spending and/or declutter. It was originally published on Aug. 5, 2018. Ever since then I have been using the heck out of Buy Nothing, both to give and to receive. With luck, your local group will be a great year-round resource to you as well.)

I got a free mini-fridge yesterday. Not for me, for a friend. (Seriously!)

While clearly secondhand, with a couple of scratches and dings, it smells freshly washed on the inside and will help someone out.

Helping people out is the stated purpose of the fridge’s source: a Buy Nothing Facebook group.

Sort of an intensely local Freecycle, this page is a great way not just to keep things out of the landfill, but also to connect with your community.

I’ve gotten so much good stuff from this site, including but not limited to:

  • A waffle iron that had been used just once (and it has a beeping timer – no more scorched waffles!)
  • A never-before-played “Game of Thrones” board game, which became a Christmas gift
  • A pair of slippers for DF’s grandchild to wear when she visits (this is Alaska, and shoes go off at the door)
  • A wraparound-style fleece poncho (very soft and cozy)
  • A bright-red colander (which I use to drain my homemade yogurt)
  • Plastic storage totes
  • Lots of food: apples, powdered milk, flour, dried beans, yeast, lentils, baking powder, pasta, split peas, and canned vegetables, fruits, fish and Spam (some of which we donated to a food bank)
  • Dig-your-own horseradish roots (always looking for new garden challenges)
  • A huge roll of parchment paper (a crucial ingredient in making that ridiculously simple, ridiculously delicious rustic bread)

It also helped me find an elementary school teacher who was delighted to take some empty Altoid tins off my hands. She’s also stoked about receiving fidget spinners, slap bracelets and any other fun items I bring back from . (Teachers are always looking for things for their classrooms.) DF and I have given away a bunch of other things, too, such as books, clothing and fresh rhubarb.

My niece has been able to find new homes for some decorative items (she’s changing décor), some outgrown toys and kids’ clothing, and a big bag of shredded bedding for pet cages (her snake died). Recently she picked up a big bag of clothing for her younger son, and also a major holiday gift (again, can’t say exactly what in case the kiddo is reading). She and I both check the page regularly, to see if anyone’s giving away something useful.

Or looking for something useful – the Buy Nothing group runs both ways. If you don’t see what you need, you can ask.

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