How to Garden: Your Options

Corey —  April 9, 2010

       When it comes to gardening, you have several options to choose from. Your choice will depend on how much space you have, how much money you want to spend, and how much time you want to dedicate to gardening.

Containers

container garden on the patio by thomas pix on Flickr       Container gardening is a great choice if you have limited space or limited desire to garden. It doesn’t take much time and you don’t have to worry about weeds. But you still get to enjoy the vegetables of your labor. You can use just about any container you can get your hands on (as long as it won’t leach poisonous chemicals into the soil). It doesn’t even need to be very deep – you can grow quite a bit of stuff in just six inches of soil. (I know. I’ve done it!) You’ll just need a few holes in the bottom for drainage. You can find cheap options for containers by looking creatively around your house, going to yard sales, or stopping by your local thrift store.

       If you decide to go the container route, you’ll need to realize that you won’t be able to produce very much unless you have tons of containers. You’ll also need a source for soil. If you’re going to dig it up out of your yard (or somewhere else), then you’ll probably need to add compost or other soil amendments to get good results. Otherwise, you can just buy potting soil and mix it with compost.

       If you’ve never gardened before, start small with container gardening. This way you can see how much you’ll enjoy gardening before making any big investments.

Raised Beds

Square Foot Garden Bed by mlwhitt on Flickr       Raised beds are just a variant of container gardening. Put a few boards together with screws, cover the ground with landscaping cloth (to reduce weeds), and throw in some soil. Now you’ve got one giant container for your garden. It should be at least six inches deep, and you’ll need somewhere to put it. Full sun is best, but you can grow all sorts of vegetables in partial shade. If you find you need to grow more stuff but don’t want to rip up your yard, you can just build another raised bed. Easy expansion!

       Raised beds require a bit of work the first year, but they’re pretty easy to maintain after that. If you start with a good soil mix, it’ll be easy to pull any weeds that sprout and to harvest your vegetables. A great book for getting started on this is Mel Bartholomew’s All New Square Foot Gardening: Grow More in Less Space!. It’s how I learned about it and I still use some of his techniques despite having gone to a regular old patch of ground.

       Another interesting concept that I haven’t tried yet is column or vertical gardening. I was first introduced to the idea at Journey to Forever’s article on Growing Columns. I haven’t tried it yet, but I hope to! It’d be a great way to get a lot of growing area in very little ground space. Journey to Forever also has lots of information on square foot gardening as well.

Garden Patch

Vegetable Garden by Southern Foodways Alliance on Flickr       This is the typical image that comes to mind when we talk about gardening – a rectangular piece of ground that’s been tilled up and is ready to plant. This option can require the most work and/or money. You don’t have to buy the soil, but you’ll probably need to add something to it and you’ll have to work it. Oh, and you’ll need the space and willingness (or permission) to tear up a patch of your yard!

       Compost is a cheap way to fix soil, but that takes time. A gas-powered tiller makes quick work of most small gardens, but then you’re looking at a large up-front cost or rental fees. There are other methods to work the ground but they’ll break your spirit and back if you’re not ready for them.

       As I mentioned before, we have a typical garden but I don’t use the row method. You know – long rows with three foot wide aisles between each row. Instead, I’ve taken the concepts of square foot gardening and applied them to what looks like a typical garden. There’s less wasted space and less weeds to pull this way.

A Final Word

       I’ll talk more about the specifics of gardening in later posts, so make sure you sign up for free updates to Provident Planning if you’re interested. But if you’re considering starting a garden because you think it’ll save you tons of money you need to proceed with caution. Gardening can save you some money but probably not as much as you think. This is especially true if you don’t have a big freezer and take time to preserve your harvest.

       You should garden because you enjoy it or because you want the convenience of fresh vegetables just outside your door. It is a hobby that can pay for itself. But once you factor in your time you’re not really “saving” a ton of money. Like most other things, if you’re only in it for the money you’ll burn out fast. So if that’s you, start small and see if you like gardening. Then you can go bigger. Just be careful or you’ll find that gardening is costing you money instead of saving it!

       Beginning February 22, 2010, banks and credit card companies had to start complying with the Credit Card Accountability, Responsibility and Disclosure Act (Credit CARD Act). (Who comes up with these names???) Here’s a summary of the new rules.

Interest Rate Increases

       Credit card companies cannot increase your rate for the first 12 months after you open an account. But, as always, there are exceptions:

  • If your card has a variable interest rate tied to an index, your interest rate can go up whenever the index goes up.
  • If your card has an introductory rate, it must be fixed for 6 months. After that, your rate can go to whatever the company disclosed when you got the card.
  • Your rate can go up if you are more than 60 days late paying your bill.
  • Your rate can also go up if you’re in a “workout” agreement (debt management plan) with the credit card company but don’t pay as agreed.

       If your interest rate increases after the first year, the new rate will only apply to new charges you put on your card. Your old interest rate will still apply to any balance you have after that time.

       Also, credit card companies are required to give you 45 days notice before they raise your interest rate, change certain fees, or make other significant changes to the terms of your credit card. They must then give you the option to cancel the card before the increases take effect.

       If you decide to cancel the card, the company may close your account and require you to make higher payments. They can require you to pay off the remaining balance within five years. Or they can double the percentage required to make your minimum payment. Either option will result in a faster repayment of your credit card debt.

       But once again, there are exceptions to the 45 days notice rule. The credit card company doesn’t have to notify you if:

  • you have a variable interest rate tied to an index and the index goes up.
  • your introductory rate expires and increases to the rate described when you opened the card.
  • your rate increases because you fail to make the payments agreed to in your “workout” agreement.

Changes to Your Statement

       Credit card companies must now begin including information on how long it will take to pay off your credit card with every billing statement. I’ve already seen this change on my credit card statements, and I think it’s a good thing. I don’t know if people will actually read it, but at least the information is there for them to see. Companies must tell you how long it will take to pay off your card if you only make the minimum payment and how much your payment should be to pay it off within 36 months. Here’s an example of what this information will look like:

Credit CARD Act Billing Statement

Over-limit Transactions

       The new rules require you to opt-in to over-the-limit transactions if your credit card company wants to charge you an over-limit fee. If your credit card company lets a transaction go through that puts you over the limit, they can’t charge you an over-limit fee unless you opted in.

       Even if you do opt-in to over-limit transactions, the credit card company can only charge you one over-limit fee per billing cycle. You can always opt-out at any time.

Caps on Fees

       If your credit card company requires you to pay fees for the “privilege” of using their card, those fees cannot total more than 25% of the initial credit limit. So if you start out with a credit limit of $2,500, the company cannot charge you more than $625 in fees for the first year. Penalty and late payment fees do not count toward this limit.

       Personally, I don’t think this is going to change much of anything. If credit card companies want to charge you a high fee, all they have to do under this rule is give you a larger initial limit.

New Rules if You’re Under 21

       If you’re under 21, you’ll have to show that you can make the payments yourself (whatever that means…) or have a cosigner before you can open a credit card. Additionally, if you have a cosigner and want to increase the limit on your card, the cosigner must agree to the limit increase in writing.

       There are also some rules on where credit card companies can market their cards (around college campuses) and what incentives they can offer to students. Again, credit card companies will find ways around these rules so they’re useless in my opinion. (except for the credit limit increase…that might be good)

Payment Due Dates and Times

       Credit card companies must deliver your billing statement at least 21 days before your payment is due. Additionally, your payment due date must always be the same date each month. (For example, always on the 15th of the month or always on the last day of the month.) The payment cutoff time cannot be any earlier than 5 PM on the due date. And if your due date falls on a holiday or weekend, you have until the next business day to make your payment.

How Your Payments Are Applied

       If you ever pay more than the minimum payment, your credit card company must apply the extra toward your balances with the highest interest rate first. However, if you bought something under a “deferred interest plan” (you know, “no interest until…”), then there’s an exception. First, you may choose to apply your extra payments to the no interest balance first. Second, if you’re within two months of the end of your no interest period, then your credit card company must apply your entire payment to the no interest balance. This is to keep you from getting socked with hidden interest fees if you don’t pay it off by the end of the promotional period.

No Two-cycle Billing

       Credit card companies can only charge interest on balances in your current billing cycle. Two-cycle billing was a nasty trick that should have been outlawed as soon as it came out – but no one made you agree to it either. Doesn’t matter any more though since companies can’t use that billing method anymore.

Questions?

       That covers the basics of the Credit CARD Act. If you have any questions, let me know in the comments!

       Maybe you forgot to claim an IRA contribution. Or you learned about a tax credit you could get but you’ve already filed your tax return. There’s an easy solution for you to fix your tax return and claim anything you forgot (or weren’t aware of). All you need to do is file an amended return. This does not mean you file another Form 1040, 1040A, or 1040EZ – you should never file more than one original tax return for any year.

Form 1040X

       The IRS Form 1040X is all you need to file an amended tax return. Basically, you’ll just fill out the correct information you should have put on your original tax return. Click here to download Form 1040X and the instructions. The instructions will help answer any specific questions you may have.

       If you did your original tax return using software, it’ll probably be easiest to use that same software to complete your amended return. You’ll need to follow the specific instructions for the program you used since it’ll vary. This is one of the easiest ways to file an amended return.

       If you used a tax preparer to file your return, you just need to contact them to file an amended return. (This is a good reason to avoid H&R Block, Jackson Hewitt, Liberty Tax Services, or any other seasonal tax preparation shop. They won’t be open when you need them later on in the year!) Send in the correct information and your tax preparer can fill out Form 1040X for you.

How Long Do I Have?

       Generally, you can only file an amended return within 3 years of when you filed the original return. If you file early, you are considered as filing on the deadline of that year. For example, if you filed on March 3rd the IRS would consider you as having filed on April 15th. If you filed for an extension, then the deadline of the extension will be your effective filing date.

       However, there are a few exceptions to this three year rule. First, if you’re physically or mentally unable to manage your financial affairs this deadline can be waived. Check out IRS Publication 556 for more details. There are also a number of other exceptions to the three year limit, including bad debts, worthless securities, foreign tax credits or deductions, and loss or credit carrybacks. See the instructions for Form 1040X for more information on those exceptions.

       This is just a simple one-stop resource to help you find out the contribution limits for various retirement plans. Click any of the following links to find the contribution limits for the corresponding retirement plan.

       To my regular readers: Thanks for putting up with these posts as I’ve been adding this information to the website!

SEP-IRA Contribution Limits

Corey —  April 6, 2010

Contribution Limits

       You cannot contribute directly to a SEP-IRA. However, your employer can contribute on your behalf. If you are self-employed, then this article will help you figure out the maximum you can contribute for yourself. The maximum amount you can contribute to a SEP-IRA depends only on your compensation. These are the correct SEP-IRA contribution limits for 2009 and 2010. Contributions to other qualified retirement plans (401(k), 403(b), SIMPLE, or SEP) will count toward this limit.

  • Up to 25% of your compensation, but not more than $49,000 total

Deadline for Contributions

       The deadline for contributions to SEP-IRAs is the same as the tax deadline for your employer. If you are self-employed, the deadline is April 15th. Otherwise, the deadline is generally March 15th unless you are on a fiscal year tax deadline. Any tax return extensions you file will also extend the deadline for SEP-IRA contributions.

Tax Deduction for Contributions

       SEP-IRA contributions are deductible by your employer (or if you’re self-employed, by your business or on Schedule C). You receive no deduction on your tax return for contributions made on your behalf to a SEP-IRA. These contributions are not eligible for the Retirement Savings Contribution Credit.

SIMPLE IRA Contribution Limits

Corey —  April 5, 2010

Contribution Limits

       The maximum amount you can contribute to a SIMPLE IRA depends on your age. These are the correct SIMPLE IRA contribution limits for 2009 and 2010. Contributions to other qualified retirement plans (401(k), 403(b), SIMPLE, or SEP) will count toward this limit. You cannot contribute more than 100% of your income.

  • Under age 49 at the end of the year: $11,500
  •  

  • Age 50 or older by the end of the year: $14,000

Deadline for Contributions

       Elective contributions are generally made from your paycheck, so you need to have your contributions set up within the year. You can choose to contribute everything at the beginning of the year if your plan allows it, or you can just contribute a certain amount or percentage from each paycheck.

Tax Deduction for Contributions

       SIMPLE IRA contributions reduce your taxable income, so you don’t need to take a tax deduction on your return. However, you may be eligible for the Retirement Savings Contribution Credit.

       Peruse Ramit Sethi’s blog I Will Teach You to Be Rich for just a few minutes and you’ll quickly learn that being frugal is a waste of time. Actually, you’ll learn that it’s impossible to be truly frugal – so why try? You’re much better off just focusing on the “big wins” and then trying to earn more money…all so you can spend “extravagantly” on the things you love. (The quotes are not for sarcasm. Those are the terms Ramit uses. And I’m not just bashing him. There are other “experts” who tell you the same thing. And yes, sarcasm was intended with the quotes that time.)

       Ramit’s stance is that you should only focus on the frugal tips that will save you big money. These “big wins” should save you at least several hundred dollars a year, require very little time on your part, and in no way negatively affect anything you love to spend money on. He calls these things the “big 5” and with limitations like that you’d be lucky to find five things you should cut back on.

       Now, it’s easy for me to pick on Ramit because Provident Planning is not about spending extravagantly on the things you want and love. (Actually, maybe it is if what you want and love is God.) It’s not about making you feel guilty for spending money on things that aren’t needs either. My goal here is to explore how Christians can glorify God through their financial decisions – to look at how our faith in Jesus is reflected in our budgets. And that means frugality is as good an option as earning more. Here are a few reasons why being frugal is not a waste of time.

Choosing a Simple Life

       Living frugally allows you the freedom to live with less. It gives you the opportunity to focus less on earning money. Yes, you’ll still need some money to live. But frugality can help lower the amount you “need” by quite a bit. The less you need to earn, the more time you have to live frugally.

       This translates into many different options depending on your calling. For some, it allows more time with your family. For others, it’s a chance to volunteer more or work on a personal project that doesn’t provide income. I’ve even read of those who choose to live simply and earn less income to avoid paying taxes because they don’t agree with how the government spends the money – especially on war. For all these people, being frugal is not a waste of time. It’s a tool that helps them achieve their goals.

Conserving Resources

       Frugality is not always about being cheap. It can be a way to use less of the world’s resources. Americans are notorious for wasteful living. And whether we acknowledge it or not, this lifestyle impacts millions of the world’s poor and will affect our future and our children’s future. For those who seek to use less “Stuff”, being frugal is not a waste of time either.

Concern for the Poor

       This aspect of frugality is partly connected to conserving resources. Part of the impact of wasteful living is the injustice that happens in Third World countries. The coffee you drank this morning was probably harvested by somebody who earned only a few dollars for an entire day’s hard work. Those bananas sitting on your counter were likely picked by people who still can’t afford to feed their families despite having a job.

       Being frugal is not just about time and money. Our choices impact someone, somewhere. Frugality can be a choice to avoid supporting those things you don’t agree with. Conscious living is hard in this world, but it can be an example of your values.

Your Take

       Those are just a few reasons why being frugal is not a waste a time. When you stop thinking about time as money, you can start to see that you can’t judge frugal tips merely by their cost savings. What’s your take? What are some other reasons that being frugal is not a waste of time? What do you think of the examples I gave? Or am I just wrong? Let me know in the comments.