taxes

I heard an interesting theory yesterday on NPR about taxes. The argument was the giving people rebate checks will result in a different outcome than offering them tax relief throughout the year or giving them pre-paid debit cards. The idea is that if we are giving a relief each month, we will significantly change our buying habits as apposed to getting a check once a year.

As I look back over the last year, I can actually relate to this theory pretty intently. Honestly, when I quit my job February 2007 to become a full-time, stay-at-home mom, our finances changed dramatically, but my spending patters took a few months to catch up. I kept spending like I was, to some degree, thinking my income was not that big of a deal. I was quick to be corrected.

When I got a new job in September, I had been hit hard enough to know that just because I was not making more money I really needed to work on catching up from February. When I became a salaried employee and my husband got a new job, we sort of went off the deep end. We got Netflix, rejoined the Y and did some home repairs that we had been holding out on. I bought a new computer for work (which I was desperately in need of) and began to see how fast that extra money each month was gone and we were "strapped" again.

This was when I resolved to get my spending into a new place. We began to adopt the 24-hour wait period for all purchases, we had to revamp our budget and really start over. I never learned much about money from my parents. I had two over-spending parents and one who was so frugal with things that if you ask for $9.99 she would hand you 9 one dollar bills and 99 pennies before handing you a 10. I never understood the implications of money.

Today, I am seeking to find balance with money and not change my spending habits just because we have more income - the "more" is to be saved, invested, or given.

I once heard that most millionaires only make about $50,000 to $100,000 a year. These people probably pay off their homes, have no car payments and rarely use credit. I want to be that frugal. I want to get a tax return and invest it rather than have to catch up from over spending.