Do you have any questions you would like MYM to answer?  leave a comment or send us an email.

I participate in my companies 401(k) and I am confused if I will pay taxes on the entire amount I withdrawal when I retire, or just the earnings?  – Jason

The entire amount, including earnings, will be taxed when you start withdrawing money from your 401(k) during retirement.  Unless you are invested in a Roth account, which would then mean you would get the full amount because you are paying taxes on the money before it goes into the account and earnings and contributions grow tax-free.  The best way to think about tax-sheltered accounts is to remember that the money HAS to be taxed once.  It’s either going to be taxed when you withdrawal the money (Traditional) or when you put in the money in (Roth).

I’m not sure if you guy’s answer reader’s questions, but I’m wondering if you can help me with a tax question.  My company offers a pre-tax option on our commuter expenses as well as certain health care expenses.  I don’t participate in the program because it seems like such a small amount, that won’t really help me come tax time.  Should I enroll in these benefits?  – Lauren

We love to try to answer questions, thanks for asking one!  You should definitely participate in your company’s pre-tax commuter and health care program.  You are right, it does seem like much, but you may be surprised at the total year’s savings.  Let’s say your commuting costs are $130/month and your eligible health care costs (i.e. Copayments, prescriptions, childcare, etc.) are $100/month.  Your total yearly expenses would be $2,760.00.  If you participate in the pre-tax program, you would save approximately $690 if your tax bracket is 25% (Take your yearly expenses times your current tax bracket).  Remember, these are costs you are going to HAVE to pay anyways, so you might as well save on them.  Who knows, participating could barely lower you into a new tax bracket too!

Are we going to get another stimulus check?  – Anonymous

This is a good question.  There is a lot of confusion out there with the talks of another stimulus package.  While it is true that Congress is considering a lame-duck session to hammer out another stimulus check, it is not true you will be getting another check.  This round of handouts is intended to boost our nation’s infrastructure with hopes of boosting our economy.  Although the bill has not been written, I’m guessing there will be plenty of money for small businesses to get off the ground as well.  We will keep you posted after the elections as to what a new stimulus package would mean for you.

Who are you guy’s going to vote for in the presidential election?  – Anonymous

Ben and I do not agree on everything when it comes to the election, but we plan to release our separate views before the election.  We hope you find them beneficial.  $

How much money do you guys have in an emergency fund or what is your target amount? – Mike

You’ll get varying answers as to how much you are “supposed” to have in your emergency fund.  Some financial experts recommend having 2-4 months of living expenses and some say 6 months.  Personally, I don’t pick a certain amount of months; rather, I pick a number that makes me comfortable.  My wife and I have a goal of having $10,000 in an emergency fund, while we’re not there yet, we are making solid progress.  To us, this number gives us a sense of stability and comfort, it’s more than enough to get us by for a few months, and that’s what is most important.  I would recommend picking a number that makes you feel comfortable and start stashing away a few dollars away paycheck to paycheck, until you reach your goal.

In response to your grocery post, do you think buying organic – especially fruits and vegetables – is worth the extra costs? – Josephine

My sister has been trying to get me to buy organic for some time now.  The price tag definitely holds me back, but I’m starting to buy into the idea.  For whatever its worth, my great grandma lived to be 104, she wasn’t exposed to the great amount of fast food, preservatives, and pesticides that we are today.  I think it’s safe to say her diet was mostly organic, and considering the advances in medicine since then, I think the idea of organic foods and our health is highly correlated.

Having said that, I have a hard time swallowing the added expenses of organic foods.  Because of this, my sister gave me a list of vegetables that are best to get organic for health reasons, and I mainly stick to the list.  If organic fruits and vegetables that are not on the list are on sale, I’ll pick them up.  Likewise, I’ll not buy organic if I see good deals on the “normal” food.  Overall, I think it’s worth buying the organic foods and at best keep try to keep an eye on them in order to snatch them up when they are on sale.

Here is my sisters short food shopping lists to live (longer) by:

12 Most Contaminated Fruits and Vegetables (worth buying organic): 1) peaches, 2) apples, 3) peppers, 4) celery, 5) nectarines, 6) strawberries, 7) cherries, 8)pears, 9) grapes, 10) spinach, 11) lettuce, 12) potatoes

12 Least Contaminated (not as important to buy organic): 1) onions, 2) avocados, 3) frozen sweet corn, 4) pineapple, 5) mangoes, 6) asparagus, 7) frozen sweet peas, 8)kiwi, 9) bananas, 10) cabbage, 11) broccoli, 12) papaya.

5 Most Important Ingredients to Avoid: 1) hydrogenated oils, 2) sugar (less than 4g. saturated fat/sugar) 3) high fructose corn syrup 4) enriched flour 5) bleached flour

I drive by a payday loan center everyday on my way to work, at times there seems to be quite a line inside.  What exactly are these loans, what are the benefits?  – KT

Payday loans are essentially a short-term loan for a small amount from a small institution, like the one you drive by every day.  They get the name “payday” because of their small amounts can get you buy until your next paycheck.  In my opinion, the benefits to these loans are nonexistent.  Frankly, in many instances they should be considered predatory loans.  Some states do not have caps as to what these lenders can charge you in interest and fees.  It is not unheard of for somebody to take out a payday loan for around $100 and face an annual interest rate nearing 400%.  No, that is not a typo.  If people are in desperate need of cash, they most likely are better off using their credit card to get by.  There are some circumstances where these help out, especially if you can pay them back on time, but for the most part I would recommend to keep on driving by.

I’m a mom that works more hours then I care to admit.  Because of this, I find that we are spending a majority of our budget eating out.  I’d rather spend time with my family than cooking after work, what advice would you have to help keep our food bill down? – Busy Mom

Busy Mom, although I don’t have kids, I’ll give this my best shot.  My wife and I try to save time by preparing more advanced/delicious (supposed to be anyways) meals on Fridays-Sundays.  During the week, we tend to eat quick meals and make good use of leftovers.  Our quick meals include foods such as salads, spaghetti, fajitas/tacos, and chip beef on toast or shit on shingles, whatever you prefer to call it.  I think you’d be surprised how fast these types of meals actually are to prepare – especially if you consider the amount of time it can take to go pickup food, not to mention the cost savings involved.  I guess the best advice I can give is try to buy groceries for the week that allow for quick supper options, don’t try to bit off more than you can chew.  $

I recently started a new job; the benefits are different than my previous one.  They offer a 401(K) match, as well as an employer paid pension.  Because they offer a pension, should I even be putting money in the 401(k)?  – Steve

Whatever you can afford to put into the 401(k), I would suggest doing.  You didn’t mention how much the match is for, but I’m guessing it’s around 2-6%.  At the very least, try to put away the exact amount as the match.  For example, if the match is 4% of your pre-tax salary, put exactly 4% into your 401(k).  It may sound like a significant amount, but I think you will be surprised how affordable it is.  Any match is free money from your employer that will grow substantially over time, try to at least match their match!

My current bank offers a decent interest rate on my checking account, but I have noticed I could earn an additional 1.5% if I switch banks – is it worth it? -  Lonnie

I’ve actually asked myself the same question.  It’s very tempting to try switch and always be getting the most for your dollar, but I think the reality is this is probably not worth it.  For one, banks often switch their rates at various times.  So you may find yourself wanting to change back to your original bank, because they are now offering higher rates.  In addition, unless you have lots and lots of money stashed away in your checking account, a 1.5% difference won’t really make a huge difference anyways.  It may be best to hold out and stick with your current bank, after all it’s probably not best to constantly be opening and closing bank accounts.

You guys talk a lot about finances, but what do you do for fun?  – Kathie

Great question!  Obviously I can only speak for myself with this one, but I’m happy to share.  I’m a big Minnesota Twins fan, so currently I spend a lot of time watching baseball.  As unproductive as this might be, I really enjoy it, and it’s cheap!  I’m kind of a project guy, so on the weekends I usually try to keep myself busy.  Whether it’s trying to fix something small on our car, or tackling a home improvement project, I usually find something to do.  My wife and I like to take small trips to surrounding cities like Annapolis and Baltimore for cheap little getaways.  Our next trip hopefully will be a day driving around Virginia taste testing various local wineries.

What software/website do you use to track the gains and losses of your portfolio?  – Anonymous

I use Google’s portfolio.  It’s very simple to use and has the only the basics, which is kind of why I like it.  Also, I like being able to log into my Google account from anywhere and see how my investments are doing versus using actual software that can only be accessed from your home computer.  As of late, I really haven’t like to check on my portfolio at all thanks to the market! $

Feel free to holler at us with any questions you might have!

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