Generally Speaking is the Voyageur's forum for columns, cartoons, and letters to the editor. Skeeter Tales by Joel Seibel is our very own locally produced cartoon. The 'Word of the Week' brings clarity and definition to unusual or oft-misunderstood words. Columns include "Wright News" by Jennie K. Hanson, "Up North" by Don Crouch, "Reflections" by Jacob Kulju, and "I Saw" by Jerome Little. Views expressed in columns, cartoons, and letters represent the views of the authors.
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Cartoon by Joel Seibel
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Beyond Boomers: financial conversations with Generation X
By Cheryl Haapoja| May 13, 2008
Ameriprise Financial Advisor
A great deal of attention has been paid to the baby boomer generation over the past several decades, but lately the focus has turned to Generation X, the children of boomers defined by the U.S. Census Bureau as having been born between 1968 and 1979. While boomers grew up at a time of national prosperity, their children came of age in a country dealing with an unpopular war, a national scandal and significant social change. As a result of these life influences, the typical gen-xer is more skeptical, less deferential to authority – and has a very different mindset about money.
The Ameriprise Financial Money Across GenerationsSM Study surveyed the adult children of boomers, a segment comprising a significant number of gen-xers, along with representatives of their parents’ and grandparents’ generations to assess attitudes toward money. Here are highlights from the study:
Leaning on mom and dad. According to the survey, adult children of boomers are the beneficiaries of their parents’ generosity. A large number of affluent boomers provide financial assistance to their adult children, helping with expenses such as college loans, or car purchases or payments, medical insurance and credit card debt.
Ready to take responsibility. Though this generation has received significant financial help from their parents, they report the need to provide for their families in the same ways they have been helped. Children of boomers rated a number of financial goals as “very important” to them, including helping their children or grandchildren pay for their education, preserving wealth to leave their children and helping supply a secure life for their parents.
Willing to talk about money. More so than their parents’ generation, nearly half of the children of boomers in the study say they regularly discuss finances with family members. They also report these conversations are a major source of family stress and frequently lead to arguments. This tension may be related to their boomer parents’ self-reported reluctance to talk to their adult children about...
For the rest of this story and more, pick up this week's Voyageur Press.
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Cartoon by Joel Seibel
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Tips on using your tax refund
By Cheryl Haapoja| May 6, 2008
Ameriprise Financial Advisor
Tax Refunds
This is the time of year when many taxpayers rejoice. Those are the ones who have just received or are about to receive a refund check from the IRS. For many, it feels like a bonus. After all, in a sense it is "found money" that can be used any way they like. But there is a catch. This "found money" was really your money from the start. Another way to look at it is that you just gave the government an interest-free loan over the past year because you had too much money withheld from your paychecks.
In some cases, the amount we're talking about is significant. So far, the average tax refund in 2008 totaled more than $2,400. In other words, millions of taxpayers are overpaying $200 in taxes every month (on average) that, instead, they could keep in their pocket throughout the year. For most people, an extra $200 a month would be considered significant cash flow.
A better solution
Some people believe "overpaying" taxes out of each paycheck is a way to force them to save money. But too often, it is easy to find a way to spend the refund check on unplanned purchases.
Instead of giving the government an interest-free loan, you can lower your withholdings on your W-4. You could use the extra $200 a month to pay down debt. Other options include saving for your retirement in a 401(k), an IRA or an education fund where the money has the opportunity to grow.
For example, people in the 28 percent tax bracket who contribute $200 a month to a traditional 401(k), lower their federal tax bills by $672 per year. Depending on how much you changed your withholding, you may still receive a modest refund even after contributing to your 401(k). Check with your tax advisor to verify your situation. If you contribute $200 into a tax-deferred account earning an eight percent return, after 20 years that account would grow in value to $118,649 before taxes are paid.
Directing the extra dollars into a tax-deferred account such as an IRA or workplace savings plan helps ensure that you won't simply save the money only...
For the rest of this story and more, pick up this week's Voyageur Press.
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