What I’ve Been Up To

This Week In Your Wallet: Tighten the Leash On Spending

Last week I got a postcard in the mail reminding me that it was time to schedule an annual physical…for my dog. I love the little guy – anyone who follows me on Twitter knows that – but I’ve got to admit I dread this visit. It’s not that it’s a huge time suck or even that Teddy (who gets nervous for any visit to the vet or the groomer) is a particular basket case. It’s the cost. For his annual vaccines, check-up and whatever else the vet finds (lingering ear infection, perhaps?), it’s always several hundred dollars. At least.

If you’re thinking about adding a furry friend to the family, it’s definitely something to budget for. While pets provide both emotional and physical benefits, they also come with a hefty price tag. In fact, the American Pet Products Association expects our pet-related expenditures to top $60 billion this year. Last year we spent over $58 billion.

As for what you might spend, the American Society for the Prevention of Cruelty to Animals (ASPCA) estimates the annual cost for a dog or cat can range anywhere from $580 to $875 — and that’s just for the basics. We’re talking food, recurring medical expenses, litter, treats and the like. Some capital costs to consider are purchase/adoption fees, getting your pet spayed or neutered ($145-$220), training classes ($110) and other initial medical expenses, like vaccinations ($70-$130). Needless to say, man’s best friend can easily turn into your wallet’s worst enemy. Unless, of course, you find some ways to cut corners. Here are a few to consider:

• Drive past the brick-and-mortar. Try ordering food, medication and supplies from sites like Wag.com, PetSmart.com and Petco.com. DailyFinance says to expect regular sales, coupons and free shipping on all of the above, including the heavy stuff, like those giant bags of kibble and big boxes of litter. Also, don’t forget to price compare using sites like PriceGrabber.com — and consider buying discounted gift cards for Petco and PetSmart for additional savings of up to 25 percent.
• Go generic. You’ve likely had this conversation with your doctor, and it’s a good idea to have it with your vet, too. Take heartworm medication, for example. PetCareRx says the generic version has the same active ingredients for a fraction of the price. On Wag.com, you can get Heartgard Plus, a name-brand option for around $40 — and on this site, you can get Valuheart, Heartgard’s generic, for just $16.
• Practice portion control. Also talk to your vet about the caloric needs of your pet, because the back-of-the-bag recommendations are usually too much (especially if your pet is pretty sedentary). Grab the measuring cup, because in many cases, one-half to three-quarters of a cup will do the trick. Another tip I picked up over the years is stick to dry food rather than canned food for your dog. Wet food is 70 percent water, forcing you to feed Fido a lot more to fill him up. For more ways to tighten the leash on spending, head here.

Amateurs with Amex

There comes a time when the weekly cash allowance won’t cut it for your teen’s lifestyle anymore and he or she needs some plastic. While this can be a scary thought for some (or rather, all) parents, it can be a great learning opportunity. Which plastic is right for the occasion? Reuters goes through the options, offering the pros and cons for each.

For example, you can add your son or daughter as an authorized user to your credit card. This usually takes a simple phone call and comes with the option of getting a separate account for their charges. The cons? Their card may come with your credit limit and no restrictions on spending. If that sounds like too much freedom, then opt to put them on a card that will set a limit just for them (I know from personal experience Amex will do this). Or, consider a bank account (that’s linked to your account) with an ATM card. You can minimize the monthly account fees by keeping enough of a minimum balance in your account to eliminate them. But you’ll have to keep an eye on overdrafts, which can add up at $35 a pop if your teen spends more than he or she has. I’ve used an electronic allowance system like this with my kids for years, and thanks to mobile banking apps, they’ve gotten good at monitoring their own balances on the go.

Tomorrow’s tax deadline

The 15th isn’t the only important tax deadline next month. If you or a parent turned 70½ last year and have an individual retirement account (IRA), you have until April 1 — that’s tomorrow — to make your first withdrawal. (In tax lingo, this is called the “required minimum distribution” or “minimum required distribution.”) The rule also applies to other tax-deferred retirement accounts (like a 401(k)), and definitely applies to traditional, Simplified Employee Pension, Simple and rollover IRAs. Miss this deadline and you may have to pay a 50% excise tax on the required amount you failed to withdraw.

As for the rest of the year, know that the contribution limits for your IRA remain at $5,500 – with a catch-up contribution that adds $1,000 to this if you’re 50 and over. There is a new rollover rule, however. Until now, you were able to withdraw money from your accounts — as often as you’d like — without having to worry about income taxes as long as you redeposited it back into the IRA within 60 days. Now you’re only allowed to do this once every 365 days. As USA TODAY reports, a recent tax-court case led to this once per year tax-free rollover rule. This means if you have multiple IRAs and would like to do a rollover from more than one account, be sure to run it by your financial advisor to make sure you’re not breaking the new rule. The rule doesn’t apply to a trustee-to-trustee transfer, which means you can transfer the IRA account you have at your local bank to a custodian, like Fidelity, without the 365-day limitation.

P.S. If you have extra money to spare, you have until April 15th to make extra 2014 contributions.