It's well established now that I don't have the saving gene. But I've done some things to trick myself into saving. One is to set up ING accounts for important things like savings and taxes.
The second is to pay quarterly taxes.
I know a lot of people groan at quarterly taxes. It's bad enough to have to pay taxes once a year--but four times? Here are the advantages:
- It forces you to stay somewhat up to date on your savings.
- It gives you a warning every few months if you're living beyond your means: If you don't have enough money to pay quarterlies, you may be overspending.
- It gives you a concrete warning that you're underearning: Can't pay quarterlies because you're not earning enough? It can be a good kick in the butt to get you earning so you can make up for it next quarter.
- It relieves you of the insanity of trying to scrape together thousands of dollars in April if you haven't saved for it before then.
So how do you set them up? The easy answer is that you hire an accountant and he or she figures it out for you and sends you invoices to pay on April 15, June 15, Sept. 15 and Jan. 15 (or thereabouts).
Set it yourself
Go to the IRS Web site and download the 1040ES form. It includes a worksheet that will help you figure out how much you expect to earn to you can determine how much should be included in each payment, and it includes payment vouchers you can fill out yourself and send.
Don't leave it to chance
Most important, don't assume you'll remember to pay. Write it on your calendar and pin the vouchers to a bulletin board or someplace else you will see them regularly. I write it on my planner a few days before they're due so I don't have to get caught in the rush.
Photo by Paul Keleher.