Money, Love, and Change

If you’re looking for a free tool to help you at your first attempt at making a budget, I would recommend taking some time to check out The Money Case.  After taking a couple of minutes to put your initial information in, you are given a breakdown of your budget by percentages.  After taking the time to input your actual expenditures, you are able to compare them to your budget.  Good stuff!

This software is very visual, with graphs that make it easy to see where your money is going.  I currently use Microsoft Money, and most of the time the graphs aren’t accurate – this software does a better job.

If I could change anything about this program, I would like the ability to enter monthly income (as opposed to yearly).  Although my husband’s salary remains constant throughout the year, mine changes monthly.  Therefore, the accuracy of the percentages is off for our budget.

I would highly recommend this program for anyone just starting out with a budget, as well as anyone considering going from a double income family to a single income family.  Being able to look at percentages can really help one to see where extraneous expenses can be cut, and whether or not it is realistic to be able to afford to live on one income.

Within the past couple of weeks, we encountered 2 financial bumps in the road totaling $600.  This surely isn’t pocket change, and until tutoring starts up again, we really don’t have a lot of extra money.  However, I am going to try to come up with $600 without dipping into our emergency fund or vacation fund.  Here’s what happened:

1.  New car tires – We weren’t really expecting this one, but when we got the car emissions and inspection done, we were told that new tires were in order pretty soon.  We trust our auto mechanic – they have done a great job so far letting us know about upcoming maintenance ahead of time (ie.  belt changes, tire changes, etc.).  To date, we’ve been able to set the money aside ahead of time and then have it done at the next oil change.  Our total bill was a little over $300 (includes our annual inspection and emissions tests).  Usually, we just take the money out of our emergency fund and replenish it, but I would like to try to pay this without touching our emergency stash.

2.  Car rental for trip to Arizona in November – We’re going to Arizona in November to visit our good friends.  The flight is booked and paid for, but we have been discussing renting a minivan and splitting the cost 50/50 with our friends.  We plan on visiting Phoenix, Sedona, and the Grand Canyon – with 2 kids in car seats and 4 adults, getting a larger vehicle to save on gas (as opposed to driving 2 separate vehicles, 1 of which would still need to be rented) seems like a good idea.

My friend called me last week with a great deal on a minivan for the entire week from hotwire.com.  Our friends will pick it up and drop it off, and the cost was about $200 cheaper than what we had previously found.  I booked it – the total was $295, and I’ll be getting back $15 for using my Discover Card.  Our friends will be paying us their half ($140), but they are tight on money right now since they just got back from traveling themselves.  They are good for the money, but I want to pay the total amount off without dipping into the vacation fund.

I’ll be keeping track of snowflakes throughout the month.  So far, I should be getting $50 from RevResponse, and $25 from my credit union because I signed up for paperless statements.  I’ve got some other tricks up my sleeve for this month as well.

Do you have any small financial goals this month?  Do you think that I can do it?

We’ve been putting aside $25 a month for Christmas.  I know that this doesn’t sound like a lot, but keep the following things in mind:

1.  My husband and I don’t buy each other gifts for Christmas.  Seriously.  If one of us wants or needs something, we discuss it and then plan appropriately.  Besides, with the birth of our son, we both get more joy watching him open presents.

2.  We don’t spend a lot on family.  In the past few years, we have sent framed pictures or photo books as gifts using gift certificates and other discounts.  I plan on using Boomertowne gift cards for family this year as well.

3.  My son (who this fund is primarily for) doesn’t need a lot of toys.  Last year, we spent $150 (toys and clothes) and he had a wonderful Christmas.  We figure that a similar amount will be good for this year, especially if we shop ahead of time (which we didn’t do last year).

Today we went shopping to get my husband the new Guitar Hero game (free after gift cards).  On the way home, we stopped at Toys R Us – I had heard that they were having a sale on Brio trains.  I was wrong – they were actually having a clearance sale!

For $60, we got our son a new train set with track, 2 extra sets of track, 2 stations (a conductor station and a repair shop), and 2 additional train cars.  This is going to be his “big gift” this year.  I’m really excited that we were able to get such a great deal, and we know that the kid loves trains already (he has a smaller Brio set).

The only thing I haven’t gotten ready is a good hiding spot for this year’s gifts!

Do you like Christmas shopping early?  Why or why not?

OK, I am a sucker.  I wanted free access to my credit score, and when I got the offer from WaMu for a card that had free access to FICO scores, I signed up.

There were no balance transfer fees, so I did a small balance transfer from a higher interest (3.99%) credit card.  I planned to pay it off in full before incurring any interest charges.  I would get free access to my credit score, and everyone would be happy.

After a couple of weeks, I had not gotten my card, but the balance transfer had occurred (I knew this from checking the card the transfer had been from).  I called Customer Service, and asked where my card was.  After being treated like a two-year-old (I understood I  had done a balance transfer, but they wanted to keep explaining this to me), I was told that I couldn’t pay the card until I received mine in the mail.

It did come a couple of days later, and I paid off the balance in full, still a week ahead of the due date.  I checked my balance today, and guess what?  A finance charge had been assessed.

I called Customer Service, and was given the run-around yet again.  After explaining my situation to a supervisor, nothing was done, so I paid the finance charge (less than $3) and canceled the card.

Ironically, every time I tried to access my FICO score online, I got a message saying that the service was temporarily unavailable.

Have you experienced anything similar with a WaMu card?  Or was I an isolated incident?

I’m just going to say that I have a real problem with these projections.  Articles like this one at MSN try to put a salary tag on a stay-at-home mom.

Here’s my salary projection for the stay-at-home mom: Priceless.

Guess what?  I would also put the priceless tag on the stay-at-home dad, the working dad, and the working mom.  There is no way to place a dollar sign on the sacrifice every parent makes for their child (or children).

Whether we choose to stay-at-home or work, most parents are just trying to do what is best for their kids.   We are trying to balance making the most of today while trying to create a good future as well.

That’s all I have to say about that.  What do you think?

Our stimulus check arrived last week. I just transferred about $540 to our emergency fund to bring it up to $5000 again. This was our first Dave Ramsey goal that I talked about in a previous post.  So it’s not official yet (since technically the money isn’t in the account), but it’s in the process!

It feels great, but I will feel better about it once I have secured another part-time work-at-home job to bring in income over the summer (I currently tutor online, and the hours will be decreasing soon). I don’t want to have obtained our goal only to dip back into the emergency fund a couple of months later!

Next, I need to update our accounts to see what we can put towards our high-interest student loan.

What were your plans for your stimulus check? Did you follow through with your plans?

I know, I know.  Everyone is wondering where theirs is.  I can’t wait for ours to arrive – it is already allocated as follows:

$600 – brings savings back up to $5000.  Yippee!

$350 – gas for traveling to OH in 2 weeks, and then western NY over Memorial Day.  This is all to visit family.

$25 – donation to friend who is doing pancreatic cancer walk.  She lost her stepfather last year, and is such a sweet gal.

$35 – basketball shoes for the husband.  He just started playing again, and his old shoes were, well, really old.  After a couple of blood blisters, he admitted that new shoes would be nice.  I used our Discover Cash Back awards to get $75 in gift cards.  With a 15% online discount, they came to $33.  He has a tendency to roll his ankles, so I’m hoping the shoes will help us prevent a $75 co-pay to the ER.

$490 – ??

I know that we won’t be stimulating the economy with additional purchases – I will leave it in checking to pay down bills while I look for a job.  Once I have something lined up, I hope to use it against that student loan!

What are you planning to do with your check?

I recently finished Dave Ramsey’s Total Money Makeover, and it is a quick and easy read.  I would recommend getting it from your local library – I would not buy it just because there are enough blogs and information on his methods on the web (and you can use the cost of the book as your first snowflake!).  I think that Get Rich Slowly has a nice synopsis of the book here if you want to get the basic idea before investing your time reading the whole book.

Is Total Money Makeover going to change our lives?  I’m not sure.  We have been  working hard to pay down debt, and I am confident that we will eventually reach our goal of being debt-free.  However, this book made me realize that we need more of a concrete plan.  We tend to throw money towards debt in a haphazard manner, but I like the idea of having a psychological boost of seeing something get eliminated.  After talking it over with my husband, we’re going to create a modified version of his plan:

1.  Get our savings back up to $5,000 – Ramsey suggests a $1000 emergency cushion, but this just doesn’t sit well with us.  Maybe it has to do with my lack of dependable income, the recent upheaval we were in as my husband found another job (since his old one will be in China soon), or the fact that our little truck will have to give out someday.  We recently used a portion of the emergency fund to cover some unexpected car repairs, and it is sitting at roughly $4400.  We will both sleep easier at night when it is back up to $5000.

2.  Pay off that *$)!(@ private student loan  – it is not our smallest debt, but it is our highest interest debt (currently at 7.5%).  I hate it.  I don’t care that the interest is deductible.  Every time I log into this account, I cringe.  At roughly $3500, it needs to go.

After these two goals, we have a couple of others, but we are not sure what order they will go in yet:

3.   Max out our Roth IRA contributions – Although Ramsey suggests stopping 401(k) retirement contributions until debt is paid off (in most cases), I just can’t pass up free money.  In a recent post, I talked about how we recently decreased our contributions from 20% to 10%.  My husband’s company match is 75% on the first 6% – keeping at 10% will help us in attaining our goal of $100,000 in retirement accounts by the end of the year.

4.  Pay down our mortgage so that the balance is at 75% of the value of our home – this will allow us to close our escrow account and keep the money in savings.  Since we are about $3000 away from reaching this goal, it seems reasonable.  Although interest rates in savings accounts isn’t so great right now, the lower mortgage payment would be a nice psychological boost.  I know we have enough discipline to put the money aside every month, and I also like the idea of having a little more wiggle room about where our money is going every month.

What do you think of these goals?  Are we destined for failure because we are not following the Ramsey plan exactly?

After finishing the taxes, we decided to decrease my husband’s 401k contributions from 20% to 10% with the intention of putting this money into our Roth IRAs.  The next day, we get a letter in the mail with regards to our health care plan.

They have changed the salary tiers and the contribution limits.  My husband now falls into a higher tier (if he made $1 less, he would still be in his lower tier).  The contribution limits have also increased.  When all is said and done, he is now making less than he did before his raise after he transferred to a new position at the end of last year.

Ironically, he works for a company that deals with health care products that is still trying to convince their employees that “they come first”.  My husband has a hard time digesting this – he was forced to transfer to his new position because his old job is being outsourced to China (his boss actually had the nerve to bring the blueprints for the plant in China to a meeting to show how big the improved facility was going to be!).

Although this really sucks for us, I am thankful that we had the cushion of our retirement contributions to fall back on so that things even out.  We come out $150 ahead (after taxes) in each paycheck after taking the health care increases into account.  Not as much as we had hoped for, but we plan on snowflaking this into a student loan, and then into retirement.

Have you been screwed by your job lately?  We really weren’t expecting this, but it hardens our resolve to get out of debt so that we’re not slave to the company (aka the man) for the rest of our lives.

Tax refunds are like steaks – everyone likes them different.  Some people like theirs well-done, and blow their huge tax refund on crap they don’t need.  Others like theirs rare – they see no reason to give Uncle Sam a free loan.  Someday, if both my husband and I have a more predictable income, I would also like our tax refund to be rare, but not to the point that it sends us to the hospital (ie.  penalty and interest fees).

This year, I am content to see that our taxes are more of a medium-rare affair.  I haven’t finished them completely, but it appears that we will be getting a medium-sized federal refund.  At first glance, it would appear that this is not so good.  However, we’ll be using this refund to pay our local taxes (state taxes are going to break even), and should have just a little bit left over when all is said and done (hence, medium-rare).

Overall, I am ok with this.  I was the lucky recipient of 5 W-2’s in 2007 in addition to having  2 business entities.  My income has been unpredictable to say the least, so I’m a little relieved to know that I wasn’t totally out in left field with the taxes.  In fact, I think that I am becoming more of a tax connoisseur with each passing year.  I took a tax course at H&R Block at the end of 2006 (that’s where one of my W-2’s from 2007 came from), and it was one of the best things I have ever done.  The books alone were worth the $100 fee for the class.  I was also fortunate in that I had a really great instructor.

I did consult with an accountant this year for a couple of questions I had when setting up my LLC (Limited Liability Corporation).  While it’s nice to have professional advice, I have always done our taxes, and I think that it is really useful to have a decent understanding of how taxes work.  I would  not say that I enjoy doing taxes, but I do like understanding where a lot of our money is going as well as  legally funneling some of that money back into our pockets!

What about you – how do you do your taxes?  Do you fire up the grill yourself or go to a restaurant?  How do you like your tax refund?