Mid Life Crisis Money

Reading back through my posts, the majority of them seem to have a negative slant, but that’s not my intention.  Our plan to get out of debt shouldn’t be depressing, and it isn’t; I get excited when I think about it.  Every time I see how much money we have budgeted (and ready) for something, it gives me a warm fuzzy feeling.  We’re definitely not invincible, but knowing that I have that $1,000 sitting there and ready in case something happens is a wonderful feeling.

The pace of our debt reduction is slower than I want, but there is progress forward.  I hope that at the end of January, when we have our emergency fund resupplied, we should have a couple hundred extra bucks to put towards one of the accounts, and, God willing, we have that $4,000 retired by May.

Another good thing is that our Flex spending account this year will be back to being as functional as it was in previous years.  Before, we had a debit card that you could you not only for prescriptions, but also to handle copayments, glasses, contacts, over the counter drugs, etc.  Last year, when our insurance switched, you could only use the card for prescriptions.  To add insult to injury, any long term prescriptions you had were required to be ordered from the insurance company’s own mail order pharmacy, making the card even less useful (and the mail order place balked at letting you use the debit card issued by the insurance company!)  So the money I had budgeted for the up-front cost of contacts and such can now go towards debt. $18 a paycheck, but it will make a difference.

So my latest goal is to not sound down or negative about our finances all the time.  We’re gonna get there, stumbling blocks or not.

Just before Christmas, I dropped my phone while shoveling in the driveway and cracked the screen.  Both my wife and I were eligible to get new phones, but we were holding off, because we (err, I ) didn’t want to pay for the phone we wanted, something similar to the EnV we currently had.  So I told my wife she should get a new phone, and I’d take her old one.  It still worked ok, and had an almost brand new battery.  So I would still have I phone I liked, and she’d have a new one.  Everybody wins.

When she went to order her phone, lo and behold, they had a special: buy one, get one free.  We both get new phones.  Win!  And they arrived in about three days.

I decided, that, this time, I would take care of my phone.  I wouldn’t let it get scratched up, or carry it around in my pocket with my keys, where it fell out while shoveling.  I would actually buy a case for it.

And then I saw how much cases cost.  One to fit my phone with a belt clip was $15.  Fifteen dollars!  I won’t pay that much for a pair of pants.  I rarely eat dinners that cost that much.  I was ready to just leave and take my chances, but in the end, breathed deeply, and bought it.

This weekend, I noticed something on the back of my phone and tried to wipe it off.  Except it wasn’t something on the phone, it was a small crater worn into the phone.  The belt clip of the case intended to protect my phone has rubbed a noticeable spot into the battery of my phone in less than three weeks.

So, in my quest to be responsible, my plan of action caused the result I was trying to avoid.  At least it is now unique to me and I can tell it apart  from my wife’s.

So if you are in need of some stylish personalization of your cellphone, just pick up a fifteen dollar(!) one at your favorite neighborhood mega-super-monopoly store today!

Here is a tangible, clear, example of losing money by being disorganized.  A check for ten dollars that we found while cleaning and getting rid of clutter.  It was written to us almost four years ago.  Obviously, that ten dollars isn’t the end of the world, but to me, it’s a miserable waste.  I would pick up a quarter off the ground if I found it, not walk by it; why did we leave this just lay?  That’s three or four gallons of milk, or enough gas to get me to work and back for a day.

And all because we were too lazy to have any organization.  At least now we have a desk and file folders to keep papers and records in a loose format, and I’m trying to make as many of our bills paperless as possible (and attaching them in Quicken when I can.  Does anybody else do this?)  And the ten dollar acrylic paper holder I agonized over buying seems to be paying off.  If I can just decide where the rest of the in-between stuff goes.  If I had another ten bucks, I could buy another organizer…

Ralph Kramden of the Honeymooners

This week, I was home on Friday (it was literally too cold to go to work,) so I filled the envelopes with cash for the next two weeks instead of my wife completing the task.  I was determined to show her how the envelopes should be managed and that she just wasn’t being diligent enough.

Fast forward to Saturday night, barely 24 hours later, and, just like a worn out sitcom plot, most of our envelopes are empty, even faster than usual.  I’m trying to decide if I’m Jackie Gleason or more of a Reginald VelJohnson.

To be fair, I did let her buy a new dutch oven pan, because the last time she saw it I promised she could get it next time they were on sale.  And I bought a USB hub (which I’m still trying to figure out if I really needed — it did help clean up and organize the desk.)  But now I have to, once again, reconsider the amounts budgeted in our envelopes.  I still think they are adequate, and we’re still feeling the after effects of the holidays, catching up on groceries, especially since I gave them a slight increase already for the new year, and would be depleted despite their level.  Spending always seems to increase to consume the amount of money present.

I resolved this year to track our charitable contributions better, for taxes, and decided I would try using It’s Deductible to track these.  We took our first container of donations to Goodwill today, and I figured it would be about $20.  I had no idea how they would give us a receipt, and it turned out to be just a checklist, with one bag of clothes and two boxes of household items.  So I logged into It’s Deductible and entered the items that we took, and it ended up being $95.50.  Incredible.  Now I could kick myself for not bothering to get receipts all of last year.  Since we plan on doing massive decluttering this year, I’m excited to see how much it will add up.

When I woke up this morning, the temperature was -29°F, actual, not wind chill.  That was -41°F.  The car wouldn’t start, and the hot water to the kitchen sink was frozen.  And the furnace has kicked on five minutes after it shuts off for the past two days.

We budget $160 every paycheck to save towards the gas and electric bill.  Based on our past usage, that should even out to the total yearly amount we pay, but the past 30 days has been extraordinary, and I don’t know if that is going to cover it without a subsidy (coming from the debt snow ball money, of course.)  Our house is horribly insulated, and that’s one of the things we want to change after we get our debts retired, but we don’t want to create more debt doing it. We keep the thermostat between 62 and 64, much to the chagrin of anybody and everybody.  The wood stove in the back of the house helps, but given the weather this year, we’re almost out of wood and it’s only the middle of January.

On the plus side, the high tomorrow will be 26ºF, so a 55 degree difference in a day.

Gah, the furnace just kicked on again!

Mrs. Micah at Finance for a Freelance Life has a good explanation of a Debt Snowball, and also of Snowflaking; taking what you have left over in your budget and using it towards your snowball.  We haven’t done this yet, but my gas budget is accumulating a surplus, so I might try it instead of adjusting it downwards.

They advocate going for the highest interest first, instead of the smallest amount, but, “Your biggest goal here is to stick with it.”

Besides being well-written, I’m also a little envious that I didn’t think of the title Bring Out Your Debt myself.

“Don’t live in fear of your debt,” she says, which is very true.  We both used to agonize about our debt and how we would pay our bills.  Now that we know what is coming in and how it’s going out, it does not seem insurmountable anymore.

Getting Started on a Debt Snowball.

Last week I tried to estimate our tax return (boy, do I know how to have fun…) and it came out to where we would get back just enough in Federal to cover what we owed in State.  I was aiming to not owe or get anything back, but for some reason, I owe State income tax every year , except for last year.

But when I got my W-2, and our real mortgage statement, we’re going to end up getting almost $1000 back.  I’m pleased with this even though it’s not the result I was aiming for, and happy I don’t owe tax, like Quicken kept warning me all year long.  My wife seems to be all for getting that tax return money, sort of as a bonus, but I’d rather have the money throughout the year, as nice as that surprise income is.

Now I have to decide if I make any withholding adjustemts this year.  My wife now works part-time, and her gross is just under the threshhold for having Federal withholding taken out.  So we will likely end up owing this year unless I remove a deduction from my W-4 and things stay the same.  But who knows what is going to happen to “stimulate” us this year?  Do I go tinkering now and then again later?  I think I will leave it alone until we get our credit card debt gone, then revisit the issue.

Another thing I intend on doing this year is to keep better track of our charitable contributions.  I have our tithe, but other things like donations to Goodwill I never bothered to get receipts, and I now regret it, because those could have really added up last year.  With our goal to get rid of junk this year, it could be even more.  I’m going to try out It’s Deductible this year to see how easy it is to use, especially since it alleges to import directly into TurboTax.

How do you track your contributions?

The Simple Dollar had a recent post about frugality and binge buying.  I’ve realized I’m very guilty of this, even now.  Last week Woot! had a dvd recorder really cheap, and I thought “ours is having problems, this is a good deal, and we deserve it because we are saving money.”  WRONG! Now we are just that much more behind in retiring our debt.  This same mentality is what helped hold us into debt before:  “we make good money, so buying this item (which we don’t likely need, nor will likely use more than once) won’t be a burden.”

I need to get some blinders on (and maybe quit checking Woot! every morning) if we’re going to make this work.

The Simple Dollar » Frugality and Binge Buying.

Over the weekend, my wife and I rearranged our front room.  After I started going back to work, I moved my computer from my basement office up to the front room.  The desk was too small (4 foot) and had not nearly enough storage space.  So part of the rearrangement included a bigger desk top and a second file cabinet (to double as a base for the desk.)  Once again, trying to get organized to save money ended up costing me sixty-five more dollars.  I’m hoping it will pay off in the long run, especially for tracking tax-related expenses, which I have failed at miserably so far in life.  But we are  little bit closer to being organized, and now I almost feel like we can tackle the front closet and clear it out, and, in the process, recover a couple hanging files filled with ten year old bills and receipts that we never looked at, but we happily blew money on.  Even though we don’t utilize the paper, we always seem to hoard it and then do one mass dump.  How do yo organize your files, and do you cull them continuously, or wait until they refuse to work anymore?