Taxes... AGAIN!

Something told me that I should do a check up as to where I am with my tax withholdings at this point. I decided to look at the total taxes withheld on my W-2 from 2010, compared to where I would be if I continued to withhold what I currently am, through the end of 2011. Oh oh, I smell trouble! From the looks of it, I would be very close to what I withheld last year. We all know where that got me (read here if you don't)... owing $7K+ in taxes.

I know how it happened. In an effort to get the taxes paid off quickly this year, I had basically nothing taken out for 5 paychecks. I thought claiming Married, Zero for the remainder of this year may balance things out but from the looks of it, it won't. Unfortunately we don't have much for deductions really since we don't own a house or have children we can claim.

I refuse to be stuck in the same situation I was last year, where I had to scramble to get the money to pay the tax man. I don't want to do that again. I won't do that again.

This leaves me with no choice but to adjust my withholdings now. I'm going to have an additional $360 withheld each pay period. There are 10 more paychecks left this year, so that will be an additional $3600 going towards taxes. I'm not even sure that this will be enough but it's all I'm willing to do right now. Anything more will impact our debt repayment schedule more than I'm willing to do.

Hopefully this will be a wash, but if not, at least I'll owe less. Just when you thought it was safe to let your guard down. Better I discover it now than when it's too late to remedy.

Dear Bank of America...

Dear Bank of America,

Thanks for not taking my money! Literally. I tried to deposit a hundred dollar bill in your new fancy ATM's where although it's convenient that you don't have to use an envelope (great idea!), you tend to spit cash deposits back out to people. Of course your lobby was already closed and unfortunately I work during your "normal banking hours" so I'm stuck using your ATM after hours.

Normally this wouldn't be a problem, but you offer no alternative way to deposit the cash (which having worked at a bank for several years, I'm quite certain is a valid, non-counterfeit bill). I'm left having to go to a store to exchange the bill into something that is considered more ATM friendly. That's assuming the store will just exchange the cash for me and not make me buy something that I don't need first.

I was trying to make this deposit on Tuesday. It's now Thursday and I won't likely get to a store to exchange the bill and make it back to the fancy ATM until Friday. I've now gained three more days of interest on the credit card that I wanted to apply the $100 payment to. You've also lost 3 days of interest that you could have gained by accepting my money.

In conclusion, while I appreciate the advances in technology and how we can now just put our bills directly into the ATM, I think it's also beneficial to offer the envelopes to customers who have their money spit back out to them, so they are not inconvenienced to have to exchange the bill elsewhere and return back to the ATM.

Sincerely,
Babybluewater

Rituals, Weakness & Strength

So, my co-worker who is going through some major issues at home has asked me to go out with her for a drink tonight. She also mentioned that she'd like to start making this a "ritual". Ugh, it's stressing me out.

I know she doesn't have anyone else in her life besides me, her husband and her therapist. Because of this, I feel kinda obligated to say "yes." However, there are a handful of reasons why I want to say "no."

-I only get a certain amount each week for my "Mad Money" and I don't necessarily want to spend it going out with her.

-I am trying really hard to not drink/eat the wrong things. I'm on Atkins and extra carbs don't really fit the lifestyle.

-I have gotten too close to her for my own good, mainly because I felt bad for the situation she's in. My position at work doesn't really allow me to be close friends with employees. It's expected that I'll keep that them at a distance.

-Last, but not least, I don't like to be locked into frequent events. In my previous life (when I was married before and lived on the East Coast), I found that I over-committed myself and was stressed with promising so much to so many people. Since moving to CA, it's just been my hubby and I. We both really like it that way. We just kinda keep to ourselves and do our own thing. The idea of having a weekly commitment is stressing me out.

As I re-read this, I know I should just tell her "no" but I just told her "yes." This is one area I need to grow in. However, it's so hard for me because I know she doesn't have anyone else to turn to. I just can't be "her person." Do you know what I mean? I have a person. I can't commit myself to making her happy.

I'll go tonight because I said I would, but somehow I need to get the point across that I'm up for an occasional night out but it can't be a planned weekly event. Any advice is welcomed :)

Owing taxes may be a good thing for us!

I know this may sound crazy, but owing taxes may be a good thing for us! I have been a bit hesitant to mention this but we've been struggling to stay on our budget each pay period. For one reason or another, we tend to stray. We have the best of intentions but "being good" has been harder for us than we anticipated.

Don't get me wrong, we have definitely made some progress from where we were previously. I actually have a "plan" that we are supposed to follow now (which is progress) and we've made some dents in our debt, just smaller than we could be making. Until now, we would kind of look at the plan but then make other decisions...

For whatever reason though, I refuse to pay the government late. I do not want to go on a payment plan and be hit with penalties and late charges. Eff that! It's not happening. This mentality has forced us to follow our plan to the T these past two pay periods. I know it may not sound like much, but I think THIS is the kick in the *** we needed to start following the plan. We have 5 more pay periods where we HAVE to follow it exactly or we won't make it. Maybe it's our procrastinator mentality that is forcing us to now conform at the last minute, maybe we get off on the pressure and the idea of the tax man coming knocking on our door, I'm not sure what it is - but it's working!

My only hope is that a habit will be formed by the time this is done, that we will continue to follow the plan and get ourselves out of this mess. One can only hope, right?

Question : What was your "A-ha moment" when it came to your debt? When did you decide it was time to take action and was it then that you actually started really doing it, or was it later because of something else?

Ouch... taxes!

What a week it's been so far... and it's only Wednesday! Well, the week started off pretty good. I found out that I will be getting a pretty good salary bump (11%). I was really happy when I heard that news :) I immediately started tweaking the budget spreadsheet and found that I could get our debt repayment this year up to around $26K! That's assuming we stayed on course for the remainder of the year, which I am bound and determined to do!

Then my husband got his W2 and I entered it into Turbo Tax. Yeah, this is where things went horribly wrong. The numbers in the corner started changing and turned from green to red. My worst fear. I had an idea that we may owe a little this year because earlier in the year we were looking at buying a home because the tax credits were so good. We did a silly thing and I changed my payroll with-holdings to almost nothing. We were trying to come up with the required down payment to get us into a house and figured we were going to get the tax credit later anyway. Well, that didn't happen. We decided to hold off on buying a house. In addition, I cashed out my old 401K plan and although I requested taxes to be taken out, unfortunately they didn't take enough. At the end of the day, it looks like we'll owe about $7K in taxes! Hold on a sec, I just had to swallow some vomit. I'm making myself sick over this. So, my change in salary is pretty much completely eaten up by us owing taxes. What a bummer.

I have to give my husband credit though. He mentioned to me that this may happen earlier in the year and told me I shouldn't reduce my with-holding but I did it anyway. I've never really had to pay before so I thought I'd take the chance. He's such a positive guy though and forward thinking that he's trying not to let me focus on the mistakes of the past. But ouch, it's so hard not to!

So, I'll spend the next few weeks trying to think of ways to get the taxes we owe down, but at the end of the day, we'll probably end up having to pay it. How's everyone else doing with their taxes? Misery loves company!

Interest / My Marathon!

So, today I decided to add up the interest we paid last month on our credit cards. It totaled $558.63! Five hundred, fifty eight dollars and sixty three cents. I'm a little sick to my stomach thinking about it. That's more than the monthly payments for both our brand new car and insurance. Throw in some gas and maybe we would get up that high! That's almost the cost we paid for my portion of our one week all inclusive honeymoon at an ocean-front Mexican resort. Jeepers!

Over one year, this would be $6,703.56. Wowzer! I know we can't pay this debt down in just one year, so it could be multiple years at this rate. Agggghhhhhhh! Okay, enough already. I need to stop.

What I need to do is really make progress this year at paying our debt down! I'm going to try to turn what I first thought of as frustrating, into motivation. Perhaps I'll put post-its around with the daily interest number on them (roughly $18.62), as a reminder of what we're paying. Maybe the next time we think about ordering a pizza or going out to dinner or something, we'll think about this number. I just had a funny thought, have you ever seen past marathon runners who get 26.2 tattooed on their legs... well, 18.62 may be my number! This whole get out of debt journey kinda feels like a marathon to me :)

So long savings!

I'm a bit bummed today. I got the notice of my fine for turning right on red without completely stopping and it will be $528 PLUS the cost of traffic school, which I think is about $100. Of course this was unplanned, so it'll have to come out of our savings.

In addition, we received a couple of Doctor bills this week (one for the ER trip - $100 and one for the DR copay - $30). Again, unplanned for, so we'll draw down the savings even lower.

Perhaps I should just be happy we have a little cushion and look forward to starting 2011 fresh. We've learned some good techniques in November and December and are learning how to budget a little better now. It's just hard not to get down about starting back at square one. I should be happy though that we even had a savings to fall back on for these expenses, or else they'd end up on the credit card! Someday it will get easier, someday.

$446 or more!

I hope that you all had a nice Thanksgiving! Sorry I didn't get a chance to come on here and do some blogging. Unfortunately, I had to return the device back to work that allows me to use the internet for free from home. So, I had to wait until I had access again to get on here.

Our long weekend was so/so. Got some bad news when we got home on Wednesday. Turns out I rolled a stop when I was taking a right on a red light and I had a citation waiting for me in the mail. I've never had a ticket before. It looks like they will send me the actual amount owed in the mail but from my research, the fine starts at $446 and goes up from there. I am so bummed and mad at myself. I'm normally a very safe driver and I can't believe that I did that. Things are so high tech nowadays, that I actually got to go online and see the video of me doing it! Seeing is believing :(

In addition, we're both fighting off colds, so we spent most of our time at home. My husband ended up having a couple of bad panic attacks though and we ended up in the ER again. Poor guy just can't seem to kick them. He plans to see another Dr soon to see what's up.

All in all, things are okay. We got to enjoy a lovely, simple Thanksgiving together - our first one as a married couple :) Looking forward to many more!

The hunt is on!

So, in an effort to reduce our monthly expenses even further, we've been hunting for a new place to live. We currently rent a fairly large condo for $1375 a month. It's much further North than our jobs and we carpool together about 60 miles a day (round-trip) between work and home. The commute is rough on us. It's constant stop and go on a very busy highway. We'd like to try to move further South so we can 1) be closer to our jobs, which will lower what we spend on gas, 2) hopefully reduce our monthly rent and 3) reduce our stress levels with our daily commute. I've sworn to my husband that the highway we drive on will be the death of me!

Although places further South typically cost more, for less living space we realize it's the best option for us right now. We're in a 1300+ SF, 2 bedroom/2 bath condo on a nice golf course. Realistically we'll probably have to downsize to about 600 SF, 1 bedroom/1 bath, in a crowded complex. There are a few non-negotiables for me though... it has to be a top floor (I'm super-sensitive to sounds and can't stand someone walking above me) and the area needs to be pretty safe (it's not worth it to me to move and live in fear for a few hundred dollars). The nice to haves would be a dishwasher, porch and a washer/dryer. I'll keep my fingers crossed on those last ones :)

We're in a bit of pickle though. We have yet to build up our savings and every place we check out wants a heafty deposit. We'd love to move into something between $1000 - $1100, so we could put another couple of hundred dollars towards our debt each month. We know it will be worth it in the end to make the move, it's just that our hands are tied and unless by some miracle, we find a complex with a low deposit, it looks like it may be months before we're able to move. It's a bit of a catch-22 and somewhat frustrating, but I guess it's just the situation we've gotten ourselves into. We're focused now and want to make progress TODAY, but I guess it'll all happen in due time. As they say... patience is a virtue.

A quarter.

A quarter. That's all we have left in our checking account right now. Twenty-five pennies. That's it! I'm not sure if I should be embarrassed by that amount or proud of myself for coming close to Dave Ramsey's zero based budgeting method. As he suggests, I allocated every dollar somewhere! Some of the dollars changed locations since we went over our budget last weekend but in the end, it all worked out.

I do have a sense of insecurity with only having a quarter in the bank, but it's just for today. My husband gets paid tomorrow (we are on rotating schedules) so that brings me some peace and the odds of something happening between now and then are pretty slim. (Now that I said that watch something crazy happen!) This really makes me wish that our emergency fund was already fully funded, but we'll get there. Mama said there'd be days like this...

Aggghhhh! Is it 10/10/10 yet?

The big day is fast approaching for me! I'm tying the knot on 10/10/10 at an intimate ceremony (just the two of us) in Vegas. I'm really looking forward to the day! Not sure if it's pre-wedding anxiety or what though, but I'm feeling a bit stressed and on edge. Everything "wedding-wise" is falling into place nicely. I think the thing that is getting me down is the damn budget! My fiance and I tend to be spontaneous and I love that about us. However, this time our spontaneity is making things a bit more stressful then they have to be. Had we officially set the date a little earlier or started saving beforehand, we would have a bit more flexibility. But hey, hindsight is 20/20, right?

As I mentioned previously, I have a budget that I plan to kick off in November (hopefully!). But in the meantime, I have a budget to get us through the month of October. Honestly, this budget is pretty tight. It's purposely designed that way so that we can enjoy ourselves to the fullest while away. But each day, I seem to have to add a new, unplanned for expense, into the budget and our "fun money" just keeps dwindling. You'd think I was balancing the federal budget or the friggin former CFO for Enron the way that I'm sweating over our budget for the next few weeks!

I'm sure you're thinking that I need to focus on getting out of debt and not "fun money" and believe me, I plan to! I really do. It's just that this is our wedding and honeymoon and I want them to be really enjoyable for us and I don't want to have to think about money in the slightest. But I guess that's what got me into this situation to begin with, right?

5 Year Plan

Okay... so I'm really anxious to get started on my official "get out of debt plan"! Before this weekend, I was toying with a pretty tight, but good, 3 year plan. Then, after getting the new car and engaged, it's now going to have to be pushed out to 5 years. As much as I don't like it, that's more realistic at this point and will give us a little more breathing room. Unless of course, I win the lottery. Which, I know some people don't like, but I do play! Someone has to win, right?!? Why can't it be me? :)

Luckily we'll probably plan a fairly inexpensive and simple wedding/elopement. We've both been married before and live across the country from our family and most of our friends, so this is the option that we are leaning towards. We both have fun in Vegas, so we're thinking of a quick elopement there. Not sure yet about a honeymoon. Wish we had a little more saved up so we could plan something nice, but it looks like that may have to wait...

This plan is important to me because I need to wrap my brain around how I'm going to get out of this situation. Dealing with debt is like a having huge weight on your shoulders. It's on my mind daily, often hourly, and it's mentally draining. Sometimes when I think about it all, I get really overwhelmed. It can feel as though you are drowning, in a way. Breaking it down into doable monthly payments, where there is at least a rough end date identified, helps me immensely. That's why I'm excited to get it all down on paper, to start the process and kind of in a way, to begin the healing.