Sunday, March 21, 2010

Taxes Done!

This morning, for the first time in my life, I paid someone to do our taxes. It took around 1.5 hours and cost $190. I wouldn't say it's the best money I ever spent, but it's pretty high up there. I like not worrying about if I made a mistake in my interpretation and avoiding my husband freaking out. Though in the end she said I seemed really on top of things- which made me smile.

2009 was less complicated than 2008, but we still had a lot going on. 2 W-2's, 1 1099, bank interest, student loan and mortgage interest, donations, car purchase deduction (federal) and credit (state) & a home energy credit (door replacement).

I ran our taxes a few different times at home in February. One program had us getting a little more and one had us getting a little less than where we ended up. Though on the one where we had more I definitely didn't get enough guidance from the program I was using about the property loss not covered by our insurance and would have claimed something illegally.

In the end we're getting back just over $7,000. The state car credit was a huge ($3,110) part of that. The rest is due to unexpected deductions/stimulus stuff and my husband being squeamish about withholding. One year when he was single and working in the mortgage industry (with only 401(k) as tax shelter) he ended up owing a lot of money. Ever since he's wanted to claim 0. Logical thinks like being married and owning a house and having (my) student loan debt don't seem to compute. I'm trying to get us to both claim 1 for the rest of the year to avoid another huge return.

Approx $3,400 of the return will go to the Prius. My thought is if we get the money for buying the car it should help pay for the car. I'm pretty sure one of us, or maybe the dealer, used the state credit when discussing price. He wants to figure out which of us overpaid by how much (after the credits/deductions things like the car) and give 20% of that back to each of us, but that seems like a lot of math and brain cells. After the $3400 I think the remainder should be split in thirds and send to the baby fund, medical savings, and efund.

Baby fund is new and somewhat amorphous, but at least helping to buy baby furniture/stuff that we'll need after the baby shower. Medical savings is also new, but this year will be a pretty expensive medical year. Copays on OB visits are going to run around $350. Delivery will either be $500 or $1,000 depending on if a perk from a year ago still exists. So best case we're looking at $850 until the baby gets here and assuming absolutely nothing is out of the ordinary.

We have around 2 weeks (if not more) for the money to actually show up so I'm not going to stress about it right now. But it feels good to be done for the year.

Tuesday, March 16, 2010


Two years ago I started this blog I was a few months out of grad school, starting a new job, and trying to get our finances on track. In the year before my husband had a hard time finding a job that was a good fit as his industry (mortgage) started to fall apart. I'd just acquired almost $40K in debt between school and my car. I knew we needed a plan to get out of debt and I needed a space to talk about it.

A big part of my motivation has always been choices. Owing others reduces the options you have- short and long term. We're not there, but we're closer and each month I feel like our options open up more.

Though I never really talked about it (or at least can't find in my archives) I wanted to have a choice when we had kids. I didn't want to have to work if I chose not to. I didn't want to have to stay home because all of my income was going to child care. I also didn't want be stuck with a child care situation I didn't like because we couldn't afford more. At any point I wanted us to be able to make the best financial choice for our family.

Until January 3rd all of the planning was pretty theoretical. We got the very exciting news that we're expecting our first child in September.

Thursday, March 11, 2010

Networth- $12,998

I finally updated my networth on Networth IQ this month after taking a January break. Things are moving upwards, despite some spending, so I'm happy.

In less than a year we've paid off 32% of the Prius. In the middle of 2009 my goal was to get the amount owed under $20K before they year ended. In 2010 we're working to get the balance under $10K. There will be some tax return money headed to the car (state hybrid credit, federal stimulus on the car tax) that will definitely help out. When I gave him my estimate (I've run our taxes 2-3 times now) he started daydreaming about what we would do with it until I quickly shut him down. I think if we're getting money back on the car purchase that money should pay down the car. He reluctantly agreed.

Our emergency fund also seems to have made significant gains- up to 70% of our goal. When we had the break in the efund was used to replace the stuff we lost. Our check was issued but got lost in the mail and reissuing it took forever. While all of that was happening $500/month from my salary was going into the efund so we're getting close to our short term goal of $10K. Any refund outside of the car items will go here.

The next 2, my student loan and our mortgage, are a bit more depressing. We're 1/4 of the way to getting out from under PMI/having 80% of our mortgage paid. Our PMI is less than $90/month, so it could be worse, but pissing away that money irritates me. In the next few weeks we may also tackle a refi. My student loan, despite 2 yrs of paying with a few over payments here and there, is only 17% paid off. As soon as the Prius is gone this baby is going to get knocked out. The recent rate reduction and my plan to get to another rate reduction in 15 months should both help.

In other news we bought a dining table and new couches, finishing out the downstairs. These purchases happened over the holiday break. Even though we're working on paying off debt we decided that we want to furnish our house over time instead of waiting until we are done. Until this point we haven't had a kitchen/dinning table. When we started living on his salary $250/paycheck went into a house stuff fund to take care of the table, chairs we'll need for outside, and any other house projects that come up.

The couches weren't planned for. On Christmas my husband broke the sofa that we had. Don't ask. At this point a love seat and sofa were the only furniture we had downstairs, so we decided to replace the set (moving the broken set to another area where the back of the couch can be supported). Luckily we had more than enough for the couches in the house stuff account. We were 4 days from the paycheck that would give us enough money when we bought the table. I honestly can't remember why, but we put them on a 0% store card. There was some logic at the time. Regardless, all of that money is hanging out and we could pay it off at any time. We'll enjoy the 1% interest the money is earning in the mean time.

Monday, March 8, 2010

Persistence Paying Off

A while back I wrote about issues with a student loan benefit. The short version is after 24 on time payments they do a 1% rate reduction. In month 22 they pulled funds 1 day later than my payment date & I set transfers too close together so it overdrafted. At first it looked like things were going to be fine, until the next months payments. Then my payment counter reset to 1.

Since them I've called my student loan company to talk about this 4 times. The first 3 times I was essentially told 'sometimes life sucks.' Since my counter was still moving (at this point 2 payments were made) I came up with a plan to get the rate reduction sooner. I was on standard repayment ($316) and realized if I lowered my monthly payments by switching to graduated payments ($209) but still payed $316 each month I'd hit 24 payments in 15 months instead of 24. The only thing about this that is a pain is I'll have 2 payments for the loan each month. They auto debit $209 each month and I have to manually make another payment for $107 each month.

The math is ($209 x 24)/$316= 15.8 months.

My student loans are fixed at 6.5, so the rate reduction was a big deal. With the graduated payments the amount I pay goes up every 2 years. Since we'll keep paying my standard payment this won't increase interest on the life of the loan. Also the student loan is next up in our debt snowball. It should be on deck (ie the Prius should be paid off) before the end of 2011.

When I called to sign up for graduated payments I got very hypothetical with the guy I was talking to. I told him my master plan was to get the rate reduced and asked if there was a better way for me to go. He got me signed up for graduated payments and said he'd look into the rate reduction problem.

I geared up for the 15 months of weird payments and forgot all about his promise. Yesterday I logged on to get numbers for our net worth spreadsheet and scanned all of the info like always when I saw the rate reductions. A little happy dance may have ensued.

The rate reduction won't change any of our plans for payment in the years. I'll make the two payments each month and we'll get to the next rate reduction (at 48 on time payments) that much sooner. Each of these changes will reduce the total interest we'll pay and the overall length of the loan, but at this point I'm late for work.

Sunday, March 7, 2010

Eating my words

I met my husband when I was 19. Young and idealistic and prone to saying things that current me wouldn't. I don't think I'm all that different at the core, just more practical.

So one day 19 or maybe 20 year old me was having a conversation with 24 year old him about future kids and how we'd raise them. Language came into play and he said he wanted our kids to learn the national language of his father's heritage. As a bit of background, our parents are from all over. His mother is the only one who was born here and the others are all from different countries. Each of our father's are from countries where a language other than English is the main language. My mother's home nation uses English, but there's a dialect that most of my family speaks.

Most of my husband's family (including my husband) speaks language A, which is less well known in the whole country. He proposed that we both learn language B, the national language, and in turn teach it to our children. 19 year old me said yes.

Honestly I'd forgotten all about that discussion until a few months ago. He saw a language program at the mall during the holidays and brought it up again. For some reason I didn't stop him. Now he's ready to buy the program (to the tune of $500) and I just don't want to.

I'm not very good at learning language. Really, I'm stunningly bad. I'd say I speak English and can get by in Spanish and that's after 9 years of instruction and 4 months of living in a Spanish speaking country.

There's also the fact that half of his family won't talk to us. They're upset that he didn't marry someone of his nationality and recently snubbed us when we were in their hometown. Also, all of his family in the US (he doesn't have contact with those back home) speak English. His father doesn't actually know either dialect.

On the other hand my father & stepmother live in their home country. I never learned growing up because my parent's split. My stepmom's English has faded since they moved home 10 years ago thought my father's English is pretty good. All of the extended family in the US speak both languages, but tend to lapse into the other language when together because it's everyone's first language. I don't necessarily think I want us to learn my father's language (fall back on I'm really bad at language) but if we're going to learn one I think the one that will help our kids communicate with the family should take precedence.

I think if anything we should raise our children with a language that will help them as they grow. Our city is 35% hispanic/latino and 90% of job applications say something like 'Spanish preferred.' Or how about Mandarin? Outside of visiting his father's country language B is rarely used.

So here we are, my husband ready to spend a whole lot of money on something that I've technically agreed to that I don't think is practical. I know it's important to him, so in the end I'll cave, but I really wish I could go back 9 years and say something else.