Tag Archives: taxes

Monday 115: April is the Cruelest Month!

Monday, 24 April 2017

This is the first line of T. S. Eliot’s poem “The Waste Land.”  Given this is all about spending money and tax season, and waste, it seems appropriate!

April is the month when our taxes are due – federal, state, and property.  It is also the month when our specialized insurance is due, for things like floods and such.  We also had extra bills to pay – dental and veterinary.  Altogether, if we had not been prepared for the known bills, and if we had not saved, we could have been really up the proverbial creek!  All told, between all these, the costs came to $5000.00 for April alone . . . we had already paid the state taxes, so!

The bad is the fact we had to pay for needed dental work and vet bills!  They weren’t on the budget!  How dare they show up!

The good is that because we have been saving, and paying off bills, our cash on hand could take the $700.00 hit for the dental and vet bills.  Not happily, of course, but necessarily.  While we are far from having F-You money, we certainly are at a point where we don’t get F’d!  A year ago it would have been a different story.

Future plans at the moment are deciding how much we want to save over the next four or five months.  I want to increase our rate of savings, but that means we will slow down our debt reduction.  Right now, it feels a bit more important to have more cash on hand.  We have a vacation coming up, and I don’t want any surprises.  I also think I want to have a 10K amount in the bank, even with the vacation.  As well, one of our cars needs some work, to the tune of about $1000, which I want to do in May.  The air conditioner is out in the Acura (14 year old car).   Then it is clear sailing until December.  Unless, of course, Murphy decides to visit.

Revisiting Dave Ramsey is also on the agenda.  It is so important to keep frugality and debt reduction in the forefront of daily activities.  As a result, I am listening to his show, and his YouTube presentations.  Even a year or so into our debt reduction, it is easy to slide back – we do like to spend money and it is so important to continue to work on changing this (natural?) tendency.

A year of hard work is showing results, even if it seems eternally slow.  We can meet financial emergencies more readily, as well as not feel stressed by large annual expenses, such as insurance premiums and taxes.

Week 118: March Recap, Taxes, and the Light at the End of the Tunnel

Monday, 3 April 2017

I hate March.  It’s one of the most expensive months on our yearly calendar, and downright depressing.  Taxes are the reason.  You pay all year, and then pay again.  However, we are better prepared than just a year ago, when we started 182 Mondays, and I need to really focus on that as I write because this monthly recap is not pretty, and I’m feeling really depressed . . . but I’ll get over it!

As always, a different month, different expenses.  In March, we paid state taxes, received a federal refund, and paid property taxes.  It was also time to restock our coffee supplies and meat supplies.  These all added to the costs for March.

  • Taxes paid:  $4295.00
  • Credit cards paid:  $1602.00
  • Student loans:  $786.00
  • Electricity:  $167.00
  • Mobile phone:  $198.00
  • Land line:  $80.00
  • Household gas:  $65.00
  • Gardener:  $100.00
  • Insurance (house, car, life):  $612.00
  • Trash:  $60.00
  • Dog food:  $38.00
  • Gasoline:  $97.00
  • Groceries:  $612.00
  • Coffee:  $64.00
  • Household supplies:  $505.00
  • Dining out:  $61.00
  • Hobbies (major parts purchases):  $745.00
  • Vehicle registration:  $238.00
  • Savings:  $1000.00

Total costs, without including savings, is $10,326.00, and with bimonthly savings of $500 each, it is $11,326.00.  We have been saving for taxes, so that pulled money out of the savings account; this brings total monthly costs to $7031.00, not including mortgage.

Observations:  This month was expensive beyond the normal allocations.  Taxes in all directions, but as they were anticipated and saved for, there was not any more stress than is normal when you have to write those checks!  Next month, our mobile phone will drop, I think to $160.00.  Groceries should remain under $400.00, trying for $350.00.  Coffee supplies should be good for the rest of the month – we buy about 6 lbs. of coffee at a time, to blend and to grind at home.  Vehicle registration was another annual fee.  Household gas was up because we had several weeks of wind, cold, and rain.  Hobby supplies were high as Mr. 182 is working on making a fancy brew rig and I bought some art supplies and a book.

Remembering to put money into savings every month is a top priority around here!

Looking ahead to April:  This next month I want to stay on budget as much as possible.  Overall monthly expenses, including mortgage, are about $8100. 00.  Add in savings, and we have $9100.00.  Again, credit cards are the biggest problem, but we are paying out minimally $1500.00 / month.  Yes, we could change our mobile phone charges, but the in-laws pay us a monthly co-pay; Mr. 182 is reimbursed for the land line, which he needs as he works from home.  This reduces our monthly bills by about $180.00 / month.  Hobbies were planned and budgeted for last month, but no high costs are expected in the foreseeable future.

And down the road, we expect to begin saving $2000.00 / month for vacation, while still allocating $1500.00 for the credit cards.

The fact is, we are really tired of paying on the credit cards!  These should be paid off – they better be! – by the end of May 2019, in time for the end of 182 Mondays to Retirement!  To make this bitter pill more tolerable, I calculated our net worth, and that was fairly good news . . . the question is, do you include life insurance value or not when you calculate it???

There is light at the end of the tunnel.

 

Monday 125: Tax Season Reflections – A Year in Review

tax-consultant-1249530_1920

Monday, 13 February 2017

Nothing like looking at what you made in money, and what you have to show for it.  The tax season doesn’t lie – unless you do, or your accountant does, or your employer.  My advice:  Don’t do it!

Frankly, I am appalled at how much money we make, and how much we owe.  A few years ago, our accountant said, “You should be living ‘the good life’ with your income.”  It sunk in.

We sold the rental, and in January of last year, we started the debt snowball.  

And then bought a car when the Subaru blew up one time too many.  We bought car payments.  And now we have student loan payments for The Student.  We are still up to our ears, but if all goes to plan, the credit cards will be paid off by May 2019.  It’s a hell of a lot of money, some at more than usurious rates.  And, that day seems like a long, long way off.  A part of me wants to cash out some stocks to bring down some debt, but with our income it may not be advisable – I am not sure what the line in the sand would be in percentage of taxes paid next year; we are already in a very high tax bracket.

We meet with our accountant this coming Friday.  I will talk to him about his thoughts on using stocks to pay down debt.  Being the type of person who doesn’t like financial surprises, we have been saving for potential taxes as well as known taxes.  There is money in the bank should we need it – more than there was this time last year.   The really cool thing is that as we slowly learn about finances – how to handle them, how to talk about them, how to plan for them – we are making progress that is of more value than the money itself.  To me, this is the biggest blessing of taking the plunge into the debt snowball.  We are not rigid – we have had to adapt – but right now, we can handle most emergencies!!  

A year ago, we could, sort of.  Rather than discuss things, we would argue about things.  Mr. 182 would sigh about the lack of money, but not think about how to save it.  He went along with the program and resented it, and while not obviously unhappy with it, a wrong word here or there, and resentments on both sides would flare.  While still not perfectly in tune with each other, we are more in coordination with our money.  The fact that money is now more of a topic of conversation off and on during the day, and a part of our conscious thinking, clears the way, and continues to clear the way, for productive usage of our money.

I am sure there are those who would tell me we should and could be doing a better job.  They are probably right.  We are working on doing better this year . . . no Amazon except as agreed upon, immediately paying for all items put on a credit card, cutting down of mobile phone costs, watching the food budget, funding the emergency and tax fund (we do not have an escrow account), and saving for known expenses.

We have paid off more than $10,000 in credit card debt while putting money in the bank, reducing everyday expenditures, and continuing to reduce other debt, even though we have added other bills.  The fact is some of our choices could possibly been different, but what we are doing now is working.  Changing 25 years of habits is work, but the change is occurring.

I could focus on what we aren’t doing, but prefer to see what we are accomplishing, have accomplished, and continue to accomplish as we change our financial habits.  It is this conscious awareness that helps us develop new strategies to cleaning up our past financial mistakes.

Monday 175: Taxes and Toys

Uncle_Sam_(pointing_finger)

Monday. 22 February 2016

Taxes and toys?

Taxes
Here, in the U.S., tax season is April.  Federal and state taxes (if any) are due; for us county property taxes are due as well.  We will be spending money to pay state taxes, and property taxes, but in our visit to our accountant, we will be getting money back from the federal government.  Overall, we will just about break even with this scenario.

Now, the question is, should we pay for an accountant?

Should we let someone do our taxes when it is so easy to buy software to prepare our taxes?

In my opinion, yes.  The relationship with our accountant has been very fruitful over the years, not just in advice, but in the lessening of stress related to tax season.  I used to get the short form back from the feds with corrections – the 1040A that has no itemizations.  The language makes no sense to me.

The other half hates dealing with money, and would have to listen to my nonstop nagging about getting the taxes done – is it done?  is it done?  is it done?

Conclusion:  The accountant is worth it!

Toys
Now, what about toys? Are toys really “toys” or really “tools”? It depends on your perspective.

So, here is the story. We prepare most of our food from scratch. This means we don’t buy food already sliced and diced, such as deli meats. We don’t buy sliced apples. We do buy convenience foods, such as canned tomatoes and nuts and frozen ravioli, and the occasional frozen, microwaveable lunch for emergencies. We seldom go out for dinner.

When we cook or bake, the idea is to make enough for leftovers or to freeze for another meal. While we do not have a dedicated freezer at this point, it is under consideration, but there simply is not room for one. (The reason is we have two refrigerators, besides the one in the kitchen, that are dedicated to beer making and serving.)

Meat Slicer Cher's Choice 615

So, back to the toy-or-tool question.

Because we like bacon, and we like it a lot, and the pleasure of making things is high on our fun list, we make our own bacon. While the other half is handy with a knife, slicing up 5 lbs. of bacon is a bit of a task. It’s really hard work! And slicing roasts and turkey breasts paper-thin for sandwiches is do-able, but also difficult. So, we bought a meat slicer. It arrives in time to slice our current batch of bacon. I personally don’t need it, but I don’t do the meat slicing. The other half wanted it. It makes sense.

So, tool, or toy?

I cast my vote for tool And you?