All day yesterday I was formulating in my head a post about how we hadn't yet received a bill for our federal taxes, lamenting how poor a job the IRS was doing in sending it out. Which is pretty stupid, actually, since the taxes were due over a month ago. So it was really me who did a lousy job by not preparing for the nearly $4000 we owed for 2007 taxes.
But I digress. It was all spoiled yesterday when I opened our mailbox and pulled out a shiny letter from the IRS, stating that we have an amount due on our income tax. Finally! I have been like a little kid, running to the mailbox every day, hoping upon hope that the bill would be there. (Well, not actually running, more like walking briskly from my car, parked directly outside the post office.) I just couldn't wait to get this bill. I was so upset and irritated that I made the mistakes of not withholding enough, not filing early enough, and not saving enough to pay the taxes on time. Finally I can fix it and make it all go away.
The original tax due in April was $3481. At that time, I sent in a check for $500, which brought the "overdue" amount to $2981. The underpaid tax was then penalized a half percent for each month overdue (April and May), or $29.81. Then 6% interest was charged on the principal for the 41 days overdue, which came to $20.10. Now, I am not a big fan of interest or fees, but compared to some I have seen in the past, these are incredibly reasonable. I was expecting worse.
My husband got paid today and I will be getting my paycheck tomorrow, which together provides us with enough to pay off this bill at the end of the week. Before I got ahead of myself, though, I looked deeper in the mail and saw another letter from the IRS - this one about the economic stimulus package. It stated that we would be receiving $1200 no later than May 23. The letter arrived in my mailbox on May 27. Then, in small print on the back, it mentioned that if outstanding taxes were owed, the economic stimulus would be applied directly to the balance.
I would love if they took the stimulus check and reduced the tax bill by $1200. However, I don't want to pay the tax bill if it's going to be reduced by $1200 in the near future. I called the number on the tax bill to figure this out and got some weird static on the other end, so I will have to call the number on the stimulus check letter. I am just trying to be patient and accept that we will pay it off soon.
Wednesday, May 28, 2008
Friday, May 23, 2008
How Many Chickens?
Back in the beginning, when we started our debt payoff, I made a Excel spreadsheet that listed all of our debts, from highest interest rate to lowest interest rate. I made our budget and figured out how much money we could allocate towards our debt every month. Then I went online, found this debt calculator, and plugged all the numbers into it. Shazam! We would have our debt paid off by October 2007. I made my goal December 2007 to give myself a little wiggle room, and rejoiced that I would enter 2008 debt-free.
It is now May 2008. I am not debt free.
Sometime in the summer of 2007, I re-did our calculations and determined that we would be out of debt by the end of April 2008. I continued with that assumption and even made it one of my goals for 2008. Now in May, we are in more debt than we were at the beginning of the year.
What happened? Life. Not planning for things. Not seeing the writing on the wall.
I counted our chickens before they hatched. I did the same thing before, back in the day when we accumulated all of this debt. I planned on using future money to pay for things, not thinking that the future money would vary and would be needed for more immediate concerns.
This was illustrated to me all too clearly at the beginning of the month. In November, we decided that, instead of exchanging gifts with my in-laws, we would all take a trip together. We scheduled that trip for the first week of May. I planned on being out of debt by the end of April, so I was psyched about the prospect of having no financial worries and relaxing in Mexico. Of course, that's not how it all turned out. We had to put our continued debt reduction on hold to pay for the trip, and there were quite a few stressful days where we weren't sure if we would have cash spending money to bring along with us. Not the relaxation I was hoping for. In the end, it all worked out, the trip was completely paid for, and we had a great time.
But moving forward, I will not be counting my eggs and making plans until they are chickens. Or at least not very rigid plans.
It is now May 2008. I am not debt free.
Sometime in the summer of 2007, I re-did our calculations and determined that we would be out of debt by the end of April 2008. I continued with that assumption and even made it one of my goals for 2008. Now in May, we are in more debt than we were at the beginning of the year.
What happened? Life. Not planning for things. Not seeing the writing on the wall.
I counted our chickens before they hatched. I did the same thing before, back in the day when we accumulated all of this debt. I planned on using future money to pay for things, not thinking that the future money would vary and would be needed for more immediate concerns.
This was illustrated to me all too clearly at the beginning of the month. In November, we decided that, instead of exchanging gifts with my in-laws, we would all take a trip together. We scheduled that trip for the first week of May. I planned on being out of debt by the end of April, so I was psyched about the prospect of having no financial worries and relaxing in Mexico. Of course, that's not how it all turned out. We had to put our continued debt reduction on hold to pay for the trip, and there were quite a few stressful days where we weren't sure if we would have cash spending money to bring along with us. Not the relaxation I was hoping for. In the end, it all worked out, the trip was completely paid for, and we had a great time.
But moving forward, I will not be counting my eggs and making plans until they are chickens. Or at least not very rigid plans.
Wednesday, April 23, 2008
One Job at Last!
For a year and seven months, I worked two jobs - my "day job" in sales and nights and weekends at a retail store. Forty to fifty hours a week at the day job and an additional 20-25 at the store.
At the end of March, I quit my second job. I finally understand again why people look forward to Fridays.
It was a long time coming. I have wanted to quit for... well, forever. I never really enjoyed relinquishing my precious free time for $8.50/hr. Sure, I made the best of it and had fun when I could, but I was never in it for enjoyment.
The first weekend in April was revolutionary. Friday night I came home from work and had a nice relaxing evening at home with my husband. Saturday we awoke to no alarm and spent the day taking care of errands and cleaning up around the house. That Sunday we went on a fantastic hike. All in all, I got to remember what it is like to have 2 sequential days off.
It was great to have the extra income, and it enabled us to put about $8,000 towards our debt snowball. The time had come, however, when the cons outweighed the pros. I am happy I was able to do it for so long, and happy to no longer have the two jobs!
At the end of March, I quit my second job. I finally understand again why people look forward to Fridays.
It was a long time coming. I have wanted to quit for... well, forever. I never really enjoyed relinquishing my precious free time for $8.50/hr. Sure, I made the best of it and had fun when I could, but I was never in it for enjoyment.
The first weekend in April was revolutionary. Friday night I came home from work and had a nice relaxing evening at home with my husband. Saturday we awoke to no alarm and spent the day taking care of errands and cleaning up around the house. That Sunday we went on a fantastic hike. All in all, I got to remember what it is like to have 2 sequential days off.
It was great to have the extra income, and it enabled us to put about $8,000 towards our debt snowball. The time had come, however, when the cons outweighed the pros. I am happy I was able to do it for so long, and happy to no longer have the two jobs!
Monday, April 21, 2008
Taxing
So we finally buckled down and did our taxes. (Last weekend, the post is late, not the filing.) When I say we "did" our taxes, I use the term pretty loosely. Since my husband has his own business, it can get a little complicated, so we have an accountant. The accountant sends us a tax planner, which is a 10 page document with tax-related questions. All we have to do is fill it out, attach any related documents, sign and send it back. Not quite as involved as actually "doing" our taxes ourselves.
Last year when we filed our taxes on April 14, we told the accountant that we would be much better this year. Not wait until the last minute. Send them in early, with plenty of time to spare.
Yeah, right.
I finished our planner on Sunday. April 13. Beat last year's record! Except Sunday is not a business day. Undeterred, I drove the packet to the accountant anyway. At 5:30pm. Not surprisingly, the door was locked and no one came when I knocked and yelled. This was not good. I drove 45 minutes and spent $50 in gas to bring this packet in! I was going to submit it! So I dialed the phone number on the business card and, one by one, punched in the names of each of the 4 partners. And got 3 voice mails. In a movie-esque climatic scene, the fourth and final partner was there, in his office, and came downstairs to accept my packet. No dirty looks or anything! I was shocked.
The next day I got the phone call from our accountant. I was expecting to hear from her as there are always a few things to go over. What I was not expecting was the amount due. Almost $3500. In federal taxes alone. I just about fainted right there in my cube at work.
With complete lack of foresight and the unforgivable ignorance of taxation, I had assumed that our taxes would be about the same as the prior year. It was not. Last year we owed about $1000 total, between state and federal taxes. This year the total between the two was almost $4000. Thinking back, it's obvious that this would happen. Our income almost doubled from 2006 to 2007. That alone accounts for much of the difference. The main issue here, though, is that we failed to plan ahead.
That's right, we didn't have the money to pay the taxes.
When I heard the total from the accountant, I panicked. Last year was the first year I've paid taxes instead of getting a refund, so I'm inexperienced. I was freaked out that if we didn't pay in full by April 15, we would get audited and penalized beyond belief. The accountant reassured me that it's not that bad, and to pay what we could immediately and they will bill us for the rest. So I wrote a check for $500 to the IRS, and another check for the entire state tax and now we wait. Wait for the next round of paychecks and for the bill to show up in my mailbox. Hopefully the two will coincide and I will be able to kick this swiftly.
In the meantime, though, I'm going to change my exemptions. :)
Last year when we filed our taxes on April 14, we told the accountant that we would be much better this year. Not wait until the last minute. Send them in early, with plenty of time to spare.
Yeah, right.
I finished our planner on Sunday. April 13. Beat last year's record! Except Sunday is not a business day. Undeterred, I drove the packet to the accountant anyway. At 5:30pm. Not surprisingly, the door was locked and no one came when I knocked and yelled. This was not good. I drove 45 minutes and spent $50 in gas to bring this packet in! I was going to submit it! So I dialed the phone number on the business card and, one by one, punched in the names of each of the 4 partners. And got 3 voice mails. In a movie-esque climatic scene, the fourth and final partner was there, in his office, and came downstairs to accept my packet. No dirty looks or anything! I was shocked.
The next day I got the phone call from our accountant. I was expecting to hear from her as there are always a few things to go over. What I was not expecting was the amount due. Almost $3500. In federal taxes alone. I just about fainted right there in my cube at work.
With complete lack of foresight and the unforgivable ignorance of taxation, I had assumed that our taxes would be about the same as the prior year. It was not. Last year we owed about $1000 total, between state and federal taxes. This year the total between the two was almost $4000. Thinking back, it's obvious that this would happen. Our income almost doubled from 2006 to 2007. That alone accounts for much of the difference. The main issue here, though, is that we failed to plan ahead.
That's right, we didn't have the money to pay the taxes.
When I heard the total from the accountant, I panicked. Last year was the first year I've paid taxes instead of getting a refund, so I'm inexperienced. I was freaked out that if we didn't pay in full by April 15, we would get audited and penalized beyond belief. The accountant reassured me that it's not that bad, and to pay what we could immediately and they will bill us for the rest. So I wrote a check for $500 to the IRS, and another check for the entire state tax and now we wait. Wait for the next round of paychecks and for the bill to show up in my mailbox. Hopefully the two will coincide and I will be able to kick this swiftly.
In the meantime, though, I'm going to change my exemptions. :)
Monday, April 7, 2008
Cheap Date #6 - Stargazing
I try to find fun, interesting dates to go on with my husband that cost less than $20 for both of us. It's been a while, but we are back in the game, trying to go out on cheap dates without breaking the bank.
Many people just pass them by, with an occasional glance towards the heavens to see the twinkly brightness. I know that I have many a time paid them no attention on all but the clearest of nights. So when my husband suggested that we go on a stargazing date, I was a little skeptical, but I agreed.
When my husband was 7 or 8 years old, he got a stargazing book, complete with Planosphere, for Christmas. This was the beginning of our journey. We perused the pages and found what our night sky would hold. Then we packed up the book, a couple of sleeping bags, a flashlight, a pair of binoculars with one side broken (or monoculars, as we called them), hats, mittens, and an adult beverage, and headed to the local park.
Our location wasn't perfect, but we sat overlooking the lake and had a pretty decent view of the sky. We were a little too close to civilization, so the ambient light blocked out stars near the horizon. Quickly we recognized Orien, but then we had to consult the book to find the others: Leo, Hydra, Gemini and many more. It was fantastic to finally put a name to something we've been looking at for years and romantic to snuggle under the sleeping bags while we looked up the different constellations. After about an hour, we were sufficiently cold that we headed home, but I was hooked.
The night sky you can see changes considerably depending on the time of year and even the time of night. The change is gradual, but the stars in March are entirely differnt than those you see in August. We've decided to make this a recurring date, about once every season - maybe skipping the dead of winter! The best part of this date is the thrill of matching the stars in the sky to what you see in the book (or on this website) and the closeness you feel in accomplishing that. Plus it's educational and free! This cheap date is definitely a keeper.
Many people just pass them by, with an occasional glance towards the heavens to see the twinkly brightness. I know that I have many a time paid them no attention on all but the clearest of nights. So when my husband suggested that we go on a stargazing date, I was a little skeptical, but I agreed.
When my husband was 7 or 8 years old, he got a stargazing book, complete with Planosphere, for Christmas. This was the beginning of our journey. We perused the pages and found what our night sky would hold. Then we packed up the book, a couple of sleeping bags, a flashlight, a pair of binoculars with one side broken (or monoculars, as we called them), hats, mittens, and an adult beverage, and headed to the local park.
Our location wasn't perfect, but we sat overlooking the lake and had a pretty decent view of the sky. We were a little too close to civilization, so the ambient light blocked out stars near the horizon. Quickly we recognized Orien, but then we had to consult the book to find the others: Leo, Hydra, Gemini and many more. It was fantastic to finally put a name to something we've been looking at for years and romantic to snuggle under the sleeping bags while we looked up the different constellations. After about an hour, we were sufficiently cold that we headed home, but I was hooked.
The night sky you can see changes considerably depending on the time of year and even the time of night. The change is gradual, but the stars in March are entirely differnt than those you see in August. We've decided to make this a recurring date, about once every season - maybe skipping the dead of winter! The best part of this date is the thrill of matching the stars in the sky to what you see in the book (or on this website) and the closeness you feel in accomplishing that. Plus it's educational and free! This cheap date is definitely a keeper.
Thursday, April 3, 2008
Back from the Dead
I am embarrassed. One blog post in March. ONE! Oh, the shame. Oh, the horror. I apologize to you for being such a lousy blogger.
I'm not a big fan of making excuses, but there are plenty of reasons. Reasons that will help to fuel some future posts. I have been traveling quite a bit for work, I left my second job (finally!) and spending some much-needed time with my family. The good news is that now I have more free time to do things that have been neglected (clean my house), build my career and work on my blog! I have so many ideas for posts and geeky changes I have been dying to make. I'm so excited to finally be able to implement them.
So bear with me... the best is yet to come!
I'm not a big fan of making excuses, but there are plenty of reasons. Reasons that will help to fuel some future posts. I have been traveling quite a bit for work, I left my second job (finally!) and spending some much-needed time with my family. The good news is that now I have more free time to do things that have been neglected (clean my house), build my career and work on my blog! I have so many ideas for posts and geeky changes I have been dying to make. I'm so excited to finally be able to implement them.
So bear with me... the best is yet to come!
Thursday, March 6, 2008
Cheap Date #5 - Cinema Pub
I try to find fun, interesting dates to go on with my husband that cost less than $20 for both of us. It's been a while, but we are back in the game, trying to go out on cheap dates without breaking the bank.
A little while back, I had a comment on a cheap date post that anonymously mentioned a local movie theater that also served drinks. Anyone who knows me would know that I am game for that! Well, it turns out that my "anonymous" commenter was actually my uncle! So he and my aunt knew that this is a place we would love to try. They were so convinced that they gave us a gift certificate to the Cinema Pub for our birthdays in January. Thank you!!
We drove to the theater on a Saturday night to catch the late showing of Atonement (which was a great movie, by the way). Like many less expensive movie theaters, they don't offer the brand new movies, but rather movies that have been out in theaters for a little while. With most movie theater tickets approaching $10 a pop, I can deal with seeing a movie that's a few weeks old.
Each ticket cost $5 and a pitcher of Bass was $14. Even in a bar, you'd be hard-pressed to find Bass for that price! Since we were also using our gift certificate, we went ahead and ordered some buffalo wings to go along with it, while staying well below our $20 budget.
If you live in MA or RI, I highly recommend the Cinema Pub, but if not, try doing a search for a discount movie theater in your area. It's a great night out, especially in the winter when outside dates aren't really an option.
A little while back, I had a comment on a cheap date post that anonymously mentioned a local movie theater that also served drinks. Anyone who knows me would know that I am game for that! Well, it turns out that my "anonymous" commenter was actually my uncle! So he and my aunt knew that this is a place we would love to try. They were so convinced that they gave us a gift certificate to the Cinema Pub for our birthdays in January. Thank you!!
We drove to the theater on a Saturday night to catch the late showing of Atonement (which was a great movie, by the way). Like many less expensive movie theaters, they don't offer the brand new movies, but rather movies that have been out in theaters for a little while. With most movie theater tickets approaching $10 a pop, I can deal with seeing a movie that's a few weeks old.
Each ticket cost $5 and a pitcher of Bass was $14. Even in a bar, you'd be hard-pressed to find Bass for that price! Since we were also using our gift certificate, we went ahead and ordered some buffalo wings to go along with it, while staying well below our $20 budget.
If you live in MA or RI, I highly recommend the Cinema Pub, but if not, try doing a search for a discount movie theater in your area. It's a great night out, especially in the winter when outside dates aren't really an option.
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