I know, I know. In my last post, WEEKS ago, I said I’d update soon, specifically regarding some of the troubles detailed in this post.

Just so you know, After I wrote that post, I promptly went and stuck my head in the sand and ignored the budget and putting transactions into quicken/YNAB completely. July was great for toy buying! But not so great for getting out of debt :(

As mentioned in my “trouble” post, we have a big budget buster. The taxes that are being withheld from our paychecks are not enough to pay the taxes taht will be due next april. To the tune of about $1000 a month.

I don’t know about you, but I can’t just take $1000 bucks away from the income I budget and still sock money at debt.

The first thing that went through my mind was of course, my big master plan. Pay off all our debt by 2011. That plan depends on a certain amount going toward debt each month. I worked my spreadsheet over and over and saw this plan totally going down the pooper. It was really depressing. I mean, hello! I registered a domain name and everything! 99k by 2011! THAT IS THE PLAN!! WE CANNOT NOT MAKE THE PLAN! The weekend I was trying to work all this through, I couldn’t sleep, actually got pretty sick with a sore throat and was just really not doing good.

My husband was disappointed of course, but was not distressed. Certainly not as distressed as I was. He expressed it this way, “Honestly, I’m not that worried about the car and home equity debt. I just want our credit cards PAID OFF.”

We will still be able to pay off our credit cards sometime next year, I’m just not sure when exactly. I wasn’t about to give up so quickly, though. I started thinking about our 401k’s. I listen to Dave Ramsey a lot, and he always advocates putting all retirement saving on hold while you get out of debt. We had not done that - 3 years is a long time to put off retirement saving. I enjoy listening to the Dave Ramsey show, but obviously, I don’t agree with everything he advocates (hi there american express!) (dave’s opinion: credit cards = big big no no)

Desperate to cling to THE PLAN! THE PLAN WE CAN’T ABANDON THE PLAN! I investigated what our scenario would be if we dropped all retirement savings and put it toward debt. — What I found, OF COURSE, was that any extra money we got in our paychecks would just be taxed more to the point that our checks would hardly be any bigger. And also, since our withholdings are off anyway, it just meant that we would have an even bigger tax bill next year.

It really cemented to me how awesome retirement savings are! I then TOTALLY turned a corner. Screw the plan. RETIREMENT is the new plan! (Have I mentioned I can be a very fickle girl?) I went gallivanting off in the complete opposite direction — what if I UPPED the % of my paycheck (my husband’s is already at his company max of 7%, blech) so that by the end of the year I would have reached the limit for 401k contributions? While I still think this was an awesome idea, it would result in a lower tax bill, but not by enough to make it so we could actually live on the resulting check I would get, and debt? FUHGEDDABOUTIT!

In the end, I did raise my contribution percentage a bit. And for our estimated 2008 taxes, instead of doing a dollar amount additional withholding on our W-4 for the extra taxes, we changed nothing on our W-4s, instead, we are saving the extra money each month - that way we’ll have the money for the taxes next year, and we’ll get the interest income. We won’t have any penalties for doing this, so why let the government have it until it’s due? Yay for interest!

So our 3 year plan is still very much in the air. After a month of not thinking about it whatsoever (and oh lord our totally blown budget shows it), I can see that .. well, I was getting a bit obsessive about everything. I was poring over our budget, over our debt spreadsheet, WAY too often. However, ignoring everything is not the answer either! But not being able to sleep, and getting sick over this was a little extreme. And I had been forgeting that we won’t be living with 1k less each month FOREVER… it’s this extreme right NOW, because it’s halfway through the year! In January, we will both get our W-4 set up properly, and I am going to set up my 401k withholdings so that by the end of the year I’ll have hit the federal limit, and we can see where that puts us.

Next up: our blown budget, and iphones! did we? didn’t we? Stay tuned!

We’ve got trouble! Right here in River City! Trouble with a capital “T”, and that rhymes with.. OK, I’ll stop already. NOT because I’d have to roll out 76 trombones, but because… I don’t remember any more of the words.

Trouble you say? What sort of trouble?

TROUBLE #1

Well, it’s a budget buster that is going to screw up everything. Not just everything THIS month, or even NEXT month, but for the rest of the year, perhaps even my entire plan to pay all this debt off by december of 2010.

This year, we took all our 1099s and K-1s and Int-Divs and W-2s and THX1138s and 402SUCKITs* and all the other tax forms we could find, shoved them in a file and marched them to a real live official CPA, who then did our taxes for us and broke the news that we owed. $3600 worth.

So here it is, the end of June, and I thought, “Hmm. Perhaps we should check our withholding to make sure we don’t have to go through that again, eh?”

So I gathered up our most recent paystubs, estimated what we’d pay in mortgage interest, property taxes, daycare costs, and heaven knows what else and sent them over to the previously mentioned CPA.

He called back later to give me the bad news. We need to withhold an extra $350 dollars each.

$350 x 4 paychecks a month = $1,400 LESS to work with in our budget each month.

We still need to firm up these numbers. I forgot some mortgage interest, dug up the points we paid on the re-fi and resent to the CPA. But even if it comes down, we definitely looking at at LEAST $1,000 less a month. Which is, ironically, the exact same amount we pledged to throw at our debt each month.

*Some tax forms described may in fact, be made up. They may also, be a nerdy George Lucas reference in there somewhere. I am sorry, I’m married to a geek.

TROUBLE #2

Mr. 99k noticed we had some water accumulating underneath our furnace/blower unit in the basement. Maybe it noticed that we had gotten a new heatpump and felt neglected. Or maybe it was all the gook stuck in the pipe trap that clogged it and caused it to spew water everywhere. Yes, you’re right, probably more of the latter than the former. $180 later, we have a new trap with a handy dandy brushee thingee to clean out the gook periodically. Yay. Did I mention we’re already over budget this month?

SEMI-TROUBLE #3

Our auto insurance is in the $1250/6 months range for a 1999 SUV, and a 2006 4-door sporty zippy go-really-fast car. I am continually annoyed at this number, especially since it went up for some mysterious reason last fall and all they could tell me was they redid the rates in our area. Since we’re now about 2 years away from our latest moving violations transgressions, I did a check on Progressive. The rate came out to about $830/6 months. Yay! I’m not quite counting our chickens before they’ve hatched yet, because I know they sometimes let you buy your policy and then check out everything about you (your credit score, your driving history, the super secret insurance files, the color of underwear you’re wearing, etc.) and change the rate on you. If it does give us a better deal, I’ll be so ecstatic. The status when I log in to my Progressive account is “policy is being processed,” So I’m in wait and see mode.

Assuming our premium doesn’t change, we’ll be saving money in the long run, HOWEVER, they like you to pay your entire premium up front. Which is $830 we don’t have. So if all this goes through fine, we’ll be taking some money out of emergency savings/debt savings to pay the upfront 6 month premium. Going forward, we’ll make a savings category in our budget for the next 6 month premium, but that doesn’t take away from the fact that we’ll be budget busted over this right now. I still think it’s a worthwhile move to make, however.

TROUBLE #4

I don’t know if you’ve heard, but the new 3rd generation i-phone comes out in just 14 SHORT DAYS.

Temptation! Thy name is I-PHONE!!

I’m not an apple-phile, but my husband kind of is. He’s wanted one of these things since they first came out. Unfortunately for him, we were still in a 2 year contract with Verizon (Apple has an exclusive contract with Cingular for the i-phone for I think another year). Back then, I was unimpressed. My husband also just HAD TO HAVE the new Treo 600w. Once he had it? It decided not to ring most of time. Who was the one who called him the most? Me. Six months later, I hate the thing because he never answered it, and he hated the thing because his wife kept hollering at him for not answering his phone. So, I’m sorry if I’m not terribly excited at the prospect for throwing another $600 at a new gadget that in my mind, we won’t even want in 6 months.

But that was THEN. This is NOW. And the IPHONE! Well, it’s so pretty and shiny! I wanted one too!

So when Apple had their big developer meeting a few weeks ago, I said to Mr. 99k, “If the new i-phone is $200 or under, I think we should get a couple!”

People! When these things FIRST came out the cheapest one was $600! Sure, they lowered it a few months later to $400, but I thought I was on pretty safe ground with a statement like that! I never DREAMED they’d actually come in at around $200 bucks! Right at the end of Steve Jobs’ keynote speech, he dropped the $199 bomb. I was ecstatic, and totally bummed at the same time. I backpedaled with Mr. 99k, but honestly, I totally want an i-phone. Would THAT be the fiscally responsible thing to do? Hell to the no. Do I still want one? Hell to the YES!

Well, I WAS on the fence, leaning toward NOT getting some (because even if we cough up the $400 for 2 iphones, the monthly phone bill would be an extra $60/month which is just too much. TOO MUCH!)

And then… we have TROUBLE #5

My cell phone died. Now I need a new phone, our contract with Verizon is up, and oh, gee, look! The new (cheap(er)) iphone is out in 2 weeks!

I know it really isn’t smart, but I really want an iphone. If we can cut some other things out of our budget to make room for the additional $60/month the phone bill is going to run us..

Except that with the extra withholdings are going to kill our budget ANYWAY…

Yeah. This sucks.

Trouble. Right here in River City.

- 99k

Hello all, and welcome to the new location. I was getting tired of the limitations of the free blog on the YNAB site, and decided to dive in and register a real domain. Somehow, it makes it all seem more real, don’t you think?

So, let’s get right to the March numbers, shall we? March was a very good month for us!

JUST THE CREDIT CARDS, PLEASE:

In March:
we paid $3,680 on our cards,
$145 was charged in finance charges,

for a total of $3,535 debt paydown.

Our new credit card debt total is $26,818.

(WOO TO THE HOO!)

THE ENTIRE PICTURE:

* Includes a $75 balance transfer fee.

For a month by month picture of our progress, see the Monthly Totals page.

We are now at a total of $92.4K. Next month, we should just stick our noses under the 80k mark.

Feelin’ pretty good over here!

-99k

My husband and I both work full time salaried jobs, which means there’s no variations in our income to worry about.

Entering in our april paychecks into YNAB and doing a quick runthrough for april, entering categories willy nilly, I came up alarmingly in the negative. For those who do not know how YNAB works, you enter in your income, and it becomes the “available” balance with which to budget. Then you enter in dollar amounts in your budget categories, and as you do so, it subtracts those amounts from the available balance. You continue to enter until your available balance is down to 0.

When I was done entering budgeted category amounts, the available balance was around -$1000. NOT GOOD.

Now, I had been fairly generous in places, so I did a quick re-run through and try to hack off some of the excess. Good, but I only managed to get it down to about -400.

The biggest culprits:

• Mortgage payment: we have a larger payment than usual on our mortgage. We refinanced in february, and instead of having us prepay the interest in our closing costs, they tack that on to the first payment. It’s about $500 more than it will be in May.
• Savings goals: There are several things we’re saving for with monthly budgeted amounts, even though they won’t be paid/used until later.
  • car tax: We have $70 going into a car tax category for a estimated $700 bill that will be due in october.
  • tuition: my husband is completing his bachelor’s degree at night, taking 1-2 classes a semester. His employer pays for a good bit of it, but as he starts taking more general electives, they will cover less of those costs. We have $375 going to tuition each month.
  • christmas: we know it’s coming! We’re putting $110 toward our christmas category so we’ll have a tidy sum at the end of the year for all the festivities.
• Debt Reduction: When we started getting serious about budgeting, we decided we could throw $1k/month at our debt.

Please understand: I’m not saying I want to cut back on our savings or debt reduction. AND I’m not saying that the rest of the budget couldn’t use a little trimming. I just want to be sure to recognize (to myself & my husband, at least) that these are not insignificant portions of our budget. Tuition, Savings, and Debt reduction add up to $1555. Tag that with the addition $500 bucks going toward the mortgage payment, and you’ve got over $2k. Yeouch.

I’m mostly thinking about our debt number. When we decided to put $1k toward debt a month, I HAD NOT YET figured out what we should be saving for tuition costs, or other yearly expenses. Could it be that we were too hasty in picking this amount? I hope not, because I WANT TO PAY OFF THIS DEBT!! Unfortunately for our debt, that is the category that it is the easiest to lower down.

We have a busy rest of the week in front of us, as well as a busy weekend planned, but maybe Sunday night, Husband and I can settle in and take a look at April and see if we can figure something out.

So I logged on to our bank account this morning to see a puzzling number. ~$1700.

How can that be? Let me explain.

I just wrote a check this morning for my kids’ school, which is ~$1400, so that number up there will soon change to ~$300, not to mention a few gas purchases that always show up as $1 until they finally clear for the real amount.

School tuition is budgeted for! Gas is budgeted for! And I have money built up in my “buffer” category, and there is also a couple hundred built up here and there in categories that won’t be spent until later in the year.

What is going on?

Have I miscalculated something?

I must have, because this can’t be right.

The only thing I can think of, is maybe I have already entered our expected escrow refund check as “income” (thus making it available to assign to categories and spend), even though it hasn’t arrived yet - but I checked on that last night, and I *thought* that I hadn’t entered it.

Hmmmm.

I have to admit, I used to be a quicken user. I would go through spots and spats of not using it, and then have a ton of transactions to download and enter at a time. I would plan ahead by entering upcoming bills/paychecks ahead of time in the register so I could see the timeline of when the money comes in and when the bills getting paid goes out, but even doing that, it didn’t give me/us the control over our money that YNAB does. I actually hadn’t opened it up since about November. And with YNAB, I haven’t done any hard core reconciling or register balancing. I enter in the transactions by hand every night, or every other night, and since we have money socked away, I idly make sure the balance on my checking is kind of close to the balance in YNAB, but I haven’t really worried about the actual account balance.

OK, I take that back - when we refinanced our mortgage, I was VERY worried about the checking account balance/register and timed everything out just so, in order to take enough money to closing and still have money for certain bills etc. But now? This is nothing like that.. I was clear sailing, the end of the month is nigh, everything should be comin’ up roses.

I feel like I’m cheating on YNAB or something, but I really do need more register/account balancing going on.

I have checked out a few other money programs, one my brother swears by adamantly (Ace Money), and it does look pretty good, but the budgeting aspects of it are nowhere close to YNAB, so I’d be doing 2 money programs, and that just makes me tired thinking about it.

Argh. Frustrated.

Oh, and a teeny side note on the power bill - Last night I was feeding our cat, and thought, “Damn, it’s cold over here in this corner!” glanced at the window, and realized it was open a crack.

ARGH! ARGH SQUARED!