Laughing, Weeping, Living

Life happens. You laugh about it or cry about it, sometimes both.

Accounting

I’m writing a really good post in my head right now, but it’s not ready yet. So I’m going to fill in with a couple sub-ideas that are going on.

A big task I have to do tonight, if I have time before bed, is balance the checkbook. Jeremy is going to get his severance pay in one big lump and it would be helpful to know what we already have when it comes time to divvy up what will be our last income for a while. We do have a bit in savings (Thank you, Dave Ramsey!). We put together what Dave calls the “baby emergency fund” back when we first started getting our accounts in order: $1,000 in a savings account that you don’t ever touch except for emergencies. We also opened a totally separate savings account for sinking funds, like saving up to buy new furniture, or a replacement car, or saving for home repairs that may come up in the future. Then when we sold our house back in January, we used some of the meager proceeds to buy Jeremy’s motorcycle then put the rest in the emergency fund so we would definitely have it later when we would need it. We didn’t have any emergencies along the way, which is good.

So we are by no means flat broke, which is a huge relief. But. We are looking at some serious outlays that do have me worried.

First of all, it’s time to file taxes. Unlike many people who look forward to this time of year, we dread it because we always have to pay. Jeremy was technically a self-employed contractor editing for Magnificat magazine, so his paychecks from there never withheld anything. The past couple years, even though we bumped up the withholdings on our other jobs’ paychecks, we still owed about $2,000 in combined taxes to state and federal. When we moved to New Mexico, Jeremy bumped his tax withholdings at his salaried position way up to compensate further, but I’m not too certain it was enough to eliminate our tax payment. All I can realistically hope for is that the damage isn’t too severe. Thank God the sale of our house didn’t close until January 2013. So at least we don’t have to deal with that right now. We just have to mess with filing in two different states.

Second, since we are breaking our 12 month lease early, we have to pay a penalty. We also have to pay back the promotional free month of rent we got for signing a 12 month lease. That is going to be significant. Apparently, losing your job and moving for health reasons aren’t good enough reasons to waive the penalty. The only thing that will do it is a letter from my doctor saying I must move for my health.

Third, moving itself is going to cost a pretty penny. The cheapest option of course is the least convenient. We still need to decide how we want to handle the move.

I think we will come out in the black after all is said and done IF we don’t owe a ton for taxes and IF we can convince the apartment manager to cut us break. It may be possible. Jeremy suggested we pray a novena to Saint Matthew. You know, the former tax collector. He was only half joking.

So if you’ve talked to me lately and were confused about why we’re moving–is it for the baby or for finances?–I hope this kind of clears it up. We are moving because we had been intending to move anyway, just not this soon. My doctor said we should move now rather than wait for the baby to be born. But I am concerned about our financial picture. I think it will turn out okay, but like I said, there are some “ifs” about it.

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Fun with zero-balance budgeting

Okay, let me just start by saying that today was one of those “weeping” days alluded to in my blog’s title. It started out with Stephen waking me up at 5 freaking a.m., and on top of that I woke up feeling sick, then Stephen proceeded to spend the morning freaking out about nothing and everything. I’m sorry, baby, but I don’t know what “ai-iah-iah-iaheeee” means, despite your very enthusiastic arm waving and scrunchy face. Suffice to say, the actual highlight of my day was when the Albertson’s cashier surprised me by issuing a rain check for the ad-special strawberries that were no longer in stock.

Even though today was such a gem and all I really wanted to do was crawl back into bed with all the remaining cookies, I needed to draft our family’s budget for March. A couple years ago, Jeremy and I did Dave Ramsey’s Financial Peace University, and we’ve been doing a zero-balance budget ever since. I really like it. Truly. For those of you who aren’t familiar with this method of keeping a budget, it’s all about subtraction. You start with your total income for the month, then subtract each expense until you have zero dollars left, then you stop spending. The forms from FPU rank the expenses from most crucial to least crucial, so mortgage/rent, utilities, groceries, and transportation are first in order, followed by things like clothes money, baby sitter, subscription payments, entertainment, and debt payments. Next to each item on the form, you write in how much will be spent for the month. In essence, you do all your spending on paper before the month even begins. Neat, huh?

When we first started doing a line by line, detailed budget, we were both working so the income was really fun to play with. “We can spend how much on frozen yogurt? Awesome!” “We can contribute to five different charities? Amazing!” “We can pay off the car loan? Sweet!” Then I quit my job to stay home with Stephen and we had to be a bit more careful. The line by line budget forms we got from the FPU have been so helpful especially for months we have to be more careful. Now I’m finding the budget form to be more oppressive. There are so many line items that don’t get an entry. Zero comes so much quicker. I can only do so much by shopping grocery sale items only and buying all my clothes at thrift stores. Thank God Stephen and I got on Medicaid. Thank God we’ve paid off our car loans and all but two student loans. Thank God we don’t carry consumer credit card balances anymore.

I really can’t stress enough the importance of keeping a detailed budget. Money can so easily slip away. For us, if we didn’t keep the detailed budget and tell our money where to go, I don’t think our ends would meet. That is how significant it is.

I would just encourage you to look into the zero-balance budget, especially if you often find that “there’s too much month left at the end of the money,” as Dave Ramsey would say. It may make all the difference.

 

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