Tax Realities....Better Than I Thought

Several weeks ago, I lamented that my goal of paying off my car by the end of this month had been dashed. Why? Because I anticipated a $2500 tax return (federal and state) which would have have been applied to my loan balance....and then I started using TurboTax and I soon discovered that my refund, if any, would be no where near that. So I updated my debt repayment plan to reflect NO tax refund. After having a CPA friend help me sort through taxes for two states (and one municipality) I've learned that I do get a refund (federal and state; I actually owe in one state). Now I am wondering how I should spend my refund. I've already purchased $100 worth of savings bonds using IRS Form 8888, so I have roughly $1100 left to play with. If I apply all of it to the car loan, I can finish the note approximately 1 month early. I could also contribute the amount to my Roth IRA for the 2010, for which I have $3,670.89 remaining. I could spend a portion of it for two weddings (within the month). I could put it in my emergency savings account towards my $10K goal. Or, I could equally divide it among the abovementioned expenses/savings. Decisions, decisions, decisions.....

What would you do if you expected something, then didn't expect anything, yet received something? Would you stick to your original idea when you were expecting something or change course?

April Net Worth Update

My net worth this month increased by $1,024.70. Here's the summary explanation:

Assets

403(b): (+682.51) Every two weeks, $125 goes to this account. The bulk of this month's increase (sans the $250 contribution) is based on the performance of my investments.

Emergency Savings: (+0.75)  No deposits (yet). This is interest earned.

Regular Brokerage Account and Roth IRA: (+146.36 and -272.36, respectively) $50 to brokerage account....$96.36 increase in value in the investments in the same account. $272.36 decline in value in investments in Roth account<<<sad face.

Savings Account: (-50.00) Originally, I had a balance of $25, then I had an automatic deposit of $25, and then I transferred $50 to spend. Now I have a penny in this account. Recently, I enrolled in "Keep the Change" - a program that rounds up the amount of my transactions in my checking account and deposits the difference into my savings account- so we'll see how this affects my savings account balance.

Liabilities

Car Loan: (+574.18) Steady paying more than the $269.11 requested of me. I can't wait for this sucker to be gone!

Credit Card: (-1514.22) From March 1st to April 1st, I've paid $1514.22 to my credit card. A large part of this is because of a $1,010.31 car repair. The other expenses are work-related (which will be reimbursed), a bit of airfare and some other things I can't quite remember (I know, I've gotta do better!)

Student Loan: (+111.64)  With each payment, a few more dollars go towards the principal. I can't wait to get rid of this sucker, too!

Until next time!

From Loose Change to Keeping the Change...

Today I enrolled on BofA's "Keep the Change" program. I've connected my checking account to my savings account, so now, when I make a purchase, Bank of America will round up my transactions to the nearest dollar and deposit the difference (between the higher number and the actual transaction amount) into my savings account.

This service is remarkably appropriate for someone like me, who, rarely carries cash.I wonder why I hadn't taken advantage of it sooner! On the rare to occasional events when I carry cash, I dump all of my change into my piggy bank at the end of the day .

With this service, I have the cashless customer's equivalent of "dumping my change" with every transaction I make. I'm also a bit excited at the prospect of having the amount deposited into my savings account matched by BofA fo three months; afterward, they match 5% of the change that has been "kept" (who knew they could do something right? LOL!) Hello, free money!

Are you enrolled in "Keep the Change" (or an equivalent, such as "Ways to Save"?) How much money have you accumulated through these programs?

Loose Change

The past 30 days have been kind of crazy. Compared to previous months of spending, I can say that my most recent spending has been out-of-control. Most of my purchases have been for food, namely eating out. Yesterday, I was faced with the temptation of getting yet another coffee from DD (Dunkin' Dounuts). For a split second, I reflected on my spending for the month and decided I would feel better if the money didn't come out of my bank account or wasn't charged to my credit card. What option did I have remaining? Short of asking someone else to pay for my indulgence, I went to my piggy bank. I cracked that sucker in half (I didn't break it, it splits down the middle to open and close) and selected 8 quarters. 

I found myself grabbing for my Visa a few times (out of habit I guess) and it was kind of weird handing the cashier the coins. Nevertheless, I experienced a sense of accomplishment knowing that that I wouldn't have to look for this expense when reconciling my expense tracker and bank and credit card statements. It was like free money!

Although my piggy bank is small, I'm happy to have it. In the few instances when I do use cash, I find myself depositing my change at the end of the day (too many coins weigh down my wrislet and I don't care for having to sort through the extra stuff). I don't have any plans for my piggy bank, such as savings or going out to a movie. Maybe I should. Perhaps only then I would become a little more intentional about using my piggy bank.

What do you do with your loose change? 

Do you have a particular purpose for it? 

How do you store it?*

*My mother has ziploc bags of coins around the house. It's kind of crazy.

What Do Your Expenses Say about Your Health?

If you believe that a snapshot of your spending is a good indicator of your health, then I would be among the 2/3rds of Americans who are overweight or obese. Since March 18th, I've spent more than $100 on food. Approximately 70% of it has been on eating out...which wouldn't be so bad if it was healthy. Instead, I've been stuffing my face with french fries, sausage biscuit sandwiches, donuts, and 290+ calorie macadamia coconut mocha drinks. In other words, McDonald's, Dunkin Donuts, and Caribou coffee (and a French bakery,  [cheese] steak shop, Panera Bread, and Subway). 

Frankly, my spending is more reflective of a recent bout of laziness than my general health status. I haven't been waking up early enough to eat breakfast at home (which doesn't make since, really, once you consider the time it takes to wait in line for someone to take my money and give me something fried and super salty). Moreover, I haven't made any time to pack lunch: mornings are out (see abovementioned excuse) and since I've been getting home considerably late, recently, I focus more on showering and sleeping once I get in the door (no packing lunch here). I know if I keep up with this habit of eating out excessively (without making adjustments to other areas of my spending plan) that I'm setting myself up for financial failure.....and high blood pressure and jiggly body parts. Instead, I'll commit to doing better the next time around =)

Fortunately, I'm a healthy weight for my height and my BMI is less than 20 =) Hooray for exercise!

What would your most recent expenses (let's say, the past two weeks) 

tell us about YOUR health?

What Are You Reading?

Image from www.caltech.edu.

Recently, I shared that I am reading Nudge, a book about behavioral economics. It's far from the typical personal finance material that I am used to consuming, yet it is very relevant to how people make decisions (including financial ones).

Today, I'd like to know what personal finance, or PF-related books, you are reading or have read. Please share what your "takeaway" is....I might have to hit up the library later ;)

I Don't Gamble, But I Understand...

Presently, I'm reading Richard Thaler and Cass Sunstien's Nudge: Improving Decisions About Health, Wealth, and Happiness. It addresses behavioral economics: how humans behave "irrationally" and what tools/techniques could be used to help us make better decisions, despite the temptations (or laziness) that lead us to be "irrational." You should read the book, because there's much more to it than I let on.

At any rate, Thaler and Sunstein discuss how one such technique that can help us perform in our best interest is betting (it really has more to do with us being loss averse, I think). They give an example of two friends who committed to losing thirty pounds over the course of nine months. If either of them failed, they'd have to pay the other $10,000. They lost the weight and extended the commitment to keep the weight off with a subsequent bet.

I began to wonder, what type of bet could I make with a friend to stay on track with my financial goals? Commit to paying off my credit card balance? Commit to only charging up to 30% of my available credit limit? Saving a certain amount of money? Making sure I periodically reviewed the performance of my investments and make changes, accordingly? Commit to earning more income through a business?

I haven't decided yet what would be appropriate for me, although the fitness goal is a compelling one.

What would YOU bet on to ensure that you would stick to your goals? 

(It can be related to finances or not.)

Thank Goodness I'm Out of School!

If, like school, my attendance was recorded on this blog, I'd probably be failing. I haven't posted in two weeks! Which is especially terrible since I post twice a week. Nevertheless, I will share what I have been up to.....spending money recklessly and not so recklessly.

The reckless part comes into play because my financial decisions over the past two weeks have effectively set my car payoff date back by a month. A large part of this is because I spent $1,010.31 (I negotiated this down from the original quote) to get my tie-rod and rear struts replaced (this is the "not so reckless" part of my spending). The rest of my car payment money (and then some) was spent on spa services ($188), dinner ($55), hair supplies ($20 and change), airfare, eating out (including Dunkin Donuts), and a new pair of sneakers ($44), among other things. 

Why the splurge? Why the major deviation from "the plan"? Frankly, there's no excuse, yet, I found myself justifying expenses because it was my birthday. Yup. I turned 27 years old last week. And unlike previous birthday celebrations, I did not plan for this one. No trip out of town. No dinner with my beau. Nothing. It was quite depressing. I guess that saying about money not being able to buy you happiness is true....I sure made an attempt at it (enter sad face).

Image from murlocparliament.com

Now it's time to refocus and get back on track. No more emotional spending, no more failing to plan and trying to make up for it at the last minute.

Have you ever made emotional purchases? Splurged in an effort to "fill a hole?" What was the consequence?

March Net Worth Update

Here's this month's summary explanation:

Assets
403(b): (+489.66) A little bit of my own doing with $100+ in contributions every two weeks. I can thank the market for the rest of it.

Emergency Savings: (+0.75) Hooray for interest! Because that's the only reason why this account balance has changed any. I'll begin making regular deposits into this account once I finish paying off the car note.

Regular Brokerage Account and Roth IRA: (+84.61 and -38.34, respectively) Recently, I shared that I started making $25 deposits into my brokerage account every two weeks; this accounts for the bulk of the increase in said account. The remaining $34.61 increase is the value of my investments going up. I wish the same could be said for my Roth IRA; instead, the value of my investments in that account decreased.

Savings Account: (-74.99) At the beginning of the month, I had a nice stack in this account. Then I transferred all of it to my checking account to cover the large part of my $141.40 credit card bill (ohhhh, airfare!!!). The current balance exists because of my recurring deposits ($25/month) and interest ($0.01).

Liabilities

Car Loan: (+354.51) Of the $400 payment I made last month, $354.41 went towards principal. Considering my new tax realities and how I've spent "car note" money for other things, I'm on pace to eliminate my car note by the end of this July.

Credit Card: (+699.57) The $699.57 I paid to Capital One includes: my previous balance of $141.40, $48 for renewing my drivers licenses (such things are so easy to forget!), and a bunch of other things, mostly food and gas for a random trip to North Carolina to see my girlfriend and family, airfare (I really miss my boyfriend :<) and a car repair (I had to replace my wheel locks and get my tires rotated...$100+).  Where did this money come from? "Car note" money, of course! Hence, my comment about "other things" =)

Student Loan: (+98.69)  Nothing extraordinary going on here. Not too long ago, I talked about increasing my payment amount to $268.91. Well, I didn't get around to including the difference between the scheduled $229.21 payment and the theoretical amount ($268.91).

That's all, folks!