The Hustle of Sistah Ant

Everybody is bugging.  Dow up.  Dow down.  Dow down, again.  Interest rate down, down, down.  I know, it’s scary.  Sistah Beginner and I were talking about it just the other day.  Gas is up.  Food is up.  Energy is up.  She is in the process of finding another place to stay under an affordable housing program.  She’s been paying off bills, getting her credit straight, and worrying about rising costs, just like the rest of us.  Even though she doesn’t have a 401K losing value to fret over, she still has a growing child to feed.  But this is what we came up with:

It’s cool.  Really.  Chances are that if you’re reading this, you’re into managing your money.  You already know all about controlling your spending, diversifying your investments, coming up with spending plans, getting rid of debt, and puttting money away.

So chill.  You are ahead of the game.  Come what may, you’ll make it, and so will I.

This is a short post, ‘cause I’m on the grind, putting in my time at work and trying to enjoy life in between.  When I finally get this all balanced out, I can devote more time to the blog.  But I just wanted to make sure I reminded you that everything is going to be okay.  Stop bugging.

I went to my friend’s shower and I was glad to be able to go.  Mom and Dad are looking good, and the twins are very active, even now.  I couldn’t find the registry, so I got my standards - onesies, diapers, and fuzzy reading material - all was well and I was glad to be able to afford the trip.  It’s really nice to have money for things like that.  All money really is, is a quality of life tool - this was one of those times that made it apparent.

I was really looking forward to my first paycheck last Friday, and I actually took time out of my lunch to go pick it up and deposit it.

I didn’t realize until I got home and was doing some online banking that my paycheck was placed on hold for an entire week.  Only $100 of the amount of  the check was released to me.  I was furious!  What if I hadn’t had any money except the value of that check?  It would have been one thing if it was held for two or maybe even three days, but a week?!?  Seven days?!? Five banking days!?!  What the???  If I had known they’d keep my money from me for an entire week, I wouldn’t have deposited the check.

When I called my credit union, they said it was because the check was drawn on a bank that isn’t local, and because my employer isn’t on some list they have.  She also said I deposited it too late to go through processing on Friday (she assumed if I did it after 2:00, and when I told her I was walking away from the CU by 1:30, she said, "Oh, well you were still too late."  I have half a mind to take my business somewhere else, but you know what?  I’m tired.  I am absolutely sick and tired of hopping from bank to bank because of bad customer service, or stupid fees, or asinine policies.  I don’t know where else to go, and every place has its drawbacks.

Plus, my direct deposit should go through by the time my next paycheck would be given to me.  So in the meantime, I’m not exceeding the limit that’s been imposed on me by the credit union.  That means paying my car note the day it’s due.  That also means paying my share of the household expenses later than I wanted to.   If I hadn’t checked my account, I wouldn’t have even known about the length of the hold, and I would have spent the money by now.   I’ve calmed down some since payday, but I’m still annoyed by the principle of the whole thing.  It’s my money, after all.

I did my taxes last night.  I used Free File, which is on the IRS homepage, to link to H&R Block’s TaxCut program - I’m eligible to file my federal taxes for free, because last year I earned less than their free file eligibility limit.  I’ve been doing this for years with no problems.  Last year, for the first time ever, I went into a tax prep company’s office to file there, because I had an interstate move and three W-2’s.  Do you know I wound up having to remind the tax preparer what to do? She was looking up stuff and everything, and I was mad, because I could have done as good a job as she did.  This year, partly because of that experience, and partly because my tax situation is more simple again, I went back to Free File.  However, I didn’t actually file the return yet.  First of all, I’m still waiting on a form.  I know how it affects my taxes, but I need the name of the institution and I won’t know it until I receive the form.  The other reason I’m waiting to actually file is because I have a question I need answered.

At this point, I owe about $500.  I got what I wanted - I didn’t overpay in taxes.  However, I made a few thousand dollars more than I thought I would last year (because of my severance pay).  So, when I used the tax withholding calculator, I wound up not withholding enough.  I’m not shocked to owe money, and I can easily pay what I owe by April.  (This is why I wanted to calculate my taxes as quickly as possible - I have a few months to save for a payment if I need to.)  That said, if I can get out of paying the government, I will.

The contribution period for my traditional IRA is not over until the taxes are due in April.  I was wondering if it would help for me to contribute about $500 to my IRA for tax year 2007.  My thinking is that I can use the IRA deduction to reduce my tax liability and come out even with the government.  I can start contributing for tax year 2008 after I contribute that first $500.  I did what I usually do when I have a tax question - I visited the IRS website.  From what I’ve read, it seems that this might actually work.  Even though I was covered by an employee sponsored 401K plan in 2007 (which would affect whether I can deduct the full amount of my contribution), it seems that my income was low enough to allow me to deduct the whole contribution.  Does that mean dollar for dollar?  I actually received a contribution form in the mail with the year-end statement of my IRA, that has a box you can check if you want your contribution to apply to 2007 instead of 2008.  Does anyone reading this know if this is something people with IRAs routinely do?

I am probably going to call an accountant and find out if my little plan will work.  I’d hate to send $500 to my IRA just to find out that I have to come up with another $500 for a tax payment, ‘cause the IRA contribution didn’t reduce my tax liability.

Update: It wouldn’t be a dollar-for-dollar deduction.  I went into the tax program and changed my 2007 contribution to $500 to see what would happen.  It made my tax liability go down, but only by about $100.  I would still have to pay almost $400.  That would mean paying $900 out of pocket to save $100 on taxes, instead of just paying the government the $500 I owe and making the regular contributions to the IRA that I was going to make anyway.  I think I’d rather do the latter.

So I calculated how much I expect to contribute between now and April 1st (10% of my pay for the next eight weeks).  It’s actually more than $500, which surprised me.  It would result in saving about $170 dollars from my tax liability.  And I can come up with less than $350 to pay the government by then, too.  I also realized that I can tell the government how much I expect to contribute and just pay them when I’m ready, even if it’s before April 1st.  I guess as long as I actually contribute what I say I will, it doesn’t matter.  

Here’s what I think of the stimulus package:

If someone wants to give me some money, I’ll take it.   I like receiving money.  I am a resourceful ant - I know what to do with it.

My goals remain the same.  I am getting out of revolving debt (my credit cards, plus a line of credit I used to pay off old credit card debt).  I am saving money so that I can have a down payment and other expenses for a home.  I am also saving money for emergencies, retirement, and for some other items that I want to pay for outright.  These are my priorities, in this order.  So this is how I’ll apply any money that comes into my hands, including any tax refund, or stimulus package money, should I receive it.  (Let’s not forget, this stimulus package is not a done deal - it’s merely in the works, and even once it’s passed, some estimates say Americans won’t be receiving any checks until summer.)  I figure that if I do get money, my revolving debt balances will probably be paid by then, so my house fund is next on the list, and the probable destination of the money.

But that’s just on a personal level.  So far as my country is concerned, I have no idea if this stimulus package will really do what it is supposed to do.  I’m not sure if the government even knows.  And because I am still not an economist, there’s no point in even attempting to come up with the outcome of a stimulus package off the top of my head.  But this I know for sure - basic rules still apply, you can’t count chickens before the eggs hatch, and you can’t tell the future.  The Fed is still concerned with balancing between the threats of recession and inflation.  People are looking at their 401Ks and groaning.  With all the talk about the economy swirling about me, my job is to remember my goals and do what it takes to reach them.  Shoot, my apartment’s ceiling was leaking today from the upstairs neighbor’s bath water.  I need a house.  My contracting position is only supposed to last me until summer, at best.  I need a healthy savings.  So yeah, I’ve got my ear to the ground to know what’s going on around me, but I’m staying mindful of getting from my own personal point A to point B.

Sorry to say this fellow countrymen, but if you give me any money, I’m not stimulating anything but my own personal net worth. 

Just so you know, I have credit card balances.  I have been spending money.  This Saturday, I paid my credit cards to make them each current.  But on one card, I just paid the balance that was due for the preceding billing period.  To clarify: I paid more than the minimum balance.  I paid the full amount I charged between the closing date of my last statement and the closing date of my most recent statement.  However, there is still a balance on that card because automatic payments billed to that card during the time between my most recent statement and the present day are still not paid yet, so the card is not paid to zero, and it won’t be for another few weeks.  On the other card that has a balance, it was paid to zero.  But on the same day I paid it to zero, I went and bought some eyeglasses and work clothes, which ran it up again.  No portion of any balance on either card is overdue or late, but my ideal situation would be to pay my cards down to zero, every single time I make a payment, regardless of billing periods.  I just charged too much to do that this time around.

I say all this to point out that I don’t want to make the impression that I have perfect willpower, that I’m so frugal that I never spend on non-necessities, or that all my credit card balances are zero, because they are not, and none of that other stuff is true, either.  I find this important because I think that it would be wrong to try to appear more perfect than I really am on this blog.  Actually, I’m pretty uncomfortable with my credit cards right now because I would prefer that they were paid down to zero at the end of this and every month, and I can’t do that this month without going into my savings, which is UNTOUCHABLE in non-emergency situations such as these.

Fact of the matter is, I spent too much money.  Forget for a moment that I actually have the money to pay the cards to zero today if I wanted to (and, for that matter, my old credit card debt, too).  The point is that because I am trying to save money, I shouldn’t spend money in such a way that I would put my savings at risk.  Period.  In order to keep my savings safe, I shouldn’t live beyond the means of whatever I’ve decided to leave in my checking account after paying bills and putting money in my savings account or IRA.

No worries, though.  When it comes to money, I tend to forgive myself easily, try to find the lesson in mistakes, and then move on.  I’m looking forward - to my first check from this new gig, to paying my credit cards down to zero, and to calculating my net worth and finding that it’s increased again, despite a month and a half of unemployment.  Things are still looking up, partly because I just identified something that I want to do differently to be more successful at reaching my goals.

This guy at my job asked me the other day how I can live without cable.

And the thing about it was, he was asking that question incredulously.  As if I was the first person he’s ever met that doesn’t pay for cable.  Wow.  Perhaps I am.  He was absolutely shocked that I never got into watching the So.pranos, and that our other co-worker doesn’t have the channel that created it.  I could see if he were shocked that I said something like I never have dessert, or I don’t have running water in my house, but come on, it’s just cable.

You know how I live without cable?  I watch whatever channels I can see on my television.  I read blogs on the internet.  I read the news, I check message boards.  I spend quality time with my honey.  I read books and magazine articles.  I call my friends and family to talk.  I visit people.  

I think my life is actually pretty normal.  I just happen to have an extra $100 in my pocket every month that my co-worker and many other cable subscribers don’t have. 

I’m not anti-television or anti-cable, per se.  I’m just pro-debt reduction and pro-savings.   I can afford to pay for cable, if I want it.  I just would rather do something more useful with my money, that’s all.  Especially while I’m still in the battle against revolving debt, and dreaming about having my own home.  I’m sure I’ll subscribe to some kind of cable service at some point - maybe one of those dishes, even.  But I’ve got too much going on in my life to be worried about TV.

This article scares me.

It talks about the possibility that the Fed may be cutting interest rates too much, and the threat of inflation.  It’s the same stuff I was worried about before - I want to earn money on my savings, and I want my savings to have real purchasing power.   

It’s funny - when I shopping this weekend - for eyeglasses, work clothes, gas, groceries, even at the fast food place outside the outlet mall - I was actually thinking, "There ya go, Sis, do your patriotic duty and support the economy by spending."  ‘Cause really, isn’t this all the market wants?  It wants us to spend, spend, spend.  The more we spend, the higher the Dow goes, the less the Fed worries about recession, the higher interest rates get, and the higher my ING account will yield.  That’s pretty simplistic, but that’s how I think about it.  And since it seems that people are spending less, it’s going in the other direction - the Dow’s dropping, the Fed is worried about recession, and they’re lowering interest rates and my ING account will yield less. 

Only thing is, it seems to me like it took a few stock trader temper tantrums to get the Fed to start cutting rates.  For a second there last year, the Fed kept saying that they weren’t eager to cut interest rates, because they didn’t want inflation to rise.  The Dow wobbled hard a few times (I understand that this is a very simplistic summary of how housing and credit problems hurt some stocks in a real way - remember, I’m not an economist, I just read stuff), and then the Fed’s story changed - apparently inflation was no longer a threat so much that the Fed had to hold rates steady.   So the Fed cut the rates.  Twice.  But I believe the question remains - when should we start to worry about inflation?  Surely the Fed can’t keep cutting rates and making money more plentiful without us facing some consequences at some point.  I feel like somebody should be letting us know how close we are to that point.  Inflation scares me.  I just started making and saving more money and I don’t want inflation to make my gains worth less than they are.  I don’t want to work harder for less.  So when does inflation become a pressing concern again, and what do we do to protect our hard earned gains if inflation spreads beyond energy bills and gas for the car?

I submit… the spoils from my weekend: 

Eyeglasses - one last hurrah before the insurance sponsored by my former employer fades away at the end of this month.  Now I can finally stop dealing with the ones that keep falling off my face - the ones that are two prescriptions old.

Three pairs of heels:  One brown pair of classic pumps, another black - just like the brown ones.  And one more black pair - slingbacks with a croc pattern on the heel and on the toe.  Each pair was on sale.

A black blazer with silver pinstripes - form-fitting, just like how I like it.  I hate boxy office wear!  What’s the point in having a waist if I can’t show it off?  This was marked down to less than a fifth of its original retail price.

A wine colored blouse from the clearance rack that fits oh-so-snug and stylishly.  I got the last one!

Another blouse, this one stripey.  I love the quality.  Now I see why things in this store are more expensive than in other stores. This was on the 60% off rack, and I got another 10% off for a small flaw that I had the salesclerk squint to see.

Outlet shopping is nice.  Name brand clothing is nice, too.  It looks better on me.  And for the first time since I’ve become an adult, I shopped without plodding through racks of clothes that I hated, in search for something that would just get me by.  I found a lot of really great clothes that were really great deals, and the only thing that kept me from buying more was self-restraint.  I’m looking forward to going back in a few weeks to see if I can pick up some more clothes.  And just like this weekend, I’ll have a spending limit.  I enjoyed shopping - I can’t believe it!

Last night I put a little chunk of money on my old credit card debt. 

I broke a thousand!!!

I now owe a little over $900 on the consolidation loan that I used to wipe my credit cards clean in the fall of 2006.  Finally - a three digit balance!  Psychologically, this is a milestone.

Do you know how eager I was to break a thousand about two months ago?  I was so close, I could taste it.  I was within reach of paying off the entire balance before the end of December.  I had my facts and figures all ready to go.  All I was waiting for was a couple more paychecks to make that final payment, and then…  my employer’s parent company eliminated some positions, and one of them just happened to be mine.  Suddenly my perspective changed.  Suddenly the money I was going to use to pay off debt from my past became more precious to my immediate present and future - and I couldn’t part with it as I had planned.  I even received a severance package that could have paid my remaining loan balance with surplus to spare - but again, I needed that money in my pocket, not my creditor’s.

But now that I’ve got an income again, I’m back on my mission.  My old credit card debt has been dogging my mind and my cash flow for years. Those credit cards were off limits to me for years because I couldn’t afford to get into any more debt, and I couldn’t afford to pay off the debt I had.  Now, I am so happy and so excited!  Words can’t describe what a relief is coming right around the corner for me.  I get paid weekly.  This old debt is on its very last leg.

I’m so close, I can taste it!