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Taking the Bad with the Good

December 13th, 2012 at 07:36 pm

(Last old entry!)

I haven't posted our month's end update yet because our financial situation this past week has been so in flux. In a recent post I talked a bit about hoping our Xmas shortfall might "magically" fix itself. And believe it or not, we actually have had a fair bit of good fortune magic come our way recently in terms of income.

Hubby's writing/website management hobby is really taking off! He's just landed a new deal that should pay a minimum of $300/month starting next week, and possibly up to $500 or more. And that's in addition to the $220 he was already making through another deal, plus some smaller bits on the side. All together that is more than enough to make up for the back pay child support that is now ending (last check tomorrow!) and also enough to bridge the income gap we were expecting for Dec/Jan.

Additionally, I've had a little bit of work come my way as well! My worse case budget scenario was assuming I would continue to have only about $140/month of income (that used to be more like $600). For at least Dec/Jan though, I think I can count on that being around $400 instead, so that's another extra $260 that also kind of feels like it just magically appeared in time for Christmas.

Were in not for the car repair that suddenly fell into our laps as well then, we would probably feel we were raking in the dough. But alas, this was no ordinary car repair. This was a $992 doosey. I'm not even sure we've paid that much for a car repair before. Usually when the repairs start getting that expensive and close together, the car is old enough that we decide its probably not worth it and time for a newer one instead. But this is hubby's car and we are still making car payments on it as it is. It's also the newer of our two vehicles and therefore not allowed to reach the end of its life first!

Anyways, that completely cleaned out the emergency fund. All but $10.17. So that's a little scary. Cause it's a good two and a half months until tax rebate season. Additionally, our discretionary account has only $4.81 in it, while even our fixed checking, which we use for things like the mortgage, has only $728.42. Not cool. Luckily, hubby gets paid tomorrow, though there are still lots more gifts to get. I should point out here that the order these fluctuations came in as was: my income increase (Oh, good, that will help a little), then the car (Oh, f**k. We're screwed again.), then hubby's income increase (Woo hoooo!!! We're saved!). It's been a long week.

We ended last month with about $260 surplus, which we would have liked to use to pay down our credit card debts given that that is the point of this whole thing. Unfortunately, as the month ended, we were projecting a $750 shortfall for Dec./Jan., so I felt I needed to hold on to that extra to help somehow bridge the gap. When my extra income came in, we had high hopes that end of Dec or at least Jan. might afford us some surplus after all. But then the car crapped out, and Dave Ramsey says our first priority now should be going back to baby step 1 to replenish the emergency fund. I'm not quite sure yet where that puts us in terms of catching up again, but it may well be Feb still. In the meantime, we will continue making our roughly $500/month in minimum payments.

More good news; some very preliminary numbers I ran in the newly released 2012 Turbotax seem to predict that we will be getting back around $8000 this year! Holy s**t! I think that's even bigger than when we got our first time home buyer's credit, though I might be wrong about that. We only claimed 4 deductions rather than 5 on hubby's W-4, so as to cancel out my estimated business taxes, but I didn't make very much compared to normal, so it ending up being a lot more withholding than we really needed. Plus, we get some kind of a $2000 education credit for my daughter starting college, since she is still a dependent on our taxes for this year. Yay!! Until the car died, we were considering buying a new fridge with some of that. But at this point, we may just muddle through and try to just get done with this ASAP. Hopefully by next Xmas we'll be on baby step 3!

4 Responses to “Taking the Bad with the Good”

  1. BuckyBadger Says:
    1355427703

    Remember that a big tax rebate is not something to celebrate -- it's something to try and avoid. It means that you gave the government an interest-free loan for a year. That's $670 a month that you could be using to pay off debt (and avoid paying interest on that debt!).

    I would seriously consider changing your withholding so that you don't get such a large refund.

    Think about what YOU could do with that money if you didn't give it to the government!

  2. annereese76 Says:
    1355429553

    Hi BuckyBadger! I totally agree with you about that. In the past, I think it was better that we got it as a lump sum because we just would have pissed it away on stupid stuff instead of making headway in something important. Now that we are budgeting though, I think we could use that money more effectively ourselves. Our tax situation keeps changing so much from year to year lately that I am hesitant to change too much until it settles out. None the less, my daughter will no longer be a dependent next year, so that should make our W-4 withholding match up better with our current situation.

  3. SecretarySaving Says:
    1355433745

    Building the emergency fund back up would be the wise thing to do.

  4. snafu Says:
    1355543907

    There was $1K in the Emergency fund when needed for $992. car repair hit. Life is full of challenges and it's very important to have your E fund in place. I hope you'll suspend/delay Christmas shopping and substitute free and nearly free entertainment, fun, home made or gently used toys.

    Since year end will soon be upon us, you might start listing ways to cut costs and follow up with your action plan. If you continue to do what you have been doing, you will get the results you have been fretting. Income will need to be s-t-r-e-t-c-h-e-d and every penny squeezed unmercilessly. Every expenditure needs to be examined. What is the worst thing that could happen if eliminated? Yes, it's tough but it's short term pain for long term gain. Once in stronger position you can ease up. You're in control of managing your money

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