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Tweaking the Budget

March 1st, 2013 at 12:59 am

I'm not sure what we would have done this year if we hadn't managed to get the credit cards paid off when we did. We have lost $600 every 4 weeks to the 2% rise in taxes. Previously that money was going to pay down debt. Our plan for this year had been to start contributing to the 401K. Now it's going to pay for a government retirement program that has no chance of even existing when we are old enough to get anything back. I feel like they are taking our retirement away from us twice. One by not allowing us to have the money to provide for our own retirement, and two, by feeding it into a system that will be bankrupt long before we ever see our 60's or 70's. It is frustrating.

Our 401K is not the greatest, it has NO matching at all. But it is a tax shelter. Just one we can't afford to contribute, too.

I am trying to rethink a lot right now. The idea of cashflowing college for the kids is still, maybe, within reach. It would be so much better if there were jobs available. If I knew they could save a couple hundred dollars a month towards college I wouldn't worry so much. Even my niece, who did manage to get a job last summer, only gets about 3 hours a week because retail is practically moving backwards right now.

So anyway, changes I will be making starting after March is to eliminate the vacation fund of $100 a month. This one is going to just have to last us for several years. And that's okay. It's a luxury and vacations were completely financed by us (no vacation benefits). If we hadn't been saving so long for this one and already had most of it taken care of, I'd seriously think about cancelling it.

I will be cutting the laptop fund down to $50 a month and I will be cutting the appliance fund down to $50 a month. Both were previously at $100 each. Once I know what the property tax is going to be this year I can make an adjustment on my property tax fund. It has been approximately $1060 per year for the last several and our tax assessment went down. They should send out the bill soon. Right now I am setting aside $100 a month, but when I know what it actually is, I will cut it accordingly.

Once mid-April arrives I can turn off the furnace at the old house, which will mean no propane costs. Propane has jumped dramatically this year. We keep the furnace on until there is no chance of the pipes freezing. Also once they are done with the repairs to the old house I can have the water/sewer shut off, saving me $72 a month.

The four person cell phone contract we are on expires this summer. With DS being homeschooled there is no reason for him to have a cell phone anymore. He is always with me or his father or his grandmother. The only person he ever texts he can IM as well. Honestly I wish there were an unlimited texting only plan, no phone calls, because that would be the best thing for our needs. DH and I use Skype when he's in Alaska.

I think when we do move I am going to up our laying hens and start selling eggs. Just one of those sign in the front yard things. If I can make enough to pay for feed for them and some broilers that would cut our food costs dramatically. Also starting to seriously research rabbits. I've talked about it off and on, but it's time to get down to the knitty gritty on it.

If eggs pay for feed I can cut our grocery budget by $200 a month. Then maybe we could handle college and retirement.

I keep trying to keep myself focused on the fact that we are out of credit card debt and we are comfortable. It is mostly luxuries I am looking to cut. It is not necessities. But we've only gotten to have luxuries recently so it is hard to have worked so hard to get here and then feel like the benefits we should have been reaping have been snatched away. We feel the loss of that $600 a month. But I imagine there are a lot of people out there that feel that 2% even deeper.

12 Responses to “Tweaking the Budget”

  1. FrugalTexan75 Says:
    1362102883

    Check TMobile - I think they have a plan that is only 100 minutes and unlimited texting. Or of course there is also Ting. Smile

  2. just a thought Says:
    1362105194

    It might be worth prioritizing your retirement over college savings? Isn't that what's usually suggested?

  3. Petunia 100 Says:
    1362108423

    Your husband makes 30k every 4 weeks? Holy cow! The good news is he will hit the limit for the year before April is over, and you'll be done until 2014.

    Even if SS is not "fixed" and does go bankrupt, benefits will be paid from payroll taxes being collected. It is estimated that 3/4 of benefits will still be paid. Not ideal, but better than nothing.

  4. LuckyRobin Says:
    1362109843

    Petunia, no, he makes $12,000 gross a month and we were getting $8500 net and now it's $7900 net. The only change has been SS. It has to do with the funky way they do withholding since he works 2 weeks on two weeks off. But they tax it as if he were making the same day rate all 28 days. I don't know why they do it that way, it's some stupid tax thing that has never made sense to me. Something about assumed income. We try every year to see if they have changed it but they have not. So they tax the $12000 like he was making $24,000, if that makes sense. So what should be $300 more being taken out is actually $600 more being taken out. We will get the overpayments back at tax refund time, but I'd rather have that money through the year. It makes it hard to have $600 extra being taken instead of just $300.

  5. LuckyRobin Says:
    1362110036

    Just a thought, I don't want my kids saddling themselves with debt to go to school. We have worked too hard to get out of it ourselves for us to want them to start out adult life with $60K in debt each. And we will not take on college loans ourselves either. I know most folks recommend putting retirement first, but it's a lot harder to think that way when you are this close to college and still 25 years from retirement.

  6. LuckyRobin Says:
    1362110160

    Laura, Verizon is the only cell service that is consistent on the slope. Most providers don't have the infrastructure above the Arctic Circle, so we need Verizon for DH's phone. We might be able to do something different for the other phones though. I'll look into it.

  7. Petunia 100 Says:
    1362111017

    Their method doesn't make any sense to me either, Robin. Smile Their 941 has to balance every quarter, and it seems like their method would make that impossible. But if you're stuck with it, then you are. Have you considered adjusting his withholding?

    What does your daughter want to do for college? Does she want to stay local or go out of state?

  8. ceejay74 Says:
    1362154401

    MonkeyMama could confirm, but I think that $600 withholding will go away pretty quickly. I don't think you can overpay Social Security and then get a refund; I think they just stop taking it once you hit your max.

    Which, I see, Petunia already pointed out. Sorry! Smile

  9. Jane Says:
    1362177030

    Robin, you could start accumulating college money now by encouraging your kids to sign up for contests with scholarship prizes. Local Lions' clubs, Optimist clubs, etc often have essay or speech contests with small ($250, $500) scholarship prizes, and they are generally open to all local students for free. $250 won't pay college tuition off by any means, but if they start before senior year it could certainly add up. I did this during high school and got a couple thousand dollars for college altogether.

    Although I know it will be unpopular on this particular site, I agree with you completely- starting life with a debt-free education is one of the best things you can possibly do for your children. One option if you need that money for your retirement would be to consider giving your kids an interest free loan for college instead of paying outright for all of it. That way they get to go to college without owing lots of interest, and you recover your retirement principle over the years as they pay you back when they are working. Instead of sacrificiing the total amount, you basically sacrifice the interest you would have earned by investing that principle during their college years. Of course, that situation would only work with certain family dynamics/personalities, and mixing money with family can turn out to be more mess than it is worth. Just something to consider.

  10. LuckyRobin Says:
    1362183191

    Petunia, we're not giving her a choice. She has always known her whole life that she is going to the local university or the local community college, because there is a local discount and that is what we can afford. If she wanted more than that she would have to get the grades to get the scholarships to go elsewhere. She doesn't have the grades to get scholarships at 3.0, so local is what it has to be. She wants to be a teacher and the local universtiy has a great teacher's college and she can do her first two years of GUR's at the CC and transfer.

  11. LuckyRobin Says:
    1362183319

    Jane, thanks for the info. I will look into those things.

  12. Anita Says:
    1362693537

    We all struggle with these things, unfortunately things like taxes force us to tweak our budgets. Congratulations on working so hard to achieve your goals.

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