What Happened to Spring?

As I sit here looking out my sliding glass door, there is snow falling on the grass. SNOW. It's not supposed to be snowing. It's supposed to be 60°F outside and sunny. Well, okay, the sunny is negotiable, but by the middle of April it should be warm!

And speaking of the middle of April, have you done your taxes yet? Are you waiting for the last minute, googling which post offices are going to stay open until midnight tonight? Or are you like me, nursing fond memories of the tax refund you've already spent?

While we're on the topic of spending, what is up with gas prices? Just a few weeks ago here in Sioux Falls, they were about $3.39 per gallon. This morning I paid $3.59--and that was with a 14¢ discount. I know I shouldn't complain. In Chicago the price is up over $4.00. And my friends in New Zealand are paying US$6.59 a gallon this week. Yikes. I'm feeling richer already.

Plus, in the time it took to look all that up, the snow has turned back into rain. You know what they say, "April showers bring May flowers." At this rate, there ought to be a garden full of blooms come next month.

Answer Me This

Why can you buy an entire printer/scanner/copier, which includes two ink cartridges, for the same price as just the two ink cartridges?

Furthermore, why can you buy the stand-alone printer (with the ink) for $10 less?

Does this make sense to anybody?

Climbing Out of Debt

As I have alluded in previous posts, Adam and I accumulated quite a bit of consumer debt while he was out of work for a year and a half. We are finally poised to actually start paying some of it off, rather than just making minimum payments to each account.

Being the analytical person I am, I wasn't content to simply follow a single strategy because some financial expert or another recommends it. I need to do things the hard way and find out for myself why they work (or don't). I'm beginning to realize just now how challenging that single trait must have been to my parents, since my daughter is exactly the same way, but that's a post for another day.

In any case, I had two basic theories to test. I have read debt-repayment plans that suggest paying off credit cards and loans based on both the interest rate (paying off high-rate loans and working your way down to lower-rate ones) and debt size (eliminating the smallest debts first so you can increase payments to your larger loans more quickly). For some, these may be the same--their lowest interest loans may be the largest. Unfortunately, that isn't the case for us.

So, I spent an hour or so gathering up all my interest rates and minimum payment numbers, then entered everything in a spreadsheet for comparison. Calculating both the interest-based repayment and debt-size repayment options, I discovered something which surprised me. While the interest-based strategy does pay off slightly faster, the total repayment difference between the them was just two months out of a five-year plan or about 3% over the life of the loans.

Depending on how your own debt is organized, you might find some differences in the exact numbers, but I honestly have to say that either repayment plan is a good one. Using the high-interest strategy, you may save a few dollars, but if your debt is poorly arranged (like ours), you end up paying off multiple lenders for a much longer time. By paying off the smaller debts first, you can eliminate several debts more quickly, which has a great motivational effect, but it may end up costing a little more money overall.

For those of you who may enjoy long division in your spare time, but would like to see how these numbers actually work for your own debts, let me share the formula I used to figure out how long it would take to repay each loan.

The amount you owe
+ The finance charge (APR ÷ 12 x the amount you owe)
- Your monthly payment

That will tell you your new balance due after one month. Repeat the same formula for the second month, but make sure you change the amount you owe to indicate the new monthly balance.

When working with multiple debts, remember when one is paid off, you then adjust the monthly payment to your next highest interest rate (or smallest balance due) to include the additional payment amount available from the debt that has been eliminated.

Did You Know About This?

Please stay tuned for a friendly public service announcement ...

Are you, like me, still working to pay off the federal student loans that helped you get through college? Is that standard 4-15% of your income an awfully large amount each month?

If so, have you heard about the government's new Income-Based Repayment (IBR) plan?

I first read about IBR on a parenting message board several months ago. At the time, we called our lender and the customer service folks had no idea what we were talking about. In trying to restructure our budget (again) to make each dollar stretch just a little bit further, I went on the lender's website today and found a whole section on this program, including a calculator that indicates our estimated monthly payments based on our annual income and family size.

According to their calculations, by taking advantage of IBR we could be saving more than $400 per month off the standard monthly payment--with no additional accrual of interest. Now, we're not actually paying the standard amount right now, so, sadly, I won't have another $400 a month in the budget. Still, the fact that our loan will not be getting larger each month, simply because we aren't able to pay the full calculated payment is fantastic news!

For more information about IBR, check out the Federal Student Aid website, or contact your lender.

Not So Small

I was reading recently about paying more attention to what God is doing in our lives and making a point to thank Him for the small measures of grace He sends us every day. Such thoughts came to mind this afternoon as we narrowly missed being part of a multiple-car pile up on the way home from Adam's office.

At first, I was simply glad that we'd avoided crashing into the cars around us. As I thought further, though, I realized that the tiny bit of mercy I'd noticed was much bigger than I'd recognized.

If we'd been in an accident this afternoon, Adam would have missed several hours work (and those corresponding dollars in his next paycheck) as we got the damage sorted out and a rental car secured. While our car insurance would have covered the cost of a rental car and most of the repairs, we would still have had to find a few hundred dollars to cover the deductible. I don't know where that would have come from, especially with a smaller-than-normal paycheck coming up.

And that's all assuming we had no injuries. A trip to the ER or even a check-up with our family doctor would require more money out of our pockets--more money that just isn't there right now. A severe injury that required hospitalization would mean even more missed work, more lost wages, more physical and financial hardship.

Today, I'm thanking God, not just for sparing us a minor fender bender, but for saving us particular struggles right now that I can only imagine.

Thank You, God for sparing us. I pray that when times of trial do come I can trust as easily in Your goodness and judgment.

Finito

Done.
Complete.
Finished.
Printed, signed, stamped, and mailed.

My taxes, they are gone. Now I can just sit back and wait for the refund to come rolling in. What do you suppose I should do with the $4 we're getting from the state of Illinois? Maybe a muffin at Starbucks?

Death, Resurrection, and Taxes

I hope everyone had a lovely Easter. We didn't really do much to celebrate. We dyed some eggs, which, in retrospect, was probably not a good idea as it inspired our daughter to dye herself. Her face, hair, hands, feet, and legs now sport several color splotches reminiscent of Jackson Pollock. I'm glad I didn't go out and buy a pretty Easter dress; she surely would have clashed.

Actually, I've not been feeling very well this weekend, so we didn't make it out to church on Sunday at all. I feel like I've missed the whole Easter season this year. Our former church celebrated Easter in a very big way and not being a part of everything this year made it a little harder for me to really feel like we've been in a holy season.

I can't remember if I mentioned it earlier, but I started doing our taxes on January 3rd. Unfortunately, there was one statement I was waiting for from the Illinois Department of Employment Security that never showed up. After waiting past the January 31st deadline, Adam called the customer service number on at least two separate occasions (but I'm pretty sure it was three).

The first time, we were told we had to change our address. No problem. Done. But rather than sending us the form I was looking for, they sent a packet on how to collect unemployment insurance from out of state. After resisting the temptation to see if we could file a claim, he called again. Either on the second call or the third, but certainly after he'd talked to a number of different people, he was finally able to speak to someone who looked into our account and said we didn't have any payments in 2008 because the last check was dated December 31, 2007. Sigh.

So I'm finally getting back to our taxes this week. Since I have all the stuff I need. Apparently.

Oh, and earlier this year, we got a fat booklet in the mail from the Illinois Department of Revenue. When I say "fat" I mean, this thing is 56 pages long. The front cover has a picture of a tree with tax forms on it and says in big black letters "Save A Tree (and fuel too) ... file electronically." There's also a cute little blue box that tells me "Last year Illinois taxpayers saved more than 12 million pieces of paper by filing their tax returns electronically." Uhm, yeah. Was this before or after the state government printed and mailed all these forms?

I Do Much Better with Spinning Rides

I used to write songs a lot when I was younger. One I wrote in high school started like this:

Life is like a roller coaster
Up and down and all around
Spinning out of control ...

That's how I feel about our financial lives lately. We have no money (down). Oh, we got some money; we can pay off XYZ creditor (up). Wait, here's another bill I thought we'd already paid off (down). People gave us cash and gift cards for Christmas (up). One of my clients found another designer willing to work for free (down). Adam has been offered some overtime hours to bring in more money (up). Our credit cards raised the APR to almost double what it used to be (down).

I think I'm starting to feel sick to my stomach. Can I get off this ride now?

Please?

When the Nobel People Come Calling

I was thinking the other day as I shared about my unreal viral award, what would I do if I were offered a real award? Particularly one with money attached, like the million-dollar purse that comes with the Nobel Prizes. How would I spend a million dollars?

Well, first I'd give a bunch to the church (or is it the Church? to those people sharing God's love in practical ways with those in need). That would take care of the first two or three hundred thousand. After that I'd probably pay off debts for myself and my family. That's probably another $100,000 there, and I'd still have $600,000 to go.

I'd buy a house, I suppose, and a new car or two, bringing me down to about $300,000. After that, I think I would finance Adam's restaurant that he'd love to open, which would probably take up the rest.

How would you spend $1,000,000 if you had the chance?

Evidence-Based Maternity Care

Earlier this month, The Reforming States Group, Milbank Memorial Fund, and Childbirth Connection released a report on the state of health care in the U.S. for expectant moms and their babies.

From the report summary
Milbank Report: Evidence-Based Maternity Care

Poor quality care and unacceptable health outcomes affect a very large population — there are over 4.3 million births in the United States every year. And they impact babies during their most sensitive and important period of development and younger, primarily healthy women.

Further, private insurers (covering 51% of all births) and Medicaid programs (covering 42%) are getting poor value for their considerable investment in maternity care. This translates to wasted resources for taxpayers, employers and families themselves. Maternity care plays a major role in the health care system. Hospital charges for mothers and babies far exceed charges for any other condition, and cesarean section is the most common operating room procedure in the country.

From Consumer Reports
Back to basics for safer childbirth

The report found that, in the U.S., too many healthy women with low-risk pregnancies are being routinely subjected to high-tech or invasive interventions that should be reserved for higher-risk pregnancies ... the current style of maternity care is so procedure-intensive that 6 of the 15 most common hospital procedures used in the entire U.S. are related to childbirth. Although most childbearing women in this country are healthy and at low risk for childbirth complications, national surveys reveal that essentially all women who give birth in U.S. hospitals have high rates of use of complex interventions, with risks of adverse effects.

The reasons for this overuse might have more to do with profit and liability issues than with optimal care, the report points out. Hospitals and care providers can increase their insurance reimbursements by administering costly high-tech interventions rather than just watching, waiting, and shepherding the natural process of childbirth.

Convenience for health care workers and patients might be another factor. Naturally occurring labor is not limited to typical working hours. Evidence also shows that a disproportionate amount of tech-driven interventions like Caesarean sections occur during weekday "business hours," rather than at night, on weekends, or on holidays.

From USA Today
Study: High-tech interventions deliver huge childbirth bill

The University of Wisconsin's Douglas Laube, a former president of the American College of Obstetricians and Gynecologists, blames "very significant external forces" for the overuse of expensive technologies in maternity care.

"I don't like to admit it, but there are economic incentives" for doctors and hospitals to use the procedures, says Laube, who reviewed the new report before its release.

For example, some doctors might get bonuses for performing more labor inductions, which adds costs and increases the risk of C-sections, which, in turn, increase hospital profits because they require longer stays.

In addition, some doctors order unnecessary tests and procedures to protect against malpractice suits, Laube says.

Bonnie Jellen, head of the American Hospital Association's maternal and child health section, hadn't seen the report. She says women's preferences and doctor's malpractice concerns have helped raise the C-section rate.

Says Corry [co-author of the report]: "A lot of people think pregnant women are accidents waiting to happen. It's just crazy."

The full text of the report is available online in both HTML and PDF formats.

Didn't Work for Me: Gift Card Budgeting

In theory, budgeting with gift cards was great. In reality, we didn't even make it one month.

What didn't work:

• My spending at various stores is somewhat inconsistent
  There is one store where I spend the majority of my grocery money, and another where I buy the majority of my specialty items. However, I don't spend the same proportion of the total at each store regularly. Depending on what I'm planning to cook in the upcoming week or two, I may need more items from the specialty store. Additionally, sometimes my local grocer has a great sale on a few items that I want to purchase. Because store fliers usually are only published weekly, I wouldn't know at the beginning of a given month whether or not I'd be buying 18 pounds of butter three weeks later.
• Two words: cheap(er) gas
  While no gas is cheap these days (we're up over $3.75 a gallon here), I do generally look to buy gas at the lowest price available. Often that's at one of two local stations, but sometimes there will be a better deal somewhere else. I really didn't like the idea that I'd have to pay more for gas, just because I didn't have the right card.
• Generic gift cards come with fees
  I had considered purchasing a portion of my budget in basic Visa or American Express gift cards to deal with some of the issues above. Unfortunately, for a $50 card, I'd have to pay a $3-$5 activation fee. I wasn't willing to spend up to 10% of my budget for the privilege of using my own money.

So, there you have it. What sounded like such a good idea at the time, in actual practice really didn't work for me.

Check out more cautionary tales at this week's special WFMW: What DOESN'T Work For Me.

Eye "R" S

I'm beginning to realize something. I spend waaaaay more time on the IRS website than any sane woman should. Yeah, yeah, that's enough out of the Peanut Gallery. You are only allowed to give me grief if you actually know what the "Peanut Gallery" is. So there! Ha!

Now, where was I ... oh, yes, sanity and the IRS. Now that all the whooping and hollering has died down here since we got that nifty little notice in the mail, I've had a chance to think clearly enough to wonder, "Gee, just how much money will that be?"

If you are also wondering, head on over to the nifty little calculator the IRS has set up. Make sure you have a copy of your 2007 tax return handy--they'll have some specific questions that you might need to look up.

Unexpected Hiatus

Sorry, folks. I haven't meant to be missing in action lately. I started writing regularly, ahead even, a week or two ago, but then my ISP started giving my trouble. It's been on the blink for about three weeks, flickering on and off at random, but this past week and a half it's been mostly off. When I have been able to get on line, I've needed to focus on the really important stuff, "Ooh, the connection is up, let's see if we have time to pay bills!" In any case, I plan to be back, so long as American Telephone & Troublesome lets me.

Note to anyone else using on-line bill pay: If you haven't already, please keep off-line and hard copy records of where to mail payments for your regular monthly bills. Next time your power goes out or your connection isn't available for several days, you'll be so glad you did.

Random Thoughts on College Education

I was about to get sucked into a totally off-topic discussion on one of the childbirth sites I visit, when I realized my thoughts would be much more appropriately shared here on my blog. The gist of the thread was: Why wouldn't you pay for your kids' education, if you could afford to?

When I first applied to colleges, I was living in Westchester County, New York. I don't know where it ranks now, but at the time, it had the second highest cost of living in the country, right after Orange County, California. Because government assistance and need-based loans were figured at the national level, rather than calculated by region, my father's income fell well above the cut off. Keep in mind, at the time, he worked for a local Christian not-for-profit organization--not the sort of place known for paying unusually high salaries.

However, even if he'd been a wealthy man, my father has told me he would not have paid for my college education. He felt it was important that I see the value of my schooling--and figured I would truly know its value if I was the one coughing up the funds every semester.

Now, I do have to add that it was understood I'd have a portion of my bill paid by academic scholarships. And, while they certainly did help, I still went into debt to pay for college. I attended a state school with in-state residency, so my costs were kept to a minimum, but I finished school with about $15,000 I needed to pay back.

I didn't find it an unreasonable burden to carry. I did have to seek out financial aid, as well as work part-time (10-15 hours per week) my entire college career. That seemed like a decent exchange to me. I did know exactly how much my education was costing me because I saw the bills coming in and wrote the checks going out.

What I also noticed was a large percentage of my friends who partied and blew off their class work didn't have to pay anything towards tuition or room and board. I felt that paying my own way made me a more serious student. I was much less likely to waste my time when it was costing me so much!

Would I do the same for my kids? I don't know. I definitely believe that students should contribute to some of their educational costs. But what if my kid wants to go to a private liberal arts school that costs $30,000 a year? Should she have to raise all that money herself?

Now that I'm married to a man who went to a private college on his own dime (or at least, his own signature on the student loan forms), I know what it's like to be in my 30's and tens of thousands of dollars in debt. For the cost of Adam's monthly loan payment, we could be driving a pretty nice new car.

So, is it worth all that? I'm not entirely sure. For now, at least, we don't have a college fund set up. What money would we be using to put into it? Maybe we should start the test-taking strategies early and make sure our daughter does really well on her PSAT. National Merit Scholarship, here we come!

Eh, maybe it can wait until she turns three.

Will Work for...$50 Grand?

I haven't really known how to say this (especially in the midst of my contest over the weekend), but Adam lost his job on Friday.

We're not entirely devastated, by this turn of events, as he was having problems with some of his coworkers and had already begun to look around for another job. But, at the same time, it's nice when one of us is bringing home a regular paycheck.

While I'm confident in the Lord's provision, I'm also a person who likes to have a plan, so this time of uncertainty is very uncomfortable for me. We have a lot of decisions on the table besides just where to find a new job.

Please keep us in your prayers, and by all means, if you know of an employment opportunity, let me know! Adam's got a ton of Customer Service and Call Center experience, as well as some management, training, and teaching (piano). Moving isn't entirely out of the question, either, so even if you're not local, feel free to suggest a job we might not otherwise hear about.

Thanks.

Works for Me: Budgeting by Paycheck

For the whole of my adult life, I have been paid either once or twice a month. When Adam and I got married, his new job paid him every two weeks. This caused undue stress in my life, since I wasn't sure how to deal with the variable paycheck dates. Sometimes the first check of the month would be on the first. Other times, not until the 14th. While some bills can be put off a few days without too much problem, I've yet to find a landlord who allows rent to be two weeks late, several months a year.

I finally figured out a workable system. Rather than simply budgeting the whole month, I took a look at the billing cycle for each bill. Those due between the 1st and 15th would be paid from the second check (of the month before). The bills due between the 16th and 31st are paid from the first check. All the rest could go into either check, as funds allowed.

Then I wrote up our income and expenses by paycheck. For example, our first paycheck of the month includes expenses for groceries, gas, household utilities, and credit card payments. The second paycheck covers rent and investments.

Twice a year, we get that bonus three-paycheck month. If you make enough money that you can cover your budget with the first two paychecks, the third can simply be savings, investment, funding for special charity projects or whatever else you like. However, for the rest of us, I've found that the third paycheck tends to budget nicely for those non-monthly expenses, such as car registration and insurance, quarterly taxes, and so forth.

For more tips, check out Rocks in my Dryer.

Works for Me: Budgeting with Gift Cards

A special thanks to my friend Dawn who inspired this idea.

Adam and I have been fighting with our budget for about as long as we've been married. The problem is, the numbers will work on paper, but in real life we find it much harder to be disciplined about how much we're spending--especially when we use our debit card.

I've tried the cash envelope method (all the cash you are budgeted to spend for groceries or gas in an envelope and when the cash is gone, you're done buying) but that really didn't work well for me. I kept borrowing and lending cash back and forth between envelopes and I never knew quite what to do with all the coins.

But then I was at dinner with Dawn earlier this week and she talked about her Starbucks card that she would reload at the beginning of every month to keep track of her coffee habit. Suddenly it occurred to me that many places have gift cards, in fact, all of my regular grocery/gas/baby/etc. stores offer gift cards. What if, instead of messing with coins and envelopes, I just went to the store at the beginning of every month and bought a gift card in the amount of my monthly budget?

I should qualify this tip with the notice that I haven't actually tried it yet, so I only think it would work in theory, but I liked the idea so much I thought I'd share now rather than a few months from now. I will definitely update in a few months with a review of how it's been going.

UPDATE: It didn't work for me! Here's the post explaining why.

For more tips and advice visit Rocks in my Dryer.