Tuesday, March 04, 2008

Money, money, money, money

It's tax season and we're getting a pretty good size refund this year. Both of us were working most of last year, and matt was going to school and was able to get a school credit of some sort (I'm not sure what it was, my mom did it for us--thanks!)

The only problem we have though is when we apply for school loans and grants for this year. They ask us how much money we have in our bank accounts and then give us financial aid accordingly. I won't mail in our tax forms until Matt applies for aid, because once those checks get deposited, they're going to say to us "what? You have all the money just sitting there? Well, we think you should give it to us right now, and live paycheck to paycheck again" I don't like the idea of that.

We're trying to figure out what to do with the money. I'd really, REALLY like to just save it because I hate living paycheck to paycheck. I like having the money there for emergencies, so we don't have to use a credit card. I like the safety cushion it gives us. But when we did that last year we ended up giving it all to the school (and then some! we had to borrow from others to cover what they told us to pay) so I'm not doing that again.

Here's what we're currently thinking of doing. I don't like mentioning amounts because I think that's one of those things that shouldn't be discussed with just anyone (money, politics, and religion on are my list--not that you all are 'just anyone' but it's an impersonal situation!).
First off, we're paying off all our credit cards. Which isn't that much thankfully.
second, we're putting a large chunk towards our car payment, paying about a 1/3 of the amount left owing.
Third, we're each giving ourselves some to spend on what we'd like. Matt's going to fix up his computer. . .again. . .we just did it last year, but it needs to go faster and have better graphics. . .again. I'm going to get a kitchenaid mixer so I can bake more. The idea of making bread by hand just scares me! although I do have a bread maker. . .I should probably use that. At least I won't have to mix cookies by hand anymore!
fourth: put a little bit in savings and hope the school doesn't take it from us! :)

now we have the remainder. . .and here is where I'm torn on what to do with it. I have 2 options that are both really good I think.
Option one: Build up our food storage. We could probably get a 3 month supply which would be really good since we live paycheck to paycheck we could use that for those times when the paycheck is really small or something comes up.
Option two: put the remainder in my IRA account. We don't have to report that when we apply for financial aid, but we can take it out without a penalty for a first time home purchase. I thought if we put most of our tax return into that account each year, by the time Matt's done with school and found stable employment somewhere. . .who knows where. . .we'll have enough money for a down payment on a house! yay!!

so those are our plans for the tax refund. And we still have the economic stimulus coming in may to us. Matt wants to buy a new tv so he can play his games in HD. We'll see.

I do hate though how money has such a pull over us. I wouldn't object to putting it all in our IRA because I don't see it, and I forget about it which is a good thing to help us save it. That's our plan though. . .we'll see what really happens!


  1. We liked our tax refund this year, too. :) Having a baby sure did help :) Although, could you could Katryn this year?

  2. ING has fantastic interest rates, if you want to have a bit of a buffer without being slaughtered by inflation.

  3. I suggest opening a credit union account for Katryn (I only say credit union because my dad works at Deseret First, it's great!) just put like $50 to start....we did that with both of our boys, just put a little bit in on b-days and each tax return. It builds up with interest and gives them a good start on college or mission :)

  4. I feel the same way! I wish it was something that none of us ever had to worry about.

  5. My sister just had a similar problem. She and her husband have both been working full time for a year, they had some CDs that reached maturity, they got money from the in-laws for graduation, and they got a tax refund. All of these things are great unless you are going to grad school the next year and want to apply for financial aid. The system is totally set up to hurt you :) If you have money they want you to spend it all that year so that you can be living pay check to pay check like everyone else. So you are constantly having to rebuild savings. And you need savings. Jason has finished five years of his MD/Phd and after five years we are always running into occasions when we need big chunks of savings. First we needed a huge chunk to put down on our condo. Then we needed to buy a new computer, and then another. Then we had two kids while in school. Then my appendix burst. We went on a trip to Jordan. Jason is going again this year. Plus there are the every year huge things like health insurance, books, and car insurance. You really need all the extra savings you can build and keep but the grant system does not reward savers. My sister bought a mini van (there car was going to die while in school), put extra money in her RothIRA, and is opening a savings account for her daughter. Other people I know pay off their rent for months, put extra money toward their utilities, and if they have car payments pay them off. Anyway good luck! I do not envy the choices you have to make this month :)

  6. Some suggestions, buy silver coins. The value will increase and when you need the money you can sell them, usually for more than you bought them for. Food storage would be good but is a HUGE pain to move around if you move a lot, even once a year.