Tag Archives: budget

Paying a Fair Share a.k.a The Buffett Rule

Yesterday Congress voted on the Paying a Fair Share Act of 2012.  Just as many have predicted, it was shot down.  The President and the Democratic Party are trying to get this passed.  Basically saying that people earning more than $1 million are not paying enough taxes or at a lesser tax rate than lower-income taxpayers.  How can this be?  Well, there is a crap-ton of loopholes for one, also there is this thing called Long Term Capital Gains, which are taxed at a lower rate.  The reason for this is to encourage people to make long-term investments, therefore encouraging economic growth and stability. 

Why am I against this “Law”?  Plain and simple, this law penalizes those that are successful.    Some people have the belief that all millionaires are just trust-fund babies, ones that were just given money and never had a hard day in their life.  That statement is completely false.  Are there some that had wealth handed to them?  Yup.  Do the majority of millionaires fall into this category?  The answer would be no.  Most millionaires have worked very hard to get where they are.  They were normal people (not that they aren’t normal now), the average Joe on the street working a 9-5 like most people.  The only difference between them and the average person, is that after their 9-5 was done, they worked a couple more hours, or attended some college courses, giving up their free time, sacrificing one thing for another.  They didn’t expect anything to be handed to them, they went out and took it (not literally) by putting themselves in a situation to succeed.  This is one of the great things about the United States, everybody does have a chance to succeed.  Yah sometimes it is harder for some people, but the chance is always there, the choices just need to be made. 

A solution that I think would work:  A flat tax.  I think everybody should pay taxes.  This goes for the lowest earning individuals and also for rich peeps like Mr. Warren Buffett.  Should Mr. Buffett pay a higher tax rate because he earns more than his secretary?  I don’t think so.  I think everybody should pay the exact same rate.   Hypothetically, starting at an annual income of say $10k, everybody, and I mean everybody should pay an income tax, lets just say 15%.  That means that a person making $10k would pay $1500 in taxes for the year, and a person making $100k would pay $15k in taxes for the year.  This system, in my opinion, is fair for everybody.  The same rate is applied to all, nothing else.  No deductions for energy-efficient windows, no deductions for having a child, nothing.  This includes businesses as well.  We all know GE didn’t pay a single penny in taxes last year, which is ridiculous.  Get rid of all the loopholes, everyone lives here, so all should pay taxes.  Get rid of the IRS, because there should be no need for any refunds.  If you make $1k this week, $150 gets taken out in taxes, if you make $2k the next week, $300 gets taken out.  Simple math.   

I am not even close to earning enough money to be effected by the Buffett Rule even if it was passed.  My whole point of this post is equality.  Everybody wants equality for the most part, taxing the rich because they are successful is not equality, its class warfare.  It is discrimination against the rich.  I am definitely not rich, and I do not expect any help from the rich either (although if they wanted to throw me a couple G’s I wouldn’t be against that).   I made a choice to do what I do, to earn what I earn, and pay the bills that I agreed to pay.  I am responsible for myself and the decisions I made, nobody else is and should be.   The government sucks at money management as it is, taxing the rich to get more money isn’t going to change the governments spending habits.  How about making, and actually following, a frickin budget.

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March Spending Recap……

We kept track of all our monthly expenses for the first time ever.  It was actually pretty easy, just ask for receipts on every purchase and put em in an envelope.  Add em all up at the end of the month and see what the total is.  Our total money out this month was $3,659.  Barely below our normal monthly take-home pay although this was one of my 3 paycheck months. 

We had our normal fixed expenses like our home, camper and student loans, cell phone, cable/internet, and car insurance.  Some of our other expenses went over our budgeted amount, and also some stuff that we haven’t budgeted, like miscellaneous expenses and recreational money.  I didn’t break down exact receipts, if we bought stuff at a grocery store I put it in the food budget, just generalizing. 

Food:  $354  Pretty much spot on the budgeted amount for the month.  This doesn’t include money we spent eating out though.

Auto Gas:  $287  This would have been closer to our budgeted amount, but I pay $25/paycheck to my carpool, and unfortunately it doesn’t discriminate against 3 paycheck months.   Hopefully I will teach the wife how to drive my car soon (manual transmission) so we can save on gas.  Although it really won’t be saving too much because MX season is coming up and we will need use the SUV to pull our camper, negating the savings. 

Utilities:  $174  Includes heat, garbage and electric.  Our natgas bill comes in mid-month, so seeing that February was freezing, our heat bill was a little higher than normal.  I can’t wait until it’s summertime. 

Misc: $1,104  About 1/3rd of this is the cost of the appraisal ($414) for our home refi.  $161 of it was spent on eating out, which is something we really need to cut back on.  Not only is it unhealthy, but we could be putting that money to better use somewhere else.  Also the wifes cooking is awesome, and I would rather eat her cooking than most restaurant food.  $139 was spent skiing/snowboarding and on a new winter coat for myself.  I think I’ve had the same coat for like 10 years now, it was time for something new.  We went to the movies once this month which totaled $20, so not too bad.  I would like to go more but there isn’t really anything I want to see until the summer.  We finally gave in and bought a paper shredder, which I proceeded to overheat like 4 times in the first day we had it.  The papers were stacked pretty high.  We have our normal $25 gym membership that I never use, (the wife goes all the time) so that needs to be added to our budget in the future.  The rest is medical expenses and random purchases like dog toys and personal hygiene stuff. 

This next month we will try to limit our eating out.  Hoping to keep our discretionary spending under $500, but knowing that I need a new helmet and boots for MX that probably isn’t going to happen.  Also the wife is planning a small weekend trip with two of her friends which will cost a little bit, but it’s totally worth it.  She definitely deserves a little vacation. 

How was your spending this month?  Did you go over on your budget like I did?


Rent To Own

I was watching some tv with the wife tonight when a commercial came on.   This commercial was from a store that sells electronics, furniture and appliances.   Not to different from many stores in the same industry.  The biggest difference between this store and it’s competitors is that it “leases/rents” the items if you don’t have the money to pay for it outright, or if you don’t have a sufficient credit score to finance it. 

I don’t know about you, but if I’m going to buy something, I want to see the price while I’m shopping without having to ask anyone for it. This goes for anything. If I go to a car dealership and see one I like and there is no price sticker on it, I leave. They obviously don’t want to sell the vehicle to me so I’ll take my business elsewhere. 

I don’t have one of these stores locally anymore, it shut down about two years ago which I think is a good thing.   People probably saw how much of a scam renting to own is.   I visited this stores website, wanting to do some research to show how much the prices are jacked up, but for some reason, they don’t want to tell you what the price of an item is on the site until after you have filled out your contact info, email and only then the store calls you to tell you the price.  Screw that.  You can’t even find any of the terms of service for their lease program.  I looked up a comparable TV on one of their competitors websites.  The tv sells for roughly $700.  Since I can’t find exact prices and details on their lease agreements,  I averaged some prices from sites about renting to own.  When renting to own you should expect to pay at least double for the item versus if you were paying cash for it.  More likely you will be paying closer to 4-5x what it actually costs, this tv would probably run $2500-$3000 if you paid minimum payments for the whole lease term. What a rip-off.  If you bought the same tv from somewhere else it would cost you $700 + Tax.  

I can’t remember what blog I read it on, but I read an article on cash-advance companies and how much interest they charge.  This is basically the same idea.  They market renting to own appliances, furniture and electronics to lower earning consumers because they know they can’t finance or because they can’t pay outright cash for it.  Brilliant marketing strategy, but is ethical?  Hell no.  Making someone pay $4k for something that costs $1k is unethical.  They are in the business to make money though, which is the point of owning a business.  This won’t go away though, they will continue to market towards low wage earners until it stops working.  People have to wise up to how much money it really costs them by renting versus saving for it and buying with cash. 

This is one of the reasons why I stress research.  It doesn’t matter what you are buying, a home, tv, freezer, vehicle or anything else you can think of.  Always research it.  Look at everything in your contract, read the small print.  Is there an early payoff penalty?  What is your interest rate?  What is your total payment going to be?  Could you finance this through your local bank cheaper instead of choosing the company’s financing?  My best advice is never rent to own.  Instead of renting, save cash by cutting something in your budget.  Anything but renting to own.   Luckily I have never done this, although you could probably classify a car loan as basically the same thing if the interest rates are high enough. 

Have you ever participated in renting to own?   How was your experience and would you ever do it again?


No Time

This weekend was a busy one, mostly just doing some spring cleaning and getting the house ready for todays appraisal.  So I didn’t have much time to blog.  Hopefully the time we spent will be worth it though and our refinance gets approved. 

I’m really excited about the rest of the year.  Motocross season is coming up and I need to get some new gear.   Hopefully I will be able to work overtime to pay for those things, really just a new helmet (previous one has been through many crashes) and a new pair of boots.  I should be able to get both for under $400.  The boots I will be able to get cheaper online, but I would like to buy the helmet local, kind of important to have a good fit.  It can get expensive but I love it and the wife is my biggest fan. 

The title of the post says “No Time”, which is something I always feel I am lacking.  It doesn’t matter what it is, I still always wish there was more time.  I am horrible at managing my time (the wife reminds me of this a lot), I need to get better at this and kind of start “budgeting” my time.  Allocating a set number of minutes/hours to what I do.  One thing I def have to start budgeting time towards is working out.  Motocross is physically intense and I am not even close to being in shape.  I tell myself every year that I’m going to get into MX shape, but I never do.  Maybe this will be the year.

Do you manage your time well?  Or are you like me and need to start budgeting time?


Feb Update: Budget & Net Worth(less)

Here is our update for the end of Feb.  I added the monthly column this time and got rid of a couple of things.  It’s really a work in progress.  But I’m pretty excited about this months gains.  I’m not going to explain our normal budget part cuz it hasn’t really changed, but if you want to read the explanations of our budget click here.  Also to clarify, the section that says Beginning of 2011, that is actually the End of Jan 2012.  It will be fixed on the next update.

Savings:  We totally rocked our savings goals for the month of Feb.  Increasing it by $2549.99.  Wish we could do this every month.  The wife did awesome with grocery shopping and kept our credit card bill around $600 (groceries,gas, misc).

Investments:  We had a pretty good month for our 401’s.  It was about half contributions and half gains.  For the month total we had a total gain of $2,594.34.  I’m pretty happy about this number also.  Although that could have been a heck of a lot more if I would have held all of one of my trades. (I kept free shares from previous profits and finally sold the free shares for a gain of over 250%)

Debt Payments:  This was another screwup of my budget, our mortgage balance that I posted last time was the actual balance at the end of this month.  Our payment comes out the 1st of every month so next month will see a different number.  Kinda sad to see it the same.  We paid just our normal payments on the camper and student loans because we are waiting for our refinance to get finished. Once it is completed, those numbers should be going down considerably every month due to our planned Debt Snowball.   For the month our debt was only decreased by $235.83.  Not a good number in my book, I guess it’s better than an increase though. Oh well.

Total Assets Increase:  $5,144.33

Total Debt Decrease:     $235.83

Net Worth End of Jan:   -$83,715.20

Net Worth End of Feb:   -$78,335

Total Increase in Net Worth: $5,380

All in all I am pretty happy with this month, although I know I could have done better (half of the gains are from investments), it is still a step in the right direction.  Next month should be better due to one of my two yearly 3 paycheck months and our taxes being done.  Also during March, we are actually going to track outgoing money  (didn’t do this in Feb, oops) so we have a better understanding on where our budget needs to be.


Keeping Track

I haven’t been around the blogosphere for very long, be it reading or writing.  I am also new to the whole budget thing, and therefore will make some mistakes along the way.  I normally read about 10 different blogs a day, as I read the latest post at Give Me Back My Five Bucks I realized I haven’t kept track of any of our expenditures this past month.  Although we didn’t come up with our budget until about two weeks ago, it probably would have been a good idea to keep track even for the partial month.  The real point of the budget is to track your expenses and try not to go over how much you budgeted for a certain item/expense.   I will chalk this up to being new to budgets and will try to keep a better record in the future.

In Making Sense of Cents latest article, She writes about monthly goals.  She has some sweet monthly goals, even small ones that if added up can make a big difference overall to either your savings or debt.  I think this is something I will do in the future, something like work a couple extra days or try to find something in our budget to cut back on.

Do you keep track of all outgoing money no matter what it is?  Do you have weekly, monthly or yearly goals and if so how often do you analyze these goals and change them?


Our First Budget

To a point, this is our first budget.  In reality, we kind of had a budget before just nothing was written on paper.  While both of us see the importance of a budget (its nice to see where the money is actually going) we both are also pretty responsible and feel like we don’t need a piece of paper telling us where to put money.   Here is our budget, I will explain it and why some things are missing. 

click to enlarge

 After Tax Income: Pretty straight forward.  Both the wife and I get paid bi-weekly.  We took the average of her paycheck, and the average of my paycheck (from a couple raises ago) and this was the total.  The reason why I averaged my paycheck from a couple raises ago is because on our prior non-budget budget, we were putting the extra on the house payment or into savings.  Essentially acting like I never had gotten the raise.  We also do not count any overtime that either of us work, because we always use it to either pay down debt or to do something fun. 

Investments: I left this one blank because the totals change quite a bit.  Between what I put in and the match I get it equals 10% of my income.  The wifes equals 20% of her income.  The total number of our retirement accounts is in the END of 2011 column.  After our debt is gone (other than the home) I plan on contributing more, especially to my Roth IRA that I haven’t funded yet. 

Actual Take Home Income: Self explanatory.

Expenses:

The home mortgage.  This is something that we are working on changing with a refinance.  Hopefully this will be done for the next months budget and be at $760 instead of $1,033.  Part of the raise that I didn’t list in our take home pay goes towards paying an extra $100 on this.  So the real number is $1,133. 

The camper payment is one of our loans that we have a goal of paying off this year.  You can see the total owed on it in the Debt section.

Student Loan: This is what is left from the wifes student loans, this is another one of our goals to pay off this year.  Total is in the Debt section.  I luckily had no student loans due to my enlistment in the Army. 

Utilities include electric and our natgas payment.  This is about our average total bill for both

Car Insurance, Cell phones, Cable and Her car are all expenses that do not change at all, pretty much the same amount every month.  I should explain that she does not actually have a car payment.  She paid that off over a year ago and just continues to pay it to a separate part of her savings account for when we need to buy another vehicle.

Auto/gas changes every month, but this is the average.  This bill might be lower during the spring/summer/fall due to her driving my car instead of her gas guzzling SUV.  I only have to drive a mile everyday to get to my carpool, so it makes sense for her to drive the better gas mileage one when the roads are good.  I would rather pay the extra money in the winter and have her drive the 4×4. 

Totals: Our total Income-expenses leaves us with an extra $1,165 every month.  Of course this number changes because we do not budget for random stuff like eating out or going on dates.  The realistic number should be around $1k. 

End of 2011: This is our balances on Jan 1st, 2012. 

End of 2012 Goals: I really didn’t know what to put here.  I know we want about a $10k emergency fund, but we are going to pay off the camper and student loans first before we fully fund it.  Also after our home is refinanced we are going to be moving to one bank account (we are both on each others accounts already) but we would like to have everything in one so its easier to track. 

Assets and Debts: Both of these are self-explanatory. 

We chose to add a section here that includes our net worth.  As you can see, it is in the red right now.  $88,715.20 to be exact.  Our end of the year goal is to get this down to $55k or better.  I am hoping with our refinance and working some extra overtime we can blow this goal out of the water.  Why did we choose $55k, I have no idea.  It just seemed like a cool number to me at the time.  I will be updating this budget about once a month to track our progress of our goals.

Are our goals pretty reasonable and realistic?  Is there anything that you think I am missing on our budget that I need to add?  Is your budget just a rough guideline our do you stick to it religiously?

SIDE NOTE: Special thanks goes out to Ninja over at Punch Debt In The Face for hooking me up with the budget template.