Trying to dig my way out

[bettie]

This is not true. We have 9 withholding allowances, but only 4 exemptions on our tax return and we always get a refund. There is a withholding calculator at the irs website. There is also one. You likely can claim more than 3. Once you know the number, you each need to fill out a new W4 with your employer.

Thanks for the links! I plan to check them out.

Right now DH claims 2 and I claim 1, but I think I should be claiming 3 since I make more, and DH should claim 0. Does that sound right?

[creditcardfree]

Thanks for the links! I plan to check them out.

Right now DH claims 2 and I claim 1, but I think I should be claiming 3 since I make more, and DH should claim 0. Does that sound right?

Generally, the person earning more does claim more allowances. The irs calculator takes your entire family picture into account and specifies how much each wage earner should claim. Use this last years tax return and your current paystubs to help with some of the questions.

The actual W4 form walks you through exactly how many to claim. It is also on the IRS website. I remember that filling out the back of the form is what helped me figure out we needed to claim 9 allowances.

[creditcardfree]

Trying to think of more stuff to sell on Amazon. It's kind of addictive. I've had 2 more books sell last night!

You could also sell things locally using craigslist.org. It's free, but be beware of some scam emails. Make sure the person meets you in person to complete the sale in cash. I've had good luck with ebay as well, but there are more fees involved. Ebay is also more time consuming!

[snshijuptr]

You mentioned looking into teaching, but as an Education researcher and wife of an Los Angeles teacherm I would reccomend against it for now. Wait at least another year. Right now no one in So Cal is hiring.

[jIM_Ohio]

Sorry, that post was getting long and the baby started to cry, so I decided to post it and return to fill in the gaps of info.

I'm still trying to work out the kinks in our monthly budget, but here's what I have

Rent 885.23
Utilities 120 (cable/internet/water/power)
Cell Phones 50
Transportation 100
Student Loans 70
Grocery 350-400
Household 50
Laundry 36
Diapers 75
Entertainment 10 (netflix)
Credit Cards 800
savings 25

Total $2,625

I work as a waitress and my husband is currently underemployed working as a barista. Our incomes vary based on how many hours we get and the seasons. But last year I averaged about $2,000 a month. My huband currently brings home $660/month but he is underemployeed and will be looking for a new job with more hours and hopefully better pay. But as I said, my income varies. Some months I made $1800, but during the summer months it was closer to $2500. Also I was pregnant for a greater part of last year. Not sure how that will change my income this year, though.

I see $2600 of expenses and maybe $2000 of net income?

Here are my suggestions:
1) Find a way to use your degree- for example teaching elementary school or high school. The ROI here is about 50% increase in pay ($2000/mo to $3000/mo is my guess). That one issue alone could be the deciding factor on making this work.

2) Rent. I do not know where you live. I rented for less than that in Washington DC making more than you make now. I rented for less than that in Cincinnati making more than you make now. However if you are in a different area, changing rent might be tough. If you move further away can you shift costs from rent to transportation?

3) $800/mo to credit cards... this is almost 50% of net pay. When will this pay off the credit cards? Can you get a new card, consolidate the bills, and lower the rate?


If you focus on #1 and #3, I think you can turn this around fast.

[jpg7n16]

Oh yeah, we'll definitely be shooting for the 5K+ mark in the future! I'm just a bit stuck on the short term and worried about that for the time being, but I see what you're saying. Long term plans, once the debt is paid off (Credit Card debt, at least, and maybe a good chunk of the student loans) we intend to throw the extra money that we were putting towards repayment into an account to save up for 6 months living expenses. Once we get there we plan to funnel the extra money into a car fund and start looking at investing for retirement and a couple of college funds. I'm hoping that it takes us under 5 years to get all of these things accomplished. Wish us luck!

Also, as far as the withholding--does anyone have advice about that? I just took a look at DH's paystub and he has 2 allowances. I think I claim 1. I have no idea what either of those numbers mean or how we arrived at them--or what we SHOULD be claiming now in order to keep more of our cash every month. Anyone know about that and have advice for us?

Good luck with your goals!!

And for the calculator - since apparently I can't post links yet (too soon on this site hah)

Google: w-4 calculator

The 1st result is from the IRS website. Open it. Click "continue to the withholding calculator" at the bottom of the page. Enter all the info it asks for, and it should give you a good withholdings number to use.

Hope this helps!

[HappyCamperKitteh]

The best thing ANYONE can do is avoid loans at all cost. Unfortunately, I couldn't follow that advice because I wanted to go to college. Bah. . . .so yeah, my input is useless. If you don't go to school, don't, by any means, DON'T take out loans.

[Adria.John]

Hey bettie,

Why dont you start some home business to lift your pay abit. I think you can start looking for some online jobs or something that can fetch you some money?

[bettie]

Well I'm headed back to work next week, and my income is variable because I make tips, so we'll see. I wouldn't even have a clue what to do as far as starting a home business or getting an online job for extra cash. What do you mean by that?

[Adria.John]

Well, anything which can fetch money is good. If you are starting your job from next week, its great and i hope you will recover from your setbacks soon.

Online business is also good, especially part time, start building blogs in your free time and after they become popular sell them off.

[bettie]

Quick update:

We've been working really hard to pay off the dabt. I went back to work and did lunch shifts while my husband found a better-paying job as a night-time valet. We saved money on daycare by working opposite shifts, and managed to get our credit card debt down from $18,700 to just under $6,700 in less than a year. We have about $1,500 in an Emergency Fund.

Well, this week I lost my job! We were so close to being out of credit card debt, and now we've had to hit the breaks a bit. It's frustrating, but I think we can still manage to get rid of the rest of the debt by the end of this year. I've had my student loans on Income Repayment Plan and am planning to apply for deferment (although we plan to continue paying enough to cover the interest on the unsubsidized Staford loans that I have.)

I'm kind of reeling at the loss of my job (I brought in the most money, so losing my job is a big change in our income) but I'm applying for unemployment benefits and thinking of using this time to move towards a new career, something using my literature degree.

We've been living on a budget the entire 2 years we have been married, but now it's going to be a bit tighter. So I'm back on here, looking for money-saving tips again and trying to figure out how to trim the budget.

[LivingAlmostLarge]

Good luck! And congrats on paying off debt.

[carolan]

Don't know what your shopping habits are but I found that going to the store with a list and only buying what's on the list helps. I also don't buy anything unless I really need it. No new clothes unless I give old ones away...no new furniture/appliances unless the old stuff is broken...Also, see what you can do to reduce your phone bill, your internet bill, your television bill as you might not really need all those features. You can get them back later when you have more income. Shop around and get prices before you buy. Buy second hand stuff, there is some really good stuff out there for really good prices.

[carolan]

Don't know what your shopping habits are but I found that going to the store with a list and only buying what's on the list helps. I also don't buy anything unless I really need it. No new clothes unless I give old ones away; no new furniture/appliances unless the old stuff is broken. Also, see what you can do to reduce your phone bill, your internet bill, your television bill as you might not really need all those features. You can get them back later when you have more income. Shop around and get prices before you buy. Buy second hand stuff, there is some really good stuff out there for really good prices.

[Frugal]

In my opinion, $50 for cell phones per month, and $70 for student loans is pretty good. They say the income-dependent student loan repayment option is always the best for people in a lot of debt, or having trouble meeting their expenses. I personally have never used it, because I tried to pay off my student loans as aggressively as possible, by paying down more principal, even right now when they are in deferment. It helps if you can get a deferment during times of unemployment and financial hardship.

$50 for even ONE cell phone is excellent. The lowest we (my spouse and I) can get our monthly cell phone bill down with Verizon is $140. OUCH! It is one of those things that is very difficult to lower, esp. if you need the access a smart phone offers remotely.

Also, $70 for student loans seems pretty reasonable to me, but I know that that depends on the total amount you know.

I am not a financial professional, these are just my thoughts and opinions! Hope that helps. It can be hard when one spouse was out of work for a period of time, I feel for you...the original poster ...