A new plan?

[disneysteve]

We don't really spend any money. When we moved in, we knew it would be a tough transition so we stocked up on our household supplies.

I understand what you're saying, but I don't think you're looking at this quite right. Let's say you used 4 rolls of toilet paper last month. Whether you bought them last month or bought them 6 months ago, they still cost money. When you calculate what your living expenses were for the month of January, you need to include the cost of those 4 rolls regardless of when you purchased them or who paid for them. Just because you haven't spent any money in the past 2 weeks doesn't mean you haven't had any expenses. It just means all of your expenses were covered by previous spending. Does that make sense? In order to project what your expenses will be for March, for example, you need to include everything that will be used, even if you already have it in the closet. At some point, things you stocked up on will be gone and you'll need to replenish them. You need to have some idea what those costs will be so you can plan for them in your budget.

[wincrasher]

Steve, you seem like a thoughful guy. Please point out the obvious.

$9 an hour probably ends up being about $1,000 a month after taxes.

How would this cover just the basic needs of a young family? Savings and debt reduction are out of the question. This is not just a rough patch, I don't see how this gets better without something really "outside the box"

Car insurance? Probably $200 a month easy.
Food/week? Most likely $100 a week.
School expenses?
Baby needs? Doctor visits? Vitamins, etc?
Car expenses/repairs?
Clothing?

This just doesn't work. How can any of you honestly suggest "living below your means" and saving 20% of income?

[Johnstone]

You've made poor choices and guess who's suffering for it? Your child.

I'm amazed that you've been able to make this assessment based on a few threads on a message board. You must have a strong affinity for living vicariously if you're able to tell her child is suffering. I'm just taking a guess here, but I don't think the OP was interested in moral indignation or moral evaluations of her life choices.

And yes, I'd put up with a shady job if it meant providing for my family. I'd certainly do that before depending on the charity of others.

Again, you make a sweeping generalization and assume your judgment call must be true for any other person. Given the replies I've seen in this thread, your opinion is far from universal. While your ideas and suggestions are constructive, the manner in which you present them is entirely subjective and condescending.

[skylovessea]

Steve, you seem like a thoughful guy. Please point out the obvious.

$9 an hour probably ends up being about $1,000 a month after taxes.

How would this cover just the basic needs of a young family? Savings and debt reduction are out of the question. This is not just a rough patch, I don't see how this gets better without something really "outside the box"

Car insurance? Probably $200 a month easy.
Food/week? Most likely $100 a week.
School expenses?
Baby needs? Doctor visits? Vitamins, etc?
Car expenses/repairs?
Clothing?

This just doesn't work. How can any of you honestly suggest "living below your means" and saving 20% of income?

I've already cleared these things up.

Car insurance - paid by DHs parents.
Food - food stamps
School - financial aid
Baby needs - help from friends/family
Doctor - health department
Car - saved money as needed
Clothing - we live with what we have, Brayden gets clothes from his grandparents

I don't know how many times I need to explain this.

The job DH has now is temporary until he can find something that pays better. He won't have this job forever. Again: rough patch.

When we have better income, we will be able to save more and reduce debt. That's how it works.

[skylovessea]

Johnstone, all I can say is thank you.

[skylovessea]

Okay guys, everything else aside, I need some help amending my taxes. I already filed them via snail mail, and I am in the process of doing the TurboTax freedom edition and finding that I messed up. I'm REALLY embarrassed to say that (and I'm hoping to GOD that wincrasher doesn't interject his opinion). I really need your help. Should I start a new post for this specific topic?

[skylovessea]

I understand what you're saying, but I don't think you're looking at this quite right. Let's say you used 4 rolls of toilet paper last month. Whether you bought them last month or bought them 6 months ago, they still cost money. When you calculate what your living expenses were for the month of January, you need to include the cost of those 4 rolls regardless of when you purchased them or who paid for them. Just because you haven't spent any money in the past 2 weeks doesn't mean you haven't had any expenses. It just means all of your expenses were covered by previous spending. Does that make sense? In order to project what your expenses will be for March, for example, you need to include everything that will be used, even if you already have it in the closet. At some point, things you stocked up on will be gone and you'll need to replenish them. You need to have some idea what those costs will be so you can plan for them in your budget.

Oh okay, I understand what you're saying. When I get my TMM book back (I left it in a friend's car) I will repost my expenses more thoroughly. Sorry about that.

[disneysteve]

I've already cleared these things up.

I don't know how many times I need to explain this.

Some of those details were posted in other threads so folks only reading this one (or not remember the others - like me) need to see it all spelled out in one place to keep track of everything. Sorry for asking about stuff that you've already explained elsewhere.

Will his new job affect any of your aid eligibility - food stamps, health care, financial aid, etc.?

Okay guys, everything else aside, I need some help amending my taxes. I already filed them via snail mail, and I am in the process of doing the TurboTax freedom edition and finding that I messed up. I'm REALLY embarrassed to say that (and I'm hoping to GOD that wincrasher doesn't interject his opinion). I really need your help. Should I start a new post for this specific topic?

A new thread would probably be a good idea. I know that you can file an amended return but I have no idea how you go about doing so. I'm sure others can explain it.

[wincrasher]

Sorry, hoping doesn't help.

But really, with any of the online services, you can do an ammended return. There is no problem with the IRS filing one either.

You may be able to do income averaging over several years if you've had big swings in income - don't know if it applies to you - you can seach for that on the turbotax or irs sites.

[skylovessea]

Some of those details were posted in other threads so folks only reading this one (or not remember the others - like me) need to see it all spelled out in one place to keep track of everything. Sorry for asking about stuff that you've already explained elsewhere.

Will his new job affect any of your aid eligibility - food stamps, health care, financial aid, etc.?

A new thread would probably be a good idea. I know that you can file an amended return but I have no idea how you go about doing so. I'm sure others can explain it.

I was just informing wincrasher that I had covered all of that in this thread. (I'm not too happy with him right now, so it may have sounded angry--sorry.)

It will affect our food stamps a little but not too much. We have already prepared ourselves for that.

I figured out how to fix it. The TurboTax Freedom Edition allows you to do it directly through the program. That's what I'm doing right now. I guess I just didn't understand the worksheets in the 1040 booklet as much as I thought. It got pretty confusing and I thought I had it right, but I didn't. Thank God you guys brought it up!

[kork13]

I guess I just didn't understand the worksheets in the 1040 booklet as much as I thought. It got pretty confusing and I thought I had it right, but I didn't.

I TOTALLY agree with you there... Sometimes I'd bet that the IRS has a deal with accountants to make everything so confusing that most people either screw it up or give up on it, and in either case, go calling to the accountant!

But seriously, those forms, worksheets, references, addendums, schedules, and whatever else are all confusing to the point of insanity. Without having someone available to help me do my taxes or a computer program to help sort through everything, I'd be completely hosed.

[skylovessea]

I TOTALLY agree with you there... Sometimes I'd bet that the IRS has a deal with accountants to make everything so confusing that most people either screw it up or give up on it, and in either case, go calling to the accountant!

But seriously, those forms, worksheets, references, addendums, schedules, and whatever else are all confusing to the point of insanity. Without having someone available to help me do my taxes or a computer program to help sort through everything, I'd be completely hosed.

Haha no kidding.

[jIM_Ohio]

nicole-

"as needed" is not a way to budget.

A budget shows the same expenses every month for 6-12 months. It is not the same thing as balancing a checkbook and making sure you have the money to make ends meet.

[scfr]

Car - saved money as needed

Aha! This might be why there is a communication gap between you and some of the members on this board.

You see ... "Car" is indeed a budget/expense item. It does not matter whether you have saved money for it or whether you pay for it with your credit card, ANY money spent on your car for oil changes, new tires, repairs, etc. is a car expense and it needs to be budgeted for.

Just for example, let's say you have kept track of all the money you spent on your car except for insurance and gas (your car expenses) for 3 years and when you add it all up you see that you spent:
- $250 for new tires
- $15 for new wiper blades
- $180 for 9 oil changes (3 per year)
- $250 for repairs
- $18 for 18 times (every 2 months) vaccuming it out at $1 a pop
- $2 for car washing soap
- $90 for the annual registrations ($30 per year)
- $60 for state inspections ($20 per year)

When you add it up, you'd see that you spent $815 over 3 years. That means your monthly car expenses were $24. (Please note that I included even the small stuff like soap and vacuuming ... It all adds up, truly.)

When you make your budget, which is you deciding in advance how you are going to allocate your income, you would look at what you spent in the past and estimate what you will be spending in the future. Let's say your car is getting older, and you know you're going to be facing higher repair bills. You might decide $24 per month isn't going to cut it so you budget $30 per month. Then, you might decide that it would be a good idea to add a AAA membership in case your car breaks down and you need a tow; so, you might decide to budget $35 per month for car expenses. After a few years (when you have more income coming in), you may decide that you want to be prepared to handle anything life throws your way AND you want to splurge on the $3 car soap ... then, you might decide to budget $50 per month for car expenses, which you think is more than you need but you decide to budget that much "just in case."

That doesn't mean you will actually spend $30 (or $35 or $50) each month on car expenses. Many months you'll spend nothing, and some months you'll spend hundreds. But if you have planned for those expenses in your budget and left the money untouched in your bank account (or in your safe or in your envelopes or wherever you decide to keep it), then it will be there when you need it.

And the same process I described above applies to anything and everything you might spend money on, now and in the future. It doesn't matter whether it's a pack of gum or a Corvette. To really get a handle on your finances, it's extremely important to see where every last penny is going and then come up with a spending plan for every last penny that is coming in. That's how you get started on the road to the things you say you want in life. You'll find that budgeting is a never-ending process. As life's circumstances and your goals change, you'll need to re-do it.

Eventually, hopefully, the spending plan will include savings for long-term goals such as a bigger car, perhaps a house, college for your child, and retirement. Those are the types of things you are dreaming about, right? And they are all admirable goals by the way. But they are going to take years and years of planning, hard work and patience. As one who had to learn how to track expenses and budget, I will be honest and say that it is not easy. I found it quite challenging. But it was worth it.

As they say, "A journey of a thousand miles begins with a single step."
So ... if you haven't done it already ... get that little notebook and start carrying it with you everywhere (get one for your husband too) and start recording every last penny that you spend, no matter where the money is coming from!

[minnie1928]

If you start a new post regarding your taxes, please post the link to it here.

Once you've completed your taxes using Turbo Tax, print it out and compare each line item to what your original tax return said. Mark the lines that are different so that you can see them easily. Then go to: Tax Topics - Topic 308 Amended Returns. There you will find the form that you need to complete in order to amend your original return. It's pretty easy, basically there are 3 columns to fill out: original figure used, corrected figure, difference between the two.

I did this last year for my parents taxes and it was painless. I was pleasantly surprised how easy it was to amend a return.