Finally Starting the Game....made some past mistakes, trying to get on track

[lemmyk]

Thanks for the info.

I do understand what CD's are, and my bank does offer them. But they also offer 1-5 year IRA's. That to me doesn't make sense... What happens when the term is up? Is there a withdrawl penalty?

[aida2003]

Thanks for the info.

I do understand what CD's are, and my bank does offer them. But they also offer 1-5 year IRA's. That to me doesn't make sense... What happens when the term is up? Is there a withdrawl penalty?

The difference is that IRA CD's are tax advantaged (you won't pay taxes until withdrawal in your retirement or you won't pay taxes at all if you set up as a RothIRA CD).
If it's an IRA CD, it follows the same rules as if you invested with a mutual fund family. The total contribution across all IRA's cannot exceed $4k for 2007 and $5k for 2008. And you cannot use that money until you're 59.5 years old.
If let's say you invest in a 2-year IRA CD, you cannot withdraw it for 2 years or you'll face interest penalties from the bank (like a regular CD). If you wanted to take that money and invest in a mutual fund instead, you'd have to wait until 2years are over (unless you're OK to pay interest penalty) and do a direct roll-over to the fund family. You cannot just take it and spend it or put in a non-IRA designated account. If you do, the IRS will come after your with penalties and taxes because you used it before the age of 59.5.

Hope it helps.

[autoxer]

I do understand what CD's are, and my bank does offer them. But they also offer 1-5 year IRA's. That to me doesn't make sense... What happens when the term is up? Is there a withdrawl penalty?

When the term is up, you roll it into another CD. There would be a penalty on the earnings if you withdraw it before you turn 59 1/2 years old.

[amberbamber]

Well, $600 is a little misleading, let me explain. My 1 year old goes through a pack of diapers and wipes a week. We also buy our detergents, soaps, TP, razors, light bulbs, etc... from the store. So it's not just "food" but also household goods too. It also includes food for lunches (I bring almost every day) so that $600 basically is for our total monthly food/household needs. We really don't eat out much anymore, maybe once or twice a month to a local place with the kids for pizza or something.

Have you heard of Angel Food Ministries? That might be something to look up in your area also.

I also buy a ton of produce. Combined with coupons you can get things really cheap. This might be a good hobby for you and your wife to take up. I make it a game- to see if I can beat each week's store receipt.

I have 2 in dipes right now. I make my own wipes (from washclothes) and we use cloth dipes. VERY inexpensive and helps the environment. Only adds an extra load of laundry a week. Not sure if your child is in daycare or not, but would be worth looking into. Also if you plan on having anymore children in the future you could definitely use the cloth dipes for future children, and/or sell them on ebay or Craigslist when you're finished using them.

We also have a vegetable garden in the spring/summer months. HELPS tremendously with the produce bill! There are local places around that I'm sure you could find where you pay a one time small fee to use their land for your garden. For example our local park system: Reedy Creek Park where you rent a section for your own garden. It's like a co-op of sorts where everyone takes care of everyone! Might be something to look into also!

Best of luck- I'm sure you could trim some of that down with just some very little time consuming planning sessions! And it could be fun as a family to do the garden!

[LivingAlmostLarge]

No angelfood in Boston area, only SERVE. And the food is okay but not what I would pick to eat. Problem with food is its expensive! It's gotten more about $4/gallon of milk in the area.

Anyway do you still have a car loan? Did I read that right?

Also do you have a 6 months of expenses in a taxable acoount? I would definitely put in 4% minimally into a 401k to get the full match, and then focus instead of college savings, all your extra money into getting 6 months of expenses in a taxable account.

We invest our EF (yeah not everyone does), but we don't have kids, and we have a lot of cash on hand to pay DH's ginormous tuition bills.