Thursday, March 25, 2010

Only so much to go around

Tonight, I've been confronting the realities of how a nice tax refund really can disappear without even trying.

When we did our taxes this year, we got a very hefty sum back in a refund - I won't say how much because my Midwestern sensibilities won't permit it - but let's just say that it was several thousand dollars. This is due almost entirely to the fact that I over-withhold from my paycheck like nobody's business. This stems from the first year that both Heidi and I were working and we both claimed each other on our W2s and we ended up owing several thousand dollars. Since I don't desire a repeat of that scenario, I have gone against the advice of many friends who said that I shouldn't let the government use my money for free for a year when I could be investing it and making money off of it. That's all fine and dandy but it would require me to actually invest it or save it versus blowing it on iTunes or something equally frivolous. I don't trust myself enough to do that and, honestly, I kind of like that big check coming to me in spring when we're trying to recover from Christmas.

We went into this tax season knowing full well that we were getting all the gutters replaced on the house in the spring. As Heidi is fond of saying - if we weren't already getting new gutters, after this winter, we would be. There were icicles BEHIND the gutters. We're actually doing a pretty significant upgrade by getting LeafGuard, which will come in handy especially because in our heavily treed neighborhood, I get up on a ladder and clean the gutters out at least 3 times a year. They come next Thursday to install it. I, of course, am right on schedule and have completely freaked myself out by reading some of the complaints on the web. I'm comforting myself with the fact that my neighbor has LeafGuard and likes them and at any rate, it's too late to worry about it now.

Anyway, we never planned on paying for all of it outright. Instead, we decided to pay the lion's share of it out of the tax refund and then finance the last little bit. Well, I was filling out the financing forms tonight and something makes me nervous about it, even though the financing is through WellsFargo and they already own our soul. A part of me wants to just pay for the whole shooting match, using the money I had set aside for my iMac just so I don't have to worry about payments, no matter how manageable they might be. Doing that puts off my iMac for quite some time, but it would probably be worth it for the peace of mind it would bring.

There was also the matter of the completely unexpected surgery that our cat Mia had to have to remove a malignant sarcoma from her back. Those of you without pets would scoff at the amount we spent on an animal (it was less than a thousand), but that's what you do when you're a pet owner. She is home now and hopefully cancer-free, although there's no guarantee the tumor won't grow back. We kind of debated the point of surgery in a 16 year old cat, but the consensus was that removing the tumor was worth doing once. If it buys her even another year, it was worth it because without it, she had a life expectancy of months and at the rate I saw that tumor grow, I would be willing to bet it would have been weeks. So there went some more of it.

We also gave into Apple's PR machine and pre-ordered the iPad which comes out on April 3rd. Heidi actually could use this professionally, and it's really the eReader that she wants plus it's something we can all use and enjoy, so there you go. Even when you're dirt poor, you still have to have your luxuries. And the iPad definitely falls into the "luxury" category. That's where I think the Dave Ramsey plan falls apart. Nothing would set us up for failure financially more than a "You can eat nothing but rice and beans for the next 8 years. You can take no vacations. You can never splurge on yourself." approach. Eventually, we'd just rebel against it and that would be that.

So who knows what we'll do. I just know that it sure is easy to spend money. But the good thing is that we are not charging any of this, which is really a shift for us. For so many years, I just figured that the money would be there. And while we're far from destitute, we're also in significant debt. Some of it is through no fault of our own and some of it, yeah, we made some bad decisions. In years past, I would have just bought my iMac knowing that the money from the tax refund would be there to cover it. But when I decided to do this, I decided to do it differently and not purchase it until I had the cash in hand. What ultimately pushed me to that decision is that I don't want the experience of a new computer to be marred by anxiety about whether or not I had the money to buy it. I would prefer most major purchases to be done like this from now on, but I'm also not so naive as to think I'll never charge anything ever again. Sadly, you really do still need a credit card.

I don't know what the point of this post is. I'm home alone tonight and I'm feeling kind of restless. Perhaps this was my attempt to turn that restlessness into something with purpose rather than letting it turn into anxiety that goes nowhere. It pretty much worked.


Matt said...

Good post, I enjoyed it. The Ramsey plan always reminded me of this skit:

The comedy works because it's such a rudimentary concept that American's don't always readily grasp.

When Anne and I worked the plan, we built in rewards for ourselves to help us reset mentally. Modest rewards, but they still helped.

Kudos to you for saving for things rather than charging and crossing your fingers!

Dan said...

Yeah, the SNL skit is funny because it really is true. It's easy to pin financial woes on things that "happen" but there's I would bet that for most folks, there's a dose of "oh, let's just do this" as well.

Two of the three things mentioned in the post fall in the non-fun category (I'm sorry, but house maintenance will never EVER count as fun, even though I am my father's son.) Getting the iPad makes me feel a little better about putting off my computer, even if it pushes it late into the 4th quarter of the year.

xolondon said...

I am the same way with taxes and money. Your life - you know yourself better than anyone else!

So excited to hear about the iPad. I am pondering an iPhone myself.

Meanwhile, nice blog revamp!

Myfizzypop said...

Loving the redecoration going on blogwise :) I am baffled by US taxes but that's because I don't live there. We just get all our taxes deducted based on our monthly salary and it's rare you have any back! Still that means there is nothing to look forward to at the end of the year!! And boooo - isn't it crap when a lump sum ends up going on something?! We got one recently and it went on car repairs!!

Dan said...

Re: the blog redesign. And this is just temporary! Blogger in Draft has a Blogger template design that I'm going to give a whirl. Perhaps I can come up with a better background picture?

Or I might just leave it.

Yes, all too frequently, cash windfalls are followed by huge expenses. The law of averages, I say.

mary35 said...

I do the exact same thing-- My mom says not to let the government have my money, but I know that I wouldn't be putting it in a savings account, let alone figuring out how to invest it. I am going to try hard to put my return into savings. Actually it's going to be direct deposited in savings, so I'll just leave it there.

Dan said...

Ours probably would have gone primarily on credit card debt had we not had all this other junk. But we have a plan for the credit card debt as well.