Beating Broke

Personal Finance Reassessment

October 16, 2012 By Shane Ede 6 Comments

Occasionally, there comes a time when you have to take a look at your personal finances and do a little personal finance reassessment. While the need may arise to do a complete overhaul once in a while, a simple reassessment can usually suffice. All it takes is a little attention, and some dedicated time to making sure that your finances are in order.

Recently, my wife and I were, more or less, forced to do a little personal finance reassessment. That’s such a nice, delicate way of saying it isn’t it? Truth be told, our finances were (are) in a mess. The ripples from when I quit my job last November are still plenty big, and the new job that I have seems to have come just in time to keep us from completely going under. Combine the drastic decrease in income that event brought about with a couple of people who remained stubborn in their budget, and it was a recipe for disaster.

Luckily, we’re usually pretty good at talking about money with each other. Don’t get me wrong. There’s plenty of room for improvement. But, we’re good about not getting into any heated arguments with each other, and being able to figure out where we’ve gone wrong and correcting it.

So, we sat down and caught up our dreadfully behind budget. And, let me stop here to say something. What kind of idiot doesn’t keep doing the budget when he quits his job and is making a fraction of what he used to? This guy. Dumb. So, yeah, we caught up the budget. About 6 months worth of financial data entry. Some by hand because our bank doesn’t keep history online over 90 days. So, one by one, directly from the statements I printed off. Did I mention how dumb that was?

In case you’re curious, catching up on about 6 months of budgeting takes about 6 hours. 6 HOURS! It’s done though.

One of the things that we discovered, after having done all of that, is that the reason that we were in the pickle that we were in wasn’t because of the loss of income, although that played a part, but more because of how badly we had slipped in the last few months with our spending. July and August in particular were well above what June was. In our defense, those are usually higher spend months because they’re usually the only real summer months we get up here in North Dakota, but it was still way off. And it cost us. The last several weeks have been pretty hairy, financially.

The scary part of all of that is that we haven’t had a bad financial situation like that for over 5 years. And, maybe, in that 5 years, we’ve become a little bit lax in our budgeting, and in our finances in general. No more. We’re taking the control back, and keeping our finances in order. Not doing so could mean disaster. It surely means stress, and that’s something we just don’t need.

During our little reassessment, there were several things that we picked up on. Like the fact that we didn’t have any life insurance on me. In my previous job, my employer kept a policy on me that would have been more than sufficient. For some reason, they decided to cancel that policy when I quit. 😉 So, we’re now budgeting for life insurance policies. Or, the fact that our spending on eating out and groceries had gone way up. A simple attitude adjustment helps with the eating out, and we’re going to start trying to use menu plans to keep our grocery bill down and to spread it out over the month. Another thing that seems to be part of the issue is the timing of some of our bills. Before, I made enough that it wasn’t an issue when the bills came due, we always had at least enough to make it to the next payday. Now, with my lower salary, it’s getting a bit tight right before the 15th (when my wife gets paid), and a few of the bills that come in right before the 15th are adding a little extra stress. I need to call a few of them and try to get them moved to a slightly later due date.

In the end, our personal finance reassessment came just in time. We kept a close enough watch on our finances to see the need arising, and were able to meet the need and keep things from getting any worse. Chalk it up to a lesson learned. The (almost) hard way.

When was the last time you had a personal finance reassessment?

img credit: Matt Mcgee, on Flickr

Parents Tax Bill Rising?

October 12, 2012 By Shane Ede 3 Comments

Tax season is right around the corner. Before you know it, we’ll all be holed away in some corner of our house punching numbers into our computers as we try to squeeze a few more of our dollars back from the IRS. That’s a task that might get a bit harder for some parents this year.

According to this CNN Money report, on January 1, 2013, several tax credits are set to expire. And, unless Congress manages to pull it’s collective head out of a dark place and extend those credits, many of our tax returns will be quite a bit heavier come April. For parents, specifically, this could cause quite the burden.

Specifically, the Child Tax Credit, Earned Income Tax Credit, Child/Dependent Care Credit, and the American Opportunity Credit will expire.

The Child Tax Credit would be reduced to $500 per child, instead of the $1000 it’s currently at, and would no longer mean a refund of any excess credit above and beyond tax liability. It’s debatable whether it should be giving that excess credit as a refund, but I’d certainly like to see them keep the credit at the $1000 number. This is one that we use on our taxes every year, and I know it’s been quite beneficial.
The Earned Income Tax Credit will have several of it’s key income thresholds reduced back to previous thresholds. The maximum credit will also be reduced by 5%. I believe we exceed the threshold for this one, but reducing the thresholds will eliminate it for quite a few families.
The Child/Dependent Care Credit, like the EIC, would see several of the maximum credit and reportable expense reduced. This is one that I know we’ve used every year, since we’ve always had some sort of child care expenses. Could mean a significant loss of credit on our tax return.
The American Opportunity Credit is a credit that replaced what was called the Hope credit. It allowed for a higher amount of credit and for some of the credit to be refundable to the tax filer. If it expires on January 1, it will revert back to the hope credit which means the credit will be reduced by $700, and also reduced to something that can be claimed 4 years to something that can be claimed only 2 years. The Hope Credit is also a non-refundable credit, so if you have no tax bill, it doesn’t mean a larger refund like the American Opportunity Credit would. Again, I don’t necessarily agree with the refundability of credits, but this could mean a huge difference for some families still paying for college expenses. I’ve never been able to use it since I was well out of college when it was put into place.

That’s just four of the parts of the tax code that are set to expire on January 1 if Congress doesn’t act on it. In a Presidential election year, you can bet they won’t make any moves on it until after election day, so they’ll have a very short window in order to get something done. I truly doubt that they’d let them all expire, but depending on the outcome of the election, it could be a pretty dirty fight.

How many of you have used these credits? Would their loss on January 1, 2013 change your tax bill considerably?

How I Saved Money on iPad Repairs (Twice)

October 10, 2012 By Shane Ede 13 Comments

In late 2011, I won a new iPad 2. By March of 2012, it needed new glass. My son, who was 5 at the time, managed to drop it off of the couch while playing with it, and put a big crack in the digitizer (that’s what the glass is called). The iPad still worked, most of the time. I contacted Apple, in an attempt to get the iPad repaired through an Apple service call, but, what Apple does with that situation is sell you a refurbished ipad of the same model for a reduced price and then take the old one off your hands. By the time Apple would have been done with me, the “repair” would have cost me about $400. Yes, the iPad is cool, but it isn’t $400 cool. (My wife and kids would argue that point though.)

Being the frugal shopper that I am, I did a little looking around. Turns out, you can purchase the repair service on eBay. Ship off your iPad with the broken digitizer, and the seller replaces the digitizer for you and then sends it back. The service that I ended up purchasing was a $79.99 service with a $10.98 shipping charge. Once it was all paid for and the iPad was back in my possession, it ended up costing me right at $100. If you’re doing the math right now, the $79.99 and $10.98 don’t really add up to $100. What I had failed to add in was that I would have to pay to have it shipped to the seller as well.

Want to know how long the repaired digitizer lasted? If you guessed “less than 30 days”, you’re right! Yep. Sad isn’t it? After it got back from the first repair, I even put a fancy case on it from OtterBox, in hopes that it would keep it from having the same fate should it fall from the couch again. But, even that fancy case couldn’t save it from a trip down the hardwood stairs of our house. There’s something chilling about hearing the thuds of an iPad as it bounces down the stairs. I suppose that could be attributed to the three year old at the top of the stairs that could have just as easily been what was making the thud sounds. Luckily, it was just the iPad.

I certainly didn’t want to pay another $100 a month later to have it repaired, so I did what any self respecting techie would do. I started doing research on repairing it myself. I could buy a replacement digitizer for about $50, and if I could figure out how to do it myself, I’d save 50% on the second screen repair. I watched a few youtube videos of repairs being done, and decided that it was worth a try. Worst case scenario, I failed and had to send it off, losing the $50 in parts and some time.

We actually left the iPad with the second set of cracks for a while. In fact, it lasted until just last week when it cracked a little bit more and actually became hazardous. So, parts in hand, I set to replacing my own iPad digitizer screen. While not terribly complicated, the iPad is full of little parts. Little parts scare me. 🙂

Two hours of work later, and the iPad is good as new. Well, close anyways. The digitizer is replaced, the iPad is all put back together, and, miracle of miracles, it all works!

I spent $100 to have someone else do the first repair. The second time, I spend $49 on the parts and did it myself. My savings on the repair were $51! It took me a bit under 2 hours, so I effectively “made” about $25 an hour. Not bad. Wages like that make me wonder if there isn’t money to be made in performing the service as a side hustle! Or, maybe buying busted iPads and replacing the parts and reselling them once they are fixed.

Obviously, I have a technical background. I’ve been tinkering with computers for just about as long as I can remember, and spend most of last summer working part time at a computer repair store. I have the skills to do the repair myself. Which made it pretty easy to make the decision to do the repair myself. Someone without that background might want to think twice before attempting it. But, with the abundance of how-to videos on youtube, and all the information on the web, maybe it’s worth a try anyways. You can save some money on the repair, and learn a new skill!

Have you ever done your own DIY repairs on something as costly as an iPad? How did it turn out?

img credit: shannonrosa, on Flickr