WWYD with this tax return?

[waiting2bemommy]

DP and I are expecting a tax return of $6,419. We are currently barely staying afloat financially so we are planning to use a lot of that money to pay off old bills. DP has his heart in the right place, but he is rather impulsive when it comes to money. I am a thrift-store-aholic (although in my own defense I am very cheap and rarely spend more than $2 on anything), so between the two of us we need a firm, concrete plan for our money or it will quickly vanish into the wind.

I broke it down like this:

$300 water bill (past due plus a little cushion, must be paid)

$550 electric bill (was turned off due to nonpayment, also must be paid ASAP as we are about to move into an apt that does not include utilities)

$1700 car expenses----this is a tricky one because we are currently 2 months behind on our car payment. We'd like to avoid it going to repo, but it was supposed to be repossessed almost 3 weeks ago, and they have not picked it up yet. We don't know why....they don't return our calls when we've called to inquire, and I'm not about to go drive it back to the dealership for them. So, we are hoping that we can still salvage our credit by making al the past due payments ($340/month) plus late fees (another $50) plus a month ahead (another $340) for a grand total of $1,070. But if the car is already in repo status and we can't get it out then we will go ahead and buy something used for about $1,500. Either way, we will end up spending $1,700 on the car, because our current car needs some work if we keep it, and then of course we have car insurance.

$1100 first month's rent and deposit on our new place (hopefully!) We don't know yet whether we are approved for this apt, but hopefully we are!

$600 moving costs. We have some things in storage but will still need a lot of basic furniture; table and chairs, beds, couch, etc. I expect that by shopping thrift stores and craigslist we can get what we need for $600.

$600 kids' needs--clothes and toys. Both kids are in desperate need of almost everything....ds has 2 pairs of pants that fit and both are threadbare, dd is even worse. Also when we cut my mom off she threw away my son's $70 bike and gave away soe of their other toys. Ds is really upset about that. So, we would like to set aside some money to buy the kids some new toys. All the toys they have now are plastic dollar tree type stuff and I feel awful about it.

$350 court costs to finalize my divorce from ex. That is at the top of my list!!!!

$100 gas (we have to drive out of town to pick up our check at the address it was mailed to and will need to fill up twice)

The remainder of the money (assuming no other emergencies or needs) DP & I agreed to spit evenly and put on two separate debit cards, one for me and one for him. That is our personal spending money on whatever we like, intended to last us for the foreseeable future (until next year's tax return, probably!)

I would like to put money away in savings. the problem is that to do that DP and I would have to go without anything. He feels like he works hard all the time and gets b----ed at by me if he ever buys anything for himself. I know it's true, because I have a hard time buying anything for myself, and I carry that over to him. We both need clothes. He wants a GPS navigator, which I want him to buy used of craigslist, he wants something new out of the store "like a normal person." I would love to have a sewing machine and I feel that would be a money saver since I know how to sew and could make clothes for the kids, curtains for the house, pretty much anything.  Since we can't agree on what the money should be spent for, and the "martyr" syndrome thing is hurting our relationship, I agreed with him to just split the leftover money after all bills are paid, and I promised I wouldn't have a word to say about what he did with his money. If he wants to wipe his butt with it and flush it own the toilet, I won't open my mouth. 

Regardless I will probably let him spend all his money, and just take most of my money and tuck it away on a debit card or in a CD or something. And then I will spend the rest of another year complaining about my one threadbare bra. 

So....rip me to shreds!!!!! What would you do.

[Poddi]

I did the math and it seems you have a bit over $1000 left after all those are paid.  I personally would put that into a "baby emergency fund".  I know it's not fun, but judging from those past due bills you guys would really need an emergency fund, so you don't have to worry about power being shut off or car being repo-ed.

Also do you have to drive to pick up the check?  Can you set up something with the post office?  I don't know about US but over here they only charge like $40 for redirecting all the mail for a few months.

[PenelopeJune]

$1000 left over is a lot. I suggest you each take $100 and do whatever you want with it, and put the rest in a savings account. It still gives you a tiny bit to play with (buy a bra! go out to eat!) and gives you a tiny cushion for the next time something goes wrong.

I know it sucks to never have anything fun, and if you go completely without you are going to both be resentful. But you also don't want to blow it all now and then have to wait until your next windfall to pay up your bills.

Can you not do a direct deposit for your check? Or have someone else in the area that you really trust pick it up and mail it to you? I'd hate to spend $100 just to pick it up.  

[waiting2bemommy]

We initially had it set up through turbo tax to do direct deposit. Unfortunately turbo tax messed up with their processing, and so we now have to get a paper check instead (thus the incorrect address, the IRS had a wrong address on record for us, and it would 6 weeks to get it switched out). It's turbo tax's fault and DP is really pissed because he spent $89 to get the taxes filed properly and to get it done quickly. We were supposed to have had the money deposited on the 8th until this happened. They did refund the fees we paid, but next year we won't use them, and we told them that.

[mamaofprincesses]

Originally Posted by PenelopeJune 

$1000 left over is a lot. I suggest you each take $100 and do whatever you want with it, and put the rest in a savings account. It still gives you a tiny bit to play with (buy a bra! go out to eat!) and gives you a tiny cushion for the next time something goes wrong.

I know it sucks to never have anything fun, and if you go completely without you are going to both be resentful. But you also don't want to blow it all now and then have to wait until your next windfall to pay up your bills.

Can you not do a direct deposit for your check? Or have someone else in the area that you really trust pick it up and mail it to you? I'd hate to spend $100 just to pick it up.  

That's what I would do, too.

Our entire tax return is going into savings. DH makes enough, barely, to pay our bills and have something left over for clothes or an unexpected dr's visit. The tax return will be saved for car repairs, home repairs, and medical/dental stuff. If he gets overtime (he does sometimes) then we'll have some splurge money.

You are already behind on bills, and moving to a new place with no paid utilities. Without a cushion, it is likely you will end up in the same position next year.

And I don't know the details, but I would probably let the car go. $340 a MONTH is a LOT of money, way too much if you are struggling.

[waiting2bemommy]

well, last night the car ran out of gas on the way home from DP's work. We got a ride but since it was 1 AM they couldn't take us back immediately to put gas in the car. We went back at 7 this morning and the car was already towed. So now it's $125 plus $25/day to get it out of impound. We're down to our last $3 which has to go to washing clothes. Waiting, waiting for that tax return to arrive in the mail, except we have to either have the folks at that address mail it to us and wait another 4 days, or convince someone to drive us 6 hrs roundtrip to go pick it up. We cant get the car out of impound until we get that windfall, because every penny of DP's upcoming paycheck is already spoken for, to other must-pay bills.

I'm trying to find out why they would tow the car so quickly....normally they tag it, give it 24 hrs and THEN tow. Our car was there (on the side of the highway, off the main traffic road) for less than 6 hrs. I located the state trooper who had it towed and I'm waiting now for his supervisor to call me back. 

[Momsteader]

Thinking that probably the best thing would be to call the repo company to go get the car from impound!  Doesn't sound like a repo will damage your already trashed credit any further and $340 is a huge payment for your situation.

Agree with PP, the $1000 leftover at least half or 3/4 should go into savings!!! You can't get this 'windfall' and not tuck at least SOMETHING into savings.  Your dp can get a GPS for under $250 even new. And if he doesn't have a car, he doesn't need a GPS anyway!  But, regardless. Split the leftover--half to savings and half of the leftover (so 1/4 of total) to each of you to spend as you see fit. 

[hopefulfaith]

Tax return is a hard time.  ;)  I say this as the spouse of a similarly "deprived" husband who sees four digits all together and gets really excited about all the Stuff We Could Buy With It!!!!

Needless to say, it's going to bills and all ---- but there's a really soft part of me that wants to just buy him something brand new and nice to treat him.  He works really hard and all that kind of stuff, so I'm really debating it.  Part of me wants to be talked down and the other part of me wants to just buy him a present.

However, then there's a little part of me that says "Well, I don't have a laptop like *I've* wanted for the past million years.  They've come down in price.  What's another few hundred dollars diverted from noble purposes?"  My responsible voice begins arguing with that voice, then.

....and this, my friends, is why tax return time is hard.  ;)

[beansmama]

The majority of it should *definitely* go into an emergency fund. No offense meant, but look at how behind you guys presently are - a cushion is needed, for sure.

I say you guys each get $50-$100 for personal things (you CAN get a GPS for under $100) and the rest goes into savings.

Also, I have 2 kids that needed clothing desperately as well and just got them both an entirely new wardrobe (sans shoes) for $180 at target. I had to skip the "fancy trendy" clothes and stick to basics (mostly jeans and tees for DD and comfy pants and tops for DS) but we still got tons of cute stuff. I think you should keep at LEAST $200 of that money for the kids in a seperate savings for when they need clothes again down the road...kids grow crazy fast, yanno? ;)

I swear, my DD's feet grow 2 sizes overnight, lol! Seriously!

Well, good luck - and I'm sorry about the inpound. Gr! What a bummer.

[TiredX2]

I feel like the entire impound thing should be a real wake up call to your DP.  If you had a savings fund you wouldn't have had to left the car in the night, you wouldn't have had it towed and you wouldn't have been out that extra$.  If you had $1K sitting in savings you wouldn't be behind on your car payment right now. 

I understand it sucks to not get what you want.  When you want it.  But it's what you have to do sometime.  Just keep your eye on the prize--- financial security. DP has wanted a GPS for a LONG time and he only just got one this last Christmas.  He works in tech and is surrounded by people who constantly have the newest gadgets, but he wasn't willing to spend the money on what is clearly a want (he can look up directions before going out if he doesn't know how to get somewhere) when all of the "needs" weren't taken care of first.  And some of the things you are not able to pay for are pretty big needs.

[TiredX2]

Oh, one last thing...

Does DP understand your family's budget?  If he doesn't, you need to spell it out like you have for us.  "We have $__ in bills and $___ in cash available."  How does he think the money should be allotted? 

[SimpleLove]

Just wanted to say your kids are so young, they don't need many toys and don't even know the difference right now. As others said, clothes can cost wayyy less than that, especially if you love the thrift store. Assuming your ex is the father of both kids, it's kind of worrisome to me that DP isn't willing to put priority to taking care of you and the kids, he must have entered the relationship knowing it would be a greater deal of responsibility than usual.

[insidevoice]

I think that your first priority needs to be an emergency fund. So many of the expenses detailed above wouldn't be there if you had one, and managed not to fritter it on trivial 'emergencies'. 

The car is an expense you can't afford.  I would contact the repo company asap and have them pick the car up.  Plan to shop around for a cheap and functional used car that you can manage to operate and insure inexpensively.  With an emergency fund, any maintenance that pops up should be something manageable. 

Toys- you are moving.  You have an opportunity here to start with some inexpensive simple and open ended toys.  There is no reason for this to cost a great deal. I understand that you want to make up some of the losses to your son, but you can't. You can teach him to move forward from sad and frustrating events with a positive attitude, and if a bike is something important to him, you can get one inexpensively.  

The past due electric bill- is there any help available for that?   Check with a community action agency for referral to some help- I suspect you should be eligible if there are programs where you are located.  If you do have to pay it, that's simply what will need to be done, but also plan on a hefty deposit when you need to connect services in your names. 

If you aren't approved for the new apartment, maybe you can stay where you are and slowly pay off the past due bills over the year- with a concrete plan you should be able to free up more for moving expenses, and if you are rid of the $340 a month car payment, you can put that money into a moving fund and debt. 

$300 to water bill

$1500 for 'new' car

$250 to set up a great playspace with open ended toys

$350 for divorce

$200 for clothes for the kids

Total = $2600

Have the check mailed. 

I think that, in your situation and being so terribly delinquent, I would do anything to stop the pattern of debt. 

Put $3000 into an EF

Throw the car payment at the past due electric bill for a couple months.

This should leave about $800- he can get a cheap  gps for well under $200, and you can get a couple things and toss $500 into checking so you have a cushion there. 

I know it means delaying things you want now, and I do know how hard that is- I've been there, but you'll be so far ahead in a couple years if you can manage to do this!

[waiting2bemommy]

He and I met when ds was a baby. Dd is ours together. Finances are definitely one of the thorns in our relationship, but we are working on it (and we both tend to be impulsive so it's not solely him.)

About the kids.....I was actually planning to buy a $100 Walmart card and a couple $50 gift certificates to our favorite kids thrift stores to be  used throughout the year. I probably should have mentioned that, sorry!

However I'm not willing to skimp on toys for them. I absolutely agree that kids don't need a lot of toys under normal circumstances, but ds has been through a lot of transition in his little life, and when we cut my mother off at Christmas, she took most of his toys hostage and even threw his bike away. Two months later he is still asking about specific toys that he really misses. We also don't celebrate Christmas so there was nothing new for them at that time either. I feel that he deserves to get those old toys replaced, and to get a few new things also. I made a "wish list" of things I would like to get for the kids and I will be shopping the thrift stores to find them (all the thrift store owners know me, so they are already holding a couple of those things at various stores for me), and then DP and I are going to wrap everything up and let the kids enjoy the experience of getting presents.

I'll share the wish list, honestly I don't think it's extravagant, but maybe it IS too much stuff. Like I said right now all they have to play with are a few random cars, a very babyish push toy that dd no longer likes, a magna doodle, a see n say animal thingy, and melissa and doug stacking trains.

dd is getting:

push toy (probably a stroller for her baby doll)

we did it dora (I know, commercialism at its finest, she LOVES it though)

blocks

chunky puzzle

ds is getting:

25 piece puzzle

racetrack/matchbox cars

transformer car OR a remote control car, he wants both but idk yet

Toy Story action figures

legos 

this construction set: http://www.toysrus.com/product/index.jsp?productId=4044778 which I will have to buy new.

For the two of them together I'm looking for, but haven't yet found at a satisfactory price,

pop up tent/tunnel

play kitchen

I'm also going to stock up now on arts and crafts supplies for a while...construction paper, playdough, etc. I know where to buy them in bulk much cheaper than if I buy individually throughout the year, so in the long run it's a worthwhile investment.

And they each will be getting an outside riding toy (replacing ds' bike and getting dd something of her own)

I think part of what is fueling me to spend so much on the right now is the fear of not knowing when I'll be able to buy them anything nice again. I grew up like that, too, so it's really really hard for me to pass up an opportunity to spend money on my kids. 

Originally Posted by SimpleLove 

Just wanted to say your kids are so young, they don't need many toys and don't even know the difference right now. As others said, clothes can cost wayyy less than that, especially if you love the thrift store. Assuming your ex is the father of both kids, it's kind of worrisome to me that DP isn't willing to put priority to taking care of you and the kids, he must have entered the relationship knowing it would be a greater deal of responsibility than usual.

[waiting2bemommy]

insidevoice---we cross posted!

I really, really like your suggestions. If you look at my list I think you will see that we had the same thought process regarding the toys.

I'm going to share your post with DP.

Also, we just came across a few mobile homes on craigslist that are being sold as-is for around $500. They are livable but need cosmetic and minor repairs like paint etc. My parents flipped houses for a while so I know a little about it, and DP and I know how to do all the work ourselves (there is no major plumbing, ripping out walls, or anything). We thought---what if we bought one of them for cash, and were only responsible for monthly lot rent and utilities? Of course a mobile home is nobody's dream home, but financially it would make it a LOT easier if our "rent" was $65/month instead of $750/month.

DP makes $9.50/hr, 35 hrs a week and I just got hired at a new job for $7.25/hr, 25 hrs/wk. We have to pay $100/wk for childcare because sometimes our shifts overlap at night and we need a sitter for those times. So it would make our lives much less stressful. what do you think? Good idea? Bad idea?

[lishoprah]

I think if you can get a mobile home that's already in a park and your rent would be much less then that's a great idea.  The problem with mobile homes from what I've heard is that they can cost a fortune to move, so look into those costs first.

[Momsteader]

Many mobile homes that are sold as is have to be moved, and many of them cannot be put in a traditional 'lot' due to age. So, be sure to check on all that. Moving expenses can be several thousand dollars and your utilities in a mobile home will be attrocious!

[crunchy_mommy]

From everything I heard/read when I was looking into buying a mobile home, they are a money-pit. I have a friend who just CANNOT get rid of her mobile home & she has to pay the park fees whether or not she lives there so it's not always just a matter of selling the mobile home itself. I'd be wary & do a lot of research before you seriously consider that option...

Anyway, I will ditto what everyone else said, that you need an emergency fund, and it doesn't really sound like you can afford to each have about $500 of spending money for 'whatever'... Maybe $50 or something to satisfy your whims, but not $500. I like insidevoice's breakdown of how to spend it...

The other thing I think is CRUCIAL here is readusting your tax withholding. Maybe there are factors of your tax status that I'm not aware of/thinking of, but IMO if you are getting more than $500-1000 back, you are having WAY too much withheld. You need that money for your day-to-day living expenses, not sitting there interest-free waiting for you to file once a year! If you reduce your withholding, you could have several hundred dollars extra a month, and still get a small refund next year. You'll save on late fees and not have to worry about your electricity getting shut off.

[orangecanoe]

I don't have any suggestions on the car situation as I don't know how urgent your driving needs are where you are or will be moving to. Money doesn't fix money problems. I would not suggest that you and DP spend a large part of the "leftover" if you find yourselves now down to the last $3. I think now is the time to start working on waiting. If three months from now your emergency fund/savings is untouched, then maybe allow another "me" purchase for each of you.

The weather will be warm enough in just a couple months to spend a lot of time at parks and such, so maybe hold off on half of the toy purchases or wait to see what the kids want most *after* moving and moving expenses are settled?

I think it's good that you're playing with the numbers now. Can you get a checking acct/debit and then set up something like an ING account to transfer savings to so the money is not quite so accessible?

[waiting2bemommy]

OK, I'm going to make myself look stupid here....what's an ING account?

I would LOVE to find a solution to saving money that would help us be more disciplined in saving it. Like, where we could only pull money out after so many weeks or months, or we both had to agree before pulling money out. I know, that's called self-control and most normal adults have it! but surely we aren't the only ones who suck at money management???

This (the overall financial situation) is something I really want to get a handle on and I feel like tax time is a great opportunity to get a fresh start on our money management. I was never taught how to handle money, and I never really had any, in spite of working since I was 12 years old, so I'm sure I have some deeply ingrained bad habits that need fixing. Ditto for DP.

Of course, long term we are looking at schooling options and other ways to increase our overall income, but for now we need to find a livable way to work with what we've got. We've already agreed to stop job-hopping and are committed to staying at these jobs even though we both don't like our work, because we know we need that for the sake of stability. We don't have thousands set aside to live off of if one of us stops working.

I really appreciate all the valuable input I'm getting. I'm sharing it all with DP as well! By all means, the more opinions, the merrier!