Tax Return February 28, 2009

So, we made out like bandits on the taxes this year.  This is predominantly due to the fact that I only worked half of 2008, so my income was much lower than usual, and because we bought a house in 2008.  If you bought your first house in 2008, you got a $7500 tax refund this year.  This is more of an interest-free loan than a refund, as you do have to pay it back in your future taxes (I believe it’s $500 extra in taxes per year beginning 2 years after you receive the refund). 

We got back a total refund of $8349 (combining  federal and one state refund) and then we had to pay in $34 for the other state (it’s a long story, but we file taxes in 2 states).  Giving us a new total of $8315.  Subtracting the filing fees we paid via Turbotax ($99.85) we come up with a final surplus of $8215.

What will we do with all that money?

$2650.97 will go into our short-term savings account (used for trips and major purchases)

$5564.18 will go towards paying down the car loan.

Yes, we will not be using our tax return to stimulate the economy.  I would feel bad about this; however, I feel we have done our share.  Looking back, I realized that in the past year, we have purchased: a new car, a new house, a new washer and dryer, and 3 rooms full of new furniture and electronics. We did our best for Uncle Sam, but now we need to replenish our savings and pay off some of our debt!

February Debt Summary February 27, 2009

Debt at start of blog (July 2008): $51,497.33

Debt at end of February 2009: $31,495.13

Difference: $20,002.20

Current Breakdown:

Car loan (at 5.75%): $8,528.43

Grad School Loan (at 6.55%): $7,943.08

Undergrad Loan (at 3.35%): $15,023.62

This month I put an additional $101.22 toward the grad school loan. This was composed of profits from selling things on Amazon and ebay as well as an $11 check from My2Cents survey company.  I also put an additional $8,588.42 toward the car loan. $24.24 of this was from my Amazon sales, and from selling some books back to Barnes and Noble. $5564.18 came from our federal tax return, and $3000 came from some money we had set aside in October of 2008.

Originally, C and I had decided to use $7000 of his bonus to pay down debt, and to keep $7000 to invest for future projects.  However, since the market doesn’t look like it will be recovering in the immediate future, and our savings account interest rates have fallen to almost nonexistent levels, we’ve decided to instead put the other $7000 toward the debt as well.  We made a $3000 payment on the principal now, and will make another $4000 payment once I have a job. (We don’t want to decrease our liquid assets too severely until we are back to two incomes again).

If we pay off the debt early, we will avoid paying a couple thousand dollars in interest, and we will free up more of our monthly income to invest down the road when the rates are better.

Financial Goals for 2009 February 17, 2009

By the end of 2009 I want to . . .

1. Get a job

2. Pay off C’s car loan (currently owe: $17,496.79)

3. Reach $9,000.00 in the Emergency Fund (currently at $4828.85)

4. Make 1 extra mortgage payment on the house

5. Roll previous job’s retirement fund into an IRA

6. Find a new method of increasing retirement contributions (401k, etc.)

7. Max out both of our Roth IRAs

My eBay Disappointment February 12, 2009

Well, after selling books, dvds, and cds on Amazon for a few years now, I decided it was time to try selling at the next level: eBay.  I got a book from the library about ebay, with tips for buyers and sellers, and I skimmed it to get a sense of how eBay operates.  It was sort of useful, for the most part I found myself drawing from information on eBay’s website and my own internet selling experience  more than the book.

I wanted to try selling on eBay because I lost a lot of weight last year, and I now have a lot of perfectly good condition name-brand clothes that I can’t wear.  I will take some of them to a tailor and get them taken in, but others I just don’t think I’ll ever wear again. eBay seemed like the perfect way to dispose of these items and make some extra bucks to snowflake towards my loan. 

Well, I sold 3 pairs of jeans, 4 skirts, and 1 shirt. I was impressed how quickly everything sold, and how easy it was to use eBay and Paypal, but I was disappointed with my profits.  I charged an adequate amount for shipping, and I listed my stuff at my “minimum acceptable sale price,” but after I deducted the listing fees, and paypal fees, I found I made less money on each item than I would have if I had simply sold it at a garage sale.  Since my condo complex is having a sale in March, I feel like I spent a lot of time and energy selling my stuff for less money with a lot more effort.

In conclusion, if I wasn’t having a garage sale next month, I think eBay would be the way to go, but since I am having a sale, I decided not to list anything else at this time.  For some reason I just assumed that (as has been my experience with books and movies on Amazon) clothing would also sell for more money on eBay than at a garage sale.  The experience wasn’t a total loss, now that I’m all set up and have received some positive eBay feedback, selling should be much easier in the future. Also, if the rest of my stuff doesn’t sell at the garage sale, I now know I can dispose of it online.