Finance Gets Personal

There’s been a lot of stuff going on in Finance Gets Personal land, so much so that there hasn’t been much time to write!

So, let’s get caught up, shall we?

The Vacuum
While on the hunt for a cheap vacuum, we managed to break the vacuum we’d been borrowing from my in-laws. Can you freaking believe that?!?! We think we may have figured out why we are the vacuum serial killers though.

My stepson has a lot of Webkinz, which are little stuffed animals that you can also play with online (or something - I’m too old to understand this crap). Sometimes, our dog kidnaps one and it becomes his new toy. AND, since our dog destroys all his toys, we’ve discovered that Webkinz have a little packet of tiny plastic balls inside of their stuffing. The packet gets chewed open, and tiny plastic balls are lodged in the carpet throughout the house. We think that when the vacuum sucks these up, they melt and cause major problems!

So, no more Webkinz for the dog!

We went to Target to buy the in-laws one of the vacuums that was on clearance there for $65, but when we called to see which one they wanted, they insisted that they don’t need one. They’ve been replacing all their carpet with hardwood, and only their bedroom is left. They’re planning on replacing that within the next month, so I guess we got lucky!

So, back to our vacuum. While I last wrote that we were going to buy a cheap one and use the American Express in order to extend the warranty, we ended up getting the Dyson Animal I wanted through Frys. It’s refurbished, and I’m not sure if the warranty extends beyond six months, but it was only $206 (including taxes and shipping), included all the attachments and arrived just like new. I LOVE it so far!

My Sister’s Financial Peace University Classes
I’m really not sure how this is going because we haven’t talked about it since the first class. But I’m going to be seeing her tomorrow and hopefully will find out more then. As I reported earlier, her husband is going with her and they are at least halfway through baby step 1 ($1,000 emergency fund).

Layoffs at My Husband’s Company
While the layoffs were originally scheduled for March 12, that date was moved up to March 6 (today). But they found out yesterday that his group was not affected by the layoffs at all! So that is wonderful news!

Meanwhile, my company announced that we probably won’t be having quarterly bonuses this year and were getting 3% raises across the board (we wouldn’t have gotten anything, but they felt bad about not giving people raises last year either). However, we are currently SWAMPED with new projects, and should be until at least June.

So, it looks like the ramen noodle budget will not be necessary. We’ll probably be moving most of the money we have in savings (beyond the $1,000 emergency fund) to the second mortgage balance in the next week or two.

Taxes
By stalking SlickDeals.net, I found a free download of H&R Block Tax Cut with free e-filing and used it to prepare our federal taxes. We’ve already received our $635 refund and can now submit our state return, which will swallow that $635 plus another $55. Did I mention we have to file two state returns? I’ll be doing the second one on paper so we don’t have to pay to download an additional state (not sure how we’ll come out on that one, though last year we got back $130 or so).

I guess I should get on that, so things don’t turn out like last year.

What I’ve Been Doing for the Past Month (i.e., Spending Money)
I’ve probably mentioned this before, but I have a “life list” of things to do before I die. Some of them (play blackjack in a casino) are easier and less expensive than others (own a photography studio). One of the items on my list is to have an Oscar party. So, I did!

Of course, being the freak I am, everything had to be on theme. I had food and drinks for each movie, a ballot contest with prizes, a red carpet and decorations, gift bags (hello, drugstore stockpile!), paparazzi, etc. It was fun, but expensive (for example, The Curious Case of Benjamin Button featured caviar with creme fraiche on toast points and vodka shots)!

Then, I had a business trip (love getting mileage reimbursement for traveling to the airport, by the way) and party-planning for my stepson’s upcoming birthday (they’re going to a movie theater to see “Mall Cop” and play laser tag).

So, things have been busy! But I think we’re all caught up now, and I look forward to posting more soon.

We still don’t know if my husband will get laid off, but now we know when we can stop not knowing:

March 12.

Apparently, his manager said this is when the layoffs will be announced, and she’s been given a number of how many people have to go.

So, will my man get a rose? Or will he be crying in the limo on the way home?

Last week, after news that my husband might get laid off, I prepared an “oh shit” budget.

As in, “oh shit, we lost half our income” budget.

It’s actually not as bad as I thought it would be.

If he gets laid off, we can continue paying our mortgages, car insurance, life insurance, utilities and telephone bills, and also manage to buy groceries and household products (hooray!). However, we will no longer be able to save for retirement (or anything else), pay extra on our debts, go out to eat (though we rarely do that now), buy new clothes, give gifts, pay for before- and after-school care (which we would no longer need), contribute to our health care flexible spending account, subscribe to the newspaper, subscribe to Netflix or have cable and Internet service.

The good news is he’s eligible to receive six months of severance pay and health insurance. He’s also eligible for seven months of unemployment.

So our plan is to cut everything to the bare minimum and live off my income while he looks for a job. If he found a new job after six months, we’d have about $38,000 in savings by then! After six months, his company would stop paying his and my stepson’s health insurance, so we’d use the seventh month of unemployment benefits to cover that cost. Anything longer than seven months would require us to dip into savings to cover their health insurance premiums (I can get health insurance for them through my employer, but we’d be responsible for 100% of the cost).

And if he found a job right away - well, that would be awesome, because we could use his six months of severance pay to pay off the second mortgage!

I’m feeling *much* less panicky.

It also helps that he got an excellent performance review at work last week. His boss even said he’s his most valuable employee! Good news! (Unless the boss gets the axe, of course.)

In other news, I still haven’t heard back from CVS (hello?), I still have my in-laws’ vacuum (getting dusty?) and I’d be done with my taxes if I weren’t waiting on the interest statement from my second mortgage (hurry, before I start procrastinating!).

Well, fate has decided which vacuum we’re going to get.

Thanks to my husband’s employer’s plans to lay off 20% of its workforce, it looks like we’ll be buying a cheap vacuum with our American Express card (for the additional one year warranty) and paying it off immediately.

That’s right - my husband thinks he’s going to get laid off.

And this time, I actually believe him.

Even if he doesn’t, things aren’t looking too sunny. All 401(k) matching has been stopped, raise freezes have been extended by another year and tuition reimbursement has been stopped. And get this - although his company no longer gives matching 401(k) contributions, any profit sharing (which occurs only if they meet specific goals) will be based on the amount of money employees put into their 401(k). What a crock of…

Needless to say, we’re preparing for the worst.

Thankfully, we’d already begun directing our extra debt payments to savings, so counting our emergency fund, European vacation fund, new computer fund and basement finishing fund, we have over $7,000 saved up. And with no debt besides our first and second mortgage, we should be able to live off of my salary if necessary (with mortgage payments at 49% of my monthly take home income, it will be tight, but do-able).

Of course, that will mean no more Netflix, no more newspaper subscription, no more landline, no more clothes, no more gifts, no more cable, etc.

So we’re going to go ahead and start cutting back a little.

I’ll cut our weekend newspaper subscription down to just Sunday (for the coupons), we’ll cancel Netflix, stop our 401(k) contributions and look into getting a cheaper Internet/cable package (or maybe just a slower Internet service with no cable). We’ll also be looking into other ways to cut the budget, like ditching our landline and reducing our discretionary spending to the bare minimum.

So folks, I’m off to watch some free movies online with Netflix…while I still can!

My husband received an email from his employer today announcing “changes to your 401(k) plan.”

Basically, they are lowering the company match from 5% to 4%, and investing the money on a yearly basis instead of on a per-paycheck basis (i.e., the 2009 company match won’t get put in his account until 2010).

Layoffs are looming at his large company, and I’m wondering: By switching from a bi-weekly to a yearly company match, does this mean that they won’t have to pay out the company match for anyone they lay off during the year?

If so, that’s crap.

If not, it’s still crap, but I guess 4% is better than nothing.

Now let’s just hope he survives the latest layoffs.