Getting Back in the Black

Feb 8, 2008

We've moved!

Decided to go all the way, site is now hosted at our own domain.

http://www.gettingbackintotheblack.com

Hope to see you there!

What is the Economic Stimulus Package?

A comment over on freemoneyfinance.com really caught my eye just now. I've been trying to figure out exactly how the Economic Stimulus Package is going to affect me and my family over the next year and especially how its going to affect my taxes.

CF had this to say:

***They're temporarily removing the 10% tax bracket on the first $6,000 in income for single filers (total of $600), and the first $12,000 in income for married filers (total of $1,200)***
To use an example: Assume congress never passed this bill, and suppose you are someone (an individual filer) who would receive a $300 refund next year for your 2008 taxes. What would you rather have?

1. No stimulus package: $300 refund in April 2009
2. Stimulus package figured on your tax return: $900 refund in April 2009
3. Stimulus package as it has been passed: $600 in June of 2008 and $300 in April of 2009

I'm taking #3 every time.

While it may be an "advance" on next year's taxes, it's a prepayment of an excess that they've decided to give. If they had passed nothing, we'd be worse off. I hope this makes sense - sorry if it doesn't, but bottom line, we're better off financially with the stimulus than without.




I think thats the best summary so far of what is in store for us. My thanks to CF for clearing it up.

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Free Wireless Bluetooth Optical Desktop Elite


A week or two ago, I received email confirmation that I would be recieving a free wireless bluetooth optical desktop elite. This will be the best item to date that I have gotten for free. And no, it's not a scam; I didn't have to sign up for any credit cards, car loans, mortgages or listen to a timeshare pitch! All I had to do is play some online games. Granted, these aren't the most thrilling games in the world but I actually enjoy a couple of them like Flexicon and Clink. You can find these games at Microsoft Live Search Club. http://club.live.com/home.aspx/
Sign up for a free account, start playing some mindless games and earn points to get all sorts of prizes. I went with the keyboard but they have lots of other options like, mp3 downloads, frequent flyer miles, webcams, headphones, xbox or you can donate to your favorite charity. The only downside is that my confirmation email tells me that it can take up to three months for them to deliver my shiny new toy to my door. I hate waiting, but hey, it didn't cost me anything except for a little time that I would have wasted surfing the internet anyways! I'll be sure to follow up when I actually get this.

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Feb 7, 2008

How to save money on groceries part 2

Here are some great tips that I have learned and some great resources to get you started on saving lots of money on groceries.

1. I buy 2 Sunday newspapers to get twice the coupons. This is my best $2 investment every week. There are no coupon inserts on major holidays. Also if you want to know what coupons are going to be in your Sunday paper, find out in advance at http://www.taylortownpreview.com/

2. To save the most money, hold on to the coupons until these items go on sale. I look through all the store flyers and see what sale items match the coupons I have.

3. Find out if any grocery stores in your area, double coupons. If you live in the Silicon Valley area of CA, the answer is most likely, no.

4. I don't buy everything at one store. There are several stores in close proximity to where I live. I get the best deals from each one.

5. If you're a fan of organic produce, buy at a farmers market. I go every week and the prices for organic fruits and veggies are much cheaper than buying organic at the grocery store.

6. Coupon stacking is the greatest thing ever! Stacking is when you use multiple coupons for the same item. Stores like Target, Walgreens, CVS, Rite-Aid, Eckerd, Toys-R-Us, etc will allow you to use their store coupons and a manufacturer coupon on the same item.

7. Most of the stores I shop at have coupons you can print out on their websites.

8. You don't have to buy all the items in a buy 3 for $5 sale, etc. Sometimes, these are great deals and other times they will cost you money. When stores run sales like 10 for $10 it looks good, but sometimes these are items that normally run for under a dollar.

9. Don't expect to save a huge amount right away. It takes about a month to really start seeing results. Once you have a month's worth of coupons it starts to make a big difference.

10. Free is best! Stores like Walgreens have a few things you can get free every month. And sometimes, you can make money doing this. Let's say they have a rebate for a free bottle of shampoo. They will let you use a coupon for that item, but will reimburse the full purchase price. And if you choose to have your rebate put on a store card instead of a check they will give add 10% to that amount.

11. Experiment and find out what works best for you. We live in an apartment so we don't have the space to keep a huge stockpile of items like some super savers do. If you aren't going to use something, then it doesn't matter how much you save unless you plan on donating it. My husband only buys Charmin toilet paper, so I don't bother buying anything else. Instead, I look for the store that has the best sale on that brand.

12. I read these websites regularly to get tips, and to keep learning. http://www.hotcouponworld.com/forums/ and http://www.frugalvillage.com/forums/

As this blog grows, I will expand on all of these tips and share new ones

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How to save money on groceries

The first time I looked at how much money we spent on food every month, I was floored. We had been averaging about 700 dollars a month for groceries. What's even worse is that we were averaging over 500 dollars a month on eating out. By the way, there's only three of us. Twelve hundred bucks a month for two adults and a three year old is beyond ridiculous. I knew we could do better.

I started planning out meals using http://www.mealsmatter.org/. I printed out my shopping lists from that site also. That helped me see what I really needed to buy so pounds of produce didn't rot in my fridge like normal. Typically, I would plan about two weeks in advance. I noticed a couple things doing this. First, we were spending even more than I usually did but were spending less money eating out. We all have to start somewhere.

Since then, I've found a better way to shop. I plan our purchases around the sales ads and coupons. That makes a huge difference. It takes more time to shop this way but the savings are worth it. One of the greatest advantages to this system is that you will know what you are gonna spend before you even go to the store. For example, tomorrow I'll swing by Raley's and spend $6.25 before taxes for 10 cups of Dannon light yogurt, 2 Glade jar candles and 1 tube of Colgate toothpaste. Without sales and coupons, these items would cost me $16.29, that's a savings of over ten dollars (almost 62% savings)! My next post will list more detailed tips and websites for saving money on groceries.

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Save money where you can - Cable

Freemoneyfinance.com has a great post up about several of its users spending a little time to save money from Comcast and DirecTV.

  • Not only will I save $360 this year...
  • So basically I "saved" $390 for about a hour of my time...

I had a similar experience last month. Comcast wanted to raise our bill from $55 (after tax) to about $80. I tried calling their customer service center but didnt really get any offers I wanted. So the next day I took the box into the local office and asked them to cancel. Within 10 minutes I had a very nice woman offer me their intro package for $30 a month for a year, including free HD and free DVR service. Taking 20 minutes out of my day actually saved me over $500 a year!

Does anyone else have any similar experiences?

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Unexpected Income

After all of the confrontations with the IRS I've had over the past year I was not expecting to get an income tax return. For the past few years its been common place at our home for us to file our income tax, expect a refund and a few weeks later get a notice in the mail that our refund was kept and applied toward my outstanding balance.

While I dont like to count my chickens before they hatch, I'm happy to report that I will be getting my refund this year. I talked to the IRS yesterday and they have the payment scheduled to go out tomorrow into my checking account.

Of course, being the obsessive compulsive person I am, I've already marked all of it for use in our savings and travel plans.

Where's your refund? - goes to the IRS website.

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Three stimple steps to financial security

Kiplinger.com has a great article that shows the three simple steps to starting down the path of financial security.

Three Simple Steps to Financial Security - Kiplinger.com
  • Save for a rainy day - There are two ways to buy what you want in life: cash or charge. The very definition of financial security is being able to buy what you want on your own terms.
  • Be prepared for an emergency - Even the best-laid financial plans can get derailed by an unexpected cost
  • Invest for retirement - Your immediate and short-term needs are easy to focus on. However, it's not so easy for young adults to take this third step seriously.

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Feb 6, 2008

Financial Status - January 2008

I've been living paycheck to paycheck for a long time now. Even when I had all the excess income, I couldnt find enough ways to spend it.

Ever since my bankruptcy discharge I've been spending a large amount of time on several personal finance blogs trying to get ideas on how to save money every month and eventually grow my net worth.

Our situation is similar to alot of other families in the country. You could sum us up pretty well by saying that we have no assets other than my 401k, my bank balance, and the value of my truck.

I use a great spreadsheet from Flexo at Consumerism Commentary (I've modified slightly for my needs) to keep track of my networth. I've got several that I use for different aspects of our financial tracking that I'll be sharing over the next few days or weeks.


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Feb 5, 2008

Our Story

So this will be my first real post on this blog. I really wanted to elaborate more on the current situation we are in and later I'll dive in to our goals and current financial situation.

My wife and I live in Fremont, California with our 3 year old son. I'm currently working as a Technical Support Engineer for a security company based out of Mountain View and make, what I consider, to be a fairly decent salary. I've been with this company for close to 10 years, which means I made quite a large chunk of change back in the peak of the DotCom years. At one point I had several thousand options priced below $30 when the stock itself was trading at $230+. While I know that last sentence will have most people in the valley salivating thinking of all the money to be made, I had to learn a lesson the hard way about Uncle Sam and how he always expects his cut.

Before I moved to California I had never made more than 8.50 an hour in any kind of job, thats including the Sys Admin role I had an ISP in my hometown of Lufkin, Tx. When I got out here at 19, I was told how much salary I'd be receiving and I nearly flipped. I'd never made that much in my life and I was happy to work my tail off to earn it. I found out later that I was grosely under paid, but thats a seperate post.

So after a year with my company I start getting notices that I'm able to vest my options, I had never looked into them before so I started doing some research and came to find out that I was sitting on about $900,000 (fully vested) worth of paper. I'm pretty sure it was at this point that I fainted, or at least had a mild coronary. Over the next year and a half, before the bubble burst, I made closed to $400,000 in income. To say I was not living comfortably would be naieve, but I can honestly say that I never did anything smart with the wealth of money I was given. Instead of putting into investments, I put it into cars, and vacations, and computers and other forms of entertainment that meant a lot to me then and that I want to slap myself daily for now.

Well, as they say all good things must end and at the end of the year 2001 my girlfriend at the time told me I should probably hire an accountant to help me deal with the money I had made. I gathered together all of my tax info and took to see an accountant. It took them a few weeks to get all of the information sorted out, but I finally got the news and almost had another heart attack. All told, I owed about $108,000 to the IRS and another $25,000 to the Franchise Tax Board (California IRS).

When I received this information, I had a little over $27,000 in my brokerage account so I immediately sent off a check to the FTB to make sure at least I wouldnt have two agencies gunning for me. The rest of the money had been...wasted. I hate to say it knowing how much I could have done with it, but really at the end of the day I didnt even have a good credit score to show for it.

I tried (unsuccessfully) in 2005 to file an offer-in-compromise, unfortunately I was rejected for a missing tax return from 1997 (when I worked at a grocery store making minimum wage). I had no way of getting the w2 for a job I worked at 10 years ago so I waited for them to contact me. I was finally contacted by the IRS in January of 2007. My balance had balooned $154,000 because of penalties and interest) and I was asked if I would be able to pay it. I informed them that I did not have the money and wouldnt be able to pay it off anytime in the next 10 years, but that I really wanted to work out a payment plan and get this debt payed off. After telling the IRS I could not pay, they promptly filed a tax lein on any and all property I had (which happened to be nothing). I found over the next several months that dealing with the IRS is a lot like trying to fit a square block through a round hole. I made several payment plan offers to them over a four month period, even going as far as offering over $1000 a month for the next 8 years to help pay off the taxes I owed. Each time I was told that according to their numbers, I made enough to pay nearly double that and they wouldnt accept less.

I finally settled on filing for chapter 7 bankruptcy in Sept. 07 after I was told that they would soon be filing a garnishment of my paycheck. While I made enough money to force me into chapter 11 if i was filing for consumer debt, I had never carried over 2k in debt on credit cards and a car note, that was the extent of my credit. Because of that I was able to apply and was finally approved for chapter 7, which was discharged the last week of November, 2007.

I guess now, I'm back at square one. I have a single credit card in my name and a car loan and now I dont have Uncle Sam leaning over my shoulder waiting to pounce. I've started using banks and savings accounts to store my money and I've even started looking for some deals online that can help give me a larger return on my savings investments.

This blog's main purpose is to help me get back on track to being financially free from my debt. I'm willing to work as hard as I can to save every cent possible until my family is secure enough to buy a house, pay off our car, and plan for our son's college education.

Because of my tax debt, I've been in the red for over 7 years. Now that the bankruptcy has completed and the debt discharged its time to start work on getting back in the black.

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Feb 4, 2008

Everyone has to have a "why?", right?

My wife and I have decided to start this blog for three main purposes.

  1. To share and learn money saving tips, tricks and advice.
  2. Having recently filed bankruptcy, we are on a personal quest to restore our credit score as fast and efficiently as possible.
  3. To maintain a higher level of accountability by tracking our financial success in a public forum.

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