Weekend Budget Busters

Saturday was a budget busting day for me. My husband being away and me left with nothing to do, I went on a shopping trip to buy some supplies for my new hobby – sewing. My husband bought me a sewing machine for my birthday and I wanted to make doll clothes for my niece’s barbie doll. I didn’t have any supplies. So I had to buy stuff. Saying “STUFF” freaks me out. I also had to buy some sewing pattern books. Anyways, the total damage was a little less than $150.

I was feeling pretty bad about this until I finished the first doll dress. After I finished it, I was convinced that it was worth it. Anything that would bring a smile on my niece’s face is worth everything in the whole wide world. And I’m going to spend each saturday making new doll clothes. I already have enough supplies to make 9 more doll clothes. And I have supplies to make a new dress for my niece.

There were several questions that popped in my head.

• How and when do you identify an activity as your hobby?
• How much money would you spend to try it initially?
• Once you identify something as your hobby, how much money do you put aside each month for it?
• When does your hobby make you think that you can make a living out of it?

I would love to hear from you all about what your thoughts are on this.

On another note, I bought the books at a used book store. They also have an online shop at http://www.bookbuyers.com. Check it out. I love the store.

Not About Valentine’s Day

Who am I kidding? It is obviously valentine’s day. And it cost us $250. I am okay with this. Because we did not buy perishables and we did not buy things that only one of us can enjoy. And the thing that I am really happy about is that we did not use our credit cards.

On the credit card note, I have been thinking about using my rewards card for all the purchases and pay it in full each statement period. This way I can handle all the household spending from one account. But it’s not going to happen this month. I have only been thinking.

Tracking our budget this month is going to be a challenge. My husband is going to be away for a month and he is going to use all cash. Anything he spends will be reimbursed. But how do I account for the withdrawn money. It would affect my networth updates too. But I think I am just going to report what it is according to my bank statements. When the reimbursements come they would adjust automatically. And honestly, I think I need to give ourselves more cushion in our budget. But I am going to stick with it for now and see how it goes.

Things that don’t look good on my budget and networth are

• The cash withdrawn for my husband’s trip
• Valentine’s day gift costs
• Misc 1 and Misc 2 categories already spent. We did not pack lunch as much as we wanted to.
• Grocery money left for the rest of the month is $50. (But I think I have enough to last me 2 weeks)
• Our electricity bill might be more for this month.
• We need to open an IRA for 2007 tax year and this is going to delay paying back our parents
• We are going to pay car insurance in full since we don’t want to pay the extra $5 each installment period.

Things that I liked about February

• I used coupons during my last visit to the grocery store and saved $6.05. This is on top of the savings($23) due to club member prices.
• I got a nice gift from my husband for Valentine’s day. It would keep me cheerful when he is away.
• I am hoping to put a tick mark next to one my 2008 goals. Will let you know what it is once I know the result for sure. 

I guess this month is the real test for my budget. January was pretty smooth compared to February. I’m hoping March would be better.

Opening a Traditional IRA

We did our taxes this weekend. We will be receiving a federal refund, but we owe money to the state. If we open a traditional IRA, the money owed would be equal to the refund.

First of all, we thought we will not qualify to open IRA. But since I do not have a 401k through my employer, it happens so that I am eligible to fund a traditional IRA. This link here provides how things are different based on whether you or your spouse participates in a retirement plan at work.

So we have decided that we will be opening a traditional IRA for tax year 2007 and would invest the money in an Index fund.

The question we are facing right now is where should we open the IRA. We have relationships with Bank of America. But we are not sure if they are our best option. We will be investing only in no-load NTF mutual funds. According to this comparison at zecco.com,  Etrade, TD Ameritrade and Scotttrade have free no load mutual funds. If in the future we want to buy company stocks or etfs, scotttrade provides the lowest fee. They also have physical office locations in our city. So I am leaning towards Scotttrade. Am I overlooking something? Is there a better option?

February 2008 Networth Update

Usually my networth updates are posted on the 10th of each month. The update is early this time since 10th comes on a weekend and the probability that I would write a post this weekend is pretty low. My husband is going on a trip next week and would be away for a month .

So here goes the update…

No major damages. We did everything right except we haven’t sent a check to our parents yet. That is why the assets are up and the debts are not as low as we projected it to be. We will be sending the check next week. So the numbers would adjust next month.

California is Expensive!!

It hit me the other day when we received the vechicle registration renewal notice for our cars. It totals to about $280 to renew it. Back in Florida, we used to pay about $52 to renew our registrations(both the cars). There is a new item, the Vehicle License Fee, which is the major contributor to this renewal fee.

As per the California Department of Motor Vehicles,

“The VLF was established by the Legislature in 1935 in lieu of a property tax on vehicles. The formula for VLF assessment established by the Legislature is based upon the purchase price of the vehicle or the value of the vehicle when acquired. The VLF decreases with each renewal for the first 11 years. The VLF is prorated if the assignment/reassignment of a registration year results in a registration year of less than 12 months.”

The history of VLF is available here.

Property tax on vehicles? Are you crazy? Is California the only state that has VLF? Does anybody have nice things to say about these?

Welcome!!!

It was such a surprise when my reader count went from 3 to 6 today. Welcome to all who are new to this blog. Thank you very much for making this 100% increase in my subscriber count.