No, I’m not talking about the gigantic butt I’ve developed since the start of this pregnancy.

How much extra float do you keep in your bank accounts?

I’m a big believer in the fudge factor. Murphy is kind of a jerk and whether it’s a transaction posting too slowly, someone cashing a check 6 months after you cut it, some fuzzy math, a transaction going through twice or just plain having a brain fart on how much is in your account, at some point there’s bound to be a screw up that could force you into overdraft.

If you’re not living absolutely hand to mouth, I’d make sure there was at least an extra $200 chilling in your checking account that should NEVER be spent. We keep more than that, but that’s because most of our transactions through the bank accounts are things like the mortgage or loan payments that tend to be bigger transactions.

To give you an example of how you could get smacked if you don’t have enough cushion, let’s say you’re going on vacation and you don’t like credit cards, so you pay for your hotel room with a debit card. Many chains will put a hold larger than your room charge on there to make sure you can pay off any incidentals or charges to the room. If there isn’t extra fudge room in your account, you could find yourself unable to use your card for anything else if you’re tightly budgeted.

A similar example would be if a cashier screwed up a debit transaction and had to refund or cancel it. In Canada, it would just be voided immediately and life would move on. In America, you money is now in limbo and you could be stuck for days or weeks where the money is held until the transaction falls off. Not so bad if it was a coffee and pastry, but it could be devastating on a big ticket items.

Getting smacked with an overdraft fee is one of the dumbest financial mistakes people make. While sometimes it’s possible to get them to waive it if it’s your first mistake or if it’s truly not your fault (like the canceled transaction), in this day in age it’s likely the bank won’t really care and you’ll be stuck with a ridiculous fee.

Popularity: 14% [?]

It occurred to me, as we were pondering what to do with the leftovers from our tax refund, that I don’t know jack about investing.

Well, that’s not entirely true. I understand the very basics of how shares and the market work (yay, economics) but I don’t really understand the different methods of investing beyond mutual funds. Obviously, this needs to be rectified.

So, does anyone have any good recommendations for books and websites on investing?

I’m NOT looking for get rich quick schemes or information on exactly what to invest in. What I’m looking for is basic, generalized info so I can bring myself up to speed and understand WTF a broker is talking about.

Popularity: 17% [?]

We finally signed the paperwork for our mortgage refinance yesterday. The whole mess was one hell of an ordeal, not thanks in part to some horrible record keeping and incompetence on the part of Wells Fargo. After several weeks of having them ask for things we already sent, question why we sent the things they ask for, and demand to know why we didn’t send things they didn’t ask for, they apparently finally managed to get it all together.

And then the title company never sent the paperwork to the notary.  Yeah, epic fustercluck there.

Anyway, we dropped roughly 1.2% off of our interest rate, which saves us $260 a month off the mortgage payment. While that doesn’t sound like too much, over the course of the next 20 years or so, that’s a little over $60,000. In any case, we are going to continue sending in the same amount that we were paying before and putting the extra money towards the principal, which should save us another $150,000 in interest.

It’s amazing how much such a seemingly small amount can do over a long period of time.

Anyway, the reasons we got a refinance while many others are begging for loan modifications and getting smacked down are simple.

• Our mortgage was not in trouble. Every payment was on time and paid in full with extra.
• Our income had gone up, not down. We were in no danger of not being able to make the payments, we just wanted to save a little dough.
• Our house isn’t underwater. In fact, our mortgage is for about $25,000 less than the current value.

If you’ve got those things going for you, you’ll have a much easier time refinancing, even though the people who are behind and were laid off need loan modifications more.

Anybody else refinance lately? Did the bank give you a hard time?

Popularity: 11% [?]

By now, you’ve probably heard about the murderer who flew a plane into the IRS offices in Texas. The news and sympathizers can call him whatever they want, but the truth is that this man murdered an innocent government employee because he was fiscally irresponsible.

Don’t get me wrong: taxes freakin’ suck. I’m as crazy a ranting, social liberal Democrat as they come and I still hate taxes. We look at Mr’s paystub and grumble at the huge chunk that good ol’ Uncle Sam takes back. My family waves goodbye to almost $25,000 a year, and boy could I think of plenty of uses for that. (No, not a trip to Hawaii, I mean things like a years worth of mortgage payments or an emergency fund.)

But taxes are essential to running this country. When crying about all the ‘welfare mothers’ wasting tax money, it’s easy to forget about all the OTHER services your taxes support. Like say… the army. I’m not a big fan of us marching into places we don’t belong, but it’s hard to argue that we don’t need an army of some kind now that we’ve pissed half the world off.

And court systems. Yes, they’re a good thing. Just go look at countries where they don’t have a jury system and people are arrested, jailed and killed on the opinion of one man. The lawyer that gets supplied if you can’t afford your own? Yup, that comes from your taxes.

And yes, food stamps and WIC. Despite common misconceptions, there are a lot of hard working, rural folks on the various forms of government assistance as well as the city folks.  You can get help feeding young children even if you have a steady but low paying job or lost your job (here the cut off for a family of 3 is $33,874.) No, I’m not pulling that out of my butt, go look it up.

And schools. You may think your local taxes are supporting your schools, but the truth of the matter is that schools receive a lot of federal support as well. Without that support, your kid may be learning from 30 year old text books and in classrooms with 50-70 kids per student (and sometimes that happens anyway in areas where the tax revenue isn’t enough.) Even if you choose to homeschool your kiddos (and yes, I think it’s a viable choice), you don’t want them growing up surrounded by completely ignorant idiots.

I hear mothers whining all the time because their kids couldn’t find the info they need in the library or that all the computers were taken. Guess what? If you cut off government spending on the library, they can’t afford new books, or new equipment, or even the employees necessary to take care of what they have. Public parks? Monuments? Museums? Zoos? Even if they’re ‘privately funded’ most of them get a lot of money from government grants, which are funded by tax money.

You like being able to drive from one place to another? Me too. Guess what funds road expansions, repair and snow clearing? I’m sure many of you have seen what happens when construction projects run out of public funds.

Do a lot of our social services need reform? Absolutely. But the answer is not to kill or threaten the innocent workers. We live in a country where you have recourse to what you feel are government injustices. Was the Tea Party protest in front of the White House violently subdued by the government? Nope. Do we need a military coup in order to change our elected officials? Nope, we regularly pass hands from party to party during elections. Did Dr. King help change centuries of injustice by marching up the National Mall with an armed militia? Oh hell no. So why do ignorant assholes feel that violence is the answer?

“There is a direct correlation between increased IRS enforcement efforts and the number of threats made against IRS employees,” said J. Russell George, who heads the office of the Treasury Inspector General for Tax Administration. His office handled more than 1,200 threat and assault case referrals from the IRS and its employees between fiscal 2001 and 2008. The cases resulted in more than 167 indictments and at least 195 convictions, he said.

Taxes suck, but they’re an important part of the social contract of living in a civilized country. Guess what’s NOT a part of living in a civilized country? Hint: It starts with v and ends in iolence.

You don’t like it paying our taxes? Go ahead and try to find a 1st world country that doesn’t have high taxes. In fact, many of them have much higher taxes than we do. If you don’t like the consequences of living in America, you have the absolute right to go ahead and live someplace else. Otherwise, you’re stuck with the social contract, so either pay up, use your rights to make a change or GTFO.

Popularity: 11% [?]

When it comes to making financial changes, are you better at making the big changes or the little ones?

Mr. and I have opposite talents here, which can clash if one of us tries to make decisions in the other’s domain. I am definitely better at micro-managing the household expenses, but Mr is much better at dealing wrapping his head around the big numbers of things like our mortgage. Not that I would run out and buy a Porsche or Mr doesn’t know what a coupon is, but we definitely work better if we utilize our talents on separate issues.

For example, I drink A LOT of milk, and Mr harps on me for buying the second gallon and the fact that I leave about an ounce of yucky, crumby milk in the bottom of my bowl when I eat cereal. I actually calculated it out once, and I’m wasting about $.50 in milk a week. Meanwhile, he managed to completely miss the fact that his insistence on meat at every meal and refusal to eat any vegetarian options (beans, tofu, etc.) tacks on an extra $10-15 a week.

On the other hand, I get frustrated that we can’t buy some of the big household and baby items we need without waiting until the next month, but Mr has our credit card bills (everything goes on them and they’re paid off every month) down to an exact science. I know I’d end up over budget on some months.

Are you better at one or the other? Do you split financial management if you have a significant other?

Popularity: 13% [?]

Study finds that 73% of people use their banking password everywhere else on the web. But not the people reading my blog, right? Y’all are to smart for that.

The problem with using the same password on multiple sites is your password could be stolen from a site using weak security and then used to get into a higher security site.

Now, having a new password for every site probably isn’t feasible for people, so you have to make a decision on which sites need separate, strong passwords.

Alas, this doesn't actually work for computer security

You should have a seperate, strong password for every site that:

• Records a lot of personal information. (Facebook)
• You have financial dealings with. (Banking, Paypal)
• People could easily get personal information or passwords from (Webmail, Ebay)

You may be able to recycle passwords among sites you just fool around on (message boards, game sites, blogs, etc.) While it’s annoying to have someone usurp your identity on a message board, it’s a lot less damaging than them transferring a few thousand dollars out of your bank account.

So what’s a strong password, anyway? A strong password:

• Contains letter AND numbers (and upper and lower case if the password can be case sensitive).
• Does not contain a dictionary word (and if it does, it’s split with numbers or another word.)
• Isn’t pulled from your personal information (no pet’s/kid’s names, phone numbers, etc.)
• Is as long as the site allows. (8 is good, 12 is better)

Truth be told, a dedicated hacker could use a brute force method to guess just about any password, but the idea here is to look like a less attractive target and prevent amateurs from nabbing your info. In the same way an angry German Shepherd barking in the window may make a thief decide to go rob another house, having a good password helps discourage identity thieves from choosing you as a victim.

Have you ever had someone steal your password?

Truth be told, when I was young and dumb, I used the same (fairly strong) password for eBay and PayPal. This was a big mistake because someone did manage to get a hold of the password and then guessed that they could use it on the other site as well. The lesson here is don’t have matching passwords on sites that go together.

Image Credit

Popularity: 15% [?]

So we FINALLY got our papers from Wells Fargo, which means we can do our taxes (hurray!)

This year, being our first year on the mortgage, we paid a whopping $17,500 in interest and $3,550 on the principle. How sad is that? And, we were sending extra $100-200 every month to pay down the principle.

The only saving grace is that we’ll be able to claim the interest on our taxes, which means we’ll have a pretty big refund this year. Logically, I know that having a large refund means we’ve pretty much been giving the government an interest free loan, but I kinda like the sweet surprise of a big refund. Then again, I think this is the year we have to start paying back our interest free loan from the government 2008 ‘tax credit’.

I’ve been mentally ‘spending’ our refund (don’t try to pretend you don’t do it too). I think that we’ll put aside $1,000 for unexpected baby expenses, another $1,000 for a kitchen table/chairs (and whatever we don’t spend goes into savings), and throw the rest at our car loan.

Technically, putting the money back into our mortgage would save us more money in the long run (especially since the mortgage is so new), but putting the money towards the car loan will free up $300 in funds every month for immediate cashflow. Admittedly, the former car payment will probably then go towards paying down principle anyway, but I prefer having  more liquid assets at the moment since we don’t really know how to budget for Baby Geek yet.

So, if you’re getting a refund, what do you plan to do with it?

Popularity: 15% [?]

Come, February 11th, there will be a ‘new’ car in our household, thanks to my parents. A 1997 Rav4 in excellent condition, to be exact.

Our first thought was a long the lines of “SWEET!”, but  now that we’ve been really thinking about, we’re not even sure whether we’re going to put it on the road right away. Some people may think we’re crazy since we’re currently a one car family, but having a second car isn’t necessarily a good option for everyone.

Sure, there aren’t payments on it (technically I’ll be paying my parents a token amount so it’s not a ‘gift’, but they’ll give us the money back later) but there’s a lot of other expenses that go along with car ownership. There’s the taxes on it, title and registration fees, insurance, inspections, not to mention the more regular costs of maintenance and gas. Altogether, it looks like we’d be paying between $50-75 a month to keep this girl on the road.

Now, $50 hardly seems like much for a second vehicle, but again, there’s more to consider. After some careful planning, both Mr. and I work from home, which means neither  of us needs a vehicle for commuting, except for 2 days every bi-week (any 2 days) when Mr. has to go in for an hour. This leaves the car available the other 330 hours a bi-week for errands or whatever else I need to do.

There’s also the matter of safety. While the older Rav4′s are hardly death traps, they do have a tendency to roll and less of the modern safety features that the Matrix has. If I were going to drive with mini-me, I would be taking the Matrix. Unfortunately, that would leave Mr. with the Rav4.  I don’t know if you’ve ever been in the passenger compartment of one of the early Rav4′s, but they are tiny and Mr, well, isn’t. He absolutely hates driving it because he ends up with massive leg cramps.

Basically, the only time the Rav4 will be truly useful for us is those 6 hours of commuting and work every bi-week.

I think we’re going to end up registering the Rav4 anyway, just for a few months to see if it’s really worth it to us. Having the second car would allow me to get a part-time job once mini-me is partially weaned and I start pumping, but that won’t happen for at least 6 months or so. It would also allow me to take the Matrix for my conventions and not leave Mr. stranded, but, again, that won’t be happening for at least 6 months.

I thought having a second car would be awesome, but now I’m definitely not so sure.

Popularity: 11% [?]

Popped into Consumerist today and found this: 11 Ways To Save Money Grocery Shopping.

This was the grocery list for 1 month for 1 woman:
Ground lean beef
Corned beef
Chicken breasts
Shredded cheese
Skim milk
Bagel bites (2)
Mini yeast rolls
Chili (2)
Refried beans
Taco dinner kit
Wheat bread
Wheat buns
Head of lettuce
Oreos
Pringles

All I could think of is ‘Where’s the food?’ Most of it’s junk and I see only one ‘vegetable’ (if it’s iceberg, it has zippo nutritional value). I’d expect someone spending like this on groceries to be asking US for help with their grocery budget.

Here’s my advice to this young lady:

1. Skip the processed foods.

Those refried beans were stupidly expensive for what they are. Buy a bag of beans and make your own, plus you’ll have a ton of beans left over for weeks afterwards.

That ‘taco kit’ is a waste of money. For $2.50, you could buy a bag of better quality tortillas, make your tacos and have enough left over to make breakfast burritos, regular burritos and other goodies to freeze or eat later. The ‘seasoning’ packet is usually glorified chili powder. Buy a jar of sauce and it will last for many taco dinners.

Canned chili is (again) a waste of money. If you’re already buying beans, beef and chili powder to replace the kit, you could make a big pot and freeze it for later.

Buy a larger block of cheese and shred it yourself. Cheese freezes nicely and you could use it to make the aforementioned burritos with the leftover chili, tortillas and cheese and freeze them for quick lunches.

Make your own bagel bites. For $8, I could make about 8 boxes worth from bulk bagels, the block of cheese and a jar of pasta sauce. If you lightly toast the bagels first so the sauce doesn’t make them mushy, you can freeze these successfully.

2. Buy more vegetables

Granted, this is only one month’s grocery budget, so perhaps she stocked up last month, but seeing only one head of lettuce is a little scary. Saving money at the cost of nutrition won’t save you money in the long run. You will pay for it later in poor health.

3. Skip the extraneous junk.

This advice is even given by the post author, but I see it wasn’t taken. She could have cut roughly $13 off of her budget just by removing the Bagel Bites, Oreos and Pringles. That’s almost 1/4 of her grocery budget.

So yeah, buying processed crap instead of real food isn’t a good way to save money, as evidenced by the original post. Sure she only paid $50, but she could have easily taken that money and bought a ton more ‘real’ food and been healthier for it.

Popularity: unranked [?]

I’ve long since discovered that I often disagree with ‘common’ financial advise. There are some universal truths of course (spend less than you make, pay down high interest debts, etc.) but after reading umpteen million financial blogs give the same advice, I often want to introduce Mrs. Forehead to Mr. Desk, repeatedly.

So what advice makes you go ARGH?

The big one for me is only having a ‘baby emergency fund‘ and then moving straight onto paying off debt. Around here at least, $1,000 wouldn’t even handle a month’s worth of essential bills if there were a ‘true’ emergency like a layoff. In this kind of economy, I’m a hell of a lot more worried about that emergency than car repairs, especially for people with unstable jobs. I know whats-his-face actually says to tailor your baby fund to the size of your family, expenses, etc. but the truth of the matter is most people don’t seem to listen to that part. In my head, it makes more sense to have 6 months worth of emergency fund and then start your snowflaking or whatever.

Granted, there are some situations where paying your debts down right now makes the most sense. If you have a payday or pawn loan and you’re looking at 100% interest or more on the debt, it probably makes more sense to just pay that sucker off. Or if you have absolutely layoff proof income from the family business or from a settlement, then maybe only a teeny emergency fund is ‘safe’ for you. In my family’s case, we’re not happy with less than 6 months worth of expenses. Now that we hit that, we’re really putting an extra $500 a month into paying off the car loan and mortgage.

My other big ARGH is people insisting others should only pay cash for a car and drive a beater. Maybe I’m this way because it was the safety features in the Matrix that saved my life, but I wouldn’t drive a car without airbags (front and curtain), even if you paid me to do so. Not even the old school airbags will do (I’m not a 6′ 200lb man and like my head where it is).

Now, I’m not saying everyone should run out and buy a brand new, luxury SUV just because it has airbags. There are plenty of modestly priced vehicles from roughly 2000 onwards that have decent safety features. I’m also not dumping on people who can only afford an older vehicle. I am, however, saying that sometimes there are things more important than money and I’d rather have an affordable car payment (it’s $200 for us) than compromise my family’s safety for the sake of saving a little dough.

Popularity: unranked [?]