I think you're well on your way. Put any extra money that you can into that emergency fund. That should be your first priority (after the bills, of course).
Teg, As Hedwig stated, you're well on your way, and on the right path. Definitely do the research on your income taxes this year. You should have some great deductions w/ mortgage interest, property taxes, medical bills, any "donations", child care, etc. Look for every deduction you can, it's all money in your pocket (or savings acct.!) As for the HELOC application, that is probably about a year away. But it should be on a longer range plan. A HELOC is like a large credit card that you borrow against. You do not have to use it. It is good financial management to have one processed during the "good times" (i.e. employed, bills paid, etc.), than try to get one when if there is trouble. The interest on a HELOC is usually deductible from your income as well. The HELOC just adds to the safety net of your financial situation. Regarding the emergency savings, just keep disciplined at the savings habit. It grows quickly, but give it time. The important thing is disciplined contributions, not the actual amount.
I will put an HELOC app on my agenda to see about once the mortgage is over a year old. Does that have to be made with the bank that has my mortgage? Or can I try a CU? That sounds like a wise decision, thanks y'all for telling me about it. Anyone know of good decent priced tax software? I have been using H&R Blocks free one for that last few years but I only filed short form so I need one that I can check the deduction route with. I wound up with too short of savings and availible cash starting out this new year. But I also ended with no CC debt except that blasted Carecredit. I am so eager to pay that puppy off! Not much I can do but stick to my plans. I plan on the 2008 year old to look much better. =))) Sigh, now to just do it! Thanks again, Tegleg
First of all, the HELOC does not have to be with the company your mortgage is with. I, personally, would not want it with the same company. The CU is a good place to start, but banks also offer HELOCs. You should check around and price them. I think Turbo Tax and Tax Cut are about the same price. I've used both and prefer Turbo Tax. Biz may be a little more in touch. I haven't done taxes for over five years now, and I do mine by reading the forms and instructions and using Excel. I don't like the interview questions on the tax software, because it seems to me that sometimes the questions aren't clear, and if you answer wrong you get a wrong answer. I had a friend who used one, it told her she not only owed taxes, but owed a penalty. When I did it, she was due a refund. It turns out that she had rental property and didn't understand when it asked if her money was at risk. For your situation, the packages are probably fine. What is the interest rate on your Carecredit account? What is the interest you are earning on your emergency fund? I'm wondering if you might want to pay minimums or barely over and build the emergency fund, but it depends on the interest rates you pay and get.
Hedwig is right, the HELOC does not have to be with the first mortgage holder company. The best advice (re: HELOC) is use the time to shop around for one. Look for "hidden savings" when researching. For example, I have my HELOC through my bank, the "savings" I get are the elimination of checking acct. fees, and higher interest rates for being a "higher balance" customer. So, shop around, and look for the best deal. In the end, it is about the interest rate, but check out all the fees involved. There are plenty out there that offer "no fee" HELOCs. H&R does offer a software, that allows accessing help advice if needed. TurboTax is a very good software also. You can get pretty good deals on TurboTax this time of year, often you'll see "Quicken" offered free with the deal. These are pretty good packages. Not to confuse you, but I use TaxAct on-line, fee is minimal, and advice is fairly good. But...as with any tax software it helps to check the actual regs on the IRS site if you have any questions or uncertainty. You can also check out the IRS website for all the electronic filing software.[/QUOTE] This is good advice, if your interest rates on the debt are not too high. Remember that medical expenses over 7% of your income are tax deductible. Your husband may want to consider himself "self employed" to start building more deductions as well. Your financial situation has changed a lot this year, and you need to step back and make sure you capture all the tax deductions you can. Based on information you've posted already, you should be getting a nice refund this year.
I knew Biz would have some better advice on tax software!! As far as his comments about the Carecredit account, he's right. You don't even have to be making more than the interest rate. If it's not too high, take your time and build that emergency fund. You have to look at it this way--if something happens and you have no emergency fund, what rate are you going to pay for the money you would need then?
Ok, thats good to know about the HELOC, since it will be awhile before I can app for one it will give me time to research whats availible. I will investigate the tax softwares since I will prob need to get one. I am thinking I will look at the paid version of H&R block's software mainly because my infor from the last few years is there & the free version I have used is pretty user friendly. The Carecredit balance was originally 3500, I have paid it down to 2800 & I have until Sept 2008 to pay it off before it starts charging interest. It is interest free until 9/08 as long as I make the monthly mimimun payment on it. The mim is 97 & I have been paying 100 per mth on it. Plus I did pay extra here & there. I think the interest rate may be high after the promotion ends 9/08. Thats why I figured it would be best to pay it off with the income tax and get it out of the way. This are some ideas I have been throwing around about saving extra money: 1. After Carecredit is paid off there will be a spare 100 a month. But before I started paying Carecredit that was our Medical/dental fund that covered dr visits meds etc. So it has really hurt when hubby/kiddos needed medical care. I think I will contribute 50 to the med/dental fund & 50 to emergency savings instead. Yearly total 600 2. I am already planning on putting a scheduled 60 a month into the Emergency fund. Yearly total 720 3. If my tax return is more than the Carecredit balance I will be sticking most of whats left in there. Hopefully with my new NASA card and it's % back that extra can go plus anything else I can squeeze out. Hopefully any over time can go to. Yearly total variable 4. I normally contribute 100 a month into my kids fund, I am considering scaling that back to 50 and adding the other to the emergency fund. Yearly total 600 5. There are two extra payperiods a year. I could prob squeeze about 500 out of both. Yearly total 1000. 6. Estimated at least 250 from this years income tax. So Grand total: 600 720 600 1000 250 Equals: 3170+. Not much is it...ouch But hopefully maybye I can put in some rewards, overtime & trim other places to add it up. Ok the emergency fund is currently 100 dollars sitting in my Penfed savings acct that was opened when I joined Penfed. I am wondering if I should put it somewhere else? I am so clueless, my bank has a savings but the interest rate is really low. It would'nt build much sitting there. Ugggghh I am such a pita, Tegleg
Well, for the emergency fund, making a lot of money on interest or whatever is not the primary concern. You want something safe and liquid--in other words, something not subject to market swings and something you can tap at any time. I'd leave it in a savings or money market account. Within those parameters, look for the best rate. You mentioned that it's a little harder to get out of PenFed. That's another aspect. You won't be tempted to tap it. Also, you're building a relationship there. You may want to look at them for your HELOC or a credit card in the future. You may get better rates someplace like ING Direct. They are FDIC insured. Maybe split it between the two, or just leave it in PenFed for now. Just make sure that wherever you put it, the account is insured by the FDIC or NCUA (PenFed is). That protects you in case the financial institiution has problems. When you get six months worth of expenses saved, you might want to put 3 months worth into a 90-day CD. That would leave you three months worth in the savings account, which would last until the 90 days is up for the CD. CDs typically have higher interest. But that's a ways down the pike. $3100 may not sound like a lot, but it's more than you have now. Over time, it will grow. You'll be surprised how soon you feel more comfortable with what you have there. You may want to pay the minimum on the Carecredit for now and put all the money in the PenFed account UNTIL September. That way you'll get a little more interest, and when the no-interest period runs out, you take out the money to pay it off, keeping the interest you've earned in the savings account. It might not be much, but you aren't looking at large amounts, and every little bit will help. Just make sure you leave it there and don't spend it.
Quote: "$3100 may not sound like a lot, but it's more than you have now. Over time, it will grow. You'll be surprised how soon you feel more comfortable with what you have there." Thank you for that. I needed that. I have a cash back card I just got with NASA CU. I plan to use it primarily for all that I can & pif after each statement. I have a few other cards in case something comes up. That was my whole plan with getting the cash back credit cards, to use them, pif and get rewards to save. I may look into a savings acct with NASA also so I can easily transfer the cash rewards into it. And I have a savings with Penfed. Penfed denied me a card in Sept so I plan to retry again in the future. Becasuse they also have a nice cash reward card. So I have 2 CU's I am on board with. The 90 days CD after 6 monthes is obtained sounds like a very good idea. I will plan on that. When I ever get there! Lol. I'm going to look into paying the mim on the Carecredit until Sept. That obviously looks like a good way to go, put that payoff from the income tax into savings, continue mim payments and then draw it out & pay it off in Sept. I hadn't thought of that. I just need to see if I can get a medical dental fund built up along with doing that, I just got a merit raise at work, hopefully maybye that may cover it. I am in the process of seeking other ways to save, grocery bill etc. Pinch my pennies till they scream. I've really thought about the whole emergency fund thing & have determined it needs to be high priority. If I had to have surgery or came down very sick, as it stands we would be in a world of hurt. Thanks for your insight & wisdom, I do really appreciate it. I could'nt have received better advice if I went and hired a financial planner. Thanks, Tegleg
You're welcome. I used to do some financial planning type work. Have you thought about a second job? Is there something you could do at home? Don't fall for these get-rich-quick schemes, but sometimes some small businesses in your area could use some part-time help. I don't know what your qualifications are, but could you do something like tutoring? Maybe a doctor who needs someone just on a periodic basis when his filing or billing gets piled up, you could go in for a day or two and help. I know you may not work regular hours at your job, I was just wondering if there might be some periodic things you could do to fill in. Even substitute nurse in a doctor's office if one of his regular nurses is off or something. Anything you could do for a little extra money could go into your emergency fund. And you're right, that's your weak point right now, so that's what you should concentrate on. If you can put even half of your raise in savings it will help.
Oh lol I do work funky hours. 12 hour night shifts 7pm to 7am. I work 3 shifts a week unless I am called off or put on call. Days vary, you may work all 3 in a row, two on, two off etc etc. Plus I work in intensive care, very stressfull, very very sick patients. Sometimes you are at full speed the whole shift just trying to keep your patients from going down the drain. It can be both physically & mentally exhausting. 1st day off you are so tired all you want to do is sleep. Then the other ones are spent catching up on housework, laundry shopping etc. With a hubby & 3 kids theres alot of it to do. My workplace is struggling financially evidently so they are enforcing a no overtime mandatory thing. Which is a huge problem because we are short staffed as it is. And not just any nurse can float in and work critical care because it's a speciality area. I have been in contact with some Home Health agencies for some possible per diem work on my scheduled off weekends. Maybye a little call, or an admission etc..Something that maybye would'nt take up a whole day so I can still have family/downtime. Bad thing is I live in a rural area where there aren't alot of prospects without traveling 1+ hour each way. So home health would prob be my best bet. I have been in talks with one, they are wanting me full time but can't (won't) match my current salary. I would go for it if they could, I used to be a Home Health nurse and enjoyed it. The doctor's offices hire either 1 year nurses (LVN's) or glorified office workers to keep their costs down. Beleive me they are so cheap!!Sure they would love to have RN's on staff but don't want to pay for them. Hopefully I'll hear something good soon. And that would be very good for my savings =))) Very sorry, no rant intended, it just kinda spews out lol. Tegleg
I was going to ask the same question as gemini72, but since it's already been asked I see some good advise that follows. Thanks for saving me some time and thank goodness for the Search function!
Teg, Two quick points: 1) You should keep making only minimum (or near minimum) payments on the CareCredit account, as long as there is no interest. In 9/08 decide what is best to do with the balance. 2) Go over your taxes carefully this year. You should be getting back more than $250 for a refund. Make sure you itemize deductions, and include everything you can think of (mortgage interest, property taxes, points on mortgage, vehicle registrations, medical expenses, work expenses, child credits, etc.) Again, I would think you should be getting a larger refund, depending upon how much you have withheld each pay period in tax.
