Smartest thing to do with $$$$

[doxieluvr]

I could not handle cash hidden in the house, which is why I suggested the bank safe deposit box.

Can you post your budget and your debts? I am sure many of the great posters can point you in the right direction when they have the details.

[haapai]

As much fun as it is to make this list, I do have to admit that there is some waste. It is simply impossible to buy all that extra stuff and not go through it a little bit faster. If the tax refund is as large as I expect it to be, the waste could be quite considerable.

Perhaps we should stop for a second and make some estimates of the waste and compare them to the food stamp benefits that would be lost. If the food stamp benefit is particularly small, or will be be reduced quite soon due to income, or if reapplying for benefits is relatively easy and automatic, it just might make more sense to hold onto the money and forgo the food stamps.

[mom2-4monkeys]

if it was 2k or less, i would put it towards debt minus a little fun money for me. It was HUGE like 100k or more the first thing i would do is go to Disney!! then debt.

[haapai]

How about property taxes? The timing is tricky and it might get hairy if you have an escrow account that adjusts too quickly (reducing your fs benefit), but it might be worth checking out.

[haapai]

There's a neat graph of the (2010) EITC credit on this page. www.taxpolicycenter.org/briefing-book/key-elements/family/eitc.cfmIt shows the acceleration, plateau, and phase-out for different filing statuses quite nicely. It also calculates the phase-in and phase-out rates. You might find it useful. I hadn't realized until just now that if qualifying children are involved, the phase-in is much faster than the phase-out.

[Tiny]

Since you can't put the money into the bank but want to 'budget' out spending it over the course of the year (like liscence plates, probably insurance, etc) why not go the old fashion Envelope route. You can use actual envelopes or an "expanding wallet" you can get at office supply stores. You label each envelope with something.. say "August Auto Tags" and then put the appropriate amount of cash into it. Do the same thing with whatever else- maybe money for b-days, parties, next year Holidays... be sure to LABEL each envelope and put down the total that's in the envelope.
When you are tempted to spend this cash on something else - you have to face the fact that you WON"T have money for that particular expense (which you KNOW you will have). You will have to make a choice. Hopefully you will make a good choice and leave the money for it's intended use. This may help make your budget alittle less tight during the year.
I suspect you could also put Gift Cards into some of the Envelopes.
If you have a "gift" envelope and you know you'll need 15 gifts at $30 you could put a selection of 15, $30 gift cards in the envelope and then use them as the occassions come up.
You could also create a Grocery envelope and fill it with 12 (or 26) $50 or $100 grocery store gift cards. You could use 1 card a month (or 1 card every two weeks) to suppliment or "tide you over" each month for the rest of the year.
You could do the same with Gas for the Car - 12 cards or some other number. Gas is almost a 'fixed' expense you can guesstimate how much you are gonna use... it will be very similiar every month.
Keep your Envelope system someplace save and out of sight.

[Tiny]

I think I saw someplace that said you expect to get back 6K in the refund? That could be an extra $500 a month!! I'd look at changing your withholding - even getting an extra $100 - $200 a month would help you and you probably wouldn't loose your benefits.

[justwhoever]

No we are expecting well more than that. It's EIC, making work pay and child tax mostly. I can't change that. Taxes that we paid in appear to be $1200. If last pay stubs of last year are correct.

I've gotten many great ideas on what to do with the money.

We will be paying off what is left on van.
Probably paying up a couple of bills for an entire year. Insurance could go down because we'll be able to just have min coverage and paying for a full yr could get us a discount.

Our only phone is a pre-paid cell. A full yr is $540. Might as well have that taken care of too.

I did have a moment of wanting to kinda hurt my husband earlier. I told him most of the ideas and said I wanna us to spend this money wisely. I do not want to blow it on junk that will not help us through the year. He as serious as he could says...a new tv and computer will help us. I think my heart stopped for a few moments. He laughed at the look on my face. I was so sure that all my talking and reading and trying to get him on the wagon with me had really been for nothing. LOL I guess I can always go over to that one store in the country and get him a 5 inch black and white for $10. Not sure how I could get him on the computer comment.

Our refund would most definitely cause us to lose fs. And no signing back up once that money is spent...isn't that easy. People have had to wait for 6 months to get their food stamps completed. last year we had to give all our info again for review. Took them 4 months to get it done. They misplaced a paper and just let it sit there. I was calling weekly. We only have 1 food bank here and you're allowed to use 1x a month. I guess thank everything holy for ramen noodles...but ewww.

Budget:

bring home pay: $1470(both me and dh; I work for a school...if there's no school...I don't get paid. That's based on no bad weather or breaks)

House payment includes taxes and insurance $485
Insurance on vehicles(nicer van and beater car for work) $70
Electric/water/sewage/trash(yes it's all together): $148 in Jan. Might be a bit higher next month...lots of snow here
gas- heat- $170- the highest I've seen it here was $250 but that was 2 weeks of below 0 temps.
gas-van/car: $320
cell- $45
cable/net: $100

Total: 1338 left over $132 for household items tp, laundry, dish, hba, clothes if kids need.

[Tiny]

Wow, you've got more month than money. Your budget doesn't have alot of stuff that you are probably spending on...
I'm thinking the Safe Deposit box at the bank with some envelopes of cash. One marked "Car Maintenance" with atleast $500 in it. Maybe a second one "House Maintenance" with atleast $500 in it. This would be your 1K emergency fund for the year.
I'm also thinking 12 envelopes (one for each month) with $200 or $300 would be a good thing. Every month you stop in and grab that months envelope to help suppliment your income.

[Waffle]

If you're not supposed to have the money, I wouldn't think a safe deposit would be a good idea. Because there would be records of you paying for it every month. But maybe that's just me being paranoid.

[justwhoever]

Yeah they ask if you have a safe deposit. Not sure what happens if you have one. How much do they cost anyways? I've never had one. A small lock box is where we keep important papers. I'm not even sure if our bank has any. It's a credit union.

[Tiny]

In my neck of the woods, the banks (and S&L) have boxes from $10 to $75 a year. The $10 box is something like 3 x 3 x 18 inches - good enough for papers or small valuables. The $75 boxes seem to be close to banker box sized. You could check the banks/etc in your area for their prices - probably online.
I think having/using a box at the bank came up just to make it alittle more difficult to get your "stored" cash to help keep you from frittering it.
The goal is to be able to spread the cash out over the course of the year so it doesn't really matter how you achieve that goal.
Personally, for 2011 I'd look at adjusting my withholding so that I'd have more money each paycheck and avoid this problem going forward. There has to be some way to get more $ each month. You will be trapped in a cycle of famine and feast until something changes.

[Waffle]

I've never had one either - but I bet if that ask you if you have one, the next question would be what is in it.

I want to thank you for asking the question - even though I'm not in the same financial place you are, I learned a lot from this thread.

[justwhoever]

Adjust my withholdings to what? I'm thinking that $1200 is about as low as they can go. Even if we had $0 taxes taken out all year we are still gonna get a lot back. Can't get advanced payments on EITC anymore. We would have to make around $50k a year to not receive any. Granted it's not much the higher your income is before that.

Most have said adjust withholdings. To what? Whatever it takes so we don't pay in any taxes? That will, going by 2010's pay stubs, lower our refund by $1200. Trust me when I say we would still have a LARGE refund.

I'd be dancing in the streets and doing flips if we could make more money. And if any offers come our way to do just that we would jump on them.

I can totally see why most people on welfare just go get the new stuff. It's too much headbanging to decide what is the smartest thing to do with the money so that we can get farther throughout the year. But I do NOT want to start with we deserve it because we can't buy things any other time mentality.

It might be illegal and wrong but I'm thinking a savings account that I just "forget" I have. I don't know about that one though because here, when you are on public assistance and start a new job...before you even have your first paycheck they send a letter stating they know you have income that they don't have in the computer and only have X days to get them a paystub. LOL And that's because they some how run your SS#. And I would have to provide my number to open an account somewheres.

Gahhhhh. Trying to be smart with every single dime we have is starting to give me a headache.

I am so very thankful for everyone offering great ideas. But I think I am getting all worked up over this and I think for now I will just stand back. I do not want to f this up.

[teen persuasion]

I always used our tax refunds to pay down our mortgage. We paid it off 15 years early. It won't really free up anything for you now, but it is better than wasting the money on "stuff", and it will help you in the future.

You should be able to adjust your withholdings to get them near to $0. You can claim more exemptions (than you actually do on your taxes) - DH needs to claim 14 to get his fed withholdings to 0, but we have 5 kids. If you will owe no tax, there is no point lending it to Uncle Sam for a year.

[Waffle]

Oh - I don't believe I'm about to suggest this. But, since you're already considering the illegal account - is there any relative you trust enough that would open an account in their name. If yes, it would also add a layer of protection from using it on a whim since you'd first have to contact that person and ask them to withdraw whatever money you need.

Now that I've said that - I really hope once you decide to think about it again , you use some of the other suggestion in this thread that won't run you the risk of getting in any kind of legal trouble.

[doxieluvr]

Jan 21, 2011 15:28:57 GMT -5 Waffle said:

Oh - I don't believe I'm about to suggest this. But, since you're already considering the illegal account - is there any relative you trust enough that would open an account in their name. If yes, it would also add a layer of protection from using it on a whim since you'd first have to contact that person and ask them to withdraw whatever money you need.

Now that I've said that - I really hope once you decide to think about it again , you use some of the other suggestion in this thread that won't run you the risk of getting in any kind of legal trouble.

I would not trust anyone to hold my money. I think you are on the right track to pay off the car, prepay the insurance, and save some money. I would put it in a safe deposit box where only you & DH have access. Who's to say you do not store birth certificates, your deed, and insurance policys in the box. If anyone at social services asks whats in the box just tell them papers, they do not need to know that some of the papers have Ben Franklin on them. ;D

[haapai]

Since you are in stand-down mode, maybe you're up for a diversionary project. How about studying the food stamps benefit? Have you ever calculated what level of income or combination of income and expenses or weird series of paychecks would end your fs benefit. Knowing the relevant numbers might change your strategy.

FWIW, I visited the Indiana SNAP page and I'm not sure that there's enough information regarding how the benefit is calculated for you to figure this out. They don't define things terribly well.

You've taught me quite a bit. So this is why sales picked up last March. This is why my grocery store has racks and racks of prepaid cards.

[justwhoever]

Just needed a break from thinking about it.

We more than likely won't open an account that they don't know about, I simply can't see my self lying. It just doesn't feel right.

And I really don't think I would be ok with having someone else hold on to our money.

As for how the benefit is calculated? We are able to get some kind of foodstamps as long as our monthly GROSS income is BELOW $3077. As long as we do not have $2k in cash or of cash value. The closer we get to our income limit the less in stamps we receive.

The fact that we are going to finish paying off our van, we could lose them. Why? Because we COULD sell it and have cash. Not that we would or should..gotta get to work ya know. Doesn't matter...it's a what if of sorts.


We'll pay up and off to help us out for the year. I hope that we read enough and taken in enough to know that we need to spend this wisely. I've been trying to convince my wonderful hubby that yeah something fun and nice would be great...but we haven't done anything to deserve it yet. Needless to say...it's causing some issues. lol We both think we are right. But I think it's the smartest thing to do...

[haapai]

You may have already answered this question, does paying off the van mean that you can reduce your insurance on it?

[haapai]

I've been thinking about the van payoff for a while. It's a nice way to make money disappear and it's a good use. On the other hand, if the payments on the van are having a significant effect on the net monthly income calculation that is used by the food stamps office to determine your benefit, it would take some huge savings on insurance and interest to offset the loss of food stamps. There appears to be a thirty percent phase-out on net income.

Edited to add: The disincentives to saving (in any fashion) that you are facing are maddening. You have no idea how much cussing my computer has heard in the last few days.

[Deleted]

I guess some depends on how old your kids are. You can always get extra school supplies you know they will need next year.

There is purchasing extra clothes in various sizes. Or you could do all your gift shopping early if you have a place to store it.

I have holed out part of an old text book to hide money when I need to. I made sure it's nice and outdate and on a subject no one in their right mind would read, but fits in with my other books.

Maybe, it might sound bad, but buy little splurges that you can pull out once a new one month. Like a board game that the family can play.

Paying up the bills sounds good too. I had a friend who would do that for about 3 months in advance when her tax return hit.

If heating costs are high for the winter, maybe look at extra blankets. These double quickly as forts, or a makeshift bed for camping in the living room.

And I'm out of ideas right now. Best of luck.

[Peace77]

You can compare prices at Walmart and Sam's Club and see which is better for the products you like. You should be able to do it online.

I suggest :
1. Pay off the CC
2. Pay off the van
3. Put almost as much into savings as you are allowed. If the total has to be under $2k, make your total $1,980. Don't allow an interest payment to put you over the limit.
4. Have maintenance done on the van. Oil change, whatever is needed.
5. Buy gift cards for gas. Better to have several in amounts close to the cost of filling up your van.
6. Pay the annual amount on the car insurance.
7. Pay for a year's worth of service on your cell phone.
8. Stock up on tp, laundry detergent, fabric softener, stain treatment, dish soap, paper towels, kleenex, bath soap, shampoo, toothpaste, toothbrushes, razors, tylenol, batteries, school supplies, printer paper & ink, socks, and underwear, etc.
Store the stuff under your bed if you don't have enough closet or storage space.
9. Buy gift cards for Walmart or Target. You can use these later for clothes, socks, underwear, etc.
10. Pay an additional month's worth on the gas and electric bills. Can also pay any other utilities early.
11. Spend a little on education. Get some books at a used book store or Goodwill store for both you and the kids. Get a game that you can play together as a family.
12. If you have funds left, buy a pre-paid VISA card, you can use it later to pay for the car registration or other expenses.

[newsmaker]

I try to save 1/3, spend 1/3 (on me, kids,vacation),pay debt 1/3 (if any-otherwise it goes into EF)

[newsmaker]

BTW, I already did my taxes (e-file) and I'm expecting a refund!!!!!!

[newsmaker]

I pay my safe deposit box once a year ($100). You can get a pre-paid Visa or MasterCard. They will be accepted at most retailers/services.

[justwhoever]

I love all the ideas.

Thanks for the responses.

Things I know we are doing:
1. pay off van
2. pay off cc(it's a closed account and never again will we have one....we both suck with them!)
3. pay insurance for a full year.
4. pre paid cell paid.

I am not sure on how much the insurance will be because I am still doing the pro/con thing on having full coverage on the van. I say we're poor we can't have such things, and others say it's not that much more just keep it for in case. I'm on the fence.

What is left will still be a lot. Exactly how much it will be is yet to be known for sure. Still waiting on 1 w-2. Probably Friday.

I am writing down the ideas(or making dh read this) and we are going to decide what to do. I so LOVE the idea of having tp and all other household stuff that is needed but not always thought of til you're low or out on hand.

But I will do this after I have filed and I am able to say ok we will have this amount of money. What do you think we should do? Or should I wait til we have the money?

[haapai]

I think you should come up with a plan. It might even make sense to delay filing until you have the plan in place.

There's so much to spend that it could be a real slog. Items 1-4 on your list are the easy ones. Once they are out of the way, getting the money spent starts getting a lot harder. Only so much TP fits in the van and picking out clothing (if you go that route) eats up a lot of time.

As wrong as it may feel, I'd build a spreadsheet detailing how to get rid of the money. I'd rather tussle with that voice in my head that is telling me not to count chickens than panic and make poor choices.

[justwhoever]

Well the good news is we've never been stupid enough to get your money as fast as you can. Paying $500 or more to get it the next day...or even same day is so not worth it. So after we file it will take about 2-3 weeks before it hits our account.

So once I know for sure what the amount will be, then we will start with the total and go down the line til we hit $0.

We know what we use around here(household cleaners) and it shouldn't be hard to say ok...we use 1 bottle of this a month..so 12 of them would cost us $xx. Same with tp..most people know how much the use in a week/month so it shouldn't be hard to figure a year. And I may go over just a bit to make sure. It's not like it's gonna go bad.

About gift cards. I've used them before but never got one and then held on to it for a long period of time. Do they expire so to speak? We've bought the pre-paid Visa cards to pay bills with. Our debit card that we have is declined at most places and we do not have checks. It's a good card, but that little machine tells the people that it's expired when the date is clearly still good. Yes we could go get a new one...but hey keeps us from needless spending lol. But anyways, if I get say Walmart gift cards to put back for Christmas/b-days will the funds still be there in 11 months? Are there fees?

[Peace77]

There are no fees and no expiration date on the Walmart card.

See www.walmart.com/cp/Using-a-Gift-Card/538428?fromPageCatId=538430&catNavId=538430