Vindicated

Following up on yesterday's post, the check to our local utility agency cleared and posted to the checking account for our investment property. Check shows it was deposited 2/18 (it was due 2/19). Not sure why it took so long to post and not sure why my current bill shows a non-payment.

Fourth Strike

Following up on yesterday's post, last night I received a bill from our local utility agency which noted that we had failed to pay last month's bill.

I know this one is wrong, because this is a bill for which I must write a physicial check and for which I drop off at the Town Hall drop box. But, looking at our checking account for this property, the check has not cleared so who knows what happened to it. I assume its floating around some where in the Town Hall.

Three Strikes

Three times in the last two months I have failed to pay a bill. I'm not sure what is going on with my bill paying system except that I've narrowed down the problem to - me.

Each month, I create a monthly spending plan which is based both on our yearly spending plan and the prior month's spending plan. Not much changes from month to month except the normal fluctuation up and down of our bills and the occasional appearance of a quarterly, semi-annual or annual bill. Then comes the first and/or the fifteenth of the month and I pay our bills, I cross them off the spending plan, I enter them in our check registrar, I deduct the amounts from our various accounts and I actually pay our bills, most of them, via on-line bill pay.

Looking back on the last two missed bills, I see that I crossed the bills off on our spending plan, I entered them in our check registrar, I deducted these monies from our total, etc. But, what was missing was the actual bill pay. I can't recall whether I missed the on-line step in total or whether I entered the bills into the on-line system but failed to hit that last button.

So, I've got to rethink my system and add in a final double checking step to make sure that the on-line payments are reflected in my pending payments at the end of the process.

What is your system, does it work for you, have you ever had this type of failure?

A Little Bit of Good News

Received a letter from the auto insurance company, sounds like the insurance company won at mediation (the two insurance companies mediated the liability for the car accident since there were no witnesses and we both said we were not at fault). I received a check reimbursing me for my deductible ($500). Happy about that.

I will be calling the insurance company to find out more, I am hoping, and assuming, that they recovered all expenses ($11,000) related to the repair of my car which would mean that I wouldn't receive a black mark on my insurance history.

Uncle Sam is a Mean, Mean Man

Our IRS audit did not go well. I will provide more details soon. We have provided more information to the IRS with the hopes that the additional information will sway them to reconsider their decision. If not, we will appeal.

2/15/10 Numbers

(1) Max out 401ks - $33,000
(2) Max out IRAs - $10,000
(3) Prepay mortgage - $1200
(4) Add to baby fund - $3500
(5) Add to emergency fund - $7000
(6) House/Furniture fund - $3000
Total - $57,700

(1) - $2636 (8%)
(2) - $1000 (10%)
(3) - $200 (17%)
(4) - $300 (9%)
(5) - $600 (9%)
(6) - $3000 (100%) [Completed]
Total - $7736 (13%)

So far, we are on target with our 2010 goals. New couch was ordered.

Audit Agony - Part 2

We spent another 8 hours on Saturday preparing our records for the upcoming audit. We also met with our CPA yesterday, happily he was pleased with our preparation and we probably only have another 1/2 of prep time left. Overall, we've probably spent 30 hours responding to the first request for documents and preparing for our audit appointment and responding to the second request for documents.

Audit is scheduled in two weeks.

We have vowed to keep our records better organized going forward and I am working on organizing our 2009 records in preparation for filing 2009 tax return. We won't turn our attention to 2009 taxes until we get the audit behind us.

One Done, Five To Go

(1) Max out 401ks - $33,000
(2) Max out IRAs - $10,000
(3) Prepay mortgage - $1200
(4) Add to baby fund - $3500
(5) Add to emergency fund - $7000
(6) House/Furniture fund - $3000 [Completed!]

Total - $57,700

(1) - $600 (1%)
(2) - $500 (5%)
(3) - $100 (8%)
(4) - $100 (2%)
(5) - $200 (2%)
(6) - $3000 (100%)

Total - $4,500 (7%)

Three weeks into the new year and we've got one goal completed. Clearly, I am desperate for a new couch. We are 1% ahead on our savings goal. Whoo-hoo!

In order to reach our goal of saving $57,500 in 2010, we have got to save $1100 a week. $1100 a week seems like a lot of money, it is a lot of money, but half of that is $630/week in 401k money. 401k money is less painful because the bulk of it is pre-income tax (we do put some of our 401k monies into a Roth 401ks [after-tax]). 401k money is also less painful because we never see that money, we never take possession or control of it, rather it is deducted from our pay-check before we get paid so the temptation to spend it is reduced.

Our prepayment on our mortgage is set up for auto-payment so I can pretty much forget that one and know that it will be completed. The emergency fund auto-transfer is set up as $200 per paycheck for a total of $4800 for the year. The baby fund auto-transfer is set up as $100 per paycheck for a total of $2400 for the year. In order to meet these two goals we will need to increase the auto-transfer or throw extra* money at these two goals during the year.

We do not have an auto-transfer for the IRA, normally I fund our IRAs by throwing extra money at the IRA as early in the year as possible. We also normally use the bulk of our tax refund to fund our IRAs.

*Salary - 401k contributions - auto-transfer savings - recurring bills - allowance = "extra money."