My Son's Money

My son, C., will be 18 months old tomorrow. He has a while before he's old enough to spend his own money. But in the mean time, he has collected a small sum of money from gifts and holidays. I would like to help grow his money until he is old enough to manage it himself.

Right now, we have his money stowed away in a simple savings account at our local bank. I see this only as a temporary measure due to the low, low interest rate that is offered. What I would like to do once he has enough is move his money into a long-term CD. He would get a much better interest rate and there would be no concern over liquidity since he won't be needing it anytime soon. Our next step would be to move his money to a money market account or fund. Again, this would allow him a better return on his money plus give him some access.

I've also thought about opening him a high interest rate online savings account like ING or HSBC Direct. I think for the sake of simplicity and accesability we will forgo this option for now. I don't know. What do you guys think?

My company offers U.S. Savings bonds through payroll deduction. I think I might start buying him bonds for his birthday and Christmas just to give him another option in his portfolio.

I know it seems like a long time before any of this will really matter. However, the past year and a half have flown by us. I don't want to wake up tomorrow and him be 18 going off to college unprepared. These are the type things I think about now. It's amazing what can change in a year and a half.

What say ye?

The Importance of an Emergency Fund

Well, I got a letter in the mail today that everyone dreads. I got a letter from the IRS telling me I owe $913 from our 2006 tax returns. I'm still not clear on where they came up with this but I believe it's from my wife and I taking payment from the state retirement funds when we moved instead of having it rolled over into an IRA. I thought we had taken care of this (as far as taxes) at that time, but apparantly I was wrong.

I'll go ahead and say it: This sucks. I've called my accountant to see if this is a mistake. With my luck, this is no mistake and I'll have to pay the money. I've just got that feeling.

I think there is two lessons to take away from this situation:

1. When in doubt, call your accountant! Even if you think it's a trivial matter, you are better off being totally sure by checking with a professional.


2. Have an emergency fund. Luckily, we've been able to build up a small emergency fund over the past few months. (Thanks economic stimulus check!) The fund is no where near what I would like it to be but a least there is enough cushion in it for us to handle an unexpected expense like this.

Anyone ever had similar experiences?

Addition to the Blog

My wife, N., edits my posts for me. As she was reading over the draft of my last post, she said my side of the story made her look like a "shrew". I explained to her that wasn't my intention and I was sorry she felt that way.

So our solution to this: she will start contributing to the blog. Not only will you get my side of our financial issues, N. will have her own stories and opinions to share. I think (and hope) this brings a much broader appeal to our blog.

Hopefully that way, you'll get both sides of the story.

Money, Communication, & My Wife

When there's plenty of money coming in it's not hard to talk about budgets. It's when things get tighter and expenses are cut that these discussions are a little tougher to have.

I hate disappointing my wife. That's the bottom line. And when I have to tell her that she can't spend as much or we can't go out to eat, I feel like I'm not doing my job as husband and provider. I want her to have everything she wants and more but, at the same time, I have to make sure what we do fits into our budget.

Last week, I had been going over some numbers and making some tweaks to our budget. I noticed that we had been over spending on our monthly American Express bill. I found that if the trend continued we would be in some trouble later on in the year. I calculated the new magic number for the AmEx bill and it was much lower than what we had grown accustom to over the past few months.

I wasn't sure what to do. I didn't want to present this new (and leaner) budget to her. But at the same time, I couldn't allow the status quo to continue.

In passing one night, N. mentioned how well our spending was on the AmEx this month. I told it was good but we needed to be cautious to keep it at the new number I had come up with. She inquired to where the new number came from and I showed her the new budget I had developed. She was very quiet and we did not speak of it again that night.

The next day we started talking about it. She said, at first, she thought there was no way we could do anything with a number that low. But once she thought about it, it wasn't as bad as she had initially thought and could be quite workable. She told me that if I would keep her more informed of our financial ins-and-outs she could play a better part in meeting our financial goals.

The lesson I learned was that if I made a better effort to communicate with my wife on financial matters I could avoid uncomfortable conversations later on. One good thing that came out of our talk was to employ having money talks on a regular basis. A talk once a week, like Sunday evening, to update ourselves on where we are in relation to our goals. Are there any big expenses coming up? Where is our money going? Things like that. I really feel these new "Money Meetings" will help us weather these tight times. And in the end, I think it will help strenghten our relationship along with our bottom line.

Budget from 2 to 1

Our son will be a year and half next month and I really feel like I'm just now getting a good grasp on what our monthly expenses should be. Considering all the life changes we've been through in this short time, I guess things are finally settling into a regular routine for us.

Let's recap:

• My son, C., was born in February
• My wife, N., quits her job in March
• Pay off hospital bills for son & wife in March
• I pay off our SUV loan in April (I'm kinda regretting the SUV purchase right about now)
• Accept a new job in Mississippi in May
• Move from Alabama to Mississippi in June
• Live with my in-laws for two months
• Purchase our first house in June
• Move into new home in August

I guess I realized around December of last year that we were still spending like we still had two incomes. Going out to eat a lot (with the family or at lunch during work). My wife is way into baby clothes. Lucky for me, she only buys designer baby clothes. Also the baby necessities add up pretty quickly too. Diapers, formula (we had to buy the expensive sensitive formula), baby wipes, Diaper Genie refills.

Before I knew it, the monthly AmEx bills was really starting to eat into my checking account. It was at Christmas I realized I wouldn't have enough in the bank to cover all our costs. Unfortunately, that's when we broke out the credit cards.

The company I work for gives out yearly bonuses in March, so I knew I would have that check plus a pretty hefty tax return and economic stimulus check to cover all those over runs with some left over to help rebuild our emergency fund and start my son's 529 fund.

Our challenge now is to continue to keep a tight hold on our expenses. It's been painful considering the freedom we had prior to our son's arrival. I should be getting a promotion in December that should help us out. I'll keep updates on how we do.

Amazon vs. eBay

Over at Free Money Finance, he has the $10k Challenge. Basically, he tasks his readers to create other streams of income outside their normal 9 to 5 jobs. Lately, I've been thinking alot about what I can do to create some extra income. Hence, the new blog.

The one I hear most is "Sell stuff on eBay". The thing that bothers me is that eBay is not the end-all be-all of online merchants. Frankly, I find eBay is more pain than prosperity. I prefer Amazon's Marketplace. I was turned on to Amazon in 2004 and I've been addicted ever since. My wife says that I would sell anything not nailed down. Over the past 4 years I've netted about $2,500 selling the following stuff:

• Books
• Textbooks
• CDs
• DVDs
• Old VHS tapes
• Video Games
• A Palm Pilot
• A PS2
• A PSP
• Some computer network hardware
• A digital voice recorder
• Pretty much anything with an ISBN number

That's the thing! With eBay, you've got to take pictures, come up with a description, decide what categories it will be listed in, how will shipping be handle, etc. etc. etc. Frankly, it's more work than its really worth . Plus, if you item doesn't sell, you still owe eBay just for listing the item.

Amazon is so much easier. Type in the ISBN number and there's all the information about the item you're selling. A picture, a description, everything. You set your price and confirm what shipping options you'd like to offer. Amazon subsidizes the shipping costs for you so if you can ship it for cheaper you make even more. Amazon takes a small commission only if you sell an item. Items listed on Amazon are active for 60 days so you can set it and forget. All you have to do is package and ship the item when Amazon tells you its sold.

To me, Amazon is so much better. I have sold a few things on eBay but nowhere near the amount of business I've done on Amazon. I wouldn't mind doing a bigger volume of business on Amazon but for right now I think I'll continue to sell odds and ends from around the house.

What are your thoughts? Have you had similar experiences? Which do you prefer?

Welcome to Tink No More

TINK - Two Incomes, No Kids

Back in the day, that's what my wife and I used to be. Not any more. I'd like to use this blog as a resource to chronicle the financial (and emotional) difficulties going from two incomes to one with a new child.

Please bear with me, I'm new to blogging so I'll be feeling my way through this.

I'll have more to come later.