I’m getting a tax refund, and I’m happy about it March 27, 2011

That’s right.  I finally filed my taxes.  I used the Fidelity discount for Turbo Tax that I mentioned in a previous post.  My refunds are going to be:

Federal:  $89.  (Effective Tax Rate:  15.88%)

State:  $465.

So hooray!  $554 back in my account.  But, if you’ve read personal finance books and blogs in the past, you know that I SHOULD be sad.  I gave Uncle Sam an interest-free loan.  But guess what?  I’m okay with that.  The government had $89 of mine that I would have had.  And I gave Massachusetts an interest free loan of almost $500.  WHATEVER.

I don’t care about that.  Because the alternative would have been that I had saved all that money the whole time.  First of all, that’s not quite accurate, because it would be more like $39 per month.  But seriously, at interest rates being where they are, even on so-called “high interest savings accounts”, earning 1% interest on that money wouldn’t have been helping so much.

I figure that, since my tax situation isn’t very complicated, I only have a few deductions/credits that affect me, so I don’t expect to owe too much or get a refund of much each year.  I don’t ever aim to get a HUGE refund, just whatever the tax credits give me.

Some people advocate OWING as much as possible come tax time.  Then wait until the last day possible to pay it.  I know I could have modified my withholding to make it so I would owe the government money.  But that honestly makes me uncomfortable.  I’m not familiar enough with the tax codes to know how to underpay my taxes without getting in trouble.  If you underpay your taxes too much, you will get hit with penalties.  I know THAT much.  If someone has an easy way to figure out how to owe the most without getting penalized, I’d love to hear it.

Wisebread posted a similar discussion with 5 Reasons It’s Okay to Get a Tax Refund.  I’m pretty much agree with points 1, 2, and 5.  I don’t use my tax refund as an alternative for an emergency fund.  I assume it’ll be something small and not a big deal.

So, what’s your tax plan?  Do you try to owe as much as possible?  Do you try to get a huge refund?  Or do you try to stick close enough to $0 difference as possible?

Seriously Considering Grad School March 21, 2011

I’m very wishy-washy when it comes to making most of my decisions.  And I get even more anxious the bigger the decisions get.

Which is why I’m feeling incredibly anxious about the idea of going to grad school.  But I know it’s important.

Every once in a while, I start thinking about going back to school.  It’s usually around the time I go to an interesting lecture, symposium, or other educational event.  Sometimes it’s when I talk to my sister, who is pursuing her Ph.D. right now.  And I’m usually reminded about grad school whenever people at work discuss the opportunities through their advanced studies programs.

This time around, I was talking with a coworker about my goals at our company.  We recently both had our yearly performance reviews, and with that, we were required to list our goals for the following year.  So he asked me what my goals were.  My near term (within the year) goals were basically to get better at technical writing and presentation and to get even more involved on higher level work within the project I am working on.  But long-term?  I want to be like the people I work with now who are basically genius problem solvers.  I want to be a subject matter expert. I know some of their skills and knowledge merely comes from experience.  They’ve been working a lot longer than I have.  But I also know that if I really want to keep advancing up the engineering ladder, I’ll need some advanced education.

The plus side of all of this is that my company is really supportive of this sort of ambition.  They’ll reimburse me for classes I want to take.  And if I decide to go back to school full-time, they’ll pay for my tuition, and still pay me half my salary while I’m gone.  It’s a pretty sweet deal.  Granted, you’re committed to the company for a few years afterward, but I don’t mind that.  I’d want to stay at a job that I enjoy!

So, what’s next?  Between my craving to learn more, my desire to advance in my career, and the sweet deal my company offers, this decision is a no-brainer, right?

Just thinking about this plan makes me really anxious.  I have to figure out what schools to apply to, what degree I’m going for (Masters vs. PhD), and what subsection of my major I want to study.  Materials Science and Engineering is a pretty vast field.  I took a lot of classes in polymers and environmental materials selection during undergrad.  And my internships were mostly in metallurgy.  And now I’m working mostly in ceramics.  So, I could go in any of those directions.  Do I pursue what I loved in undergrad, or get more schooling on my main focus at my job (since, well, they’re paying for it, and I’d want to do what would be good for my career)?

I also realize that I would like to go to grad school sooner rather than later.  It gets tougher to go back to school the longer you’re away.  I’m getting pretty used to this post-college lifestyle.  Then again, I could try going to school part time…which would take FOREVER.

I’m still very unsure of what I am going to do.  But I keep seeing signs in my life that I need to get serious about my grad school ambitions.  I can’t put this off forever.

To those of you who have gone to or are currently going to graduate school, how did you make all these important decisions?  I feel so overwhelmed!

Weddings are expensive for everyone March 20, 2011

First:  No, I am not engaged.  Just wanted to calm everyone down.

Whenever I read a personal finance book/blog/website, I am warned that I better save up for my wedding.  I’m quoted figures like $20k, or more, for even a small wedding.  I’ve thought, “Well, I love my friends and family and everything, but $20k for one day?  Are you serious?”  Even though I’m not planning a wedding or anything, I’ve already made a few ( financial) decisions about if/when I get married.

My dress will NOT cost thousands of dollars. I’ve seen episodes of Say Yes to the Dress (I admit, I watch it from time to time!) where the girls have a price goal of $5k, or more, or sometimes the father announces “Price is no object, I just want my little girl to be happy”.  At which point I yell at the TV.  I want to look good, but I’m pretty sure I can look pretty good without spending a fortune.  Plus, I’d only wear the dress one day.  And knowing my luck, I’d probably spill something down the front of it.

My cake will be amazing. I don’t need it super fancy.  I need it super tasty.  I also don’t need it in the shape of something ridiculous and difficult to make.  I might even go with cupcakes.  Haven’t really thought farther than “delicious cake”.

Other than that, haven’t really given much thought to what I’d want for my wedding.  So, we’ll just cross that bridge when we get to it.

But my other realization about weddings?  They’re not just expensive for the Bride and Groom (or their parents, depending on the situation).  They’re also pretty expensive for the guests.

I’m planning on attending two weddings this year.  I’m glad to be going, because I love the couples that are getting married, and it will be great to be there on their big day, and share it with them and a lot of other friends.  But these are the first weddings I’ve been invited to that require travel.  All other weddings that I’ve been to (with the exception of my older sister’s) have been local.  A GPS-guided drive to a town outside of Boston.  No flights.  No hotel stays.  Just a drive to a beautiful wedding.

So, I’m realizing that, besides saving up for my wedding, I need to save up money for my friends’ weddings.  Airfare isn’t cheap.  Round trips tickets could be upwards of $500.  And even with a group rate, the hotels are still $100 or more per night.  Plus, there’s the wedding gift, and I’m probably going to need a new dress.  Yes, I want to buy some new dresses.  And so maybe I’m using my friends’ weddings as an excuse for new dresses.

So, I am going to have to start two different wedding funds:  the one for my own wedding, and the one for my friends’ weddings.  They’re going to keep getting married, I can’t stop them!  And I want to go.  I don’t want anyone to think I’m not willing to go to a friend’s wedding.  Now I just need to figure out which flights to get.  I’m really bad at shopping for flights, through all those online sites.  Where do you go to find cheap flights?  I’ve tried a lot of the aggregated sites like Kayak, Expedia, and Travelocity, but I also know that not all airlines are searched by those sites.  So, suggestions would be greatly appreciated on that front!

Also, I’m curious…those of you out there that have gotten married, or are getting married soon:  how much did your wedding cost?  Is that $20k figure books keep throwing around accurate?  Did you spend a lot less or a lot more than that amount?  And how did you keep your costs low?

How much will you spend?  And do you have any definites like my dress and cake plans?  Is cost no object?  Or will you be trying to get by spending as little as possible?

How I tricked myself into spending money March 13, 2011

Usually I’m pretty good about not spending a lot of money.  I try to stay out of malls and clothing stores.  I try to only spend money on groceries, gas, utilities, rent, and the occasional dinner out.  But then I end up tricking myself, and it all goes out the window.

I’m a big fan of Flexible Spending Accounts (FSAs).  They enable you to stash away pre-tax money for use on medical expenses.  Doctor and prescription copays.  Behavioral health counseling.  Hospital fees.  Eyeglasses and contacts.  First aid supplies.  And until this year, you could get reimbursed for over-the-counter medication.  Now I guess you can still get reimbursed, you just need a prescription for it.  Very confusing.

A few years ago, I had put $300 in the account.  And between getting new glasses and contacts, and going to a few appointments that were only partially covered by insurance (silly me, I know), I ran out halfway through the year.  I vowed not to do THAT again.  So for 2010, I put $500 in.  But even though I got my wisdom teeth out, I didn’t really have a lot of medical expenses.  Turns out I spent around $300 in 2010.  Should have just stuck with what works.

But luckily, my company allows me to use up the rest of the previous year’s money up until March 15th.  So, armed with that knowledge, and the fact that I wouldn’t feel right buying $200 in bandaids, I decided to make an appointment with my eye doctor.  I was up for a new pair of glasses in my insurance plan, anyway! So I went to the eye doctors.  My eyes are healthy, and my prescription hasn’t changed.  I didn’t need to buy a new pair of glasses.  So, if I was trying to save money, I would have stopped at that point. But I didn’t.

Knowing I had money that had to be used up within a week or so made me a lot more willing to spend the money.  And I knew I had to “use it or lose it”; that money would be gone if I didn’t use it.  So, if I wanted to use up that money, I could get a new pair of glasses or get a pair of prescription sunglasses.  I could also have bought some new contacts.

So, if I was trying to save money, I’d only get one of those.  And I’d worry more about the price.  But I couldn’t help it.  Knowing I had money to burn, I ended up getting both new glasses and prescription sunglasses.  Frugality fail.  Even when I found out the prices, I kept with it.  I could have opted for cheaper frames.  But I trusted the opinion of the optician that helped me pick out glasses (from past experiences at the eye doctors), so I figured if he thought I looked good, and I was good with them, I might as well buy them.

After adding up eye exam copays, and lens and frame costs, minus the discounts and insurance coverage?  $434.  I know.  I’m a little ashamed.  Had I not had that money, I probably wouldn’t have spent it.  Maybe that’s the good part about an FSA?  You spend money on your health that you might not have otherwise spent?

I’m still getting used to my new look.  When I picked up my frames, I was a little unsure if I still liked the way they looked on me.  They’re definitely different.  But I got my sister’s approval (she was in town visiting), so that was enough for me.

And did you want to see them?  I tried taking pictures of me wearing them, but the pictures looked really weird.  My regular glasses look like this, and my sunglasses are like these but with sunglass lenses.

So, what do you think?  Was I a big idiot, letting the “extra money” dictate my spending?  Or was I just being forced into spending money on myself that I otherwise wouldn’t have?  How much do you usually put in a Flexible Spending Account?  And does it ever make you spend more than you otherwise would have?