The big banks. The new fees. Ugh. It’s been all over the news, and it’s finally trickled down to little-ol’-me. My bank notified me that my small checking account (the one I use for business) will now have a $15/month fee because my balance isn’t high enough. I only have this account to keep my blog earnings separate from my family’s main bank account, like I did when I did direct sales. I’m a full-time mom working not-even-part-time hours, so it’s never going to have much of a balance! What to do?

It’s a movement, I know, but I’m just doing it to save myself that $15/month. I did a little research on fee-free checking accounts and ended up opening an Electric Orange Checking Account from ING Direct. It’s perfect for a mom with a small side business, since I never need checks (but they do offer them if you do). I rarely spend money, just a few Paypal transactions here and there and a few store purchases for supplies. I’ll be able to link up my Paypal account, my affiliates and other sources of income, and I’ll receive a debit card for those occasional in-store purchases. I can even get cash at ATMs all over town, if needed. It’s completely fee-free, no charges at all, with no minimum balance requirement (yay!).

I’m even going to make $50 on this move. When you make 3 signature-based transactions or Person2Person Payments with your Electric Orange Debit Card in the first 45 days, you’ll get a $50 bonus deposited into your account. Signature-based just means that you run the card as credit rather than debit, such as when I’m at Staples buying supplies for my upcoming coupon class. Learn about Person2Person Payments and more at ING Direct.

For now, I’m leaving our family bank account alone, but I’m keeping a close eye out for notifications about fees and other changes. I’m already researching credit unions and other fee-free options in case we decide to move.

 

I’m overdue with an update on our 2011 Financial Goals because a lot has been happening. We’d been off-track earlier in the year between our FEMA fiasco and the repeated threats of a government shutdown. In September, I was feeling very discouraged, so I re-read Dave Ramsey’s Total Money Makeover and used an online calculator to lay out a plan showing exactly how to get our debt paid off to reach our goals. That renewed our energy, and now we’re firmly back in the Debt Snowball phase of the 7 Baby Steps. We’re definitely feeling the pinch going into these last months of the year, but we’re determined and focused, with a light at the end of the tunnel that makes it worth it. We told the kids we would have a small celebration in February once our biggest debt is paid off.

With all that in mind, here’s where we stand on the goals we made at the beginning of the year:

1) Pay off one whole debt
While Dave’s plan suggests paying the smallest debt first, we’re ignoring this on purpose. It’s a small amount sitting there at 0%, so we’re going to complete #4 below first, then pay this off in the following month.

2) Increase our Emergency Fund
We did this, and now have 5 months of living expenses socked away, but it’s upside down from the order of the 7 Baby Steps. We feel we need to keep it on hand in case there actually is a government shutdown (the next possible date is November 18), but if we applied it to debt we’d be almost done!

3) Contribute to a retirement plan
We’re currently doing the minimum at my husband’s government plan and will increase this next year once our debt is gone. With a solid plan in place, we can turn our debt repayment dollars into retirement savings sooner.

4) Pay down our second mortgage
This is our BIG GOAL. With all the cuts we’ve made, money I’m bringing in, etc. we’re paying every penny we can towards this, and it should be paid off by February. Then, we’ll be able to re-fi our regular mortgage and apply everything over that to any leftover debt. Things will move a lot faster then, which is why we’re pushing so hard right now!

5) Pay for two family vacations (using the “extra” 2 bi-weekly paychecks)
Occasionally I wonder if it was a mistake to take these trips when we could have paid the money towards our debt. No, it was not a mistake. We needed to see our family at the family reunion, and we needed our first family vacation. That set us up for reaching our goal next year, because we can’t plan the next trip until we’re done with the Debt Snowball, and that is very motivating. In my own defense, I budgeted the two “extra” paychecks for the year for these two family trips, and we managed to come in $1400 under budget overall. That overage went straight towards debt repayment.

 

Back in January, I shared with you the financial goals that my husband and I set for 2011. Each quarter, we sit down to review our progress, and I’ll share it here so you can see how it’s going. At the beginning of April, I shared how everything went askew because of our FEMA drama about flood insurance. I’m sorry to say this has not been resolved, even with the many many hours I’ve put into it. Grrrrr… We had also been nervous about the government shutdown, which obviously didn’t happen (yay). So here’s the current update:

1) Pay off one whole debt
Nope. See #2.

2) Bigger Emergency Fund
We hadn’t moved on either of these goals by April because of having to send a bunch of money to FEMA. Grrrrr… I think we’re close; I’m waiting for one more letter to get from point A to point B and we should see the money returned. In the meantime, we’ve socked all money–our tax refund, extra monthly from a raise my husband received, and my blog earnings–into our emergency fund. At this point, we’re feeling really good about goal 2 but really lousy about goal 1. As soon as that FEMA refund check comes, it’s going straight to #1.

3) Contribute to a retirement plan
My husband is now contributing enough to his work plan that they’ll match it, but we’d still like to do more. Obviously, the previous goals have higher priority.

4) Pay down our second mortgage
Ahem.

5) Two family vacations (using the “extra” 2 bi-weekly paychecks)
We did it–we went to Florida for one week in May. It wasn’t bad–we actually came in $900 under budget, since I was militant about cooking and stretching our funds. Our second trip this year is a big family reunion in the Midwest in August. We bought plane tickets at the best price I could find, so it was expensive, but I’ll get creative in all the other areas and try to keep us on budget.

It’s early Friday morning, and there’s been no movement from DC, other than some Congress members publicly saying they believe the shutdown will really happen. I’m less upset than I was on Wednesday, having some answers to my questions helps. I’m a planner, so I’m already thinking about what will happen next week. Some thoughts:

• It has astounded me how many people are unaware of the possible government shutdown. I know that many haven’t believed that a shutdown would actually occur, but there were military moms at preschool yesterday who were just learning how military pay will be affected starting Saturday. For those living paycheck-to-paycheck, working for no pay with a promise of “future retroactive pay” can be devastating.
• While my family can weather 1-2 weeks of unpaid furlough, because my husband and I meet our financial goals and have an emergency fund, our concern is what comes after the shutdown. If the solution to the budget deficit is lowering federal pay and benefits or cutting positions entirely, we no longer have the “job security” we counted on when we moved to DC. The long-term effects could drastically change our financial goals to get out of debt and save for the future.
• I also anticipate gaining weight during the shutdown. I’ve already broken into the Easter candy for my stress-eating this week, and while others self-medicate with other substances, I use caffeine and chocolate. Lots of chocolate.

 

Back in January, I shared with you the financial goals that my husband and I set for 2011. Each quarter, we sit down to review our progress, and I’ll share it here so you can see how it’s going. I’ve been putting off writing this review because so much has happened (see below) and so much is uncertain right now:

1) Pay off one whole debt and
2) Bigger Emergency Fund
The original plan was to snowflake all extra money each month into one debt and have it paid off by April 2011, when we would then build up our emergency fund. The very day after I shared our financial goals, we got a letter from our mortgage company telling us we needed mandatory flood insurance because FEMA put us in a high-risk zone. Don’t get me started on this–it’s taken me over 10 hours of phone calls and paperwork to get this taken care of, but in the meantime we had to spend $3,000 on flood insurance. As of yesterday, we will now get that money back, but it will probably take over a month. Basically, we haven’t moved on any of our financial goals because of this and the impending shutdown; we’re simply paying the minimum on our bills and banking the rest.

3) Contribute to a retirement plan
Yeah, right.

4) Pay down our second mortgage
Again, waiting on reimbursement from FEMA, our tax refund, and #1 and #2 being settled.

5) Two family vacations (using the “extra” 2 bi-weekly paychecks)
With the government shutdown, a loss of pay will impact us most here. We simply cannot spend the extra money if there isn’t money to spend, no matter how tight a budget we’re on (and we’ve been working hard since January). I’m really hoping that it doesn’t come to this, because seeing our families is very important to us, and it will be hard to explain to the kids.

We’re a family of five living on one-income, the income of a government employee, and my husband is now being told to prepare for a government shutdown this weekend. This almost happened twice this year, but preparations never got this far because Congress agreed to extensions and avoided it; this time, it is looking very likely. This not only affects my family, but many of those living here in the DC area, and others throughout the country. It may also affect you. Here are some important things to know:

Will we receive paychecks that pay out April 15th?
The bi-weekly paycheck that most government and military receive would normally occur Friday, April 15th. At this time, most agencies and the Defense Department are saying that 1 week’s pay (for this current work week) will be paid out, with no paychecks after that if the shutdown continues.

Will the IRS shut down? Do I still need to file taxes? 
Yes, you still need to file your income taxes by the April 18th deadline. If you have already filed and are expecting a refund, it should be on its way. The Washington Post is reporting that only paper-filed returns after this Saturday’s possible shutdown would be affected.

Will my spouse (or I) get paid for the shutdown time? When?
Some employees are deemed “essential,” such as those in the military, providing security support, and many others throughout the country. Employees are to be notified by Friday as to their status. Whether or not employees will be paid for working during the shutdown will be determined by Congress, but in the previous shutdown all employees were retroactively paid. Essential employees, by working during the shutdown, have created an “obligation of pay” for the government and must be retro-actively paid, but there is no guarantee that non-essential workers will be paid. My husband and I are preparing for him not to be paid.

What my school/group is visiting Washington DC?
National parks and museums across the country will be closed during the shutdown. Unfortunately, this will affect millions of kids and seniors whose groups visit during spring break. Privately-owned properties (like the Newseum) are not affected. If you live elsewhere in the country, any federal buildings, parks, etc. will be closed.

I have some more personal thoughts about this as a dependent spouse, which I’ll put in the next post. In the meantime, please see the Post’s Government Shutdown FAQ article that is being continually updated as new information comes out. I’m also following Ed O’Keefe on Twitter. Updated: I just found the OPM’s Guidance and Information on Furlough, which is where the Post is getting the info.