Big News In The Beagle Household

My wife and I have been sharing some big news with our family and friends, and now that the word is out, I wanted to share the news here:
My wife is expecting our first baby!!!!!!
We actually found out a few weeks ago, on our anniversary trip last month. We wanted to make sure to where it was far enough along and past our first doctor’s appointment before we spread the news. Our parents and grandmothers were extremely happy, and our family and friends are extremely happy for us as well. We are of course thrilled!!!!!
I’ll obviously be dedicating some posts on this as having a baby changes everything and turns everything upside down, including the world of personal finance.
Some of the things that I’d like to talk about are:

  • Whether or not my wife will work after having our baby
  • Budgeting for medical costs during pregnancy and after
  • Adjusting our budget and spending habits after the baby

I’m sure I’ll cover those plus many others!
My wife and I are extremely happy and excited. I know we have a lot going for us. My wife has a degree in Child Development and works in the field, so although I’m not familiar with very much about babies and have only a small idea of what to expect, I know that my wife will be a great teacher. From a personal finance perspective, we’ve been slowly preparing for this since we got married, knowing that this day would eventually come.
In other words, my wife and I have made a great team and I know that we will continue to do so as we approach and reach parenthood!
On a slightly sadder note, the circle of life made itself evident today, as an aunt passed away suddenly and unexpectedly. She lived out of state and had been in town for a few days to visit. She was preparing her bags for her return trip home this morning when she was stricken with what appears to be a stroke, and it was too much to overcome. She will be greatly missed by our family.
If postings are a little sporadic for the next few days, please be patient as there is a lot of things consuming time and thought. Prayers are always welcome!

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Not Understanding Withholding Rates

Something has been sort of bugging me, and today I ran some numbers to verify that I should be concerned. I noticed after I changed my marriage status from SINGLE to MARRIED after getting married last year, that my take home pay increased.
I didn’t add any allowances from what I’d filed with when I was single. Nothing else changed, so I’m confused as to why the withholding rates suddenly change. I verified today that in years past, they took out about 18-20% in federal withholding. I’m making the same as last year, yet it’s only around 14%. Yet, somehow I have a hard time believing that I’m going to pay less taxes.
My wife’s withholding is even worse. She makes less, and for last year, they took out about 15%. Now, they’re barely taking out 5%. What the heck???????
This shouldn’t affect us too much, because when I noticed the increase, I started simply taking the ‘extra’ amount in my paycheck and putting it into savings. I figured I’d just combine that with whatever return we got to get our ‘total ‘return, and it wouldn’t end up too much differently than what we got as a total refund last year.
Still, this seems rather dangerous to me, because it seems to me that a couple that didn’t save that ‘extra’ money might spend it and end up owing money to the government come next April 15th.
Am I missing something totally obvious here?

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Wall Street Meltdown: What The Government Should Do Next

After another brutal day on Wall Street, the question will surely be raised as to what the U.S. government should do next to try to stop the bleeding and the meltdown that is occurring day after day.
I think I have the answer. Are you ready for it? Here it is:
Absolutely nothing.
That’s right. Nothing. No more interest rate cuts. No more providing additional loans or credit to banks. No more bailing out insurance companies. No more promising to buy risky debt. Nothing. Zip. Nada. Zilch.
Why?
Because nothing they have done so far has worked. The government has tried tactic after tactic to try to calm the markets, but it isn’t working.
These investors that are hitting the panic button have it in their heads that they need to drive the market down day after day. No rate cut, bailout, insurance company rescue, or anything else seems to stop them from panicking. They’ve made that clear.
So, I say let’s just stop trying.
My opinion is that these ‘traders’ who are choosing to let hundreds of billions of dollars disappear from our economy every day are the equivalent of crying babies.
When a baby cries, you can do many things to try to make it stop crying. You can feed it. You can change its diaper. You can rock it. You can give it a pacifier or a rattle. Most times, these things or others will make the baby settle down and stop crying. But, not always. Sometimes a baby is just going to cry no matter what. In those cases, you have to make the decision at some point to just let the baby cry itself out until it’s done.
Basically, these traders driving the market down are the babies of our economy right now. The government has fed these babies (bailout), changed their poopy diapers (interest rate cut), given them their rattles (extended additional credit), and everything else that you provide to a crying baby.
But, these babies have made it clear that they just need their time right now to cry. And cry they will.
So, I say let them cry. Let these sellers bawl their little eyes out. Let them sell and think that they’re accomplishing something. Let them wail at the top of their lungs until they can’t wail anymore. Eventually, just like a baby, these sellers will tire themselves out. And they’ll quit crying.
Then, and only then, the government can get back involved. At that point, maybe the investors will appreciate the steps being taken to try to calm the waters. But for now, there’s no appreciation.
Only the sound of babies crying.

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Net Worth Review: October 2008

Well, it was a brutal month if you look at the bottom line for net worth. We witnessed the largest percentage drop since I’ve ever seen since I started tracking.
Let’s start off with the bad:

  • Where to I start? Well, anything with investments was brutalized. Our retirement funds went down in double digits, as did all of our other non-retirement investment holdings
  • Our bottom line net worth was reduced down to levels not seen since 2004. I guess that sort of goes in line with the stock market since I think we’re around lows not seen since around that same time.

The positives:

  • We continued to make good progress on our debt. We paid of 0.39% of our total debt, which is good. It wasn’t as good as last month (which was over half a percent) but it still beat what was normal for us in the first half the year, which was around 0.39% 0.25% (corrected). Our debt consists solely of our mortgage and my wife’s student loans.
  • We began the move of some of our cash savings from a non-FDIC insured account to an FDIC insured account. Even though the return is lower, I think the peace of mind we get makes it worth it. As I outlined in an earlier post, we will most likely create a CD ladder in our ING Direct account to improve our return.
  • Our home value decreased only slightly. Normally this would be a negative, but according to Zillow and CyberHomes, the value only decreased by a few hundred dollars. With the way the value has been shedding off lately, this is actually the ‘best’ month we’ve had in quite a while. I guess you have to look for the silver lining in all clouds.
  • We continue to have no credit card debt, as we pay everything off every month.
  • I have $187 to allocate after winning my Fantasy Baseball league this year. I unseated the previous champion who had won for five straight years, so that was an accomplishment. I will probably dedicate a future post to what I might do with this, but for now it’s sitting in the bank.

All in all, a bad month if you look at the bottom line. But, since I made a conscious decision a few months ago to gauge our progress more on how we pay off debt, I feel we did as good as we could.

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