Tuesday, November 27, 2012

One giant step back

I'm having a heck of a day, & trying to stay positive. I have a monster cold, and last night, we got some terrible financial news.

Backing up a bit, I've been working super hard trimming our 2013 expenses, & focusing on using my bonus that I saved from September to cover our income variances. Short back story - our monthly spending is higher than our fixed monthly income, but my bonus (that I get one time/year) makes up the difference. The key, of course, is to get a year ahead, save the bonus, & use it to offset the cash flow difference each month. For the first time ever, I didn't get all excited & use my bonus to pay off debt (well, I did do some of that, but kept enough in reserve). I kept enough for our taxes, (always more than $10K), and enough to offset our monthly overage for one year. I have been SO excited about this, & feeling so responsible about our pre-planning.

Last night, we got a letter from M's previous employer. M works in sales, & his pay structure is complicated. When he left his employer in April (& switched to another company), he received verbal confirmation from his manager that he would owe under $1K in a repayment of a previous bonus payout, based on the status of those accounts. Well, that person was wildly wrong. Like, way wrong. They've since been fired, & we owe $16K. Due in two weeks.

I'm not going to pretend like I didn't have a good cry last night. I know we're blessed, I know that we can do this, & I know that we have plenty of budget messiness & "exuberance" (i.e. overspending) that needs to be cleaned up. I'm trying to keep in mind that we never really had that money. But, it's a pretty crushing blow.

I wrote the check this morning, & sent it off. I need it out of my sight. So, all of my money that I saved (plus some money we were saving for a remodel)? It's gone. In one fell swoop. We also need to restate & refile our 2011 taxes. Oh joy. Doesn't that sound like a great time? We'll likely get back $2k maybe on that, since our income is going down. But, I'm sure that will take some time.

In in the interim, I need to figure out how to cut $1,000 out of our monthly expenses. Immediately.

Because I hate depressing posts, here's a fun picture we used for our holiday cards three years ago. Look at those cute boys!



If you have any fun or positive news, please share it!

17 comments:

  1. First off....I am so sorry. That is a huge blow.

    Second, how can they expect a family to come up with 16K within 2 weeks??? If you thought that your bonus was YOURS...who is to say you didn't spend it already???

    No advice on cutting expenses....just support.

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    1. Thanks, Mysti! Much appreciated. Oh, & we most definitely have already spent the money.

      The "bonus" is calculated based on how each account is expected to close at the end of the year. Well, due to a bunch of staffing changes that happened after M left, some of the accounts were not managed (i.e. no one was selling to them) & the numbers were WAY off what was expected. It's ridiculously complicated, & because M wasn't with the company at the end of the fiscal year, we had no visibility into the issues.

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  2. I am so sorry! I really am and you so deserved that cry. I may cry for you. That is crushing. But the good thing is you have the cash and I have faith in your budgeting skills. You will figure it out. We have been hit really hard a few times for huge amounts of cash. I cried and then got it in my head that I was going to find a solution. Having the can-do attitude will get you through it.

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    1. I keep reminding myself how lucky we are that this was the one year that I didn't immediately use my bonus to pay down our mortgage or dump it into the boys college funds. Because, we'd be seriously screwed. Thank goodness for that at least.

      Yep, need to dust myself off & focus on how we can improve going forward.

      Also, has anyone ever refiled? I have no idea what I'm doing with the taxes.

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  3. I'm so sorry that this happened to you. I'm puzzled on how that company would pay a bonus on how accounts are expected to perform in the future. You will be able to scrape your budget together and regroup. I really feel for you that this happened 1 month before Christmas, too.

    I have never refiled my taxes but I use an accountant so I would just go back to her. I think that refiling is just a simple amendment. It doesn't look terribly hard. If you used a program like TaxAct, I would think that they could help you refile.

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    1. I filed using Turbo Tax this year, & need to dig the software back out. What a treat. ;-) For whatever reason, the .pdf file isn't stored online (although I have a hard copy), so I'm hoping it doesn't mean manually re-entering everything. That would add insult to injury!

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  4. *Thud* That's brutal!!! :( Ugh!!

    Can you try a "no spend" month? Are you done Xmas shopping? Can you cut WAY back this year? Have any household items you can sell to make up the difference?

    So sorry. :(

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    1. I'm done with my holiday shopping (and, cut way back, which is fortuitous!), but I need to cut $1K per month every month this year. It needs to be more of a lifestyle change than a one time cut, of course. But, those are always the most painful to make. Time to dust off & see what I can do!

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  5. Holy Crap. I'm so sorry to hear this. Thankfully you had the money to pay it. I'm sure you will come up with a creative way to cut $1000. I have to do some cutting myself. We can do this, right?

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    1. We can do this. It's unpleasant, but necessary!

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  6. Ughhh! I'm sorry this happened too!

    Hopefully you can cut back and 'find' the £1k :)

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    1. Thanks - I appreciate it. I like a good challenge, afterall. ;-)

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  7. I love how you call your overspending "exhuberance" that is classic ;) I'm confident that you'll be able to fix your budget. I'm sure you've learned a lesson here. My husband and I both get hefty bonuses yet we never plan on them. I can't imagine getting the cash, then having to give it back, you must be thankful he is no longer working there! Also I think this must reaffirm that selling your second home is a good decision. Simplifying is not a bad thing. You still have more than most. But sometimes a good cry is totally in order. I've cried over a serious stock fall, IPO at $10-, then high at $45- to today being less than $1- per share, OUCH! At one time it was worth more than my house! Wish I would have sold it then. I've learned not to be too greedy.

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    1. Oh yes, lessons were learned. We've never spent a bonus we didn't have (or, so we thought, clearly), as my bonuses are true - meaning, when you get them, they are yours, no strings. M & I worked for the same company, & he was on a different compensation plan. His bonus was actually an advance, given quarterly. Ahhhh, fun times.

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  8. This is the worst! So thankful this was the year you hadn't already spent yours though. I've never gotten a bonus before, but if I ever do, this story will serve as a cautionary tale for me and I will try not to touch it like you did with your bonus.

    I've also never written a cheque for $16,000... I can't even imagine how much that must have hurt.

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    1. I know - small blessings that this was the year we had the money saved. Now it's time to get hard core about our expenses.

      Oh, & the check for $16K may be my highest ever. We had some tax bills that were over $10K, but I don't think we ever reached $16K.

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  9. I am so sorry, I really have nothing more to say that what has already been said. Cutting $1,000 a month is very, very tough and I don't envy your position. If there is any way to earn money, it may have to come from earning AND cutting back to get the to the $1,000 per month. Which is what we have had to do from time to time.

    Take care and if anyone can do it, you can!

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