insidious_machinae

I believe I have a fairly unique financial situation. I'm not up to my ass in debt...in fact I'm far from it. I'm just curious about how some of the wiser members of the TFP would act in my particular situation. Hopefully nobody has posted a similar question or scenario. I looked, but couldn't really find anything quite answering what I'm dealing with.

Okay, first, the background: I'm anally retentive with my money. I'm a contractor, and my paychecks come to me entirely untaxed. Per advice from my father, I have been pulling 20% from each paycheck and stowing the money in a "Tax" sub-account, as well as about 8-10% from each paycheck into another account I've nicknamed "Investments", although it's actually more of an Expenses account (I generally spend the money from that account on birthday/christmas gifts). Lastly, I have my typical savings/checking accounts. Before I started living financially independent of my parents, I was putting 50% of every paycheck into savings, and the remainder 30% into checking for leisure expenses and paying bills.
In January I started paying for my own rent, parking, food, gas, etc. I'm living almost entirely financially independent at the moment. My parents have agreed to paying my future tuition and books for college, however this entire year I've been going off a scholarship I earned in high school, so I feel it's safe to say that they've not given me any real financial assistance until this problem occurred.

Now, the problem: I invoice to the company I'm working for on a monthly basis. I could invoice every 2 weeks and be paid in smaller, more frequent checks, but I choose not to. It's entirely my own issue. Anyway, the result of this is the fact that Month A's paycheck arrives about halfway through Month B. In January (winter break) I worked a great deal. February I barely worked at all. The result of this is that I had enough money to pay all my bills and rent for February and March, but then I bled my checking account dry when it came time to pay April's rent (rent is due the first of the month). It wasn't that I didn't have any work in February. I'm just really lazy and didn't motivate myself properly. I've since taken care of that issue, and worked a great deal more in March to make sure the problem won't reoccur. Regardless, the money I was earning during March wasn't going to arrive until after April rent came due, so I called up my dad and asked for help. He gave me enough money to pay my April rent and food. In the meantime, I had to pull $1000 from my taxes account to continue paying off my due credit card bills. I always build up bills when I travel home to visit la petite moi because I have to pay for gas and split meal costs with her.

Because I communicated my situation to her, LPM has been paying for our meals during March, which caused her checking account to take a serious nosedive. After discussing this, we've reformed our policy on expenditures and have started conserving our money by cooking meals ourselves, driving less, etc.

Now, I'm not exactly in debt. I just balanced my checkbook today and worked out how much I owe on my credit card counting recent expenditures. Right now I'm looking at about $650 in my checking, and I owe about $120 on my credit card. My paycheck (which is due to arrive any day now) is for $787 (although $160 of that is going to taxes), which will be enough to get my credit bill paid off, and pay my rent. After rent I will have about $240 left over, which is easily enough to live off as I've been doing, except I still owe back $1000 to my tax account from when I didn't work enough. Taxes are due in 5 days, and I owe $1280 in taxes. Even without that thousand I pulled out, I still have about enough to pay my taxes, but my anal-retentive nature is forcing me to replenish the money I've taken out, so that when April 2006 rolls around, I'm not smacked in the face with a ton of bricks.

I really don't like this idea, but I've considered the possibility of taking some of the money from my savings account (I'm not going to be using my "Investments" account money, because that's going to pay for LPM's birthday) to replenish the money from the Tax account. So now I'm finally to my question.

Is this a reasonable and logical reason for pulling money out of savings?

billege

Sounds like it to me. My wifey and I just pulled around 800 out of savings, because we paid more federal and state taxes than our budget could absorb by itself. Since teh government just insists on being paid, we figured, that's what the money's there for, pull it and plan better for next year.

Best of luck chum.

__________________
I can sum up the clash of religion in one sentence:
"My Invisible Friend is better than your Invisible Friend."

braisler

Yeah, you are doing just fine. The fact that you are concerned about it at all says volumes about not getting into financial trouble. There are lots of folks who would just put the taxes on credit card (Yes, you can do that now though it has got to be one of the worst ideas ever) and forget about it.

Moving money around to fit your needs is part of knowing your finances and making them work for you.

__________________
---
You do not really understand something unless you can explain it to your grandmother.
- Albert Einstein
---

Cynthetiq

You seem to be on top of it.

those choices seem to be the correct actions with the information presented. the most important part is to be prepared for the nex time and learn lessons from this time. If not then you'll just continue to repeat this cycle over and over, while not getting further into debt, but also not generating further wealth.

savings is there for you to use as you see fit. it gives you more choices and more options, than without.

__________________
I don't care if you are black, white, purple, green, Chinese, Japanese, Korean, hippie, cop, bum, admin, user, English, Irish, French, Catholic, Protestant, Jewish, Buddhist, Muslim, indian, cowboy, tall, short, fat, skinny, emo, punk, mod, rocker, straight, gay, lesbian, jock, nerd, geek, Democrat, Republican, Libertarian, Independent, driver, pedestrian, or bicyclist, either you're an asshole or you're not.

insidious_machinae

Thank you very much for all your replies. If it comes down to a crunch, I will pull the money out of savings. I guess that if I do well at properly allocating my money, then this is about as "rainy" as my "rainy days" will ever get.