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Lots of words, people. Lots of words.

I am so not “Manhattan guy” January 2, 2010

Filed under: Arkansuck,Life, Whatnot — indiakonstanze @ 11:03 pm
Tags: , , ,

I am home.

I am home.

I am home.

Here I am, three years after leaving, back in California. We left Little Rock on December 9, and are now settled in Folsom. I have no job, no prospects, and nothing more than a vague plan to go to school in the fall (Masters in English…yeah, that’s useful), but it feels wonderful. I moved in on December 17 and haven’t plugged in my alarm clock yet.

The heartache of being a freelance writer will set in, once I realize how little I’ll have to live on. But for the moment, I am deleriously, deliciously happy to be able to do things like go to the beach, buy a bottle of wine on a Sunday, and eat at Panda Express on a regular basis (Sweet Jesus, the Panda map tells me I have FIVE locations to choose from).

I don’t regret my decision to leave California for a moment. It had to happen this way. Remember that episode of Sex and the City where Miranda ended up dating Manhattan guy? The guy who had never been outside of Manhattan because he just didn’t see the point? I hate people like that, and unless I lived outside of California, I’d be a female version of that guy. So naive and obnoxious, self-centered in the extreme.

California is majestic and beautiful and amazing, but if you’ve never lived anywhere else, how do you prove it? Every trial has a prosecution and a defense, and if you can’t staff both sides of the bench, you have a mistrial.

The things we learned in Arkansas can’t be learned anywhere else, and I had a duty to myself to experience life somewhere else. I did it, I learned what I was meant to learn, and I’m back! Arkansas is a beautiful place, but everything there feels like it’s on a smaller, gentler scale after growing up in California. I met some wonderful people there, and I’ll miss them, but even proximity to New Orleans can’t keep me in a place where church and state aren’t quite separated yet, and racial integration is still a daily battle.

What I left behind

So long, Arkansas.

I’ll write about something funnier next time, I promise, but this post is for California, my empress, my muse, my home.

 

The American Dream, Version 2.0 April 6, 2009

It’s finally here: the day when the albatross lifts from my shoulders. The sale of our home closes today, and I feel like wearing a party hat and throwing confetti. If I just survive until this evening, I’ll be free.

How I felt as a homeowner. I kid you not.

How I felt as a homeowner. I kid you not.

True, the sale was only accomplished by our willingness to take a big financial hit. True, the process has been more painful than an unanaesthetized root canal. True, I have learned that the two agents involved in this transaction are the moral equivalent of actual plastic douche bags turned inside out and used as pooper scoopers in a dog park where the dogs have all had triple espressos and a platter of mozzarella sticks. Realtors, I am convinced, suck. Still…the end is in sight, and I’m approaching it with a profound sense of relief.

The $10,000 down payment I signed over in December of 2006? Gone, never to be seen again, along with about $24,500 of our cash reserves and available credit. But it’s worth it. It’s like amputating a dying limb, and saving the rest of the patient. True, he might not feel whole until he’s had extensive prosthetics and physical therapy, but he’s alive. He made it. And now he appreciates everything he sees so much more, because he almost lost it.

So why did we do what home-buying gurus claim is the dumbest thing possible? It’s the economy, stupid. #1: I work in retail, which means my days might be numbered. I’ve survived several rounds of layoffs so far, but there’s no such thing as a cocky advertising employee right now. #2: I live in Arkansas, which isn’t exactly the capital of economic development. On any given Sunday, there are more dogs for sale in the paper than there are jobs. It’s not a pleasant environment in which to find a liberal arts job, let alone one that lets you live above the poverty level, with benefits (even crappy ones). Faced with these possibilities, there is only one solution: make every dollar go further by reducing what it costs to live, month in and month out.

By opting out of the house, we’re looking at a significant reduction in monthly expenses. Here’s a brief tally of our projected savings:

–No property tax: + $225/month

–No homeowner’s insurance: + $57/month

–No homeowner’s association dues: + $41 a month

–Savings in monthly rent vs. mortgage: + $400/month

–Switching from Comcast cable/internet to AT&T no-land-line-required DSL: + $20/month

–Switching from TMobile to AT&T, to use my husband’s preferred employer discount: + $30/month (yes, our contract was up; no, I did not pay an early termination fee)

–Projected savings in monthly utilities: + $120/month (electricity, gas, sewer, water, garbage)

Total per month: + $893/month

And guess what: our 2-bedroom luxury apartment only costs $850/month. True, we have taken on a total of $18,000 in debt to get out of this house. But with aggressive savings, we can push hard and repay that amount in about two years. (Less than that if we forward our entire tax refund for those years to Citibank.) This way, if I lose my job, I’m covered. We owe much less on a monthly basis, and I can enroll in my credit card’s protection program that defers payments if I lose my job.

Will we need to keep our heads down and ignore the siren song of eating out multiple times a week, new clothes, and vacations? Yes, but so will many others. It’s a recession, after all. It’s the perfect climate to buckle down and pull yourself up by your bootstraps.  In a sick way, I’m almost looking forward to it.  I have a goal, a purpose, a mission. And when it is all over and we emerge with debt paid and a long hibernation of thriftiness, we’ll be smarter, stronger and wiser. And none of it would have happened if we hadn’t taken the plunge, shaken things up, and gotten the hell out of that house.

 

The Money Pit Part Deux: Tax Benefits for Homeowners? I’m Still Waiting March 10, 2009

First of all, thanks to everyone who commented on the first Money Pit post! Since so many of you asked about the tax incentives for homeowners, here’s what I have to say about that:  it’s a crock. I fell hook, line and sinker for this myth, and no one, not even my own parents, set me straight when I bought my home. Two full tax years later, I’m still waiting for these so-called benefits to appear. Maybe in some other market you’ll actually see a benefit, but in ho-hum Middle America, it just isn’t working.

Let’s refresh the basics:

I bought my home in Little Rock with a purchase price of $215,000 and a down payment of $10,000. My mortgage is broken up into two parts: $172,750 at 6% and $32,250 at about 11%, for a total of $205,000. My husband and I together have an annual household income of just under $70,000.

Before I bought a home, I believed everyone who told me there was an awesome tax benefit coming my way-friends, family, even random newspaper and magazine articles.  None of these sources explained HOW it was possible, but they all agreed that it was. Through some strange tax code alchemy, my mortgage interest would become this awesome way of ripping off the government. Sounds good? Of course. So I went along with it.

The ugly truth:

When you prepare your taxes, you deduct the total amount of interest you paid, along with any other deductions, from your taxable income. The folks from Countrywide (assholes) tell me that this amount is approximately $10,778.90 on my first mortgage, and $2,582.30 from my second for a total of $13,361.20.

Luckily, I am able to add to this total with a few other small itemized deductions: my husband works from home so we are able to deduct a portion of our utilities commensurate with the room he uses solely for work, the amount he pays for his own health insurance, and we donated his ugly single guy furniture to Habitat for Humanity and wrote off the value of the donation. This gets our total itemized deductions up to $15,763.

The standard deduction for a married couple filing jointly is $10,900. So right off the bat, owning my home has given me $4,863 of extra tax write-offs. But don’t get excited yet-none of this represents any actual money without two things: my taxable income, and the figure from the tax table that tells me how much tax I owe for the year.

Let’s do some math, with a little help from Jackson-Hewitt (these numbers are taken directly from our prepared taxes). Our total wages are $68,181 with $4,312 in adjustments (student loan interest, moving expenses, etc.). This puts our adjusted gross income at $63,869. From this, we get to deduct our exempt amount of $6,800. Our taxable income total is now $57,069.

NON-HOMEOWNER: If we did not own a home, we would not bother itemizing. Our standard deduction for a married couple filing jointly in 2009 is $10,900. We subtract this from our current taxable income ($57,069) for a new total taxable income of $46,169.  Based on our tax bracket, our tax due is $1,670 plus 15% of the amount over $16,700. This equals $6,090.35.

HOMEOWNER: Our itemized total is $15,763. We subtract this from our current taxable income ($57,069) for a new total taxable income of $41,306. We are in the same tax bracket, so our tax due is still $1,670 plus 15% of the amount over $16,700. This equals $5,360.90.

The total amount of tax I saved by being a homeowner is the difference between $6,090.35 and $5,360.90: $729.45.

Let’s pause for a moment of reflection:

I’m sitting here in stunned silence as that number stares me in the face, bold in more ways than one.  I am being robbed, and it’s as if I opened the door and put out the welcome mat for the thief.

I have paid $13,361.20 in interest, $2,700 in property taxes, a year’s worth of maintenance and homeowner’s association fees, plus a year’s worth of homeowner’s insurance for the unbelievable privilege of saving $729.45?  That’s the great tax savings I’m supposed to be so damn happy about? Are you freaking kidding me?

I had to deal with mice in the attic, a window broken by a freak accident, a brick mailbox plowed over and destroyed by a joyriding teenager, and all the other wonderful spur-of-the-moment surprises that YOU as a homeowner get to pay entirely out of pocket, and I’m supposed to be happy about it just because I owe $729.45 less in tax?  I expended more than that this year in home maintenance alone. Great savings.  Thanks a lot, Uncle Sam. Say hi to Typhoid Mary, will ya?

But the fun isn’t over. The total amount my husband and I have had withheld is $1,100 over the amount of our tax due (along with another $750 from the state of Arkansas). Our total tax refund amount is $1,850.  A small consolation, but hey, we still get to play with almost two grand, right? Wrong. Our yearly property tax bill arrives at the same time as the refund, and guess what? We still have to pay out of pocket. Our property taxes are $2,700, so once I fork over the ENTIRE refund, I’m still $850 in the hole.

Now let’s jump backward for a moment. If I didn’t own a home and we took our standard deduction, we would have paid a bit more tax, and only gotten a federal refund of $370.55, along with a state refund that would amount to slightly less than my homeowner-entitled $750. Let’s say I only ended up with $900 total in refunds….even so, it would have stayed in my pocket. No property tax, no maintenance, no nothing. I could put it in savings, take a cruise, or buy a new flat-panel TV. Now which sounds better to you…paying $850 out of pocket, or going on a Caribbean cruise that’s already paid for?

But, you might say, only idiots get their property tax bill at once. Most normal people fold it into their mortgage payment. (Why in HOLY HELL did no one tell us we’d be sorry if we didn’t do this?)  If we’d done that, we’d have paid the tax gradually and gotten to keep our refund. True, but my monthly payment would go up $225/month. Now, we don’t make so much money that that wouldn’t take a major chunk out of our budget. There are things we wouldn’t be able to do if that money had to come out of pocket…routine home maintenance would be put off, doctor bills and vet bills would probably be credit carded, car repairs would probably be credit carded, and we would in no way be traveling or shopping or putting small bits of money back into the economy. When we got that $1.850 refund, it would be eaten up by repairs and paying down high-interest credit card debt.

What can I learn from all this?

As a homeowner, I will never get to keep my refund. Never. I will always have to sign over whatever I get AND THEN SOME to Pulaski County. And what’s even worse is that a few years down the road, when my payments go toward principal and not just interest, I will have less and less and then nothing to write off.

The people who think there are tax benefits every single year of a 30-year mortgage are wrong. They are not paying a full year’s worth of interest every year of that loan term, so they will only get the maximum benefit of owning a home for the first few years, then the benefits will slow to a trickle and then dry up entirely as there is no longer any interest to write off at all.  And guess what? Does property tax ever go away? Nope. Does routine maintenance? Nope. Are you guaranteed a raise every year to help offset these costs? Nope-just be grateful you have a job.

So where are my great tax benefits?  What am I really saving?  Why did everyone lie to me and tell me this was going to work out in my favor, when every time I turn around I just have to pay and pay and pay for the privilege of owning my home?  Am I just supposed to be okay with handing over my refund in entirety every year and then some, just so I can say I’m a homeowner? I’d rather be a renter, keeping that refund and building my savings or traveling to Europe or using that money to self-publish either of the two novels I have lying around. Anything would be better than handing it right back over.  He giveth and then he taketh away.

Susan Powter had it right all along...stop the insanity!

Susan Powter had it right all along...stop the insanity!

 

Things You Won’t Find in Arkansas: Jimmy Hoffa, Basic Literacy, Thai Food February 26, 2009

Filed under: Arkansuck,Grammar Police — indiakonstanze @ 4:05 am
Tags: , , , ,

Spotted in Little Rock: a sign telling drivers about an ongoing road improvement project, with the following tag line: “Little Rock…Making Improvements for It’s Citizens.”

You’d think a city government responsible for the health and welfare of 183, 133 citizens could manage to spell one of the most basic words in the English language. Then again, this *is* Arkansas. These people marry their cousins even though it’s illegal, microwave babies, and think cell phone holsters are the height of sophistication.

Most of us learned the difference between “its” and “it’s” somewhere in grade school. This is a contraction, in which two words have been jammed together in a noble effort to eradicate writer’s cramp. I realize most people think grammar is lame and don’t understand why anyone would care, but it isn’t lame. It does matter, and everyone should care.

After all, someone who works for this city wrote that slogan. Someone proofed it. Someone produced the sign. Someone probably proofed a draft of the sign. Is it really okay that none of these people can read, spell, or operate a computer well enough to use spell check? And these are the people in charge of an entire city? The people I trust with my general welfare on a daily basis? It is not okay that they can’t spell, because if they can’t do that…what else can’t they do?

There are things that separate us from the animals, and these are things we should always hold dear: showers, soap, Mongolian BBQ, and punctuation. Just think…if language became a free for all, your boss could write you an email that said, “Bold for the good word and fix it’s tree,” and you’d have to figure out what the hell he/she meant.