Friday, April 29, 2011

Vacation Planning

We just returned from a short vacation, 5 days out of state, and we have three trips coming up.  For the past few years we have followed the same sort of financial plan for our vacations.

First, we always have a travel savings account at ING and we always have an auto transfer funding that account.  Most times the auto transfer is $50 every two weeks (if no travel is planned) and if we have travel planned we up the amount.  As a result, we generally have enough in our travel account to pay for the flight. 

Second, once we know where we are going, we book the hotel.  Even though we don't normally use credit cards for day to day spending, we do use credit cards for booking travel. We use credit cards both because we don't like travel holds on our debit cards and because we get travel insurance with our credit card.  Normally we can book the hotel without paying for it upfront and then we up our auto transfer to the travel fund to account for the hotel/accomodations costs.  I love to stay in nice hotels, but I still search for the best rate on those nice hotels. 

Third, once I've got the hotel booked and rental car (if applicable), I plan out our "budget" for the trip.  And budget does not mean I limit our spending, but rather I just plan out how much we are going to spend.  I normally budget $100 a day for each of us when we travel.  Yes, that is a lot of money.  But, when I factor in eating out, entertainment, museums, shopping, tipping, cabs or rental car, admissions, etc., this is normally what we spend when we travel.  Then I up our auto transfer to our ING travel savings account and by the time we depart on our trip I have the full "budget" saved up. 

Fourth, at the time of travel, I transfer the travel funds from our ING travel savings account to my checking account.  I actually like to use cash when we travel if there is a safe in the room.  I prefer just taking $100 cash for each of us at the start of the day, spending what we spend and then accounting for it at the end of the day.  But if it doesn't seem safe, we use my debit card since I transfer the travel savings to my checking account.

Fifth, after travel, normally I might have the hotel bill or rental car bill on my credit card.  But, we've already got the money set aside to pay the credit card bill and we promptly pay it off.  Often times, when we return there is no bill awaiting us. 

Wednesday, April 20, 2011

2011 Goals - Mid-April Update

(1) Max out 401k(s) - $10,404 (32%)(goal is $33,000) (2) Max out IRA(s) - $9,000 (90%)(goal is $10,000, my IRA is now maxed out for 2011)
(3) Add to e/r fund - $2,800 (28%)(goal is $10,000)
(4) Pay down mortgage - $1660 (33%)(goal is $5,000)
(5) House projects - $0 (goal is $5,000)

Total - $23,864 (38%)

Plan is to start contributing to house project fund, once 2011 IRAs are maxed out. 

Tuesday, April 19, 2011

Economics and the Movies

Well, it turns out that we were the last folks in Florida renting movies from our local brick and mortar Blockbuster store.  And as such, Blockbuster has gone bust and both stores near us are now closed. 

We don't rent a whole lot of movies, normally we rent a bunch of movies for a couple of months and then we go six months or more without renting any.  I have lots of friends who are big fans of Netflix, but I am really not a fan of the recurring expenses.  I don't want to sign up for another monthly payment.  I do rent movies from my local library from time to time which is free (hooray!) but the selection is limited.  So for now we are going with Redbox which is $1 a night (plus tax), way less than Blockbuster and we won't be tied into a recurring expense.

So far the Redbox system has worked well, the only catch is getting the movies back on time to avoid an additional $1 charge. 

Monday, April 18, 2011

It is Tax Day

We filed for an extension. 

As I mentioned earlier in the year, one of our non-saving financial goals is to find a new accountant (due to the fact that we were audited last year and such audit was painful and expensive and fully the fault of our accountant).  So I have the names of two potential replacements but since we've not gotten around to meeting with either candidate it was easier just to put the whole thing off for now. 

Friday, April 15, 2011

Economic Security

I found this recent story on Economic Security from NPR fascinating. 

According to the Basic Economic Security Tables in order to achieve economic security the average minimum income needed for a family with two workers and two young children is $67,920 — that is with both parents working, and earning just over $16 an hour.  And a single worker with no children needs to make about $30,000 a year (twice the minimum wage). 

These number seem very high to me, but when you look at the individual categories they seem to be realistic (although I though transportation costs were too high, but again my commute is quite short).  One of the biggest categories of expense is child care.  Because of my charitable activities I have first hand knowledge of the average cost of preschool child care (not in home) and I found the numbers from this study to actually be on the low side. 

And of course, the amount necessary for economic security far exceeds the federal poverty numbers.

Wednesday, April 13, 2011

One Milliooooonnnnn Dollars

Our Net Worth has jumped over the $1 million mark.

We've been on this side of the net worth line before, twice, and nothing changes for us except we can say we are millionaires now again to each other. Mostly we throw the millionaire term abound when one of us wants to make a certain purchase and the other says no we can't afford it. Then the other will say, but wait, arn't we millionaires. And then the other says, we are only millionaires because we watch each penny, etc. Often time we switch sides on this discussion depending on the particular expenditure.