Thursday, December 13, 2012

2012 Savings Goal - Update

(1) Max out 401k(s) - $33,293 (98%)(goal is $34,000)
(2) Max out IRA(s) - $10,000 (100%)(goal is $10,000)
(3) Add to e/r fund - $9,600 (96%)(goal is $10,000)
(4) Pay down mortgage - $2,490 (50%)(goal is $5,000)
(4)(a) Savings for goal (4) - $1,250
(5) House projects - $1,500 (30%)(goal is $5,000)
(6) Trading account fund - $50 (1%)(goal is $5,000)

Total - $58,183 (84%)

Well, the good news is we have finished maxing our our non-deductible IRAs for 2012.  The other good news is that we are on track to max out our 401ks and to complete our emergency fund goal.

As, I posted previously, our revised* goal is to complete goals 1-4 which means that as of today, we have to save another $2,357 before the end of the year.  I am confident that we can do it.  We have, generally, completed our holiday spending (which is funded by our ING holiday savings account).  I have a trip this weekend, that is paid for already.  We, also, have a New Year's trip planned, we've paid for the condo for the trip, but we will have gas, grocery and misc. expenses associated with that trip.  My hope and plan is to have our 2012 savings completed before we head off on our New Year's trip.

* We are $8,163 behind on our original 2012 goals.  

Thursday, December 6, 2012

Mortgage Musings

Now that we are a few months into our new loan term it is time for me to start dreaming about killing the mortgage again.

As a reminder, our new loan term is 15 years (or 180 months) and our new rate is 2.75% fixed.  Post-refinance, our monthly mortgage payment actually went up, although our rate went way down, about a $100 because we shortened the loan term by 6 years.  Our current monthly loan payment is more than 60% principal payment, so we are already making good progress at chipping away on our principal.

If we continue to pay an extra $415 a month towards principal, which is what we have been doing the last couple of years, we will shorten our loan period by 40 months or 3+ years.  We actually don't save that much in interest by prepaying on our loan because our current interest rate is so low.  If we keep to this prepayment schedule of an extra $415 a month, we will save $13,500 in interest.

If we increased our prepayment to $830 a month (doubling what we are prepaying now) we will shorten the loan period by 65 months or almost 5 and a half years.  Meaning that we would have the mortgage on our primary home paid off in under 10 years.  Doing so would mean saving $21,800 in interest.

Having our mortgage paid off in under10 years is very appealing, but we'll have to balance that against whether it makes mathematical sense to do so and the priority of other goals.

Wednesday, December 5, 2012

2012 Savings Goals - December Update

(1) Max out 401k(s) - $32,693 (96%)(goal is $34,000)
(2) Max out IRA(s) - $7,898 (79%)(goal is $10,000)
(3) Add to e/r fund - $9,200 (92%)(goal is $10,000)
(4) Pay down mortgage - $2490 (50%)(goal is $5,000)
(4)(a) Savings for goal (4) - $830
(5) House projects - $1,400 (28%)(goal is $5,000)
(6) Trading account fund - $50 (1%)(goal is $5,000)

Total - $54,566 (79%)

At present, we are $10,453 behind on our 2012 savings goals.  Currently, our revised plan, is to complete savings goals 1-4 which requires a total of $5,889 in savings contributions before the end of the year.  The remaining 401k contribution will take care of itself, via payroll deductions, so that means we really have $4,582 that we need to pull together before the end of the year.

Can we do it?  Reflecting on on my last post, I'm going to say that I will do whatever it takes to get this money into savings.

Tuesday, December 4, 2012

Goal Setting

As I start planning our 2013 savings goals and I reflect on our progress to date on our 2012 savings goals this NYT Bucks Post by Carl Richards really resonated with me.

When setting an important goal, he focuses on financial goals, how do you respond to the question "how badly do you want it?"

Mr. Richards notes that there are generally two kinds of answers to this questions:
  • I want it badly, and I’ll do whatever it takes to get there.
  • I want it badly, but I don’t think it’s possible.
Looking at my own history of financial goal setting, in 2007 (shortly after my marriage to Mr. Sam and on a trip to Key West, Florida) I decided that we would pay off all of our unsecured debt, which exceeded $55,000.  I also decided that we would pay off all that debt in one year.

When I set our 2007 debt killing goals, I had the mindset that I (we) would do anything to reach our goals.  Frankly, Mr. Sam thought I was a bit loony and he wasn't on board until he saw the plan on paper.  During 2007 there were a number of times that we got derailed and our plan seemed like it was destined for failure. What did we do, we doubled our resolve and get going.  The result, we paid off $55,500+ in just over a year.

Thinking about our 2012 savings goals, I can honestly say that we did want to save $69,000 but we were unwilling to change our lifestyle to meet our goals.  Yes there were lots of other important expenses, our refi expenses, Mr. Sam's certification classes, that derailed us.  But, more importantly, we did not make the sacrifice necessary to meet our goals.

I'll be thinking about this article as we set our 2013 savings goals and its further applicable to some career goals and personal goals that I'm working on.

Friday, November 30, 2012

Monthly Networth Review

I have started my monthly update of our networthiq profile for December 2012.  Updating our net worth numbers is part of my monthly personal finance tasks which also include the following:  (1) update monthly spending plan (our form of a budget); (2) pay beginning of the month bills; (3) update 2012 savings goals chart and move money to savings goals as appropriate; (4) review and monitor automatic payments/automatic savings/automatic distribution of our allowance monies.

When updating our net worth numbers I review, on line, the status and amount of our ING/Wells Fargo savings which is reflected in the "cash" category on our networthiq chart.  I, also, review our non savings ING accounts, these would include our various escrow and short term savings accounts for travel, holidays, fun, etc. and these monies are reflected in the "other" category on our chart.

Then, I review all of our retirement savings/investments.  I log on to Fidelity and review my IRA accounts and my 401k account from a prior employer.  My current 401k account is at Vanguard so I log on and check those numbers.  I also log on as Mr. Sam to Fidelity and review Mr. Sam's IRA accounts and his 401k accounts.  My IRA monies are reflected in the "stocks" category and Mr. Sam's IRA monies are reflected in the "bonds" category on our chart.  Our 401k monies are combined into one number and are reflected in the "retirement" category on our chart.

The other asset categories on our networthiq chart include the value of our home, the value of our other real estate, the value of our cars and the value of personal property.  Those numbers get updated about once a year.

On the other side of the networthiq chart are our debts which right now include the mortgage on our primary home, the mortgages on our investment properties and, currently, some Home Depot credit card debt (0% interest rate) incurred at Rental # 3.  I update the debt numbers when we pay our various mortgages.

Keeping track of all these numbers and updating them on a monthly basis certainly takes some work, but I find the tracking to be beneficial.  First of all, for me, tracking these numbers helps me stay motivated in our personal financial and savings goals.  Second, checking in on our investments online, at least once a month, is useful.  Today, while I was checking my Fidelity numbers I converted my non-deductible traditional IRA to a Roth IRA (I'll be posting about this later if you are curious) which took less than 5 minutes to do.  I would have, and I did consider, doing the same for Mr. Sam but I figure I ought to ask him before I go ahead and convert his account.  Three, being familiar with the online tools for our retirement accounts is very helpful because there are some great research tools.  When you jump onto those accounts once or twice a month you get much more familiar and comfortable with the tools and terms, you increase your education and knowledge.

Wednesday, November 28, 2012

2013 Goal Planning

It is that time of the year, time to start thinking about our savings plan for 2013.

Always first on our list of goals is to max out our 401k contributions.  This year the 401k contribution limits a are going up to $17,500.  So, goal number one will be to save $35,000 in our 401k.

Second on our list of goals is to contribute the maximum to any other tax advantaged savings.  For us that means we will want to max out our non-deductible IRA.  We will later convert our non-deductible IRA to a Roth IRA, see this article for more information on how to do so.  IRA contribution limits are also going up from $5000 to $5,500.  So, goal number two will be to save $11,000 in our IRA.  Because of the respective contribution increases our retirement savings will be going up by $2000.

Other goals that are up for discussion:  (1) continuing to add to our emergency fund; (2)  working to pay down the mortgage on our primary home; (3) increasing our non tax advantaged savings (also known as adding to the trading account); and (4) adding to the house project account.

For me, paying off the mortgage is a primary goal as I've explained here, here and here.  Although, with our new lower interest rate of 2.75% from our recent Refi I recognize that paying extra on the mortgage really doesn't make good financial sense when you crunch the numbers.

We also have some house projects that I've been dreaming about for two years now.

How about you, have you started planning your 2013 savings goals?  What is on your list?

Tuesday, November 27, 2012

Budget Busters - Cell Phones?

Are cell phones now number two on the household budget?

Upon reading this article I decided to review our AT&T bill which includes one home phone, two cell phones (one of which is a smart phone with a data plan) and our internet service.

This past month our bill was $202 (which is about $20 higher than normal).  In studying the bill there are certainly charges that jump out at me.  And of course each phone has separate surcharges and taxes which further ups the costs.

For my iPhone I have a data plan (unlimited) which my employer reimburses, $30, each month since I regularly use my phone for work.  But, I don't have a texting plan and last month I had $6.00 in texts.  I don't have a text plan because I don't normally text but others text me.  I've thought about adding a text plan, but I always worry about changing my plan and losing my grandfathered in unlimited data plan.  Frankly, I don't trust AT&T to change my plan without screwing up something else.

Mr. Sam doesn't have a smart phone so he calls directory assistance quite often, those calls are billed at $1.99 each and last month he had $7.96 in such charges.

We continue to maintain a home phone which Mr. Sam uses when he works at home.  This past month he had $12 in long distance charges.  After discussing whether to seek reimbursement for those charges from his employer we have decided not to because the amount he saves in gas by working at home far exceeds the telephone charges.

How about you, how much is your phone bill?  Have you undertaken efforts to curb your phone bill or is it simply the price of being connected these days?

Monday, November 26, 2012

Executing on the Holiday Plan

Earlier, I posted about our holiday plan and budget and since its Cyber Monday it is time for me to start executing on our plan.

As I previously posted, for the past few years we've been sending out holiday wreathes to our adult family members (we don't exchange holiday gifts with the adults in our family).  The past few years the holiday wreath giving has also supported one of my favorite charities, but they have opted not to participate this year.    So, I was thinking of sending wine from a winery we visited this year.  But, that option ended up being too expensive and too complicated although I am going to order a 6 pack of wine to give as gifts locally (work and hostess gifts).

For the wreathes, I decided to go with L.L. Bean. First, L.L. Bean makes the wreathes right in Maine, so the company supports American workers.  Second, the wreathes ended up costing about the same amount, with free shipping today and 10% off today, as the charity wreathes.  Also, I will receive $40 in gift cards, $10 per $50 spent, which I can use for other holiday shopping.

Wednesday, November 21, 2012

Cooking Baby Steps - Part IV

Tuesday night, before Thanksgiving, is NOT the time for grocery shopping especially for someone, like me, who hates grocery shopping.

Yesterday, I left work early to do some pre-Thanksgiving charitable work.  Nothing helps one be thankful for one's financial stability like helping to hand out groceries to working families in need.  Then, even though I didn't want to go, I made myself go to the grocery store.

Rather than head to my local Publix, which is smallish, I went to the extra big Publix one town over.  Even though I do my best to avoid grocery shopping I'm familiar enough with the big Publix to know my way around.

I arrived about 6:30 p.m. and went directly to the bakery section because I had a birthday cake to buy.  But, since I'm a novice grocery shopper I didn't realize I could put in an icing order.  So I snooped around the bakery for 5 minutes before deciding to come back at the end of my shopping.

I utilized my Publix shopping list which I created on the Publix web site.  I found the list helpful but, as I mentioned before, I'd like it better if I could designate brands.  I did

Overall I spent $189 so the list didn't help me save money.  The spendy items on my list were:  (1) 12 pack Corona Light at $12.99; (2) the birthday cake at $16.99; (3) Gruyere cheese at $12.50; (4) salmon at $15.96; (5) white wine at $9.59.   So, $68.03 in extra spendy items.  Corona light is actually a staple for us, we buy it regularly.  The other items were triggered by guests coming into town, the birthday cake, wine and the salmon (to be used on Friday for a birthday dinner).  The pricey cheese is for the Thanksgiving casserole I'm making for our group dinner.

But, I also recognize that I did save money by purchasing the birthday dinner supplies at the grocery store rather than footing the bill for dining out which would have reached at least $100.  The salmon was actually on special and I "saved" $8.

I'm thinking of noting the prices in my saved Publix shopping list so I can get better at figuring out what is or is not a good price.

Tuesday, November 20, 2012

The Bright Side

Over on the GRS forums, which is really where I started my personal finance blogging, I was moping a bit about the fact that we are unlikely to meet our 2012 savings goals of $69,000.  Of course the joy of blogging and posting is that other people give you all kinds of feedback.

CecilyC provided this feedback:  "Seriously, Sam, give yourself major props for this year even if you didn't exactly meet your goals. I wish I could say I'd saved $50,000."

Cecily's point is a good one, saving $50,000 is a major accomplishment.  And, in fact, Mr. Sam and I are doing much better than the average American, who has $3,500 in regular savings and $35,000 in retirement savings.

While, we know we are doing well and we do celebrate the fact that we are making good progress on our savings, we want to do better.  The fact is, with the exception of last year, our savings has averaged $50,000 each year with little to no increase.  In 2011, we saved $60,060 (our best showing).   In 2010,we saved $49,325.  In 2009, we saved $50,168.  In 2008, we saved $50,000.  And of course in 2007, we paid off $55,500 in unsecured debt (in 12 and half months, this goal was completed in January 2008).

Now looking on the bright side, how fantastic that we were able to save $50,000 four years in a row.  That is a fantastic accomplishment especially in light of the fact that we were able to save that kind of money during the great recession.  But, I remain frustrated that we have not been able to increase our savings, with the exception of last year, despite the fact that both of us have had salary increases.  I really want to do better and, more importantly, I believe that we can do better and save more without a major lifestyle change.

Monday, November 19, 2012

Cooking Baby Steps - Part III

Since its Thanksgiving week and since I will be doing some cooking for Thanksgiving dinner I was checking out the Publix web site to figure out their hours this week.

In looking at the Publix web site, I discovered that they have some helpful recipe tools and, more importantly, a grocery list tool.  The grocery list tool can be personalized to your specific store and as you add items to the list it populates the location within the store so you don't have to wander around aimlessly.  And, you can also add items from the weekly sale list and/or populate your grocery list from their recipe tools.  You can also set up a standard grocery list of items that you buy regularly.

Since I am trying to do better on my cooking at home goal, I decided to sign up for a Publix profile.  I am not a fan of having corporations track me and mine my data, but in order to save my grocery list I needed a profile.  So I used my junk e-mail address (the one I use for shopping on-line) and when it asked for all my data I used my standard fake information which only includes my real zip code.

Once I had my Publix profile set up, I started adding items from my Thanksgiving recipe (I'm making one casserole dish for our group dinner) as well as regular items that I'll need to pick up since I'll have guests in town.  The grocery list doesn't have each and every brand which is a bummer as it would be great if I could specify in my list the particular brands that I use (it does have a notes section where you can add that information).

Since we will have guests to cook for on Friday, I also tried out Publix's Simple Meals Recipe tool which is divided among different categories like "main dish" and "celebrations", etc.  I clicked on main dish which has different categories like "beef", "vegetarian", "seafood (salmon)" and "seafood (shellfish)".  I was already planning on salmon, so I clicked on a recipe that sounded easy and good and then it is one easy step to populate your grocery list with all the necessary items (you can delete those items that are already in your pantry).  You can also save the recipes to your profile as well.

I plan to go shopping Tuesday evening, so I'll continue to work on my list between now and then and I'll report back on whether this tool is helpful or not.  What do you do to make grocery shopping less painful?

Friday, November 16, 2012

2012 Savings Goal - Mid November Update

(1) Max out 401k(s) - $32,036 (94%)(goal is $34,000)
(2) Max out IRA(s) - $7,829 (78%)(goal is $10,000)
(3) Add to e/r fund - $8,800 (88%)(goal is $10,000)
(4) Pay down mortgage - $2490 (50%)(goal is $5,000)
(4)(a) Savings for goal (4) - $830
(5) House projects - $1,200 (26%)(goal is $5,000)
(6) Trading account fund - $50 (1%)(goal is $5,000)

Total - $53,335 (76%)

I plan to update our 2012 goals every two weeks or so until the end of the year to help me stay focused.  At present, we are about $7,700 behind on our goals.

While I don't think we will be able to meet our  2012 goal of saving $69,000  I am hoping (and planning) to completed goals 1-4 and to surpass the amount we saved last year which was $60,060.

Thursday, November 15, 2012

IRS and Paranoia

Ever since we were audited in 2010, each of the last two years we have received additional correspondence from the IRS after our taxes were completed and our payment submitted.

So, this year, when we received correspondence saying we owe additional taxes I am officially paranoid.  I've done some research and I can't find anything to support my position that once you've been audited your future tax returns receive additional scrutiny.  But, thanks to Jim R. as he found a article indicating that if you have been audited in the past you're on the audit hit list for at least a few years.

We are, of course, not claiming the deduction that got us in trouble before, and not (in my opinion) being aggressive in our tax avoidance efforts.  We are, also, paying a CPA to prepare our taxes.  We are paying our taxes on time although we have sought an extension the last few years.

In researching the form we received this year, a CP14, I understand that it is a form indicating an underpayment of taxes not based on a math error.  Often times, individuals receive a CP14 if their tax payment was not received at all.  I know for certain that the IRS received our tax payment because (1) I have a copy of the cancelled check and (2) the amount that is show due on the CP14 is less than a hundred dollars and we paid a ton more in taxes than that.

More than likely, I'll just pay the amount the IRS is claiming that is due because I am terrified of the IRS and do not want to end up being audited again.  But, since I understand (based on my own research) that these CP14 notices are computer generated and are often wrong I've asked my CPA to review and advise.  I also understand from my research that a GAO study found that 47% of this type of correspondence to taxpayers was incorrect and the IRS just collects and keeps the money.

Wednesday, November 14, 2012

Cooking Baby Steps - Part II

I have started researching the best (but not super expensive) cooking tools and I found this helpful list from Consumer Reports.

I actually already have one of the tools on the list. The KitchanAid mixer.  KitchenAid Artisan Stand Mixer KSM150PS - Contour Silver - KitchenAid (Google Affiliate Ad)  And, while I don't use the mixer on a daily or even monthly basis, it does work very well.

My plan is to take this list and compare it against what I've already got and work on improving our stock of kitchen tools.  At present, our biggest issue is cookware and knives, although I could also use some better baking sheets.

Tuesday, November 13, 2012

Holiday Budget Planning

Since Thanksgiving is early this year (next week!), the time to get your holiday plan in order is quickly running out.

For us, our holiday plan will generally be the same as last year.

We have our holiday savings account, which we fund each pay period and keep at ING so we earn a little interest.  The great part of setting up a holiday budget and plan, each year it is quick and easy work to adjust and replicate.  For a lot of people, the word budget has a negative connotation, for us budget really means plan.

First, I have already ordered our holiday cards, this is an expensive part of our holiday plan since we send out about 80 cards.  All together, with the printing of the cards and the postage this is going to run about $200.  Another trick for holiday cards is to get your holiday addresses into an Excel spreadsheet so its easy to adjust the list from year to year.

Second, while we have a general agreement not to exchange gifts with the adults in our family (except for one or two holdouts) the past few years I have sent holiday wreathes which also supports a charity.  Sending the wreathes runs about $200.  I'm thinking of mixing this up this year as we visited a winery on our travels this past year and I was thinking of sending wine.  This is something I need to investigate and figure out my plan.

Third, the kiddos in the family.  I'm upping the budget for the kids this year.  My nephew is in college now I'm increasing his holiday gift from $50 to $100 in cash.  Of course,  I need to do the same for his sister who is in high school (total $200).  $50 in cash to the little ones and a little something gift (total $150).  $50 each to college fund (total $200).  So, this category is going from $250 last year to $550.  That is a big increase in our holiday budget so we'll need to make an adjustment to our automatic savings plan for the holiday account for next year.

Fourth, I am budgeting $100 for work related gifts.  This is an increase from last year,but I also missed my assistant's birthday so need to make that up.

Fifth, $100 for misc. expenses, baking supplies, hostess gifts, etc.

Sixth, $50 for stocking stuffers for my husband and dog.

  This year we are again taking a trip over the New Year's weekend (this is budgeted in our travel fund) as such we won't be doing gifts to each other.  We haven't done holiday gifts for each other in years.

Finally, $100 to sponsor a need child's Christmas.

Overall, our holiday budget will increase this year by @ $300.  Since we already have saved $1000 (plus we have a bit of interest) the increase in our budget is manageable.  I was surprised to hear that the amount we are planning to spend greatly exceeds the norm.

How about you, do you have a spending plan for the holidays, how much are you spending, is it going up or down or staying the same?

Tuesday, November 6, 2012

Cooking Baby Steps

One of my general financial goals for 2012 was to reduce the amount of eating out and ordering in that I do.  Clearly eating out and ordering in is more expensive than eating at home or bringing my lunch.  Also, eating out during the work week cuts into my productive work time.  And finally, eating out and ordering in normally means that I am eating more calories than I would like.

Although we have reduced our eating out, overall I have not been particularly successful on this goal.  I have a variety of excuses.  First and most importantly, I really do not like to cook.  Second, I hate the grocery store.  Third, I work a lot and by the time I get home I want to relax not cook dinner and certainly not prep lunch for the next day.

But, recently I made an effort to improve my cooking skills by attending a healthy cooking class.  A few things that I figured out from this class.  First, we need to invest in a few better pots and pans and a few better quality knives.  We also probably need a new set of measuring spoons.  Second, I need to reorganize the kitchen.  Our kitchen is not particularly large and doesn't really have a whole lot of storage (not surprising since we live in a 1920s home).  But, taking a look at what I do have in my kitchen, I noticed that a lot of the space is dedicated to antique glassware, cocktail serving dishes, vases, large serving dishes, our fine china, etc.  While I don't like to cook, I do like to party so I have lots of fun party/serving/cocktail supplies.  I need to work on getting the special occasion things out of the way and organizing the kitchen so that more of the space is dedicated to cooking tools.

So, I'm going to work on getting our kitchen better organized and I'm going to do some cooking equipment shopping this holiday season.  I'll let you know how I do.

Monday, November 5, 2012

2012 Savings Goals - November Update

(1) Max out 401k(s) - $31,379 (92%)(goal is $34,000)
(2) Max out IRA(s) - $5,829 (58%)(goal is $10,000)
(3) Add to e/r fund - $8,400 (84%)(goal is $10,000)
(4) Pay down mortgage - $2490 (50%)(goal is $5,000)
(4)(a) Savings for goal (4) - $415
(5) House projects - $1,200 (24%)(goal is $5,000)
(6) Trading account fund - $50 (1%)(goal is $5,000)

Total - $49,763 (72%)

I've added a sub goal to our list, since at present, I'm allocating our mortgage paydown money to savings until I figure out how to prepay our new mortgage.

At present, we are approximately $9,900 behind on our 2012 goals and the gap is approaching $10,000.

What can I say about our current savings deficit and the fact that it continues to grow?

I can tell you that (1) we've spent thousands on certifications for Mr. Sam this year (to improve career opportunities); (2) I can tell you we spent thousands on refinancing our primary dwelling and (3) thousands on fixing our our primary dwelling for the appraisal for the refi; and (4) recently a few thousands on some projects at Rental # 3.

But, I can also tell you that in the face of the above we have failed to change our lifestyle in any significant manner.  We continue to eat out more than we should.  I just booked a girls weekend in South Beach, Miami and, of course, I just bought some fabulous art. 

So, with two months to go, including the expensive holiday season, it seems doubtful that we will reach our $69,000 number.  Rather, at this point, while I'm not amending our goals, I'm hoping to meet and surpass last year's savings number which was $60,060.

Thursday, November 1, 2012

Happy Days - Part III

Earlier I posted about my recent raise and retroactive pay, related to my raise, and how I wanted to spend those monies. I decided that I would put 2/3 of my retroactive pay towards the art that I've been stalking since Memorial Day and the rest would be put towards our 2012 IRAs or other 2012 savings goals.

Well, I am pleased to report that I have more than enough in my ING savings account to purchase the art work and I've already e-mailed the artist and made the purchase.

And, yes, I put the other 1/3 of my retroactive pay into our 2012 IRAs.

Wednesday, October 31, 2012

I Hate Grocery Shopping

I have never ever enjoyed grocery shopping.  In fact, grocery shopping is my least favorite chore.  As a result, I generally refuse to grocery shop and that chore has become Mr. Sam's responsibility.  He has learned over the 6 years of marriage and the 8 years of cohabitation that if he wants to eat he has to do the shopping.  Similarly, I've learned that Mr. Sam hates to pay bills and if I want the bills paid I've got to pay them.  Marriage - divide and conquer.

Being that Mr. Sam has been deep into renovations and projects at Rental # 3, he has been slacking on his grocery responsibilities.  And, being that it is Halloween, I figured I needed to at least swing by the grocery store and pick up some candy for the kids.  And, if I was stopping by to pick up candy, I might as well pick up a few things.

Reason # 1 that I hate the grocery store, a few things turns into a $150 in groceries.  And really, I only picked up a few things, fruit, salad stuff, milk, juice, cereal, bread, bagels, cheese, sandwich meat, peanut butter, cream cheese, butter, a few frozen dinners (for my lunches), yogurt, beer and the aforementioned candy.  Honestly, I have no idea how a few things, plus Halloween candy, can turn into $150.

I'm sure if I were a regular shopper I would have a better handle on what things cost or should cost at the grocery store.  And, I further recognize that it is certainly cheaper to buy my lunches at the grocery store than order in at $10-$12 on a daily basis.

Reason # 2 that I hate the grocery store, it is close to impossible to be an informed shopper.  It is difficult and time consuming to compare prices among similar products.  The prices on products change from week to week.  The sizes for items are not standard, you have to study the little per ounce shelf tags to try and get a realistic sense of pricing.

Reason # 3 that I hate the grocery store, the pricing game.  There are special prices for people with savings cards and the like.  Ugh, I hate those cards and I don't use them.  If I shop at Publix, which I prefer, then I don't have to worry about the preferred shopper game.  But, I was at Winn Dixie which utilizes a customer reward card which just adds a whole extra level of pricing complications.  As I mentioned, I'm not a fan of customer cards, I don't use them but Mr. Sam has a Winn Dixie reward card and I figured I would take advantage of it.

Now, I don't go out of the way to buy certain products because they are on special, but if I was already buying a product I might opt for the one that is on special and that is what I did last night.  I am a fan of the  Chobani greek yogurt and I often eat the non-fat varieties for breakfast or afternoon snack.  I noticed Winn Dixie was running a special, buy 10 Chobani yogurts and they would be a $1 each.  I made sure to select 10 to get the deal.  I also opted for a buy one get one free on bagels and a three for something special on the sandwich meat.

And, therein lies the problem, by the time I get to checkout I can't recall or keep track of the various specials I'm trying to take advantage of.  The only specific special that I remembered at checkout was the yogurt and can you guess what happened at check out?  The cashier rings them each through and I'm watching and seeing that the ring up at $1.34 each.  I'm thinking that maybe the price will be adjusted when all 10 are rung up since the special required me to purchase 10.  And, drum roll, nope didn't work.  So then I'm that person telling the cashier that I'm not getting the special price and she has to call a supervisor over, she has to void all 10 and then just ring them through as a flat $10.

I find the whole process extraordinarily annoying, and I have no idea if I was charged the correct price on the bagels or the sandwich meat.

One of our general goals for 2012 was to reduce our eating out and ordering in costs by doing more grocery shopping.  I can't say that I have been particular successful this year, because I can't seem to improve my grocery store experience.

How about you, who does the shopping in your home, do you have a system for making it less painful, do you have a deals and savings system?  Please share, I need to learn your tricks.  

Tuesday, October 30, 2012

Refinance Update - Part 12

As I indicated earlier, our home mortgage (recently refinanced) has been sold to CitiMortgage.  I just spent 20 minutes setting up an online profile with CitiMortgage.  And while I have reviewed each and every FAQ, each section regarding payments and payoff, there is nothing on the CitiMortgage web page about how to prepay principal except for their own "Biweekly Advantage Plan" which of course has a charge associated with it.

While I am disappointed, I'm not surprised because Citi makes more money off of us if we don't prepay our mortgage.  So my plan is to make our first regular payment and then I will call about how to set up principal prepayments.  Its important that Citi know that I'm going to be making principal prepayments so that they properly apply them and so they don't assume I'm making some partial regular payment.

Sunday, October 21, 2012

Happy Days - Part II

Earlier, I posted about a recent raise that I received at work.

I have decided that I will take 2/3 of the retroactive pay and put it towards my art savings account.  The extra funds from my retro pay to my art account should mean that I can pull the trigger on the art purchase prior to the end of the year.

The remainder of the retroactive pay will go towards our 2012 IRAs.  The extra pay received in my pay check will be allocated towards current expenses and our 2012 goals.

Thursday, October 18, 2012

Happy Days

Good news, I  received a 5% raise yesterday at work.  And further good news is that the raise is retroactive for a few months.  Whoo-hoo!

So, since today is pay day for me, I received my newly increased paycheck via direct deposit and a check for the retroactive pay.  Eyeing that retroactive pay, we could use it towards funding our 2012 IRAs or towards paying down our mortgage.  We are behind on both of these 2012 savings goals (behind $2371 in funding our IRA, and behind $1461).  Or we could put it towards expenses related to turning Rental #3  (which Mr. Sam is working on as we speak).

But, what I really want to do is put it towards the art work that I've been saving for since Memorial Day.

What would you do, put it towards 2012 saving goals, put it towards current rental related expenses or spend it on something fun?  As an aside, I already have $110 in my art account so I only have $515 to go before I have sufficient funds to purchase.  This piece of art would be my Christmas present to myself from myself and Mr. Sam.

Saturday, October 13, 2012

Net Worth Number Crunching

I am in the office today, supposed to be working but ended up getting sucked into analyzing our 2012 net worth numbers at

Overall this year, since January, our net worth is up $92,851 which I must say impressed me.  Most of the growth can be tracked directly to the growth of the stock market since $42,911 of our increase in net worth comes straight from growth in our 401k accounts.  Plus, we have contributed $30,565 to our 401k accounts, so all together our 401k accounts are up $73,476.

The other big area of movement is in our debt load.  We have reduced our debt (all mortgage) from $594,056 to $574,735 for a total of $19,321.  Between the grown in our retirement accounts and the reduction in debt our net worth is up $92,000+, maybe by the end of 2012 it will be up over $100,000.

Friday, October 12, 2012

Refinance Update - Part 11

We knew at closing that our mortgage would immediately be sold from the broker to another lender.  Yesterday we received notification that it will be CitiMortgage.  While I own stock in Citi and we have one of our rental mortgages with Citi, I can't say they are my favorite company when it comes to levels of customer service.

But, I keep telling myself 2.75% and 15 year term, and we are saving $180,000.  I look forward to getting an electronic account set up and getting back to paying our extra $415 in principal each month (one of our 2012 savings goals).

Thursday, October 11, 2012

The Importance of Reviewing Statements

I am pretty good at paying attention to the documents that arrive by U.S. Mail.  While I do most of the management of our personal finances by electronic means, I prefer to receive paper bills for review and tracking purposes.

Last night I was sitting on the couch opening mail, and we get quite a bit from day to day, and I started reviewing our joint Fidelity statement.  Fidelity is where we keep our individual IRAs and also where I have an old 401k and Mr. Sam has his current 401k and a roll over IRA.

The statement that we receive in paper form just covers our individual IRAs (traditional and Roth) but not any of our work related retirement accounts.  I spent some time pondering how each of our investments is doing (or not doing).  Since we utilize our individual IRAs for stock investing, reviewing individual stock performance is more exciting than following fund performance.  For example, I've done really well with Apple since I bought it in early 2009, up over $8000.  But, when I was looking at my performance for 2011 I was surprised to see that I have $3000+ (out of $5000 contributed) just sitting in cash and not invested in anything.

I was stunned that I had this chunk of cash just sitting in cash.  I really have no idea what happened.  Did I forget to invest it? Was I researching stocks and never circled back around to effectuate a buy?  Did I put in a limit order that expired and I forgot to put in another order??

Ugh, I am mad at myself, since the market is up 9% from January 1st of this year and up 17% from this time last year.  As such, I have likely missed out on a positive return by letting this money sit in cash.

The morale of the story, I should be paying more attention to the statements we receive from Fidelity.

Wednesday, October 10, 2012

2012 Goals - October Update

(1) Max out 401k(s) - $30,565 (90%)(goal is $34,000)
(2) Max out IRA(s) - $5529 (55%)(goal is $10,000)
(3) Add to e/r fund - $8000 (80%)(goal is $10,000)
(4) Pay down mortgage - $2490 (50%)(goal is $5,000)
(5) House projects - $900 (18%)(goal is $5,000)
(6) Trading account fund - $50 (1%)(goal is $5,000)

Total - $47,634 (69%)

At present, we are approximately $7,000 behind on our 2012 goals and the gap is widening each month.

The good news, Mr. Sam has maxed out his 401k for 2012 and we have completed savings for one of our IRAs.  Other good news - we are on target to complete our emergency fund savings goals.

The bad news, principal prepayment is on hold at 50% due to our refinance.  We don't have any prepayment penalties or restrictions on our new loan, so, in theory, we could complete this goal once our mortgage payment is set up with the new company as of November.  But, we would have to scramble to do so.  Of course we spent $3,000+ on the refinance but (I've decided) we can't really count that as principal prepayment.

As for our house projects and trading account, those both continue to lag behind.  The plan was that once Mr. Sam maxed out his 401, which he has now done, to reallocate those funds towards some of these goals.  But, as noted in my earlier rental posts we have been spending money on various house projects from our regular funds.  We also have to see if we owe the IRS any money (which we normally do).  I will know if we owe Uncle Sam this week.

Between the principal prepayment goal and the house/trading account goal, I'm leaning towards focusing on principal prepayment first, after the IRA savings is completed.  I'd also like to end the year, although it will be difficult with the holidays and the rental expenses, at least ahead of last year so we need to save at least $61,000 (which is short of our $69,000 goal).

Tuesday, October 9, 2012

Rental Update

Earlier, I posted that two of our rental properties were vacant.

Rental #2, as I indicated before, has rented with an increase of the monthly rent by $5.  We had the property tented for termites which cost $800 and we also had a small electrical issue addressed which cost about $200.  Both expenses would have been necessary regardless of the tenant turnover.

Rental #3 is a work in progress, Mr. Sam was over at the property all weekend working on cleaning up the exterior of the property and having the interior painted.  So far we have spent $600 on labor and supplies.  We hope to have the property ready to show by mid-month, but obviously we are not collecting the rent for the month of October.

Due to the refinance of our primary property, we did not have a mortgage payment this month which means we have been able to utilize that money for all of these projects rather than dip into our rental property escrow savings accounts.

Monday, October 8, 2012

Charitable Giving

A while back, I posted on charitable giving - who gives the most and to what organizations along with information regarding our own giving.  Today we had our appointment with our accountant to prepare our 2011 taxes, we filed for an extension  so we are rapidly running out of time to get our taxes done and in by October 15th.   **As an aside and to help me stay honest, I'm declaring here that I'm determined not to file for an extension on our 2012 taxes.

In my earlier post I under-estimated how much we are giving, in 2011 we gave $1,800+.  More interesting to me, is that from 2010 to 2011 we doubled our charitable giving since in 2010 we gave $900+.  I am only counting cash contributions, not our in-kind contributions (i.e. clothes to Goodwill) or our contributions of time (which are also significant).

While 2012 is really almost over, I hope that we exceeded (or will exceed) our 2011 giving.  Since I gathered up our 2012 tax documents as I was gathering and organizing our 2011 documents, I plan to add up our year to date giving for 2012 and see where we are at.  As I previously posted, I would like to increase our charitable giving each year since my individual charitable giving decreased after we got married and we got super serious about killing debt and increasing our savings.

Tuesday, September 18, 2012

Rental Update

Rental #2 has turned over.  Our last tenant broker her lease and has moved out of town.  We already had her last month rent (September) and her lease break fee.  She never really moved all the way in and wasn't there much so the rental turn over consisted of changing the locks and cleaning.  

This is our best rental property and as such we have already rented the place for October and collected the first month rent.  I wanted to increase the rent by $30 a month, and we did initially advertise it at that level but then we reduced it as Mr. Sam would rather not lose a month of rent than collect a few hundred over the course of a year.  Before our new tenant moves in we are having the property tented for termites.  

Rental #3 is also vacant.  The tenants that were in rental # 3 were there for quite some time.  I have no idea as to the status of the property although I'm sure Mr. Sam has checked on it.  I assume there will be some turn over costs and we are unlikely to have the property ready for advertising for October.  Which means we likely will be losing a month's rent.  

This is our worst rental property for a variety of reasons but because it is a three bedroom we do get quite a few family candidates who are interested in it because it is cheap.

Thursday, September 13, 2012

Refinance - Part 10

Well it took four hours, 25 e-mails, and three conference calls, but we signed our refinance paperwork yesterday.

As I previously posted, I have not been particularly impressed with the level of service we have received from either the mortgage broker or the closing agent.  But, as I noted previously we are very happy with the rate and term and the bigger banks (the ones with better service) were not able to match these terms.

First, lets start with the positives.  We got a 2.75% fixed interest rate, which is a rate reduction for us of 2.05%.  We also went from a 25 year term, on which we had 22 years to go, to a 15 year term, which means we are cutting seven years off our loan term.  Overall, the new loan will save us approximately $180,000.  Our actual mortgage payment is only going up a $100 a month.

Additionally, our closing costs were approximately $3,100, which is about $1,700 less than we paid in closing costs when we refinanced in 2009.

And, while I thought there was a prepayment restriction the first two years of the loan term, I was incorrect.  Rather, there is no restriction on prepayment so we can continue to work the goal of getting our primary home paid off.

Now the negatives . . .

If you follow my adventures regularly, you know that I am not a fan of bank escrows for tax and insurance.  But to get the best rate, we were required to escrow our property taxes.  I plan to, once the loan is assigned (the mortgage broker will be immediately reassigning our loan), contact the lender and see if we can reach an agreement to waive escrow after a certain period of time.  I have done this before and have had success. We also have to prepay our property taxes, as part of our closing costs, since our property taxes are due to be paid in November.  However, I don't count that as closing costs since we would be paying that money in November regardless of whether we refinanced our property.  And, since we do our own escrowing, we already had that money set aside.

I thought the level of customer service during the closing process was dismal.  I had asked to receive our closing documents a day in advance of the closing and I was told that I could not have them until closing.  We have bought, sold, refinanced a number of properties in the last 10 years and I have never had a problem with requesting documents a day in advance.  The mortgage broker actually suggested, and I would say pressured, us to sign the documents without reading them because there is a three day rescission period. I'm not sure how the rescission period would help me if I found an error after the fact, since the rescission period applies to the whole loan and we would likely lose our great rate and term.  We actually went several rounds, before I put my foot down and demanded sufficient time to review the documents in advance of signing them.

So, the closing documents were delivered to my office and then closing was scheduled for three hours later.  Do you want to guess what I found in the documents?  Errors, errors and more errors.  My husband's name was incorrect throughout the documents.  My husband and I, like many professionals, do not share the same last name and his name on many of the closing documents utilized my last name.  While he is used to being called Mr. Sam, obviously on legal documents you need to sign your legal name.  For a while yesterday, it was unknown if we would be able to close, but it was determined that the important documents were correct (i.e. the note, the mortgage, etc.) and on the other documents he could correct and initial.

Regarding the HUD-1 settlement statement form, borrowers are entitled to receive the document one day in advance of closing.  Despite repeated requests, we did not receive same until the day of closing and only shortly before we were supposed to close.  After closely reviewing same, I located an issue such that the HUD-1 had to be corrected and reissued.  The problem I uncovered related to how much daily interest was calculated to pay off Wells Fargo versus the amount of daily interest the new lender planned to collect until our first mortgage payment is due.  There was more than a week where there was overlap, such that double interest was calculated to be collected.  I fully expect that we would have gotten a refund either from Wells Fargo or the new lender, but I'd rather the figures just be correct.  Since we did not receive the HUD-1 a day prior to the closing, we could not make arrangements for payment of the closing costs at the actual closing.  So now, we will be wiring the closing costs funds tomorrow.

Again, these are all issues that could have been address and corrected prior to closing, if I had received the documents as requested and, for the HUD-1, as required by law.  The mortgage broker kept blaming the closing agent and the closing agent blamed the broker.  I would say that they were both at fault and I certainly would be cautious in recommending either company to others.  I might recommend the broker because he was able to give us such a great rate and term and I thought the closing costs were reasonable, but I would absolutely warn others about the closing issues we encountered 

Wednesday, September 12, 2012

Refinance - Part 9

We are scheduled to close on our refinance today.  I can't say that I have been particularly pleased with the level of service we have received from either the mortgage broker or the title company.  But, I keep reminding myself that we are getting a great rate and term.  I further remind myself that Wells Fargo, which gave us great service when we originally got the loan (it was Wachovia then) and when we refinanced in 2009 could not match the rate we are getting.

I know/suspect/expect that as soon as we close, the loan will likely be reassigned to one of the bigger banks.  And I hope that we will get better service from the servicing institution.

Wish us luck.

Monday, September 10, 2012

2012 Goals - September Update

(1) Max out 401k(s) - $27,697 (81%)(goal is $34,000)
(2) Max out IRA(s) - $5126 (51%)(goal is $10,000)
(3) Add to e/r fund - $7200 (72%)(goal is $10,000)
(4) Pay down mortgage - $2490 (50%)(goal is $5,000)
(5) House projects - $900 (18%)(goal is $5,000)
(6) Trading account fund - $50 (1%)(goal is $5,000)

Total - $43,463 (63%)

At present, we are approximately $5,600 behind on our 2012 goals and the gap is widening.

Due to the mortgage refinancing, our mortgage pay down goal is on hold.  Our thinking was that we will have closing costs approaching $4,000 and we ought to save our pennies for those costs.  Do we count the closing costs towards this savings goal or not?  Once the refinance is completed, our closing is scheduled for this week, we will have two years in which we are not permitted to pay off the mortgage in full.  I need to understand whether that restriction extends to paying extra towards the principal or not.  If we are restricted on paying extra towards the principal do we keep saving the money we committed to the mortgage pay down or do we put it towards another goal?

For the house project goal, when we were getting ready for our refi appraisal, we spent close to a $1000 on getting the house cleaned up.  Do we count those expenses towards our house project savings or not?

We also have the added expense of the life insurance policies coming up.  And, we also have to get our 2011 taxes done which will include a payment to the IRS.

In sum, we have a lot of outgoing expenses in the next few weeks, but we need to get our savings back on track.  Mr. Sam will max out his 401k savings by the end of September which will free up some extra cash to put towards our other goals.  We also need to get ourselves refocused and recommitted in order to close out the last year with saving success.

Friday, September 7, 2012

More on Insurance Home Work

As I previously posted, Mr. Sam and I are working on obtaining term life insurance, we met with our insurance agent last night and completed the life insurance application for each of us.  We have settled on $1 million in life insurance for each of us for a term of 20 years.

We also are exploring  umbrella insurance.  An umbrella insurance policy provides broad and additional insurance above and beyond home owner and car insurance.  Because we have three rental properties and an additional property (just land) and because our net worth has now hit the $1 million mark (and has held there for a few months) an umbrella insurance policy makes sense for us.  We don't have control over four properties that we own from day to day, the three rental properties obviously involve people who may or may not hurt themselves or invite people onto our properties that might hurt themselves.

Step one of obtaining an umbrella policy is to increase our car insurance coverage.  Luckily, increasing our coverage and combining our previously separate policies, as a married couple, will decrease our overall car insurance costs.  The umbrella policy we are looking at requires underlying $250,000 bodily injury per person and $500,000 per accident coverage which is normal for umbrella coverage, so we are increasing our coverage.

Step two of obtaining an umbrella policy is to increase our liability coverage on each real property (and/or determine that we have sufficient liability coverage).  The umbrella policy we are looking at requires underlying $300,000 liability coverage for each home and property we own.  At present, we have determined that one of our homes has sufficient coverage, the other three homes covered by Florida's Citizens Property (the state run insurance organization) most likely do not because Citizens has reduced liability coverage across the board.  But, we need to check.  To the extent our Citizens' insurance policies do not provide sufficient coverage we will need to purchase gap insurance to provide the additional $200,000 in liability coverage which will run $200 per year per property (so probably $600).  We also have property up north which is undeveloped, and, as such, it never crossed my mind that we should have an insurance policy on it.  But, of course there is a chance that someone could enter our property, get hurt and sue which is why a liability policy is required on that property before we can get an umbrella policy.  So I've called an insurance agent up north to see how much a liability policy will cost, hoping its cheap as the risk seems quite low.

Friday, August 31, 2012

Tax Time

It is that time of the year and we have just received the notice of proposed property taxes for our various properties in Florida.

Florida's homestead law complicates the real estate tax situation.  Florida's homestead law provides protection against forced sale of one's primary home.  One of the reasons O.J. Simpson  lives (or lived, he is in jail at present) in Florida is because of the generous protections from creditors provided for one's primary dwelling no matter how big or expensive.

For our purposes the homestead law provides a tax exemption from our real property taxes.  A family with a homestead property receives a $50,000 tax exemption for all real property taxes except for school taxes (for which $25,000 of that exemption applies).  So a family with a home valued at $200,000 would only pay taxes on $150,000 of the value and $175,000 for the school district taxes.

Even more important though is the protection provided against the rate at which taxes can increase from year to year.  For a Florida homestead property, the rate at which taxes can increase is 3% or the rate of inflation which ever is less.  For 2012 that increase is  3%.  So, that means, when we receive our proposed taxes for our primary home there are two numbers for our home, the assessed value (which is the market value for our home and land less the $50,000 homestead tax exemption) and the taxable value.  The taxable value can only rise by a maximum of 3% year over year and that is the number we pay taxes on.  For our Florida investment properties the assessed value and the taxable value are the same and there are no exemptions.

While the Florida real estate bubble deflation has been hard on our net worth, the upside (gotta look on the bright side) has been that the assessed value went down on all of our Florida properties, which means that our real estate taxes and overall carrying costs have gone down.  Now that property values are starting to edge up we have the 3% tax rate cap protection for our primary home so it will be quite few a years untill we are paying taxes at the level we were paying back in 2007 and 2008 (at least on our primary home).

For some long time Florida home owners, during the recession their real estate taxes continued to go up because there was such a huge gap between their assessed value and taxable value.  For folks like us, landlords to three Florida properties and our primary home was purchased in 2004 our real estate taxes have come down to be similar to the rate that the long term residents of our neighborhood pay.  We live in a very eclectic area so the disparity in real estate taxes is not as glaring as newer construction areas, where you could have, during the boom time, two identical sized homes with one owner paying $4000 in real estate taxes and the other non-homesteaded resident paying $8000 in real estate taxes.

Thursday, August 30, 2012

Financial Poker Face

I recently ran into my former assistant out and about.  This is a sweet woman, single mom, about my age.  Because we worked closely for a few years, I have general knowledge of her financial status.

Anyways we were catching up on respective news and she proudly announced that she had a new car.  She goes on to tell me its the same brand as my car, one model level down from mine.  Of course I had to ask, new or used?  New, she tells me.  And this is where I fail, I make a face of disapproval.

When we were working together she had a late model small SUV, nothing that needed replacement in my mind.  But, I have no idea as to what happened to it, maybe she got in a car accident or maybe it required an expensive repair.  So, I start calculating how much the car cost and then I move on to calculating the cost of  a 5 year loan, and what she would have probably have gotten for her trade in . . .  and I come up with probably at least a $450 payment per month.  And, I make that face of disapproval.

And she knows me well enough to know I'm one that hates debt and that I am much more structured and conservative when it comes to our personal finances.  So she knows what I'm thinking when I make that face.

Frankly, I shouldn't be so judgmental.  Buying a new car may not be for me, but for most people it is an event to be proud of and to be excited about.  Our financial path and plan is not appropriate for most people so I need to get over it when I hear people making financial choices that are different from ours.  I shouldn't share my opinion (even non-verbally) unless someone asks for my advice.

Wednesday, August 29, 2012

Lease Break

Ugh, one of our tenants has decided to break her lease.  Our tenant has a job opportunity that is requiring her to move and its an opportunity that she can't pass up so she has opted to break her lease.  

Mr. Sam normally handles the interactions with our tenants, because I can be too tough and over the years he has done a better job at working and managing our tenants.  This is our plan, we will review the lease and abide by the lease.  I'm sure you are thinking, of course you'll abide by the lease, well Mr. Sam can be too nice and not charge fees that we ought to be charging.  So, because we only got notice late in the month, we will charge her the last month of rent (which we have in our tenant account) because we won't be able to lease the unit before September first.  If we rent the place quickly (i.e. mid-month) we will refund part of her last month's rent, meaning we won't collect the rent twice for the same unit.  We also will charge her the lease break fee (which we also have in our tenant account) since she is breaking the lease.  The lease break fee covers the expense of advertising the unit and any other expenses related to re-renting the unit (i.e. there is a utility fee for transferring the utilities back to our name).

Tuesday, August 28, 2012

Refinance - Part 8

We finally heard from the mortgage broker.  Our loan application has made it through underwriting and we have been approved.


We do have to provide a few more documents.  We refinanced one of our rental properties in 2011 so we need to provide some documentation related to that refinance.  We also need to provide our most recent bank statements since more than a month has gone by since we provided the prior documentation.

We hoped to have the paperwork wrapped up shortly and then on to closing.

Wednesday, August 22, 2012

2012 Goals - Mid August Update

(1) Max out 401k(s) - $25,347 (75%)(goal is $34,000)
(2) Max out IRA(s) - $5123 (51%)(goal is $10,000)
(3) Add to e/r fund - $6400 (64%)(goal is $10,000)
(4) Pay down mortgage - $2490 (50%)(goal is $5,000)
(5) House projects - $800 (16%)(goal is $5,000)
(6) Trading account fund - $50 (1%)(goal is $5,000)

Total - $40,210 (58%)

At present we are about $4900 behind on our 2012 goals.  We have made progress on funding our 2012 IRAs, one is now fully funded, as I have been putting our monthly home mortgage principal prepayment of $415 towards the IRA while we wait on our Refi.  As previously mentioned, Mr. Sam will max out his 401k in September so we'll have some extra cash available to put towards our goals that are lagging behind.

Tuesday, August 21, 2012

Other Homework

In addition to working on getting term life insurance, we are also FINALLY working on getting our car insurance consolidated.  We have been married for five years now, and getting our car insurance consolidated with one company has been on our "to do" list since then.  Neither of us are particularly happy with our respective car insurance companies, mine is Allstate and his is Progressive, so we have a quote from a new company that will give us more coverage for less money for the two policies.

We also have a third car, an antique, which will have to stay on a separate special policy (which is very low cost).

Monday, August 20, 2012

How Charitable?

This morning I caught an NPR segment on the geography of giving.

Very interesting to learn that lower income folks actually give away a bigger percentage of their discretionary income.  
  • Households with incomes of $50,000-$75,000 donate on average 7.6 percent of their discretionary income.
  • That's compared with about 4 percent for those with incomes of $200,000 or more.
Also, "red" states give more than "blue states.  Religion seems to play a large factor in this division.  Red states are more religious and citizens of those states give more to their church.   Utah ranks number one in giving, and that is due to the high Mormon population and the tithing to their church.  Personally, I'm not sure giving to church, in general, should count as charitable giving.  Certainly some of those funds goes to the church's charitable mission, but a good chunk of it goes to support the church on an administrative level (the upkeep of the church, heating and A/C, the pay for the preacher, etc.)

The Chronicle of Philanthropy has some great data that you can drill down into.  Some of the data is restricted to those that subscribe, but much of it is available to the public.

Florida ranks  # 15 in giving for percentage of discretionary income.  And, I think that is an interesting way to measure giving.  We rank fourth for total giving, which makes sense when you think of Florida population.  Overall, Florida's population is older and we have pockets of great wealth.

Thinking about our own level of giving, I think we could do better.  I know, because I've kept track of my personal finances for years and I used to give more when I was less focused on my (now our) personal finance goals.  Now that we set regular and focused goals, if we have "extra" cash available, I am much more likely to put those funds towards our personal goals rather than charitable giving.

This is how we give:  First, I make a monthly regular contribution to the children's charity that I am involved in.  This giving is set up to go automatically to our credit card and then I pay it off each month.  We give $40 a month, which is $480 a year.  I have to say, that automatic giving, like automatic savings is really a great way for me to give because I don't have to think about writing a check.  Once the giving is set up, I don't think about it all.

We also give money at Thanksgiving for our turkey give away (same organization), we normally give $100 in November.  We also give $100 to the annual fundraiser (same organization) which is also in November (I am on the board, so we strive for 100% board participation for our annual fundraiser, because that level of participation helps with grant writing).  We also normally sponsor a family at Christmas time, which means buying basic supplies and a few gifts for the family (same organization) which runs around $200.  So, to one organization we normally give close to $900 a year.

Second, we have two health/disease focused charities that we give to.  These are organizations that focus on support, research and finding a cure to two diseases that impact my family.  We normally give at least $100 a year to both, for a total of $200.

Third, I'll give $20 here and there to support friends that are fundraising.  Plus, we always buy Girl Scout cookies and support the kids in our neighborhood that are doing fundraising.  Finally, at Christmas time we have, for the past few years, bought everyone in our family a Christmas wreath which is shipped to them as part of the local marching band fundraiser (that normally runs $100+).  So with miscellaneous giving and the Christmas wreaths, that adds another $200 to our yearly total.

So, our grand total runs us about $1300 in giving. I've decided that I am going to increase my monthly giving from $40 to $50.  How about you, how much do you give and how do you give?

Friday, August 10, 2012

Recycling Bandits

Today, Friday, is recycling day in my small City.  We utilize a single stream collection system.  Which means that all our recycling, paper, cardboard, plastic, glass, cans, etc. is put into one large bucket.  Then the City utilizes an automatic pick up truck system that grabs the bucket and dumps it into the truck (which looks like the below image from another city).

The recycling program doesn't cost anything to the City, or the tax-payors, because the recycling program pays for itself by recycling and selling off the higher value recyclables.  In fact, there has been some discussion about a program in which the City will start tracking the weight of each household's recycling and eventually provide rebates (that will go to cover cost of waste removal) based on higher levels of recycling.

As you know, we live in South Florida.  South Florida has a large immigrant population (both legal and illegal).  I have general objection to the Federal government not enforcing our immigration laws and the fact that the illegal immigrant population strains our tax funded resources.  However, on a personal level, I generally have no problem with the illegal immigrants that make their home in our City.  Most of these folks are hard working, family orientated, peaceful folks who are doing their best to make a better life for themselves and their children.

But, every Friday I see, without fail, a group of immigrant women who goes around and collects the cans from the recycling buckets.  As far as I'm concerned this activity is theft from the City and from the citizens, because it is undermining our recycling program.  On the other hand, I'm sure these folks probably don't see any harm in their efforts since what they are stealing from is trash.  Some municipalities have criminalized recycling theft or scavenging  but I can't find that our City has done so.  As such, if there is no ordinance against the activity I'm not sure anything can be done at this point.

At this point, I'm thinking about reaching out to my local commissioner, what would you do?

Wednesday, August 8, 2012

Diamonds and Dollars

Have you ever received mail alerting you to the fact that you are a presumptive member of some class action lawsuit?  If yes, what did you do?  Did you ignore the mail, toss it, investigate and then toss, respond, file a claim, opt out?

Maybe you have heard news reports about the Nutella class action lawsuit (over the issue of whether chocolate nut spread is nutritious or not), wherein the settlement to the class was for coupons to buy more delicious, but not nutritious, Nutella.  In fact, many class action settlements involving retail wrong doing involve discounts or coupons for future services or products.  As a result, in some class action settlements, response rates are lower than 25%.

Yesterday, Mr. Sam received follow up mail from the Diamonds Claim Administrator for the DeBeers diamond price fixing settlement.  While neither of us have any recollection of submitting a claim, I assume I filled out the paperwork and submitted it back in 2008 (my research indicates that claims were due in 2008).  I have been prone to submit class claims ever since I received a check for almost $200 for a test prep class I took years ago in advance of professional school.

So, now the claims administrator is looking for actual proof of purchase for the engagement ring diamond that Mr. Sam purchased back in 2005.  Since my engagement ring is our most expensive piece of jewelry I do have a detailed file.  I have the GIA grading report and the Gemprint Certificate of Registration for the center diamond.  I also have the documentation regarding the wedding band and insurance paperwork, but nothing in my files that documents how much Mr. Sam paid for the main diamond.

Part of the problem is that Mr. Sam went through a diamond broker and bought the center diamond from a wholesaler and then had the engagement ring designed by a jeweler. As such, there is no receipt for the ring as a whole.  Thank goodness for Yahoo email, after I dug through our hard copy file and came up empty, he was able to go back to his 2005 e-mail records and find a receipt.  Hooray!!

Today, I will copy all of the diamond material and will send it off to the claims administrator.  Who knows how much we will get, but something is better than nothing.

Tuesday, August 7, 2012

eBay Errors

So, like many brides, when Mr. Sam and I got married, we registered for fine china.  I registered for a brand and pattern of china that has been around for 100+ years.  But, like many brides, I didn't end up receiving a full set of china, since the fine china I registered for was and is expensive (think $150 for a dinner plate).

Now, five years later I have discovered that since my china has been around for so long, I can find it on eBay for prices that are much more favorable.  So, what do I do, I get excited and start bidding on my china.  Three soup bowls for $30, that sounds like a bargain, bid away.  $10 for an egg cup, deal!

Guess what, I am not an eBay expert and I've realized that I've skipped over a very important part of eBay bidding process . . . and that is actually reading the item description.  Because, as you may have guessed, I now have three soup bowls, but all three have chips on the rim.  And my egg cup has a crack.  Luckily, I've only spent $40 on this experiment.  But, its certainly a wasted $40 because really, I can't do much with chipped and cracked fine china.  

So, what have I learned.  I need to make sure I click through and actually read the description, because based on my two purchases, both sellers fully disclosed that the items I was purchasing had flaws.  But, since I had bid before I read, that information wasn't particularly helpful.  Additionally, a very low price likely indicates a flaw.  How did I win the auction for three soup bowls at $30, no one else wanted them because of the rim chips.  

At present, I am watching six dinner plates (no flaws) and the auction price is up to $305.  I don't expect to bid on the plates since it outside my budget but six perfect plates would be a deal since at retail cost they would run $900.

How about you, have you had success on eBay?   

Saturday, August 4, 2012

Headboard Project

Working on my headboard project today.

A few weeks ago, on bulk trash day, I spied an old, painted, wood headboard that had been set out for trash pick up. Since we needed a headboard for our guest room, when I returned home from my early morning walk, I made Mr. Sam get up and go pick it up in his truck.

 Today, I sanded the headboard utilizing Mr. Sam's handheld sanding machine. I started off with 50 grit sandpaper, then used 80 grit and finished with 120 grit. In between rounds of sanding, I washed off all the dust.  Once I was done with sanding, I then primed the headboard with white primer spray paint. At present, I'm waiting for it to dry and then I'll paint it with a bright white high gloss paint.

Total cost for new headboard will be zero dollars. With all the projects Mr. Sam does, we already had all the necessary supplies.

Friday, August 3, 2012

The Zen of Personal Finance

Zen Habits is one of my favorite personal philosophy web sites.  It is chocked full of great ideas for productivity, de-cluttering, exercise, mindfulness, etc.

Recently, I came across this article about not automating personal finance, which is actually by the Man vs. Debt blogger.

I go back and forth on this issue as I'm a big fan of automating retirement savings, bill paying and budgeting to make life easier.

First, I'm a big proponent of automating savings.  For us, our 401k contributions are automatically deducted by our respective employers.  As such, we never see that money and therefore never get a chance to spend it.  Furthermore, our 401k contributions are undertaken, in general (we also each have a Roth 401k option) pre-tax which is one of the significant benefits of a 401k plan.  I can't see a way to or a reason to unautomate 401k contributions, but I'm all ears.  However, we are mindful of the amount we are contributing to our 401k plans each year.  We are mindful to adjust the amount withheld by our respective employers in order to max out our plan each year.

When it comes to our other savings, I find that our automated savings work better than our unautomated savings.  For example, we are putting $400 per pay period towards our emergency fund, as such we are generally on track to meet our goal of adding $10,000 to our emergency fund in 2012.  For other savings goals which are not automated, i.e. our 2012 IRA savings or our trading account savings goal, we are lagging behind in part because I making those savings decisions after I pay bills, allocate allowance, etc.  Meaning, that if I have a decision making process when it comes to savings, I might not transfer that money to savings. Often, I'm not spending it on other things but I get nervous having our day to day checking account get so low.

When it comes to debt repayment, if you are struggling with debt, I think a measure of automation can help.  If you can get all of your minimum payments set up and automated (where you are pushing payments, I don't think its a great idea to allow banks access to your checking account) you know you won't miss any more payments and incur late fees and penalties.

But, I also recognize the importance of being mindful with one's spending and personal finances.

We use the $100 and $300 rule to keep engaged with our spending.  The $100 rule provides that for every "want" purchase over $100 we must wait one day per $100.  Which means if we are faced with a $500 want, we must wait at least 5 days.  The $300 rule provides that for every purchase over $300 we must discuss the purchase and agree between the two of us (bribing the dog to your side doesn't work).
We also don't use credit cards for day to day spending.  Using debit cards tied to our respective checking accounts in tandem with our adult allowance system requires each of us to think before we swipe since we each have a limited amount available to us for spending.

How do you maintain mindful spending?

Thursday, August 2, 2012

Life and Death

Mr. Sam and I have been married for more than five years now.  But one of the personal finance tasks that we have not addressed since marriage is life insurance.  Life insurance and stream lining our other insurance has been on our "to do" list for years now.  We do, both have a life insurance product through our employment, but as you may or may not know, that policy is often not portable after you leave employment.

We have met with folks over the last few years, but we have never committed to buying life insurance.  Most of the folks we have met with have focused on whole life insurance  or some hybrid of whole life insurance.  Whole life can be very expensive since, as the name implies, it provides life insurance for your whole life and pays out upon death.

Life insurance is a very personal matter and how much you need or want depends on lots of factors.  We have generally decided that we want term life insurance.  Term life insurance means it lasts only for a certain number of years.  At present, we are looking at 20 year term insurance.  What do we want the insurance for?

Our general thought is that we want enough life insurance to retire any debt, at present we have @$580,000 in mortgage debt.  We don't have any other debt and our plan is to avoid incurring debt for the rest of our lives (ignore the fact that we have @$1500 in Home Depot debt at 0%, it will be paid in full shortly).  We expect that in the next 20 years we will continue to pay down our mortgage debt, with the plan of completely paying off our primary dwelling within 15 years, as our tenants pay down our investment property mortgages.   We may incur additional mortgage debt when we build our retirement home, but the plan is to fund that project when we sell our investment properties.  

So, we want at least $580,000 in life insurance for both of us to cover our debts.  Secondly, we want enough life insurance to ease the transition for either of us since we each rely on our joint income to maintain our current lifestyle.  What does that mean for us?  Well, we want enough life insurance money so that upon death, neither of us has to start liquidating assets right away in order to maintain current lifestyle.  On the other hand, we are not looking at this life insurance to be a "lottery" influx of cash.  There is a balance between how much we should pay on a yearly basis for term insurance vs. risk vs. pay out.  So, at present, we have settled on that magic number of $1 million in term life insurance for each of us, $580,000 in debt coverage and $420,000 in transition monies.  We have a pre-medical quote and we are also going to shop it around a bit as well.

How about you, do you have life insurance, what kind, how much and how did you settle on same?

Tuesday, July 31, 2012

2012 Goals - August Update

(1) Max out 401k(s) - $23,217 (68%)(goal is $34,000)
(2) Max out IRA(s) - $4705 (47%)(goal is $10,000)
(3) Add to e/r fund - $6000 (60%)(goal is $10,000)
(4) Pay down mortgage - $2490 (50%)(goal is $5,000)
(5) House projects - $750 (15%)(goal is $5,000)
(6) Trading account fund - $50 (1%)(goal is $5,000)

Total - $37,212 (54%)

Seven months into 2012 and we have now crossed the 50% mark on our 2012 goals.  The good news is that we are on track to complete goals 1-3.  Mr. Sam will, in fact, max out his 401k in September.  We will then redirect the monthly sum that was going to his 401k to other goals come September.

Regarding goal number 4, I've put paying down the mortgage on hold as we work towards refinancing our mortgage.  I can't say we have abandoned that goal, but since there will be $3-4,000 in closing costs I'm holding that goal for now until we close on our refinance.

As for goals 5-6, we are making little to no progress on them, perhaps we can pick up steam in September.  We did, just spend about $1500 on house projects as we prepared for our Refi appraisal.  I'm not counting those monies towards our house project savings, but simply noting the fact.

Overall, we are currently, approximately $3900 behind on our 2012 goals.

Friday, July 27, 2012

Net Worth

I have updated our figures for August 2012.  Based on our Refi appraisal, I have reduced the value of our primary home to the appraisal figure of $399,000.

Monday, July 23, 2012

Refinance Part 7

We just received our Refi appraisal report (the rough draft, we don't have the signed one with all the photos yet).

And the good news is we appraised at $395,000 which is above the number we needed which was $348,000.  And we are only down $20,000 from our last appraisal in 2009.

So, we should be able to move forward with our super awesome Refi terms.  There is a re-review of the appraisal, this is part of the process now, so there is a chance that the Refi could be derailed if the appraiser really screwed up.  I've not studied the report or the comps yet, except for the one comp which I suggested he utilize and, therefore, was already aware of based on my own research.

Wednesday, July 18, 2012

Capital One Hit With Fine

A little while ago I posted about my own dispute with Capital one involving a charge back for services I did not receive.  The charge back was not resolved in my favor due to misleading and incorrect information received by me from Capital One's call centers.  Thereafter, I closed the account since I had no interest in doing business with a company that would basically lie to me when I was trying to responsibly resolve a dispute with a merchant. So, I can't say I was too surprised to hear about Capital One getting hit with a major fine for deceptive practices.

Monday, July 16, 2012

Refinance Part 6

I am physically sore today after all the work this past weekend.  And, I only worked a day and a half, Mr. Sam worked two and a half days.  We made good progress, below is our list and the status of same.  Appraisal is scheduled for Wednesday morning, so we have a little bit of time to finish up.  Overall, we spent close to a $1000 this weekend.  But, even if the appraisal is a bust, the projects and effort expended was well worth it and generally necessary.  For example, we normally replace the mulch every two years, but the last time we redid the mulch was 2010 so we were, frankly, due to undertake this project anyways.

1) Remove old mulch in back and front yards and replace with new mulch (we've had this mulch in for a year plus so its started to break down and turn into dirt).  Mostly done, all the old mulch is gone (given to an organic gardener), I would say 60% of the new mulch is down.
2)  Power wash all walks.  Done.
3)  Weed and trim up any plants as necessary (we did a big trimming project a few weeks ago, so we are ahead of the game on this one).  Done.
4)  Get rid of any mold on the house and carriage house (we are in Florida, after a while mold starts to grow on the sides of the home that don't get a whole lot of sunshine).  Done.
5)  Paint touch up as needed.  Done.
6)  Wash windows.  Not done, and more than likely off the list.  
7)  Fix a couple of sprinklers.  Not done, but still on the list to get done.  
8)  Fix fence in back yard and back yard gate.  Fence is fixed.  Mr. Sam decided to replace the old gate which was beat up from the elements and hurricanes.  He has started building the gate (from a kit), but needs to finish.   

1)  Clean and organize garage.  Done.

1)  Make sure everything is put away, including in the office (our dumping ground) so I'll need to catch up on filing which will take a few hours at least.  I put away all the clean laundry (also did three or four loads of laundry, so laundry room is not overflowing with dirty laundry) and tidied up elsewhere.  I did at least a couple of hours of filing, but there are still baskets of "to be filed" in the office.  However, the office looks a lot better, desk is clean and tidy.
2)  Super clean the house, vac, mop, dust (including things like art and photos, every ceiling fan, A/C vents, light fixtures, plantation shutters, etc.), scrub kitchen (wash windows on kitchen cabinets) and baths, wash base-boards, get rid of scuff marks on walls and base boards.  We don't have a cleaning service, as much as I'd like one, and with our works hours our house is generally tidy, but not super clean most of the time.  I spent from 7:00 a.m. to 5:00 p.m. yesterday working on the deep clean.  As I mentioned, I am physically sore.  I scrubbed baseboards, I cleaned ceiling fans, I dusted art and photos, I dusted furniture, I vacuumed soft furniture, I scrubbed the bathrooms, the tub, the floor, the walls, cleaned toilets, I washed the kitchen cabinets, etc.  We still need to do a final vacuuming and mopping which we will do Tuesday night.
3)  Complete headboard project for guest room.  Not done, and not sure its going to get done before appraisal.  But, headboard is in the garage so it is not a noticeable issue.  
4)  Replace any light bulbs.  Done.
5)  Trip to Goodwill to get rid of donation stuff sitting in master bedroom.  Still need to make this trip, plan to load up dry-cleaning and Goodwill donations for delivery tomorrow or even Wednesday after the appraisal.  Point being that this stuff will be in the trunk of my car, not sitting out.    
6)  Tidy up closets.  Done.
7)  Fix light fixture in mater bedroom sitting area.  Done.

Additional Projects:
1)  Mr. Sam completed a ceiling repair project in the living room.  Our house is a 1920s home and the plaster had separated from the lath.  Of course it ended up being a big project, moving furniture, mudding, texturizing, and will be painted today.
2)  Mr. Sam re-stained the kitchen kick-boards.