I'm sorry I've not posted here more. But, now I understand how busy one gets with a full time job and a new baby.
Financially, we are all over the place. We can't seem to get back on track post baby. While our incoming salaries remain the same or better, our outgoing expenses are much. much higher than normal.
Child care is running $1900 a month ($22,800 a year) which appears to be way higher than normal for Florida, but I don't know anyone in my circle paying the Florida annual average of $8300. Add in diapers, formula, wipes, etc. at $300 a month or so and we are up to $2200 in expenses. And, we actually don't spend much on Baby Sam, we hit the thrift stores for books and toys and I stick to super sales for baby clothes. At present, we are also adding $200 a month to Baby Sam's college fund. So in total, about $2400 a month in baby expenses.
Another challenge, we are converting a rental property from rental to family. We have, in the past, utilized one of rental properties for our snow bird relatives which was a financial hit. Now, that we are turning the rental property to a family property, we have had a couple of months where our old tenants have not paid us. So that also, obviously, impacts our cash flow.
Anyways, we continue to contribute to our 401ks, at max level, and continue to put money into savings, but we need to catch up on our IRAs.
Hope your summer is going well.
Showing posts with label College Planning. Show all posts
Showing posts with label College Planning. Show all posts
Thursday, July 23, 2015
Monday, March 30, 2015
College Savings Plan for Baby Sam
As I work on figuring out our 2015 savings goals, we know that college savings for Baby Sam is on the list.
We have settled on a 529 Plan rather than a prepaid tuition plan.
The next question is how much to contribute. $28,000 is the current annual limit if you file taxes jointly, $14,000 if filing singly status before having to do gift tax analysis.
Mr. Sam is in favor of skimping to front load Baby Sam's college fund now and then once Baby is in school dialing back because there is a good chance we will be paying for private school.
I'm not sure where I stand on the issue, but because I manage the finances I prefer more regular and even contributions because its easier to manage. But, if we contributed $28,000 a year for year one to year five we would end up with $140,000 and that is a huge chunk of money that would then grow over the next 13 years.
Start researching estimated college costs in 2033 and its enough to make your head spin. $57,000 a year for public, in-state university up to $130,000 a year for private university. Multiply that by four - five years and you get total costs from $285,000 to $650,000. Yikes!
However, many experts say that the tuition increases that have occurred in recent years, 5% - 7% increases each year, are simply unsustainable. So, its quite difficult to know what the real costs will be. I guess its better to plan high and then be pleasantly surprised, but I don't want to sacrifice retirement savings or other savings to hit an inflated college savings number.
At present, the 529 plan paperwork is filled out, I've sent off the check for the initial contribution and I have set up bi-monthly electronic contributions at $50. Not much, but a start while we figure out how much we will be contributing going forward.
We have settled on a 529 Plan rather than a prepaid tuition plan.
The next question is how much to contribute. $28,000 is the current annual limit if you file taxes jointly, $14,000 if filing singly status before having to do gift tax analysis.
Mr. Sam is in favor of skimping to front load Baby Sam's college fund now and then once Baby is in school dialing back because there is a good chance we will be paying for private school.
I'm not sure where I stand on the issue, but because I manage the finances I prefer more regular and even contributions because its easier to manage. But, if we contributed $28,000 a year for year one to year five we would end up with $140,000 and that is a huge chunk of money that would then grow over the next 13 years.
Start researching estimated college costs in 2033 and its enough to make your head spin. $57,000 a year for public, in-state university up to $130,000 a year for private university. Multiply that by four - five years and you get total costs from $285,000 to $650,000. Yikes!
However, many experts say that the tuition increases that have occurred in recent years, 5% - 7% increases each year, are simply unsustainable. So, its quite difficult to know what the real costs will be. I guess its better to plan high and then be pleasantly surprised, but I don't want to sacrifice retirement savings or other savings to hit an inflated college savings number.
At present, the 529 plan paperwork is filled out, I've sent off the check for the initial contribution and I have set up bi-monthly electronic contributions at $50. Not much, but a start while we figure out how much we will be contributing going forward.
Friday, March 20, 2015
Updated Net Worth and Housekeeping
I'm continuing to work on getting our finances back under control. I spent some time this morning working on updating our net worth numbers. Our net worth is now above the $1.5 million number.
Net Worth IQ web site continues to be flaky, but when its up I prefer to keep my data there. I've added entries for November 2014 - February 2015 but they are not accurate. I will be working to add the correct data over the next couple of weeks.
Additional good news, our primary mortgage is now below $220,000. I will be super excited when its below $200,000 although prepaying the mortgage is unlikely to be something we will be working on any time soon.
In baby news, I opened a savings account at Wells Fargo for Baby Sam for monies received as gifts. We have been researching college savings plans and at this point we have settled on a 529 plan rather than Florida Prepaid. More about that research later.
Finally, I am almost done with our 2015 Spending Plan which will influence and direct our 2015 Plan. More about that later too.
Net Worth IQ web site continues to be flaky, but when its up I prefer to keep my data there. I've added entries for November 2014 - February 2015 but they are not accurate. I will be working to add the correct data over the next couple of weeks.
Additional good news, our primary mortgage is now below $220,000. I will be super excited when its below $200,000 although prepaying the mortgage is unlikely to be something we will be working on any time soon.
In baby news, I opened a savings account at Wells Fargo for Baby Sam for monies received as gifts. We have been researching college savings plans and at this point we have settled on a 529 plan rather than Florida Prepaid. More about that research later.
Finally, I am almost done with our 2015 Spending Plan which will influence and direct our 2015 Plan. More about that later too.
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