2013 Savings Goal - Another One Down

(1) Max out 401k(s) -        $27,677 (79%)  (goal is $35,000)
(2) Max out IRA(s) -         $11,000 (100%)  (goal is $11,000) completed
(3) Add to e/r fund -          $9,200 (92%)    (goal is $10,000)
(4) Pay down mortgage -   $5,000 (100%)    (goal is $5,000) completed
(5) Trading account fund - $4,902  (98%)    (goal is $5,000)
(6) House projects -          $2,300 (77%)     (goal is $3,000)

Total:  $60,079 (87%)

Today I closed out goal number 4 and I made the last extra principal payment to CitiMortgage.  In 12 months we have reduced our primary home mortgage by $18,500 which includes the $5,000 in extra payments.  Pleased to see our mortgage principal is now below $240,000.

At present, we are about $3,600 behind on our original 2013 savings goals.  To the extent we want to meet our revised 2013 savings goals, then we need to save another $2,950 before the year ends in just over a month.  I have another $1,998 in 401k contributions before the end of the year.   Which means that we would need to save another $1,000 towards our emergency fund, our trading account or our house project account.  Assuming we have five weeks left in the year, we will need to save $184 per week to meet our revised 2013 savings goals.

I think reaching our revised goal should be do-able, but December is always an expensive month.  

I Love Numbers!

A couple weeks back I posted an update on our debt progress.  From 11/2012 - 11/2013 we paid off almost $35,000 in debt.  At this point in our lives, debt means mortgage debt either on our primary home or our three investment properties or our piece of land.

I didn't think much about that number, except I liked it because I like round numbers.  But, going back through our networthiq.com numbers I realized that our debt progress in 2013 took an unusual jump (thankfully in the right direction).

11/2012 - 11/2013 - @$35,000
11/2011 - 11/2012 - @$22,000
11/2010 - 11/2011 - @$20,000
11/2009 - 11/2010 - @$19,500
11/2008 - 11/2009 - @$19,000

I'm sure you can see that from 2008-2012 there was a gradual and upward trend on the amount of debt we killed each year.  And then, all of sudden, whammo, this year a thirteen thousand increase.  Even putting aside the mortgage principal prepayment goal of $5,000 (which was also a goal last year and the year before), I am surprised by this dramatic forward progress.  I'm going to have to further investigate the numbers, but I'm assuming this year's dramatic advance is as a result of our primary home refinance, which closed last quarter of 2012,  in which we shortened our term and got a reduced rate of 2.75%.

Financial Bully

According to this post from the Today Show, it sure sounds like I should be classified as a financial bully.  We work on an allowance system, so I absolutely limit the amount of money Mr. Sam has to spend.  I similarly limit the amount of money I have to spend as well.

I think if you asked Mr. Sam about this system he would have the following to say.  First, he is very happy at our progress over the last 7 years (since we got married).  We paid of $55,500 in unsecured debt the first year and half of that was Mr. Sam's MBA debt.  We have also made good progress at saving money every year since then.  So he recognizes that by limiting our spending and working from a spending plan and an allowance system there is a payoff.

Second, he does, from time to time complain about running out of money and further complains that he can't have a credit card.  When I say "he can't have a credit card" he agrees with the fact that he has an abstainer personality and therefore really can't have one.  What that means is that Mr. Sam can't eat just one cookie, rather if there are cookies in the house he will eat the entire package.  So, in order to not eat an entire package of cookies he has to abstain and not have them available.  I am a moderator personality which means that I could each just one cookie a week (if I want cookies in the house I have to hide them).  So when it comes to money, Mr. Sam really will spend just about as much money (or utilize as much credit) as is available to him.  Hence the allowance system actually works very well for him.

While I am the financial task-master in the house, Mr. Sam is involved in the decision making, the spending plan creation, the savings goal setting, etc.

2013 Savings Goals - Mid November Update

(1) Max out 401k(s) -        $27,603 (79%)  (goal is $35,000)
(2) Max out IRA(s) -         $11,000 (100%)  (goal is $11,000) completed
(3) Add to e/r fund -          $8,000 (80%)    (goal is $10,000)
(4) Pay down mortgage -   $4,565 (91%)    (goal is $5,000)
(5) Trading account fund - $4,902  (98%)    (goal is $5,000)
(6) House projects -          $2,000 (67%)     (goal is $3,000)

Total:  $58,070 (84%)

Since we are coming down to the wire, I will be posting mid-month updates.  At present we are about $3,000 behind on our goals with 45 or so days to go.  We need to save another $4,930 in order to exceed our 2012 savings total.   I have $2,000 to go in 401k savings, so that leaves about $3,000 in other savings that we need to complete before years end.  A lofty goal.

The Upside of the Real Estate Crash

I was on Zillow today, poking around looking at a home that was recently listed a couple of blocks away.

Of course, I had to look up our home as well.  As for the Zillow Zestimate, it has our home listed as worth $40,000 less than what we paid for it, almost 10 years ago now, which I would say is not too far off the mark.

More interesting to me, Zillow has property tax records listed going back to the year we bought the home.  And while I knew hour taxes had gone way down, whoo-hoo I was surprised by the actual numbers.  Our property taxes are down 54% from 2004.  And, since Florida has both a homestead law and a law called Save our Homes, our property taxes on our primary dwelling (does not apply to our investment properties) can only increase at the rate of inflation or 3% which ever is less.  As a result, it is going to take a very long time, assuming values continue to rise, to get back to that initial tax bill from 2004.

Time for 2014 Goal Planning

Since it is November, it is time to start thinking about our 2014 annual spending plan and our 2014 savings goals.

First on the list, 2014 IRA savings.  As I previously posted, I have already set up our 2014 IRA savings account at CapitalOne 360 (f/n/a ING).  The 2014 contribution limits for IRAs are holding steady, so we can each contribute $5,500 to our non-deductible IRAs.

Second, 2014 401k contributions, I will contribute $17,500 to my 401k at work (again the limits are not increasing next year).  We need to figure out if Mr. Sam will be eligible for a 401k at his new job in 2014.  If he is not eligible, then he may be able to contribute to a deductible IRA (see above) to get a bit of tax savings.  But, regardless of whether he is eligible for 401k we will sock away $17,500 anyways.  Yes it will be after tax money so we will lose out on that advantage but we will still put that money into the trading account.

Third, I assume we will put money into the emergency fund and for house projects.

We will need to decide whether it makes sense to continue to pay down the mortgage principal on our primary home.  While I continue to have the goal of being debt free and paying off the mortgage on our primary home could provide significant insurance savings, we really are not saving much interest by paying early because our mortgage interest rate is so low (2.75%).

I also think we need to start a savings account for a replacement car/truck.  I bought my car, a 2006, in 2008.  I just put about $3000 into it so, even though it is 7 years old, it should be good for quite some time.

But, Mr. Sam's truck, which we bought used in 2005, is more than 10 years old and not in the best condition these days.  He would prefer to keep it and have me buy a newer car and he would take my current car for his work car.  Then we would have the truck to use for house projects and the like when we need it.  But that means we would have 4 cars (we also have an antique weekend car) and that is a lot of insurance.  I'm also not keen on having 4 cars to store/park.  As such, I'm more inclined to replace Mr. Sam's truck with a newer and nicer truck (something with a bigger cab and shorter bed and a smoother ride.  

Progress on Debt

Updating our networthiq.com numbers today and I was pleased to see we have less than $540,000 in debt (all real estate debt).  We have paid off just under $35,000 in debt in the last twelve (12) months.

These types of round numbers make me happy.  Now to get under $500,000 in debt.

Fun Tool Showing Income and Lifestyle

I heard about this tool this morning on NPR. Enter your annual income and zip code into the Income Upshot Income Upshot and it spits our various characteristics that should match up.  The results were pretty good on some obscure information including commute time, type of car, and most surprising my zodiac sign.  The Income Upshot was off on political and religious leanings.

Anyways, give it a shot and let me know if picks your sign.

2013 Savings Goals - November Update

(1) Max out 401k(s) -        $26,231 (75%)  (goal is $35,000)
(2) Max out IRA(s) -         $11,000 (100%)  (goal is $11,000) completed
(3) Add to e/r fund -          $8,000 (80%)    (goal is $10,000)
(4) Pay down mortgage -   $4,150 (83%)    (goal is $5,000)
(5) Trading account fund - $3,900  (78%)    (goal is $5,000)
(6) House projects -          $2,000 (67%)     (goal is $3,000)

Total:  $55,281 (80%)

At present we are about $3100 behind on our goals.

We have just under two (2) months to go to complete our goals.  And, like most years, it will be a challenge to come close to hitting our goal numbers.  For at least one category it will be impossible to meet our goals since Mr. Sam was unable to continue contributing to his 401k post layoff.  While we continue to stretch towards our original goals as we close the year out, I remind myself that I will be content if we exceed our savings goals from last year (meaning our re-calibrated 2013 savings goal is really $63,000).  That would mean that we need to save at least another $7,750 which will be a challenge.  I will max out my 401k which is about another $3000, we will meet our emergency account savings goal, another $2000, and we will meet our mortgage principal prepayment efforts, another $850.  And, that leaves another $2000 we need to scrape together to exceed our 2012 savings numbers which I really would like to do even with Mr. Sam's layoff and his subsequent salary reduction at the new job.