2013 Savings Goals - Final Report (Edited)

(1) Max out 401k(s) -        $29,695 (85%)  (goal is $35,000)
(2) Max out IRA(s) -         $11,000 (100%)  (goal is $11,000) completed
(3) Add to e/r fund -          $10,800 (108%)   (goal is $10,000) completed
(4) Pay down mortgage -   $5,000 (100%)    (goal is $5,000) completed
(5) Trading account fund - $5,000  (100%)    (goal is $5,000) completed
(6) House projects -          $3,200 (107%)     (goal is $3,000) completed

Total:  $64,695 (94%)

Final report shows a deficit of $4,305 in our 2013 savings.  But, as noted before, we exceeded our 2012 savings total of $62,446 and exceeded our 2011 savings total of $60,060.  And, we did so even with Mr. Sam's layoff in July.

Additionally, when you add in Mr. Sam's 401k match of $3,501 (from prior employer) and my !surprise! 401k match of $5,000, our total savings in 2014 exceeds $73,000.  That is a lot of money, and therefore we can't be disappointed in our efforts, our discipline, and our progress.

Happy New Year!

*Edited to reflect 12/30/14 auto transfers to emergency fund and house project account.  

2014 Planning - Third Time is the Charm

So, for the third time we are going to plan/try to save $69,000, maybe 2014 will be the year we hit this number.  Now that we have our 2014 total goal number, we have been working on planning.

Some goals are pretty easy to establish.

First, tax advantaged retirement savings.  I will max out my 401k savings, $17,500, in 2014.  We both will max our our non-deductible IRAs for 2014, so that is $5,500 each or $11,000.  We will save $17,500 for Mr. Sam in 2014, that money will be after tax until he is eligible for his 401k in September.  Then we will max out what he can contribute from 9/1/2014 until 12/31/2014 which Mr. Sam thinks will be about $12,000.  So, the monthly savings we do for Mr. Sam's 401k between 1/1/2014 and 9/1/2014 will be used to supplement income for the last quarter when he is putting the bulk of his paycheck into his 401k.  Then, the amount that is left over will be put into our trading account.  While Mr. Sam will not be able to save as much in 401k savings, we will make sure to save at least the same amount in our non-tax advantaged trading account.

(1)  Max out 401ks (goal is $35,000)
(2)  Max out IRAs (goal is $11,000)

As for our IRAs, we have already saved $1800 towards our 2014 goal.

Second, other savings goals.  I probably will maintain the monthly savings already set up which means we would put another $10,000 into our emergency savings in 2014.  I like having money go towards e/r savings.  With our various real estate properties, a health emergency fund makes me happy.  For similar reasons, I probably will keep the $200 a month that goes towards our house account.  With an old house, there are always repairs or projects (last year I imagined plantation shutters, but that project got put off).  This year, we are also likely looking at a roof repair or roof improvement on our carriage house.  Accordingly, I am putting $5,000 into roof project savings.  If the roof project costs less, then we will put that money towards mortgage principal prepayment.

(3)  Emergency account (goal is $10,000)
(4)  Roof fund (goal is $5,000)
(5)  House fund (goal is $3,000)

Third, Mr. Sam is going to need a replacement vehicle within the next couple of years.  So, the last goal for 2014 is car replacement fund (goal is $5,000)

(6)  Car replacement fund (goal is $5,000).

How about you, what are your financial plans and goals for 2014?

NetWorth - Retirement Investment Progress

So, at almost the end of 2013 we have just over $800,000 in total retirement investment accounts which is mostly due to the performance of the market.  $200,000 more and our investments will be evenly divided between real estate and retirement accounts.

Holiday Cheer - 401K Match

For the first time in my corporate career, this year I received a 401K match.  My employer contributed "profit sharing" in the amount of $5,500.  

That was a surprise and certainly welcome holiday cheer at the end of somewhat tough financial year for us (with Mr. Sam's layoff).  

Stock Sale - Update

Back in October I posted about my hot stock dilemma and trying to figure out when and how to plan my stock sales (since I'm more of a buy and hold gal).  In particular I had a stock that was up 500% since I purchased it and I was trying to figure out if I should sell it or not.

I ended up selling the stock and making $4300 in profit (tax free since I hold my stock in my Roth IRA) but I did have regrets, what if the stock kept going up and up?  So I decided to calendar a two month follow up (which is today) to check and see the status of the stock I sold.  I sold the stock at $32, it has hit $34, but today it is at $28.

So, how do I feel.  I feel pleased, right now it looks like I made a good decision.  I sold close to the peak based on expert research telling me to sell and that research seems to have been correct.  We shall see, I will check again next year.

2013 Goals - Progress Has Exceeded 2012

(1) Max out 401k(s) -        $28,327 (80%)  (goal is $35,000)
(2) Max out IRA(s) -         $11,000 (100%)  (goal is $11,000) completed
(3) Add to e/r fund -          $10,400 (104%)   (goal is $10,000) completed
(4) Pay down mortgage -   $5,000 (100%)    (goal is $5,000) completed
(5) Trading account fund - $5,000  (100%)    (goal is $5,000) completed
(6) House projects -          $3,100 (103%)     (goal is $3,000) completed

Total:  $62,827 (91%)

Because I have contributions to our emergency and house fund on automatic transfer, those contributions continued even though we completed those goals.  As a result, our total has nudged past our 2012 total of $62,446.  Of course, we are going to fall short on our 2013 goals due, in large part, to Mr. Sam's layoff.  But, I am happy that we have at least completed 5 out of 6 goals and that we have saved more this year than last year.

Hopefully in 2014, we will save more than in 2013.  And sticking with that theme, I've already put away $800 into our 2014 IRA savings account.

Another Budget Proposal

In my humble opinion, if you have a budget, a spending plan or some other written system for managing your personal finances you are way ahead of most people.  Having a plan and working that plan, whether it is an envelope system, an Excel spreadsheet, an allowance system, etc. will help you kill debt, save more and have better control over your money.

We work off a spending plan/allowance system, but even though we have a plan that works for us I still am interested in reading proposed plans by the experts.

Mitchell Weiss via NBCnews.com suggests the 25% plan (25% for taxes, 25% for housing, 25% for debt and 25% for living expenses).  I think his advice of planning your budget before locking in expenses is a good one.  If you are going to limit housing expenses to 25% of your before tax income, then you need to know that number before you buy a house or rent an apartment.  And limiting big expenses is a great way to free up income to kill debt or save money.

But, the rest of the advice fell flat for me.  First, I was surprised that he would include payroll taxes in the budget plan.  It is true you need to pay attention to taxes, but I think most budget plans and advice just utilize after tax income which to me seems easier.  I guess if you are an independent contractor or you run your own business this advice makes more sense since you will be responsible for taxes.

25% of pretax income for housing seems reasonable, most guidance provides for limiting housing expenses to no more than a third of after tax income.

I thought the debt advice was lame.  Sure, limit your debt obligations to 25% of your gross monthly income, but that ignores a whole variety of issues.  Maybe your budget should be set up to put more towards debt if you are trying to kill debt, etc.  And since this advice seems geared towards recent graduates it ignores the topic of student loans all together.

Finally, the last 25% of the formula is for living expenses.  But, living expenses is supposed to also include savings for an emergency fund.  Nothing in the post mentions retirement savings, so I would assume that long term savings is also supposed to come out of the last 25%.  I prefer a budget plan that prioritizes savings rather than lumping it together with living expenses.

Weekend Reading

Slate has put together a selection of Longform articles on debt. Happy Reading.

2013 Savings Goals - 5 Down

(1) Max out 401k(s) -        $28,327 (80%)  (goal is $35,000)
(2) Max out IRA(s) -         $11,000 (100%)  (goal is $11,000) completed
(3) Add to e/r fund -          $10,000 (100%)   (goal is $10,000) completed
(4) Pay down mortgage -   $5,000 (100%)    (goal is $5,000) completed
(5) Trading account fund - $5,000  (100%)    (goal is $5,000) completed
(6) House projects -          $3,000 (100%)     (goal is $3,000) completed

Total:  $62,327 (90%)

Completed, completed, completed - feels fun to type that five times in a row.

In July when Mr. Sam was laid off, I assumed we would just have to throw our 2013 savings goals out the window.  But, he was able to find reemployment before his severance ran out.  And while he took a pay cut, I received a raise that off set his pay cut so overall our household income remained the same.  Even so, we had to work hard to catch up since I had put many of our savings efforts on hold while he was job searching.

I have one more pay check before the end of the year, so the 401k number will increase and, as a result, we will exceed our savings from 2012 and come close to saving $63,000 in 2013.  

What Would You Tell Your Younger Self?

Over at Get Rich Slowly April Dykman posed the question of what would you tell your younger self regarding personal finance.  Below is my post.

This is fun! 

To College Sam – walk away from the credit card offer, you don’t need that free t-shirt.
To post college Sam – good job on taking that personal finance course through the local extension system. You learned a lot and it will help you in the future. Good job on paying off that college credit card, now you really ought to cut it up. Also, congrats on opening your first IRA even though you are earning poverty wages in social services. And tell your parents thanks for paying your way through college, you probably didn’t even appreciate the fact that they saved each month your entire life to give you a great education. 

To post professional school Sam – good job on paying off that student loan debt and good job on keeping your student loan debt lowish during school. You rushed into your first house purchase, but it will turn out great. Now that you are making a good living you are making a lot of good choices, paying off the student loan debt, creating your first budget (2001), investing in your work 401k and paying off all credit cards in full each month. I sure wish I could tell you that even when you are paying off your credit cards in full each month you are still spending too much money. You should have listened to me when I told you to cut up those cards post college. 

A few years later Sam, just because everyone is investing in Florida real estate doesn’t make it a good investment, maybe you should do some more research before you buy that investment property in 2005, 8 years later it will be worth half of what you and soon to be Mr. Sam paid for it. Good thing its rented. 

To engaged Sam, good job on picking a spouse that is hard working, frugal and recognizes that even though he has the MBA he is terrible at budgeting and bill paying so he turns it over to you upon marriage. 

To married Sam, whoo-hoo, good job to you and Mr. Sam in paying off $55,000+ in just over a year during your first year of marriage. That first year of marriage in which you created your first annual spending plan (an update on the 2001 individual budget), finally cutting up the credit cards, creating an allowance system, prioritizing savings and making sure that you and Mr. Sam are on the same page when it comes to money, that will pay off big time. Seven years later and you guys have increased your net worth by $550,000. 

Now, stop eating out so much.  :)

Looking back at my own journey, I certainly have made some mistakes along the way.  It is hard not to, and many of those mistakes or detours have helped to make me a better person.

I think the most important ingredients to my financial success are as follows.  First, I invested in a good education which lead to a well paying, good, professional job.  I was able, both due to my parents and due to smart choices (savings/grants/working) in professional school, to avoid student loan debt until the very end of my education. Second, early on in my career I started utilizing a spending plan/budget and focused on paying off debt and having a plan for my money.  Third, I met and married a frugal man who, while horrible at paying bills and tracking spending, is fully on board with living a debt free life and prioritizing savings/investing rather than consuming.

How about you, what personal finance guidance would you give your younger self?

FitBit Data - Update #2

I now have three full months of FitBit (pedometer) data.  In October, I increased my step count by more than 10,000 steps.  In November, I increased my step count by another 3,000 steps.  I am also increasing the number of days where my step count is above 7,500 which is considered light active.

But, but, but, I still have quite a ways to go.  I still have too many days below 5,000 steps which is considered sedentary. 

Surprisingly, I often have low step count days during the weekend.  It would seem on days that are less structured, I should have more exercise opportunities but I don't.  Instead, I sleep in, hang out on the couch with my husband, maybe run a few errands but I don't schedule exercise and that means it doesn't happen, 

Onward and upward.

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.

Lucky Numbers

Fascinating post on PIN code data, reveals 11% of 4 number PIN codes are 1234.  Looks like lots of other people are using expected PIN code combinations.  Take a look and see if your PIN code is on that top 20 list, if it is you may want to consider changing it up.

Stocks - Time to Sell?

Today, I sold some stock.  This was a momentous occasion because this was a first for me.  The last few years, in my IRA, I have been buying individual stocks (my 401k is mutual funds).  As of today, I had 21 stocks and my "change since purchase" (this would be my return if I sold everything) is in the 70s%.

Now, before you commend me on my stock picking skills, let me tell you that I am not an expert and you shouldn't be following my investment advice.  Secondly, I really started buying stocks in 2009, in particular March 2009, so much of my gains is as a result of a dramatic increase in the market between March 2009 and now.  Thirdly, I pick most of my stocks utilizing Fidelity's Preset Expert Strategies, so I am working off of expert research and not some particular skill on my part.

So, as I have been working on research for investing my 2013 Roth IRA monies, I noticed that I have several stocks that have done quite well.  One stock was up 500% in less than a year.  As a result, I was looking for some advice on whether to sell or not.  Thankfully there is a lot of good research available to read on the topic.

First, I realized that I am not setting any goals when I buy stocks.  And, sometimes you don't need to set a goal if this is a stock, i.e. blue chip, that one plans to hold for many years.  But, on some of my more riskier investments I should be figuring out what I want to get out of the purchase and then "pull the trigger" when that event hits.  For an example, if I buy stock XYZ at $10 a share and my goal is to triple my money, I need to set that as a goal and then set up a limit order to sell when it reaches that number.

Second, tax implications (and note I am not a tax expert either, and we were audited by the IRS so you really should not rely on any tax discussions that you read here).  Since, I am buying and selling within a Roth IRA there are no tax implications.  But, if I were selling this stock that I bought less than a year ago in a trading account I would be paying short term capital gains.  Roth IRAs are awesome because that $4,300 I earned today is tax free.

So, yes, I ended up selling my super hot stock, profiting and pocketed $4,300, tax free, and . . . .  I had immediate regrets.

Even though I set a well researched limit order to sell at a price that I thought was reasonable, the stock went even higher today.  Bummed, is how I feel, I could have made more money and I worry whether I could have made even more money by holding on to it.  I expect that I will continue to stalk this stock in the future to see how much more I "lost" out on.

The lesson I learned, among others, is that if I set certain goals for my stock purchases and I hit those goals I will feel better about my plan rather than being caught up in the exuberance of one hot stock.

How do you buy (and sell) stocks?  Do you have a goal or plan for each at time of purchase?

Florida - Fraud Capital of the Country

Today I read a news article about scammers targeting Nordstrom computers in South Florida.  Scammers distract the Nordstrom employees and take apart the register/computer back panel and add a credit card skimmer.

Thankfully these bad guys were caught because of surveillance camera footage.  But, as a consumer you wouldn't even be able to be on the look out for this kind of skimmer because it is hidden.  So make sure you pay close attention to those credit card and debit card statements.

2013 IRA

Today, I funded my 2013 IRA, $5,500 into my traditional, non-deductible IRA.  Once the transfer from my Wells Fargo account to my Fidelity traditional IRA clears, I will immediately convert the traditional IRA to a Roth IRA.  Since 2010, the income limits for Roth IRAs were removed by the Federal government, but one still has to contribute to a traditional and then convert to a Roth.  On Fidelity, it is easy to do.  I convert the funds immediately, while it is still in cash, as I don't want to incur any gains that I have to pay taxes on prior to conversion.

Thereafter, my plan is to watch the markets this week which have been down and up due to the government shut down and the debt ceiling debate.  I don't normally try to time the market, but if the Dow dips below 15,000 again this week I will make some investments.  For our IRAs, we invest in individual stocks, i.e. Apple or Ford, etc.  I like to use the expert preset strategies to find well rated stocks that are on sale.  

Additionally, I have set up our 2014 IRA savings account over at CapitalOne 360 (formerly known as ING)

Good News - Salary Adjustment

Last month I posted on the impact of The Great Recession on our career and salary . Overall, our salaries from our professional careers were down between 2008-2013.

 But, I am happy to report that I just received an upward salary adjustment, a 7% increase!, which means a couple of things.  First, this kind of increase outpaces inflation.  Second, this increase almost brings me back to my pay level in 2008.  Third, this increase almost makes up for Mr. Sam's pay cut that he took at his new job (post layoff).  Fourth, this big increase reflects on the kind of work I am doing, the level of complexity, the results I am attaining and the fact that my company is placing an increased value on me (it feels good).

I think, although I've not done the nitty gritty math, that our salaries are still down between 2008-2013, but now down just a bit.

Pedi Toes Lead the Way

Pedicures certainly should be classified as a want when one is doing a budget or a spending plan.  But for a South Florida gal, like me, they nudge into the category of need since my toes are exposed on a regular basis.  I wear peep toe pumps at work and sandals and flip flops on the weekend so unsightly toes are something I "need" to avoid.

Over the last year or so, having a regular pedicure has turned into a regular habit for me.  While I strive to avoid lifestyle inflation, I have just worked this service into my regular expenses, as part of my allowance.  Said another way, while I am spending more on my toes I am not spending more in general.

I pay quite a bit to have my hair cut, I've got long hair complicated hair and this is an expense that has been part of my regular budget since college.  So the spa/salon where I get my hair cut offers a very nice pedicure service which I have used with some regularity over the last few years.  Basically, when I get my hair cut, every six weeks, I often get my toes done.  The cost at this location is $55 ($65 with tip).  A pedicure at this spot is a luxury experience, super nice massage chairs and thorough and pampered experience.  The pedicure lasts quite a long time, normally at least two and half weeks or so.

On the other end of the spectrum, there is a no-frills nail salon near my office which charges $22 for a pedicure ($27 with tip).  This spot is very convenient and has later hours so it is an easy stop after work. But, there are no massage chairs and I don't find it to be a relaxing experience.  The pedicure from this place lasts a week or so.

So recently, I bought a Groupon for a day spa located near my home (I had no idea it was there) and had a great pedi and mani for $30.  It is a great spa, new and well appointed (meaning that it had great massage chairs).  My Groupon pedi lasted for more than two weeks (really almost three weeks) and I was very happy with the quality of the services.  Even though I only had a classic pedi, the treatment and time almost reached spa level pedi in my mind.  So, the Groupon worked, and I went back for another pedi this past weekend.  The regular price for a classic pedicure is $40 ($50 with tip) so this spot falls in between the prices of the spa/salon where I get my hair cut and the convenient spot near work.  But, I would say that this new location provides similar quality and level of service as the $55 pedi.  The only down side is that this place is not open late so it has to be a Saturday stop for me and my Saturdays are always busy.

I've really found that paying a bit more for quality is saving me time (since I don't have to have a cheap pedi every week or so) and increasing my joy in that I really enjoy the experience.

Small Fries

Last weekend, Mr. Sam and I rented a two movies from Red Box and one of our selections didn't play.  This has happened to us before, I would guesstimate at 1 out of 20 movies.  I really like the Red Box system but I have never, until today, figured out how to get a movie credit or a refund.  And, something about not being able to get that $2 or $1 back really rubs me the wrong way.

I have the same aggravations with ATM fees and other small fees.  For a while, Home Depot kept charging us $2 on our 0% Home Depot credit card bill.  I would have to call each month and get them to refund the $2 charge which they could never explain.

So, anyways, the secret to getting a Red Box credit is as follows.
(1)  Google "red box how to get a refund";
(2) Click on the result that is labeled "what's the red box refund policy"
(3) Under the policy, click to talk to customer care and explain problem.

Red Box gave me two movie credits which I thought was reasonable for my request.  

2012 Taxes

Today I (Mr. Sam is out of town) met with the CPA and completed our 2012 taxes.  We owe the IRS, which is par for course sine we got audited a few years back, so I will send off the check and be thankful we are done with our 2012 taxes.

We do need to work on getting back on track so that we are filing our taxes in a timely manner rather than seeking an extension each year.  We also need to work on getting what we pay during the year, our itemized deductions and our withholdings in better balance.  We have made some progress this time around in that we owe less than we did a two years ago, but I'd really like to get it down to where I stroke a check for less than $1,000.

Investment Property Debt

Hit a milestone this month with our investment property debt, at present we owe less than $300,000 on our investment properties.  

Feels good.  

2013 Savings Goals - Rapid Catch Up

(1) Max out 401k(s) -        $25,581 (73%)  (goal is $35,000)
(2) Max out IRA(s) -         $11,000 (100%)    (goal is $11,000)
(3) Add to e/r fund -          $7,600 (76%)    (goal is $10,000)
(4) Pay down mortgage -   $3,735 (75%)    (goal is $5,000)
(5) Trading account fund - $3,900  (75%)    (goal is $5,000)
(6) House projects -          $1,900 (63%)     (goal is $3,000)

Total:  $53,716 (78%)

Since my last savings goal update post, I've done some noodling and some moving of monies.  As such, we are now on target to complete most of our 2013 savings goals.

First, as previously noted, I have maxed out our 2013 IRAs savings account, meaning that I have that money sitting in cash but ready to invest.  And depending on the market, I may invest sooner rather than later if the government shutdown continues to depress the market.

Second, I have taken a chunk of Mr. Sam's severance monies and put it into our trading account fund. Again, this money is simply sitting in cash, but the idea would be for Mr. Sam to invest these funds, even if not tax advantages, to make up for the fact that he was unable to max out his 2012 401k due to his layoff.

Third, I have caught up on our principal prepayment goal and I'm now back on track to complete the goal of paying down an extra $5,000 on our mortgage (on our primary home)

Accordingly, right now we are $600 ahead on our savings goals.  Whoo-hoo!!

2013 Savings Goals - One Down

Today, I finished goal number two of our 2013 Savings Plan.  Goal # 2 was to fully fund our 2013 IRAs, and as of today I have $11,000 sitting in our CapitalOne360 (f/n/a ING) targeted savings account.  Since, Mr. Sam is employed we probably are safe in putting that money into our actual IRA accounts but I have not done so just yet.

Otherwise, we are about $100 from breaking the $50,000 mark on our 2013 Savings Plan progress.  And, we are $13,100 away from exceeding our 2012 savings total (which, due to Mr. Sam's layoff is kind of my current target).

2013 Savings Goals - October Update

(1) Max out 401k(s) -        $24,981 (71%)  (goal is $35,000)
(2) Max out IRA(s) -         $10,631 (97%)    (goal is $11,000)
(3) Add to e/r fund -          $7,600 (76%)    (goal is $10,000)
(4) Pay down mortgage -   $3,320 (66%)    (goal is $5,000)
(5) Trading account fund - $50  (1%)           (goal is $5,000)
(6) House projects -          $1,900 (63%)     (goal is $3,000)

Total:  $48,482 (70%)  

Posting a few days early as I was working on our personal finances this morning.  We are still about $3200 behind on where we should be.  We also have some unexpected upcoming expenses for Rental #3 (more about that later).

While I feel like we are working hard to catch up, doubling up on our mortgage prepayments, throwing money at the 2013 IRA fund, we are still $3200 behind as were were last month.

We also have to work on our taxes this weekend (Ugh!, my least favorite thing to do) as we have our appointment next week with the CPA and the deadline to file, with our extension is October 15, 2013.

Have a great weekend everyone!!

An Interesting Follow Up - PowerBall

I found this NBC.com followup article on colorful PowerBall winner Wild Willie an interesting read.

As I've posted before, I'm not a fan of lotteries at all.  So, it was interesting to hear Willie and his wife's take on the $4 Million they netted after taxes, fees, etc. as a curse.  Willie further noted that $4 MM is not much money these days.

Based on their ages, $4 MM should be more than enough for a comfortable retirement, but they have done a lot of the things professionals tell you not to do after coming into big money.

First, if you win the lottery stay anonymous if you can.  Not all states and not all games permit one to stay anonymous, but even if you have to give your name out when you collect your check, meaning its a public record, you can avoid appearing on the Today Show and engaging with the media.  Also, some states permit one to collect a lottery winning via a Trust, which also can help with gifting and taxes (note, I am not a tax professional), and can also help shield the winner from publicity.  You want to get advice on that before you sign your winning lottery ticket because, generally, you have to collect in the name of the person/entity that signs the ticket. So you would need to create the Trust before signing the ticket.   Now, Wild Willie didn't have control over that since he was part of a lottery pool, but he could have avoided the extra publicity.

Second, most professionals also advise people coming into large amounts of money not to make any quick emotional decisions.  Don't quit your job, don't buy a new home, don't buy new cars, etc.  Here, Willie did all of that in a month.  You need to get some good advice, some good tax advice, some good investment advice and figure out how much your winnings will earn, how much you can draw down from the "principal", what your goals are, etc. before you quit the job.  Obviously you not only lose your income stream when you quit your job, you lose health insurance and other benefits that you have to replace on the more expensive open market.  And, if you make a rash decision to quit your job and you need reemployment that can be difficult to obtain.

Furthermore, on the issue of new homes, new cars, vacation homes, homes for families, etc.  You may think you have $4 MM to spend on that, which you do if you are Willie, but often times lottery winners fail to factor in the carrying costs.  Those new homes will create higher utilities and insurance, second set of utilities and insurance on the vacation home, higher insurance on new cars, etc.  Not only do you spend your winnings on the goods, but then you have to continue spending to maintain those goods (for many years to come).  Think of this as lifestyle inflation on steroids.  

Finally, helping family.  I can totally understand Willie paying for cancer treatment for his father.  I am wondering why that treatment is not being paid by Medicare of Medicaid.  Helping your kids pay for a home or a graduate degree can be a good investment or it might not be.  Again, professional advice and taking a few months to plan can help one sort these issues out.

2008 - 2013 The Great Recession Check Up - Part III

Okay, so far we are one and one.  While we are doing well on our savings/retirement plan, see Part II, our occupation based salary is flat/slightly down after five years, see Part I.

Real Estate

First the good news, we are making decent progress in paying down our primary mortgage.  Last year we refinanced into a 15 year term with a 2.75% interest rate which will save us (between the reduced term and the reduced interest) $180,000 over the life of the mortgage.

The other good news we have is that all three of rental properties are rented and paying for themselves.

So, now the bad news.  We live in South Florida and our rental properties are located in South Florida and if you know anything about the real estate bubble you know South Florida got hit hard.

In 2008 our primary home was valued at $465,000.  At present I have the value at $399,000 which is based on the very thorough appraisal we had done last year as part of our refinance.

In 2008, our three rental properties and our vacant land were valued at a total of $823,920.  At present, I have our investment properties valued at a total of $606,350.

So, in total, over five years we have lost, in equity, $283,550.  Actual lost equity is likely even higher in that I have no idea if we could sell any of our properties for the current value.

2008 - 2013 The Great Recession Check Up - Part II

Yearly Savings Goals

In 2008, we undertook our first annual savings goal, and saved $50,000 (even with my big pay cut).   In 2009, we saved slightly more at $50,168.  In 2010, we had a bit of a backslide, but we saved $49,325.  In 2011, we increased our annual savings by $10,000 and saved $60,060.  In 2012, we saved slightly more and saved $62,446.

Retirement Savings

In January 2008, we had a combined $245,795 in 401k savings.  Most of that savings, $150,000+, was in my 401k.  As of September 2013, we have a combined $606,324 in 401k savings.  And, our 401k savings is basically split between the two of us which means Mr. Sam has made significant progress in adding to his 401k savings.  The dramatic increase in 401k savings over the past 5 years is due in large part to (1) each of us maxing out our 401k savings year over year; (2) Mr. Sam's awesome match at his prior employer in that he was getting a 20% match for 5 years; (3) continuing to regularly invest in stock based mutual funds during and after the great recession which meant that we bought some great bargains; and (4) the overall recovery of the economy.

In January 2008, we had a combined $7,217 in IRA savings.  At that point, all of our IRA savings was under my name.  As of September 2013, we have a combined $125,510 in IRA savings.  The dramatic increase in IRA savings is due to (1) each of us maxing out our IRA savings year over year; (2) buying stocks at super bargain prices during 2008 and 2009; (3) the overall recovery of the economy.   

2008 - 2013 The Great Recession Check Up - Part I

This morning, on the news, there was a story about where we are, as a society and as an economy, 5 years after the great recession.

I actually started this blog during 2008 and went back to read some of my posts during that time.  So, I am undertaking our own Great Recession Check Up.  

Career and Salary/Benefits

In 2008, both Mr. Sam and I had a job change in that we each changed companies.  

While my job change was voluntary, I would say that my departure from my prior company was caused by the recession.  Meaning, I could see that my opportunities for advancement were low and the amount of work/projects that I was handling was reduced.  As such, I felt like I had to make a change and therefore took a pretty big pay cut in 2008 when I changed companies.  But, my career and my life vastly improved even with the big pay cut.  Then, in my new company, I ended up taking another smaller pay cut which lasted about another year (which was directly caused by the recession).  Since 2010 my pay has steadily increased and I am generally happy with my job, my company and my career.  But, I'm still making at least 10% less, I calculate it as 13% but I'm not totally sure, than I was before I resigned from my prior job in 2008.   

Mr. Sam also changed companies in 2008.  His change was totally voluntary and a good career move for him.  He increased his salary and his benefits were great (his awesome 401k match directly contributed to our progress in that area).   And, his health benefits were so great that I ended up switching to his plan and we saved about $3000 each year in doing so (over 5 years).

Now, due to Mr. Sam's layoff he ended up taking a pay cut with his new job.  He is not happy about the pay cut, but I'm happy he is employed in a job that is a perfect match for his education, skills and background and I'm hopeful that the pay will follow.

As a result, overall, between 2008 and 2013 our compensation from employment decreased.  

2013 Savings Goals - September Update

(1) Max out 401k(s) -        $24,233 (69%)  (goal is $35,000)
(2) Max out IRA(s) -         $9,631 (88%)    (goal is $11,000)
(3) Add to e/r fund -          $7,200 (72%)    (goal is $10,000)
(4) Pay down mortgage -   $2,075 (42%)    (goal is $5,000)
(5) Trading account fund - $50  (1%)           (goal is $5,000)
(6) House projects -          $1,800 (60%)     (goal is $3,000)

Total:  $45,819 (66%)

At present we are @$3,200 behind on our savings goals.  I have restarted goal number 4, prepayment of mortgage principal, and if I double up on our payments for a couple of months I can get back on track.  I also expect to complete goal number 2 over the next few weeks.  We are on target for goal number 3 as well.  We will not be able to complete goal number 1, maxing out our 401ks, due to Mr. Sam's layoff.  But, I am hopeful that we can add some money to the trading account fund to make up for that shortfall.

Since it is September, and because of Mr. Sam's job situation, I am starting to think about how to close out our savings year such that we can beat last year's savings number ($62,066).  We need to save another $16,281 to exceed last year's total.  That is going to be a stretch.  If we complete goals 1 (by adding to goal 5), 2, 3 and 4 we will reach $17,000.

We shall see.  

So, More on the Good News

I wanted to share more about Mr. Sam's new job.

First, the positives.  Mr. Sam obtained new employment while he was still receiving severance from his old employer.  As such, we never had a real gap in income stream.  Mr. Sam also was able to obtain a few weeks of unemployment compensation from the State of Florida and we continue to have health insurance, paid for by his employer, until October.

The new job is with a much smaller company than Mr. Sam is used to working for.  But, that will provide him with more autonomy and opportunities for growth.  The new position is also an exact fit for his skills and experience.  Finally, the new job is located in reasonable proximity to our home (his commute is about the same distance it was before).

Second, the negatives.  Mr. Sam is not overly excited about the compensation.  While he believes he is being paid within the proper compensation band for his experience, education, etc., he is on the absolute low end with the new employer.  Furthermore, the benefits are not nearly as generous as his last job, which provided a 20% match on the 401k along with such awesome health benefits that I opted for their insurance as well.  The new company has also had a lot of turn over and flux with leadership, which is not surprising based on their growth and the size of the company.  And while the unsettled nature of this company may be a negative as I mentioned above, it is also a positive in that there are some real growth opportunities.

Since this is my blog and not Mr. Sam's blog, I think, overall, that this is a positive step in Mr. Sam's career.  While the pay and benefits are a bit reduced, the chance for growth and leadership may mean that he ends up in a higher pay grade within 6 months to a year.  And whether or not the pay grade increases, he will be gaining skills and experience (hopefully) that he never seemed to get with his past employers.

Hopefully I'm Not Getting Ahead of Ourselves

Working on bill paying today, I sent off a $415 mortgage principal prepayment to my friends at CitiMortgage.  While, Mr. Sam is only in the early stages of his new job, I have opted to get back to our 2013 plan in full force.

We need to make two extra payments in addition to our regularly scheduled principal prepayment to end the year on target.

Good News!

Happy to report that Mr. Sam has accepted a job offer.  More details later.

2013 Savings Goal - August Update

(1) Max out 401k(s) -        $23,633 (68%)  (goal is $35,000)
(2) Max out IRA(s) -         $9,125 (83%)    (goal is $11,000)
(3) Add to e/r fund -          $6,400 (64%)    (goal is $10,000)
(4) Pay down mortgage -   $2,075 (42%)    (goal is $5,000)
(5) Trading account fund - $50  (1%)           (goal is $5,000)
(6) House projects -          $1,600 (43%)     (goal is $3,000)

Total:  $42,883 (62%)

At present, we are about $2,200 behind on our 2013 savings goal.  While I continue to contribute to my 401k and I continue to add to our emergency fund and our house project fund, I've otherwise mostly ceased efforts on our other 2013 goals due to Mr. Sam's lay off.

I did add a $100 to our 2013 IRA fund to make myself feel like we were still making some forward progress, but that money sits in cash so we could still use it if necessary.  We won't make our 2013 IRA contribution until we see what happens with Mr. Sam's job search and we have until April 15, 2014 to do so.  Our emergency fund and our hose project fund are both liquid as well, so we can draw on them if we need to.  

FitBit Data - Update # 1

Earlier I posted about my new FitBit and improving my fitness through data.

A week or so into using the FitBit, I've determined the following.  I am averaging about 5,400 steps a day which is well below my goal of 10,000 steps per day.  On exercise days, Monday, Wednesday and Friday, I obviously do better and approach 8,000 to 8,500 steps on average.  On non-exercise days (Tuesday and Thursday) I've improved a bit by watching my FitBit data, and I've moved my average step count from about 3,500 to 4,000 steps on average. Certain guidance I've found suggests a reasonable goal of improving week over week step numbers by 20%

Most surprising is my weekend step count which is dismal.  On days I have the most free time, it appears that I am stepping/moving the least.  I do know what happens, I get up and I go out to run errands (Saturday) which doesn't involve that much walking since I'm in my car.  On Sunday, I tend to either be at the office or relaxing at home.

Analyzing the tracking data from my FitBit also reveals that my activity level is color coded.  My exercise steps are coded as green, less active is orange and sedentary is red.  I can't find any information as to whqt the colors are supposed to mean, but I can guess.

I am working on setting up a TV/DVD player in the garage and I have a plan to do Zumba, which involves lots of steps, twice a week.  But, so far, I've been having technology problems.  Yesterday I had the video working but not the sound, then in trying to get the sound working I lost the video.  Mr. Sam said he would work on these issues for me today (I hope he does).

Otherwise, I need to walk Snarfle the dog when I get home each night.

Unemployment Compensation - Follow Up # 2

Earlier I posted regarding Mr. Sam's Florida unemployment compensation adventures, and the fact that his application was denied because he received severance.  Well, now Florida has changed their minds and determined that he is entitled to benefits because he is not receiving ongoing severance.

As a result, yesterday he received a payment representing two weeks of benefits ($550).  Somehow I expect the State to change its mind and ask for the money back so we will be prepared to repay it.

Improvement Through Data - Fitness

As someone who has improved their finances by utilizing data, I am a fan of tracking data.  For our personal finances, we use Quicken to track our spending, easily downloaded from the Wells Fargo web site.  We also utilize an Excel spreadsheet to track our annual savings goals (when we were killing our $55,000 in unsecured debt we also used Excel to track our progress).

My employer has a fitness/health initiative (designed to reduce health insurance costs) and they recently offered use of a FitBit Zip which keeps track of steps, distance and calories burned through exercise.  I recently set mine up and it is illuminating to see how little I move even though I exercise regularly and make an effort to walk during my day.  On the days I exercise, walk 45 minutes three times a week, I accumulate about 7,500 steps which is considered light active. My goal is 10,000 steps per day which would push me into the active status

On days I don't exercise I only get about 3,500 steps although I do, already, take breaks during the day to get out from behind my desk and I try to take the stairs into and out of my office.  Under 5000 steps per day can indicate a sedentary lifestyle sedentary lifestyle and the associated risk factors related to same.

I think the idea of tracking my activities will make me more accountable, to myself, and is likely to increase my activity.  I know that I respond well to tracking my data and I'm interested in seeing how utilizing the FitBit can help me in this regard.

How about you, do you use any of these methods to track activity?  Does tracking work for you?  

Refinance of Rental # 3

Gosh, I am so glad we got refinanced our primary home last year (into a 15 year loan at 2.75% rate) before Mr. Sam was laid off from his job.  Since we knew that the lay off was likely coming that was one of the reasons we pushed to get that REFI done, obviously better to have two stable salaries to show the bank.

Yesterday, I turned my attention to Rental #3 which is the only property/loan that we have not refinanced. And I did so because the mortgage company keeps sending my notices that this property qualifies for the HARP program or some other program and that they can do a cheap and quick REFI for us.  While we need to refinance this property since this is our only non-conventional loan, its on an ARM that resets on an annual basis, it really has not made sense to do so because (1) the current rate is 3.125% and (2) I really don't think it qualifies for a REFI.

I had a lovely chat, seriously, with a mortgage broker at my current loan servicing company.  She indicated that in fact the property is eligible regardless of the fact that it is not a primary dwelling.  It is eligible because its backed by Fannie Mae, it originated prior to 6/1/09, no late payments in the last year (no late payments ever) and we haven't used the HARP program before on this loan.

But, the rates she could offer me for an investment property were in the 5% range.  And, further we would likely be forced to refinance into another 30 year term, even though we would prefer a 15 year term, because under the HARP program the REFI cannot increase the mortgage payment by more than 20%.  It makes no sense to me to impose a 20% limit on an investment property when we have several good years of rental income well above that level.

As for the LTV ratio they keep citing in the advertisements, she indicated that is simply based on the original loan amount and the amount we currently owe.  She further agreed that the LTV ration quoted in the documents  likely has nothing to do with appraisal value (I seriously doubt this home would appraise for what we currently owe).  But, even if we are underwater we can still REFI.

Right now it really doesn't make sense to refinance this property, but I'm going to start watching rates again.  I'd like to lock in a rate under 5% with a decent term before the ARM adjusts above that level.

How Low Can You Limbo

In addition to our primary home mortgage, we have three other mortgages on our investment properties.  In working on updating our net worth numbers today  I realized that one of our investment property mortgages is now under $100,000 (specifically $97,061).  Something about getting that loan number under $100,000 makes me very happy!!

We are also just a month away from getting our investment mortgage totals under $300,000.  Which I will similarly celebrate next month.  Gotta look for those silver linings.

Unemployment Compensation - Follow Up

Earlier, I posted about how difficult the State of Florida makes it to obtain unemployment compensation.  Well, after Mr. Sam worked on this task for a few weeks, jumped through all the hoops, spent hours completing forms and making his way through the mice trap the State of Florida has set up (in order to deny benefits) he learned he is not eligible since he received a severance package.

Ugh times a hundred.  Such a huge waste of time and red tape.  Assuming Mr. Sam is still unemployed when his severance package expires he can reapply and the severance doesn't reduce the number of weeks of payments.

Tossing and Turning

I found myself unable to sleep last night and as a result ended up reading several great articles on Longform.org which is one of my favorite cites for in-depth, well written articles.

Since the Powerball jack pot is up to $425 million I found this article from Nautilus on why we keep playing the lottery extremely insightful.  I use the term "we" loosely as I'm not a fan of the lottery and I have often pondered why so many people play and why so many people who play are poor.

I have a personal objection to lotteries in they act as a regressive tax on the poor.  As such it was interesting, and depressing, to think about the analysis of the lottery is more popular among the poor.

For many poor people, he adds, there is “no scenario they can come up with in which they are suddenly going to get very rich.” To them, the lottery may be a low probability event—but so is getting a job that pays six figures.

The last time I played the lottery was the last really big Powerball jackpot.  Now, I really had no interest in playing, but everyone in my office was chipping in for a pool and I didn't want to be left out (I also didn't want to be viewed as a "stick in the mud").  The article notes, that indeed, some people are motivated to opt in not because they think they will win, but they don't want to miss an opportunity.

In a 2003 study, researchers in the Departments of Economic and Social Psychology, and Marketing at Tilbrug University in the Netherlands, noted fear of regret played a significantly larger role in the Postcode Lottery than in a regular lottery. It was not the chance of winning that drove the players to buy tickets, the researchers found, it was the idea that they might be forced to sit on the sidelines contemplating missed opportunity. 

So how about you, are you buying a Powerball ticket today?

It is Expensive to be Poor

If you have never read Nickel and Dimed by Barbara Ehrenreich, I highly recommend it.  At this point, the book is probably a bit dated since the events written about took place around 2000.  But in it Ms. Ehrenreich takes a series of low paying jobs and tries to make ends meet.  If my recollection is correct, she actually starts her journey with enough money to find an apartment and she has a car (which she notes puts her well ahead of many of the folks in her travels).  

Today, I read an nbc.com article that highlighted many of these issues. Yolanda Williams, the woman featured in this article, is trying to support an adult daughter, her disabled husband on less than $300 every two weeks.  She spends 28 hours a week commuting by bus to work and to school.  She also struggles to afford medication and treatment for her and her husband's diabetes treatment (which likely means more expensive treatment down the road). 

It is distressing to hear about this woman, who is working so very hard, but doesn't seem to be making much progress. 

2013 Savings Goals - August Update

(1) Max out 401k(s) -        $22,285 (64%)   (goal is $35,000)
(2) Max out IRA(s) -         $9,020 (82%)    (goal is $11,000)
(3) Add to e/r fund -          $6,000 (60%)   (goal is $10,000)
(4) Pay down mortgage -   $2,075 (42%)     (goal is $5,000)
(5) Trading account fund - $50  (1%)        (goal is $5,000)
(6) House projects -          $1,500 (50%)      (goal is $3,000)

Total:  $40,930 (59%)

We are about $300 behind on our 2013 goals.  And with Mr. Sam's lay off I expect that number to grow.  In July, I kind of kept up with most of our goals in that I continued to fund 2, 3, and 6.  But, all that money is sitting in my Capital One 360 (formerly know as ING) savings accounts, so I know that I can access that money if we need it.  I didn't put the $415 towards paying down our mortgage in July, since I'd rather have liquid assets available.

As for our 401ks, Mr. Sam can no longer contribute to his 401k this year, but with his match he has saved $15,676 for 2013.  While we don't normally count the match towards our savings goals, he is happy that he's not too far off our goal of maxing out his 401k.  In fact, with his match he is only short $1,824.

I would like to continue to fund my 401k during the lay off, although we've talked about whether it makes sense to scale back.  Frankly, I almost think it is more important to save towards our future during this time.  I still need to crunch the numbers and see if it is feasible.  And while I keep our 2013 IRAs money liquid, I'd like to be putting that into our IRA if we can (and we have until April 2014 to decide). 

Dreaming of Faraway Lands

I've been dreaming about a 10 day or two week trip to a particular country for more than 10 years.  While we keep a "travel" savings account that we add to each pay period, I've decided to start a travel savings account for this dream trip. 

It may seem odd to be thinking of a dream trip in the middle of dealing with Mr. Sam's layoff, his unemployment, and the uncertainty of our finances and future savings.  But, I've been thinking about this trip for a long, long time and I want to start planning for it.  Opening a savings account, which if necessary can be used for other expenses, is a way for me to do a little dreaming and planning without incurring any real costs. 

Unemployment Compensation

Mr. Sam has been working on applying for unemployment benefits.  Sadly, Florida makes it super difficult to apply and obtain benefits.  Florida puts up so many road blocks regarding the collection of benefits that they are being investigated by the Department of Labor.  Mr. Sam's application process took about three hours, which includes a very long application and a skills test.  Luckily Mr. Sam has access to internet, the only way one can apply, he speaks English and he is educated.  Even so, he remarked at how difficult the process was, which is probably why only 17% of Floridians who are eligible actually received these benefits. 

Florida also provides a maximum weekly benefit of $275, which is the fifth-lowest amount in the country.  Mr. Sam should qualify for the maximum benefit which means $1,100 per month for three months (benefits cut off after 12 weeks).  

Working Vacations

Even with Mr. Sam's work issues, we just returned from a long weekend.  While, we could have cancelled the trip, this preplanned long weekend will probably be our only vacation together this summer so I voted to move forward with our trip.  I do have an upcoming family trip which is not really a vacation and Mr. Sam will not attend.

And, even though Mr. Sam was not really excited about this trip, mostly because he is worried about finding a new job, we had a great time.  We spent time together, we relaxed, we spent time with friends, we had fun, etc.

But, like most professional Americans, I never really disconnected from my office.  My normal vacation/work protocol is to work, in a focused manner, during travel time.  I specifically bring work that is easier to tote or that is in .pdf form on my iPad so I can read or review materials while flying or driving (assuming that Mr. Sam does the driving).  Then when I arrive at our vacation destination, I generally stop working but I continue to attend to emails/deadlines and issues that may arise.  I try to limit how often I check emails to early morning, lunch and then mid-afternoon (before my assistant leaves for the day).

I would like to disconnect when I'm on vacation, but coming back to several days of unread emails almost ruins the point of vacation.  Today is my first day back in the office and I've spent nearly half the day reading all my emails even though I was keeping an eye on them and responding to important ones.  If I had disconnected altogether I'd lose even more time.

What do you do?  If your stay connected to the office during your vacations, how does that impact your ability to relax and recharge?  How does your spouse feel if you work during a family vacation?   

Good News

Can there be any good news when it comes to a layoff?  I really don't know, but I do choose to see some positives.

First, Mr. Sam gets a decent number of weeks of severance.  We have not figured out our "lay off budget" yet but my tentative plan is to try and save the vast majority of that money.

Second, Mr. Sam' health benefits, which are good, generous and cheap, continue well into the fall.  I am also covered by his health benefits due to the good, generous and cheap nature of them.  We do have to pay the biweekly amount (the amount that was deducted from his pay for his portion) to maintain these benefits but it makes economical sense to do so since my benefits are good but cost 4 times (or more, still figuring this out) as much as his.

Third, we have a decent amount in our emergency fund.  This money was bookmarked for other purposes but it is there.

Fourth, Mr. Sam started preparing for this lay off last year by taking some certification courses so he has some additional skills and certifications to add to his resume.

Fifth, I have a good job.  Frankly, this is the most important item on this list.  I have a good, professional job for which I am fairly compensated.  While we have not figured out our "lay off budget", will work on that this weekend, I'm generally confident (since I am well versed in our monthly income and expenses) that my salary can cover our fixed and basic monthly expenses.  I also have opportunities for bonus monies and we need to think about whether I should up my output to make sure I am eligible for same (and at what level).

Bad News

At I mentioned in my last post, the layoff we have been talking about and expecting for the last year and a half has finally showed its ugly face.  Mr. Sam has been laid off from his corporate job.

While it was no surprise, it is certainly a devastating blow to Mr. Sam and to us as a couple.  Financial and family plans are impacted.  Our day to day spending will be impacted.  Our 2013 savings goals are impacted.  Our long term financial goals are impacted. Etc.

We are in the process of sorting out his plan forward and our plan forward.

2013 Savings Goals - July Update

(1) Max out 401k(s) -        $21,611 (62%)   (goal is $35,000)
(2) Max out IRA(s) -         $9,020 (82%)    (goal is $11,000)
(3) Add to e/r fund -          $5,200 (52%)   (goal is $10,000)
(4) Pay down mortgage -   $2,075 (42%)     (goal is $5,000)
(5) Trading account fund - $50  (1%)        (goal is $5,000)
(6) House projects -          $1300 (43%)      (goal is $3,000)

Total:  $39,256 (57%)

It is July in South Florida, it is hot and wet and we are moving into hurricane season.  July is also the first month of the second half of the year and it is time to evaluate where we are on our savings goals.

The good news is that we are just about $2,000 ahead of where we should be.

The bad news, if you've been reading this site for the last year and half you'll probably guess.  Mr. Sam lost his job as of Monday (along with a 100 others).  We've been expecting this reduction in force for about a year and a half now and, unfortunately, the day finally came.  I'll be posting more on this next week, but obviously a job loss may mean that our goals for this year have to be updated.

No to Zip Code

I am one of those consumers that says no to most questions at the end of the transaction.  No to rewards card.  No to email receipt.  No to phone number.  And, no to zip code.  Basically, I've come to the conclusion, and it is just my personal belief, that the company or the store is not asking these questions to help me.

Now, I've come to find out that I was right at least as applied to the zip code question.  Rather then gathering data to figure out where to locate the next store, stores are gathering data on you.  Take your zip code and your name (gathered from your credit card or debit card) and they can track you down to send you catalogs and other unwanted marketing material.

2013 Savings Goals - June Update

(1) Max out 401k(s) -        $19,428 (56%)   (goal is $35,000)
(2) Max out IRA(s) -         $6,013 (55%)    (goal is $11,000)
(3) Add to e/r fund -          $4,800 (48%)   (goal is $10,000)
(4) Pay down mortgage -   $2,075 (42%)     (goal is $5,000)
(5) Trading account fund - $50  (1%)        (goal is $5,000)
(6) House projects -          $1200 (40%)      (goal is $3,000)

Total:  $33,566 (41%)

We are about $400 ahead of where we should be.  Looking at each goal, we are generally on target or a bit ahead of the game for each except the trading account fund.

As I mentioned during my last super savers update, I had some un-budgeted car repair/service expenses (more on that later).  We also have a large house project expense coming up so I'm going to have to tap that account as well.

When is a Sale Not a Sale?

Earlier, I wrote about the psychological impact of shopping without actually buying the product you are shopping for.

Now comes news on something I've suspected for many years, at some stores sale prices are not really sale prices.  Rather, as Today News reports certain stores, including J.C. Penny, Kohl's and Macy's have been caught advertising and pricing items on sale when they are actually selling the product for the manufacturer's suggested price.

There are almost an unlimited number of techniques companies use to get us, the public, to part with our money either by increasing purchases and/or by increasing the purchase price.  A "sale" when its not really a sale is just another technique but one that the savvy customer should be aware of by comparison shopping and doing their own research.

Diamonds and Dollars - Update

Back in August of 2012, I wrote about a claim we had submitted in the DeBeers diamond price fixing case. Well, yesterday Mr. Sam received a $270 settlement check.

I have no idea if this is a fair or reasonable settlement for the damages suffered by the consumer class (I understand, from my research that the wholesaler class is getting much larger checks) since I never studied the claims or undertook any analysis as to Mr. Sam's damages.  I understand from the diamonds class action web site that "payments were calculated based on several factors, including how much you paid, the quantity and quality of the diamonds you purchased, the amount of money that is available for your Class or Sub-class, and how many Class Members filed claims."

Anyways, assuming we never would have thought to bring a claim related to the diamond in my engagement ring, we are happy to recover $270 and we are putting it into our vacation fund.

This is the second time I've recovered more than $200 in one of these class settlement scenarios, so I'll continue to fill out the paperwork.

Satisfy Your Shopping Itch Without Buying

I've used a little trick for years to satisfy my urge to shop while also keeping my spending in check.  I go to my favorite online stores, J. Crew, Amazon, Pottery Barn, etc.  For clothes, I pick out something, I take a look at colors, I pick out my size, etc.  I may shop for an entire outfit.  Then I put it into my shopping bag or my shopping cart and then I simply don't check out.  My Amazon.com cart has items that I picked out more than 2 or 3 years ago.  Sometimes I use this method because I'm following our rules on waiting a day for every $100 an item costs, meaning if I picked out a pair a shoes that exceeded a $100, I am required to wait before I purchase them.  But, just as often, I simply enjoy this process, the browsing, the effort of coordinating a skirt with a shirt, finding the perfect dress for an upcoming event or trip and then feel little to no need to complete the sale.

This morning I read an article on The Atlantic that seems to confirm that materialistic folks (perhaps I am one) receive a greater happiness boost from thinking about acquisitions than from the actual acquisition.

What do you think?  Do you ever engage in imaginary shopping to satisfy your shopping impulses?

Quick Debt Update

I don't post much about our debt, because there isn't much to say these days.

We don't use credit cards in our day to day life.  But, we do, for our rental properties, occasionally run up the Home Depot credit card, we obtain 0% deals, and then pay it off over time with rental income.  I am happy to report that the $2500, 0% interest, credit card debt incurred in November 2012 has been paid off with proceeds from rent.

Additionally, I was pleased to note that the mortgage balance, for our primary home, is now below $250,000.  The outstanding balance is $248,962.  In two (2) years we have knocked off $25,000 from our principal.  And since our refinance back in September 2012 our progress has accelerated in that so much of what we pay each month goes to principal rather than interest.  The original loan balance was $315,000 and we took the loan out in July 2004.  We refinanced twice, reducing both the term of the loan and the interest rate each time.  

The Zen of Debt Reduction and Weight Loss

I've posted before about ZenHabits.net as its a blog I read on a regular basis and one I check in on when I'm struggling with focus or a project.

This morning, as I was spinning my wheels on a work project I came across this post on the similarities of weight loss and debt reduction. This is a topic I have visited before, but one that I am happy to return to. To me, getting into good habits is a skill and once I am into the groove on one habit, its easier for me to apply those skills to something else.  So, back to work, applying my drive and focus developed in the personal finance world, to my day job.

Have a great week!

Drinking and Shopping Don't Mix

I enjoyed this fun Atlantic Wire post on shopping under the influence.

 I have been to enough Palm Beach charity events over the years to understand the silent auction (and live auction) bidding dollars go way up the more people drink.

As such, I would add a section to the article that one should generally get a pass for shopping/bidding at charity auctions, since its for charity.

Otherwise, I thought the suggestions in this guide were great.  Definitely leave the credit cards at home if you are shopping after drinking and have a friend there to talk you out of bad ideas.

I often find myself in trouble when it comes to art, because (1) I love original art, (2) I'll spend good money for art, and (3) I'm often admiring art while holding a glass of wine.  So I stick to my rules and anything over a $100 requires a cooling off period.  I'll take a photo of the art with my iPhone, I'll take a business card, but I generally don't buy art on a first viewing.

NetWorthIQ

Although I lost my blog link to our NetWorthIQ.Com profile, it looks like the system is back up and running. Whoo-hoo!

2013 Goals - May Update

(1) Max out 401k(s) -        $15,736 (45%)   (goal is $35,000)
(2) Max out IRA(s) -         $6,013 (55%)    (goal is $11,000)
(3) Add to e/r fund -          $3,600 (36%)   (goal is $10,000)
(4) Pay down mortgage -   $1,660 (25%)     (goal is $5,000)
(5) Trading account fund - $50  (1%)        (goal is $5,000)
(6) House projects -          $900 (30%)      (goal is $3,000)

Total:  $27,959 (41%)

We are about $1400 ahead of where we should be.

Otherwise, we continue to chug along.  I've got some unbudgeted car expenses coming up, new tires, new breaks, tune up, etc. which is likely to run more than a thousand.  My eating out/ordering in expenses continue to be high.  The busier I am at work, and I'm super busy right now, the more I spend on eating in because I don't have the time or energy to prepare food.  Last week I spent close to $100 on eating in (yikes!) which is way too much.

I was trying to get into networthiq today, and its not working.  Another yikes!  I love that site and I have a lot of data stored in it, so I'm trying not to freak out and hoping it will be back up and running shortly.

Dow Closes Above 15,000

Did you hear that the Dow closed above 15,000 yesterday for the first time ever?

How did you celebrate?  Me, I updated our NetWorthIQ profile and reviewed our Roth IRA holdings, which is where we hold individual stocks, to see if there are any holdings we should be selling.

ProFlower's Scummy Scam

At one point I used to regularly use ProFlowers as my go to company to send flowers across the miles.  It was so easy as I had all my information and my recipients' information stored.  I could just log in, click, click and click and flowers would arrive for birthdays, Mother's Day and other occasions.  But there was a reason I stopped using them and that reason reared its ugly head this past week.

I had a coupon code for ProFlowers and since Mother's Day and a birthday is coming up I figured sending flowers would be easy for both.  I logged in, picked my flowers, one arrangement was $25 and the other was $29 with my coupon code.  And then onto easy step two, picked my delivery day, clicked on my recipients (data already saved) and then went to check out.

Ugh!!  Now I remember why I stopped using ProFlowers, when I went to check out, up popped charge after charge.  Delivery charge, delivery day up charge, care and handling charge.  That discount coupon doesn't end up being much of a discount with all the charges at the end.  The total for the two arrangements was more than $120.  In the end I cancelled the order, just can't give my business to this company even if its super easy.

For one of the recipients, I have a local florist that I will order from (have used them before and they do a great job).  I'll figure out something for the other recipient.

Ask, and you shall receive

I have been a DirecTv customer for years.  We also have an HBO package which includes access to HBO Go.  HBO Go is a great service, we can watch any and all HBO series, including past seasons and current seasons, on an iPad or iPhone anywhere (assuming access to WiFi) at anytime.

But, there is a down side of DirecTv and HBO and that is the price.  While, I feel like we get a lot of enjoyment out of the service, DirecTv has been inching up and inching up in price.  So I've developed a habit of calling once every 13 months or so and asking for a discount.  I used to call armed with information from their competitors, but now I just call up and tell them I want to keep our same services but I want to pay less and it seems to work.

Last night I called, and I received a $10 discount on our DirecTv package and then I spoke to someone in the premium channel department and received a $10 discount on our HBO package.  The general discount is good for a year and the HBO discount is good for six months.  So in 5 minutes I saved us $180.

This is a good lesson for all who are working on killing debt, sticking to a budget or increasing savings.  While you may have to cut certain things out in your quest for improved personal finances, there are also opportunities to keep the same services but pay less.

When we were killing our credit card debt in 2007 I regret that I never called, on the cards that were not 0%, and asked for reductions in interest rate or some other accommodations.  Last year, we combined and redid our car insurance (more than 5 years after we got married).  We dramatically increased our coverage and saved a ton of money (which we put towards our umbrella insurance policy).  We could have saved thousands of dollars over the 5 years of insurance status quo, but we didn't make the time to investigate our options.

2013 Goals - April Update

(1) Max out 401k(s) -        $13,392 (38%)   (goal is $35,000)
(2) Max out IRA(s) -         $6,010 (55%)    (goal is $11,000)
(3) Add to e/r fund -          $3,200 (32%)   (goal is $10,000)
(4) Pay down mortgage -   $1,245 (25%)     (goal is $5,000)
(5) Trading account fund - $50  (1%)        (goal is $5,000)
(6) House projects -          $800 (27%)      (goal is $3,000)

Total:  $24,697 (23%)

We are a couple of thousand ahead of where we should be.  I'm not sure how that happened except that Mr. Sam is ahead on his 401k contributions which may have occurred when he received his bonus but just showed up now.

An Interesting Analysis of the Envelope System of Budgeting

I enjoyed this interesting post from Slate by Emily Oster on the Dave Ramsey envelope budgeting system.

While I am a big fan of Dave Ramsey's philosophy and we utilized his snowball system of paying down our unsecured debt, I've never used his budgeting plan.

Rather we use a allowance system which works like this.  I pay all the fixed and semi-fixed bills, the mortgage, car insurance, utilities, etc.  Then I allocate and move money to savings which can include savings for upcoming annual bills, i.e. property taxes, or upcoming expenses, i.e. vacations.

Then each of us receives the same amount for day to day discretionary spending which includes groceries, gas, dry cleaning, personal expenses, gifts (but not holiday spending), eating out, entertainment.  And part of the reason for this is our expenditures in these categories changes from month to month as Ms. Oster pointed out.

Example: You go to the store and milk is more expensive than usual (something about the sequester?) Because you have your limited grocery envelope, you have to respond to this by buying less of some grocery. You could buy less milk, or fewer veggies, or less pasta.  However: It may very well be that you’d rather keep with your normal grocery purchase and cut back somewhere else—say, two fewer lattes this week. But because the “coffee” budget is separate from the grocery budget, you end up with the same number of lattes and fewer bananas.

Additionally, neither of us likes to feel overly restricted so with one pot to spend on day to day spending we can spend as we like on different categories but we restrict the overall amount of money.

How do you budget your day to day expenses?

Remote Check Deposit - Follow Up

Earlier, I posted about Wells Fargo's new remote deposit feature which allows you to take a photo of your check and deposit it remotely.

Since its a new month, I used the remote deposit feature of our first two rental checks received in April.  I found the feature easy to use and saved me the 10 minutes of running to the bank to deposit the check at the ATM (times two, saved me 20 minutes).

My only complaint is that I'm limited to $1000.00 remote deposit per day.  However, I'm not clear if that limitation is per account (we have different accounts set up for our rental properties).  So, for the first two rental checks, just under $1000.00 each, I received the checks on separate days and was able to remotely deposit both.  But, the third rental checks is $1500.00 and it was rejected when I tried to deposit it using the remote deposit feature.  I'm going to call Wells Fargo and see if I can get my daily balance bumped up to $1500.00 per day.

You know its spring in Florida when . . .

You know its spring in Florida when you are at the Super Wal-Mart at 6:00 a.m. buying rat traps.

Now I'm not in charge of rat wrangling, rather Mr. Sam is takes care of this landlording task (thank goodness).  So, he was at Super Wal-Mart early this morning buying traps.

Here in Florida we have problems with roof rats due in large part to our climate and the abundance of fruit trees.  And, at one of our rental properties, we have a beautiful, big mango tree that produces tons of fruit.  This tree produces so much fruit that its more than our tenants or ourselves could ever eat.

I've heard about some food pantries that run back yard fruit drives so I'm looking for an agency that is local to us where we can donate these mangos.  In the meant time Mr. Sam is over at the property setting up traps.

Remote Check Deposit

Between the collection of rent checks and reimbursements from work, I can find myself at the Wells Fargo ATM depositing checks multiple times in one week.  While I'm happy to have the money, each of those trips to the ATM takes at least 15 minutes.  And, for some reason my local ATM seems to be out of order on a regular basis so at least one in ten trips requires a second trip to the next ATM.

I just recently learned, while I was at the ATM on Saturday, that Wells Fargo now has smartphone deposits.     I already had the Wells Fargo app for my iPhone so it was easy to simply click on a tab on the app to add remote deposits to my available services.  One of the helpful Wells Fargo bankers walked me through how it works and the process is super easy.  You simply sign into your account on your iPhone, you select mobile deposit from the menu options, take a photo of the front of the check and then the bank, select the account where you want the money to go, type in the amount and deposit the check.  Then you hold onto the check for fourteen days and then destroy it.

I'm very excited about this new option and I think its going to save me at least an hour of time a month.