We are less than a week away from our big family vacation. Hooray! Most of our planning is done, although we still have a few items to take care of before we depart.
As we head towards our departure date, I need to do laundry and pack. I also have one more Amazon Prime order to execute on. But as for our travel plan, the airline tickets are paid for, the hotels are reserved and the rental car is booked.
We vacation on a budget, but we don't scrimp. What does that mean you ask? Well it means that we always have a short term savings account earmarked for travel/vacation. We also have an automatic deposit set up, so $200 per pay period goes into our vacation/travel fund. That normally means that we have more than enough in our travel/savings account to pay cash for airline tickets. After our airline tickets are booked and our vacation is planned I often up extra savings into our travel/vacation fund to make sure we have more than enough cash on hand for our hotel, rental car and spending. This time around we didn't need to since our savings account was well funded.
I don't scrimp when I go on vacation, so I normally budget at least $100 a day for food which seems like a lot, but if you are eating out or stopping at a local brewery for a couple of $10 beers it works out to the right amount for us. I also think about and plan for other spending, we'll be stopping at two national parks, so I'm accounting for entry fees, gas, and misc. spending on a t-shirt here or there or a special souvenir. Mr. Sam likes to pick up t-shirts on his travel and he wears them a lot. I like a more upscale souvenir, a piece of art from a local or maybe a handcrafted piece of jewelry. I am picky so that means I often come home with nothing and that is ok. Baby Sam gets to pick out something fun for herself that is inexpensive and I will likely pick out something for her along the way. I normally set aside another $100 in cash for misc. spending.
All of this preplanning means that when we get home from vacation we only bring memories, a rock or two for our collection and no debt.
Monday, July 4, 2016
Tuesday, June 28, 2016
You Really Never Know
So, I know a woman from high school (she was a year behind me) that I sometimes follow on Facebook. We were not friends in high school, but I was sorta friends with her brother who was a year ahead of me. I haven't seen her since high school, many years ago, since I moved away from where I grew up. But, she is very active on social media and one of those people who is friends with everyone and hard to ignore.
She is attractive, tall, super athletic (she played sports in college), fit and thin, and glamorous. She married an athlete as well, tall and handsome and super successful guy. I mean really successful - works in media in California. They have super attractive, sporty kids. I mean really sporty, probably will play in college level type sporty. Because he works in media, they attend fun events like award shows and movie openings. She is always posting photos in their black tie outfits, posing with celebs and the like.
Bottom line, it was easy to be jealous of her.
Recently, I went to her Facebook page because she had posted a quote that I had read but wanted to reread and save for myself. I couldn't find it though, and I was poking around trying to find it (as I'm persistent in that way). In my poking around, all of sudden I realize her about section says she is divorced. What ??!!?
When the heck did that happen.... I poke around some more, because obviously I'm entitled to know this woman's business (this woman that I haven't seen since high school, this woman who is not even a friend of mine) and see that she is no longer friends with her husband (now ex-husband) and his profile also says divorced. I see that they haven't really been in photos together for a year or so.
I was really shocked because they seemed so perfect and seemed to be living the most perfect life. But, you really don't ever know what is going on in people's life.
Social media makes it easy to compare our life to someone else's life, but social media, while a great way to keep up with family, doesn't give you the whole picture or the whole store. This is true in a "keeping up with the Joneses" mentality as well. People can project wealth and riches, but just because someone has a big house or a nice car that doesn't mean they are wealthy or financially savvy.
She is attractive, tall, super athletic (she played sports in college), fit and thin, and glamorous. She married an athlete as well, tall and handsome and super successful guy. I mean really successful - works in media in California. They have super attractive, sporty kids. I mean really sporty, probably will play in college level type sporty. Because he works in media, they attend fun events like award shows and movie openings. She is always posting photos in their black tie outfits, posing with celebs and the like.
Bottom line, it was easy to be jealous of her.
Recently, I went to her Facebook page because she had posted a quote that I had read but wanted to reread and save for myself. I couldn't find it though, and I was poking around trying to find it (as I'm persistent in that way). In my poking around, all of sudden I realize her about section says she is divorced. What ??!!?
When the heck did that happen.... I poke around some more, because obviously I'm entitled to know this woman's business (this woman that I haven't seen since high school, this woman who is not even a friend of mine) and see that she is no longer friends with her husband (now ex-husband) and his profile also says divorced. I see that they haven't really been in photos together for a year or so.
I was really shocked because they seemed so perfect and seemed to be living the most perfect life. But, you really don't ever know what is going on in people's life.
Social media makes it easy to compare our life to someone else's life, but social media, while a great way to keep up with family, doesn't give you the whole picture or the whole store. This is true in a "keeping up with the Joneses" mentality as well. People can project wealth and riches, but just because someone has a big house or a nice car that doesn't mean they are wealthy or financially savvy.
Monday, June 27, 2016
10 Year Reviw - Part I (The Beginning)
Mr. Sam and I will be celebrating 10 years of marriage this fall. As a result, I'm starting to think about what we've accomplished, together, in those 10 years.
We started our financial journey together, before we got married, but January 2007 was the beginning of our effort to pay down our unsecured debt and implement a debt free life. The journey was mostly inspired by the fact that I wanted and needed a new car, but did not want a car payment. It was the summer of 2006 and my car, then a 1999, had hit expensive repair time. I had made some repairs to it and it was calling for more repairs and I was fed up. So, I was doing some internet research and I came across a Dave Ramsey article about car payments. I read some more on Dave's web site and I later checked out one of his books from my local library and read The Total Money Makeover. I read some other books as well like The Millionaire Next Door and others.
We were in the middle of getting ready for our wedding, so I did not have time to implement the plan. Instead, over the December holidays of 2006 (after the wedding and honeymoon), I reread TMM and we started working the plan. We began with Dave's baby steps which we also modified a bit as we moved forward (side note, my husband is a lapsed Catholic and I'm not religious, while Dave's books and message can be a bit preachy we just ignored those parts).
We began 2007 with a financial reckoning. First, we combined our assets and our combined net worth was $807,539. We were holding real estate valued at $1.27 million dollars (that changed dramatically the next year). Our retirement savings was at $216,184. We had the $1000 emergency fund already covered (TMM baby step one).
Second, we had a lot of debt. We had $679,520 in mortgage debt, our primary home, three rental properties and a piece of land. And, we had $50,946 in unsecured debt, $27,000 for Mr. Sam's student loans (MBA) and the rest credit card debt. So, we began 2007 with TMM baby step two, pay off all debts but the mortgage. We had added up all our debt, we had a chart showing interest rates, minimum payments and totals. I took over paying all the bills (prior to marriage I paid our joint bills and my bills, but Mr. Sam handled his own bills). So, we began working the debt snowball.
More on debt later, I also want to look at where we are, 10 years later, with careers, education, family life, savings, real estate, car habits, etc.
We started our financial journey together, before we got married, but January 2007 was the beginning of our effort to pay down our unsecured debt and implement a debt free life. The journey was mostly inspired by the fact that I wanted and needed a new car, but did not want a car payment. It was the summer of 2006 and my car, then a 1999, had hit expensive repair time. I had made some repairs to it and it was calling for more repairs and I was fed up. So, I was doing some internet research and I came across a Dave Ramsey article about car payments. I read some more on Dave's web site and I later checked out one of his books from my local library and read The Total Money Makeover. I read some other books as well like The Millionaire Next Door and others.
We were in the middle of getting ready for our wedding, so I did not have time to implement the plan. Instead, over the December holidays of 2006 (after the wedding and honeymoon), I reread TMM and we started working the plan. We began with Dave's baby steps which we also modified a bit as we moved forward (side note, my husband is a lapsed Catholic and I'm not religious, while Dave's books and message can be a bit preachy we just ignored those parts).
We began 2007 with a financial reckoning. First, we combined our assets and our combined net worth was $807,539. We were holding real estate valued at $1.27 million dollars (that changed dramatically the next year). Our retirement savings was at $216,184. We had the $1000 emergency fund already covered (TMM baby step one).
Second, we had a lot of debt. We had $679,520 in mortgage debt, our primary home, three rental properties and a piece of land. And, we had $50,946 in unsecured debt, $27,000 for Mr. Sam's student loans (MBA) and the rest credit card debt. So, we began 2007 with TMM baby step two, pay off all debts but the mortgage. We had added up all our debt, we had a chart showing interest rates, minimum payments and totals. I took over paying all the bills (prior to marriage I paid our joint bills and my bills, but Mr. Sam handled his own bills). So, we began working the debt snowball.
More on debt later, I also want to look at where we are, 10 years later, with careers, education, family life, savings, real estate, car habits, etc.
Friday, June 24, 2016
Chase Auto Wants to Be a Little B*tch
So, following up my post from the other day, I have been putting some extra funds towards paying down my nused car loan. When I bought my nused car in December 2015 I went with a short loan, two years, with a low interest rate. I also made sure there was no prepayment penalty because I knew that I might want to pay it off early.
Well, yesterday I realized that Chase Auto is not applying my payments towards principal and instead is moving my next payment date out farther in time. I sent Chase Auto a message and they reallocated all my payments from January to June 2016 to match my preference. Thanks, Chase. But, they sent me the below snotty message.
This type of crap annoys me to no end, why make things so difficult. I've told you want my preference is, you've demonstrated I can get my way by sending you a message every month or every quarter, but you won't do it automatically. My credit card is with Chase and I've previously had a savings account with them, although I closed it recently because they just took fees out of it and I had to email them every 6 months and tell them to put the fees back.
So, while I'm not a big Chase customer, I am a Chase customer. However this type of game makes me LESS likely to do business with Chase not more likely to move my accounts to them.
And, no I'm not doing automatic payments, I only do automatic payments for my mortgage. One bad experience with a gym membership years ago has taught me not to give anyone access to my account. I
Well, yesterday I realized that Chase Auto is not applying my payments towards principal and instead is moving my next payment date out farther in time. I sent Chase Auto a message and they reallocated all my payments from January to June 2016 to match my preference. Thanks, Chase. But, they sent me the below snotty message.
Please note that any payment coming from a non-Chase bill
payment service will be processed as a regular payment. If
you would like the excess payments to go towards the
principal balance, we suggest you to enroll your automatic
payments via Chase.com.I'll interpret for you, Chase Auto is saying we won't put excess payments toward principal unless you switch your payment account over to Chase Bank or unless you give us access to your accounts.
This type of crap annoys me to no end, why make things so difficult. I've told you want my preference is, you've demonstrated I can get my way by sending you a message every month or every quarter, but you won't do it automatically. My credit card is with Chase and I've previously had a savings account with them, although I closed it recently because they just took fees out of it and I had to email them every 6 months and tell them to put the fees back.
So, while I'm not a big Chase customer, I am a Chase customer. However this type of game makes me LESS likely to do business with Chase not more likely to move my accounts to them.
And, no I'm not doing automatic payments, I only do automatic payments for my mortgage. One bad experience with a gym membership years ago has taught me not to give anyone access to my account. I
Thursday, June 23, 2016
Voting by My Actions
So, even though we need to focus on savings and adding money to our 2016 IRA (in 2015 we saved nothing in our IRAs), I find myself doubling up my monthly payments for my nused car (purchased in December of 2015).
Why am I doing so? Well, we paid off Mr. Sam's 2013 truck in full as of last month. That means that I have an extra $500 a month. So, rather than using that $500 for savings I sent it off to Chase for my auto loan. I'd frankly be better off putting that $500 towards our linger credit card debt (now down to $1195).
So why do I make these choices? I much prefer killing debt than saving money. Now don't get me wrong I love saving money and watching the balances grow in our retirement accounts. But, I seem to get more satisfaction paying off debt. I also am not a fan of car loans. I'd prefer to pay cash for cars, but over the course of 2013-2015 we found ourselves buying a new truck for Mr. Sam and a nused car for me. I seem to dislike car debt more than credit car debt, etc.
Why am I doing so? Well, we paid off Mr. Sam's 2013 truck in full as of last month. That means that I have an extra $500 a month. So, rather than using that $500 for savings I sent it off to Chase for my auto loan. I'd frankly be better off putting that $500 towards our linger credit card debt (now down to $1195).
So why do I make these choices? I much prefer killing debt than saving money. Now don't get me wrong I love saving money and watching the balances grow in our retirement accounts. But, I seem to get more satisfaction paying off debt. I also am not a fan of car loans. I'd prefer to pay cash for cars, but over the course of 2013-2015 we found ourselves buying a new truck for Mr. Sam and a nused car for me. I seem to dislike car debt more than credit car debt, etc.
Monday, May 30, 2016
Amazon Mom Update
Almost a year ago, I signed up for Amazon Mom/Prime program.
What I have learned, and it is also what I expected, is that having Amazon Prime makes it super easy to buy stuff from Amazon. "Free" two day delivery on lots of items means that I often go to Amazon for my buying needs. Does that mean I'm spending more in general? Hard to know. I could be making the same purchases, but simply making them at Amazon instead of other retailers. Or I could be making more purchases since Amazon makes it so easy. I suspect it is both.
Today, I was working on my Amazon Prime subscription box. The subscription service allows one to sign up for purchases that are regularly occurring. For us, that includes diapers, wipes, diaper genie liners, baby sunscreen, baby snacks, etc. If you sign up for five items a month that ups your savings to 15% off on everything and 20% off on diapers.
So each month, we get diapers and wipes. Normally we get some puff snacks for Baby Sam. That normally leaves two items left. We have storage space, so I'm genarlly looking for something we go through a lot of and is a dry good or cleaning supply.
As working parents, coffee is a big thing for us, so today I decided to look at coffee options. On Amazon, even narrowing by Prime, that brings up thousands of choices. Select ground and hazelnut and I'm down to hundreds. Sort by price and I come up with some brands that Mr. Sam buys regularly. Ok, price per bag, price per ounce. No idea if this is a good price. Am I falling into the trap of buying something to get a discount that isn't a good deal? Cross check to the Wal-mart site and yes this is a good price.
Do the same thing for Mr. Clean Magic Eraser and I'm good to go for check out.
So bottom line, discounts can work but you have to be careful about making a poor buying choice for purposes of getting a discount.
Also, being able to get items I need delivered makes my life so much easier. Between, work, baby, family life, maintaining sanity is important.
What I have learned, and it is also what I expected, is that having Amazon Prime makes it super easy to buy stuff from Amazon. "Free" two day delivery on lots of items means that I often go to Amazon for my buying needs. Does that mean I'm spending more in general? Hard to know. I could be making the same purchases, but simply making them at Amazon instead of other retailers. Or I could be making more purchases since Amazon makes it so easy. I suspect it is both.
Today, I was working on my Amazon Prime subscription box. The subscription service allows one to sign up for purchases that are regularly occurring. For us, that includes diapers, wipes, diaper genie liners, baby sunscreen, baby snacks, etc. If you sign up for five items a month that ups your savings to 15% off on everything and 20% off on diapers.
So each month, we get diapers and wipes. Normally we get some puff snacks for Baby Sam. That normally leaves two items left. We have storage space, so I'm genarlly looking for something we go through a lot of and is a dry good or cleaning supply.
As working parents, coffee is a big thing for us, so today I decided to look at coffee options. On Amazon, even narrowing by Prime, that brings up thousands of choices. Select ground and hazelnut and I'm down to hundreds. Sort by price and I come up with some brands that Mr. Sam buys regularly. Ok, price per bag, price per ounce. No idea if this is a good price. Am I falling into the trap of buying something to get a discount that isn't a good deal? Cross check to the Wal-mart site and yes this is a good price.
Do the same thing for Mr. Clean Magic Eraser and I'm good to go for check out.
So bottom line, discounts can work but you have to be careful about making a poor buying choice for purposes of getting a discount.
Also, being able to get items I need delivered makes my life so much easier. Between, work, baby, family life, maintaining sanity is important.
Thursday, May 26, 2016
Keeping Up With the Joneses - Part III
Earlier I posted about some of my friends and former co-workers that have been engaging in expensive housing purchases. See the posts here and here.
Today, I'm discussing Leslie and John.
Leslie and I used to work together, so we are in the same industry. John works in the arts business. I really have no idea what kind of income John pulls down, but back when Leslie and I worked together she earned considerably more than he did. I don't know if that is true today, but assume it is. Leslie and John have one child.
Last year they bought a $1 million dollar foreclosure home. Yes, a foreclosure at $1 million. Back during the housing bubble, the house had actually sold for $1.7 million so you could argue they got a great deal. I would expect the house to appreciate quickly and, in fact, the property appraiser has it assessed at $1.6 million. As a result, annual taxes on the home are $35,000 ($2900 a month).
The house is 4 bedrooms and has 4700 square foot of living space. It also has a pool. The neighborhood they moved to has an excellent elementary school, but after that it gets mixed for middle and high school.
They have a mortgage in the amount of $750,000. And, they also took out a home equity line of credit in the amount of $100,000. So total debt is $850,000. With a 30 year mortgage their monthly payment is $3800, add in taxes monthly carrying costs are $6700. This does not include insurance, which is expensive in Florida.
Leslie and John previously lived in very nice historic home in a community with a good elementary school. They actually sold that nice home for a decent profit - $172,000. There old home was also 4 bedrooms and had a pool. I'd argue their old home was in a better location because the street their new home is on is very busy.
Today, I'm discussing Leslie and John.
Leslie and I used to work together, so we are in the same industry. John works in the arts business. I really have no idea what kind of income John pulls down, but back when Leslie and I worked together she earned considerably more than he did. I don't know if that is true today, but assume it is. Leslie and John have one child.
Last year they bought a $1 million dollar foreclosure home. Yes, a foreclosure at $1 million. Back during the housing bubble, the house had actually sold for $1.7 million so you could argue they got a great deal. I would expect the house to appreciate quickly and, in fact, the property appraiser has it assessed at $1.6 million. As a result, annual taxes on the home are $35,000 ($2900 a month).
The house is 4 bedrooms and has 4700 square foot of living space. It also has a pool. The neighborhood they moved to has an excellent elementary school, but after that it gets mixed for middle and high school.
They have a mortgage in the amount of $750,000. And, they also took out a home equity line of credit in the amount of $100,000. So total debt is $850,000. With a 30 year mortgage their monthly payment is $3800, add in taxes monthly carrying costs are $6700. This does not include insurance, which is expensive in Florida.
Leslie and John previously lived in very nice historic home in a community with a good elementary school. They actually sold that nice home for a decent profit - $172,000. There old home was also 4 bedrooms and had a pool. I'd argue their old home was in a better location because the street their new home is on is very busy.
Tuesday, May 17, 2016
Keeping Up with the Joneses - Part II
Earlier, I wrote about some of my friends and co-workers whose house purchases have caused me to suffer house envy.
Next on the list, Jessica and Tony. Jessica and I used to work together and she and I are in the same industry. Tony works in the engineering field. They do not have any children together, Tony has children from his prior marriage and just recently concluded his support obligatins. They live in the same county we live in.
Last year, they built a home that cost more than a million dollars. The home is more than 5000 square feet and has four bedrooms along with a pool. Taxes on the home are $20,000 a year. They have a $1.1 million dollar mortgage mortgage. Carrying costs, assuming 30 year mortgage and not including insurance costs (which in Florida are expensive), are $7000 a month.
As a comparison, taxes on our home are approximately $3500 a year.
Also, when Jessica and Tony sold their prior home they lost $125,000 on the sale. They had bought pre-recession and the value of their prior home had not yet fully recovered.
What do you think about this type of real estate purchase? On the one hand, Jessica and Tony have a gorgeous home in a great location. On the other hand they have a $1.1 million dollar mortgage and that type of debt would keep me up at night.
Next on the list, Jessica and Tony. Jessica and I used to work together and she and I are in the same industry. Tony works in the engineering field. They do not have any children together, Tony has children from his prior marriage and just recently concluded his support obligatins. They live in the same county we live in.
Last year, they built a home that cost more than a million dollars. The home is more than 5000 square feet and has four bedrooms along with a pool. Taxes on the home are $20,000 a year. They have a $1.1 million dollar mortgage mortgage. Carrying costs, assuming 30 year mortgage and not including insurance costs (which in Florida are expensive), are $7000 a month.
As a comparison, taxes on our home are approximately $3500 a year.
Also, when Jessica and Tony sold their prior home they lost $125,000 on the sale. They had bought pre-recession and the value of their prior home had not yet fully recovered.
What do you think about this type of real estate purchase? On the one hand, Jessica and Tony have a gorgeous home in a great location. On the other hand they have a $1.1 million dollar mortgage and that type of debt would keep me up at night.
Real Estate Update
Just did an update on our networth numbers. Our three investment property mortgages are each, now, under $100,000 in debt.
The current mortgage balance numbers are as follows:
$98,207
$85,483
$74,520.
We also are about to get under $200,000 on our primary home mortgage, right now the balance is $201,583. Next month's mortgage payment should get the balance below $200,000. This makes me happy especially in light of my recent house envy.
I seem to respond more positively to reducing our debt than I do to increasing our savings.
The current mortgage balance numbers are as follows:
$98,207
$85,483
$74,520.
We also are about to get under $200,000 on our primary home mortgage, right now the balance is $201,583. Next month's mortgage payment should get the balance below $200,000. This makes me happy especially in light of my recent house envy.
I seem to respond more positively to reducing our debt than I do to increasing our savings.
Friday, April 22, 2016
Keeping Up With the Joneses - Part I
So, for the past few years, probably five or so, more and more of my friends and peers, and even people who report up to me at work (so, I'd consider them non-peers) have been buying homes at purchase price points ranging from $700,000 to a million.
I find this phenomenon strange, but also incredibly alluring.
Let's start with an analysis of these folks. I will start with the ones who started this trend, and I do believe there is a somewhat contagious trend among friends that equates to keeping up with the Joneses. The ones who started the trend, in my humble opinion, likely made smarter choices.
1. It started with my friend Mary, all names changed to protect the innocent, and her husband George. Back in 2011, they actually got a great deal and paid mid $500s for a home that is now likely worth close to $800,000. They bought a 5000 square foot McMansion in a better school district, they have a small child, with 5 bedrooms, 4 baths in a new development. Their family consists of 3 people and they do not plan to have any more children so this is a house bigger than they need. Their real estate taxes are more than $8000. They took out a $400,000 mortgage. Five years later they are putting in a pool. The house they sold they had owned since 2002 and they made about $50,000 profit when they sold it. They were buying in a buyers market due to the 2008 real estate crash which means they were also selling in a buyers market.
Mary is in the same profession as I am, I assume she makes similar money to me. Her husband is in law enforcement. While he makes less money, he has a great pension that will be coming to him (and soon) such that their retirement savings is less crucial. I have one other friend who will have a federal pension, but she cannot collect said pension until closer to traditional retirement age. George will be able to start collecting his pension in less than 10 years and his pension is for life. As a result, they don't have to save as much for retirement.
2. Jennifer and Alan were next. They are a dual income, professional, couple. Both are in the same profession I am in. They have three kids.
In 2012 they bought a 4 bedroom, 3.5 bath, 5000 square foot home. It also has a 2000 square foot out building (with air conditioning) and a pool. They bought the home for $775,000 (the prior owner had bought it for $800,000 so, again, it was likely a good buy) and it is likely worth close to a million now. Taxes are $14,000 a year. They took on a $620,000 mortgage. Later they took on a $35,000 home equity loan.
They held onto their prior house for a couple of years, while the Florida real estate market improved (likely a smart move), and they later sold it in 2015 for a $265,000 profit. I don't believe they took that profit and reduced or refinanced the mortgage on their current home, rather before they sold their prior home they put it into a trust and I assume the profits also went into that trust.
They have engaged in a variety of real estate and trust maneuvers in the last few years. This is probably because Alan also bought an office building and they are creating protection for their other assets.
Does it sound like I'm stalking my friends' personal business?? Well I guess I am. All of this information, at least in Florida, is public record and readily accessible on line. I also am learning from what they are doing, and that is both positive and negative (more on that later).
I find this phenomenon strange, but also incredibly alluring.
Let's start with an analysis of these folks. I will start with the ones who started this trend, and I do believe there is a somewhat contagious trend among friends that equates to keeping up with the Joneses. The ones who started the trend, in my humble opinion, likely made smarter choices.
1. It started with my friend Mary, all names changed to protect the innocent, and her husband George. Back in 2011, they actually got a great deal and paid mid $500s for a home that is now likely worth close to $800,000. They bought a 5000 square foot McMansion in a better school district, they have a small child, with 5 bedrooms, 4 baths in a new development. Their family consists of 3 people and they do not plan to have any more children so this is a house bigger than they need. Their real estate taxes are more than $8000. They took out a $400,000 mortgage. Five years later they are putting in a pool. The house they sold they had owned since 2002 and they made about $50,000 profit when they sold it. They were buying in a buyers market due to the 2008 real estate crash which means they were also selling in a buyers market.
Mary is in the same profession as I am, I assume she makes similar money to me. Her husband is in law enforcement. While he makes less money, he has a great pension that will be coming to him (and soon) such that their retirement savings is less crucial. I have one other friend who will have a federal pension, but she cannot collect said pension until closer to traditional retirement age. George will be able to start collecting his pension in less than 10 years and his pension is for life. As a result, they don't have to save as much for retirement.
2. Jennifer and Alan were next. They are a dual income, professional, couple. Both are in the same profession I am in. They have three kids.
In 2012 they bought a 4 bedroom, 3.5 bath, 5000 square foot home. It also has a 2000 square foot out building (with air conditioning) and a pool. They bought the home for $775,000 (the prior owner had bought it for $800,000 so, again, it was likely a good buy) and it is likely worth close to a million now. Taxes are $14,000 a year. They took on a $620,000 mortgage. Later they took on a $35,000 home equity loan.
They held onto their prior house for a couple of years, while the Florida real estate market improved (likely a smart move), and they later sold it in 2015 for a $265,000 profit. I don't believe they took that profit and reduced or refinanced the mortgage on their current home, rather before they sold their prior home they put it into a trust and I assume the profits also went into that trust.
They have engaged in a variety of real estate and trust maneuvers in the last few years. This is probably because Alan also bought an office building and they are creating protection for their other assets.
Does it sound like I'm stalking my friends' personal business?? Well I guess I am. All of this information, at least in Florida, is public record and readily accessible on line. I also am learning from what they are doing, and that is both positive and negative (more on that later).
Tuesday, April 19, 2016
Tax Day Update
Well its the day after taxes are due, so its a good time to think about our 2016 progress.
First, we haven't filed our taxes since we normally seek an extension which is what we did this year.
Second, we skipped 2015 IRA funding. Just didn't happen for a variety of reasons. Lack of discipline, baby and child care expenses, life, etc. So, that means we have a bit of extra savings to put towards 2016 IRA funding.
Third, I'm still waiting on Mr. Sam to make my 2016 Excel savings chart. He's as busy as I am, so it hasn't happened. Hard to track progress without the chart. But see below.
Definite goals:
(1) Max out 401k, $18,000 for each of us, for a total of $36,000. On track.
(2) Finish funding our 2015 IRAs - $8900, Skipped
(3) Fund 2016 IRAs, $11,000 for the both of us, for a total of $22,000. $1100
(4) Baby Sam'college fund, add another $5000 this year. On track
Updated tentative goal, so this is a definite goal now:
(5) Add to emergency fund, $10,000, increased this from $5,000 to $10,000, since we utilized a chunk to buy my nused car. On track
Debt killing goals:
(1) Pay off lingering credit card debt in the amount of $4261. Down to $2403
(2) Pay off Mr. Sam's new car, remaining debt $2000. Down to $1000
Overall debt below $450,000 goal: Total debt $474,731.
First, we haven't filed our taxes since we normally seek an extension which is what we did this year.
Second, we skipped 2015 IRA funding. Just didn't happen for a variety of reasons. Lack of discipline, baby and child care expenses, life, etc. So, that means we have a bit of extra savings to put towards 2016 IRA funding.
Third, I'm still waiting on Mr. Sam to make my 2016 Excel savings chart. He's as busy as I am, so it hasn't happened. Hard to track progress without the chart. But see below.
Definite goals:
(1) Max out 401k, $18,000 for each of us, for a total of $36,000. On track.
(2) Finish funding our 2015 IRAs - $8900, Skipped
(3) Fund 2016 IRAs, $11,000 for the both of us, for a total of $22,000. $1100
(4) Baby Sam'college fund, add another $5000 this year. On track
Updated tentative goal, so this is a definite goal now:
(5) Add to emergency fund, $10,000, increased this from $5,000 to $10,000, since we utilized a chunk to buy my nused car. On track
Debt killing goals:
(1) Pay off lingering credit card debt in the amount of $4261. Down to $2403
(2) Pay off Mr. Sam's new car, remaining debt $2000. Down to $1000
Overall debt below $450,000 goal: Total debt $474,731.
Thursday, April 14, 2016
I Keep Trying to Get Back on Track.......
I've been spinning my wheels now for more than a year.
With the time pressures of a more than full time job, baby, husband, landlording, life, etc. my ability to manage our finances has been backsliding.
I'm not paying bills on time, rent is not being collected (that is Mr. Sam's duty), our savings rate has gone down. I haven't even started to create our 2016 spending plan (our form of a budget), although I've put down on paper what I'd like to accomplish for savings. Mr. Sam has not created our 2016 savings Excel chart.
I know the reason for all of this: full time job, baby, husband, life, etc. I've yet to figure out a solution.
I used to spend 20-30 minutes 2-3 times a week working on finances or reading about finances (money blogs help me stay on track) when I arrived at the office. But, I used to arrive at the office @ 7:30 am. Now, on average, I'm arriving at @ 8:45 am.
The solution is to get up earlier so I can get to work earlier. Today, I arrived at @ 8.20 and spent an hour or so on finances and made good progress.
With the time pressures of a more than full time job, baby, husband, landlording, life, etc. my ability to manage our finances has been backsliding.
I'm not paying bills on time, rent is not being collected (that is Mr. Sam's duty), our savings rate has gone down. I haven't even started to create our 2016 spending plan (our form of a budget), although I've put down on paper what I'd like to accomplish for savings. Mr. Sam has not created our 2016 savings Excel chart.
I know the reason for all of this: full time job, baby, husband, life, etc. I've yet to figure out a solution.
I used to spend 20-30 minutes 2-3 times a week working on finances or reading about finances (money blogs help me stay on track) when I arrived at the office. But, I used to arrive at the office @ 7:30 am. Now, on average, I'm arriving at @ 8:45 am.
The solution is to get up earlier so I can get to work earlier. Today, I arrived at @ 8.20 and spent an hour or so on finances and made good progress.
Friday, January 22, 2016
Focusing on Debt
This was my December update on debt:
Of course, we've added to our debt by buying me a nused car. But, I'm ignoring that for right now.
I've been chipping away at our credit card debt. We killed the 0% credit card debt that we took out for tile in one of our rental homes. Mr. Sam also cancelled that card/account. As for our revolving credit card (Chase) that has been hanging around since Baby Sam arrived, it is now down to $3809. I'm utilizing Dave Ramsey tricks by throwing a $100 at it here and there, and sending payments from various checking accounts on the same day. I expect that Chase will be killed off by mid-March (hoping for end of February).
Mr. Sam's truck is down to $2000 and we have 4 payments left. I don't plan to pay ahead as we have a 0% situation. So, by May the truck will be paid in full.
Once the Chase is killed, we really need to ramp up 2015 IRAs savings since the deadline to fund is 4/15/16. At present we have $2500 in our 2015 IRA savings. That means we need to find $9000 before 4/15/16. Our available savings is down because of my nused car purchase. We do have $4200 in our vacation/travel fund, which means I could likely raid it for a couple of thousand. And I could probably take $1,000 from savings. That would mean we need to find $5,500 from other sources in about a month or month and a half.
Debt killing goals:
(1) Pay off lingering credit card debt in the amount of $6500.
(2) Pay off Mr. Sam's new car, remaining debt $2500.
Of course, we've added to our debt by buying me a nused car. But, I'm ignoring that for right now.
I've been chipping away at our credit card debt. We killed the 0% credit card debt that we took out for tile in one of our rental homes. Mr. Sam also cancelled that card/account. As for our revolving credit card (Chase) that has been hanging around since Baby Sam arrived, it is now down to $3809. I'm utilizing Dave Ramsey tricks by throwing a $100 at it here and there, and sending payments from various checking accounts on the same day. I expect that Chase will be killed off by mid-March (hoping for end of February).
Mr. Sam's truck is down to $2000 and we have 4 payments left. I don't plan to pay ahead as we have a 0% situation. So, by May the truck will be paid in full.
Once the Chase is killed, we really need to ramp up 2015 IRAs savings since the deadline to fund is 4/15/16. At present we have $2500 in our 2015 IRA savings. That means we need to find $9000 before 4/15/16. Our available savings is down because of my nused car purchase. We do have $4200 in our vacation/travel fund, which means I could likely raid it for a couple of thousand. And I could probably take $1,000 from savings. That would mean we need to find $5,500 from other sources in about a month or month and a half.
Monday, January 11, 2016
Pulled the Trigger
I wanted to keep my old car, a 2006 sedan, for another year. But, it didn't happen. My old car was simply becoming too unreliable, especially since I'm often driving Baby Sam. So, my options included investing about $4,000 in repairs or moving on.
I opted to move on. While I could have kept my old car and invested in repairs, our lifestyle and needs have, with a baby, changed. Babies bring along stuff, strollers, bikes, pack and play contraptions, etc. So even if I spent the money to repair my car, I still felt like it no longer fit our needs for a family car. Mr. Sam has a relatively new truck, but since its an open air bed truck, we don't normally use it for family trips or travel.
We ended up doing the research, test driving several models within the class we were interested in (small SUVs), shopping for the one we settled on, negotiating sale, finding financing, buying the car and selling my old car within a week.
Which means, instead of paying off our car debt this year (Mr. Sam's truck will be paid off by summer), we added a new debt to our family budget. We paid for my nused car half in cash and then financed the other half at 2.8%. I was bummed that I couldn't get 0% which is the interest rate on Mr. Sam's truck loan. But, its a short loan, 24 months so the interest total overall is low.
I'm disappointed that we didn't save up and pay in cash for my nused car, in the same way I was disappointed that we didn't pay cash for Mr. Sam's truck (we basically did the same thing for Mr. Sam's truck, paid half in cash and then financed the other half except we got 0% since it was a new truck). I believe in Dave Ramsey's plan to never have another car payment in your life, yet here we are with car payments. On the other hand, I need reliable transportation both for family and work and I didn't want to empty out our savings account solely to avoid taking on the debt.
I opted to move on. While I could have kept my old car and invested in repairs, our lifestyle and needs have, with a baby, changed. Babies bring along stuff, strollers, bikes, pack and play contraptions, etc. So even if I spent the money to repair my car, I still felt like it no longer fit our needs for a family car. Mr. Sam has a relatively new truck, but since its an open air bed truck, we don't normally use it for family trips or travel.
We ended up doing the research, test driving several models within the class we were interested in (small SUVs), shopping for the one we settled on, negotiating sale, finding financing, buying the car and selling my old car within a week.
Which means, instead of paying off our car debt this year (Mr. Sam's truck will be paid off by summer), we added a new debt to our family budget. We paid for my nused car half in cash and then financed the other half at 2.8%. I was bummed that I couldn't get 0% which is the interest rate on Mr. Sam's truck loan. But, its a short loan, 24 months so the interest total overall is low.
I'm disappointed that we didn't save up and pay in cash for my nused car, in the same way I was disappointed that we didn't pay cash for Mr. Sam's truck (we basically did the same thing for Mr. Sam's truck, paid half in cash and then financed the other half except we got 0% since it was a new truck). I believe in Dave Ramsey's plan to never have another car payment in your life, yet here we are with car payments. On the other hand, I need reliable transportation both for family and work and I didn't want to empty out our savings account solely to avoid taking on the debt.
Friday, January 8, 2016
Updated 2016 Savings/Financial Goals
Still working on our goal planning, some changes since I last posted.
Definite goals:
(1) Max out 401k for each of us, the limits have not changes for 2016 so that is $18,000 for each of us for a total of $36,000. Automatic payroll debits are in place, I will just need to check them in January
(2) Finish funding our 2015 IRAs - $8900, The 2015 IRAs must be funded by 4/15/16. As such, we will have some heavy upfront savings of about $1110 per pay period between 1/1/16 and 4/15/16.
(3) Fund 2016 IRAs $11,000 for the both of us, this number also is unchanged from 2015.
(4) Baby Sam'college fund, add another $5000 this year.
Tentative goals:
(5) Add to emergency fund, reducing this annual goal to $5000 (this year we saved $10,000)
The above savings goals total $65,900. The highest savings number we have ever hit with our savings efforts is @$64,000 (back in 2013). So, this would be a stretch for us, especially with our child care expenses for Baby Sam.
I've deleted the nused car savings goal, because I went ahead and bought a nused car in December. More on that in a later post.
Debt killing goals:
(1) Pay off lingering credit card debt in the amount of $4261 (this was at $6500 in my last post, we've made progress).
(2) Pay off Mr. Sam's new car, remaining debt $2000.
Above debt totals at $6261.
Also, I'd like to reduce our total debt to under $450,000 total. At present our debt total is at $491,863 (this number went up due to the nused car) which would require killing the above credit and car debt and also killing another almost $35,602 in debt. I think that is this is may be a reachable goal since we paid off @$34,000 in debt this year.
Additional financial goals:
Roll over old 401k to my current employer 401k. This has been a previous goal, and guess what it is still an item on my to do list.
Definite goals:
(1) Max out 401k for each of us, the limits have not changes for 2016 so that is $18,000 for each of us for a total of $36,000. Automatic payroll debits are in place, I will just need to check them in January
(2) Finish funding our 2015 IRAs - $8900, The 2015 IRAs must be funded by 4/15/16. As such, we will have some heavy upfront savings of about $1110 per pay period between 1/1/16 and 4/15/16.
(3) Fund 2016 IRAs $11,000 for the both of us, this number also is unchanged from 2015.
(4) Baby Sam'college fund, add another $5000 this year.
Tentative goals:
(5) Add to emergency fund, reducing this annual goal to $5000 (this year we saved $10,000)
The above savings goals total $65,900. The highest savings number we have ever hit with our savings efforts is @$64,000 (back in 2013). So, this would be a stretch for us, especially with our child care expenses for Baby Sam.
I've deleted the nused car savings goal, because I went ahead and bought a nused car in December. More on that in a later post.
Debt killing goals:
(1) Pay off lingering credit card debt in the amount of $4261 (this was at $6500 in my last post, we've made progress).
(2) Pay off Mr. Sam's new car, remaining debt $2000.
Above debt totals at $6261.
Also, I'd like to reduce our total debt to under $450,000 total. At present our debt total is at $491,863 (this number went up due to the nused car) which would require killing the above credit and car debt and also killing another almost $35,602 in debt. I think that is this is may be a reachable goal since we paid off @$34,000 in debt this year.
Additional financial goals:
Roll over old 401k to my current employer 401k. This has been a previous goal, and guess what it is still an item on my to do list.
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