Uphill Battle

I'm sorry I've not posted here more.  But, now I understand how busy one gets with a full time job and a new baby.

Financially, we are all over the place.  We can't seem to get back on track post baby.  While our incoming salaries remain the same or better, our outgoing expenses are much. much higher than normal.

Child care is running $1900 a month ($22,800 a year) which appears to be way higher than normal for Florida, but I don't know anyone in my circle paying the Florida annual average of $8300.  Add in diapers, formula, wipes, etc. at $300 a month or so and we are up to $2200 in expenses.  And, we actually don't spend much on Baby Sam, we hit the thrift stores for books and toys and I stick to super sales for baby clothes.  At present, we are also adding $200 a month to Baby Sam's college fund.  So in total, about $2400 a month in baby expenses.

Another challenge, we are converting a rental property from rental to family.  We have, in the past, utilized one of rental properties for our snow bird relatives which was a financial hit.  Now, that we are turning the rental property to a family property, we have had a couple of months where our old tenants have not paid us.  So that also, obviously, impacts our cash flow.

Anyways, we continue to contribute to our 401ks, at max level, and continue to put money into savings, but we need to catch up on our IRAs.

Hope your summer is going well.

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?

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).  

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.

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.  

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%.

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.

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.

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?

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)

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!!

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.   

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.

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.  

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?