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.

2014 - Final Savings Numbers

(1) Max out 401k(s) -        $22,588    65%  (goal is $35,000)
(2) Max out IRA(s) -         $11,000    100% (goal is $11,000)
(3) Add to e/r fund -          $10,400    104% (goal is $10,000)
(4) Roof project -              $5,000       100%  (goal is $5,000)
(5) Vehicle replacement -  $5,000      100%  (goal is $5,000)
(6) House projects -          $3,000       100% (goal is $3,000)

Total:  $56,988  83%  (Goal is $69,000)

So, we saved almost $57,000 in 2014.  While a respectable number, we missed our goal by $12,000.  Mr. Sam was not eligible for his 401k until midway through the year and that is one of the main reasons that our 401k savings number was reduced in 2014.

We did have some major expenses in 2014 that are not reflected (entirely) in our savings goals.  First, a new car for Mr. Sam which was paid in part with cash.  Second,  a new roof for one of our properties.  The roof was a savings goal, but also cost more than what we saved and we could no longer put the project off.

We also incurred some debt in 2014.  Mr. Sam's new car was paid in part with cash (about 40%) and the rest is loan.  Second, we added to our family in 2014 (which is why I've been away from the blog for so long).  We had considerable expenses related to the conception (via IVF) and related to the nursery and birth (most covered by insurance, but a big chunk that was not).   We also had a major house project prior to the baby arriving.  We are working on paying down the baby debt and it will be part of our 2015 savings/debt killing plan which I am working on creating.

Royal Screw Up

So, I have a pretty good system set up for our personal finances.  I have a system for paying bills and for our savings that works off of our spending plant.  But, every once in a while things go surprisingly wrong.

At the end of last month, February, I was getting ready to do some work travel and I made the decision to pay our home mortgage March payment in February.  What was I thinking, well it seemed like I had lots of cash laying around our joint checking account, I knew I was traveling and I figured let me just take care of that big bill now instead of later.

Big mistake!  Several auto transfers and other obligations drafted after I made this payment and I, of course, came up short.  And further, of course, I had to try and fix this mistake while traveling.  Ugh, ugh, ugh.

Two weeks later, I am still undoing the damage that was incurred.

Florida Unemployment Compensation - Follow Up

During Mr. Sam's unemployment, I posted about how difficult it is to obtain unemployment compensation.  It took several rounds to just get through the application process and we were amazed at how it seemed like the State was making it almost impossible for the unemployed to obtain benefits.  Mr. Sam, with a MBA and a reliable internet connection almost could not obtain benefits.

Well, the unemployment system in Florida was replaced, on October 15, 2013, with a new system.  But the new system has a whole host of problems.  Well now the Department of Labor is heading back to Florida to investigate the new system.  The DOL estimates that Floridians have lost $20 million in benefits due to the faulty new system.

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.

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.

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.

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).