Mr. Sam's Truck

Happy to report that Mr. Sam's 2013 truck is now paid off.

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.

Updated Net Worth and Housekeeping

I'm continuing to work on getting our finances back under control. I spent some time this morning working on updating our net worth numbers.  Our net worth is now above the $1.5 million number.

Net Worth IQ web site continues to be flaky, but when its up I prefer to keep my data there.  I've added entries for November 2014 - February 2015 but they are not accurate.  I will be working to add the correct data over the next couple of weeks.

Additional good news, our primary mortgage is now below $220,000.  I will be super excited when its below $200,000 although prepaying the mortgage is unlikely to be something we will be working on any time soon.

In baby news, I opened a savings account at Wells Fargo for Baby Sam for monies received as gifts.  We have been researching college savings plans and at this point we have settled on a 529 plan rather than Florida Prepaid.  More about that research later.

Finally, I am almost done with our 2015 Spending Plan which will influence and direct our 2015 Plan.  More about that later too.

$2 MM

According to today's update, our assets have snuck over the $2 million dollar mark.  While a number is just a number and I recognize that the value of our assets are mostly variable (except for the cash), I always get positive vibes when I hop over one level to the next.

Fidelity Faux Paux

So, yesterday I spent some time on our finances, paying bills, updating our savings chart, updating our net worth numbers, etc.

I was on the Fidelity site to determine if some of my recent limit orders had gone through (trying not to let my IRA money sit idle in cash).  I'm a big fan of Fidelity and, in fact, I've been a Fidelity customer for many years.  I generally have nothing but good to say about them.

But, of course you knew a but was coming, I'm puzzled by something that I just noticed.  When I pull up a statement online (and same for paper, because I checked), my name is nowhere on the statement.  The statement is addressed to my husband (alone).  It lists our various accounts, mine are listed first, I assume because they are older accounts but it doesn't reference ownership.  These are not joint accounts, these are accounts that are individually owned by each of us (we do have a joint trading account) and in fact were established prior to marriage.

Am I bothered by this, yes.  And, I'll tell you why.  While I very much agree that the money on this statement is "ours", if you look at the numbers, I own, individually, the bulk of the money in these accounts.  And that is simply because I've been saving for retirement for a longer period of time.  The statement should be addressed to both of us and the accounts ought to be listed by ownership.

Truck Update

Big news on the truck front, Mr. Sam is the proud owner of a new truck.  

As I shared recently, we were not finding very good prices on used trucks, they were running $12,000 or so for the type of truck we wanted but were 10 years old.  As such, after doing a lot of research, we opted for new (as Anon noted, the used car market is tough).

Anonymous said...

we had to replace our truck last year too. After looking for used ones in the 3 - 5 year range and finding not much of a price break off new ones, we went new. Its been awhile since we bought new but the cost justified it this time. I was going to pay cash, like you we hate car loans but the rate was so cheap and a $1000 rebate off the price for financing that we financed about 60% of the cost and paid it off over 6 months and came out way ahead with the rebate vs interest expense. I would have paid off the loan with the first payment but feared they would come back at us for the rebate amount. Our weekdays cars we bought in 2007, both luxury cars that are 2002 and 2004 models, bought as a package deal and plan to drive them for many more years.

We bought last year's truck (2013) and opted for a low end model.  We paid cash for about 40% of the purchase price and the rest was paid via a loan.   While I hate having debt of any kind, we will work hard to get it paid off quickly and, in the long run, I think it is a better decision.  We have a new truck that is under warranty, it has four doors which gives us greater flexibility (old truck only had two doors), and Mr. Sam is so happy to be out of his old, beat up truck.  

2014 Savings Goals - June Update

(1) Max out 401k(s) -        $8,088    23%  (goal is $35,000)
(2) Max out IRA(s) -         $8,838    80% (goal is $11,000)
(3) Add to e/r fund -          $4,400    44% (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 -          $0            0% (goal is $3,000)

Total:  $31,326  45%  (Goal is $69,000)

We are having the year of unplanned expenses, and as a result our progress chart has been altered.  First, because Mr. Sam needs new/nused truck (and that goal just won't wait anymore) we have cleaned out the house savings account and Mr. Sam's 401k savings account.

Mr. Sam is not currently eligible for his work 401k so we were putting aside cash so when he is eligible (September) he could increase/max out his 401k deductions per paycheck (up to his employer's limit, most employers do not permit a 100% contribution) and we would have cash available to make up for that budgetary shortfall.  But, the truck won't wait so since this money was not invested and available we are putting into the truck fund.  Hopefully, by the time September rolls around we will be able to manage our budget such that he can still increase his contributions to try and put away as much money as he can.

Second, similarly, our house project fund has also been cleaned out for the truck fund.  Our truck fund is $10,000, not the $5,000 listed in our chart.

At present, we are about $3000 behind on our savings goals.

Rainy Day News

News today on Americans lack of savings.  Since our emergency fund has taken a hit this year (more on that later), I can relate to this news.  Our emergency fund is down to less than 3 months of expenses, which causes me great consternation.

Most of the time we are able to plan ahead for expenses, meaning that if we have a house project, like our recent new roof, we save up for it and then we incur the expenses.  We were not able to do that with the roof because we had to replace the roof prior to the rainy season here in Florida.  We had a recent family vacation, planned by family, that we were similarly not able to plan for (and our vacation savings fund was depleted due to a prior planned for vacation).  And now, we've got car issues (more on that later).

But, putting all that backward slide aside, we generally do well with our savings because we have a system in which we put savings first on our list of expenses.  Which means we pay ourselves first and second.  First is our pre-pay savings, meaning the 401k.  And, second is our automatic savings which goes for things like the emergency fund, the travel fund, annual and semi annual expenses like taxes and insurance, etc.  But, our automatic savings is based on planning and when our planning is either wrong or we have unplanned expenses we run into trouble - which is where we are at now.

Fleeting Figment

On Saturday I logged into my Fidelity Roth IRA account with the plan to check on and, likely, cancel some open limit orders.  Imagine my surprise (and short lived excitement) when the total value for my Roth IRA had jumped upwards by more than a $100,000.  I quickly realized that my Apple stock was showing the post 7-1 stock split with the pre-split price.

It seemed odd, to me, that Fidelity would combine the two pieces of data, over the weekend.  Better to just leave it as is until Monday and today my short lived wealth has disappeared.

Drum Roll - New Goal

CNN.com reports that the number of millionaires has hit a new high.  Which got me thinking, because this survey of millionaires excludes their primary homes in the asset count.

So, the new goal is to hit the million dollar net worth mark without counting our primary home.  And, looking at our networthiq.com numbers we are not too far from that mark.  At present, our net worth is at $1,380,755 and our primary home's value is listed at $399,000 (value from our last appraisal in 2012).  Which means that we are about $18,000 away from having a million dollar net worth without including our primary home.

Not too shabby.    

Interesting Tool

Interesting calculator from MIT that calculates a living wage based on where you live and your life circumstances (number of kids, adults in a household).  Also, provides typical expenses for your area as well.

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.

$300 Rule & $100 Rule

As I have previously posted, I have a long standing goal to have plantation shutters installed in two bedrooms in our home.  But, since plantation shutters are very expensive I decided that I would update my plan and just get some new, nice shades for these two bedrooms.

I have done quite a bit of research, measured the windows, priced out my options and then I settled on a plan which will run about $800.

But, in our home there is another step I had to take and that was to discuss the project, the expense, the source of the funds (we have this money sitting in our house project account) with Mr. Sam.  We have a rule that anything over $300 has to be discussed and agreed to between us.  Most of the time we reach agreement pretty quickly, but not so this time around.  I've talked to Mr. Sam about this project several times, gave him the pricing, told him about my research, but he thinks it is silly to spend this kind of money on custom shades.   If we can't reach agreement then we don't go forward that is our rule.  We imposed this rule back in 2007, because we were trying to throw every extra dollar at our debt.  But, we have kept the rule because we believe that we should be in agreement that expenditures above $300 are necessary or a mutual want (vacation) or one of us convinces the other.

We did finally agree or he finally gave in, but we did reach agreement.

The other rule we have is the $100 rule.  When we are spending more than a couple of hundred dollars we have to wait a day for each $100 of the purchase.  So in this instance, if we are spending $800 on custom blinds we have to wait 8 days before we actually make the purchase.  This waiting period prevents expensive impulse purchases.

I haven't yet ordered the blinds because of the waiting period rule, but will do so next week.

Wrap Your Mind Around These Numbers

Nbc.news reports that the richest 85 people in the world now hold the same amount of wealth held by 3.5 billion (yes, B - billion) poorest in the world.  Said another way, half of the world's population, the poorest half, holds the same amount of wealth as the 85 richest individuals.

Mind is boggled.

Target Moves

Early I posted about a recent Phishing email I received at work.  As I previously mentioned, I shopped at Target during the time of the data breach (which seems to be growing each day).  I already canceled and ordered a new debit card and I have checked my credit report using the free credit report site.

Today, I signed up for Target's free credit monitoring.

Last week, I put in a limit order for Target stock. If the stock drops enough, I'll take advantage of the discount.

Red Lobster and the Middle Class

Interesting article from cnn.com about the impending demise of Red Lobster and the continued squeeze of the middle class.

Reading the author's experience about going out to eat at Red Lobster as a kid, I thought back to my own experiences.  While I was raised by professionals, college professors, and we had a vacation home (cabin), we actually had very little free money growing up.  I think that was due to the fact that my parents income was somewhat sporadic in that Dad was paid only 9 months out of the year and Mom's income was based on then number of courses she taught.  We also probably spent more money on housing and recreation than a normal family in that we had a house on the water, the vacation cabin, and my parents prioritized experiences over things.  So, we did lots of camping, sailing, skiing, traveling and that all cost money.  They also were doing the right things with money, putting it away for college funds and their own retirement.  As a result, we didn't have free money for eating out.  Eating out was for super special occasions and mostly when Grandpa was in town for business.  I can remember Grandpa taking my brother and I out for dinner.  As a family, I remember just a few times going out to some kind of all you can eat buffet (I also remember getting sick b/c I ended up eating too much or the foods were too rich).  Mostly though if we ate out it was never at a chain restaurant.  As a result, I don't have the fondness or nostalgia for chain eating.

Today, we eat out quite a bit (an issue I am always working on) but we still hardly ever eat at a national chain.  I much prefer eating at mom and pop places.

Did you have a favorite chain restaurant when you were a kid?

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.

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.

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.

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.