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.

2016 Savings/Financial Planning

Starting to think about 2016 savings and financial goals.

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)
(6) Save for a nused car for me $10,000.  My car will be 10 years old next year and its got some expensive repairs that I've been holding off on. I replaced my last car after 9 years of life so I'm thinking this car will need replacing soon.

The above savings goals total $75,900.  The highest savings number we have ever hit with our savings efforts is @$64,000 (back in 2013). So, this would be a big stretch for us, especially with our child care expenses for Baby Sam.

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.

Above debt totals at $9000.

Also, I'd like to reduce our total debt to under $450,000 total.  At present our debt total is at $484,848 which would require killing the above credit and car debt and also killing another almost $26,000 in debt. I think that is this is a reachable goal since we paid off @$34,000 in debt this year.

End of the Year Updates

Well it is December 1, 2015 and I still never got my 2015 savings/debt killing Excel spreadsheet chart from Mr. Sam.  It has been that kind of year, new baby, maternity leave, new baby expenses, balancing work with new baby, child care expenses, etc.  We also converted a rental property to a family property which brought along a ton of expenses as well.

These were my goals from May of this year, posted on one of the other personal finance sites:

(1) Max out 401ks: Goal $36,000
(2) Max out IRAs: Goal $11,000
(3) College fund for Baby Sam: Goal $5,000
(4) Add to emergency fund: Goal $10,000
(4) Pay off baby debt:  Goal $0, started with $7000
(5) Pay off Mr. Sam's truck loan: Goal $0. started with $7500
(6) Save for nused car for me: Goal is $20,000. This is two year goal, so this year's goal is $10,000)
(7) Get total debt under $500,000: $519,000 was thestart of the year number, goal is $499,000, difference of $20,000

Savings goal of $72,000 and
Debt killing goal of $34,500.

So let's start with the bad news.  We only put away $2100 for our 2015 IRAs, we can continue to invest for 2015 until April 15, 2016 so we have some time next year to finish this goal.

Baby debt, well it really morphed into debt, we have rental property conversion debt, some baby debt and just other cr_p debt that popped up this year since our finances were pretty crazy this year.  At present, the misc. credit card debt is $6275.  Can we kill it by year end?  Maybe, but doubtful.  But, I am working on it with renewed focus.

Nused car for me, didn't really happen at all this year,  I put away $400 and that is it.  I did spend some money on the car this year, about $1500 in repairs and the mechanic says I have about $4000 in repairs that could be done but were not necessary at the time.  Need to work on this goal in 2016 as the time is coming, car will be 10 years old as of next year.

The good news, we are on track to max out our 401ks by the end of the year.  At present we are at $33,009 and we will complete the $36,000 goal.

College fund for Baby Sam, we hit this goal as well and we have $5,781 in the 529 plan.  About half of that was from us and the other half from family as we have asked for 529 contributions in lieu of gifts for birthdays, Christmas, etc.

Emergency fund, we are also on track for hitting this goal.  We will have an additional $10,000 into the e/r fund by end of year.  At present we have $19,215 in our e/r fund which sounds like a lot, but it really isn't when you take into account our investment properties.  We have been working on rebuilding our fund after buying Mr. Sam's truck (we paid half in cash) and our IVF, pregnancy and birth expenses.  I've never really figured out how much I want in the e/r fund, but I'd be more comfortable closer to $30,000.  We do have $20,000 in other short term, liquid savings, for things like insurance, taxes, vacations, etc.  So that money is also available if we really got in a jam.

Mr. Sam's truck, we are paying $500 a month, 0% loan and at present we have a $2500 balance.  No current plan to pay ahead, but will be paid off early next year.

And as for getting our debt under $500,000, we easily hit that goal with $34,152 in debt paid off (even including the debts we added during the year).  Our present debt number is $484,848.

So grand, estimated, total for 2015 savings will be:  $53,881  (falling short by $18,119 of our 2015 goals).

And, grand, estimated, debt killing total for 2015 will be:  $34,152 (which does not include additional debt payments that I plan to make) so we basically hit that goal.

Thoughts, how did your 2015 financial year go?  What are you planning for 2016?

NetWorth Update

I have updated out networth numbers over on NetworthIQ.com.  That site remains wonky and spotty, but I know how to use it and I can do a quick update when it works.

Angie (a reader here) had told me about NetworthShare.com, and I did create an account and had them port over data, but not all of my data came over.  So I need to spend some time, which I'm perpetually short on these days, bringing the rest of my data over and getting used to the site, etc.

Our expenses have gone way up with Baby Sam which is mostly due to child care costs.  We have also had some cash flow issues since we are converting a rental property.  As a result, we've been relying on our credit card to fill some holes in our monthly budget which I hate to do.

We do have plenty of cash in our savings so its not necessary to do this, but I don't want to take cash from savings.  Its been somewhat circular this summer.  I really, really need to kill the credit card debt once and for all and then cut the card to get us out of this habit.

The positive is that we should be under the $500,000 debt number by end of year (one of our goals).  If I killed the credit card debt we would be below the $500,000 number in a month.  Another positive is that we have stayed above the $2 Million mark (in assets) for a year now.

Otherwise, we continue to struggle with putting money into our IRA 2015 fund, and we will need to work hard on that goal this fall.

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.  

Sam's Plan for Killing Debt in 2014 - Step # 1

It is the new year and many people want to get their financial house in order.  This my guidance on killing debt and gaining control of your finances.

Step # 1 - face the music.

This is actually one of the hardest steps of paying off your debt, you (along with your spouse/partner) need to gather up your statements and figure out how much you owe.  Look at your credit card statement, student loan statement, car loan information, other loans, etc.  Find the statements or go online and determine your balance, interest rate, regular payment, term for each loan (I would exclude the mortgage for now).

Create a documents, whatever format works best for you, with each debt listed, the interest rate, the term, and the monthly payment, along with the due date.  We used an Excel spread sheet when we started our debt killing journey in 2007.