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.  

Car Repair Blues

One of the ways we keep our expenses down so that we can save more is keeping our transportation costs low.  I drive a 2006 four door car, which was purchased with cash in 2008.  Mr. Sam drives a truck, a necessity for our rental properties, which was purchased with cash in 2004.  The truck is of the late 1990s vintage.  So, I've had my car for six years and Mr. Sam has had his truck for 10 years now.

This year the average price of new car was $31,252.  Additionally, Americans are keeping those expensive cars for more years (due in part to longer car loans).

Last year, my car needed a fair amount of work.  The work was done, about $2000, and I was hopeful my car would be good for a few years.  No such luck, I've just put another $1200 into my car and I have an outstanding transmission problem that needs to be addressed by a specialist (which means expensive in my mind, but its an unknown at this point).

While we were talking transmission for my car, Mr. Sam's truck has reached its end.  He either needs a new engine or a new vehicle and the mechanic who looked at it said it really wasn't worth putting a new engine into the truck. The truck is also only two doors and we really need another four door vehicle for a variety of reasons.

So, we are on the hunt for a used four door truck (with a shorter bed).  Interestingly, the prices on used (2010-2013) trucks are close to the price for a new one.  I mentioned financing a purchase rather than depleting our savings account (which has already been battered by prior unplanned expenses this year), but Mr. Sam is strongly against having a car payment (I've trained him well).  Which means that we will need to look for something that is older or figure out some other plan.

$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.

Financial Bully

According to this post from the Today Show, it sure sounds like I should be classified as a financial bully.  We work on an allowance system, so I absolutely limit the amount of money Mr. Sam has to spend.  I similarly limit the amount of money I have to spend as well.

I think if you asked Mr. Sam about this system he would have the following to say.  First, he is very happy at our progress over the last 7 years (since we got married).  We paid of $55,500 in unsecured debt the first year and half of that was Mr. Sam's MBA debt.  We have also made good progress at saving money every year since then.  So he recognizes that by limiting our spending and working from a spending plan and an allowance system there is a payoff.

Second, he does, from time to time complain about running out of money and further complains that he can't have a credit card.  When I say "he can't have a credit card" he agrees with the fact that he has an abstainer personality and therefore really can't have one.  What that means is that Mr. Sam can't eat just one cookie, rather if there are cookies in the house he will eat the entire package.  So, in order to not eat an entire package of cookies he has to abstain and not have them available.  I am a moderator personality which means that I could each just one cookie a week (if I want cookies in the house I have to hide them).  So when it comes to money, Mr. Sam really will spend just about as much money (or utilize as much credit) as is available to him.  Hence the allowance system actually works very well for him.

While I am the financial task-master in the house, Mr. Sam is involved in the decision making, the spending plan creation, the savings goal setting, etc.

So, More on the Good News

I wanted to share more about Mr. Sam's new job.

First, the positives.  Mr. Sam obtained new employment while he was still receiving severance from his old employer.  As such, we never had a real gap in income stream.  Mr. Sam also was able to obtain a few weeks of unemployment compensation from the State of Florida and we continue to have health insurance, paid for by his employer, until October.

The new job is with a much smaller company than Mr. Sam is used to working for.  But, that will provide him with more autonomy and opportunities for growth.  The new position is also an exact fit for his skills and experience.  Finally, the new job is located in reasonable proximity to our home (his commute is about the same distance it was before).

Second, the negatives.  Mr. Sam is not overly excited about the compensation.  While he believes he is being paid within the proper compensation band for his experience, education, etc., he is on the absolute low end with the new employer.  Furthermore, the benefits are not nearly as generous as his last job, which provided a 20% match on the 401k along with such awesome health benefits that I opted for their insurance as well.  The new company has also had a lot of turn over and flux with leadership, which is not surprising based on their growth and the size of the company.  And while the unsettled nature of this company may be a negative as I mentioned above, it is also a positive in that there are some real growth opportunities.

Since this is my blog and not Mr. Sam's blog, I think, overall, that this is a positive step in Mr. Sam's career.  While the pay and benefits are a bit reduced, the chance for growth and leadership may mean that he ends up in a higher pay grade within 6 months to a year.  And whether or not the pay grade increases, he will be gaining skills and experience (hopefully) that he never seemed to get with his past employers.

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?   

Diamonds and Dollars - Update

Back in August of 2012, I wrote about a claim we had submitted in the DeBeers diamond price fixing case. Well, yesterday Mr. Sam received a $270 settlement check.

I have no idea if this is a fair or reasonable settlement for the damages suffered by the consumer class (I understand, from my research that the wholesaler class is getting much larger checks) since I never studied the claims or undertook any analysis as to Mr. Sam's damages.  I understand from the diamonds class action web site that "payments were calculated based on several factors, including how much you paid, the quantity and quality of the diamonds you purchased, the amount of money that is available for your Class or Sub-class, and how many Class Members filed claims."

Anyways, assuming we never would have thought to bring a claim related to the diamond in my engagement ring, we are happy to recover $270 and we are putting it into our vacation fund.

This is the second time I've recovered more than $200 in one of these class settlement scenarios, so I'll continue to fill out the paperwork.

2013 Goals - Post Bonus Update

(1) Max out 401k(s) -        $7644 (22%)   (goal is $35,000)
(2) Max out IRA(s) -         $4508 (41%)    (goal is $11,000)
(3) Add to e/r fund -          $2400 (24%)   (goal is $10,000)
(4) Pay down mortgage -   $830 (17%)     (goal is $5,000)
(5) Trading account fund - $50  (1%)        (goal is $5,000)
(6) House projects -          $600 (20%)      (goal is $3,000)

Total:  $16,032 (23%)

With Mr. Sam's added bonus monies, we are currently $109 ahead of where we should be for the year.  Whoo-Hoo!!  I doubt it will last, but I enjoy being ahead.

Sounds Familiar

Today on Slate, in the Dear Prudence column there was an inquiry from a young professional swimming in debt.

I’m an attorney with a mountain of student and credit card debt. Before I got married, I told my wife about this, but thought I owed about $100,000. It turns out to be about $170,000. When I finally added up the total eight months ago and told her, she accused me of lying previously. My job barely pays me enough to cover our monthly expenses, but I’m supposed to be moving up. I continually look for new jobs and am trying to advance in my company, but that takes time. My wife is in her early 30s and is desperate to have kids and buy our own home, but she insists we can't because of our financial situation. When I have gone to interviews and was not hired, she blamed me for doing something wrong to blow it. A few days ago she found out one of her friends had a couple interviews for a much higher paying job. She became extremely frustrated, insulted my work ethic, and now won't speak to me. I don't know what to do. Should I stay in a relationship that is this unsupportive?
—No Pots to Piss in

I'm afraid this is a common problem, and it seems to only be getting worse and college, graduate school and professional school go up in price.  A quick review of the ABA tuition charts show that tuition at a private law school in 2001 ran about $23,000, but in 2011 was up to $39,000.  According to the New York Times, 90% of law students finance their education and the average debt in 2001 was $70,000 and in 2011 was $125,000.  So, $170,000 in debt for a private law school education doesn't seem that far off from these "average" numbers.

Here is Prudie's response:
Dear Pots,
It’s too bad your wife is incapable of procuring one of those high-paying jobs she thinks are so easy to get. Sadly, there are so many young people in your situation—people who wonder if crushing debt will ever allow them to start families or have a normal life. When you told your then-fiancée you were one of those burdened people, the two of you should have looked closely at your finances and started figuring out a long-term plan toward solvency. If that didn’t interest her, she should have walked. Instead, you now have another burden: a punitive spouse who blames you for everything. I hope your health insurance covers couples counseling. Even if it doesn't, paying for a few sessions will clarify whether you can save a marriage in which you get the silent treatment because someone else got a job.
—Prudie

Before Mr. Sam and I moved in together we had a major financial summit, in which we brought our credit reports and a list of debts and assets.  At the point of our financial summit we were in love and in a committed relationship.  I remember that I was worried about what I was going to learn and if it was going to impact our relationship and our plan for the future.  Luckily, his disclosure was better than I thought and I could see a way forward together.  But, we didn't actually create a joint plan for killing the debt or for our financial futures until a couple of years later when we were married.
For the couple in the Dear Prudie column, it seems like they didn't have a financial disclosure discussion until they were already engaged and the disclosure wasn't complete.  I also find myself wondering about the wife's career and how much she is contributing to killing the debt.

How about you, did you have a financial summit with your significant other before you married?  Have you walked away from a relationship due to a person's poor financial skills/habits?  Has student loan debt impacted your life choices?

Happy St. Valentine's Day - Part III

Last week, in honor of St. Valentine's Day, I posted about the marriage tax penalty.

So if you were feeling blue about having to pay more in taxes as a married couple I'm here to let you know that you probably are wealthier if you are married.

Sure when two people combine household there is a certain level of savings by combining forces.  But, that doesn't appear to be the only reason.  Most interesting to me is that the education and capability for wealth may be coming before marriage since college educated folks are more likely to marry. 

But, stay married as those who divorce are financially worse off, on average, than those who never married.

Speaking from my own experience, even though Mr. Sam brought a fair amount of debt into our marriage, getting married has dramatically increased our combined net worth.  As of January 2013 our combined net worth is $1,143,223.  In December 2006 my "individual" net worth was $582,800 (this number included the primary home that we bought together and also an investment property that we bought together).  In 2007 our combined net worth was $807,539, which means that in six years of marriage we jointly increased our combined net worth by $335,694 (or about $56,000 a year).

2013 Goals - Update

I'm not sure why it takes us so long each year to shake of the holidays and get going with our New Year's financial (and other) goals.  But here we are, its after Valentine's Day and Mr. Sam just got our Excel chart put together for our 2013 savings goals.  I have not updated our spending plan for 2013, but  hope to do that this Saturday.

So, with out further ado, here is our first 2013 savings goals update.


(1) Max out 401k(s) -        $6160 (18%)   (goal is $35,000)
(2) Max out IRA(s) -         $1008 (9%)     (goal is $11,000)
(3) Add to e/r fund -          $1600 (16%)   (goal is $10,000)
(4) Pay down mortgage -   $830 (17%)     (goal is $5,000)
(5) Trading account fund - $50 (62%)       (goal is $5,000)
(6) House projects -          $40 (13%)       (goal is $3,000)


Total to date is $10,048 and we are about $500 short of where we should be.

Happy St. Valentine's Day - Part I

Happy St. Valentine's Day to you!

What are you doing to celebrate heart day?  Are you sending flowers, going out to dinner, buying gifts for your spouse, your children or your dog?  Do you boycott Valentine's Day as nothing more than a Hallmark holiday?

The Atlantic has a great series of charts showing how much is being spent for today and on who.  Not surprising to this dog owner, a lot of people buy gifts for their pooches.

Besides a few heart shaped dog treats for Snarfle I "spent" the following for Valentine's Day.  First, one of the organizations that I support has run a Valentine's Day fundraising event for the last few years.  Donate $20 and they'll send a Valentine's Day card to someone in your honor.  I did three of those cards, so that was a total of $60.

Then I sent my nephew, niece, god-daughter and her sister Valentine's Day cards which enclosed checks.  $50 each for my nephew and niece, and $30 each for my god-daughter and her sister, so that is a total of $160.  Then I send a few regular cards out to a few folks, so I'll say $5 in additional cards and postage.  That gives me a grand total of $225.

You'll probably notice that Mr. Sam is not on this list . . .    Like Christmas, we don't gift to each other on Valentine's Day either.

How about you, how much did you spend on St. Valentine's Day?