We are less than a week away from our big family vacation. Hooray! Most of our planning is done, although we still have a few items to take care of before we depart.
As we head towards our departure date, I need to do laundry and pack. I also have one more Amazon Prime order to execute on. But as for our travel plan, the airline tickets are paid for, the hotels are reserved and the rental car is booked.
We vacation on a budget, but we don't scrimp. What does that mean you ask? Well it means that we always have a short term savings account earmarked for travel/vacation. We also have an automatic deposit set up, so $200 per pay period goes into our vacation/travel fund. That normally means that we have more than enough in our travel/savings account to pay cash for airline tickets. After our airline tickets are booked and our vacation is planned I often up extra savings into our travel/vacation fund to make sure we have more than enough cash on hand for our hotel, rental car and spending. This time around we didn't need to since our savings account was well funded.
I don't scrimp when I go on vacation, so I normally budget at least $100 a day for food which seems like a lot, but if you are eating out or stopping at a local brewery for a couple of $10 beers it works out to the right amount for us. I also think about and plan for other spending, we'll be stopping at two national parks, so I'm accounting for entry fees, gas, and misc. spending on a t-shirt here or there or a special souvenir. Mr. Sam likes to pick up t-shirts on his travel and he wears them a lot. I like a more upscale souvenir, a piece of art from a local or maybe a handcrafted piece of jewelry. I am picky so that means I often come home with nothing and that is ok. Baby Sam gets to pick out something fun for herself that is inexpensive and I will likely pick out something for her along the way. I normally set aside another $100 in cash for misc. spending.
All of this preplanning means that when we get home from vacation we only bring memories, a rock or two for our collection and no debt.
Showing posts with label Zen. Show all posts
Showing posts with label Zen. Show all posts
Monday, July 4, 2016
Friday, April 22, 2016
Keeping Up With the Joneses - Part I
So, for the past few years, probably five or so, more and more of my friends and peers, and even people who report up to me at work (so, I'd consider them non-peers) have been buying homes at purchase price points ranging from $700,000 to a million.
I find this phenomenon strange, but also incredibly alluring.
Let's start with an analysis of these folks. I will start with the ones who started this trend, and I do believe there is a somewhat contagious trend among friends that equates to keeping up with the Joneses. The ones who started the trend, in my humble opinion, likely made smarter choices.
1. It started with my friend Mary, all names changed to protect the innocent, and her husband George. Back in 2011, they actually got a great deal and paid mid $500s for a home that is now likely worth close to $800,000. They bought a 5000 square foot McMansion in a better school district, they have a small child, with 5 bedrooms, 4 baths in a new development. Their family consists of 3 people and they do not plan to have any more children so this is a house bigger than they need. Their real estate taxes are more than $8000. They took out a $400,000 mortgage. Five years later they are putting in a pool. The house they sold they had owned since 2002 and they made about $50,000 profit when they sold it. They were buying in a buyers market due to the 2008 real estate crash which means they were also selling in a buyers market.
Mary is in the same profession as I am, I assume she makes similar money to me. Her husband is in law enforcement. While he makes less money, he has a great pension that will be coming to him (and soon) such that their retirement savings is less crucial. I have one other friend who will have a federal pension, but she cannot collect said pension until closer to traditional retirement age. George will be able to start collecting his pension in less than 10 years and his pension is for life. As a result, they don't have to save as much for retirement.
2. Jennifer and Alan were next. They are a dual income, professional, couple. Both are in the same profession I am in. They have three kids.
In 2012 they bought a 4 bedroom, 3.5 bath, 5000 square foot home. It also has a 2000 square foot out building (with air conditioning) and a pool. They bought the home for $775,000 (the prior owner had bought it for $800,000 so, again, it was likely a good buy) and it is likely worth close to a million now. Taxes are $14,000 a year. They took on a $620,000 mortgage. Later they took on a $35,000 home equity loan.
They held onto their prior house for a couple of years, while the Florida real estate market improved (likely a smart move), and they later sold it in 2015 for a $265,000 profit. I don't believe they took that profit and reduced or refinanced the mortgage on their current home, rather before they sold their prior home they put it into a trust and I assume the profits also went into that trust.
They have engaged in a variety of real estate and trust maneuvers in the last few years. This is probably because Alan also bought an office building and they are creating protection for their other assets.
Does it sound like I'm stalking my friends' personal business?? Well I guess I am. All of this information, at least in Florida, is public record and readily accessible on line. I also am learning from what they are doing, and that is both positive and negative (more on that later).
I find this phenomenon strange, but also incredibly alluring.
Let's start with an analysis of these folks. I will start with the ones who started this trend, and I do believe there is a somewhat contagious trend among friends that equates to keeping up with the Joneses. The ones who started the trend, in my humble opinion, likely made smarter choices.
1. It started with my friend Mary, all names changed to protect the innocent, and her husband George. Back in 2011, they actually got a great deal and paid mid $500s for a home that is now likely worth close to $800,000. They bought a 5000 square foot McMansion in a better school district, they have a small child, with 5 bedrooms, 4 baths in a new development. Their family consists of 3 people and they do not plan to have any more children so this is a house bigger than they need. Their real estate taxes are more than $8000. They took out a $400,000 mortgage. Five years later they are putting in a pool. The house they sold they had owned since 2002 and they made about $50,000 profit when they sold it. They were buying in a buyers market due to the 2008 real estate crash which means they were also selling in a buyers market.
Mary is in the same profession as I am, I assume she makes similar money to me. Her husband is in law enforcement. While he makes less money, he has a great pension that will be coming to him (and soon) such that their retirement savings is less crucial. I have one other friend who will have a federal pension, but she cannot collect said pension until closer to traditional retirement age. George will be able to start collecting his pension in less than 10 years and his pension is for life. As a result, they don't have to save as much for retirement.
2. Jennifer and Alan were next. They are a dual income, professional, couple. Both are in the same profession I am in. They have three kids.
In 2012 they bought a 4 bedroom, 3.5 bath, 5000 square foot home. It also has a 2000 square foot out building (with air conditioning) and a pool. They bought the home for $775,000 (the prior owner had bought it for $800,000 so, again, it was likely a good buy) and it is likely worth close to a million now. Taxes are $14,000 a year. They took on a $620,000 mortgage. Later they took on a $35,000 home equity loan.
They held onto their prior house for a couple of years, while the Florida real estate market improved (likely a smart move), and they later sold it in 2015 for a $265,000 profit. I don't believe they took that profit and reduced or refinanced the mortgage on their current home, rather before they sold their prior home they put it into a trust and I assume the profits also went into that trust.
They have engaged in a variety of real estate and trust maneuvers in the last few years. This is probably because Alan also bought an office building and they are creating protection for their other assets.
Does it sound like I'm stalking my friends' personal business?? Well I guess I am. All of this information, at least in Florida, is public record and readily accessible on line. I also am learning from what they are doing, and that is both positive and negative (more on that later).
Tuesday, April 19, 2016
Tax Day Update
Well its the day after taxes are due, so its a good time to think about our 2016 progress.
First, we haven't filed our taxes since we normally seek an extension which is what we did this year.
Second, we skipped 2015 IRA funding. Just didn't happen for a variety of reasons. Lack of discipline, baby and child care expenses, life, etc. So, that means we have a bit of extra savings to put towards 2016 IRA funding.
Third, I'm still waiting on Mr. Sam to make my 2016 Excel savings chart. He's as busy as I am, so it hasn't happened. Hard to track progress without the chart. But see below.
Definite goals:
(1) Max out 401k, $18,000 for each of us, for a total of $36,000. On track.
(2) Finish funding our 2015 IRAs - $8900, Skipped
(3) Fund 2016 IRAs, $11,000 for the both of us, for a total of $22,000. $1100
(4) Baby Sam'college fund, add another $5000 this year. On track
Updated tentative goal, so this is a definite goal now:
(5) Add to emergency fund, $10,000, increased this from $5,000 to $10,000, since we utilized a chunk to buy my nused car. On track
Debt killing goals:
(1) Pay off lingering credit card debt in the amount of $4261. Down to $2403
(2) Pay off Mr. Sam's new car, remaining debt $2000. Down to $1000
Overall debt below $450,000 goal: Total debt $474,731.
First, we haven't filed our taxes since we normally seek an extension which is what we did this year.
Second, we skipped 2015 IRA funding. Just didn't happen for a variety of reasons. Lack of discipline, baby and child care expenses, life, etc. So, that means we have a bit of extra savings to put towards 2016 IRA funding.
Third, I'm still waiting on Mr. Sam to make my 2016 Excel savings chart. He's as busy as I am, so it hasn't happened. Hard to track progress without the chart. But see below.
Definite goals:
(1) Max out 401k, $18,000 for each of us, for a total of $36,000. On track.
(2) Finish funding our 2015 IRAs - $8900, Skipped
(3) Fund 2016 IRAs, $11,000 for the both of us, for a total of $22,000. $1100
(4) Baby Sam'college fund, add another $5000 this year. On track
Updated tentative goal, so this is a definite goal now:
(5) Add to emergency fund, $10,000, increased this from $5,000 to $10,000, since we utilized a chunk to buy my nused car. On track
Debt killing goals:
(1) Pay off lingering credit card debt in the amount of $4261. Down to $2403
(2) Pay off Mr. Sam's new car, remaining debt $2000. Down to $1000
Overall debt below $450,000 goal: Total debt $474,731.
Thursday, April 14, 2016
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.
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.
Thursday, December 3, 2015
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.
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.
Tuesday, December 1, 2015
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?
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?
Tuesday, October 27, 2015
Updates on Debt
I've recently, as of today, updated our networth debt numbers. One of our goals for 2015 was to get our total debt load under $500,000 and I'm pleased to report that our debt is now at $489,000. Since, January 2007, our debt load has gone from $735,054 down to $489,000. That means, on average we have killed about $30,000 in debt per year since 2007.
On our primary home, purchased in 2004, we have paid off $105,546 in principal. Since we refinanced our mortgage a couple years ago to 2.75% our payments have accelerated. We also refinanced from a 25 year loan to a 15 year loan and cut off 7 years from our overall term. On our three investment property mortgages, as of next month, all three mortgages should be below $100,000.
As for our other debt, I've struggled with credit card debt, pay it down, run it up, pay it down, etc. I really need to kill it once and for all as its now been hanging around since the baby arrived. We also have a new debt that is not yet listed, 0% financing on floor tile that we bought for one of our investment properties. That debt is a couple of thousand dollars.
As for Mr. Sam's new truck, we continue to pay down his truck debt (we paid for his new truck half in cash and half in 0% financing) at $500 a month, so that debt will be gone in seven months. I really need to be saving for a nused car for me, as my car has been acting up. Recently it was out of commission for a few weeks with an electrical problem but the fix ended up only costing $250. There are several other more expensive things wrong with the car, but the dealer says none are pressing to fix as of now. The dealer gave me a print out of things to fix that would likely cost $4000 which is more than the car is worth. It was kinda funny as I had started to research my next car. Since Baby Sam arrived I, of course, want a family car. But, I'm better off trying to make my car last another year or so as I've only got $400 saved in my nused car fund.
On our primary home, purchased in 2004, we have paid off $105,546 in principal. Since we refinanced our mortgage a couple years ago to 2.75% our payments have accelerated. We also refinanced from a 25 year loan to a 15 year loan and cut off 7 years from our overall term. On our three investment property mortgages, as of next month, all three mortgages should be below $100,000.
As for our other debt, I've struggled with credit card debt, pay it down, run it up, pay it down, etc. I really need to kill it once and for all as its now been hanging around since the baby arrived. We also have a new debt that is not yet listed, 0% financing on floor tile that we bought for one of our investment properties. That debt is a couple of thousand dollars.
As for Mr. Sam's new truck, we continue to pay down his truck debt (we paid for his new truck half in cash and half in 0% financing) at $500 a month, so that debt will be gone in seven months. I really need to be saving for a nused car for me, as my car has been acting up. Recently it was out of commission for a few weeks with an electrical problem but the fix ended up only costing $250. There are several other more expensive things wrong with the car, but the dealer says none are pressing to fix as of now. The dealer gave me a print out of things to fix that would likely cost $4000 which is more than the car is worth. It was kinda funny as I had started to research my next car. Since Baby Sam arrived I, of course, want a family car. But, I'm better off trying to make my car last another year or so as I've only got $400 saved in my nused car fund.
Wednesday, May 27, 2015
Update on Swap.com Experiment
Earlier, I posted about my Swap.com experiment.
Almost a month later and I have earned $80 in profit. I've sold about 18 items (a couple of which were sets). The least expensive item I sold was $3.00. The most expensive item I sold was $15.00. Initially, the first week or so that my items were posted on the web site (they do the photographing and posting), I sold several items that were lower priced. Then my selling rate slowed down and I sold an item here or there but the items were more expensive. I have 8 items (include a couple of sets) posted and priced that have not sold.
I did much better selling maternity clothes that I did selling infant/baby items. In fact, I have only sold one baby item thus far.
At present, I have another big box of mostly maternity items to send off now. The items I am sending in this time are my high end, business and fashion maternity items. I also had almost all of these items dry-cleaned so I will need to price the items high enough to recoup my dry-cleaning expenses. These items will likely be priced at $30 or more to account for dry-cleaning costs of $10 and original prices of $80 - $130 per item (and many were only slightly worn).
Wish me luck.
Almost a month later and I have earned $80 in profit. I've sold about 18 items (a couple of which were sets). The least expensive item I sold was $3.00. The most expensive item I sold was $15.00. Initially, the first week or so that my items were posted on the web site (they do the photographing and posting), I sold several items that were lower priced. Then my selling rate slowed down and I sold an item here or there but the items were more expensive. I have 8 items (include a couple of sets) posted and priced that have not sold.
I did much better selling maternity clothes that I did selling infant/baby items. In fact, I have only sold one baby item thus far.
At present, I have another big box of mostly maternity items to send off now. The items I am sending in this time are my high end, business and fashion maternity items. I also had almost all of these items dry-cleaned so I will need to price the items high enough to recoup my dry-cleaning expenses. These items will likely be priced at $30 or more to account for dry-cleaning costs of $10 and original prices of $80 - $130 per item (and many were only slightly worn).
Wish me luck.
Friday, May 8, 2015
A Windfall is Coming
As you can tell from the title of this post, clearly I'm a Game of Thrones fan.
So, I received news that I'm getting a bonus this year. This bonus was unexpected for a couple of reasons. First, I was on maternity leave for more than three months. Second, I did not believe I was eligible for this type of bonus.
So money is coming our way and it is a decent size chunk of cash. Of course, after Uncle Sam takes his bite and after the deduction for my 401k, the number shrinks. But, I won't complain one bit.
My tentative plan for the money is as follows (final plan depends a bit on the amount). First, 50% will go to our baby debt (which presently is $5421 at 0%). Second, 25% will go towards our upcoming summer vacation (so, into our travel savings fund). Third, 15% will go towards our 2015 IRA savings account. And, finally, 10% is for me to do what I want with (spa, clothes, dinner out, or some other kind of treat).
How do you spend bonus money?
So, I received news that I'm getting a bonus this year. This bonus was unexpected for a couple of reasons. First, I was on maternity leave for more than three months. Second, I did not believe I was eligible for this type of bonus.
So money is coming our way and it is a decent size chunk of cash. Of course, after Uncle Sam takes his bite and after the deduction for my 401k, the number shrinks. But, I won't complain one bit.
My tentative plan for the money is as follows (final plan depends a bit on the amount). First, 50% will go to our baby debt (which presently is $5421 at 0%). Second, 25% will go towards our upcoming summer vacation (so, into our travel savings fund). Third, 15% will go towards our 2015 IRA savings account. And, finally, 10% is for me to do what I want with (spa, clothes, dinner out, or some other kind of treat).
How do you spend bonus money?
Wednesday, May 6, 2015
Cars, cars, cars
Back in 2008, the first year of this blog, we saved up $17,000 and I bought a 2006 nused car. While that feels like a short time ago, its been almost 7 years. That car has served me well, but last year (and the prior year) it cost me a pretty penny in repair costs.
Now that we have Baby Sam, and I have to wiggle and wrangle that baby stroller in and out of my trunk (even though its very large) and as the car approaches the 10 year mark, I've started thinking that I need a new/nused car. I'm thinking about a small SUV or cross over type of car. Something with a larger back storage area (not a trunk) so I can more easily fit the baby stroller and all the stuff that goes along with a baby.
The length of time Americans keep their cars has grown. On average, a new car is kept for 71.4 months (or just under 6 years). On average, a nused car is kept for 49.9 months (a bit over 4 years). In my situation, I've exceeded the average for both data points. since I've been driving my nused car for more than 6 years.
I generally do well with resisting the influence of friends and colleagues, but most everyone I know is driving a newish car. In fact, I recently got together with a good friend and she has a newly leased SUV. In the last 15 years she has had 5 cars and I have had 2. In our family, I was the one with the nice car since Mr. Sam was driving an old 1998 truck. But, that's not true anymore.
While I'm starting to pine for a new car, our financial situation is stretched. We have the expenses of the baby, indeed we still have a little baby debt. We have Mr. Sam's truck debt. And, we've barely made any progress on our 2015 savings goals (indeed we've hardly started). We also have child care costs and a college fund to feed. So, if I can hold off on a new or nused car for a couple of years, we'd be much better off.
As a result, my tentative plan is to start a nused car fund now so I feel like I am working towards a goal. I need to also spend some money to get my car cleaned and tuned up, oil change, tire rotation, etc. If I do that, I'll feel like my car is in better condition and won't be so antsy for a change.
Now that we have Baby Sam, and I have to wiggle and wrangle that baby stroller in and out of my trunk (even though its very large) and as the car approaches the 10 year mark, I've started thinking that I need a new/nused car. I'm thinking about a small SUV or cross over type of car. Something with a larger back storage area (not a trunk) so I can more easily fit the baby stroller and all the stuff that goes along with a baby.
The length of time Americans keep their cars has grown. On average, a new car is kept for 71.4 months (or just under 6 years). On average, a nused car is kept for 49.9 months (a bit over 4 years). In my situation, I've exceeded the average for both data points. since I've been driving my nused car for more than 6 years.
I generally do well with resisting the influence of friends and colleagues, but most everyone I know is driving a newish car. In fact, I recently got together with a good friend and she has a newly leased SUV. In the last 15 years she has had 5 cars and I have had 2. In our family, I was the one with the nice car since Mr. Sam was driving an old 1998 truck. But, that's not true anymore.
While I'm starting to pine for a new car, our financial situation is stretched. We have the expenses of the baby, indeed we still have a little baby debt. We have Mr. Sam's truck debt. And, we've barely made any progress on our 2015 savings goals (indeed we've hardly started). We also have child care costs and a college fund to feed. So, if I can hold off on a new or nused car for a couple of years, we'd be much better off.
As a result, my tentative plan is to start a nused car fund now so I feel like I am working towards a goal. I need to also spend some money to get my car cleaned and tuned up, oil change, tire rotation, etc. If I do that, I'll feel like my car is in better condition and won't be so antsy for a change.
Thursday, March 5, 2015
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.
(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.
Monday, June 30, 2014
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).
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.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.
Monday, June 23, 2014
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.
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.
Thursday, June 5, 2014
Aspirational Housing
Great article by author Michael Lewis of The Blind Side fame regarding the perils of expensive housing. Even a very rich man like Michael Lewis couldn't keep up with renting a landmark mansion in his home town. Mr. Lewis' fun essay also documents the hidden costs of utilities, maintenance and furnishings for a much larger house.
I'm in a phase right now where many of my friends are selling their first or second home and upgrading into McMansion world. It is somewhat surreal for my husband and I to visit our friends/peers who have moved from reasonable rancher to gated community McMansion. Some of them bought during Florida's real estate bubble deflation so they got good deals, but it is still a whole different world. One of my friends, who moved into McMansion world in the last couple of years mentioned that she felt like she had to buy (or lease) a new car to keep up with her new neighbors.
My friends' homes are beautiful and sometimes its hard not to think envious thoughts about those new chef kitchens and especially the walk in closets. But, I have no desire to take on that kind of debt. I did have a refreshing conversation with a college friend recently and she is just a couple of years away from paying off her home in full. Great motivation for me as not having a home mortgage is a goal that is always in the back of my mind.
I'm in a phase right now where many of my friends are selling their first or second home and upgrading into McMansion world. It is somewhat surreal for my husband and I to visit our friends/peers who have moved from reasonable rancher to gated community McMansion. Some of them bought during Florida's real estate bubble deflation so they got good deals, but it is still a whole different world. One of my friends, who moved into McMansion world in the last couple of years mentioned that she felt like she had to buy (or lease) a new car to keep up with her new neighbors.
My friends' homes are beautiful and sometimes its hard not to think envious thoughts about those new chef kitchens and especially the walk in closets. But, I have no desire to take on that kind of debt. I did have a refreshing conversation with a college friend recently and she is just a couple of years away from paying off her home in full. Great motivation for me as not having a home mortgage is a goal that is always in the back of my mind.
Friday, May 30, 2014
2014 Savings Goal - May Update
(1) Max out 401k(s) - $10,139 29% (goal is $35,000)
(2) Max out IRA(s) - $8,835 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 0% (goal is $5,000)
(6) House projects - $1,100 37% (goal is $3,000)
Total: $29,479 43% (Goal is $69,000)
(2) Max out IRA(s) - $8,835 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 0% (goal is $5,000)
(6) House projects - $1,100 37% (goal is $3,000)
Total: $29,479 43% (Goal is $69,000)
Can you tell things have been cray-cray for us, no posts in quite some time. But, surprisingly, when I updated our savings chart today we are generally on track for 2014.
The roof project is done, cost more than $5,000 so counting that goal as completed. We are making progress on our house project fund, but even with the roof done, we have several house projects that we need to attend to this year that likely will exceed our savings. Now that the roof project is done, I will switch my auto savings to Mr. Sam's car replacement fund. My car also has been acting up and I'm going to need to invest a couple of thousand into it in the next couple of weeks.
As for 401k, I'm maxing mine out. Mr. Sam will not be eligible for his 401k until September, in the mean time we are putting savings away so he can up his contributions come September. But, we are behind on that goal. We are making good progress on our 2014 IRA savings.
Monday, January 13, 2014
2014 Savings Goals - First Update
(1) Max out 401k(s) - $1,346 (goal is $35,000)
(2) Max out IRA(s) - $2,825 (goal is $11,000)
(3) Add to e/r fund - $400 (goal is $10,000)
(4) Roof project - $5 (goal is $5,000)
(5) Vehicle replacement - $5 (goal is $5,000)
(6) House projects - $100 (goal is $3,000)
Total: $4,681 (Goal is $69,000)
I don't have my new 2014 Excel spreadsheet set up, so I've not calculated all the percentage complete for the various goals. I did calculate total and I estimate that we are presently ahead on our 2014 goals by about $2,000. I still need to set up auto transfers for the roof and vehicle accounts.
(2) Max out IRA(s) - $2,825 (goal is $11,000)
(3) Add to e/r fund - $400 (goal is $10,000)
(4) Roof project - $5 (goal is $5,000)
(5) Vehicle replacement - $5 (goal is $5,000)
(6) House projects - $100 (goal is $3,000)
Total: $4,681 (Goal is $69,000)
I don't have my new 2014 Excel spreadsheet set up, so I've not calculated all the percentage complete for the various goals. I did calculate total and I estimate that we are presently ahead on our 2014 goals by about $2,000. I still need to set up auto transfers for the roof and vehicle accounts.
Wednesday, January 1, 2014
New Years Resolutions
I am a big fan of new years resolutions, goal planning, goal tracking, etc. I've started to put together my list of resolutions for 2014 and I'm up to 12 so far and none of those resolutions relate to finances. Eight of my draft resolutions relate to health and fitness.
I learned back in psychology that it takes 4 weeks to develop a new habit. Indeed, one of the reasons rehab is 28 days is based on the 4 week new habit model. Today, I read an article over on today.com that it actually takes closer to 66 days to establish a new habit.
So, if today is day 1 of a new behavior, stick with it for a couple of months and it should become an actual habit.
Here is to a happy, healthy and prosperous 2014.
I learned back in psychology that it takes 4 weeks to develop a new habit. Indeed, one of the reasons rehab is 28 days is based on the 4 week new habit model. Today, I read an article over on today.com that it actually takes closer to 66 days to establish a new habit.
So, if today is day 1 of a new behavior, stick with it for a couple of months and it should become an actual habit.
Here is to a happy, healthy and prosperous 2014.
Tuesday, December 31, 2013
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.
(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.
Monday, December 30, 2013
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?
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?
Monday, December 23, 2013
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.
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