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Archive for March, 2008

"Spring" updates

March 31st, 2008 at 08:13 am

It's blizzarding outside right now, so it doesn't feel very springy. Saturday and Sunday were in the 30s-50s with lots of sunshine, and we did lots of springy things, so this is a real downer!

It's been a great month, moneywise. I discovered we had some exercise-incentive money hanging out in the bank that we have not, ahem, had use of (been a bit slothful lately). So I put $150 toward my big credit card payment going out this week, and $150 toward fun-money savings.

Then, I got my 3/31 paycheck and my increased withholding didn't have as much of a negative effect as I thought it would, so that's $80 per month extra. NT got nearly $90 of overtime in his 3/31 paycheck. Earmarked another $150 to the now-massive ($1900) credit card payment! Can't wait to report that step toward my goal once it hits!

Also, I found out AS's enrollment in grad school doesn't technically end til July, even though her classes end in May. So that means both her deferred federal student loans probably won't start coming around until August. August is NT's first anniversary at his job, so good chance of a raise there, and my job (which could not give the usual annual raises this month) is hoping to be in good enough shape to give us all a small raise in September instead. So if our luck holds out, one or both of those raises will come through to partially or fully offset the student loan payments, and our budget will not be much affected.

Then, since I now know when our "stimulus" checks are coming, I thought I'd extrapolate our budget out a few months. We're putting one check toward debt, one toward savings and keeping one for pocket money. I realized as I was figuring all that out that AS has an extra check coming in July, so our budget through 7/15 shows quite a large surplus; $1400. I haven't decided where that's going yet; probably half to debt and half to fun-money savings. It's a ways away. Right now it's just sitting as a pleasant bottom line that I can look at whenever I update my budget.

Anyway, all that good money news is helping me keep a springy mindset despite the snow. Also, we painted our bedroom this weekend, with bright green and a very pale greenish white, and bought daffodils to display and vegetable seeds, and planted the first of the seeds in little soil cups.

We're anticipating our May England trip more and more (less than seven weeks now!), and we've been planning some other fun activities, like a garage sale (at a friend's garage) and a weekend in a cabin (that same friend's mom's cabin) both in June.

C'mon, spring weather! It's the only missing ingredient! :-)

April goals

March 26th, 2008 at 02:42 pm

April payoff goal: $3000 of principal by 4/30.

This is a bit conservative because I still haven't seen what my increased withholdings are going to do to my paycheck. So I estimated about $100 less than what I think I can do, just in case I have to retool my budget once that first lower paycheck comes in. (I almost waited to set my goal till I get that, but I feel grounded by my goals, so I decided it was more important to get one on the board now.)

A very psychologically exciting milestone I will almost certainly reach in April is getting our combined credit card and personal loan debt (including $7K I owe my dad) under $60,000!

Reached March goal!

March 26th, 2008 at 01:41 pm

OK, I admit it, I paid a little extra on a credit card using funds I was saving up for a big payment on it in April. I didn't save any interest by doing so because it's 0% for a little while longer. But I really wanted to make my goal!

$307 to a credit card (all principal)

Reached March goal of $3400!

$62,387 to go on my Big-Picture Goal.

Now to figure out how much I think I can pay off in April...

March net worth update (sort of)

March 21st, 2008 at 08:50 am

I haven't updated AS's 403(b) because she's lost her PIN and will have to get it re-sent. Luckily for the purposes of this entry, her account's quite small and wouldn't be much affected by market fluctuations. So here's our progress as far as I know:

NT's pensions: 7,250 pounds ($14,500)
10,725 pounds ($21,450)
NT's 401(k): $1,092
AS's 403(b): $1,440
CJ's 401(k): $24,704
NT's flat: 130,000 pounds ($260,000)
CJ & AS's condo: $182,000
---
Total Assets: $505,186

Total Debt: $436,743

Current Estimated Net Worth: $68,443

2/22 estimate: $65,704
Change in net worth: +$2,739

Summary: Well, I dumped about $225 into my 401(k) during the past month and ended up with a loss in value of about $25. That feels futile! But aggressive debt repayment increased our net worth anyway.

An interesting side note: We live a communal existence, but there are certain assets and debts in each of our names. Recently I totaled the debts up out of curiosity, and NT had the greatest amount (if I count his estimated future education debt), while AS had the smallest amount, and I was in the middle. Today I decided to see how our net worth would look if we parceled out our debt and our assets according to what's in whose name. Interestingly, NT had the highest net worth (in that he had any at all!) and AS and I both had negative net worth. Hers is slightly more in the hole than mine. So even though NT has the most debt, we're dragging down his net worth with our negative worth!

None of us has any savings to speak of. The biggest difference? NT bought his place in his early twenties, so its value has risen exponentially since then. (He's 35 today.) AS and I went in on a place together only five years ago, and it's depreciated more than $20K in value.

Note on the numbers above: House value estimates are conservative, and retirement totals don't include amounts currently unvested.

The BIG big picture

March 20th, 2008 at 01:23 pm

I posted this in the forums in response to someone asking what everyone's goals were, and another poster explaining that goals had to be achieved with plans. Figured I should put it in my blog so I don't lose it, since it's the first time I've really written my desired life plan all out.

Overall goals: Pay off all debt, save a lot of money, learn how to invest it, and live well (and well within our means) for the rest of our lives.

The Plan: Well, I formulated those goals gradually over the past year, after 33 years of not being able to see past next payday. So part of me thinks I won't get to where I'd like to be. But the good news is, every step I take at least gets me to a better place than I was before. :-)

Step 1: Only make purchases we can afford. Stick to a budget. (Has worked well for almost a year.)

Step 2: Pay off all credit card & personal debt by 12/31/09. ($63K to go.)

Step 3: Put future raises partly toward debt snowball and savings, and partly into quality of current life (travel, gifts, home improvement).

Step 4: Clear out room in budget to make and start tending to babies in 2-3 years.

Step 5: Learn best way to invest (we're planning an international move in 5-10 years and aren't sure if maxing out US-tax-free venues will save us anything if we have to pay UK taxes on them eventually).

Step 6: After CC debt gone, babies getting taken good care of, quality of life satisfactory, and investing knowledge gained ... find a good balance between paying down remaining (house & education) debt and investing/saving like crazy to make up for lost time!

Maybe I should add (since this is about dreaming big) ...
Step 7: Live Happily Ever After!

Personal loan payment posted

March 16th, 2008 at 06:41 pm

$441 to principal!

$3,093 down, $307 to go on my March goal.

$62,694 to go on my Big-Picture Goal.

I have a few more payments that may hit before March 31, but if I'm getting close and it looks like I won't make my goal, I will probably prepay something just so I can say I made it. As I've never missed a goal yet, I'll only allow really extenuating circumstances to make me do so. :-)

What being recently converted to thriftiness can teach you about money in a rece

March 14th, 2008 at 02:58 pm

This is really in response to Monkeymama's great recent post (http://monkeymama.savingadvice.com/2008/03/14/interesting-local-article-today_36624/)--I'm never able to respond on MM's blog!--about how the drastic cutbacks necessary aren't really anything but common sense that most of us already abide by (or are easily able to abide by in times of financial shortfall). But I thought I'd make it into a contest entry as well.

I straddle the fence, perspective-wise, between mainstream America's mindset and the average SA blogger's point of view. I've been watching every penny for about a year. Before that, I felt I was always struggling, never able to get everything I wanted, always in debt, raises and bonuses seemingly disappearing into the ether with nothing to show for them, either materially (possessions or savings) or in lower debt.

I do sympathize with the average American because I remember exactly how I used to feel. "Sure, I'm living beyond my means, but I have no choice! It's not like I live extravagantly; I just don't want to feel poor and miserable." That's how I felt, and I bet that's the gist of what almost anyone (outside this site) would say. I didn't think I was a bad person, or irresponsible; I just didn't know any other way.

I always thought I would gradually earn more and be able to reduce my debt while living better and better. Needless to say I'd started myself in a bad position, and not budgeting "everything" didn't help.

Soo, I sympathize with those who feel like cutting back during the recession will seriously affect their happiness and quality of life. That's what I thought I was in for, just over a year ago.

But now I look back at my old self and snicker. If I could go back in time and talk to her I'd say, "Self, living beyond your means IS extravagant, no matter what level of income or lifestyle you're at. And THAT'S the only thing that's making you feel poor and miserable, you silly thing."

A year later, I'm not cutting everything back, but I'm living consciously, paying for everything with cash or knowing exactly how I'm going to pay for something if I do put it on credit at the time. And I have places I could cut back--I pay $1500 extra on debt per month, allocate several hundred toward saving up for fun stuff, even reward members of my household with cash for exercising. Out of three incomes, one is dedicated to just those budget items that could be eliminated. Some day a good chunk of that will go toward savings, and our future. Right now it's digging us out of the hole we're in, and allowing a little extra fun. But it's good to know we're disciplined enough that we could live on just two incomes if we had to.

So I have to say once you've been through the looking glass for a year, on the other side of the American mindset, everything is opposite. Living beyond my means is the last thing I'll ever resort to again. I feel extravagant because I always have plenty of cash in the bank to cover the bills, and spending money in my wallet that I know is mine free and clear. And far from feeling poor and miserable, I feel strong, and smart, and in control of my future.

Being recently converted into a truly budget-conscious person can teach you a lot about money, about people's perspectives on money during a recession, because you've walked in both sides' shoes. And you know anyone can do what you did, and even learn to love it. Because you were sooo typical, and now you're sooo not.

Small credit card payment posted

March 13th, 2008 at 04:48 pm

$8 to principal, hee hee.

So that's $2652 down, $748 to go on my March goal, and $63,135 to go on my Big-Picture Goal.

I should have maybe another payment to report tonight, and one on Monday or Tuesday. Not sure if I'll reach my goal then, but I should get close.

Bless her beautiful hide...

March 12th, 2008 at 02:18 pm

A quote from one of my favorite musicals, but it also refers to AS. Her paycheck is frustratingly unpredictable, and her HR department unhelpful and slow. (I think it has something to do with her free tuition being partly taxable, but it's hard to reach anyone to help us understand.) So I only budget for the minimum amount I'm fairly sure we'll get.

This pay period, she got almost $200 more than that! So thanks to that boost, I'll be able to change my tax withholdings immediately, hopefully reducing NT's and my 2009 tax bill (and avoiding a penalty).

Now back to work (I've been swamped at work all week and don't usually get around to blogging once I get home.)

Grocery spending update

March 10th, 2008 at 02:12 pm

Things are looking up with our grocery budget. In mid-February we had used nearly 3/4 of our Feb. 16-29 budget before the 16th. We've been trying to cut back, buying no extras, planning some frugal meals and switching to juice from concentrate. We even found some plastic pitchers on our condo's "free table" and started washing and reusing other juice bottles.

As of today, we've used about 1/3 of our March 16-31 budget, and we have all our groceries for meals through the 16th, so except for some household incidentals we shouldn't have to spend anymore. That means we've caught up a great deal from same time last month. If we can make it through March 16-31 with only 2/3 our usual allotted money, we'll be totally caught up by April 1!

But even if it takes a little longer than that, I'm just glad we're starting to get back on track. It's usually not a problem borrowing from the next pay period's grocery money, since I have some padding in the bank for future bills. But occasionally, when a lot of big payments hit at once, it has caused us to skate pretty close to overdrawing our account. If we can straighten this out, there will be virtually no danger of that anymore.

I'd love to eventually have a surplus of grocery money that we carry forward each month, so if we have a party or some unusual household expenses, we can easily cover that without messing anything else up.

Shuffling money around

March 6th, 2008 at 02:55 pm

That's what it feels like I'm doing right now...I got a medical bill for $850 and only have $600 left in my flex spending (such a bad year to try this high deductible thing, as I ended up having to get some tests and things at the beginning of the year)! So I've been moving stuff around...noticed we probably weren't going to need one chunk of exercise incentive money, because AS hasn't been working out lately, so wiped out that line item. Sold some CD box sets on eBay for over $100 total, so that covers the rest of it.

The good news is I didn't have to do anything drastic; the bad is that I feel like a sucker with this new healthcare plan, and it's going to be awhile before I can afford to change my paycheck withholdings; without this medical bill I'd be able to change it for the next paycheck. Oh well, if I owe taxes next year I don't really mind; I just want to make sure I don't owe as much as or more than this year, because I think that would generate a penalty.

Oh yeah, and it means I'm going to have to pay for future medical stuff with cash, so I may not be able to save as much. I don't understand this maximum out-of-pocket thing, but hopefully I will hit that soon. I wonder if it still means I have to take care of copays, and dental and vision stuff? Either way, health care is going to be more expensive this year than I thought, by a long way.

I looked at this way-cheap way of transferring money, bank account to bank account (that's harder than just transferring the money to an office where a person can pick it up), xoom.com. Only $4.95 for an international wire transfer of any amount! However, it looked kind of bare-bones so I searched for consumer reports, and saw some pretty wretched testimonials. So I'll stick to my $50-per-month setup with my bank--it hurts, but it will motivate me to get our UK cards down to where NT's flat rental income will cover bills, and I won't have to transfer money at all anymore. I'm hoping to accomplish that in about eight months.

Another credit card passes on! Ad hoc goal reached!

March 4th, 2008 at 09:07 am

Woo hoo! One more for the Old Debt Graveyard.

Paid off $1,206 in principal to achieve that.

So $2,644 down, $756 to go in my March challenge.

$63,143 to go on my Big-Picture Goal.

And...breathless silence...I REACHED MY AD HOC GOAL!!! My very first long-term goal, set in July 2007, was to pay off $19,520 of debt by 3/31/08. My goal debt balance was $438,135. Today, 3/4/08, our debt balance is at $437,192. So in reality I've paid off $20,463 since July.

Deep breaths...time to look ahead. Besides my Big-Picture Goal of paying off all credit card and personal debt, I think I'll continue to set monthly goals so I can still track my overall debt reduction. The credit card is the most important part to get rid of, but I also want to continue to work on the rest of it.

Several payments=big step

March 3rd, 2008 at 10:17 am

Several payments posted today, though not the credit card payoff I'm looking forward to. It should hit tomorrow.

US mortgage: $291 in principal
UK mortgage 1: $144
UK mortgage 2: $30
UK mortgage 3: $32
Credit card: $284

Total: $781 in principal

So $1,438 down, $1,962 to go on my March goal
Only $263 to go on my Overall Ad Hoc Goal! I can't believe I'll reach that tomorrow.
And $64,349 to go on my Big-Picture Goal