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Archive for December, 2012

January debt goal

January 1st, 2013 at 05:07 am

My first debt repayment goal for 2013 is to pay down $2185 of debt. Much of it will be "estimated future debt" because NT's tuition is due. Part of it will be paid with student loan but I think about $1275 will be due in cash. This is how we set up the fall semester, so I think the spring semester will be the same.

AS is also expecting some freelance checks, but I'm not sure if they'll come in January so I'm not going to count them in my debt repayment goal, even though if they do come, I'll put them toward student loan debt.

Some early progress for 2013

December 31st, 2012 at 04:57 am

I realized I had some money to deposit into the house/moving fund, so I went ahead and did it. $209.75, and there was $1.60 in interest earned this month, so that's $211.35 into the house fund and our first step in the new big-picture goals.

Still figuring out how I'm going to track these, and my head is all plugged up with sickness, so I may refine later. I guess I'll go for $2541 of progress each month, and then note how far behind or ahead I am at the end of each month. So, $2329.65 to go for January in either medical savings, house fund savings or student loan/tuition payment.

Well, shucks.

December 29th, 2012 at 01:39 pm

As I was reading everyone's nice comments on my last blog, I suddenly thought wait -- a 5,000 pound increase in the home's valuation equals $15,000 less in what we have to save? Didn't sound right so I went and checked my spreadsheet. Sure enough, I made a big boo-boo. I really need to save $71,000, not $65,000.

So yeah, that's a big difference. We need to come up with $121,957 over the next four years, or $2541 a month. Meaning my current budget is $539 short. $125 more per month than I thought!

But all is not lost. I've been thinking about ways we could raise the money if we start getting far behind next year, and one option, once we've paid for our England vacation in May, would be to scale back our vacation fund. We typically do a fairly extravagant vacation twice a year (except years when one of the kids was born). We could cut that down to one big vacation, and find cheap/thrifty staycation options to use the rest of our paid time off. We currently save $850 each month for travel and vacation, so if we cut that back as needed, on months when we didn't come through with the additional money needed, that would keep us on track. We couldn't do that until June 2013, since all our travel budget allocations up until then are committed to paying for the May trip.

Also, if we focus on the student loans first, we could gradually add the $148 total that goes toward interest, toward our goals instead, as the interest portion decreases.

If the payroll tax cut or a comparable cut comes out of the fiscal cliff negotiations, we may have about $40 more in the budget.

I do have a performance review coming up in the new year, with the (very remote) possibility of a raise.

So, the budget is not a fixed thing, and as long as I put everything extra toward these goals, we should be able to reach them, or at least come close.

My 2013-2016 goals

December 28th, 2012 at 06:02 am

Shoot, I think I'm getting sick. Both girls have colds/fevers (AA the toddler is much worse than SL the infant) and NT is probably getting sick too. AS has the whole week off, but her dream of alone time has been snatched from her, since AA has to stay home from daycare until 24 hours after the fever subsides. We had a pretty good Xmas Eve and Day (even though AA threw up at breakfast on Christmas morning). But the past two days have been tough. None of us is at our best, physically or mentally.

So I wanted to get my goals post up, in case I get sicker.

I've decided instead of just annual goals, I'm going to post all my big-picture financial goals and just work as hard as I can at them. My plan of attack may change from time to time, maybe even my exact goals will change; four years is a long time and who knows what will happen? But this is my focus right now, so it seems like the right way to proceed. (I'll still do monthly debt-repayment goals, since that's practically a tradition now.)

I've been posting sporadically about what I thought would be my big goals: EF to $20K, medical fund to $5K, student loans paid off and NT's college fully paid, $80K in a new home/moving fund.

But when I refigured my finances, I also reassessed a couple of factors and priorities.

First, although the UK condo was valued at 130,000 pounds in our net worth calculations, I realized that when we were figuring out how much we needed to save to move to England or buy a house here in Minneapolis, we had it valued at 120,000. So with my new, more accurate 125,000 estimate, we can actually anticipate more profit when we eventually sell the UK flat. Which means we shouldn't need to save up $80K, more like $65K!

Also, I decided we don't need $20K of dedicated EF funds. Since we're going to have $5K in a medical fund, it will total $20K. Plus, I could always raid the house/moving fund if a really expensive emergency came up.

This means we have a fully funded EF. I moved all but $15K into the medical fund, so we now have nearly $1275 in that. Which means less money needed to get that fully funded.

So all told, the big goals look a lot more obtainable. At one point, our budget was about $600 per month short of attaining all of them in 4 years. But now, it's only a bit over $400 short. With AS's freelancing, and if we're careful with how we use windfalls for the next couple years, we might actually be able to do this!

The new goals have been updated on my sidebar.

The great "true-up"

December 27th, 2012 at 03:29 am

What the heck, I went ahead and did it. So this is our revised financial picture:

THE BEFORE PICTURE

Debt before:
HOME DEBT
US Mortgage $160,656
UK Mortgage 1: GBP35487--$70,440
UK Mortgage 2: GBP7481--$14,850
UK Mortgage 3: GBP7877--$15,636
Total home debt $261,582

EDUCATION DEBT
AS SM $10,560
NT DL $15,358
NT FM $5,507
NT Education (estimated future debt) $6,806
Total student loan debt $38,231

TOTAL HOUSEHOLD DEBT $299,813

Assets before:
NT's UK pensions:
#1: 13,884 pounds ($27,768)
#2: 17,268 pounds ($34,536)
#3: 3,709 pounds ($7,418)
NT's 401(k): $20,619
NT's Roth IRA: $4,758
AS's 401(k): $8,210
AS's trad. IRA: $1,682
AS's Roth IRA: $9,444
CJ's 401(k): $48,180
CJ's Roth IRA: $4,758
NT's flat: 130,000 pounds ($260,000)
CJ & AS's condo: $160,000
Emergency fund (shared asset): $18,562
House down payment/moving fund: $2,195
---
Total Assets: $608,130

*****

THE AFTER PICTURE

Debt after:
HOME DEBT
US Mortgage $160,656
UK Mortgage 1: GBP35487--$56,779
UK Mortgage 2: GBP7481--$11,970
UK Mortgage 3: GBP7877--$12,603
Total home debt $242,008

EDUCATION DEBT
AS SM $10,560
NT DL $15,358
NT FM $5,507
NT Education (estimated future debt) $6,806
Total student loan debt $38,231

TOTAL HOUSEHOLD DEBT $280,239
Change: -$19,574 (yay!)

Assets after:
NT's UK pensions:
#1: 13,884 pounds ($22,214)
#2: 17,268 pounds ($27,629)
#3: 3,709 pounds ($5,934)
NT's 401(k): $20,619
NT's Roth IRA: $4,758
AS's 401(k): $8,210
AS's trad. IRA: $1,682
AS's Roth IRA: $9,444
CJ's 401(k): $48,180
CJ's Roth IRA: $4,758
NT's flat: 125,000 pounds ($200,000)
CJ & AS's condo: $145,000
Emergency fund (shared asset): $16,085
House down payment/moving fund: $2,195
---
Total Assets: $516,708
Change: -$91,422 (big ouch!!)

The final debt payment of 2012!

December 27th, 2012 at 02:17 am

I've been checking AS's student loan account periodically today to see if her payment would hit, and it finally did! $130 went to principal, which takes us to $977 paid for the month of December, $37 over the goal.

Total student loan debt is down to $38,231, and total household debt (using my soon-to-be-changed exchange rate) is $299,813. That means we paid $14,724 of student loan debt this year, $24,565 total (including mortgage principal). A modest year by our standards, but we've accomplished a great deal of other things with our money, including supporting a second child, so I feel good about it.

Now that the final transaction for the year has posted, I can go about my true-up of our finances; adjusting the exchange rate for our British assets and debts, and downgrading our home value estimates. Not sure if I'll get to that tonight, but definitely before the end of the year.

Quick check-in

December 23rd, 2012 at 01:04 am

Hello all! I had yesterday off and absolutely just relaxed and did as little as possible. AS had the day off too, so we dropped the kids at daycare, stopped at McD's for breakfast, went home and relaxed. We even took a nap in the late morning.

Last night after the kids went to bed, we played videogames, snacked way too much and drank too much wine. I've felt a bit blah all day, but I'm finally about back to normal. We got all our food shopping and meal planning done, and there are just a few more presents to wrap. We put most of the non-Santa gifts under the tree and AA is very intrigued, but she's been pretty good about not messing with them.

SL now knows how to crawl and is figuring out how to pull herself to standing. She's tiny for her age and not even 9 months old! So it's pretty freaky. She also likes to put EVERYthing in her mouth, so we really have to watch her closely.

Tonight NT took AA to the "Holidazzle," a parade that runs every weekend from Thanksgiving to Xmas (or maybe New Year's, I can't remember). I've never been and have no interest, but it has lots of festive lighted floats. Hope she's having fun! Once they get home, NT and I are going out for a date night (Ethiopian food!).

Tomorrow we may have a friend over, but other than that should be a pretty quiet day. Monday I have to work a half day from home (bummer), but after that I'm off until Thursday. Our friends are having a small gathering at their home Xmas Eve, so we're getting a carshare and doing that. After the kids go to bed, we'll be filling stockings for the kids for the first time! Very excited about that for some reason.

Xmas day is a big hearty breakfast (sunrise pasta -- a casserole with spaghetti, tomato sauce, veggie sausage, eggs/tofu and cheese/vegan cheese), gift opening, Skype with the grandparents, and a big hearty dinner (vegan roast, Brussels sprouts, parsnips, potatoes, gravy, stuffing, stewed apples and cranberry sauce).

The next day is Boxing Day, a holiday introduced to us when NT moved here from England. As far as I can tell all you do is open one more present and hang out. But it's fun to have an extra day to relax after Xmas.

I think that's it. Oh! NT did get a bonus from work, $663 after tax. Not the thousands of dollars he gets most years, but enough to throw him a pretty good party for his birthday next year. Smile

We're pretty over budget on groceries, but I think it'll be pretty easy to fix once the holidays are over. We're also already halfway through January's carshare money and will probably be into February's by the end of December. That too we can get back in balance by just not using the service as often for a couple months. It's been unusually social lately.

Spending money is also a bit tight now, with at least two of us owing a bit in. But that too can be rectified by taking it easy on spending after the holidays.

After last night's snackfest and tonight's Ethiopian feast to come, not sure how my weigh-in will go! But I'm not even that worried if I'm not exactly at my goal weight at the end of the year. I have a good system that works, and I don't think indulging now will cause a permanent fall into bad habits.

On the good financial front again, AS got another freelance proofreading project, about $600. I hope we can put it all straight to savings or debt repayment!

Next week, once our final debt payment hits, I'll rebalance all our accounts, reassess our big-picture & 2013 goals, and get everything ready for the new year.

26 acts of kindness?

December 19th, 2012 at 07:55 pm

Someone just posted on my Facebook feed that there's a viral movement of people pledging to do 26 extra acts of random kindness in memory of the 26 lives lost in Newtown. Sounds like a good idea to me. I'll list them on here as they happen! Not sure what they'll be, but it'll be fun trying to come up with them, especially ones that are budget-friendly. Smile

Bonus-lite holiday; service provider tips

December 19th, 2012 at 05:56 pm

It looks like a very lean Xmas, bonus-wise. I got a $100 Amex card, which I used to offset my Va. trip and our holiday party food costs. NT's company mentioned they'd get a "token" of appreciation on Friday; doesn't sound too promising! AS has heard nothing of a potential bonus at her job.

Luckily we had AS's freelance check to set aside money to tip our service providers. We're doing a very similar setup to last year:

- $50 and a bunch of cookies to our house cleaner
- $25 to the condo building management's employee holiday fund
- $50 to our cloth diaper service provider
- $200 to our daycare providers
- Card to our estate planning/adoption lawyer

We decided to give a bit less to our house cleaner since we have a new one who's only cleaned for us two or three times, and a bit more to the diaper service since they now handle two little girls' dirty diapers instead of one. Smile We're giving all cash to daycare instead of cash and gift cards, just to keep it simple, with a total value that's $25 more than last year.

All told, only $10 more than last year. Smile

Since we had planned to fund NT's big 40th birthday party next year on any bonus money we got this year, it looks like it'll be a smaller celebration than I'd hoped. But we'll still manage to make it special.

December 2012 net worth update: annual goal reached (again)!

December 18th, 2012 at 04:00 pm

Assets:
NT's UK pensions:
#1: 13,884 pounds ($27,768)
#2: 17,268 pounds ($34,536)
#3: 3,709 pounds ($7,418)
NT's 401(k): $20,619
NT's Roth IRA: $4,758
AS's 401(k): $8,210
AS's trad. IRA: $1,682
AS's Roth IRA: $9,444
CJ's 401(k): $48,180
CJ's Roth IRA: $4,758
NT's flat: 130,000 pounds ($260,000)
CJ & AS's condo: $160,000
Emergency fund (shared asset): $18,562
House down payment/moving fund: $2,195
---
Total Assets: $608,130

Total Debt: $299,943

Current Estimated Net Worth: $308,187

August 2012 estimate: $299,508

Change in net worth: +$8,679

Summary: We did it! We surpassed the 2012 goal of $300,000 net worth. (On paper, that is.)

I'm going to "true up" our accounts soon using the current pounds-to-dollars exchange rate and reassessing our home values, so our debt, assets and net worth are all going to go way down.

I will update my "Individual Net Worth" page shortly so you can see how it breaks out per person.

Notes on the numbers above: House value estimates are very approximate. I don't have a way to check NT's UK pensions or flat value, so their values stay static for the purpose of this update (unless I happen to get some info by chance). UK asset values and debt amounts are calculated figuring $2 for every British pound, which was the exchange rate when I started keeping track. Starting in 2013 I'm going to use the true current exchange rate, which is now closer to $1.60 per British pound.

Progress on goals; quick check-in; the great "true-up"

December 16th, 2012 at 10:55 pm

Wow, what a week. I flew from MN to VA with 2 kids, alone, to visit my family. Flew out Sunday and came back Wednesday. Wed. night there was a party at AS's work, Thurs. night we got a babysitter and went to a friend's birthday dinner at a restaurant, and Friday lunchtime was the parents' party at my kids' daycare. At least I had the whole week off. We had a party Saturday, so I did a big shopping trip Thursday and spend most of the day Friday cooking and prepping for the party.

The party went great; about 30-40 people showed up and seemed to have a really good time.

Today I'm ... not really hung over, but pretty lazy and low-energy. I can't remember the last day I had nothing to do, so I've been taking advantage. Other than doing dishes and making coffee, I haven't done much.

Anyway, I did balance my accounts, and have some progress to report:
$1062 went into the EF, so it's up to $18,561.99, just $1438.01 short of my 2012 goal. So I'm not going to make it, but I'm proud that we got so close after a pretty rocky start at the beginning of the year.

I sent an interest payment to NT's student loan and $25 went to principal. That takes us to $847 down, $93 to go on the December debt repayment goal. I'll surpass that when AS's student loan payment hits after Xmas.

I weighed in last week at 129, 4 lbs. over the previous week! I'm also worried about tonight's weigh-in, what with traveling, restaurants and parties. But we'll see. I'll still have 2 weeks to lose weight if I creep up over my 129 goal. But yikes! That amount of weight gain in one week really freaked me out, since I didn't feel like I was going too much over my calorie limit.

I'll do my net worth in a couple days and hopefully it'll be back up to $300,000. But it's kind of moot because, after that ...

I've decided to "true up" my numbers, taking into account the current pounds-to-dollars exchange rate. I'm also going to take a hard look at my home valuations (for both our US condo and the UK flat), because I think they're both inflated in my net worth at this point. So this will mean, for 2013, that our debt, assets, and net worth will all be a lot lower. I'm going to check the exchange rate at the end of each year and change again if necessary.

Once I have new totals for debt and savings, I'll reassess all our goals and see if any need to be adjusted. For instance, I might lower my EF goal from $20K to $15K; after all, that would still be over 3 months' expenses, and we would have the medical fund and the house/moving fund to dip into if the EF weren't enough for an emergency.

As for my debt calculations, I won't count it as debt paid; I'll just update my number and continue to track debt reduction from there.

I'll be glad to have accurate numbers for everything so I can be realistic and serious in my future planning.

Progress on debt goal; debt under $300K! Plus, musings on exchange rate

December 3rd, 2012 at 07:51 pm

Well, we did it! As of today, our official household debt total is $299,968. That's one more goal for the year crossed off! Love watching the odometer turn over. Smile

But as I celebrated, I realized that it's not a "true" number in today's exchange rates. When I started my blog, a British pound was worth about US$2.00. Now it's more like $1.60, but I've kept my calculations of debt and assets at GBP1 = US$2 for continuity.

But in reality, our assets are worth about $532K, almost $70K less than I calculate. And our debt is at $280.5K, or about $20K less than my "official" number.

So I'm torn. On the one hand, to calculate the progress we're making, I like the idea of keeping it at the old rate. But for serious planning (like trying to save up for an international move, or seeing if we have enough money for retirement) we should know the real numbers.

I wouldn't mind losing the continuity too much at this point. The hardest part of my debt journey is behind me, I feel. But the volatility of the exchange rate makes me afraid that it will become an exhausting venture to try and change it (daily? monthly?):



Still thinking about it. We shall see.

I also added 280 pounds to the EF, which I calculate as $560. That takes our EF to $17,474.76, about $2500 short of our 2012 goal.