I was feeling pretty great about our grocery spending last Saturday. We went about $30 into February, not bad at all.
Then I realized that I somehow (still wondering how) forgot to record a $60 purchase from the previous week! Ouch.
That was offset somewhat by the Amex card giving us $25 of rewards. So I still felt decent.
Then, we needed to replace toothbrush heads on our electric toothbrush. Over $40! Yikes. I know it's better for our teeth, but yowch.
A couple random bits of money out here and there, and we're starting February with $240 in the grocery budget, instead of the $375 we'd have if we were staying within budget. Sigh. Guess we'll be scrimping and scraping for Feb. 1-15. Hopefully Feb. 16-28 will be better. (I'm always saying that, but one of these days it'll be true!)
Archive for January, 2013
I was feeling pretty great about our grocery spending last Saturday. We went about $30 into February, not bad at all.
I set my February debt goal; I'm aiming to pay off at least $1960 of debt. Most of the progress will happen this week, with one last payment at the end of February pushing us over the top.
Thanks to everyone's advice on the past post, I decided that I will throw every bit of debt & savings money at that one student loan (DL) that bugs me so much. I forgot that February will be a bit lighter than usual, but I combined what I have in the Feb. budget and set up a payment of just over $1100 to hit Feb. 1. HOPEfully, since I've sent $145 in the past month and only apparently lowered the balance by $22, this will almost entirely go toward lowering the balance. (Did I mention that the later payment showed up with a date stamp of the day BEFORE the earlier payment that I sent two weeks before? Ugh, whatever.)
I also decided to start up the credit card churn again. In 2011 I earned $3927 in bonuses alone (not counting regular purchase rewards) and in 2012 I got $4000 in bonuses! I don't think I'll come anywhere near those amounts this year, but I'll see what I can do.
First off, I applied all three of us for the Barclays NFL card, and all three of us were approved! This one is a 10K bonus (worth $100 statement credit) after the first purchase. I imagine we'll each need to make one purchase, pay off the card to avoid interest while waiting for the statement credit, and then spend at least $100 more on the card to take advantage of said credit. So maybe 2 purchases each, and we get $300! That should cover a lawyer consultation fee and leave $50 to put toward debt repayment.
Once we finish that, I think we'll apply for the USBank Visa for me and AS (would be our first time) to get $150 for spending $500, and sign NT up for the Bank of America deal where you get $100 for spending $500. That will net us $400 total for the three offers.
Then, I think we'll each try to double-dip the Chase Sapphire deal of spend $3000 get $400. We'll do those one at a time, because depending on whether any unusual expenses come up, it's sometimes a struggle to spend that much in 3 months, especially since we like to keep using our Amex card for groceries for that 6% reward (and now Target RedCard for the 5% discount).
If we do manage to double-dip that one 3 times, we'll net $1200 (plus at least $30 each for regular purchase rewards, so actually $1290).
Not looking forward to the hassle of recordkeeping and bill-paying, but it's a relatively easy way to snowflake that debt, so I'm willing to do it!
Omigod, worst title ever. Sorry, I'll be writing this in dribs and drabs between bits of work, so it'll probably be scattered too. You have been warned.
I'm in email contact with a lawyer about our immigration/tax-filing question; if he consults with us it'll be $250. I'd really like to pay that upfront without disrupting the momentum of our goals, so I started looking around at credit card deals.
There's a Barclays NFL card where you get 10K points, good for a $100 statement credit, after your first purchase! If we each got approved for this, we could easily cover the lawyer fee. I'm going to cancel some errant card accounts and then try for this.
creditcardfree's contemplation of paying off the car loan really got me thinking about the loan that bugs me the most: NT's student loan with Direct Loan, the federal loan place. Not only is it our highest interest rate (6.175%), but their site is terrible and frequently posts inaccurate, delayed or confusing information regarding the balance and how payments are applied. I don't want to empty our savings accounts to pay it off, which is what it would take, but I would LOVE to see this one gone.
So I started thinking what it would take to get rid of it by the end of the year. First, I'd need to virtually ignore adding to the medical fund for the rest of the year. I'm kind of OK with that. We have enough in there for now, and could always rearrange the budget and slow down student loan payment if we had an emergency that took more than what we have saved.
And, I'd probably have to pretty much ignore the house/moving fund, except the UK money that goes toward it (that wouldn't be worth transferring over here to pay down debt, so I'd just let that accumulate toward the moving fund.
Also, to avoid taking out any more money with Direct Loan, I'd have to cashflow NT's fall tuition, which would run us about $4K.
OK, so if I did all that, how close could I get? I'd need $18K to finish off the student loan plus $4K to avoid taking any further loans from Direct Loan, so $22K total.
I currently have $1062 extra to put to education per month, plus about $50 that goes to principal on this DL loan when I make a $100 payment to cover interest. That would knock $12,232 off, leaving $9768.
I believe AS has $1850 of freelance income due to her in the next couple months, so if we put all of that toward this, that would leave $7918.
If we put the $101 per month I have earmarked for the house moving fund, that would be another $1111, leaving $6807.
If I really scraped the barrel and put the $75 I earmark for the medical fund monthly, that would be another $825, leaving $5982.
Starting in July or so, I could start siphoning money from our travel budget, say $350 per month for those 6 months. That would be $2100, leaving $3882.
We could potentially each double-dip the Chase Sapphire reward, the last big-money credit card reward, if we staggered it throughout the year. We should be able to clear at least $1290 that way, leaving $2592.
Hmm...that's still a $236 average monthly shortfall if we wanted it paid off by the end of the year. It also assumes no budget hiccups where money would need to be diverted toward an unexpected expense.
Oh! And if NT took a summer class, that's something else we'd have to cashflow. Probably a couple grand.
So I guess it's not looking very likely that we'd be able to completely rid ourselves of this annoying loan. The question is, should I go ahead and do all of the above and try to get as close as possible? Or should I continue to contribute something to the medical and moving funds every month?
AS's student loan hit, with $128 going to principal.
For the January debt goal, that's $2145 down. Since it's the last debt payment of the month, that means we're $40 short of the $2185 goal. (As reported earlier, I tried sending an extra payment to another student loan, but much less went to principal than I thought should have.)
At least I've met the January leg of our 4-year big-picture goals. This takes us to $2242.61 of big-picture progress, $13.61 more than the $2229 I aimed for.
I'm going to structure the big-picture goal progress slightly differently than my monthly debt goals. With those, I just note how much I was under or over, then create a new goal based on my expected budget.
For the big picture, each new month I'm going to aim for a cumulative amount, $2229 more than the previous month.
So for February, the goal is to get to $4458 of big-picture progress, and the starting point is $2242.61.
Not sure if it makes sense outside my own head, but that's the only place it really needs to, I guess!
I just realized I forgot to record $25 that went into savings automatically, as well as $0.26 of interest from this month. I'm putting them both toward the medical fund, which counts toward our big picture.
So that takes our medical fund to $1348.68 ($3,651.32 to go).
And it means our big-picture progress for January is $2,114.61 down, $114.39 to go.
I had some credit card reward money and wanted to make an extra student loan payment to try and hit my January goal. This is the Direct Loan where they switched over their site last year and it has seemed messed-up ever since. For instance, I estimate the monthly interest to be about $50 per month; it's difficult to tell because the loan is in deferment and so when I make a payment, sometimes it comes out of interest and sometimes principal. I just combine the two totals to come up with what we owe, because we will have to pay the interest eventually.
I sent a $70 payment earlier this month, but it didn't change the interest+principal amount at all, so I figured maybe somehow $70 of interest had been added since the last time I checked and I just broke even.
But then earlier this week -- and just a few days after that other payment -- I sent a $75 payment to them. Now I'm showing interest+principal to be $22 less than after I sent my $70 payment. I refuse to believe over $50 of interest built up in just a week, since that's usually what we average per month. We did borrow some more recently, but just a fraction of the total principal. So what's going on? Who knows. They're really hard to get in touch with and supremely unhelpful when you do get them to respond. None of my payments from September through December 2012 even show up in the "past payments" section, though a phone rep has assured me they show up on their end. I'm just going to log $22 of progress. So $2017 down, $168 to go on the January debt goal and $2089.35, $139.65 to go on the big-picture goals for January.
I don't think I'm going to borrow any more from them, even if the interest rate is preferable when next year's financial aid package arrives. I just want this crap paid off and forgotten about. Nothing makes me feel more unmotivated than not having a grasp on actual financials.
In other news, in reference to my last blog entry, my lawyer got back to me with a referral to an immigration lawyer, and I shot that guy an email asking for a consultation. I'm thinking it'll be $250 or $300 to talk to him for an hour, but we'll see; I asked him for a price quote. Hopefully I can get in with someone before too long so I can figure out what to do about our tax filings. It'll hurt a bit because that's $250 or $300 we'll have to divert from our big-picture goals, but I think it'll be well worth it in the long run to gain some clarity at this early stage.
Ugh, I realized one of the reasons I've been putting off gathering our tax docs this year is that I just don't know who should claim SL on their taxes.
Of course most of you who follow my blog know the whole story, but bear with me while I explain it, just so this entry makes sense. (note to newbies, I have a very "alternative" family, so if that sort of thing tends to bother or offend you, best to skip this post. )
So we have a three-adult relationship. NT and I are legally married and he is a UK citizen, permanent resident of the U.S. through a marriage visa.
AS is an equal partner in the relationship (in fact she and I were together long before NT came into it), but not in legal terms. (Although she is well-protected in terms of estate planning and healthcare directives, there's not much we can do to legally establish our relationship in the eyes of the government.)
NT and I had a child, AA, and NT and AS had a child, SL. (My child has my last name and their child has NT's last name, if anyone's interested.) We were able to do a third-parent adoption, so in Minnesota state, at least, we are all three the legal parents of both kids. (I'm not sure that ruling would have any bearing outside of our state and especially outside our country.)
When it comes to filing taxes, NT and I file jointly, of course, and AS files as a single person. Last year we added AA to the mix, and it was an easy decision to put her on NT and my return, since she is biologically ours, the adoption had not taken effect, and we provide the majority of support.
So now we come to SL. We still provide the majority of support for her as well (having two incomes on our return, and both making more than AS), so should we claim her on our return?
I believe the answer is yes; if I recall from my tax course many years ago, the household that provides more than 50% of support claims the child.
But at the back of my mind I'm thinking about the eventual immigration process to the UK, and what would be best for that. If we move, it will be because AS has found a way to establish residency on her own, probably through employment or starting her own business.
NT and I would then apply for entry as a UK citizen and his spouse. Again, it's a no-brainer that AA would be part of our application. But what about little SL?
In providing records for immigration, the birth certificates are going to be produced, no doubt. Which will raise fewer red flags; AS applying with her child who has a British citizen's name on the birth certificate although he's not her spouse? Or NT and I applying with a child whose mother isn't legally related to us?
And, since tax documents may also be a key part of the application (proving me and NT were a legitimate married couple), where should SL be on our tax docs? Are we even allowed to include her on AS's return if that seems like the smartest move for immigration, since she only provides 1/4 to 1/3 of the financial support?
It concerns me a lot. We're not attempting to circumvent any rules, and haven't broken any laws. SL would be legally entitled to move to UK with either NT or AS, since she is biological child to both of them. She also is going to have essentially dual citizenship once we get her a British passport. But I feel like our situation is going to come to light in the immigration process and will raise the risk of some kind of red flag/ban on one of us moving between countries.
When NT came over here, we didn't have children so AS's name never even had to enter the picture. We basically avoided talking about our situation. I just don't think we'll be able to do that this time around, and I'm not sure how best to handle it.
I'm still leaning toward putting SL on my and NT's tax form. She has his last name, she's his biological child, and we provide the most support. Maybe on immigrating a simple consent form from AS allowing NT to bring SL to England, without further comment about her own plans, would suffice? Maybe I'm making too much of this and it wouldn't be a problem. People have affairs and children out of wedlock all the time, so in legal terms that's what I should be looking at, I suppose. That's the closest model to what we have, even though it's NOTHING like what we have.
I may ask my tax attorney for his input, but he'll only be able to advise on the tax side, not in terms of possible future immigration.
Quiet night home tonight. It was my turn to go to trivia, but I'm fighting off a cold and pretty much out of spending money, so I gave up my spot.
Today I left my wallet at home, which I hardly ever do. I only needed it for my bus pass, but I was stumped for a second because I didn't have any cash. Then I remembered my envelope of $1 bills I took from my charity budget to give out on the street between Xmas and Thanksgiving. I never even gave away half of it; I'm not on the street much, and people are less apt to be out in our winter than in the nice weather! I gave $20 to a friend who was doing 31 nice things for her 31st birthday, but I still had some ones left over. I've given them out sporadically but honestly not that many people have asked me for money.
So I used $3 to get to work and $3 to get back. It's still a good use of charitable money; I'm very much in favor of Metro Transit, and it fits my values of sustainability and helping poor people survive.
I just redeemed $34.57 of Chase Freedom rewards. I decided to pull $35.43 from next month's extra debt repayment and send a $70 extra payment to NT's student loan, in hope of meeting or at least getting close to our January debt repayment goal. It'll hit the loan on the 24th or 25th, so we'll see how much goes to principal.
Remember my goal last year of getting and staying under 130 lbs.? Well, I managed to stay under 130 from about mid-November to last Sunday, when I ticked up to 132! I told myself if I went over, I'd go back to calorie counting until I got back down again. It's been an adjustment getting back into the calorie counting groove, but hopefully I'll get down under 130 again soon and can stop doing it again. I imagine it's something I'll have to do from time to time to stay on track, and I think that's OK. It's easy to slowly increase your calories without really realizing you're doing it.
We've been talking about what to do for our cat when we're in England for 2 weeks in May. Someone here mentioned that Jeffrey (SA site owner) does housesitting, so I actually contacted him! He'd do it but would need airfare, which ended up being prohibitive. But that got us on the idea of getting a housesitter who would pay their own transportation and would do it just for the free housing. We found a site where many of the users have background checks and references, and advertised last night. Really, when you think about it, a high-rise condo near downtown Minneapolis in the late spring is pretty attractive as a vacation spot. We've already got two responses, so we'll probably wait a bit longer, pick a couple of finalists and NT said we should try to Skype chat with them to get a feel for them. Turns out there are a lot of retired and/or telecommuting people who like to travel around and see new places by housesitting. Who knew?
We were talking about our big-picture goal of saving for a big move the other night. The $56K goal includes money for sprucing up our current condo to try and get a better price for it. NT asked if we could do some of the upgrades sooner than right before we try to sell, so we could enjoy them for a bit before we go. Someone else here (snafu maybe?) mentioned that a while back. We agreed it would be nice to update our super-dated bathroom with something a bit more modern once we get some of our big-picture money saved.
We've only got $5,000 budgeted for the bathroom (and we don't even have that saved up yet). So we'll have to be very careful about what we choose to do; I know renovations can quickly go over budget, and I really don't want to do that, because we'd either have to save more or cut back somewhere else.
But, it would be nice to have a bathroom we could really enjoy for a while. And I know NT would love all the planning and work (I'm no good at that side of things, but he loves home improvement and is always itching for a new project).
So we agreed we'll wait until we have at least $10K saved, and then we can talk about redoing the bathroom with $5K of it. We've only got $3K saved, so it'll be a while.
I'm still waiting on some tax docs, mostly for AS. I can probably send my and NT's off to our tax preparer soon. I'm just procrastinating mostly. I used to love doing taxes, but now they're so complicated, and I have them so we don't give the IRS an interest-free loan, so we don't have the anticipation of a big refund. I'm glad we have the money each month instead, but it does remove that big motivation to get the things done!
I've got 7 yesses and 1 maybe coming to my "League of Ordinary Savers" budgeting discussion group in February! I only invited 6 people, actually, but one said she's bringing her husband and another said a friend of hers saw the Facebook event and asked if she can join. I'm a teensy bit nervous now that there are a couple people I don't know coming, but at the same time excited!
I wrote one post and some "About" info on the companion blog. I haven't started a matching Facebook group yet; I'm going to wait until closer to the Feb. 10 meeting to start that.
I've been playing around with Mint.com so I can talk about more than just my one budgeting method. It wouldn't really work for me in real life, I don't think; for one thing I can't figure out how to link NT's UK accounts, so it doesn't really give a full picture. Also when I was last on it, my main checking account balance was showing as $0. I hope it was just taking a while to sync up; I have to go check again.
I also tried to set up a Payoff.com account, but I wasn't able to link my Barclays account properly. I think I was answering one of the security answers wrong, but if so I'm not sure what I would have said instead for that answer!
I'm mostly going to talk about the DIY methods such as Google Drive and physical envelopes. I like the hands-on approach vs. everything being automated; I feel like my Google system keeps me honest because if I don't keep tinkering with it, it will fall to pieces. So I know I have to stay involved with it, and that keeps me focused on our goals.
I've got some time to plan for the meeting, so if there are any important methods or tips you want to make sure I don't forget, let me know!
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): $21,506
NT's Roth IRA: $5,000
AS's 401(k): $8,689
AS's trad. IRA: $1,682
AS's Roth IRA: $10,174
CJ's 401(k): $50,791
CJ's Roth IRA: $5,000
NT's flat: 125,000 pounds ($200,000)
CJ & AS's condo: $145,000
Emergency fund (shared asset): $15,000
House down payment/moving fund: $2,958
Total Assets: $521,577
Total Debt: $277,633
Current Estimated Net Worth: $243,944
August 2012 estimate: $308,187
Change in net worth: -$64,243
Summary: It looks terrible, but actually we did very well in retirement fund performance, debt payoff and savings.
What happened is I "trued up" our accounts using the current pounds-to-dollars exchange rate, reassessed our home values, and moved some money out of the EF into our medical fund (which I don't count among our assets).
Now we can start building toward a TRUE net worth of $300K.
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 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 $1.60 for every British pound.
Well, I decided to do an internet disconnect day Sunday, so I thought I'd get an entry in before that! I'm shooting for midnight-to-midnight, so I've only got about 2 hours left! The house is a mess, but I figure I can clean tomorrow, because I think I'll suddenly have a lot of time on my hands.
That is, assuming I feel OK tomorrow. My stomach's been bugging me all day; feels somewhere between indigestion and period cramps, so I can't tell what's going on. I hope it's one or the other, and not a flu symptom. That would be terrible, after just getting over one long illness! It ebbs and flows; I just took some Alka Seltzer and it feels less painful, but I can still feel something. Anyway, we'll see how I feel tomorrow. I was going to do abdominal workout today but I don't think I could handle that!
NT and AS are out at a dance performance thing, so I've got the house to myself. AA only recently went to bed, because her nap was thrown off today and because she's kind of sick again, so I was humoring her and letting her stay up late.
We rented a carshare and got a lot done today. AS and I are going to need our passports renewed before the May trip to the UK, and SL will need a new one. So we went to a FedEx Office and got passport photos for all three of us, as well as photocopies of NT's and AS's driver's licenses (which they needed to provide since SL is a minor). Then we went to a government center and submitted her application. AS and I just need to mail our old passports in with the new photos and application forms. All told it's nearly $400 of our travel budget toward this endeavor! Yikes.
But we did get the good news that NT's mom wants to pay for our rental car on our vacation. So that will just about make up for the money spent on passports.
After those chores were over, the girls were exhausted and we were all starving, so we got some takeout food at Chipotle and dropped AS and the kids at home. NT and I used the remaining time on the carshare to do our weekly grocery shopping, because the weather was getting ugly and we really didn't want to bus, walk or bike with heavy bags!
Our groceries came to about $145. Considering our pantry was pretty much empty of staples, that's pretty cheap. We got pastas, various beans, rice, veggie burgers, snacks for the girls, as well as our usual weekly fresh fruit & vegetables, milk & soymilk. We even got a big bottle of olive oil and a bunch of herbs we'd run out of. So I think we did really well!
We got some frozen peas where we stacked and doubled coupons, and we actually made 48 cents on the deal! We also got a box of Fruit Newtons cookies for free after sale and coupon, and some Teddy Grahams for nearly free.
We have about $110 left in the grocery budget through the 31st (and I've already subtracted what we'll spend on diapers). We'll definitely need formula for home ($25) and we may need one for daycare, so we'll have either $85 or $60 for next week's grocery run. But we should be able to utilize a lot of the stuff we stocked up on, so hopefully we can get through this period without dipping into the next! Oh, and we may have $25 put back into the budget from Amex rewards; if that happens, we'll really have a good shot.
I've started another personal finance blog! This has been a couple weeks in the making, but I didn't want to write about it until I'd actually done something about it, because I tend to make plans and not follow through when it comes to blogging, creative stuff, etc. It's weird; some things in my life I've really stuck to, while a lot of other things fizzle out before they really get going.
It all started when a friend asked if she could come over and ask my advice about retirement and some other financial things. I agreed and was a bit surprised about how basic her questions were. She basically wanted me to advise her on what to choose for the 401(k) at work and how much to put toward it. Then, she had a credit card offer she'd gotten in the mail and wanted me to look at it and make sure it was as good a deal as it seemed.
I looked through her 401(k) and told her to pick an aggressive fund that already had the mix set up for her, and to contribute up to the matching max, explaining how that ROI was unbeatable.
Then I looked at the credit card offer, read all the fine print, asked about her existing credit cards and advised her that, as long as she was careful to not use her existing cards anymore, it would be a very good deal to transfer the balances to this $0 transfer fee, 0% for 12 months card. (Even after the 0% period is up, the rate will be lower than both her existing cards.)
That led to a conversation about credit scores, and I sent her links to annualcreditreport.com and creditkarma.com and explained what each site had to offer.
So, you know, really basic stuff to those of us who have been on this site for a while, but she didn't know any of these things. It felt so good that I'd helped a friend basically exponentially increase her financial literacy in less than an hour!
Then, a friend of AS was talking to her about my personal finance obsession. She wanted to see my blog so AS sent her a link. (Hi K if you're reading this!) AS mentioned that other people, upon hearing about my very exacting financial management, have expressed their confusion and anxiety when it comes to their own personal finances.
So that made me think that maybe I could do what I'd done for my friend, but in a group. People could bring any questions or issues from their financial life, I could share my basic philosophy of finance, and we could trade ideas and inspiration.
I posted on Facebook to see if anyone would be interested in something like this, and got 5 or 6 people expressing interest. Several more people from out of state said they wished they lived near enough to take part because they loved the sound of it.
THEN, I started thinking further. What if I started a Facebook page to record everything that we talked about in the discussion group? Then my out-of-state friends could also get some value from it even though they couldn't attend in person.
Then I thought, why not have a website as well as a Facebook page? Maybe other people besides just my friend group could get something out of it too.
I started brainstorming name ideas with AS. I wanted something that sounded sort of heroic but also kind of old-fashioned. I picture the group being very inspring but also nonthreatening, so old-timey superhero-y was the vibe I was going for. She and I collectively came up with "The League of Ordinary Savers." I love it more every time I say it!
I liked it so much that I went ahead and registered the domain "ordinarysavers.com"! Now I've got skin in the game, so hopefully it'll motivate me to keep it going. I've got 2 weeks free but after that, I'll get charged about $120 for a year of service. I'm going to pay for it gradually with my weekly spending money, $10 or $20 a week until I pay it off.
AS is helping me set up the site; there's nothing there yet, really, except an intro post and some "about" info. I hope to pretty it up and add more content in the coming weeks.
Then, I invited all the local people who had expressed interest in a personal finance group to come over in February. I just did that tonight and already have 2 Yesses!
I'm pretty excited. I've off and on cast about for ways that I could use my past mistakes and what I've learned from them to help other people with their money. This seems like a way to do it that's fun, and it's "scalable"; I can make this as informal and private, or as high-minded and public, as seems appropriate (and depending on how interested I stay in this project). I've also wanted a creative project such as a blog, and I've considered and discarded several blog ideas. This is the first one I felt sure enough about to actually get it going! I know there are a ton of well-established, prolific personal finance bloggers out there, so maybe the wider world doesn't need another one. But I at least feel like my social circle could get something out of it.
I'll let you all know how it goes!
NT's tuition balance for the spring semester posted to his student page in December, but we've been waiting for the student loan we took out to hit the account, so I could see exactly how much we owed in cash. Well, it finally hit today; we took out a $2723 loan and I paid $1254 to cover the rest of the semester.
I took both amounts out of "estimated future debt"; of course the loan added to actual debt, but the tuition paid is just future debt gone. So that's $1254 more to our January debt goal and to our big-picture goal.
$1994 down, $191 to go on the January debt goal. We might actually miss that by a bit, unless I decide to pay extra on some loan. We'll see.
$2067.35 down, $161.65 to go on the January portion of our big-picture goal. That one we'll almost certainly hit, maybe even exceed if one of AS's freelance checks comes in this month.
With taking this semester's loan and tuition out of "estimated future debt," that brings that category down to just $2829. That means the $40,000 I estimated for NT's college degree is almost gone, with a year and a half of classes still to go. That's OK, I'm confident we can stop borrowing and start cashflowing once that money is used up. And, my debt numbers will be less confusing to outside observers once I get rid of this shadowy "future debt" category.
Finally, all our paychecks hit and I got to look at our paystubs too. Turns out the decrease due to the tax cut expiring wasn't quite as bad as I thought because other taxes (federal, state, medicare) adjusted ever so slightly lower. So instead of losing $226 per month it's more like $195. Hey, I'll take it! That means $30 more to our big-picture goals, so our budget shortfall's only about $330 (I'll do the exact math in a bit and update my sidebar when the blogs are working again).
I therefore have a small budget surplus over the next two months because I underestimated our take-home pay. But we have a few dental and doctor visits coming up, and I don't want to dip into our medical savings, so I decided to put that windfall aside to cover co-pays.
I also took the opportunity to update a spreadsheet I don't use too often but find helpful for assessing our spending relative to income. I call it "Absolute Budget Breakdown" and I list our gross income and itemize all the taxes and pre-tax paycheck withholdings. I have everything listed by "Need," "Want" and "Savings/extra debt repayment." I like to measure things against the 50/30/20 yardstick (50% to needs, 30% to wants, 20% to savings/debt repayment). Our new numbers look pretty good. Counting tax withholdings as a "need," this is how the budget breaks down:
Debt repayment/savings 23.37%
However, if you remove taxes from the mix and just evaluate the money that is actually mine, here's how it breaks down:
That seems pretty well balanced to me. I also calculate how much of our gross income is going toward retirement, and right now it's at 9.29%. So, that's a bit low, but considering how many other debt and savings priorities we have, I'm fairly comfortable with that. As we knock other goals out of the way, I see us upping that percentage gradually. (We are saving 10.19% of our regular income, but if you count our two property rental incomes, we're not quite there.)
Other financial news, briefly:
We went over our grocery budget by about $46. This is the least behind we've been in months. Part of it has been smart grocery shopping, but also we each donated $50 of our Xmas gifts from family to the groceries, so that helped wipe out the deficit caused by Thanksgiving and Xmas food expenses. AA is down to just three or four pull-ups per day, so that expense is a bit smaller. I have high hopes that we're going to stay within our grocery budget from the 16th to the 31st (even without the $46 we took as an advance this past week), and if we can manage that, I think it'll be even more doable from now on. In late March SL won't need formula anymore, and in early June we'll start getting our CSA veggies again.
Other creative budget tidbits: We had some winter gear and some school book purchases that weren't budgeted anywhere. I just put them in the spreadsheet as something we had to reimburse somehow. NT sold a pile of DVDs we'd been meaning to get rid of, and that made up for about half the expenses. We still have $68 that we need to make up somehow, but we have a bunch of books as well as a thermal stroller cover, so if we can sell some of that, we may be able to pay for the winter clothes and textbooks without disrupting our regular budget!
I guess that's it for now. I look forward to reading everyone else's blogs when the site is back up and running!
When I woke this morning, I felt like the illness was gone but that I had no strength or energy. I went to work and requested that we see if I could arrange my work so I could leave early. Well, the stars aligned and I left around 12:30. Picked up some lunch on the way home, ate it in bed along with some chamomile tea, and read and watched TV until about 2 or 2:30, when I fell into an extremely deep sleep and didn't wake up till 5:30! I was dazed, but I feel more at my normal energy levels. I cooked a fairly complex dinner and still had energy to play with my toddler for about an hour before her bedtime.
Now that I'm feeling better, I need to start knocking out to-do's that I've been putting off. I need to schedule doctor and dentist appointments, renew/apply for passports for England, start to gather tax documents, finish reading a manuscript submission that I volunteered to review for AS's publishing house, and do my self-assessment at work. I also need to start working out again. But most of this can wait until next week. I think I'm just going to try and enjoy my energy and my family this weekend, for the most part.
We've been talking about AS not taking any more freelance projects soon. NT's all for it, but then it would mean if any household wants come up (home improvement etc.), we would either have to say no or find creative ways to finance it., if we have any hope of saving enough for a move to England. I'm all for that. I think we're in a good place and should be able to get through the next few years without buying much for the house. It's not a perfect home or anything, but if we want to save up and buy a better home, we'll need to accept that and make do with what we have.
AS shouldn't keep burning the candle at both ends, anyway. So I'm hoping after these next couple of projects she's already accepted, we'll all have the strength to help her give up this side income. It's good money, but at a heavy price to AS's work/life balance, health and free time.
And it's not like it couldn't be picked up at a later date if emergencies arose, or that there won't ever be any other, less punishing freelance opportunities for any of us.
Guys, I'll be clearing up my faulty reasoning and math forever, it seems. These big-picture goals just had too many moving parts, and I was too hasty in setting down my amounts!
This one's in our favor, thank goodness.
When I figured how much we'd probably profit from the sale of the UK property, I figured in current mortgage figures at the time. That was months ago. Today, the mortgage balance is lower. In four years, it will be lower still. That means if we're planning to sell in four years, I should use the estimated balance by then.
I'm not using a sophisticated worksheet, just using the current amount that goes toward principal and multiplying by 47 more months. So this is hopefully a conservative estimate, and the amount to principal will actually be a bit more by the end of the four years.
So, what does that take us to? We'd need to save $56,000 to be at the same place I want us to be in four years. Not $71,000. Hooray for shaving $15K off our total goals!
Thank goodness. That seems a LOT more doable. That means we need $106,957 total, or $2229 per month. Just a $363 monthly shortfall to make up, then. ACRES better than $675.
I hope I don't discover any more major holes in my logic. But if I do, I hope they go in our favor in a big way, like this one!
AS is going to be happy about this, because she's feeling the strain to come up with the extra with her freelance money. This seems more doable just by cutting the travel budget a bit starting in June!
I'm so tired. I'm feeling nearly recovered from my illness, but doing so during the first full week back at work after the holidays is rough. I have a headache so I'm taking a copy-editing break to just blab a bit.
Last night I was home alone while NT and AS went to trivia, so I started sketching out a meal plan and shopping list for the next week (which starts Saturday for us, grocerywise). We only have about $12 cash (and we still need 1 or 2 things from the Asian grocery for this week) plus $50 in Target gift card to get us through next week without dipping into the following week, so we have to be really strategic. (Of course if we dip into the next period's cash but still have some left on the Target card, that's acceptable too.)
So, working with what we've got in the pantry (not much: onions, garlic, pancake mix, pasta, beans, rice, veggie meat alternatives, tomato sauce & pizza dough), and what's on sale at the grocery store, here's what I came up with:
Pancakes, veggie bacon & stewed apples
Asian lettuce wraps w/ramen noodles
Veg burgers, fries & salad
Mexican skillet (beans/rice/corn/"burger" topped w/cheese & avocado)
Chikn parmesan w/spaghetti
BLTs & cauliflower
2x avocado ($1 ea)
2x mushrooms .99 ea
3x bell peppers 1.29/lb
cat food (c)
butter (coupon for free pack)
Ugh, every time I think about what our new take-home pay amounts will be, it feels like NO time has passed since the last time I wondered. Basically it's on my mind a LOT, and time has slowed to a crawl. I will find out Tuesday what our pay looks like (possibly Monday, if we can access our paystubs a day early). And now that I'm finally beginning to recover from my cold/flu/whatever, it's making me very impatient.
I have a slow moment at work, so here are other random bits of financial news:
- Now that we need to come up with $675 more every month than we have in our regular budget to meet our big-picture goals, I'm casting around in my mind for ways to make that extra amount. AS has $1600 coming for two freelance projects, so that helps a lot. She also has the potential to take on more projects from that place, but she's contemplating not doing anymore because the last one was so stressful. I don't blame her if she can't do it anymore; she has by FAR the busiest, hardest and most stressful job of all three of us. I don't think I could do what she does, let alone do MORE work in the evenings on freelance projects.
- One thought is to do more credit card rewards. There aren't any big offers out there that I can see, but there are a few spend-$500-get-$100 ones. It's easy money as long as we continue to get accepted. Keeping track of paying and closing the cards is a pain, but doable. There's an NFL Visa that none of us have done, and a Chase Freedom MasterCard (we've only done the Visa for that one). I need to cancel a few cards that are hanging around from our last bout, and then I think I might start signing us up for new ones.
- I still have a vague hope of a small raise at work. It would at least make up some of the pay lost with the payroll tax cut expiring. I need to finish my self-evaluation by next Tuesday and hopefully our reviews will follow shortly.
- Another solution would be reduce expenses. As I mentioned in a past post, once our England trip is fully funded (end of May), we could start reducing the amount we put toward travel/vacations, and plan to have cheaper staycations instead of big trips sometimes.
- Another possible budget reduction will come soon. SL only has to have formula until she's one year old, which is March 29. So, only about 2 and a half months more of that. Whole milk will be much cheaper; I reckon she'll use a half gallon a week, which is about $4, versus a half box of formula, which is about $11. Savings of $7 per week equals almost $30 a month. It won't affect our budget directly, but it will make grocery budgeting a bit easier.
- Also, AA is finally starting to take an interest in her potty training, so we're starting to see a reduction in the use of pull-ups. If we can cut that in half, that would probably save us about $20 to $30 a month (again, not directly helping the budget but definitely easing the strain on our grocery/household expenses). When she's fully potty trained, we can reduce our diaper cleaning/composting service and could see another $15 drop in expenses monthly. (And THAT one will actually benefit our budget, because the cleaning/composting is a separate line item from groceries.)
- Other than that, we do have plenty of discretionary spending in our budget, but cutting it would warrant some serious discussion in our family: What's more important to us? Keeping these luxuries and pleasures that mean so much to us, or reaching our goals on time?
These are the discretionary items that could be cut, but none of us would want to lose:
Spending money $1040 (about $345 per person per month; encompasses clothing/shoes, all gifts except bday/Xmas for the nuclear family, babysitting, eating out/snacks/coffees/sodas, wine/alcohol, and any entertainment like movies/books/music)
Cable/Internet $75.80 (cutting the DVR would save about $20 per month. The rest is internet, which is our biggest source of entertainment, communication and information.)
Xmas & bdays $133.34
Housecleaning ($121.21 per visit, 13x per year) $131.31
CSA farm share ($650 annually) $54.17
Car share $90.00
Of these, I would find it the least painful to cut back on travel/vacations and the car share. I used to think the spending money allotment was way more than enough, but now if we want a date night, the babysitting cost on top of everything really adds up fast.
Everything else, I would give up if I saw no other way of meeting our goals (or if some financial hardship befell us). Now my spouses, they might fight even more than me to keep them. They are all optional, to be sure, but they are very much appreciated in our lives!
So, we'll see what happens if we start lagging behind our big-picture goals. Right now I think we'll be OK at least for the first three months of 2013; after that it's up in the air.
It's hard doing financial stuff when my head is fuzzy; more prone to weird errors! Anyway, I think I looked at some old info when I calculated the UK mortgage balances with the current exchange rate. Here's what I got:
TOTAL HOUSEHOLD DEBT: $280,239
But when I checked the mortgages to record payments today, I realized that they were much lower than the payments could account for. I redid my calculations, and THIS is our actual starting debt number for the year:
TOTAL HOUSEHOLD DEBT: $279,628
So at least the error correction worked out in our favor this time! It's not real progress, but a nice surprise anyway.
Now for the real progress. All our mortgage payments hit:
US: $437 to principal
UK1: $211 to principal
UK2: $45 to principal
UK3: $48 to principal
That means $740 down, $1445 to go on the January debt goal.
EDIT: Also saw that my automatic $50 debit into savings for my medical fund hit, so that's another bit of progress on my big-picture goal. $813.35 down, $1727.65 to go on that one for January.
I calculated how much less we'll be taking home now that the payroll tax cut has expired. I'd set aside $90 in the budget, but I forgot that AS got a full-time job and NT and I both got raises since the break was implemented. Plus I may have misremembered how much it was to begin with. Anyway, the actual hit is going to be $226 per month. I was $136 off! Ouch.
I took that out of the house down payment savings line item. Now we'll be $675 short every month of what we need to accomplish all three goals. It's a lot to come up with every month for 4 years. But, hopefully we'll get some unexpected windfalls as well as curveballs over the course of it.
I went to check the UK account because NT's dad said he'd put some money in there for the girls. He'd deposited 100 pounds, so I transferred it to UK savings and allocated 50 (US $80) to each daughter. They each got $25 from my parents, so they're up $105 each in their savings.
I don't have much of a money plan for the girls yet; we have so many other things to focus on first. But my vague goal is to save at least $1000 a year for each of them. Right now, AA has $2,802.11 and SL has $566.00, so they're pretty much on track to have $3000 and $1000 saved by their respective 3rd and 1st birthdays (March 5 and 29).
While I was in the UK checking account, I calculated how much rental income we'd have left after the mortgage payments hit, and transferred the excess into savings. That means US$552 more toward the house/moving fund, taking it to $2958, and taking our January big-picture progress to $763.35.
I'm nervous what our Jan. 15 paychecks will look like. The payroll tax break is not being renewed, and I may have underestimated the impact to our take-home pay. But we'll adjust if we need to.