We had a fantastic month of debt repayment in February, which is good because otherwise it was not a particularly frugal month. In the February eat-at-home challenge, I think we maybe racked up 2 points. LOL.
First, I found out that AS frequently buys a Coke at work, nearly every day. Then, I've felt less inclined to go walking around with NT at lunch, so he's been coming over to my building, where the only place to sit is in the coffee shop. So we've been buying beverages to be able to sit together there.
Then, I've been trying to have date nights, and we've been too exhausted to cook some nights, so we've been eating out or getting takeout WAY more than we usually do. Also, my sugar and chocolate cravings have been so bad that I've been buying random candy bars and snacks, which I virtually NEVER did before I got pregnant.
Then there was Valentine's Day, and this weekend, AS and I are having our birthday dinners out. Our birthdays are March 2 and 4, but since we're so close to the due date we decided to celebrate early.
Also, our grocery spending has gone way over what it normally does because we've been buying all sorts of nonperishable foods (we usually eat mostly fresh foods and don't have a very heavily stocked pantry) and convenience meals in preparation for whatever the first few weeks have in store.
And then, we had a flurry of baby-supply buying for any supplies that we didn't get through hand-me-downs or baby-shower gifts.
Despite all that, we still managed to save up most of the money needed for our family trips and to put a bit away in the EF, so I don't feel bad about it, but it's just been a weird feeling to do so much buying.
For March, my debt-payment "goal" is just to pay the minimum required maintenance on everything, about $1130 total. So we'll follow our record-breaking month with another record--the lowest amount of debt paid since I started my journey. LOL.
Other than that, I have a whole huge list of to-dos for March, divided into pre- and post-birth, but I won't bore you with them. They'll get taken care of because they pretty much have to.
Archive for February, 2010
We had a fantastic month of debt repayment in February, which is good because otherwise it was not a particularly frugal month. In the February eat-at-home challenge, I think we maybe racked up 2 points. LOL.
Well, we're lazing around watching movies, so I decided to check AS's student loan account, and our payment was there! $116 went to principal, so that brings our February debt repayment to $5079. Cracking $5K is a new record for us!
How did we do it? Some of it was planned. Some was due to bigger-than-expected tax refunds. Then there was a flurry of freelance income from AS. Plus, we'd been hanging onto some of her 2009 income in case she owed self-employment tax, so we were able to put that toward debt as well.
This is a good flourish before we settle into minimum payments only, which consist of about a grand a month, until probably late summer.
My credit card payment hit, just the minimum, with $144 going to principal. After a heady couple of months of paying down big chunks of debt, we need to pull back and pay the minimums for awhile until we've made sure the baby is all right, the months of reduced pay are over, and the trips to see the grandparents are fully funded.
So our total progress on debt in February is $4963. If one of AS's student loans hits tomorrow (not sure if they process payments on Saturdays), we'll crack $5000 this month. If not, still an awesome month.
Our biweekly $25 was transferred into savings, so I'm putting that toward our England trip: $2476 saved, $524 to go. AS just completed a freelance proofing job, so soon we'll get $600 or $700 (can't remember exactly) to put toward travel.
That's good, because I projected out the next six months or so, and I did some maneuvering so that we'll stay in our budget just fine, but we won't have ANY extra money (beyond the biweekly $25) to put toward travel until July at the earliest, and one of our trips will have already happened by then. I'm going to have a family meeting and see if they think we need more money for the Va. trip, and if so, what we should move around to do so. Thanks to momcents' recent blog post I'm feeling much more mellow about viewing our money as one big amount vs. separate untouchable buckets, so I feel confident we can come up with something.
Of course, I tried to be conservative in my estimates of our reduced paychecks, so I have some hope that they'll be a little higher than what I'm projecting, but not much. At some point my HR will give me a projection of what my checks will look like, but I'm not sure at what point they do that, and me being me I just had to work out some kind of rough estimate so we could be looking ahead.
A week and a half to go, if baby is planning to stick to the schedule! I just set up diaper cleaning service--weird! Have to figure out how I'm going to pay for that--leaning toward my medical-expense fund, since it's at a healthy level and doesn't feel as drastic as taking from the emergency fund. The good news is it's one lump sum that covers 12 weeks, so I only have to come up with it once--after that we're planning on managing the cleaning for ourselves, but we thought we could use any help we could get in the first couple months.
NT's UK pensions: 7,250 pounds ($14,500)
14,721 pounds ($29,442)
NT's 401(k): $7,400
AS's 403(b): $3,237
AS's IRA: $1,681
AS's 401(k): $104
CJ's 401(k): $31,406
NT's flat: 130,000 pounds ($260,000)
CJ & AS's condo: $160,000
Baby/emergency fund (shared asset): $8,256
Total Assets: $516,026
Total Debt: $372,825
Current Estimated Net Worth: $143,201
January 2010 estimate: $135,321
Change in net worth: +$7,880
Summary: My dad cashed all the checks I gave him since my last update, so our net worth skyrocketed! I would be happier if I hadn't gotten a disturbing piece of mail: My property valuation by the county went down from about $151K to about $137K. Yikes! I haven't changed it on the info above because I go by sale prices, so I'll start watching for how comparable units in my condo are selling, and adjust my assets next time if necessary.
In other good news, though, I got a peek at how AS's old 403(b) account is doing--it's been gaining 6% all along, but I wasn't able to see that, so I got to record it as a nice lump gain this time. She also opened her 401(k) at her new job and we added $80 to her IRA. So her individual net worth should show a nice little bump (which may or may not be crushed next month by our condo's falling value, but c'est la vie).
I will update my "Individual Net Worth" page shortly so you can see how it breaks out.
Notes on the numbers above: House value estimates are conservative. 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. I maintain that ratio for the purpose of tracking progress, even though the exchange rate is now closer to $1.60 per British pound.
AS needed a refill, so we spent $107.78 to buy 1000 more minutes. She made her minutes last 4.5 months this time, much better than the previous record of 3.5 months. Having a work phone has made a huge difference, and she didn't even have it for half of this time.
Initial layout to get us set up with phones and 2300 minutes: $241.63
NT's late-May Net10 fillup: $32.65
AS's late-June T-Mobile fillup: $107.40
NT's late-July Net10 fillup: $32.82
NT's late-September Net10 fillup: $32.82
AS's early-October T-Mobile fillup: $107.78
NT's late-November Net10 fillup: $32.82
NT's late-January Net10 fillup: $32.82
AS's late-February T-Mobile fillup: $107.78
So our total cost so far is $728.52.
I still have 140 of my original minutes, NT has 185 remaining on his phone, and of course AS has 1000 brand new minutes. We're assuming that's the last we'll have to buy before late March, at which point I'm going to start a fresh year of calculations. So, if I divide our total cost by 12, our new plan cost us an average $60.71 per month over the span of a year. That's much better than our $85 average on the T-Mobile family plan (and better than the $80 minimum which our family plan used to cost us in a really good month).
RECAP: I switched to prepaid in late March, meaning it's been 11 months. We have 2 phones on T-Mobile prepaid and 1 on Net10 prepaid. AS and I refill in 1000-minute increments and only need to refill when we run out or when it's been a year since our last fillup to stay active. NT needs to buy 300 more minutes every 60 days to keep his phone activated.
(Our cellphone bill, for three phones on a family plan, used to range from $80-$95, depending on texts, calls to 411, etc. Usually it was close to $85. My goal for next year is to get my average cost to $50 per month, but any average number below $85 will be a savings.)
One of AS's student loans hit: $79 to principal. Makes the February debt repayment toal $4819. This is also the loan that I want paid off by December 2011, so it's progress on one of my Big-Picture Goals.
I must be feeling protective of monkeymama because of the awful comments someone has been posting to her blog! I had a dream that I had this magical device where I could go through the SA website and directly into SA bloggers' homes. I used it to go into monkeymama's house where she was being robbed, and helped fight off the robber and call for help.
When everything was OK and the robber had been arrested, I said soemthing like, "And look! Since I came straight into your house, I still have no idea where you live. Your anonymity is still safe!" Then I went back to my life using the magic device. LOL.
I've developed two more financial goals that would be nice to accomplish in 2010, but I'm not sure I'll add them to the list since I still think my current goals are kind of ambitious, but it's in the back of my mind that they could be completed this year. One is that we want to screen in our 18th-floor balcony so it'll be safer for the kid (and the kitty) to be out there. For the kid, we won't really need it until summer 2011, but it would be nice to have it this summer for the cat. It costs about $1800 to get the screens installed.
The other is to find some experts to help me out with all the complex financial and familial situations we have, to make sure I'm protecting all of us and doing the best for the future. On the SA forums someone was asking who had a trusted financial adviser, and it reawakened my desire to get some help with our life.
I think I need a tax expert fluent in both U.S. and UK taxes to make sure I'm reporting everything correctly; I've been doing both for about three years now, so if I was making mistakes it would be good to correct them before I have too many years to fix.
Then I need a financial adviser who can address taxation practices for both the U.S. and the UK, and can steer us toward the right strategy for our unique situation, which is contributing to retirement in America now but eventually retiring in England. We also need to know whether it's beneficial to do a tax-free college fund in the U.S. if chances are our child will be going to school in England.
And finally, we need help from a family lawyer who has experience with nontraditional family structures, to see what parental rights we can put in place for AS, and to figure out wills and other documents to protect our family's cohesion in the event of serious injury or death of one or both of the (biological) parents.
So, all of that is going to cost me money. We'll see if I can afford to do anything about it this year.
My dad just e-mailed me to let me know he cashed the last three checks! Even though they haven't come out of my checking account yet, I'm counting this as PAID because he has the cash in hand and I know they're not going to bounce when they do hit my account.
Happy, happy, happy dance! He wrote a really nice note in response to my thanks for the loan--very unusual for my dad to write about anything resembling feelings, and my note to him was pretty effusive (by my family's standards) so I'm pretty touched he acknowledged it. My parents love me very much but are not so much about talking about it. LOL
This one's going on the Old Debt Graveyard page as soon as I come back from a meeting.
Oh! And it gets my (and by extension the household's) personal debt down below $10K!! Now we just have to tackle that last credit card.
Oh yeah, and it means I passed my February goal of payind off $1800--so far I've paid off $4740!
AS's federal refund was deposited yesterday, $1338. Her paycheck also hit and was still $20 more than I expected. I'll have to look at her stub and make sure she's paying her healthcare premiums. (Or maybe it's one of those plans where the employee doesn't have to pay a premium...well, I have to find out what's going on one way or the other.)
So anyway, that means I get to put $1358 into the travel savings, bringing the UK travel fund to $2451. So close to the $3000 minimum goal! Just goes to show that really trying to predict your finances is a bit like playing the stock market. Sometimes when I'm really confident I'll hit a goal, something unforeseen pops up. Other times, when I'm a bit pessimistic and think I won't be able to reach my target, all of a sudden things fall into place and I hit it even sooner than I ever hoped. At this rate, a lot of things would have to screw up for us to miss our goals.
I think I forgot to mention in my last post that I e-mailed my dad on Friday and let him know he could cash the last three $1000 checks, thereby wiping out my debt to him! It may take a while for him to do it, but at least I know I've taken the final step and now just need to sit back and wait for it to happen.
Today was our baby shower with friends (as opposed to the workplace showers). It was very unstructured and fun, just people chatting and snacking and having a good time. The only shower-y thing we did was I opened gifts while everyone watched. It made me really shy and overwhelmed to see all the things people got us and the sweet things they wrote in the cards. I just hoped people could tell how much I appreciated it, because I'm not sure how much I emoted.
Anyway, we're pretty much set for baby to come. All we need now is a carseat (we discovered that the freebie one we found had "expired"), some disposable diapers for the first few days, breast pump and bottles, some swaddling blankets and burp cloths, cloth diaper service (just for the first three months, then we'll clean our own). Eventually we'll need a crib mattress, but we got a nice Moses basket bassinet that we'll be using at first. And we'll need cloth liners for diapers once we start doing it ourselves (someone gave us several outer diapers, but we might have to supplement that with a few more). Several of these things can be purchased at the hospital, and their prices are actually quite competitive!
Tomorrow the baby is full term, meaning it can come anytime with no cause for concern. Our due date is March 8. Whether or not the baby comes by then, I'm starting my maternity leave then (unless of course it comes sooner). I haven't had any signs that the baby is impatient to come early, so my feeling is that it will be on time or a little late.
The mixture of calm and extreme excitement I feel as we prepare for this is just indescribable! It's definitely something I wouldn't have been able to understand before actually going through it.
My and NT's paychecks came early--I forgot Monday was a holiday; that's probably why. (I have to work that day but I do get a make-up vacation day later.)
My paycheck was a bit bigger than expected (I had attempted to calculate the drop in pay from today being a furlough day), so I put that $42 toward the travel fund, as well as the $25 regular biweekly savings transfer that happened yesterday. So the UK travel fund is up to $1093.
EDIT: Oh yeah, I just realized why my paycheck was more--I altered my federal withholding in anticipation of having another dependent this year, and because I got such a big refund for 2009. Cool, now I can go through my budget and increase my projected paychecks a bit!
Last Saturday we had a date night--dinner and a movie. (At my request we're trying to do something date-y at least once a week; enjoying our freedom, so to speak.)
Conversation turned to the two family trips we're planning this year, and I explained how I wasn't sure I'd be able to save up for much more than the plane tickets, what with the other financial goals, unpaid parental leave and unpredictability of our soon-to-arrive new family member. I revealed I was hoping that our families would pull through to provide us room, board and transportation once we got there.
AS was especially resistant to this idea. She didn't want to feel trapped with any of our families, and admitted a bit of resentment that we were using all our vacation time to visit, when no one ever visits us in return. (For understandable health and/or financial reasons, but I still get where she's coming from.) Since these are going to be our only "vacations," she wanted a few perks if possible to make them more bearable. NT also mentioned that his parents don't have a lot of extra money and so their ability to provide for us might be limited.
I recently raised our allowances, and she and NT both offered to go back to the old amount and have the extra money go into making the trips a bit more luxurious.
So that was going to be the plan, until:
- AS's tax refunds ended up being nearly $800 more than expected, and
- I realized that we could use some of the income from renting the UK flat. Every month I just shuffle whatever's left over after paying the UK mortgages into the EF. While it's certainly a good idea to do so, it's not strictly necessary to do it EVERY month. So if I keep a few months' income in checking instead of dumping it into the EF, we can use that to rent a car, have a meal or two out, or even get a night at a hotel room while we're in England.
So I now feel more confident about my chances of meeting all our financial goals AND being able to put a bit more away for the trips than I originally planned. And I don't think I'll need to take back our increased spending money, though we're all going to squirrel some of it away for the trips just in case.
On that note, AS got another freelance check. We'd decided she could afford to give me $1000 from last year's profits and $1000 from this year's. I'm taking the whole recent check minus a small IRA contribution--$690--plus $1000 from her business account, for the vacation fund. That means I've funded the $1000 for the Va. trip and have $1026 saved toward England. I'm going to get the base amounts saved, so we can order plane tickets as soon as we're sure we'll be able to travel, then work on my Amex credit card for awhile. Then, before the trips take place (June/July and Aug/Sept), I'll put some more into the Va. travel fund (the UK one should be fine now that I'm going to use the rental income for that one).
I'm happy that we're getting lucky and making so much progress on this year's goals early on! The more we do now, the more we'll be able to roll with the punches for the rest of the year.
All done with our taxes! I e-filed both federal returns for free and am hard-copy filing the MN state ones. I'll be mailing out AS's today since she gets a refund; I'll wait to send out mine and NT's until we get our federal refund, since we owe a bit.
AS's refunds are bigger than I anticipated, over $1700 total. I'd be annoyed that we were that far off except 1) it was a total wild-card year, with a home business and unemployment, so better a big refund than owing, and 2) I've been eyeing my 2010 goals a bit worriedly, so the unexpected extra money will help tremendously.
I knew that last year was a little hard; due to furloughs and AS's layoff we had to cut back here and there. But I didn't realize to what extent until I looked at our completed returns next to our 2008 tax returns.
AS 2008 total income: $39,970
AS 2009 total income: $19,985
CJ/NT 2008 total income: $89,768
CJ/NT 2009 total income: $79,138
Combined 2008 total income: $129,738
Combined 2009 total income: $99,123
Wow, that's like $30,000 difference! We certainly didn't feel that kind of pinch in 2009.
The contributing factors to the income difference were AS's layoff for most of 2009, my furloughs and health-insurance cost increase, and NT's furloughs and lack of bonus. (Needless to say, none of us got raises either.)
The factors that made it doable, and the steps we took to cope with the smaller income:
-Stimulus program. I can't say enough about this; it really eased the burden of the layoff and furloughs. AS got $25 more per week for unemployment; we all got reduced tax bills and less withholding throughout the year; and the lump sums at the beginning really helped, too.
-Fewer bills. Luckily we'd aggressively attacked our debt in 2008 and knocked out a number of monthly bills, so our budget was already less tight and so absorbed the financial blows much more easily than it would have before. In a stroke of luck, our adjustable-rate mortgage actually adjusted downward at the end of the year, so we had two months of lower payments there.
-Gradual budget cuts. Whenever our income got reduced, we cut back in little ways rather than one big drastic cut. We reduced our grocery/household spending by $200 per month, reduced discretionary spending money in small increments, and cut back a bit on extra debt repay.
-Lifestyle adjustments. Besides monitoring our grocery costs more closely, we switched from a family contract cellphone plan to three prepaid phones (saving an average of $20 per month), and took a downsized fall vacation to Wisconsin instead of doing one of our big blowout trips.
-Frugal pregnancy. Although I misstepped when I chose the high-deductible insurance plan (which ended up costing us quite a bit more than the other plan would have), in everything else we've tried to be sensible. We've openly solicited hand-me-downs from friends and have avoided buying most of the supplies and furniture needed for the baby. In the grand scheme, what could have been a budget-buster in such a tight year hasn't been a financial strain at all.
That's all I can think of off the top of my head; I'm sure there were other factors but that's most of the biggies.
Wow, my dad already cashed the check I told him about last week! He doesn't even know how happy that makes me.
That makes $1740 down, $60 to go on the February debt-repayment goal. It also leaves just $3000 that I owe my dad. The original loan was $12,000 in 2003, and I started this year still owing him $6000.
He doesn't know it yet, but I should be able to have him cash all the remaining checks in under two weeks! (I'm holding off telling him until I'm sure nothing catastrophic happens to our budget between now and then.)
That will be a relief on multiple levels--being able to at last cut the purse strings connecting me to my parents, bringing our personal debt down under $10K, and getting to add another epitaph to the Old Debt Graveyard page.
The US mortgage payment hit with $376 going to principal. That makes $740 down, $1060 to go on my February goal.
I did my taxes on TaxAct.com and it was indeed free, though they kept throwing in sales pitches every couple steps. Also, they would charge if you wanted to preview schedules or forms before e-filing; the only thing they let you preview for free is 1040. So it took me awhile to figure out why they had my income as $3000 more than I thought it was. Turns out I needed to report my HSA as an income deduction. 2009 was my first (and last, for awhile at least) year of having an HSA, so I didn't know that. Once I figured that out it was fine. The software actually prompted me to itemize the state tax I owed last year, which had slipped my mind somehow, so I'm getting an extra $100 or so more than I'd calculated.
Now that I know my refund and when I'm getting it, I was able to shuffle some money around and make some progress on savings goals. I fully funded our birthdays with $600, $200 for each person's gifts. I also put $336 into the travel fund, so we're a third of the way to our Va. trip goal! The rest of the federal refund will go to pay MN state taxes, which I owe on.
I did a rough calculation of AS's taxes and it looks like she'll probably get a refund. Unless I'm really off on her business profits, should be about $1000. I did pretty well on hers; she would have broken even but for the Making Work Pay credit, the stimulus benefit of not paying taxes on the first $2400(?) of unemployment money, and starting a traditional IRA.
This means she has a nice chunk of change to help move her sewing operations into our dining area! That'll be fun to help her plan. We'll probably sell a few pieces of furniture, repurpose a few and buy some new things.
It also means we can take out some of her business profits to put toward our financial goals. Sweet...