Since we won't have any more progress in June, I'm going to set our July goals.
For debt, I'm going to shoot for paying $2400 in July.
Our July benchmark for our big-picture goal is $15,659, but we're already past that with $19,686.18, so no problem there!
Although we won't be adding much to savings this month, we'll be doing some of the 10K pounds (estimated) of repairs needed to upgrade NT's flat in the UK. So I'll count those costs as progress against the big-picture goal. I'm going to keep track of the repairs and expenses as they come to see how close that 10K estimate is to the actual cost when they're done with everything.
Archive for June, 2013
Since we won't have any more progress in June, I'm going to set our July goals.
I'm up way too late because we went out with friends and I'm STUFFED. I really hope today doesn't mess up my weight loss attempts! Just got to try and be moderate for the rest of the week.
While out with our friends, we ended up spilling a lot of info about my financial management. It started with me advising my friend to start a Roth IRA and went from there. I hope it never comes back to bite me, but I feel like sharing my viewpoint more openly has had a positive impact on friends and acquaintances. A lot of people are surprised by various aspects of my story: the depths we reached at our lowest point, the strict financial rules we all abide by in my family.
I just don't want to become one-note in my conversations, like a lady I knew who got really obsessed with bodybuilding and from then on could talk of nothing else!
Anyway, checked AS's student loan when we got home, and her payment had hit. $131 went to principal, so that takes us to $2308 of debt payment for June, just over the $2300 goal.
It also takes our big-picture progress to $19,686.18. Getting close to the $20K mark!
Friday night there was a crazy big storm all across the Twin Cities and surrounding towns. For about 20 minutes there was a wall of water against our windows, and our balcony doors were bending inward in a most alarming way. NT heard a gurgling as he passed by the bedroom and realized that rainwater was being forced through the vents and edges of our windows. We put cloths and towels along them and swapped them out a couple times as they got saturated. It was so weird! Our power flickered but didn't go out. I knew from Facebook that trees were going down and power outages happening all over, but we didn't realize how bad it was until we were actually out and about the next day.
Saturday morning I tried to do part of our shopping at our co-op, and they were closed because their power was out. Several traffic lights were completely out, not even flashing red. Later that morning, AS and I went to a fascinating alumni event at a Russian art museum that featured women in Soviet art. The bus was detoured a couple times, and we could see trees down all over.
Saturday evening we went to an event called Secret City, featuring art, performances and various fun activities in several locations around Minneapolis. Before that we ate at a restaurant with outdoor seating, just enjoying the mild weather. We headed home around 9:30 (way past the girls' bedtime) just as clouds were gathering for another storm, though this one was just rain, no crazy wind.
Sunday AS and I went out for Open Streets, a community event where they block off 20-30 blocks of a major thoroughfare and people can walk, bike, even do yoga or play chess in the middle of the road. We dropped off our bikes for tune-ups, stopped at some shops and bought some clothes (AS and I have been on a tear recently since none of our summer clothes from the past few years really fit us anymore) and a gift for a kid's b-day party later that day. Oh and we grabbed some food; some restaurants along the way had food stalls set up outside. There were huge trees down in some people's lawns along the street, and power was still out in some stores including our co-op.
After that we drove to the kid's party, which had been moved to an indoor playground because of the storminess. We have the use of some friends' SUV for the next couple of weeks so we used that. On the way we saw still more trees down and traffic lights out.
Our friends have been gradually getting their power back, but some areas may not get theirs until Wednesday.
Today, we all had the day off, so we sent the kids to daycare and spent a rare kid-free day relaxing. We had brunch, went to a couple spas to see if they had walk-in availability (no one did), wandered around doing a bit of shopping, picked up our tuned-up bikes, had a late lunch with some cocktails, and then NT went to class while AS and I picked up the girls. It was such a nice relaxing day with lots of time outside, despite another brief rainstorm. We saw still more trees down though; trying to drive from daycare to the brunch restaurant, NT wanted to take a right turn but had to pass up four streets in a row that had large trees across them -- some with squished cars still under them! I've never seen anything like this since I moved to the Cities in 1997.
We weighed in Sunday and I was up another pound. I was bummed because I'd tried to lose weight by not night snacking and by doing 5 mins of extra exercise every morning and every night. I'm still going to do both of those things, but I've decided I need to get back into calorie counting to get my weight back down. Ah well, at least I know it works for me. It's tedious, but it's the surest way to get back on track. Today was my first day counting calories and I went way over my goal because of the two meals out, but most days the next week should be more under control.
Anyway, all of the above spending is way out of the ordinary for us these days, but it all comes out of buckets of money that have already been saved up, so even though it feels a bit weird and out of control, we're not actually overspending at all. But I'm paying attention and tracking everything, because I feel like it could be very easy to get used to spending this freely.
I just finished reading this book for a company "book club" discussion. (As a matter of fact, I stayed up till almost 2 a.m. last night to finish on time, so I'm exhausted and feeling a bit spacy at this point in the day!)
Anyway, it was fascinating. I haven't read all the endnotes and references to try and see how reputable the author's information is, but I found the overall premise -- that habits and the basal ganglia part of our brain control much more of our lives than we give them credit for (we think much more of our actions are based on conscious thinking and decision-making) -- so interesting. And I've heard similar things from various sources, so I don't think he's making it up.
His other point is that habits, though very powerful because they're unconscious, are also delicate, and can be fiddled with to change things around.
I may try to write a more coherent, detailed post about it on my ordinarysavers.com site sometime, maybe next week. I'm also going to try and examine some of my flaws and things I don't like about my own habits, to see if I can apply his theory to rewire some of them and produce more desirable behaviors. Duhigg says you can be scientific, trying to isolate the separate elements of the habits, experimenting with different substitutes until you find one that works. Could be interesting.
My weight has been creeping up lately, so one thing I'm trying to do immediately is install a strength training habit into my daily routine. AS was doing this before our vacation, and she's trying to get back into it. Since I rarely feel like getting into workout clothes and doing a full circuit of weight training, I'm trying AS's method of 5 minutes when I wake up, 5 minutes before I go to bed. Combine that with the 20 minutes walk to daycare and I've got my recommended half hour of exercise per day!
Currently, my goal (which I accomplished Wednesday and this morning, so far so good) is 25 ab crunches, 10 girl pushups and 10 squats, every morning and every night. I don't get out the mat or dress in workout clothes, just do them wherever I am in whatever outfit I happen to be in when I remember to do it.
I'm also trying to re-institute my rule of no late-night snacks. Herbal tea will be my substitute when the urge seems overhwelming. It worked last year when I was doing my big calorie-counting push, so hopefully it will work even if I don't get back into counting calories.
We'll see how it goes!
Checked the savings accounts ... $3.59 of interest on the house fund account. $25.30 of contribution plus interest on the EF account.
That takes us to $4548.07 on the house savings goal, and $1,513.18 on the medical EF.
It also takes us to $19,555.18 of big-picture progress!
AS got confirmation of her raise, which will take effect in September! It's going to be a great boost; I conservatively estimate another $250 per month in take-home pay. If we can keep things status quo from there, we could shave another 5 months off the time it takes to reach our goals.
I've heard a few rumblings about my main client's boss being displeased with the way people are using the guidelines that I enforce, so she's coming for the client meeting in July too. Everyone I've spoken to says it's nothing specifically negative about me, but since I'm the main conduit for enforcing the guidelines, I can't imagine I look great in their eyes. And since I'm getting all this information in oblique dribs and drabs, it's nerve-wracking. If only people in corporate America could just be straightforward and to the point for once -- it's always how I deal with people at work; I don't pull punches, and I don't avoid telling the truth, even though I'm an introvert and that would be the easy way out for me. If I, a shy awkward person, can be a straight-shooter in my business dealings, I just don't understand why more people can't be the same.
But, if it were really bad I assume I'd already be fired or called on the carpet by our president. So I have to assume that the blame is being equally placed with my client liaison, and with the people who are actually writing the turds that I try to help polish. I don't mind being told off; I just want to know what's wrong so I can help fix it. Ah well, I just have to try and relax and let things take their course; there's nothing I can think of to do except wait for that meeting and keep doing my job to the best of my ability.
If we were not saving for a home and/or move, I wouldn't even worry, what with the budget surplus we have. But that surplus is what's going to get us into a new home, either in Minneapolis or in England. So I really hope nothing happens to my job in the next couple years.
Sorry, I just have to get my worst fears out in writing! I know we'll be OK, and I don't think my job is actually in danger. But I know we'll be OK either way.
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): $23,665
NT's Roth IRA: $5,600
AS's 401(k): $9,782
AS's trad. IRA: $1,682
AS's Roth IRA: $12,662
CJ's 401(k): $55,989
CJ's Roth IRA: $5,600
NT's flat: 140,000 pounds ($224,000)
CJ & AS's condo: $145,000
Emergency fund (shared asset): $15,000
House down payment/moving fund (shared): $4,544
Total Assets: $559,301
Total Debt: $258,175
Current Estimated Net Worth: $301,126
April 2013 estimate: $263,203
Change in net worth: +$37,923 (over 2 months)
Summary: I didn't do a net worth calculation in May because of our vacation, so this covers two months of progress. And, just like that, we're back up to $300K net worth! Retirement went up quite a bit, debt went down, but the biggest contributing factor was finding out that NT's home was worth 140K pounds instead of our estimated 125K. That right there added $24K to our assets.
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.
It's about 8 am and I'm doing some kid wrangling so NT can hopefully sleep in a bit more for Father's Day. Then we'll bring him a gift, a card and breakfast in bed!
We're in a "hotel" (it's a 2BR suite in a converted house) in a small town in Minnesota this weekend, about a 2.5-hour drive from Minneapolis. We came down to visit the farm where we get our CSA share; they had a small free event on Saturday. That was great; we petted baby goats, toured the fields, listened to a poet, ate strawberry rhubarb shortcake, picked strawberries and won a gift basket of goodies (fancy olive oil, vinegar, chocolate, pasta, sauce and salt).
Spending-wise I'm in vacation mode, so haven't been at all thrifty. I spent $50 on lefse, unusual jams and other Scandinavian treats at a specialty store. We bought a big bag of black lava salt (I tasted it and fell in love) for $12 and handspun, hand-dyed yarn for $20. We've also eaten out a lot (though at least dining is pretty cheap in this small town and on the road). This suite is about $150 per night for two nights and the carshare was nearly $200.
Today we're just having cereal and coffee for breakfast before we leave, but then we're treating NT to both lunch and dinner for Father's Day. Partly covered by my and AS's spending money and the rest through vacation and/or surplus line items. It's been a VERY indulgent weekend and we're loving it so far.
AS got some really good news before we left, too. It's not set in stone, but she's one step closer to a raise, and it could be a big 'un. Looks like we might net $250 more per month, minimum! It might not happen until later this year, but it's nice to look forward to.
Oops, NT is stirring, so I'd better get going on Father's Day!
I sent a $1425 payment to NT's student loan, and today the balance was ... $1426 lower? That's odd. The only thing I can think is that maybe interest hasn't hit yet for this month, and he had one little portion of the debt that was less than a dollar; it disappeared. I think they forgive debt that's less than a dollar. Anyway, I'll take it! That brings us to $2177 down, $123 to go on the May debt goal.
It brings our big-picture progress to $19,526.29. We're a fifth (20%) of the way toward our new, lower goal! And in only a seventh of the time allotted.
We've been doing some more unallocated spending recently; the bikes all need tune-ups, and the first one cost over $100, so I'm sure the other two will be about that as well. The hot water stopped working in our bathroom sink because of the faucet, so NT is going to try and fix it himself; otherwise we'll need a plumber. Either way it'll cost something. NT is going to get some alterations done to the nice suit he bought in England so it'll fit perfectly. I think there were a couple other things I agreed to, but I can't remember now! We are planning a fun weekend, visiting the farm that provides our CSA share, staying in a hotel, and pampering NT for Father's Day. But that's all coming out of allocated budget line items.
But, we've also been doing some frugal/free things and earning/saving money. AS got the last of her freelance checks we were expecting; $1375! We canceled three weeks of diaper pickups, so our nice diaper service canceled a full four-week invoice! $76 saved that I wasn't expecting at all. AS sold a dressmaker form that is too big now that she's lost some weight (and plus there's no room for it in our little condo) on Craigslist for $50. NT got a cat-litter rebate check for $7.99. And we needed a travel crib for our upcoming trips, so I put the word out on Facebook and got an old but sturdy one free from a co-worker.
Another co-worker (AS's) has been giving us hand-me-down clothes in 5T (for five-year-olds). We take 'em and put them in a box in the closet. I'm such a kid's clothing hoarder! I'll take any size clothes, and we divvy them up into boxes in the girls' closet. Then every few months, I get rid of outgrown clothes (or if the younger will be able to wear them eventually, I add them to a box for that age/size). It's a bit of effort to keep everything organized, but we've barely had to buy any clothes for the kids, ever.
Yesterday I had a startling realization. We've paid off over $180K in debt, but I'm impatient to get to (and celebrate) the $200K mark. For some reason I glanced at my "Debt starting point" page, and realized that, on paper, we have hit that mark. Our highest debt point was somewhere between $457K and $460K, and our current debt is $258,175! However, about $20K of this difference is because, when we began, the US dollar was much weaker against the UK pound, so our UK debts counted as $2 for every pound. Now the exchange rate is a bit closer and they're calculated at $1.60 per pound. So I don't count that in my debt payoff calculations. But, effectively anyway, our debt is $200K less than it was when I started 6 years ago!
If you read through my huge post yesterday there was a small note about how I was worried about a pending call from my client. Well, he finally emailed this morning, and it was just about wanting to come visit so he could meet with us and go over the new guidelines that have just been put in place. Whew! So now I can relax about budget disruptions and carry on with my plans.
Wow. The longer I wait before really blogging, the more it stacks up. But work is so busy, and getting into the swing of things at home is time-consuming, and jet lag is still somewhat draggin down energy levels. AS and NT actually got a cold and are in bed early tonight. I should go too, but I want to try and get some of these news tidbits and thoughts into my blog before the list grows even bigger!
So where do I start? I guess with my vacation, since that's what caused this build-up.
So England was wonderful. We didn't do anything earth-shattering, just spent time with family and friends, kept the little ones entertained, ate way too much, and saw a few sights (mostly nature-related vs. touristy places).
I noticed lots of ways Brits do everyday thrifty/environmental things that Americans might consider extreme frugality. NT's mom had no dishwasher, so we washed all our dishes by hand. She had a dryer but didn't seem to use it; she showed us how to use the clotheslines that were on pulleys, so we hung our clothes out whenever we washed them. Cars are small and much more fuel-efficient than American cars, which is necessary because their government doesn't subsidize the price as much as the U.S. does. Most homes in or near cities are row houses or "semi-detached" (essentially a duplex). Yards are tiny but beautiful. Houses are always, as far as we could tell, chilly in comparison to typical U.S. homes. Temps felt in the mid- to high 60s. I like to keep our home at 70 to 75, so it was a big shift. If AA didn't get dressed right away and ran around in her undies, her teeth would start to chatter! When we went to our friends' house for the second week, they -- two bachelor brothers living in a house-sized man-cave, basically -- did have a dishwasher that they actually used, but they didn't have a dryer and instead hung all their clothes to dry.
I thought it was so interesting. So many frugal and/or earth-friendly things that are unusual in America (outside like-minded communities like this site) are completely commonplace in Britain. I'd noticed little things on past visits, but this time I really paid attention and saw this pattern recur.
I've been contemplating trying to get sweatshop/slave/child labor out of more of my products, and clothing has been my first focus. So this trip, I went to several charity shops. It's really nice that most of their used clothing stores are for good causes like fighting cancer. Many are church or charity-based in MN, but many others are just consignment stores for private profit. Every used store I saw in Oxford was a charity shop. Anyway, I got some really nice dresses. Most were around 12 pounds ($20 or so), but one was 32 pounds. But the tag was still on it and it had originally been 65! I still probably wouldn't have spent that much if I hadn't had vacation funds to do it.
We stayed under budget! My math got shaky toward the end, but judging from what we had left in the bank accounts (400 pounds and $90), we had about $640 left of what we planned to spend. This is directly attributable to A) NT's mum paying for the rental car and B) NT's family paying for a lot of stuff the first week. But we knew those two facts by the beginning of the second week, and so we went a bit hog wild: NT bought a suit for about US$350, we bought hundreds of dollars' worth of snacks and other things. And we still came in under budget! Guess we don't know how to really go crazy anymore.
While we were there, NT visited his flat that he rents out. The management company showed him a lot of the wear and tear that's happened over the past 7 years or so with tenants. He was glad he saw and could confirm it needed a lot of work, because otherwise it would have been hard to swallow their number: They reckon it will take about 10,000 pounds ($16,000) to do a full renovation.
Now, we don't have to do it all at once. The new tenant just signed a year-long lease, so there are only a couple of things needed to make it livable for him; the rest can be stretched out over a couple of years.
There was good news to go along with this though: They reckon the place in its current state could sell for 140K pounds, and with the 10K reno it would be worth 160K pounds. So not only would it make it easier to rent in the future, it would contribute to our eventual profit for selling it.
When I got home, I checked what value I'd put on the place in my "big picture" calculations. 125K! That means if we put in 10K toward reno, we could come out 35K ahead of where I thought we were, or 25K after the reno costs.
I did realize I'd never calculated the management co.'s share of the profit (10% or 16K pounds). We could possibly avoid that by taking the place back for a year, but if our circumstances don't allow for that, we should calculate the fee anyway. Even with that, 9K ($14,400) better than we thought.
Aimed with that number, AS and I sat down and figured out that we could lower our big-picture goal number and move our timeline up 6 months!
Our original goal was to hit about $107K of combined progress in savings and non-mortgage debt repayment by end of December 2016; that would require average progress of $2229 per month. Our new goal is $94K by end of June 2016, and that will require $2237 per month.
Very exciting! And that still leaves about a $150 monthly surplus, and doesn't account for any windfalls coming our way.
So, I felt good enough about our financial position to make some unbudgeted purchases when we got back home. So far we've bought:
Sit-n-stand tandem stroller (used) $85
Swim class for AA $45
Gifts for our UK hosts $35
Gifts for our daycare lady $25
We also had to pay for a 3-month bus pass for $97
The vacation money left over in the UK account will go toward the immediate repairs needed at the flat. Not sure if that counts toward the 10K; I might have NT ask them if they think it'll be 10K above that or if these are included. If so, I could count it as big-picture progress, since saving for the reno is now part of our savings goal.
AS had a lot of time to think about her job during our trip, and she capped the vacation off with a visit to a UK publishing house she has dealings with. Through it all she realized she couldn't put up with the work levels and pay imbalance much longer. Her boss (also a friend) has acknowledged this, but today she decided to make it clearer that she was pretty close to a breaking point. They talked about solutions, and one he mentioned was a raise in the near future! So that could accelerate our progress even more.
I had a stressed out moment at work today where my main (and contentious) client casually mentioned in a group conference call that he'd be calling me later to discuss something. Well, this is rarely a good thing, so I started freaking about about possibly losing this account (easily 50% of my job) and getting laid off or fired. I don't think any of that would happen, but it made me nervous. We wouldn't struggle to live if we lost an income, but we'd struggle to make the debt and savings progress we need to if we're going to be able to move soon. Unlike AS, who is way under what she could be making, I feel I'm at about the peak of what I could earn with my limited skills. So although my job isn't perfect, I really don't want anything to change with it for a couple years.
So anyway, I'm not celebrating AS's likely future raise just yet. I need to talk to my client and satisfy my sudden insecurity. I hope he calls tomorrow! (Or, it could have been something minor that he's already forgotten about. Gah.) But it will probably end up to be nothing, and when AS's raise comes, we'll be on even better footing!
Quick update before I go to bed to try and lose the rest of my jet lag:
All the mortgage payments hit:
US: $444 to principal
That takes us to $751 down, $1549 to go on the June debt goal!
I have so many things to blog about, but I want to get back on track with my routine and post monthly financial goals.
May was a good month:
The debt repayment goal was $3075, and we paid $3950.
The big-picture benchmark was to hit at least $11,135 (cumulative progress in student loan repayment, medical EF savings and house/moving fund savings), and we got to $18,100.29.
For June, I'm not 100% clear on how much money we'll put to debt, so I'm going a bit conservative and saying $2300 is our debt-repayment goal.
The June big-picture benchmark is $13,422. Of course, we're already past that at $18,100.29, so no stress there!
This is mostly for my reference; we got some new information that made us decide to change the big-picture goal number and shorten the timeline. Will definitely post a clearer explanation when I get a chance, but I just wanted to put this on the blog so I have a record of the original goal should I need it at some point.
Big-picture goal: $2229 per month to the goals below.
Jan. 2013 ending balance: $2,242.61
Feb. 2013 ending balance: $4,399.89
March 2013 ending balance: $12,441.20
April 2013 ending balance: $14,405.04
May 2013 goal: $11,145
Progress: Done for May! $18,100.29
- $5K medical fund by sometime in 2013. Current balance: $1,487.34
STILL NEED: $3,512.39
Jan. 2013 progress: $75.26
Feb. 2013 progress: $0.28
March 2013 progress: $36.85
April 2013 progress: $101.80
May 2013 progress: $0.27
- Debt-free except mortgages by end of 2015; paying off all student loans and cashflowing the rest of NT's college tuition.
STILL NEED: $33,889 ($22,695 of student loan debt plus $11,194 more in tuition)
Jan. 2013 progress: $1,404
Feb. 2013 progress: $1,621
March 2013 progress: $7,454
April 2013 progress: $1,860
May 2013 progress: $3,197
- $56K in a moving to England / house down payment fund by the end of 2016. Current balance: $4,544.48
STILL NEED: $51,455.52
Jan. 2013 progress: $763.35
Feb. 2013 progress: $536
March 2013 progress: $550.46
April 2013 progress: $2.04
May 2013 progress: $497.98
Total need: $106,957 to achieve it all, or $2229 per month over the next 4 years (2013-2016)
The current monthly budget items that go toward this goal:
From regular budget $1727
AS student loan to principal $128
Rental income $538 (est.)
Savings interest $2 (est.)