Ceejay74's Personal Finance Blog

This is something I just started thinking about yesterday, and I thought who better to ask than my SA buddies!

I use this calculator when tracking our progress toward potential Coast FIRE status:

https://walletburst.com/tools/coast-fire-calc/

As some of you may have read, we recently bought a rental property. While it's not fully rented yet, when it is, we think we can count on about $1500 monthly income after expenses.

Since we intend to hold onto this property and keep renting it, I was looking at the Coast FIRE calculator trying to figure out how to factor that in. The only solution I could come up with was to reduce the projected spending in retirement (since some of the spending would theoretically be covered by rental income vs. drawing down retirement funds).

Does that sound like the right way to think about this?

I keep putting off posting here. We've got several big money-related and other things that are in process right now, and I keep thinking when they're more settled I'll post, but honestly some of them are going to be months or more before they're settled, so I should just post now, and then post updates as things move along!

Let's see...I'll start with something that's pretty settled.

1. AS applied for a top job at a local nonprofit this summer, and she got it! She's been involved with them off and on for about 20 years, most recently on the board, but this was a huge step up for her, both moneywise and careerwise. (It's the kind of job that warrants an interview/article in the city newspaper!) Moneywise, well, she was freelance before, and her annual income would fluctuate but was in the $70Ks these past few years--$77K was her highest one. Her new job pays $110K, so pretty much a 50% raise, and steady versus unpredictable!

I'm going to put money in her SEP for the rest of the year because I'm not sure what the retirement plan picture is at her job--she doesn't think there is one, but she's the boss now, so she can get that started up if there isn't!

So that takes the pressure off...once NT's unemployment ran out, and AS was slowing her freelance business to work on applying for this job, we went in the hole quite a bit, but now AS and my paychecks will cover the budget, so whatever NT brings in can hopefully make up the difference. And with next year's budget I'm hoping to expand some of the line items that we tend to go over on...mainly groceries, healthcare and personal spending.

2. We sold the UK flat! If you recall, we've waWented to sell it for years and years, but the English real estate market was soft, and then Brexit threw a huge curveball, but just as all that was looking better and we listed the flat, COVID hit and we had to take it back off the market and take on a renter. Once their lease was up earlier this year, we signed a 6-month lease and listed the flat with tenant in situ, and an investment property owner snapped it up for the asking price we were hoping for, 200K pounds! We closed at the end of September.

I'd made some very rough estimates and reckoned we'd only clear half of that, after we paid the management company, mortgage, estate agent, lawyer, tax pro and taxes. But we actually ended up with about 160K, so my calculations were way off! We still need to have our accountant do our regular annual UK taxes, which he can't do until April, so we left a couple grand in the UK account. And we still need to do our US taxes and see if Uncle Sam wants a piece of the action, but I'd been figuring only 100K before US taxes, so we're already way ahead in my mind.

We're in the process of transferring the funds from the UK to US, which is a whole complicated kind of nervewracking process for people not used to doing it, but it should be in our US savings account by the end of this week or beginning of next. I haven't done a detailed calculation but think we could end up with nearly $200K!

Most of it, we'll save for now, and once US taxes are settled, start looking for an investment property here. But I am going to give us all a big spending money bonus, because we all went in the hole this past summer, being pretty self-indulgent. So $3K each for the adults to wipe out our deficit and give us a tiny bit extra, and maybe $500 each for the kids (which I won't let them spend willy nilly but they can use for clothes, makeup and stuff that's kinda reasonable).

3. The kitchen reno is supposedly going to start within the next few days! The last piece is that our contractor needs a plumber to remove and seal off the radiator in that room, and he's been trying to chase one down for a month or more. But he got one to commit to Thursday, Friday OR Monday. Not much of a commitment in my mind, but the contractor seems to think it's gonna happen! I took pics of our crappy current kitchen just in case it's getting ripped out tomorrow. We'll be moving the fridge to the dining room, doing dishes in the bathtub, and doing a lot of our cooking on hot plates/microwave/toaster oven for god knows how long.

We have the new appliances purchased and waiting for us, and we've specified some finishes, but there are still things that will need to be worked out on the fly. I'm a little worried with all the supply chain disruptions of late, but we'll just have to roll with whatever happens!

We also don't know what the final price tag will be--I mean you never do, because things always happen in a reno, but this one is especially fuzzy. We were roughly quoted $60-$80K like two years ago, pre-pandemic, but I know materials and labor and everything else has gone up, so I have no idea! We have $45K saved up, plus a $10K emergency fund, and we have a $50K HELOC. So hopefully that'll be enough to cover it without dipping into the proceeds from selling the flat, but who knows. We have $500 per month in the monthly budget that'll mainly go to paying off the HELOC I suppose--I'll figure out a more detailed plan once the dust (literally) settles.

So, fingers crossed. We absolutely hate our kitchen and have always wanted to completely tear it down and make it different--the doorways, window and placement of the appliances are all changing drastically--so this'll be really exciting even if super expensive and stressful. This is by far the most expensive renovation we have our eyes on--everything else we've been holding off on will be much smaller chunks of money.

- - -

So those are the big three financial-related updates. Other random stuff:

- My job continues to go pretty well considering. Through layoffs and attrition we're down to about 12 Minneapolis employees--we've had as many as 75 at various times in the past. We're still part of a bigger organization and now we work more closely with them, handling our couple of legacy clients we haven't lost but also supporting work for our D.C. headquarters. So it seems like there's more than enough work and that they want to hang onto me, but I'm ready to roll with whatever punches after the past few bumpy years. But ideally, I'd stay at my company until my family reaches Coast FIRE...then I might look at something more part-time. But that's going to be several years so I'd love to just hang on here and not have to look for another full time job.

- NT's been in talks to do bookkeeping for our downstairs neighbors' businesses...he took a Quickbooks training course but that plan appears to have stalled for whatever reasons. But he still does admin work for them, and his hat business is slowly but surely growing, turning a bit of a profit now, and he plans to handle property management once we get an investment property here.

- NT and I are both getting pretty embedded in two different music scenes here--hip hop for him, country music/Americana for me. We did vaguely toss around the idea of looking into investing in a venue type place instead of a rental home--but the rental home seems like a MUCH more stable income prospect so we're most likely going with that.

- I've been getting more and more into a creative groove, so much so that I can't even work on all my projects as much as I want to. I have my music website adventuresinamericana.com, which has gotten lots of positive attention by the local scene (and I even get non-local musicians asking us to review their work--one as far away as Sweden!). We're even working on doing a podcast for it! So there's lots of writing, planning, and of course going to as many shows as I can squeeze in. I'm doing NaNoWriMo again this year so another novel in the works, and I have at least four in various stages of completion for self-publishing. (I'm a terrible self-promoter so that's in no way a revenue generator--nor is the Americana website which we don't even do ads on [yet].) There's my guitar practice and songwriting--I have weekly lessons which at least keeps me practicing guitar, but songwriting has fallen by the wayside with all the other things I have going on. Anyway, as DisneySteve wrote about on his blog earlier, I'm getting a bit impatient with having a full-time job when I've got all these other way more interesting projects! Definitely going to be open to opportunities to not have a full-time job as soon as that's realistic with our retirement goals.

- The kids got their first vaccine shot today!!! I'm so excited. Even though this won't protect our family 100%, we'll be so much safer once they get their full course. I'm still going to mask up everywhere I go for a while because cases are AWFUL here in MN, but hopefully when things look a bit better, I'll feel more able to take some chances because damn, I don't want to mask up in public for the rest of my life! But right now it seems unnecessarily risky not to, with our kids unvaxxed and cases sooo high here.

Well, our goal just went way up because of a rise in income! Which means we're way behind, but for a good reason. (I also decided to round off salaries while I was at it so our goal could be a nice round number too!)

New goal: $922,000 by March 2024

Current retirement balance: $779,114

May 2021 balance: $732,687

Progress since last update: $46,427

Still needed: $142,886

This interim goal is based on getting my and NT's retirement to 4x my current and his last full-time salary (approximately $84,000 and $64,000) by the time we turn 50, and AS's retirement values to 3x her current salary ($110,000) by the time she turns 45.
$84,000 x 4 = $336,000
$64,000 x 4 = $256,000
$110,000 x 3 = $330,000

It will shift anytime our salary/annual income changes. (The only exception is I won't lower if there's a lower-income year.)

There are 31 months to go before March 2024, so that means we need to gain $4609 per month on average to meet our goal.

The ultimate goal we're working toward is 8x our annual income by the time we retire at 65.

***

Coast FIRE Goal

I've also started using this Coast FIRE calculator (https://walletburst.com/tools/coast-fire-calc/) and according to it,  our retirement goal is $2.1 million by the time I'm 65 (18 years). It says we're currently 10 years from our Coast FIRE number of $1.5 million!

Here are the Coast FIRE parameters I use:

I'm in between my spouses' age, so I used my age but our combined retirement investments.

Current age: 47

Retirement age: 65

Annual spending in retirement: $84,000

Monthly contribution: $2,700

Investment growth rate: 7%

Inflation rate: 3%

Withdrawal rate: 4%

The thing about promising is, it's not a sure thing, but all of a sudden there seem to be a bunch of good prospects on our horizon financially!

- This is more a giant expense but would be soo great if it happened: our long long long planned kitchen reno seems to be kicking into gear. The contractor has city approval for the changes and has a new window due to be delivered end of August! We've resumed picking appliances, finishes, etc., which had kind of stalled because there was always one thing or another holding us up. Financially I feel in good shape for it; we've got $50K in savings, a $50K HELOC, and $500 per month in the budget. So fingers crossed!

- We seem to be about to sell the UK flat! We've wanted to do this for years but finally listed it in early 2020 when the market in England looked good. Of course you know what happened next; it couldn't even be shown in person so we got another renter with a year-long lease. Now we've got one we can give 6-month notice to, so we decided to try listing the flat as an investment property, and switch it to a residential listing if it didn't sell. Well, a week into being listed we got a bite! We were asking 210K pounds and they came in with a 190K hard offer, so we turned it down without countering. Guess it wasn't as hard as they made it seem because they came back with 200K and we accepted it! The investor buyer keeps talking about moving quickly in his emails, so I guess we'll find out what that means in UK investment property buying terms!

- Between paying off the mortgage (30K), paying the management co (15% of sale), paying the estate agent, solicitor and tax pro, and paying the actual capital gains tax on the property (which NT originally bought for 40K), I'll be happy if we pocket 100K of the sale. Still, that'd be enough for a good down payment on a property closer to home! We're hoping to get a duplex and rent both unites out. Our CoastFIRE number assumes we'll have a modest rental income, so it seems preferable to anything else we could do with the money. Of course we'll need to let everything take its course in England and then check with our US tax guy to see any tax implications here, but I can't help but start to glance around at real estate listings in our neighborhood...

So yeah! Once again, we could have two big home-related things going on simultaneously; that seems to be kind of our thing. Those are the big money things, but we also have some other promising bits of things:

- NT's unemployment has nearly run out. He's stretched it this long by working part time doing admin for our downstairs neighbors. We only need him to make a bit more to make ends meet, so he asked our neighbors if they knew any other entrepreneurs in need of virtual part time admin support. Instead, our neighbor asked if he'd learn Quickbooks and take on their bookkeeping as well as the other things he's doing! So he's signed up for a course and it seems like that could be all sorted out!

- AS's freelance business is doing as well as ever but she's started to look around at other options. She applied for a pretty high-ranking position at a nonprofit she used to work at and has been involved with for years, and she just got notified that she's being called in for an initial interview! It's only the first round, but it's pretty promising. If she got this job, it would likely be a step up from her highest annual self-employed year of income. Not a huge jump, but noticeable. So we're just at the beginning of this process, but it's interesting to contemplate!

I guess that's it for the big stuff! Everything else is about as normal as it can be in the new normal.

Assets:
NT's UK pensions:
AV: 22,397 pounds ($27,996)
SW: 27,225 pounds ($34,031)
FL: 6,462 pounds ($8,078)
NT's trad. rollover IRA: $111,934
NT's Roth IRA: $66,268
NT's SEP/SIMPLE: $2,500
AS's trad. rollover IRA: $28,143
AS's Roth IRA: $95,092
AS's SEP IRA: $72,046
CJ's 401(k): $228,862
CJ's Roth IRA: $72,251
NT's flat: $212,500 (200,000 pounds value x1.25 -15%)
CJ/NT/AS house: $592,200 ($630,000 value -6%)
---
TOTAL ASSETS: $1,551,901

Debt:
US Mortgage $367,740
Loan from friends (duplex) $9,000
UK Mortgage 1 $25,813
UK Mortgage 2 $5,441
UK Mortgage 3 $5,730
---
TOTAL DEBT $413,724

Current Estimated Net Worth: $1,138,177

May 2021 estimate: $1,122,570

Change in net worth: +$15,607

Summary: I actually remembered to do net worth two months in a row, and it was a pretty good month!

Notes on the numbers above: House value estimates are usually approximate. UK pension values updated about once a year. UK asset values and debt amounts are calculated figuring $1.25 for every British pound (just to have a system, even though I checked the exchange rate and it's more like 1 to $1.38).

Had to change the retirement goal due to a raise I got last month! Old goal was $814,292 by March 2024.

New goal: $820,892 by March 2024

Current retirement balance: $732,687

November 2020 balance: $632,504

Progress since last update: $100,183

Still needed: $88,205

This interim goal is based on getting my and NT's retirement to 4x my current and his last full-time salary (currently $84,150 and $64,118) by the time we turn 50 and AS's retirement values to 3x her highest annual income ($75,940 in 2018) by the time she turns 45.
$84,150 x 4 = $336,600
$64,118 x 4 = $256,472
$75,940 x 3 = $227,820

It will shift anytime our salary/annual income changes. (The only exception is I won't lower if there's a lower-income year.)

There are 34 months to go before March 2024, so that means we need to gain $2594 per month on average to meet our goal. (Seeing as how we contribute a minimum of $2K per month and average out to more than $2700, that shouldn't be a problem!)

The ultimate goal we're working toward is 8x our annual income by the time we retire at 65.

I usually get confused and overwhelmed when I try using retirement calculators. That's why I use the 8x rule of thumb as my goalposts for our retirement. But Firefly's post about Coast FIRE made me curious to try that calculator. (https://walletburst.com/tools/coast-fire-calc/)

I ran the numbers once, and it said at our current pace we'd reach Coast FIRE in 11 years! That would be incredible!

But then I realized what they meant by "net worth" was total invested. My net worth calculations count the value of our home, so I had to redo it. But, I also realized that initially I had $1500 listed for housing because even after we pay off the mortgage we'll have property taxes and insurance. I forgot that we do intend to still have rental properties, so the money from those should at least offset our housing expenses. Also, I estimated we put aside $2,500 but realized it's closer to $2,700 (conservatively). So I lowered my "net worth," raised retirement contributions, removed the line for housing expenses and tried again.

Here's my attempt at a retirement budget. (Let me know if you see any glaring omissions here.) Keep in mind this is for three adults.

I'm in between my spouses' age, so I used my age but our combined retirement investments.

Current age: 47

Retirement age: 65

Annual spending in retirement: $84,000

Current net worth (retirement balance): $732,687

Monthly contribution: $2,700 (varies, but this is a conservative approximate average)

Investment growth rate: 7%

Inflation rate: 3%

Withdrawal rate: 4%

Coast FIRE number at current age: $1,036,619

Result: You're 12 years from Coast FIRE!

Unbelievable. I only seem to have added one year in my new calculation. Is this telling me at this rate I'll be done saving for retirement by 59 and be able to retire at 65? If so that's amazing, because if you'd asked me when I'd have enough saved I'd've said "never." I'm sure I'm doing something wrong in the above calculations. Can you poke holes in this scenario?

I have a lot of stuff I want to get done today, but I also really wanted to check in since I realized it's been a couple months! Time both flies and crawls in the pandemic. It's the strangest thing.

Well first off the household except the kids is partially vaccinated! Our downstairs neighbors both got theirs, and when MN opened eligibility on 3/30 I started hunting. It took several hours but I decided to target my search at counties that had vaccinated at least 50% of their population, and I found a place 2.5 hours away that had appointments the next day. So on 3/31 I took a half day from work and NT and I drove 2.5 hours, got the shots, drove 2.5 hours back. We have the Moderna so we'll have to go back in 4 weeks unless we can find a second shot closer to home. By 4/14 the first dose's preventive benefits will be in play and on 4/28 we become eligible for a second shot, so hopefully by 5/14 we will be well protected.

By coincidence, AS was in the Johnson + Johnson trial and she went the same day to find out whether she'd gotten the real vaccine. Turns out she'd had the placebo, so they gave her the shot then. She had a horrible reaction, vomiting and other tummy troubles plus chills and hot flashes, but is feeling much better today. At least her shot was one and done! So she should be well protected by 4/14.

I've been really busy on my music website that I mentioned in my previous post, adventuresinamericana.com. We have a small audience but feels like it's building slowly but steadily. I have more musicians reaching out asking to be interviewed and I keep finding new albums and new artists, so there's no shortage of content. I could probably write more than one post a week and still have plenty of topics, but I feel like it's already taking time away from other stuff, so I don't want to go there just yet, as fun as it is.

I haven't spent as much time on my other hobbies--writing fiction, self-publishing it, songwriting and guitar playing--but I give them a bit of time every week at least. I wrote a new song about a month or two ago and am slowly revising a third novel to eventually self-publish.

I started a weight loss journey in January to take off the pandemic gain (about 10 lbs.), and it was going well until the insurrection. My weight went back up and I haven't made any progress since then. I lose a few and then gain them back, over and over. Just having trouble getting enough walking in my work-from-home routine mainly, I think.

We are still talking with our contractor about the kitchen and things are plodding along at a slow and erratic pace. We got AC installed but that was handled through a different company. The city has approved our kitchen plan, and we've picked out our new window type and cabinet finish, but we need to pick flooring, countertops and backsplash, and we're waiting on something else as well from our contractor (can't remember what). We still need to choose appliances as well but we did decide we're going with stainless steel this time. We didn't want to do that when the kids were younger but they're a bit less likely to mess it up as much now that they're 9 and 11! But I still have no idea of the timeline, start date or overall cost of the renovation yet. The big picture cost estimate a couple years ago (yeah, this has been going on that long!) was $60K-$80K but I have no idea how that's changed as time has gone by and our plans have gotten more specific. We have about $35K saved up (plus a $10K emergency fund and we add about $1000 per month to reno savings) and I applied for a $50K HELOC, so hopefully we will be fine.

The kids have been back in school since mid-February and even with social distancing/masking requirements and some upheaval of being shuffled around as teachers and other families adjust plans, they're so much happier and better-adjusted. There's only been one COVID scare there and it was this week; I took the potentially exposed kid for a test and it came back negative in less than 24 hours. (It was doubtful whether she was actually exposed but we didn't want to take any chances.)

Music shows are starting to be scheduled, mainly outdoors, limited-ticket and socially distanced. I'm so happy to have tickets to several concerts--I've missed that more than almost anything!

Spring break has begun for the kids, so we're heading to a rental home for a week starting tomorrow. We were going to road trip to a new state (Iowa maybe) but with cases rising, MN doesn't want people traveling out of state so we got a place in southern MN. We're driving there with a rental car and don't plan to interact with anyone indoors outside of gas, groceries and takeout food. We'll continue the cautious behavior that has worked for us so far at home. We just wanted a change of scenery!

My job is still going, somehow; I'm not nearly as busy as before the pandemic but there seems to be enough work to keep me for a while longer at least. I've adjusted to remote work and hope to reap the benefits of being able to work from anywhere once the world opens back up. NT doesn't have a full time job but he's been working part time to stretch his unemployment benefits and that's going well. AS is making good self-employed income. Both of them are eyeing full time jobs; NT a remote position with a company that's very similar to the one that laid him off but supposedly with better work life balance (no international tasks that require him to be awake at all sorts of weird times). AS is going to apply for a high-level publishing job that would be a step up from any title she's held before but that she's well qualified for. So we'll see about both of those. If they don't pan out, I do think our current employment is serving us well. Once unemployment runs out, NT would just need to find a bit more part time work to keep us at the current level. That seems doable. I think he could pick up virtual admin assistant work quite easily because he excels at that. Plus, we might get that child tax credit monthly thing if that happens, which will also help.

What else? Pets, family and friends are doing well. Our only loss during the pandemic has been our good friend's dog (who we loved), and that was of old age.

Our tax guy is backed up (and we didn't send our packets until early March) so we have no idea what taxes will look like this year. We have a bunch of money set aside and hopefully that will cover it.

I haven't checked our net worth or retirement accounts in a while. It's all just kind of on autopilot; I make quarterly contributions to AS's SEP, I'm setting aside money from NT's income to eventually open maybe a SIMPLE for him, I'm still doing the 401(k) through my work (though no matching benefits anymore), and we're on track to max out Roths.

I guess that's it! Sorry I haven't been posting as much but I do keep up on everyone's blogs pretty regularly.

While I'm still working on self-publishing novels, my next work in progress is a bit stalled while I wait for reader feedback so that I can edit it. Meanwhile, a friend and I restarted a project we'd been discussing just before the pandemic hit.

We both really love music; she loves all kinds while I'm mainly interested in Americana -- country, folk, bluegrass and such. I love to write about music and my friend loves designing websites, so together we created a site called Adventures in Americana! It's mainly to provide positive publicity for musicians via record reviews, interviews and an events calendar.

If you love this kind of music, or just want to see what I'm up to, check it out at www.adventuresinamericana.com !

Budgetwise, this is a hobby that's not expected to make any money, so it comes out of my personal spending. So far I've paid $20 for a year of the domain name and $126 for a year of web hosting. We'll be doing an e-newsletter that I'll have to pay extra to do through Squarespace, but we get three free emails so I haven't had to pay anything for that yet.

Anyway, less than $20 per month to pursue this creative project is definitely worth it to me! I've written a few more articles and have a bunch of ideas for more, so we'll be posting something new every week, at least for a while.

Does anyone know how I can change my password? I got a weird spammy email from someone claiming to be from Wordpress saying my SavingAdvice blog password had been changed; it hadn't, but made me want to update mine anyway since it's been a while. I can't for the life of me figure out where to do that! I went over to Forums but was unable to post a question and got logged out of the blog section, which in itself was a challenge to figure out how to get back into.

We have three adults and two kids so we got $3,000. Our January budget is looking pretty good so I flowed $1,400 into our February budget and doled out the rest as personal money -- $400 for each adult and $200 for each kid.

The kids' money is split up: $120 each into savings, $20 each for giving, and $60 each to spend as they want.

The adults just get theirs as spending money. Well, for me and NT it mainly goes toward our personal money deficits -- mine from self-publishing and his from his hat business.

At least his hat business is pulling in some money and he may break even on his personal deficit soon -- my self-publishing is nowhere near profitable. That's my fault though, since I don't put a lot of work into publicizing my books. Turns out I like writing them, editing them and getting them into book form, but then I lose interest and want to work on the next book instead of marketing the ones I have out! Oh well.

I thought I'd share my budget for the year. It's an annual budget so each month is a little different; for instance, in February (the month shown below) I'm setting aside $800 for our summer CSA share. But this shows what our fixed or predictable income is, the necessities we need to cover first, and then the variables, listed in order of priority so we fund the more important ones first and go down the list. So far, we are fully funded for January and everything but groceries is funded in the needs list for February. Once we finish funding the essential expenses, subsequent income will go to funding variables. We still have some variable expenses outside of that list, so when they come up, I'll fund them with incoming freelance money if possible, or we'll discuss taking something out of one of the other categories if we need to.

I feed this month by month into our ongoing budgeting tool which I call "Number Crunch" or "future checkbook."

Assets:
NT's UK pensions:
AV: 22,397 pounds ($27,996)
SW: 27,225 pounds ($34,031)
FL: 6,462 pounds ($8,078)
NT's trad. IRA: $100,851
NT's Roth IRA: $56,572
AS's trad. IRA: $25,413
AS's Roth IRA: $82,315
AS's SEP IRA: $59,256
CJ's 401(k): $198,555
CJ's Roth IRA: $61,939
NT's flat: $212,500 (200,000 pounds value x1.25 -15%)
CJ/NT/AS house: $592,200 ($630,000 value -6%)
---
TOTAL ASSETS: $1,459,706

Debts:
US Mortgage $372,600

Loan from friends (duplex) $9,000
UK Mortgage 1 $26,970
UK Mortgage 2 $5,685
UK Mortgage 3 $5,988
---
TOTAL DEBT $420,243

Current Estimated Net Worth: $1,039,463

November 2020 estimate: $1,015,882

Change in net worth: +$23,581

Summary: The gains continued for another month and my household closed out 2020 with net worth millionaire status!

Notes on the numbers above: House value estimates are usually approximate. UK pension values updated about once a year. UK asset values and debt amounts are calculated figuring $1.25 for every British pound.

Happy holidays, whichever and however you celebrate! I've had a quiet and lazy time so far; I worked Monday and had the rest of the week off, and then I work part of tomorrow and have the whole rest of that week off. And I got pretty caught up on work so I can actually relax!

I'm eating and drinking a little too much and not getting much exercise, but I plan to get a little bit back into healthy habits next week and then really try to get back to normal after Jan. 1. I've been maintaining my shape this whole pandemic but starting around Thanksgiving it's gotten kind of rocky and I can see the difference in the mirror, even though I haven't been weighing myself since the lockdown started. So I really want to get active, cut out the snacks and cut down the drinking. But I've been so good all year considering the circumstances, that I'm letting myself slide a little bit longer.

I'm also being a little more lax about my creative goals this month. I wrote another song and another novel in November and I've got an older manuscript out with some beta readers, and I'm co-writing a novel with an old college friend. I have another couple I could be working on revising as well. But other than writing my chapters when it's my turn on the friend one, I haven't been doing much in December. I've been more or less keeping up on guitar practice/lessons at least.

Our new budget goes into effect 1/1, and so far we're only $1000 away from fully funding the January budget--all essentials are funded so it's just a couple of variables left. Once we do I'll start putting money toward the February budget, essentials first and working my way down the list. We need a bit over $8K (gross; that's just over $5K after tax/retirement) to fully fund February. AS has about $17K coming to her from projects that are mostly already done, so I'm not worried about hitting January and February and maybe even part of March, and by then she and NT will have some more money lined up hopefully.

NT's severance ran out so he's getting unemployment, not the maximum amount as he's been able to work a little doing admin work for our downstairs neighbors. He's also been able to help AS with her business so she was able to take a couple of extra proofreading jobs for him to do. So he is bringing in a little money from various sources and that'll help us fund our 2021 budget too.

The kids are on break and will be starting school fully from home in January; we're not sending them to the Y three days a week like we did the first semester. Partly because we were disturbed by skyrocketing cases here (though our numbers have decreased quite a bit over the past month) but also because with NT working part time, he's able to take care of the kids during the school day. And they've gotten very self-sufficient as they've become acclimated to distance learning. They're not doing perfectly at school, but good enough for me.

Our governor has said schools can start going back in person in mid-January if they meet certain conditions, but he's leaving the decision up to the individual districts. Our district has said they'll let us know over the break, so they still have another week before they need to announce their plans. I'm hoping for in-person, especially if our teachers can get vaccinated, but I trust them to be cautious and do what they think is best. Overall I've been satisfied and even impressed with how our school administrators and teachers have adapted. (Bad news for our kids though: now that everyone is set up for remote learning, there's going to be no such thing as snow days anymore, even if they do start going back in person!)

What else? Just waiting for a vaccine (I'm about the last person on the list so it'll be a while) and hoping things get normalish at some point next year. Now that I'm a full-time remote worker, and NT and AS too, it could get really interesting to possibly extend trips by working part of the time in another place. So I'm eager for travel and tourism to become a more feasible option again.

AS took part in a vaccine trial (for the Johnson & Johnson one that's still being tested) so she possibly already got the vaccine, but she won't be sure for a while. The rest of us are in the last groups that will get it--non-frontline workers, no health factors, middle-aged and under 16. But I'm excited for the rollout and really hope this helps us get to a place where we can be with other people again!

I'm gradually retiring my previous budgeting system and gearing up for a new one that will hopefully be flexible for our new income situation yet still enable us to maintain control, so I wanted to share it with you.

I'm excited and hopeful but also nervous because we've done things the same way for several years. It worked when we had two fixed incomes and one variable, but it won't work for one fixed and two variable. And there are other unknowns in our future as well, so I'm hoping this flexible format will work even if our income situation fluctuates over the course of the year.

So for the past few years, we've used two main tools for day-to-day budgeting: the Number Crunch (which I also call Future Checkbook) and the Weekly Spending Tracker. And big picture budgeting is mainly handled in my Annual Budget spreadsheet. Number Crunch starts with our checking account balance, lists out all the upcoming expenses and incomes for the next couple months, and ends with a balance of zero. I update the checking account balance and delete things that have already happened, so it always only shows things that are in the future.

I would factor in the predictable income and expenses based on the Annual Budget, which broke things out by month as well as having a 12-month snapshot tab. Every month or so I'd paste another month's worth of projections so that the Number Crunch was always looking ahead at least a month.

For the variable income (AS's freelance business), I usually put some of it in savings, set some aside for tax and retirement, and dumped the rest into the Weekly Spending Tracker sheet. This sheet shows each individual's spending and available money (or deficit), plus there was an extra column for shared spending stuff that didn't fall easily into any budget category. Subscriptions, random drugstore purchases, family fun or date nights, etc. I would have the starting surplus (or deficit) at the top, add and subtract things throughout the week, and the bottom would show the ongoing surplus (or deficit). Every week I cleared it out, updated the top line and started over.

Well, with only one fixed income, we can no longer be as cavalier with our variable income, which is over half of what the household needs to bring in to make things work. So I adjusted each month's tab in the Annual Budget sheet. Now it lists fixed income, fixed/necessary expenses, and variable/nonessential expenses separately.

The fixed income (my income, the duplex rental) doesn't quite cover essentials, so I wanted to make sure that we covered those first with variable money before we started funding the less essential things. We met as a family and arranged the variables in order of importance, so if we can't fund every item, we'll at least start with funding the more important ones.

Boy this got very long-winded! Anyway, I'm slowly shifting over to the new system. When I pasted the January budget into my Number Crunch, I marked the things in red that aren't funded yet. Now, as we get more variable income, I can fund each item in order of priority.

OK, I realize I have no idea how to upload pics of my spreadsheets with the new system. Darn! Oh well.

Other changes to our budgeting: We didn't have fixed intentional amounts for certain things like Vacays/travel, Home improvement and Giving. And we were putting very little away for the kids' college. I did some calculators and $500 per month seems like a reasonable amount. I'm going to start one of those tax-advantaged college accounts, I forget what they're called, through Vanguard soon and put the money in there.

There are still some random expenses that won't fit under any of the categories I've set up, so we'll just deal with them as they come. AS and NT will have to be a lot more diligent about telling me when they make a purchase and letting me know how they think we should pay for it. I've just been funding random stuff through variable income but now our variable income will be put to such specific uses, there won't be much left over (if any) for randomness, so we need to be much more intentional about incidentals.

I thought I'd plug my second novel--which I mentioned in my last post--in its own separate post! I'm kind of hopeless at the publicity side of things, which is a bit ironic seeing as how I work in marketing for my full time gig! But what can I say--I find it easier to talk up others!

So here it is. Devil's Sanctum is an action thriller where a man's girlfriend disappears and he has to figure out why, and where she is--and what he didn't know about her true identity. Warning: My fiction is a bit racy and may not be to everyone's taste!

You can order it on any platform that sells books or e-books. I think you can even get your local bookstore to order a copy (it's print on demand so they won't have it in stock). If you're looking for a bit of good trashy fun, I hope you check it out! (My debut novel Viral is also still available everywhere.)

Finally, some progress on the retirement goal!

Goal: $814,292 by March 2024

Current retirement balance: $632,504

July 2020 balance: $565,234

Progress since last update: $67,270

Still needed: $181,788

This interim goal is based on getting my and NT's retirement to 4x my current and his last full-time salary (currently $82,500 and $64,118) by the time we turn 50 and AS's retirement values to 3x her highest annual income ($75,940 in 2018) by the time she turns 45.
$82,500 x 4 = $330,000
$64,118 x 4 = $256,472
$75,940 x 3 = $227,820

It will shift anytime our salary/annual income changes. (The only exception is I won't lower if there's a lower-income year.)

There are 40 months to go before March 2024, so that means we need to gain $4545 per month on average to meet our goal.

The ultimate goal we're working toward is 8x our annual income by the time we retire at 65.

I never got around to calculating last month's net worth, so this represents the change over two months. But holy cow, what a surprise I came back to this month!

Assets:
NT's UK pensions:
AV: 22,397 pounds ($27,996)
SW: 27,225 pounds ($34,031)
FL: 6,462 pounds ($8,078)
NT's trad. IRA: $97,596
NT's Roth IRA: $54,171
AS's trad. IRA: $24,606
AS's Roth IRA: $79,044
AS's SEP IRA: $57,264
CJ's 401(k): $190,361
CJ's Roth IRA: $59,357
NT's flat: $212,500 (200,000 pounds value x1.25 -15%)
CJ/NT/AS house: $592,200 ($630,000 value -6%)
---
TOTAL ASSETS: $1,437,204

Debts:
US Mortgage $373,403
Loan from friends (duplex) $9,000
UK Mortgage 1 $27,163
UK Mortgage 2 $5,726
UK Mortgage 3 $6,030
---
TOTAL DEBT $421,322

Current Estimated Net Worth: $1,015,882

 September 2020 estimate: $965,842

Change in net worth (over 2 months): +$50,040

Summary: Wow. We're a net worth millionaire household. I don't even know how to comprehend that! 

A little over 13 years ago, in September 2007, I started tracking our net worth, and my initial valuation then was $54,903. Little did I know at the time that our condo had lost a ton of value when the housing bubble burst, so it was probably a lot closer to $0 than I realized. So we've essentially built up a million dollars of net worth in those 13 years.

Notes on the numbers above: House value estimates are usually approximate. UK pension values updated about once a year. UK asset values and debt amounts are calculated figuring $1.25 for every British pound.

I've been very off my blogging game. I didn't even do my debt payment and net worth update posts at the beginning of November as I'd normally do! At some point I came on to try and write but that was when the big outage was happening, and I never came back afterward. I've been popping in to at least skim everyone else's entries every week or two, but that's about it.

So what's happened? My brain is all over the place this year, as are most people's I think, and time passes really strangely. Last time I did a real check-in, it was back in early September, shortly after NT had been laid off. So let's see if I can remember the high and low points of my life since then...

- Oh first I should say I self-published my second book! Maybe I'll do a separate post about it at some point. If you're interested, it's called "Devil's Sanctum" and my pen name is T.A. Berkeley. I will warn you my books are pretty racy, so they're not for everyone. :-)

- NT is still unemployed, but we still have his severance funding the budget, so we've been operating fairly normally. He'll also qualify for unemployment starting next month, I believe, so that'll help. He's applied for a few jobs and interviewed for one; he should hear in December whether he's moving on to the next round on that one. He has enough severance to get us through the first week of January. He's been doing a TON around the house, taking on most of the kid care and housekeeping, plus a little freelance work for our downstairs neighbor and for AS's business; she's not officially paying him but his assistance has enabled her to take on more work. I've been helping her as well. She's on track to be the biggest breadearner this year! There is some chance NT could patch together enough income between her, our neighbors and a bit of other stuff to not go back to full-time work, so we're exploring that among our options as we look to next year.

- AS has applied for a few jobs that seem interesting and lucrative enough for her to consider re-entering full time employment! She's also applied for a fellowship that would award $100K to use however she chose to increase her leadership skills and advance her goals. She made it through the first round and will hear about second round results in January.

- My company is doing marginally better. They laid off enough people that we're down to a pretty small staff. They're closing the physical office so we'll be 100% remote even when the lockdown is over. They reversed the temporary paycut, though I'm not sure they reinstated 401(k) matching. I had a chat with one of my former colleagues who's at another agency; he was very interested in bringing me on board. But he doesn't make the hiring decisions and the person who is never got in touch, so I'm not sure if they decided against it or haven't opened up the position at all. I'm happy enough at my job for the time being, so I'm not looking actively.

- The kids are 100% distance learning. We send them to the YMCA three days a week; they take their computers and do school from there. So at least they're around other kids, even if it's not their classmates. They do Monday and Friday at home. They're holding up pretty well, even though they'd rather have in-person school. The teachers are doing an awesome job considering the challenges. The school provides a ton of free food which we pick up on Mondays; we give the meat stuff to friends.

- The kitchen reno is still out there as a possibility, though it's really up to our contractor to make a schedule and let us know the final price tag. He's checked in a couple times and brought an electrician to look at our wonky wiring. We have about $50K saved up and will borrow as much as it takes to get the kitchen the way we want it. We've lived with this terrible kitchen so long, when we redo it, we'll redo it right. I hope it comes in around $70-80K but would probably go up to $100K if that's what it takes. (It'll include mini ductless AC for both floors of our part of the duplex.) This will be our only really big renovation; all the other stuff we want to do on the house will be smaller chunks.

- I've been trying to stay healthy and creative, but time and my headspace are so weird these days, so I've been using some apps to track my habits. It's worked fairly well; I don't think I've gained much weight, if any, and I've gotten a lot of creative stuff done. And kept my drinking fairly under control; that was something I wanted to get a handle on when lockdown started. I just wrote another book for NaNoWriMo, and I have one manuscript out to a couple friends for beta reading. I've also written another song and kept up on my guitar lessons.

- We haven't lost anyone to COVID or caught it ourselves yet, but of course MN is one of the worst states right now. Other than the kids being at the Y three days a week, where they wear masks all day, we have very limited physical contact with people outside the family. Just trying to hang in there and stay safe until a vaccine is available.

- We've more or less kept to our budget this year despite all the weirdness, though we haven't saved anything outside of retirement and whatever goes into the UK account from the rental. And of course NT doesn't have his 401(k) so we're putting less toward retirement. But looking forward, I want to make more of a concerted effort to put money aside. If NT does end up staying freelance/part-time, then we're going to have to treat that variable money as part of our regular budget, which means we'll need to be a lot more intentional about our priorities for funding various budget line items. More on that later; I'm coming up with a new kind of annual budget that will help us be flexible since we have so many income unknowns right now!