August 2014 Early Retirement Progress

We contributed $3,806.57 this month to our retirement accounts  We gained $10,857.66 in interest this month.  That’s almost as good as we did in February when we gained just over $14,000.  The markets were nice to us this month, and hopefully they continue.

At this moment, I’m more concerned about mortgage interest rates remaining relatively low.  We wouldn’t borrow the money for our new house until February at the earliest, March as likeliest, and April as a late option.  Interest rates do more for our monthly payment than our option choices.  We’re looking at about 1900-$2100/month depending on exact rates for the new construction – but that wouldn’t start until March probably (maybe as late as April).  We’re hoping that our house in VA sells before the end of the year – preferably in the next few months, so we can save that payment until we move in.

I’ve maxed out my 403(b) contribution percentage which will start coming out in my September paycheck – 20% of my salary (~$2100/mth with “match”).  That will increase our monthly contribution for the rest of the year, pushing us just over $45k in contributions for the year.  We’re just going to learn to live on a lower take home pay.  (I’ve also figured out that we’ll end up paying more PA taxes at 4.07% of gross than VA’s 6% of Federal AGI :( )  I have to wait until my September paycheck to figure out our new monthly net amount.

2014 Totals

So far, for 2014, we’ve contributed $26,905.35 (67.26% of the new goal of 40k), and we’ve gained $26,041.09 in investment gains (128.53% of our planned total).

Offer #1

In the last few days, we’ve had a lot of progress on the selling and buying front.  We’re pretty sure we’ve figured out where we want to live (Jefferson Hills), in new construction. I’m testing the drive into work tomorrow to confirm if the commute is OK.  I got myself a parking pass – it’s in one of the more expensive areas ($121.50/mth) because that’s all that’s left, but it is a garage.  After the bus passed by 3 days in a row without stopping at my stop for me to get on – resulting in me taking 1.5hrs to get home each time – I’m done with the bus for actual commuting.

We also got an offer on our house in VA tonight.  Almost exactly what we were asking for – they offered list price with 10k in closing cost assistance.  We’re countering with list price and 5k in closing cost assistance.  They want to close while we’ll be in Europe, so we told our Realtor that we need to close before we leave (preferable) or after we get back.  So, our closing date may be Sept 30.  Not so far away!  Fingers crossed that we get to closing with this first one!

We’ve never dealt with new construction, but we *really* liked the model house and the available lots.  The model was within our price range, and there were some options that we would do without to make it even more affordable – but we’d finally have our “dream” kitchen!  They want 8k down before we can get on the construction schedule, and then we’d complete the financing when the house was finished.  We’re looking at 5-6 months at least – during which time, we’d be living at my mom’s and saving money (almost 3k/month) to buy the “upgrades” we want that aren’t offered as part of the package – like a specific range or custom paint colors.  We’re trying to do our research about the builder through Angie’s List and BBB, but this is new territory for us.

Has anyone bought new construction?  Anything we should specifically ask or research about the builder or the process?  Or anything else that would be useful for us to know about buying a new construction home?

Decisions, Decisions, Decisions

We have to pick where we’re going to live in Pittsburgh over the next few months. We’re at least trying to decide what part of the city we want to be looking in so that when our house does sell, we’ll be ready to seriously look for something.

We were originally looking at the North Hills (North Allegheny school district), but after commuting for the last week and a half, I’m wondering if we shouldn’t live closer to my job – in Squirrel Hill (my job is in Oakland). I’ve been driving to a park and ride and then riding the bus in (the 61C), and it’s taking me about an hour each way. I leave before Daughter Person gets up in the morning, and I’m home in time to spend about 2 hours with her before she goes to bed. I’m used to getting up at 7:30, to be at work by 8-8:30 and then picking her up by 4-4:30pm. This long commute stuff may be for the birds. I have been taking the bus primarily because at my mom’s the bus takes the exact same route I would drive, it only takes about 5 minutes longer, and it’s free. Living in the North hills, I’d be driving every day, paying $87/mth for parking, and theoretically driving 30 minutes each way (I’m going to assume my co-workers are being generous and stretch that to 40-45 minutes each way). That kind of commute was fine – when I was single, and when I wasn’t a parent. Now, I want to get home to spend time with Daughter Person in the evenings – not sit on the bus or in the car all day.

We’ve talked about possibly buying in Squirrel Hill – the neighborhood just outside of Oakland where I work. I could walk it (about 20-30 minutes – biking is not an option because I’m very hill averse), or take any of 5 buses home – all of which seem to come more often than the bus I ride now. Tonight, the one bus I need to get home drove right past CMU without stopping because it was full – so I waited *another* 30 minutes for the next bus – something I’d rather not continue to do.

There are some advantages besides the shorter commute: a smaller home is easier to find, we’d be walking distance to a lot of great stuff – a grocery, a jewish community center, lots of restaurants, etc. But there are some serious downsides: the schools are crappy from what I’ve heard (especially compared to North Allegheny), and it’s in the city, with smaller yards and property. We’d pay 3% local tax instead of 1% local tax (comes out to about $4000/year). *But*, we’d likely get rid of one vehicle (and be able to get a 1 car garage instead of 2), and not paying gas or insurance on it – but that doesn’t quite match up to $4000/year difference (maybe $3000/year). We’d still have a car payment because we’d be keeping the car with the payment, but we wouldn’t be saving for a replacement car for a while.

The housing prices are within our price range, and in decent parts of town (except maybe the schools). The commute can’t be beat – and if we ever worked outside the city, we’d be right downtown and could get most places pretty easily.  We know this isn’t likely to be our “forever” house, so there are some compromises we’re willing to make.

Are we missing something major to consider? Does anyone have kids in the Pittsburgh Public Schools (Colfax K-8 and Alderdice High school) that would be willing to talk about them?

Settling In – Part 1

After one week at my new position, we’re starting to settle into a pattern living at my mom’s.  Although, when they say you can never go back, we’re living that at the moment.  We’re all trying to keep our distance from each other, but the house is small, so we bump into each other a lot.

I’ve been driving to a park and ride and then taking the bus into the city.  The first day, I didn’t get home until 7pm, I left campus at 5:45.  Now, I’m getting there earlier and leaving by 4:30 and getting home by 5:30, even with stopping at the local wine store :)   If I was driving, I’d only save about 5-10 minutes, because I’d take the same route the bus would.  But, I’d have to pay for parking whereas the bus is free for me as university staff.

Daughter Person is really liking her new daycare – she actually wants to go to school every morning.  The center is really small, but the teacher enjoys what she’s doing and it shows.  We haven’t had any potty accidents except the first day she was there (yay!), so my biggest fear hasn’t materialized.

Our house in VA had 6 showings this weekend, but we haven’t heard any feedback yet.  *Fingers crossed* that we hear something shortly.

Money is flowing out a little more quickly than it’s flowing in due to all the moving and the registration fees and license fees, and not being able to rely on our systems for saving money (like our large freezer).  We’re limping along as best we can, and hopefully we’ll get some new systems in place to help us save money.

How have you adjusted to your new life when you’ve moved?

Detailed Financial Picture – August 2014

July’s Numbers

As of August 11, 2014, we are $429,666.44 in debt (that includes the mortgage).  Without the mortgage, we’re at $16,000 in debt from our auto loan. We currently have $1,049,072.86 in assets (including our house).  Our retirement accounts are at $389,802.48. Our Net Worth is $619,406.42  (includes house and mortgage), down from $626,585.42 last month (1.15% decrease).

Until our house is on the market, I’m continuing to use Zillow’s estimate of our house – which is pretty wildly off: ~$617k vs the ~$540k we expect to list at.  I’m not ready to take that hit to my net worth yet, but that’ll come next month.  Hopefully, we’ll have a contract this time next month, and on our way to being “home” less.

Daughter Person and I are living at my mom’s, and Dad will be joining us on Wednesday.  The house is as ready as it’s going to be for listing and showing. We likely won’t be back until we have a contract.  The garage looks like a personal storage facility, but I’m not paying extra to store stuff we’re moving, just to pay the moving company even more to retrieve it from that location.  They can just pick it up from the garage.

We’ll be able to pay the movers in stages: moving into storage, storage by the month (1st month free!), then moving from the DC area to our new home in Pittsburgh – once we have one.  So, hopefully, we won’t need to borrow from our line of credit.  My mom’s generosity is astounding to let us live here rent free.  She’s still refusing to let us buy groceries, but I snuck a few into the fridge and cabinets this evening.

Debt (in the order we’re paying it down):

  • Line of credit (8.75%): $0.00
  • Chase (4.99% for life): $ 0.00 
  • Student loans (aggregated 4.21%):  $0.00 
  • Car loan (0%): $16,000 (-500.00)
  • Mortgage (4.125%): $ 414,666.44 (-711.30)

Total paid off in July: $1,211.30

July 2014 Early Retirement Progress

We contributed $3,292.35 this month to our retirement accounts  We “lost” $7,215.19 in interest this month, pretty much wiping out the gains of June, but such is the market.

I put in $900 into our taxable account to sort of make up for the lack of contribution to a retirement fund, and of course, it was deposited and purchased stocks at pretty much the peak of this month.  We almost have enough in the taxable account to get into a mutual find vs the ETFs we’re in now.  There are short term trading fees on one of the ETFs (90 days), so I may have to wait a bit before selling to buy the mutual fund though – and I’ll take the capital gains.  Hopefully, I can get that in before the end of the year, so that we can offset some of those with deducting all of our moving expenses (estimated at 10k).

I won’t be able to contribute more to my Lending Club account (PA residents can’t buy new loans, but they can hold them and buy them on FolioFN).  I don’t want to mess around with buying loans, so I’m just going to let my existing loans run their course, and that’s that.  I haven’t considered whether I will sell the ones I have though (~$400).  Because the balance is so low, I’m not very diversified, but I’m also in mostly A and B loans, which don’t have a high risk of default, so I lean towards just waiting 3 years ’til they all “run out”

The markets have not been good to us this month, but for the year, they’re still doing pretty well, and I suspect we’ll still be able to “meet” our goal of just over 20k in gains this year.

2014 Totals

So far, for 2014, we’ve contributed $23,098.78 (57.75% of the new goal of 40k), and we’ve gained $15,183.43 in investment gains (74.94% of our planned total).

Temporarily Unemployed

Today was my last day at the office.  I have enough extra hours and vacation to cover until the end of July.  I’m owed about $650 in expense reimbursement, but my former boss knows how to get a hold of me, and the company has my forwarding address.  I don’t have to be at my new job until August 11, almost two weeks.

We’re “moving” to Pittsburgh on the 6th, when Daughter Person, the cats and I will begin living with my mom.  Dad will be going with us and we’ll be establishing residency on the 7th (to avoid Dad having to show up for jury duty on the 11th!) – getting our new licenses and getting the cars registered, inspected, etc.  I’m not likely to be returning to the DC area until our house here is under contract.  Dad will be going back and forth until we close.

Until then, I’m going to be doing a combination of relaxing, getting rid of things on craigslist/freecycle/facebook and packing.  I’ve had good luck getting rid of things on the local Facebook “yard sale” group.  It’s nice to not have to worry about work for a while.  I don’t have to respond to e-mails and I don’t have to go to an office – although I do have to wake up to take Daughter Person to daycare.

And the best part – I don’t have to worry about money while I’m not working!

Last Trip for Work

The rest of this week will be a little bittersweet for me – I’ll be taking my last trip for this job.  I’m going to Peru, so it’s not a “boring” trip by any means – just long flights.  I’ve been traveling for this job since 2005, and as a friend commented to me the other day, I have “more stamps in my passport than a post office has”.  I’ve flown all over the world – literally – over the last 9 years, and I’ve enjoyed it.  I’ve been to 6 continents, about 20 countries (and will be adding two this trip!), and according to TripIt, 288,157 miles since April 2008 when I started using it.

When Daughter Person was born, I started collecting dolls from each of the countries I visit – something preferably in the native dress of that area.  My father had created a similar collection for my aunt when he was in the Navy that ended up being mine, and I passed it on to a cousin – and it was damaged in a flood :(  Hopefully, I can take Daughter Person to see the world when she’s old enough to appreciate it and she can pick out her own dolls.

I’m not going to be making airline status in the future – not via actually flying anyway. I should have Silver status at least for next year, but after that, I’ll be on my own.  I’ll have to collect my points the “new” way of churning credit cards – after we’ve gotten our new mortgage!

Expected Budget Changes from Moving

I’ve talked about the benefits to us moving in general, but what are the real budget changes we’re expecting once we move?  I know the first few months will be all over the map on how much we spend because we’ll still be settling in, fixing things in a new house, etc.  But I have a pretty good idea of how much extra we’ll be saving.  This isn’t all of our budget, but the items I think will be changing.  The rest, like how much we spend on clothes or groceries might change a little, but not really drastically.    Our income isn’t changing significantly (I’m getting $2000 less per year – about $150/mth), and Dad’s is staying exactly the same.

Overall, we’ll be spending a little less in food and clothing purchases because of Pittsburgh/Allegheny county sales tax (0% clothes and basic food vs the 6% on clothes and 2.55% on food in VA).  We’ll also theoretically be paying less in income taxes,  VA has a 6% on Federal AGI tax, but PA taxes ~3% of all income (very few deductions), and 0.5-1% local income tax – depending on where we live.  We shelter a lot of income from the feds (and therefore VA), and it won’t be sheltered from PA income tax, so I don’t know how the raw numbers will work out. I don’t *think* we have enough sheltered to make up the 3% difference, but we might.

Bills that will go up:

VA PA Difference
Auto insurance 75 110 -35

Bills that will go down:

VA PA Difference
Mortgage (including property taxes & insurance) 2700 1700 1000
Daycare 1300 500 800

Just among those three things, we will be able to save an extra $1765 per month beyond what we’re saving now.

Definitely looking forward to seeing how all the expenses play out.  We are also likely to save more in fuel as I’m planning on taking the bus to work on a regular basis (and I get a free bus pass as a perk of employment, but I have to pay for a parking pass).  That’s a decision that hasn’t been made yet though, so we’ll see how it plays out.

We’re also going to have at least one month with no mortgage – just as part of the buying and selling process (and we’re living with my mom during that time).

Update July 21: I just found out that I’m also getting an $80 “communication allowance” per month to pay for cell and Internet service.  That’s about 90% of our entire family cell phone bill – an “extra” $80 per month :)

Have you ever made a significant move to lower your expenses?

We Have Too Much Stuff!

As we start to pack our life into tiny boxes for moving, I’m starting to realize how much “stuff” we actually have. And how much of it wasn’t being used much (if at all). Some stuff we have to keep for a prescribed period of time (like old tax returns), other stuff, we just need to get rid of. Moving is as good of an excuse as any. I’m more concerned that I don’t have time to seriously go through the stuff and separate between keep and donate before it needs to end up in a box for moving.

I still have a huge monster suitcase that my parents gave me when I graduated high school – that I’ve used maybe 3 times in the last 20 years – and at least the last time, I wish I hadn’t brought such a large one with me. I haven’t carried anything larger than my medium sized one for the last 8 years – and that was for 3 weeks of work clothes! It’s listed on freecycle, but no bites yet :)

I already have a rather large pile of things that are going to donation. The charity does pickups and they’re coming by today to take that away. Then we start a new set of boxes for donation, because I’m sure there will be more!

There is the pile of things that I would like to sell before moving, but it might have to wait until after we’ve moved: like our exercise bike and treadmill. No bites on the bike on craigslist, and the treadmill has stuff sitting on it so it hasn’t even gone up on craigslist yet.

Finally, there is the “trash” pile. As much as I hate throwing things out, there are just some things that aren’t worth donating or even giving away.

The Realtor came by last night to sign the listing paperwork, and we went over what should and shouldn’t get packed. All the stuff we really don’t use that often, like tchotchkes, that would be easy for us to pack up, are the things he wants us to leave unpacked for the stager to use. We’ll just have a *lot* of extra packing to do between going under contract and closing :(

Why is it that moving spurs you to get rid of things that haven’t bothered you for the last 5 years?