Author Archives: Mom

About Mom

A family of three living in the Pittsburgh area. We both work full-time and work on raising our daughter.

Job Hunting and Financial Independence

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These past few weeks have been a reminder to both Dad and I about how much we would like to not have to work for someone else any longer.  We’ve both been applying for jobs and interviewing (at multiple places for me).  Trying to do so while working full time has been interesting – I’ve had a lot of slightly longer than usual lunches, or picking up Daughter Person early a few times.  I’ve only applied for 5 positions – and I’ve gotten responses on all of them – phone interviews for 4 already and in person interviews for 2 after tomorrow – but no offers yet.

I’m only applying for positions that are interesting to me, which is why I’ve applied to so few.  I’ve got a well-paying job, that theoretically I like (still not bad after a month, except the whole lacking a 401k thing), so getting me to jump ship is more difficult than it would be if I didn’t have a job.  I have the “luxury” of picking and choosing which offer (if any) I take.

We don’t *have* to work, but that’s only sustainable for one month at most, then at least one of us would need to find something, so we continue to work and make excuses when we need to get away for an interview.  If we had a fully funded emergency fund, we could take off for a bit longer, and not have to work while searching.  One of the primary reasons it’s our first goal now that we’re done putting all of our extra money towards debt (we’re not debt free though). We’re shooting for 3 months of expenses at first (same rate as paying off debt), then 6 months of expenses while contributing more to investments at a 50/50 rate.

Next time something like this happens (because it’s likely), we’ll be ready to walk if we need to.

Missing the Buzz

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Now that my student loans are paid off and we’re not making any extra payments this month, I find that I’m missing the little buzz of excitement I get when I make an extra payment and watch the line of total debt drop closer to zero.  We’re still paying on the car, and I can watch that amount owed drop, but since we’re in a holding pattern, that little buzz just isn’t there.

I enjoy watching our other accounts grow, but it’s not quite the same “stick it to them” feeling that came with making an extra payment.  I also look at our accounts way more than a sane person should.  I don’t touch them or buy/sell, but I look at the little “portfolio balance” chart in Personal Capital a bit too much.

I have a new goal in completing our emergency fund, but for some reason, it’s just not as exciting.  I’d love to set some more short term goals as far as savings go – like continuing to spend very little on groceries or getting our savings rate closer to 50%. But with life at a cross-roads, I don’t know what a reasonable goal is at this point.  Moving will seriously impact our savings rate as we spend money on things like deposits, down payments, and fixing up the house for sale.  We’re trying to avoid buying groceries right now – especially freezer stock up items – in case we do move.  Just the bare minimums to get us through the week – which both helps keep the grocery bill low, and increases it since we’re not buying in bulk.

One thing I am excited about is the possibility to buy a smaller house with a (much) smaller mortgage, and hopefully saving more.  We don’t know what our new salaries might be though – just what we’ve asked for, so we might not save as much as we’re expecting.  But, it lets us look for a house with a different set of priorities in mind rather than just “how big of a house can we afford”.

If you’ve finished paying off your debt, what do you do to stay excited about saving?

eBay Selling Spree

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Total items out of the house: 194/365

I’ve gone on a mini eBay selling spree in the last few weeks.  I sold two Apple TVs (we had 3 – and we really only need one now), and my old Mac Pro.  It went for $270 – not bad for an 8 year old system.  I netted $536 and some change in the last two weeks.

I’ve also listed some of our living room furniture on craigslist and sold it pretty quickly.  I have pictures of the treadmill and other toys of Daughter Person’s to put up on craigslist, I just haven’t gotten them up yet.

If I do accept the position in Pittsburgh, we’ll definitely be getting rid of more things.  I may use the move as a “clean slate” and only pull things out of boxes when I want to use them, then donate the rest after a year.  Need to clear that plan through Dad first though 🙂

Opportunities

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I’ve made mention of this a few times in comments, but our lives are a bit upside down at the moment.  While I accepted the position at the company that bought out mine, I have been looking.  And I found a position that sounds perfect for me.  It’s in Pittsburgh, at my alma mater of Carnegie Mellon University.

I’ve applied, and based on conversations, it’s practically mine.  I have a formal in-person interview on Monday with the other departments I’d be working with to make sure personalities mesh.  I gave them a salary number and they didn’t blink, and they’re putting together a relocation package for me to look over.  And they offered to send Dad’s resume to the campus HR group to help him find a position in Pittsburgh as well (at the university or nearby).

There’s a lot to think about.

It’s one thing to uproot yourself and move when you’re single.  There’s a lot more to consider when you’d be uprooting your entire family.

I wouldn’t start work until mid-August, so there’s time to consider it and get our house ready to sell, and do all the other stuff that’s needed to move – like find a house/rental in Pittsburgh.  We’d also have to work around a few (local DC) concerts we already have tickets for, and our trip to New York to see The Last Ship.  And our big 2-week vacation in October – we’ll just have to take leave without pay for both of us in new positions.  But all those things are down here in DC or start from here.  It’s a 4 hour drive to get here and we’ll have a place to stay (with Dad’s Dad), so it’s not unreasonable to come back.

This job sounds almost exactly what I was looking for – of course, I’ll find out more at the interview, but you never really know until you’re there.  I’m guessing that the environment is casual (it is a university!), and they have great benefits (8% into Vanguard – I don’t need to contribute to get it, it’s just there with a vesting schedule). 17 days vacation plus holidays – to start with.  Sounds great!

Dad would have to find another job – we’d lose about $17,000 in our retirement accounts as we lose Dad’s unvested balance.  Not the end of the world, and we can make it up with contributions, but still a “cost”.  The cost-of-living isn’t as high in Pittsburgh (it’s about 80% of DC), so we don’t expect the salaries to be as high either – I asked for under my current salary, which is “more” relatively.

Until we make a decision, we’re not paying off the mortgage any earlier, or spending a lot of money on anything.  I don’t particularly like being so unsettled.  The other option is to remain where I am and hope for the best…

New source for CC rewards – for me.

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My “new” company doesn’t have a corporate credit card, but I still have to book flights and hotels, and all that other good stuff while traveling.  The solution?  I put it on my personal card(s) and get reimbursed in my paycheck.  Since I have enough in the savings to cover most of the trips I need to take, I don’t think this is a problem – and I get the credit card rewards for it.

I just booked a $2,000 flight to Peru with my Costco AMEX card – 2% cash back on all travel – that’s an extra $40 in my pocket later in the year (I get business class tickets based on the client’s travel policy).  I’ll also be able to rack up the expenses on my new Hilton Honors Reserve card to meet the minimum spend for the bonus as well (and it doesn’t charge foreign transaction fees).

The only issue arises when there’s a $8-9k trip that I’ll need to cover.  I’ll have to make sure that the reimbursement falls before I owe the balance on the credit card.  I can supposedly request a check with a week’s notice, so if I have to buy one of the very expensive flights, I can get reimbursed almost immediately if I need to.

Here’s to more rewards!

$200 Grocery Budget

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This month, we’re buckling down to save more money and put more aside in savings.  The goal is for the next few months (into the foreseeable future really) to live off of Dad’s take-home pay as much as possible and bank all of mine.  We know that we can’t cover daycare on only one salary, but that’s OK.  Our goal is to save as much of mine as possible – which equates to almost 45% of our income.

The first step is reducing our grocery budget.  We had a budget of $250 on non-splurge months, and now we’re reducing it to $200 on non-splurge months, and down to $500 from $800 on the splurge months (July is looking to be a splurge month based on what’s left in our freezer).  Our grocery budget includes toiletries and paper products as well.  To be honest, we only fell within that previous budget 50% of the time – the rest was taken from other budget line items to make up for it.

It’s been one week (two “trips” to the grocery store), and I’ve spent $141.  Luckily, we don’t expect to need to buy anything but fresh milk, fruits and veggies for the rest of the month.  We needed a few things at Costco (like TP) this past week, so I spent more than planned.  But, I really think we can do this – even if it seems almost hopeless already.  We’ll just have to do without fresh stuff towards the end of the month.  We still have just under $60 left, with three more grocery trips needed – that’s $20/trip.  Milk is just over $3/gallon and we buy it weekly, and lettuce for salads is just over $3/week for us.  Bananas are pretty cheap, and we have *plenty* of frozen fruit and veggies – we won’t go hungry, but Dad might get bored with what we’re eating.

How do you keep your grocery expenses low? 

Detailed Financial Picture – June 2014

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May’s Numbers

As of June 4, 2014, we are $432,197.60 in debt (that includes the mortgage).  Without the mortgage, we’re at $17,110 in debt.  That’s our auto loan.  We currently have $1,040,786.32 in assets (including our house).  Our retirement accounts are at $380,035.80 Our Net Worth is $608,588.72  (includes house and mortgage), up from $591,725.97 last month (2.85% increase).

My student loans are paid off! – just less than 5 years after I finished my degrees  (graduated in Dec 2009).   Now, the only consumer debt we have left (besides the mortgage) is our car loan, and it’s at 0%, so there’s not really a fire lit under us to pay it off.  I “borrowed” from June’s budget to pay off the student loans on May 30, so technically, the loans are in our budget for this month.

My 401(k) contribution hasn’t made its way into my account yet – just waiting so I can roll it over into Fidelity and take advantage of *much* lower fees.

I no longer have a tax-deferred savings account available to me, and I increased my federal tax withheld to not have a surprise next April.  Based on some paycheck calculators online, I’ll be getting about the same amount every month.  Dad’s paycheck will be about $250 less every paycheck (bi-weekly) because we’ll be using his health/vision/dental insurance.  So, we end up with a bit less in after-tax income according to my estimates.  I may need to adjust our tax withholding in the future, but I’d rather have a pleasant surprise next year than owing a lot of money – which has happened 4 of the last 5 years.  We just both selected “married, but withhold at single rate” on our W4 forms – even though we have a kiddo and about $24,000 in itemized deductions.

The extra ~6,500 (estimated) I’ll get from accrued paid time off will be used to refill our emergency fund back to $5k plus some.

Our focus will be 3 months of minimum living expenses in the emergency fund – without contributing to an investment account, and then contributing 20% of my gross salary to a taxable investment account, *then* paying off the car loan.  If we do get a 401(k) by the end of the year, I’ll have them take up to 100% of my salary for Nov/Dec and we’ll live off the emergency fund through the beginning of the year – depends on when they get it as to what percentage I’ll contribute.

We’ve moved into “no spend” mode – and our goal this month is to not spend more than $200 on food/eating out/beer/wine.  We have some wine at the house already, and we’ve agreed to only drink some on weekends, and we’re just not going to go out this month at all.  It’s been 6 whole days and I haven’t stopped anywhere to get a snack or a soda, or eat my lunch out (and pay for it).  Yes, this is an accomplishment for me, and where most of my “fun money” goes 🙂  Hopefully, this will break me of that habit by doing this for 2-3 months.  Then I just won’t care.

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 (-4944.49)
  • Car loan (0%): $17,110 (-490.00)
  • Mortgage (4.125%): $ 415,087.60 (-707.43)

Total paid off in May: $6,141.92

May 2014 Early Retirement Progress

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Contributions were up a bit – mine was at 8%, with a 4% match, and Dad’s was a lot of money (~$2500).  I was planning on increasing my contribution in July/August, but my new company doesn’t have a 401(k) much less a match, so no more 401(k) contribution for me.  Our new health insurance (through Dad) allows for an HSA – except that this year, we already have an FSA, so we can’t participate in an HSA.  We’ll be taking advantage of that next year, but not this year :(.

We increased our tax payments since I have no options for reducing my income (which is technically higher now).  We’re likely to get a lot back next April.  Any extra is going to the e-fund at the moment.  I’d rather have a positive surprise than a negative surprise come tax time though.

Supposedly, there will be a 401(k) option at my new company before the end of the year (no word on match) – if there is, I’ll max out as much as I can, but I’m not sure I’ll be at that company towards the end of the year.  I’m not sure that I’ll be able to continue “contributing” as much as I have been, but I hope I can keep contributing the same amount ($580/mth at a minimum) to my taxable account.  If I can contribute to the 401(k) before the end of the year, I’ll contribute 100% of salary towards the end of the year, and take from the taxable account for living expenses.

Investment gains have been nice this month – almost 7k increase.  It’s almost scary that we can “make” 7k in one month – that’s more than we need to live, but I’m not sure I’d take that as  “OK to retire” since it’s still pretty close to what we need, and not really consistent month to month.

2014 Totals

So far, for 2014, we’ve contributed $16,502.10 (41.26% of the new goal of 40k), and we’ve gained $14,673.47 in investment gains (72.42% of our planned total).

Investing without a tax-deferred account

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My new job does not have a tax-deferred account option – other than an HSA.  I don’t believe we can even *have* an HSA until the end of the year.  We’re using Dad’s Health Care FSA (although, we can drop it when we update his coverages because our health insurance has changed – “qualifying event”).  The new company contributes $1500/year to an HSA (high deductible plan – hope I can use Dad’s high deductible plan, and their HSA – since I hopefully won’t be there long).  We may be able to contribute $6,550 to the HSA for the year (which I’m going to see if I can make happen almost all at once if we can contribute – might as well get in on the fun while I can).

I *was* going to max my 401(k) contributions starting in August, but well, that plan is shot at the moment.  So, the best I can do is the HSA (if I can contribute), and try to get a deduction for a traditional IRA contribution – not sure if I can because I was covered under a plan for part of the year.  And then sock away a lot into a taxable account.  I *think* we’ll be able to contribute to a Roth, but our taxes will be *super* high this year without me being able to shelter some (at least 6k extra), so it probably doesn’t make sense.

I am getting ~$8,800 in accrued paid time off – no idea when that’s coming through or in what form (will taxes be taken out of it? will it be as part of payroll from the new company?).  It will be a nice pad to our emergency fund – which I had just almost drained to pay off my loans (talk about bad timing).

We’re moving into “save a lot” mode where we’re going to try to save 90% of my net salary, or about 35% of our total gross (we still have to pay daycare if I work, so we can’t do 100% of mine).  That extra money will be invested in a taxable account.  I’ve so far only been investing in ETFs in my taxable account – in about a month, I should have enough to switch those over to mutual funds.

We’re going to use Dad’s health insurance, because it’s too annoying to switch again, and at the moment, his job is more stable.  I’m hoping to find a new position in the next month.  I already had to cancel my annual exam (originally scheduled for 6/2 and way overdue – should have been in April) because I had no clue what my insurance status would be. I just need to get the paperwork from our HR that says I was “laid off” to give to Dad’s company to start under their plan next week.  From what I can tell, their prices are about the same as Dad’s.

Does anyone else have to deal without a tax-deferred savings?  I’m already looking for another job, but aside from that, how do you deal with investing for retirement?

Accepted the Offer

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I verbally accepted the offer with one condition – they have to have some kind of tax-deferred retirement account available by the end of the year.  I ran some numbers, and if we can’t sock away my contribution tax-deferred, we’ll owe about $6000 more in taxes per year (and without being able to lower my taxable income, I can’t deduct any amount contributed to an IRA because Dad has a 403(b)).  Those extra taxes combined with the piss poor salary offer and benefits basically causes me to lose almost 30k/year in compensation – from what I’m making now – which is well below what I should be making.

I haven’t signed any paperwork, so I have no idea if I technically have a job on Monday. I’m at home today (taking as much of my personal leave as I can before it disappears – except I’ve pretty much spent all day dealing with this crap…)

I will however be actively looking for another position which pays better/has better benefits.  Won’t hurt to have *some* money coming in while I look….  And if your company is looking for a CISO or CISO type position, let me know via e-mail (mom at mydomain) 🙂

Update 30-May 5:30pm: my boss is making up the PTO issue – we’ll be paid out what PTO we had accrued – I had 5 weeks, so I’m getting a bit more than a month’s extra money out of it – a nice start to our long term emergency fund.