Category Archives: Finances

Detailed Financial Picture – June 2014

8 Replies

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

5 Replies

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

8 Replies

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?

Last student loan payment scheduled

14 Replies

I just scheduled my last student loan payment.  I’m cheating a bit by scheduling it on May 30, when technically the payment isn’t in the budget until June, but whatever.  The money will be in our account on May 29 to be used for June, and the processor probably won’t take the money out of our bank account until June anyway.   I’m a bit over-excited about the prospect because that means that all of our non-mortgage, non-0% interest rate debt will be GONE!  The car loan remains at 0% interest, and the mortgage remains at 4.125%

3 years of trying to get out of debt will be “over”:  from owing a high of just under $100,000 in debt to $17,600 (what’s left on the car).  Or progress will “slow down” as we focus less on paying off the car, and more on building up our long-term emergency fund.  I’m excited and nervous at the same time.  We’ve been paying off debt with an almost laser focus for 3 years, and now we’re moving on to the next “baby step“.  It’s a pretty big change in our lives really.  I’m hoping that we can transfer that laser focus to saving up our large emergency fund next.

We’ll be maxing out our retirement accounts, giving us a “new” income to work with, so I don’t think we’ll build our emergency fund as quickly as we paid off debt, but at least we’ll be paying ourselves instead of someone else in the meantime!    We’ll continue to round up payments on the car and mortgage, but not dump all of our extra money to them like we were to debt.

Reasons we have a large-ish emergency fund

6 Replies

This month, the annual checkup of our two kitties revealed that one has hyperthyroidism.  They’re both a bit older (~14), but they are indoor only cats, otherwise healthy and expected to live another 5-6 years.  Bloodwork revealed early hyperthyroidism in Bootsie, our black and white cat.  Just the diagnosis for her was $178 (in addition to the “normal” vet visit which we had saved for all year long and was already in the budget).  Then we needed to decide what to do.

Untreated, it is fatal.  It can be “cured” (98% success rate) with a one time injection of I-131 radio isotope (Iodine), or it can be managed with 2 times daily doses of medicine.  Realistically, we know we’re not going to remember to give her pills twice a day, and many times, we leave for long weekends, and we’d have to find someone willing to come by the house to dose her up while we’re gone.  So, that left the one time “radio cat” treatment.  It’s not cheap, but it has some distinct advantages over the medicine – other than not having to dose her twice a day, we would only have to have her thyroid levels tested once per year after the treatment, whereas with the pills, we’d have to have her tested every quarter to make sure the dose was still correct (at $178 a pop!).

We got the estimated costs for the medicine (we don’t have pet insurance), and doing the math, the $1400 radio cat treatment would end up being cheaper if she lives 4 more years – and there’s a really good chance of that if the treatment is successful.  It also means that we have to come up with about $1800 “now”.  The $1400 is for the full treatment, we also had to do a few more diagnostic tests with the vet before hand, and a one month and 3 month followup with the vet to make sure she’s “cured”.

She’ll be at the treatment facility for at least a week, because she’ll literally be a radioactive cat for a bit, and we have to follow special precautions once she does come home for 2-3 weeks, but it’ll be easier than giving her a pill twice a day!

If we only had $1000 in our emergency fund, we’d still have to come up with $800 in the budget quickly, but with the $3000 we had left in the emergency fund after taking some to pay off the student loan, we’re doing OK.  I’m not even going to “refill” the emergency fund until August – after the student loan is paid off.  We live in a high cost of living area, and I always felt that $1000 wasn’t enough for an emergency fund – now I’m glad we had it.

Second Student Loan Paid Off!

Leave a reply

My student loan processor just “processed” the final payment on my second student loan – the remaining one at 6.55% interest.  I’m now down to one student loan left – ~$2500 at 2.10% interest, and I hope I can pay that off in July.

June’s a possibility, but one of our kitties needs a rather pricey treatment and I have to wait and see what the final details of that are.  There’s apparently an “interest-free” payment plan available, but I don’t know if there’s a fee.  And I think I’d rather just pay it off and not worry about it.  But that’s what our emergency fund is for!

So, it’s looking like July will be our “first” debt-free date – the only thing we’d have left is our car payment at 0% interest and mortgage at 4.125% interest.

Detailed Financial Picture – May 2014

2 Replies

April’s Numbers

As of May 6 , 2014, we are $438,339.52 in debt (that includes the mortgage).  Without the mortgage, we’re at $22,544.49 in debt.  This includes student loans and an auto loan.  We currently have $1,030,065.49 in assets (including our house).  Our retirement accounts are at $370,706.34.  Our Net Worth is $591,725.97 (includes house and mortgage), up from $589,763.53 last month (0.33% increase).

This  month was relatively flat in the investment area.  We went up by our contributions, and that’s it (1.33%).  Our assets went down again – our estimated house value (through Zillow) dropped as well as using some of our savings to pay off debt.  I suspect the house value will increase a bit as the spring/summer selling season goes on – there are about 5 houses for sale in our neighborhood, none of which are our model though (one of the largest in the neighborhood).

I decided to strategically reduce our emergency fund to pay off more of the student loans.  The 6.55% loan has a balance of about $2,300, and will be paid off in July (at the latest).  We reduced our e-fund from 5k to 3k, so we still have quite a bit should Murphy pay a visit.  The plan is to pump up our e-fund to 3 months of expenses after paying off the student loans (and maxing my 401k contribution), then split what’s left between bringing it up to 6 months and investing.  At 5k it would cover our minimum expenses for a month if both of us lost our jobs at the same time (which is unlikely), *and* we use YNAB’s rule 4 to live on last month’s income, so we have a built in one month buffer/e-fund there as well.

We’re still up 5.30% in net worth since the beginning of the year, and I think we’ll be able to hit our goal of 650k this year – especially if we keep contributing as we plan to.  If the markets take a dive, we’ll be out of luck, but that’s gambling for you!

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%):  $4,944.49 (-3,282.14)
  • Car loan (0%): $17,600 (-490.00)
  • Mortgage (4.125%): $ 415,795.03 (-705.01)

Total paid off in April: $4,477.17

April 2014 Early Retirement Progress

4 Replies

April saw a slight decrease in contributions because I didn’t get a bonus payment in March (which shows up in my account in April).  Next month will have more of an increase though as I upped my contributions to 8%, and $580 was taken out of my April paycheck.

The markets were flat, in our account that has more bonds than the others (about 25% of the account) lost money, and the others didn’t really increase that much either.  We gained $835.73 in investment gains/value, so pretty close to zero.  I have a feeling that this year won’t be near as nice to the investments as 2013 was.

Even if I don’t increase my contributions later this year, we’ll contribute more than $40,000 this year, so I’m going to be changing our contribution goals to reflect that 40k is the minimum we should be contributing.

2014 Totals

So far, for 2014, we’ve contributed $13,114.40 (37.47% of our planned total of 35k, and 32.79% of the new goal of 40k), and we’ve gained $8,005.37 in investment gains (39.51% of our planned total).

Daughter Person’s Easter Money

8 Replies

This is the first year that Daughter Person has received small sums of money directly for any holiday – $5 from finding the affikomen at Passover, and $12 from Easter eggs – and we’re not sure what to do with it.  Usually, we’re given a check to put towards her college fund, so we dutifully cash it and transfer that amount to her 529 account.  This year, we feel like it should be *her* money, and not go into her 529 account.  But, we’re not sure if we can use it to teach her about money – she can barely count to 10, much less understand the concept of dollars and cents.  I was figuring I’d wait until she could count to (or at least understand the concept of) one hundred.

She knows we have to pay for things – when we go to the grocery, she’ll carry her bag of goldfish (my bribe to get her to behave long enough for me to actually shop) up to the counter and lay it on the belt for the cashier, but I don’t think we’ve ever discussed amounts – how much we’re paying for things.

I was thinking we could let her buy a doll or other trinket with it, but I don’t think she’d understand the concept of “not enough money” yet – although $17 is enough to buy most of the little things she tends to want/ask for.

The other option is to add it to her savings account – the catch there is that I add a little bit of money there for her every month to use when she’s older.  We have a S is for Savings account open at PNC for her – and I think she’d understand the jars “save, spend, share” – but we’re back at the question of what to save for or how much to save.  Or maybe it just sits there until she’s ready to learn?

Any of my readers have ideas on introducing money to young ones (she’s just over 3)? 

Dipping my Toes into the Points Game

7 Replies

I don’t make a secret about how much I love to travel, what I have to admit is that I haven’t played the credit card rewards points game yet (at least not to its full advantage).  Today, that has changed.  I applied (and was approved) for a Citi HHonors Reserve card (not an affiliate link).  Why did I choose that card?  I really enjoy Hilton properties (mostly the Hilton Gardon Inn, Hampton Inn and Homewood Suites), and that’s my hotel chain of choice.  The reserve card automatically gives me Gold status (free wifi) as long as I hold the card.  I also get two free weekend night certificates (and one each year after) for Dad and I to enjoy a weekend away – or take Daughter Person – I plan on using these first ones to take her to Hershey Park this summer (free hotel!).

The most important items to me are: the EMV (Chip-and-PIN) and the no foreign transaction fees.  Those alone are worth the $95 annual fee.  EMV/Chip and PIN is a technology that is used all over Europe and protects your credit card from a very common type of fraud: Your card never leaves your sight – waiters cannot take it to the back room and swipe it making a copy of the magnetic strip (the strip is active however, and *can* be used – especially since merchants in the states don’t take EMV).   Many ticket machines and gas stations in Europe also take chip and pin only (usually those that are unattended at night).

I’d been getting by by having a Travelex chip and pin card pre-loaded with Euros, but I have to remember to reload it before a trip, and it’s a $4 fee/yr I keep it active.

We’re also thinking about when we want to take her to Disney World, and the spring she’s 5 is the likely target (18 months away) – so we’re going to follow Brad’s advice at RichmondSavers and get there almost free!

Other statuses I already have:

  • United Gold (from actually flying that much – and likely to hit it again this year. This one I actively try to keep for Star Alliance Gold status)
  • Marriott Gold (status match with United).
  • I randomly get to Hilton Gold some years, but most often Silver – I just don’t stay that many nights when I travel.