Category Archives: Finances

Detailed Financial Picture – August 2014

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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

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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).

Expected Budget Changes from Moving

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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?

June 2014 Early Retirement Progress

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We contributed $3,304.33 this month to our retirement accounts – my contribution was “left over” from my May paycheck, which didn’t get deposited until mid-June. We “made” $7,565.24 in interest this month.

My “new” job has an 8% contribution to a 403(b) plan – it’s not a match, but it’s contributed whether I contribute or not. I have to wait 3 years until it’s vested, but that’s OK. Depending on how difficult it is to change my contribution levels, I might start with 8% contribution for the first month or two until we sort out the moving expenses and anything we borrowed to move. Then I’ll contribute 20% from then on (which will bring me up to the legal max). Or, if it’s difficult to change, I’ll just start with 20% right off the bat.

Dad will continue working for the same company, so he’ll be able to completely vest in his 403(b). Things are looking good for being able to contribute our planned 40k this year – and possibly 50-55k next year. And with a $1000 less for mortgage payments, we should be able to contribute that to our taxable account (or maybe a Roth?).

2014 Totals

So far, for 2014, we’ve contributed $19,806.43 (49.52% of the new goal of 40k), and we’ve gained $22,398.62 in investment gains (110.55% of our planned total).

Detailed Financial Picture – July 2014

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June’s Numbers

As of July 7, 2014, we are $430,877.74 in debt (that includes the mortgage).  Without the mortgage, we’re at $16,500 in debt.  That’s our auto loan.  We currently have $1,057,463.16 in assets (including our house).  Our retirement accounts are at $397,055.28. Our Net Worth is $626,585.42 (includes house and mortgage), up from $608,588.72 last month (2.96% increase).

The markets did really well for us this month – a 4.48% increase from last month.  I still don’t have the money from my paid out vacation.  I got the “pay stub” for it, but not the check.  A co-worker has gotten his check, so I should be getting it shortly – ~$7900, almost all of which is going to the emergency fund.   That’s not counted in our assets yet (since it’s not in the bank account).  I still haven’t been able to close out my 401(k) and roll it over to Fidelity – starting to get a little pissy about that actually.  I’d rather not be paying high expense ratios longer than I need to.

We’re expecting to spend down the e-fund again over the next few months (and/or probably borrow from our line of credit) as we get our house ready to sell and actually move.  We have two realtors (referred by USAA) coming by the house this week to “interview” for selling our place.  We’re hoping we can get at least 100k out of it after all the taxes, fees, etc are paid.  The sale will bring our net worth down because of the selling fees, but that’s OK – it’ll realign itself with “reality” as far as our house is worth and what we owe on it.

All debt except our car loan (at 0%) is gone – I paid a bit extra to it this month to make the numbers nice ($610 vs $490), but we won’t be paying much extra to it over the next few months.  Once we settle down with our new mortgage payment, we’ll re-evaluate what we can pay towards it every month.   We’re hoping to find a place where the mortgage payment is at least $1,000 less per month than we pay now – and it’s looking like that won’t be a problem.

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%): $16,500 (-610.00)
  • Mortgage (4.125%): $ 414,377.74 (-709.86)

Total paid off in June: $1,319.86

We’re Moving!

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I got a job offer in Pittsburgh yesterday.  It’s conditional on me passing a background check, which I don’t see as an issue, so really, I have an offer. I’ve verbally agreed to it this morning to start the background check process.

It’s a *very* good offer too – $2k less/year than I make here in DC, but with *much* better benefits and a lower cost of living area.  I’m basically getting a 20-30% raise given the cost of living difference.  There’s only a small stipend available for moving expenses ($1,500) – not near enough to cover what it’ll cost, but it’s something – and I can deduct the rest on my taxes.

There is a tax-deferred plan with an 8% contribution and it vests in 3 years.  I don’t have to contribute a dime (although I plan to). Health insurance will cost us about $200 less per month than it is under Dad’s plan, which we’re currently under.

Dad has already talked to his boss and his boss’ boss about it, and he may continue to work at his current job, just remotely – coming down to DC once every few months or so.  They are OK with it (they like him – and there is some precedent), but they have to check with higher-ups to confirm that it’s OK within the company. That’d continue to get us his DC-level salary and he’d be able to vest in his 403(b).

I’d start mid-August, so there’s time to get everything ready, and maybe even sell the house before I start.  I haven’t told my boss yet – but he’s on vacation for the next two weeks.  If I tell him when he returns, that will be two-week’s notice.  “Hi, how was vacation? – here’s my resignation”. More notice than the 24 hours he gave us on the company sale/acquisition.

Now to turn my efforts to getting the house ready and put together for sale!

$200 Grocery Challenge Results

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With today being the last day of June, how did we do on our grocery challenge to spend less than $200 this month?  Not so great, but better than most months: $246.61  We had a few things come up that we weren’t expecting, but I think we did well.  We had to buy more scoopable cat litter after our radioactive cat was no longer radioactive and we had to toss out what we had.  Costco also had a sale on rice and flour – both of which we needed, so a bulk purchase was in order.   ~$250 is better than our normal $300-$350 though!  We also fed my mom for a weekend while she was here as well.

On the plus side, we only ate out of the house on our car trips to and from Pittsburgh (reimbursed), and ordered pizza in only twice in the month – bringing our eating out final to $54.34.  *Much* better than our normal $250-$300 of eating out.  We did buy some wine, but it was limited to only drinking on the weekends, and was mostly Aldi’s house brand (at about $32 for the month)

Except for the $2000 plane tickets that I needed to front the money for (and have since been reimbursed), we spent about $2500 less this month than we normally do.  Now, a good bit of “normal” month is/was debt payment, so that’s some of the difference (about $1500 of that), but the rest is us not spending money.  Good practice for the future since I know what our new take-home pay is: about $2000 less per month!

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?

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?