I told DH full disclosure. I ended up showing him a few emails and photos and he agreed she needed the money. She retained a lawyer today and was advised not to wait to file for divorce but most as quickly as possible.
Well things are worse than she thought. So she thought it was just cheating Nope. Well she went into their garage and started opening up all the mail they've been ignoring for years. She hasn't paid a bill since 2007 when they got married. They had separate checking and savings accounts and he paid all the bills. So she never bothered to open a bill or inquire how things were going.
Her husband has played her and everyone for a fool. He's built a house of cards spending money he makes as fast as he can and then some. As I've helped organize the paperwork and explained some of the debts I said to her it's time to cut her losses and pray she can get out of this without declaring bankruptcy. But it might already be too late. She is so far in the hole.
The lifestyle she's become accustomed to is too champagne taste for her beer budget. How will she go back and change her mindset? I can see it in the way she handles money now? I can't tell her right now but she needs to realize that the house of cards money even after the divorce won't cut it. Maybe the sale of the house will wipe the slate clean of debts. But the days of going to the grocery store and buying whatever she wants is probably over. I asked her once before how much they spend on groceries and she guessed for a family of 5 about $3k/month. She put down in the budget $2k/month on groceries. That's not counting the eating out, starbucks, take out. We've found receipts for an average of $600/month lunch at her husband's club. That's on top of his eating out daily.
I dare not say the truth, but perhaps she had a suspicion that the lifestyle they were leading was way more than $200k/year. That the spending was so over the top, but she thought they were making enough to cover it. Yes she was saving for retirement but she made much less money. I really wonder how she had no idea they were living an unsustainable lifestyle. Or maybe he has been burning through his inheritance faster than even he imagined.
I don't know but the unpleasantness of the money situation I think will be hard. I can't even fathom how hard this fall will be. Tougher still to realize that he dug them into a deep hole and if not for the hole she might have a chance. I know BK seems irresponsible, but I wonder if it's not the best option in this case? How do you live on a $50k salary when you've been used to 5x that or more?
We'll see how this all plays out. But it turns out that more people than you can imagine are living lifestyles they can't afford. I never dreamed that she would be one of those people.
Viewing the 'Budget' Category
I told DH full disclosure. I ended up showing him a few emails and photos and he agreed she needed the money. She retained a lawyer today and was advised not to wait to file for divorce but most as quickly as possible.
Okay people really do spend everything they make. You think they don't. Or at least I thought they didn't. Turns out people really do spend everything they make and then more.
I've now seen people making incredible salaries, still working, and drawing from a 401k. Paying 30% tax on their 401k withdrawal based on their income and somehow not saving. Being in their 60s and still have a mortgage with interest. I am floored.
It explains a lot about people talking about how will they retire? I mean I work in a tax office where one of the other tax people has admitted to it being too hard to save. So she gets a $8k tax refund to help them through the year make ends meet. She said it was too hard to save for college so they meant to but they never got around to it. Her kids have $8k saved at 16 and 14 and most of it was from her dad's initial contribution into a 529 of $2500. She said everything else just seemed more important.
Or another one said there's no way we'll retire before 65. My husband was hoping 60 but we have so many expenses. Apparently they have a couple of rentals that aren't really breaking even. I wanted to point out that perhaps they should cash in and buy rentals that actually produce income. But they see it as a long term investment of price appreciation. I'm not RE savvy enough but I can't help but wonder if this is a losing proposition? Sure you can write off depreciation and other stuff on rentals, but if you can't cover the mortgage with rent, I wonder if you shouldn't buy a different property?
These are supposedly financially savvy people and the clients who come in are in the top 2-3% of earners in the US. But they have very little savings. They spend it as soon as they make it.
I know we chose to live without income. But I have to wonder don't these people worry? Do they even have 3 months saved in an EF? From what I can the answer is no.
I'm struggling with auto-bill pay. I am so annoyed by it. I put things like the internet, cell phone, garbage, water, electric bill on auto-bill pay. The problem is that the CC it's hooked up to keeps getting changed and I have missed payments because I forgot to update the credit card. The real problem is that these credit cards discover, citibank have been compromised so much that we were trying to update our accounts over the summer every month. It's so frustrating.
Plus I'm pissed at Capitol One now for not paying our CC in full even though I have confirmation numbers of payments. So now we are hit with finance charges and late fees and I'm dealing with paying everything manually and calling the card companies to deal with the fees. I'm just annoyed that it's taking so much time. Plus they refuse to help me when I have confirmation payment codes. Seriously? So I've been dealing with all of BS all morning.
I need to still evaluate our investments and rebalance our accounts. I think we're a little to aggressively invested. Of course it probably doesn't matter too much long term. Staying invested is most important.
But TD Ameritrade lost $60k of our money for 2 weeks. They couldn't find the check we mailed for our Roth IRA conversion. But after we called and complained then they suddenly found it in processing. I am ready to shriek.
The US needs to become more automated. They literally cut checks from checking accounts and mail them. Other countries do immediate electronic debiting when you pay bills. I can't help but wonder how the US is so far behind other countries with processing of banking?
At least the year is over and we have some potential good news. DH might not be the executor of his uncle's estate. There might be a will. So he doesn't have to deal with anything. Cheers. So much better because he won't have to deal with any ramifications from being executor. YES!
It's almost the end of the year and it's been good. So we hit our peak NW in June 2015. And since then we are down about 12%. From when we moved because we had a lot of costs moving, selling house, etc September 30th 2015 we are down 0.7%. So we have made up the difference. At our lowest point we dipped 19.4% from 6/15 or 9.1% from 9/30/15.
Part of it has been saving and part has been the market. We managed not miss a beat and maxed out DH's 401k and Roth IRAs for 2016 and kid's college funds $4k. We also saved our signing bonus. We hit a new high of $600k+ in retirement savings. To just show what holding steady does in DH's old 401k without contributions after August
June 2015 $332k,
In one year we had quite a ride. So shut your eyes and let it ride. A stretch goal for 2017 will be if market cooperate $700k in retirement.
We are right now in a holding pattern until we settle into a house. It'll be interesting what the next year financials hold with proposed tax reform. I can't say I'm upset because I know we'll benefit a lot. We pay a ton in taxes and this year more than ever.
It's been a great year. I'm doing it now a little late because as of September 1st we spent a whole year in our new life. It's been amazing for all of us. We got to get closer as a family with DH not working for 11 months. He pretty much did not get a paycheck for 12 months. But he was unemployed from August 15 2015 to July 25 2016.
We burned through $91.5k. Yes you read that right in 11 months. Granted $17k was tuition but still that $74.5k. We spent around $6700/month including our fees for renting our place which was $8k up front costs. So we spent around our normal $5500/month rate we had budgeted. Lucky for us a signing bonus helped bump our spending for the year up to $71.5k including the $17k tuition.
Was it worth it? Yes. We had a great time. I think perhaps our spending will force us to delay "retirement" by 1 year.
I forgot that from our $91.5k we direct $4k to college for kids, $11k to Roth IRA so I guess we "saved" $15k out of the $91.5k. Also we're maxing out Roth IRA and 401k this year on a compressed 5 month paychecks. So we're still on track to save for retirement even if we aren't saving our normal cash cushion.
But the real goals were met. Move and be able to be closer to family. Get job that DH loves. Buy a house. Check on first two and working on the third.
Sometimes in life as I'm reflecting on the past year you have to spend money to make money. You have to invest in yourself, maybe start a business, buy a rental property, go back to school and retrain to get to where you want to be. It's a HUGE risk and it can cost you a lot of money. But the rewards can be significant, not just financial but pay dividends in other ways.
I suspect our net worth might be able net zero with gains in our retirement accounts. But back to regular programming of saving now. I have to admit it was REALLY daunting spending all this cash without any income. To go from being a saver to a spender. This could be why my DH and I are not meant to be true early retirees, we are too nervous nellies and risk averse to pull the trigger. We're actually very close to being able to do it but would rather pad our accounts.
I have so much to do. We are back from almost a month away. We have new budget to work on, school to start, and house hunting. I think I am dreading the house hunting.
I need to iron out the kids schedules and figure out where we are with activities. It's weird this year we have so much more to do it seems than last year.
We blew August budget out of the water obviously but it's okay. Back to the grind. I'm so excited we have medical insurance and income again.
Right now with the knowledge I have from company documents and potential gross income I have drawn up a potential budget. Right now I have us saving 30% of our income excluding bonuses. Right now I hope we are able to save our bonuses after taxes. Right now I plan on us saving the maximum 401k, roth ira, college ESA, and ESPP. With all of that we will be at 30% savings. This is of course with us approximating taxes.
With the approximate budget I've drawn up we have $3500/month to save/spend on food, groceries, fun, etc. It's close to what we spend now so we should be okay.
But my budget assumes that we are still paying the same in rent/mortgage. What happens when we buy a house and pay more? I am worrying about our budget. I have to admit that renting another year is a relief. It gives us time to stabilize a budget.
I'm starting to understand now what renting buys freedom. It's buying me peace of mind. However I get why people buy before moving into an area. It's so stressful though to go through a new job, budget, and moving.
Interesting thread about how to spend money and use your debit card. I know many who follow Dave Ramsey say "use a debit card." I think even Dave Ramsey has said it's okay.
But I have to disagree. I'm a credit card user without an issue. But I think a debit is too easy to abuse. I think if you have a problem with spending the only way to curb it is cash. If you have trouble with credit cards it's just as easy to spend on a debit card. The bank will keep letting you spend and you'll rack up overdraft fees.
I also think that it's super easy to spend without following spending by swiping a card. But if you had cash and tracked every penny it's harder. Also if you are married or partnered up and sharing an account it's easy for both parties to overspend.
I find we need a CC to track our spending since we don't use cash. Also because we both spend independently it prevents overdraft. But this has worked for 15+ years and we aren't big spenders and haven't ever paid interest. So I'm not concerned.
But for people getting out of debt? I wonder if cash doesn't make it easier?
It's been 4 weeks into the bootcamp. Things are getting into a routine. My DH was crawling up walls at the end of his sabbatical. I'm not sure he could deal with early retirement right now. But either way it's not in the card for us right now.
On financial news we are more in line these past two months with spending. I find our spending on gas since moving amazing. From September to February we spent $137, $203, $180, $180, $69, and $22 respectively! So I used to budget $350/month and last month we spent 10% of the budget. CRAZY. I am finding it insane.
Our grocery budget has been bad though since September it's been $1183, $608, $981, $1222, $637, and $749 respectively. I've been trying to stay around $800/month or $200/week which for a family of four seemed reasonable. It seems we have very drastic swings in spending. I think it might have to be stockpiling and sales.
But because we made a concerted effort to eat out less our grocery budget had to increase. We spent $197, $162, $224, $266, $185, $121 respectively again on eating out. My previous budget was probably closer to $300/month and our grocery budget was closer $600/month.
So even though we were mostly under budget these past few months we ran over with lots of Murphy's law moments and unexpected expenses. Mostly dog vet bills (OMG I think we're at $5k and we are done yet) and moving replacement of stuff. Also buying two new computers happened.
But overall things are progressing.
My bad habit is easily going out to eat. It's a vice I'm sure I share with many others around the world. Something I enjoy and find convenient. But is it a way of life even for people in debt? Is it something that people just do even if they can't afford?
Next week my DH starts his program and we were joking today about lunches, dinners, and eating out. Since we've meet he's pretty much always brown bagged it. I can honestly say probably 95% of the time both of us have always packed a lunch. When we've gone out to eat for lunch it's usually a planned meal with friends or some weird like a smashed glass container in lunch bag or accidental forgotten lunch bag (both things happened to my DH). So I can honestly say for 15 years and as he's made more money he hasn't changed his spending habits. What was necessity at 23 at 35 wasn't at all required.
Also for the most part until we had kids we enjoyed cooking dinner together at night and would turn on the TV and cook leisurely. We sometimes would sit in front of the tv and prep meals and just enjoy wine or beer. It was very pleasurable to eat out at hole in the wall places or nicer restaurants. But then we had kids and our meals became less cool (fancy meals from cookbooks) and more boring and standard and efficient.
So I ask if he's planning on packing a lunch and if so what. He said absolutely he's planning on brown bagging it, but he mentioned that on the group board for the program everyone discussing their favorite delivery programs and restaurants they want to order from. I suggest perhaps he may have to eat out to network dinners or lunches. He said he'll see.
But both of us are curious about the dynamics next week. This is a 13 week intensive program you can't hold down a job and do. Either the other 19 people are on sabbatical from work or not working. It's like that most have partners that are working and supporting them, but I imagine going down to one income and spending $16k on a course, then suddenly eating out lunch and dinner every day would still strain most budgets. Or maybe it was just a way of life.
I can easily imagine it costing us $35/week for lunches and $60/week for lunches. In 13 weeks that will cost us around $1300 which in the grand scheme of no income and $16k tuition a drop in the bucket. But as we are living off savings and it's half a month's rent. I wonder though will most be frugal and try to pack a lunch?
My DH said so I'm assuming $7/lunch how much is it for him to bring a lunch? I said $1 maybe. Am I wrong to throw together a sandwich? Or leftovers?
Have you calculated what lunches or packed dinners cost? I know if we spend say $800/month for groceries and my kids milk cost me $80/month at $175/week for groceries. A meal assuming 21 meals for 3 people (2 adults and 2 kids = 1 adult) = $2.77 a meal not discounting snacks or fruits. So by brown bagging it my DH is saving at least $5/meal if not more.
Do you think people who eating out every meal is a way of live have ever calculated it? Is it worth it?
We have been really good about our spending in this past month. Ridiculously good. Our spending with 2 kids is on Mr Money Mustache level. We spent about $2000 on everything outside our mortgage last month. We also spent $1000 on the dog but I don't consider that "us" spending. We got our grocery budget more in line and eating out too. A lot of money was spent on getting set up again and in October as well but we had a better handle on it and really the bulk was done in September.
But there a few expenditures this week which I found interesting. I bought myself 3 new silicon spatulas from amazon for $5.49, 8 piece pyrex baking for $15, and cake tray for $5.99. For some reason I lost in the move, or perhaps we threw out our old bakeware because it was in poor condition.
But I've noticed as we are cooking more a few things are not quite up to snuff. I find myself yearning to buy the cookie scoop and I always tell myself at Christmas I need to buy it because I hate doing cookies with spoons. But at the same time I know right now I shouldn't be spending money. I also would like to buy the stackable cookie racks. UGGH.
How do you budget replacement of items you either have but are old or never bought but want? In the past I'll admit I'd have bought it without blinking an eye. But right now we're very budget conscious and so I'm reluctant to spend money on anything.
The things I did buy I really need and the best home "investment" I ever did was buy in 2005 (year we got married) my calphalon cook set. OMG I think it was $550 for the set and I got the roasting pan, griddle, extra pan, etc and spent over $1k. But I have used it daily. I have used the pots and pans so much in 10 years that whatever I paid for it, it's returned to me in spades.
Before I bought it I remember my aunt pulled me aside and said "don't cheap out, but the best quality you can get for pots and pans because you'll use them forever. And you'll use them daily." Of course the one thing I didn't buy then was really good knife set something I'm still lusting for.
I think I might cave on the cookie scoop and maybe the racks too. But I'll resist everything else unless it happens to break or i can't find it. I also wanted to get a french press but that's again on the wish list.
What is your favorite kitchen tool/appliance you have? What is the most expensive appliance or tool and do you regret buying it? Or do you love, love, love it and would recommend it? I swear by my pots and pans and when people ask I say I still have mine and they are phenomenal.
So October we came in under budget. On the CC we spent $3255 to be paid November 1st, though its not due until November 22nd. That included about $1000 in vet bills for the dog's chemotherapy. So we were way below budget for us as a family but in our "budget" now we are trying hard to run lean because of unexpected dog costs.
We spent $203 on gas fuel, $74 on alcohol (we bought some rum and vodka restocking), $608 on groceries, and $199 on restaurants/eating out. The eating out included $50 I spent on groupons for future restaurant visits. All in all, I think we got a pretty good handle on food now. The $608 included all my groceries for the week except some milk and maybe some veggies. Of course November is probably going to be expensive with Thanksgiving and potentially my in-laws visiting.
An interesting thing we use a lot of data at home. We don't have cable but have high speed data for $50/month. So we used 11 GB in August (5 days), 130 GB for September, and 173 GB in October. It was suggested on the forum that we could cut internet and use only the cell phones. At those usage rate we'd blow over the normal cell phone limits. Guess we're stuck with paying for internet for a long time.
I'm still pondering college and retirement and overall savings goals.
First we are doing better this month on groceries. We've spent $45 on alcohol so far and have enough beer to last the month, $57 on eating out/coffee shops, $242 on groceries and honestly we are good enough for the week. So I think we are on track to spend $150/week this month or around $600-750. I think spending around $150/week = $650/month which seems reasonable for a family of 4. Last month and even some of this month's costs are still us rebuilding our stockpile and necessities. Plus $650 for groceries and spending very little on eating out compared to previously I think is a huge savings. Last month spending around $1200 on groceries freaked me out a lot.
Second we are debating whether to do a Roth IRA this year. We have until April 15th to decide. We usually wait until January 30th anyway to see where our income lands. This year we may be able to do a roth IRA without doing a backdoor rollover Roth. We did manage to max out DH's 401k before he left his job. But it's $11k we'll be tying up instead of having in cash. My preference is once he's in his bootcamp in February we move the money if we think he's going to land a job asap. Or if I land a job sooner.
Third our utility bills are ridiculously cheaper. It's 20% of what we used to pay. A full month of electric and gas and we paid a combined $83 for the month! This is with a very inefficient furnace and refrigerator. I can't believe it. We did use 404 kwh of electric instead of our base usage of 900 kwh. In our last place our water heater was electric and we never changed it to natural gas because of the location it was impossible. Second we used 28 therms to heat the house where we are now and it $35. Insanity. We were on a budget billing for both electric and natural gas in our last place to help even out the winter costs and we were budgeting $250/month each. This is on top of our $250/month for HOA dues for water and insurance. $400 extra month for just utilities I had to admit really helps the budget. I can totally understand now how Mr Money Mustache talks about living frugally as a early retiree.
Anyway I had a great weekend and I'll post more later.
Ugh....What can I say? I haven't looked at our investment accounts or retirement accounts until now. We'll we've lost about 10% in retirement down from 6/15/16 $575k to $520k. And we're not adding to it either this year anymore so it's a bit frustrating. Our taxable accounts are down $40k but part of that is from our investments going down $33k. $7k for a move, month long trip, deposits, and start up costs is not terrible. Of course our investments tanking is a sorry thing.
Unfortunately our burn rate needs to come down we're been spending way to much money on just getting set up again. How bad has it been? Well the utilities weren't bad this month we paid trash $52 until end of October, $59 for electric/gas, $99 to set up internet with comcast $50, downgraded our cell phones to $90/month from $130 and am waiting for the water bill. We spent $137 for the month on car gas.
So the food budget and pet budget are where we are bleeding money. We spent $203 on eating out, way too high I think. But I'm having trouble curbing my husband. He's not willing up a coffee from starbucks and wants it almost daily. Our groceries this month was $1122! OMG. Granted a lot of it was set up stuff like toilet paper, paper towels, diapers, shampoo, body wash, cleaning supplies, and basic kitchen stuff. We used up mostly everything and gave away stuff that would have been difficult to move. Also we had to buy a lot of stuff to start up the kitchen like a spice rack for $25 from costco. But honestly it was everything else that added up quickly. Canola, sesame, evoo, balsamic, red, cider, white vinegars, soy sauce, mirin, cooking wine, etc. A shopping trip to the ethnic markets we spent $100 on spices and other stuff. The cleaning supplies from costco was another $100. Moving is a lot more expensive out of town than probably people realize. I certainly didn't expect all these expenses.
Hope that we are able to curb our budget next month.
I find it impressive and amazing people can follow a budget. I struggle with organizing receipts and honestly I hate breaking them down. I hate trying to group cleaning supplies, home furnishings, clothing, etc. I mean I can do very simple stuff like groceries and eating out and gas for the car. I also can do stuff like insurance or cable or water or electric.
But tracking all the spending? I'm not sure where to put categories and receipts sometimes. I only check my restaurant receipts against the charges to make sure the tip is put on correctly. And I keep receipts of things I might return or are high value with the item.
But how do you really track it? Is it better weekly? Or month? How do you budget stockpiling groceries or cleaning supplies?
What really worked for us and I'm still getting into the rhythm is picking a number and seeing where our budget will land. I'll pick a number and see if we can stay within and if need be I'll tighten it.
Rent $2400, Electric $200, Water $100, Internet $60, Cell Phone $95, Trash $30, Gas $200, Groceries $500, Eating out $200, Misc $100. Then see if we hit these targets and adjust.
But tips for budgeting will be appreciated.
Still love my dyson cordless. But we moved into a house full of carpet. Ugh. Oh well it's a rental. But I'm not sure our cordless will do the whole house. So I'm considering $200 dyson DC 41 from Amazon or $210 canister DC 39 from overstock. Both are refurbished vacuums.
I hesitate to buy a canister but a lot of people swear by them. They say they are easier to use on stairs.
Do people have canister or upright vacuums? Which do you prefer and why?
I realized that old habits are hard to break. I find that even now traveling with our kids and getting older I'm reluctant to spend more on our hotels. I do spend more because I need a bigger room, but the the level of hotels aren't so much more expensive than when DH and I traveled solo.
The level of hotel I've come to realize is substantially lower than most of our friends. Most tell me then never spend less than $100 or $125+. They look for hotels with pools and location and name. I will admit based on our income we likely should be spending more on hotels. Our next hotel stay is $60 for America's Best Value Inn.
But at the same time where we stay makes it more palatable for us to drop extra cash on experiences. Recently because the hotels we were staying at were less than $100 we made up for it by doing a Niagara Falls boat tour, Whirlpool Aero Car Ride, and renting bikes at Mackinac Island. The bike rental was $100 for 3 hours.
But at the same time if we spent more I think I might really examine what "experiences" we want to do when we are traveling instead of just doing them.
Do you find you've changed the way you travel as you've gotten older? Or stayed the same?
I wonder if I'll ever feel comfortable just booking a hotel without considering costs? And yes I will admit to spending more but it was Manhattan and it can't be helped there. Our most recent NYC trip we spent $200/night in the financial district and it was a king size bed for all four of us.
I write this because my DH mentioned perhaaps we should consider upgrading and staying somewhere nicer. FWIW with one exception everywhere we've stayed has exceeded expectations.
Moving means upping the food budget. Why? Because right now we are in mode of eating what we have but at the same time not stockpiling sales. Instead we are trying to create meals with stuff both in the freezer and pantry that need to be used up since it's not worth moving. Plus since we are moving at the end of June, the idea of buying in bulk meat or making food and freezing food seems wasteful.
I think I freaked out my DH a lot because this week we finished off a bunch of food in the freezer and it's starting to look empty. I can definitely say that we have one shelf clear. Our fridge we are eating the permanent residents and not replacing them, ie hoison, bbq sauce, etc.
Usually I buy meat and portion out the meals and freeze them. I also usually cook in bulk and we eat half and freeze for lunches the leftovers like curries, stew, chili, etc. But I've decided to stop doing it though we have three months and instead focus on cooking stuff we have and keeping the freezer lean. Before I might have bought 2 bags of fish, 2-3 meats, but now I'll keep only 1 bag of fish and 1 bag of fish.
No more stockpiling toilet paper or paper towels. I'm done with cleaning supplies and laundry detergent. Before I usually buy a backup when i'm on the last of something but now I'm running everything out and not looking for sales.
You can see the difference in the amount of stuff in the house. And while I haven't seen the difference yet in my grocery or shopping bills I bet it'll increase the amount I'm spending. Plus just eating out more for convenience of painting and packing.
So we had two late/overdraft fees last month. Because February is 28 days my DH set up auto deposit into our checking for the 28th of the month and it didn't hit until the 3rd. So some of bills I auto pay on the 1st would have cleared if the cash got deposited on time. We were over by $65 anyway and BofA protected us by transferring some from our savings float. Still they charged us $10 and I was annoyed with my DH for not setting up deposits on the 1st of the month.
But I called and they waived the fees since we don't do it very often. They were actually very nice about it. I wonder if we should deposit more into the checking instead of cutting it so close. Usually there is a $500 buffer but the deposit being late ate that up.
We are exploring our options right now and I have a call out to the realtor who sold us our house. We really liked and trusted her and she's very experienced and lived in our neighborhood. She did us a big favor helping us get our place and guiding us what neighborhoods.
So now do we just hire her back and go with her recommendations? Or do we contact other realtors say 2 others and get an idea what our place is worth? Have them do comps and show us what they can offer?
Last time we also with the realtor who sold us our place. But she was my friend's mom and we knew she had our best interest at heart. At the same time, when we were selling she told us to call 2 other realtors and ask for comps and we did and she came in "dead on" with the other two estimates and we sold for $1k above what she priced at in the 1st weekend in a bidding war. So I believe she was good and secure in knowing we trusted her.
This realtor we know was suggested by the relocation company. But she seems like our old realtor someone whose been in the business over 20 years, lives where she sell, etc. She didn't get in during the boom and has lasted.
But should we talk to others? What's the etiquette?
Further I contacted from craigslist some apartments to discuss potential month to month rentals and how to handle that. There are a few places both cheaper and more expensive than what we are spending that based on location we could be happy with.
This week my goal today is to try and list a few items for sale and donate at least 1 box. I am determined if we are selling I am going to minimize the amount we are going to move. We can't hold onto baby stuff anymore. Perhaps we'll have a third child, that is not off the table, but shelved until after we move. I am a little sad because I feel my kids are getting older and so am I, but at the same time I know that a move isn't easy with 2 and we certainly couldn't take this risk with 3 kids. So perhaps it'll still happen.
I find it stunning that so many women have no clue about their family finances. I mean literally no clue. Now you'd think okay maybe because they are stay at home moms? Nope. Turns out that many of them are also working moms. It doesn't appear to matter. I find it incredible that so many women in a marriage have no idea what they have saved, make, or spend in a month. I'll tell you a few different stories recently which left me wondering WTF?
Dr H is a primary care doctor with three kids and her husband works as well. They are super busy and never have time to manage their money. They are pretty frugal and don't overspend and save a lot. BUT they could be saving more. Unfortunately neither Dr H and DH haven't a clue what they spend. They went to their financial advisor and said we were thinking about buying Amazon Prime to save on shipping. The FA said "you've been paying for 5 years for Amazon prime and had no idea you've been paying it?" DH said "I just pay our bills in full, we've never looked." Dr H tells me and a friend this story and says the FA told them they should probably try to see what they are spending their money on. Thankfully they make enough to not care, but it could be detrimental.
Friend Mrs. C is a full time school teacher. She has no idea what she makes or what they save. She says her husband takes care of everything and he tells her what she can spend on groceries. She says that she's sure he's taking care of their retirement but has no idea if she even has a Roth IRA or college accounts for the kids.
As you all are aware Mrs A is the financial train wreck of a stay at home mom. Has no idea what they make or spend and figures if they made more they'd be fine. Her husband is having his wages garnished by the IRS because he hasn't paid taxes in 7 years and filed in as many. They are being audited.
Another friend Mrs K also works part-time is being audited because her husband handles all the money and she too has no idea what it's being spent on.
I have many, many more friends both working full and part-time, and non working moms, NONE of which have any clue how they are spending their money. They have no idea what their mortgage is, but they know what daycare costs. They have no idea if they have a retirement account or how much they are saving.
I found it incredible that all these well educated women have completely handed over control of the finances to their partners/spouses. They have no clue if these people are being at all responsible. They have no idea what they have saved for retirement if anything. They just assume whatever financial decisions are being made are the right ones.
Granted the two under audit have realized that something is not right, but still. Does it take getting audited for someone to get concerned? And when I said perhaps they should take over the finances the response was "it's too much work and it was a mistake."
Really? I know that people of both genders here on SA are more concerned and aware of finances than the general population. But I can't wrap my head around women just having no idea about their finances period. And literally they aren't even worried or concerned that they could be eating cat food when they get older or are in debt, or not paying taxes.
My DH and I are both aware of our finances. He's not as detail oriented, but he knows the gist and well aware of our spending habits and our savings plan. He knows roughly what we spend and doesn't care for those details. We make joint decisions and I'm well aware of ALL accounts and track them. I know it's a bit obsessive, but why don't more people care?
So we are not sure what to do whether we should sell our home and rent. Background and some information. We are planning on moving June 2016 no matter what. DH is quitting his job and we are leaving the area to relocated cross country. This could happen sooner if the right opportunity arises. Unfortunately his most recent interview did not work out. So we plan on selling our townhouse next spring no matter what. But we have one year to live where currently are or sell.
We live in a nice 3bd/2.5ba townhouse (1700 sq ft) with parking spots in good school district. DH commute is 30 minutes driving and 1 hour by public transit. We owe $385k on our place and conservatively we could sell for $750k right now. Our current monthly payments are $1700 mortgage, $550 property taxes, $250 HOA = $2500/month. Our utilities we pay a balanced budget of $250 electric and $300 natural gas (last month our gas/heat bill was $700).
If we were to move we would be looking at paying around $2k/month to rent a 2 bd condo 1200 sq ft. However it would be a 30 minute commute by public transit and less driving. A few of these rentals include heat and hot water including one I found for $2195/month 2 bd. The school district is also good but the commuting location is better.
So the question is should we sell our place and lock in our equity? Perhaps it'll go up more in the next year but we are really betting on is that nothing will happen to our condo in the next year. That we won't be hit by any big repairs.
When I look at it I know financially it makes most sense to stay put right? I mean we are paying around $850 interest and $850 principal. And the interest and property taxes are deductible and principal payments are enforced savings. So in effect we are paying to rent our place $1300/month with HOA + interest/property taxes (taxes deducted out). Versus $2k to rent a smaller but better located apartment.
So how do I calculate what's better? What am I missing out?
Seriously winter sucks. I can't believe how much snow there is. I have ice dams hanging off my house. I also have 2 inches of ice on my stairs, life is not good right now. But seriously I am finding that my friends are splintering into two groups. Those with money and those with less.
The group with money often don't even realize their lifestyle is not the norm. For instance recently they are SAHM who on a snow day hire a babysitter and go to the spa. I was told "we deserve it, spent all day cooped up inside. It was tiring yesterday and we are used our "me" time," since the kids normally go to preschool in the mornings. I was invited but said sorry too expensive a day. My DH hears this story and the invite and said "what part of staying at home with your kids is hiring sitters and going to the spa?" I hear that a lot recently from a group of moms, "we deserve time away from the kids. You should send them full time and get time to yourself. How unaffordable can it be?" I'm seeing a pattern.
Of course on the flip side you see those moms who either stay at home and say they can't do anything. Or who are working and say they have no money because everything goes to childcare. I hear complaints from these friends about how hard it is to do anything. And I find it interesting that mom's who stay at home but with a very tight budget are offended by the suggestion to work. And those who work are horrified at the idea that if didn't work they'd have to live on half or reduced income.
The pattern I'm seeing is that very few people are actually satisfied with what they have or make. Very people understand or realize that the grass is not always greener on the other side or that some people are satisfied with less money.
I mean the people who have money rolling in have no idea how to people live on so little money. You just can't when you are used a certain lifestyle. And those who have less can't fathom spending that much and desire more but aren't willing to make a sacrifice of working more. While dual income families are jealous of those not working but never stop to examine how much less often times the single income families are living on.
I rarely make financial comments to friends because I doubt they would listen. But I really want to shake them all and say be satisfied and realized people make difference choices for different reasons. That if you choose to work then realize you make more than the family who has one breadwinner.
But when will people learn? What would happen if more people were satisfied with what they have?
We've got great coverage for our health insurance through my DH's job. However less and less is being covered and "co-pays" and premiums are going through the roof. It's going up faster than our raises percentage wise. I know others here will weigh in but I hadn't really thought about it till I looked at my DH's paystub this month and cringed a little.
In 2015 we are paying $135/biweekly (26 payments) for family health insurance. We paid in 2014 $119/biweekly for an increase of 13.4% in one year. In 2013 we paid $101/biweekly for an increase in 2014 of 17.8%! In 2012 we paid $96/biweekly for an increase of "only" 5.2%. In 2011 we were paying $84/biweekly for our family plan for an increase of 14.3%. In 2010 when we had our first child and moved to a family plan it was $82/biweekly so the increase was only 2.4%
So in 5 years our premiums have gone up 65%. I imagine in probably the next two years we will have doubled our premium cost. What can be said and done? I don't have a clue. I guess we just suck it up and say I hope we get a raise, which has happened but it's been 2% merit increases. How do we keep up with inflation when some of our fixed costs are spiraling out of control?
I'm not complaining. I'm actually happy we have health insurance and it's a very generous policy. But I worry how much more expensive it's going to get and whether we can ever afford to leave a "group" plan and buy our own.
Have you been tracking your health insurance premiums? Dare I ask what others pay? I am going to guess a lot.
I probably should write goals but what I think we need to do are not really goals but ideas I'd like to see through. It's been a very interesting 9 years living where we live. Like Monkey Mama we've changed a lot. How much?
So in the 9 years we've lived where we are we increased our net worth 8 fold. This past year has been particularly good to us as we increased our net worth by 22% or $195k. It was a combination of decreasing our debt by $30k and I valued our house $50k more. We wiped clean the last of our student loans, we had around $8k hanging around at 2%, and $8k 0% CC debt. We also paid off one of our cars and the second car will be done in July.
Account 1/1/2014 1/1/2015
LAL IRA $62,327.00 $77,254.24
DH IRA $132,924.00 $148,527.37
DH 401k $244,399.00 $287,059.53
Fid Tax 1 $86,847.00 $85,389.30
Online Check $1,000.00 $8,642.11
Online Savings $42,510.00 $55,542.43
Fid Tax 2 $54,000.00 $50,959.49
SB 1 $10,788.00 $34,493.33
College 1 $11,239.00 $12,251.00
College 2 $6,369.00 $6,831.00
House $650,000.00 $700,000.00
Subtotal Assets $1,302,403.00 $1,466,949.80
Car 1 $7,900.00 $3,045.00
Car 2 $3,900.00 $0.00
Sallie Mae $8,000.00 $0.00
CC #1 0% $4,000.00 $1,867.00
CC#2 0% $4,000.00 $0.00
Mortgage $396,131.00 $388,563.00
Subtotal Debts $423,931.00 $393,475.00
Net Worth $878,472.00 $1,073,474.80
So we got close to my last year "goals" of increase NW by $200k, break $1M net worth, and break $500k retirement. But where does that put us?
Well my DH just came back from a job interview out on the west coast. We'll hear back in a month but they contacted him and said he hadn't filled out a formal application just resume and cover letter. So he's guessing they are going to do the background check, credit check, etc and are interested. He also has a second interview to be scheduled on the west coast.
We are still wavering on whether to move this year without a job or wait until 2016. If we wait until summer 2016 we'll have 18 more months of job hunting and potentially a lot more money saved.
As it stands we have I would guess about 1 year in cash living expenses at our current budget and no income. After the sale of the house we stand at closer to 8 years without income, not touching our retirement.
I guess our goal is to continue saving and break $200k net worth increase this year and see if we can't make a big push in saving cash since we don't have to pay down $30k in debt.
I'll write more as the story about jobs unfolds.
This month's cleanse has been enlightening. I'll probably keep on the low car and high veggie diet for a while to keep losing weight. But it has been interesting how eating vegetables and fresh fruit can be expensive as eating meat and carbs. Our bill will likely be as expensive more with the slight modifications in diet. What I found interesting is that we barely ate out as well thus far (it should be going up) my BIL is town for thanksgiving. We usually go out to eat and will be hosting him and his girlfriend. So I'm guessing we are breaking the budget.
But on a serious note, I can see why people on a limited budget eat less healthy food. It's cheaper to eat a grilled cheese sandwich and tomato soup than a full veggie meal. Or a bag of goldfish for $1.99 is cheaper than 4 apples or 4 yogurts.
We are going on vacation in a few weeks for a few weeks. Leaving in two weekends till after the new year. We are trying to decide between vrbo in San Diego. One is in Pacific Beach (PB) and other in Ocean Beach (OB). I prefer the PB location and it's great a block from garnet and on the beach. I found it through VRBO, but the guy only advertises on there. You have to mail a check and sign a lease, but you can't book through VRBO. This is the first time its happened to me. I usually book through the vrbo website so I'm nervous and why I'm considering booking the OB site though we don't love the location. I will say the PB rental did offer me to pay through paypal by check.
What have people's experiences been? Should I be worried? My DH prefers booking through vrbo he thinks it gives us an extra layer or protection. Does it?
Also we've gotten a good deal on the mininvan we're renting. We're staying with my in-laws at the VRBO so we need a minivan. And a one way rental of a small car from SD to LA so we can leave for Hawaii. I can't wait to get away from the start of winter and see family (even my in-laws). The only thing left is organizing gifts for family and teachers.
I bought 4 cookie skillets from costco for $18.99 and will give 1 skilled to each teacher with a $20 starbucks gift card. I bought two sets and figure it's a nice christmas gift. I may add in a dry cookie mix I make as well or a book. Last year was cookies and banana bread with SB gift card. The year before was hot chocolate homemade in containers and SB gift card. End of the year gifts were target gift cards and plants. If anyone has creative gifts I'll take it.
I wrote a few weeks ago I was floundering and I still am in some ways. I applied for a couple more positions and my DH has a phone interview with a small company on the west coast. But he's had so many it's hard to get excited. However reading that post, I realized I have to keep moving forward and counting down the months. If we move without jobs it'll be important we purge and minimize.
Plus my DH and I have been talking more. The third child is still on the table perhaps later than I would wish but it is. We've done nothing permanent and we have all our baby stuff. I don't feel complete but I do desire to move and having a third would change our timeline.
On a depressing thought my Dad is 84 has said that he is not coming to visit me again. The trip is too long. So this June my oldest finishes preschool and wanted my parents to see her little ceremony and visit. It'll be warm since it's June so my mom is coming. My Dad said no. So it really is coming now or never. My in-laws have also said they don't want to see us in the winter anymore where we live. It's too far a trip and they feeling the transfers as well.
But with 2014 wrapping up I am trying to think positively. I am trying to be in a good frame of mind. I am definitely purging, losing weight, and just focusing on moving.
Nika brought up a great point about enjoying your money now and later. That it's hard to find the balance between spending and saving. It really is. It's so very easy to get miserly and not spend money. At the same time it's also easy to go off on a spending spree and justify all your spending because you make $X.
So how do you balance spending now versus saving for later?
My thought, it depends on what your priorities are. Do you want to retire early? Do you want to have time with your kids now by staying at home? Or perhaps time later by retiring early? Can you never imagine retiring early because you want a certain lifestyle? Or do you feel obligated if you have kids to pay for college so retirement is out of the question?
There are so many choices and no one right answer. All of the choices above are valid. The choice you make is the one that will lead your financial decisions.
About a year ago when I submitted our financials to MMM blog for a reader case study, I realized that without knowing it we were mustachians. I also realized and confirmed that my DH and I bought wanted the financial security of being "financially independent" from working. He's still unsure about "retiring early" but my DH is completely on board with having money to say FU to anyone, anytime. To know that if we didn't have an income we'd still make it as a family. How did this realization affect us?
We have never lived up to our income and never been big spenders. But that realization that really living on a budget, curbing our spending, and watching every dollar meant we might be closer to "FIRE = financial independence early retirement" than we ever imagined. We had $462k in retirement, we now have in 9 months $519k. We had $163k taxable and $54k cash, now we have $167k and $58k cash and our liabilities has gone down to $3800 car payment gone in 6 more months. Also according to zillow (very underestimated) our house went from $609k to $647k, I am guessing more like $750k to be honest.
Are we there yet? Projections say no. But I do think that we are definitely closing in fast on a FI number but more importantly we are much more focused on becoming FI to decide what we really want to do.
I am a pretty boring investor. We just buy and hold. We don't actively invest, and I rarely look at the accounts and total them up because it'd probably give me white hairs if I did. Anyway though I guess I'll give some interesting updates.
In January we had $439k in retirement savings, as of today we have $500,444. However when I checked in mid-September (19th) we had $515,884. So it's going up but also come down.
Taxable accounts we started with $195k and are at $228k. Good savings, but more importantly it's not up as high because we've paid off a lot of debt. Starting debt was $27,800 in January 2014. Of which $11,800 was car loans 0.9%, $8k was 0% Credit Cards, and $8k in student loans at 1.9%. So as of today we owe $4900 on one car and $2330 on one 0% CC. We've paid off $20,500 of debt. It was just getting to us so we decided to start minimizing payments even though it didn't make financial sense. Accordingly our NW went up from $839k to $959k. I am hoping the year ends with our retirement solidly above $500k, taxable above $230k, and debt below $5k.
This month I also decided to start a spread sheet on tracking in depth my groceries and eating out. What I found is that I spent a lot more on eating out this month which caused my cooking budget to be super low. Our groceries currently with a week to go is at $282.05. Our eating out $282.28, which I usually don't break $300 (usually closer to $200) and our groceries have been running around $600 a month. And we are eating out at least 1 more meal for sure if not 2 this next week. Yikes!
I guess it's just that we ate out with friends more than usual. We ate out 7 times with friends so far this month and are planning on meeting up on Tuesday again. Socializing is tough on the pocket book.
I can't complain about this year. I think I may keep a running tally of my groceries and eating out which is easier in excel than mint. I also now stand in self-checkout lines at costco and bjs and track what is home stuff and what is groceries.
It's been awhile since I posted and I really need to write a bit more. Right now we are wrestling with whether to do a Roth 401k. It would mean we can save tax free but there is a 34% hit on savings. We'd have to save an extra $6k/year not a big deal, but I am more looking at the tax implications.
What if we withdraw it and it's lower? Should we have taken the tax break now? What if brackets go up? Obviously the tax brackets will get larger, but our deductions will go down as we age and the money will grow tax free. That means if we let it grow 15 years it'll double 2x by the rule of 7. So potentially we'll have another $750k saved or more. This is counting doubling of savings and assuming we are done working in 15 more years or by 50.
I'm leaning towards the Roth 401k for a couple of reasons. At most my DH has 2 years working for this company and where he moves to we may not have it offered. I don't know what the future hold but I suspect we might make more in the future since we are on one income.
Anyway though on a positive note our retirement accounts are at $515k so we reached our goal of the year to break $500k. Our taxable accounts have broken $220k and increased $25k/year and we've paid off $20k in debt. We paid off $4k car and $3k on the other (only $4800 left) we had the interest rate of 1.9% but decided we were tired of seeing the payments. We also paid off a CC we put my dental work on that was 0% $4k and still am paying on the lasik also at 0%. Both were on 24 months interest free but again I got tired of payments. Finally we paid off the last tiny bit of my super cheap 0.9% student loans $8k that I left hanging around.
Life is pretty good.
Overall I know what I spend monthly and we stay within our "monthly limits." I get $5k/month to spend on everything like mortgage, groceries, gas, eating out, utilities, preschool, activities. That's not the problem.
I've been using Mint since about March and trying hard to reconcile all spending. I've actually been pretty good. So where I fail? Well trying to figure out my actual budget categories.
I find easy to keep a running tally of my monthly spending by looking at my CC charges throughout the month. A lot of our spending is predictable and the same. What isn't is gas for cars, travel, and groceries/eating out. The travel I can sort of guess since we do 2 big trips a year. That I can't change more than looking for the best deals.
But groceries and eating out? I was pretty sure I knew what I spent monthly but I think I'm wrong. I'm obviously under budget monthly big picture. But I can't break down my category to $400 groceries and $400 eating out because I buy clothes and home supplies(paper plates, dish soap, etc), shoes, books, etc. Stuff that isn't groceries basically gets stuck in grocery budget so I haven't been able to get under my $400 I think I spend. Instead I've been blowing the budget category.
But at the same time what I thought I spent eating out was less, but when I started tracking every penny I thought it was because I spent so much more on groceries that we ate out less. Now I'm not so sure.
Overall we're not in terrible shape anyway you cut it. And until recently I've never been a true "budget" follower. I am naturally frugal and so is my DH. We've always had the meet A, B, C saving goals and we can spend D-Z. And since we've met we've done more big picture annual budgets where we say we have to save X amount and we have Y to live on (hence the $5k).
But now I want to see our spending to project our true future budget. I want to know where it goes really. I mean I have a firm handle on a couple of categories like insurance, mortgage, cable, cell, etc. But what are we spending on prescriptions? What are we spending on dr co-pays? I need to figure this out for our flex spend this coming year. We've always maxed it out since having kids because we just have had stuff come up (this year my eye surgery and dental). But we should be done with "major" work, what's our baseline? I have no idea.
How do people track every penny? When you have clothes, food, home supplies on the same receipt? What about being reimbursed by friends?
Decided to summarize answers. I want a third kid now because I worry about getting older, birth defects, the usual nine yards. My DH is worried not about the short term finances and of course the normal long term financial hit college, weddings, cars, anything and everything.
So why am I short changing them as they get older? It's starting over, and our lifestyle has to go back to baby lifestyle versus older kids you can go biking, hiking, kayaking, camping, traveling, etc with. I admit we've just about hit the sweet spot with both kids and adding a third now would rock boat, but we're in the rhythm of babyhood. What if we wait and we don't want to go back? What if we wait and can't go back? What if we wait and realize that our life feels complete in 2 years that it doesn't feel now? I don't know.
But truthfully what really worries my DH? Finances in the mid-term. Short term we'd be fine, i'm home we make more than enough to survive and honestly if we didn't save as much he can chill. He is a little stressed out because he feels we don't save enough, but that's a completely different argument. Long term he is worried we won't make enough to afford college, weddings, retirement, etc for 3 kids versus 2. I think it'll work out.
But the mid term? This is the real kicker. In 6/2016 we agreed we are making a huge change in our life. We are selling our house that winter and leaving where we live. We are moving to the west coast without jobs if need be. We are going to live off of our savings, which will not be enough to retire. We will not have health insurance. We will have to buy some. We will not have unemployment or anything coming in. Our net worth will be dropping because we are going to be going NEGATIVE. We will only have outgo, no income.
Now things between now and 6/2016 can change. DH or I could get a job. He could get laid off and we get severance and unemployment. But we cannot predict those things.
So DH reason for not having a kid now is he doesn't want to add a mouth to feed, diaper, insure when we have no income in 2 years. If we were staying put we'd be discussing when to have another kid. If we had a job opportunity and were moving with guaranteed income, we'd talk more about our 3rd. But right now he said he feels as though we need to make sure we can provide for the 2 we have before we add a third. Having a third would also mean less time at night for job searching as he'd have to take on more of the childcare after we have 3rd.
My DH also said he still doesn't see himself retiring but he wants to be secure in the knowledge that if he were unemployed that it wouldn't matter. That we could live "retire" and not worry. Hence why he thinks we should be saving more and spending less. The fast we get to the point where we have enough to live, then the faster he'll feel secure.
Finally about cost of living and our jobs. I think BOS-NYC-DC, LA/SD/OC, SF and Honolulu are HCOLA in the US. These places taxes are high, condos start at $400k for a 1 bd, homes more in the range of $750k+ for small crappy homes. Then there is a second tier of costs like Seattle, Portland, Philly, Denver, NJ, Chicago, CT/VT/NH/RI, VA/MD, rest of CA. These places are cheaper I think condos start at $250k, homes $400k, and taxes are still higher than normal. But the homes are nicer even at the higher end the higher end of the HCOLA. Overall the cost of living I'd say is 20%-30% lower cost of living according to calculators and just looking at real estate in general. But ideally I think we should look at moving to Seattle or Portland.
That being said we're not quite able to buy a home cash. We're getting close but not quite. And even with a paid for home, my DH is hesitant because he thinks we are going to take a severe paycut. I don't believe the paycut is as severe as he thinks. He also believes it'll be very, very difficult to land a job. I'm sure it won't be easy but I don't know the job markets of those areas.
Perhaps I'm wrong and he's right but he feels that most people in business make $50k. With an MBA $80k, where we live. He thinks if we move he'll be lucky to land a job making $75k. I showed him the numbers according to what we pay now we're going from paying $45k in taxes federal and state, to if we make $100k or less nothing in federal taxes with 2 kids. So off the top assuming we make half of what we make now half of the difference goes away to taxes. Yes we save the other half but still.
Making less = need to save less. But he's still worried we should be saving the same proportion. His argument that our house because living in a HCOLA we'd buy a $1M home versus $500k if it goes up 10% you make more on the more expensive house. True, but you have to struggle making payments! And often in HCOLA people are paying 30-50% of their net on housing.
I find it interesting that my DH was always mustachian before it became a word. Apparently though he never intends on retiring he always planned and hoped to be financially independent before it was popular. Me? I had no idea we even had a chance. But perhaps this move will derail us. I don't know.
But until then we'll keep chatting about jobs, third kid, etc.
|<< Newer Entries||Older Entries >>|