Home > Page: 2

Inflation is crazy

October 19th, 2021 at 08:38 pm

Inflation is crazy right now. You can just see it everywhere.  In my car mileage sheet the year started 1/7/21 with gas at $2.60/gallon. My recent fill up a week ago was $3.60/gallon.  38% increase in gas in 10 months. 

Eggs were $1.79 for an 18 count at target in July 2021 is not $2.49 for the same 18 count.  Sugar 4 lb white bag was $1.79 it's not $2.49.  Dark brown 2 lbs sugar was $1.59 it's $1.99.  Chicken breast and thighs boneless/skinless was $2/lb, but now I'm lucky to find $2.49/lb.  Stew meat was $5.49/lb and now it's $7.49/lb.   I also think the sizes of things like chips, cleaning stuff have all shrunk an oz or two not easily discernable but it's the same "price" but you get less.  

Definitely you get less eating out.  I mean 3 bowls of noodle cost us $55.  I think the same restaurant last year was maybe $45?  This is for takeout.  Then on Sunday I had a girl scout troop event of pizza, pumpking carving, etc outside.  And I ordered pizza with troop funds.  It was $153 for 4 pizzas delivered.  Yes it was not dominos/pizza hut and higher end.  BUT $40 a pizza?  Pizza is supposed to be a cheap meal for people.  We had 10 adults and 10 kids.  Let's say for our family of 4 we ordered one pizza for $40.  Okay I could have saved on tip $20 and delivery $5.  But it's pizza.  The pizza itself was like $33 plus tax.  A large pizza at dominos was $16.99 plus tax and delivery.  So I was looking at $100 at a cheaper pizza.  Yep dominos still would be $100 to feed a group?  Pizza is supposed to be cheap food to feed large groups.  Not expensive.

Last year I spent $1000 on groceries and we weren't eating out because of covid, and I felt we ate like kings.  Lobster, steak, high quality meats, veggies, etc.  I could buy what i wanted for the family for $1000 and it might include alcohol.  Now last month I spent $990 and I certainly was not buying as much meat, nor seafood, nor as much fresh veggies.  It's crazy.  

And certainly from last year I have noticed how expensive eating out has gotten.  I felt like before okay a meal out was $60-70 mostly ethnic food takeout.  But now it's more like $100 and that's takeout same restaurants and same meals but smaller portions and each dish is couple of bucks more.

Am I going nuts?  Is this going on everywhere?  Does anyone else feel this?  I swear it really started ramping up as the summer ended. I don't think I felt quite this way before.  And of course part of it might be that we are living on a new budget, but still I feel like 6 years ago when we lived on the same budget it wasn't so tight.  I shopped easily on $600/month groceries very similiarly to my last years $1000/month so there was some inflation and my 5 and 3 year old are now 9 and 11 and eating adult portions (sometimes more than us).  But  price per pound is substantially more.

I think my family's noticed that I am really not buying takeout and going out to eat is minimal.  Now one takeout meal is $100 that going out once a week is costing us $400/month. Before $400/month was like 2x/week eating out.  

With gas, clothes, food, everything seemingly more expensive the budget just feels tight.  Have you even felt any inflation?

Should you overbid on a house?

October 14th, 2021 at 05:29 pm

That's an interesting question.  Should you overbid on a house?  Probably not.  Does it matter if you do? I think it depends on your reason behind it.   First off sometimes people list homes lower than they know it's worth to get a bidding war.  So prices are not normally that low.  Second the price of homes also change especially in the spring when you see the prices escalating which will carry through the rest of the year.

The house we bought we went 30% above list price to win.  We paid $2500 more with an escalation clause than the next highest bidder.  So in theory we "overpaid" but only by $2500 because there was someone else interested in buying the house for $2500 less than we paid.  

Why did we do it?  We had a reasonable budget for buying a home.  But the market in 2017 was very hot and we had lost out on a few homes that we had been lukewarm about.  Finally when we saw this home we decided we were all in.  Mostly because the location was prime and exactly what we wanted.  It was the smallest house we had seen and needed the most work.  But the location was ideal and prime compared to the other homes we had bid on so we wanted it. 

Because of our budget and our observation from looking for houses for almost a year, we noticed that most homes were going in bidding wars.  Most people were going 20-30% or more over list price.  So we decided the smartest thing to do was not go to our limit but step down our "needs" in a home and bid on lower homes we were more likely to win.  This was probably the biggest factor in getting a home.  Managing our Needs versus Wants.  I find a lot of people have somewhat unrealistic expectations for what they can afford.  The dream house is only affordable the further out they move often times.  Rather than living smaller they move farther.

We did the opposite.  We scaled back our expectation of home size and quality and bought something much smaller and needing work as opposed to moving further.  I'm not sure it was the right decision for everyone but it was for us.  A lot of that stemmed from we had never lived bigger so we just didn't jump into a huge home.  

Even now the 2040 sq ft home feels tight and small.  But it's the biggest place we've ever had with kids or ever and we have an attached garage to boot.  So while it's not a dream home it's pretty lovely and nicer than what we had or grew up with.  I had a carport and DH had detached garages.  Our homes growing up were 1970s tract home 1200 sq ft 3bd/2ba ranch homes pretty identical.  This is substantially nicer than what we both had.  

The cost of buying even overbidding was a wash.  In 2017 the going rent on our place was around $3500-4000/month that's what the neighbors got for their rental.  It's now closer to $4500/month.  Our PITI with a fixed rate is $4800/month but that's likely to go up with property taxes going up.  Currently we are at $4100/month but it's an ARM mortgage and lower PT.  Why was it a wash?  Well our principal in 2017 was $1587 and interest/property taxes escrow was $2998.  So it came out to about the same as renting our place if not a little cheaper.  So overbidding on our place was still the better deal than renting. 

The calculus now?  $1400/month interest plus $1000 Property Taxes = $2400/month to rent our place.  Our principal payment is $1717/month enforced savings.  Also our location is the most resistant to price decreases because of proximity to things and we bought the smallest home in the nicer neighborhood.  All these things were factored into our decision.

I had no idea we would be "renting" our house for what we used to pay in rent $2400/month in 2015-2017.  I guess my point is that housing is a hedge against inflation. It's a great way to fix your costs if you can see yourself staying put. It's if you overbuy or aren't sure if you are staying that it becomes a huge risk.

money flowing out

October 5th, 2021 at 07:06 pm

It's interesting to see all the money flowing out right now and being very aware of it happening.  Looking at my budget and thinking gee, I really need to watch my spending.

1. Brakes for Subaru - $700 the front and rear need the brake and rotors done.  It's 5 year old car and 46k miles.  Apparently it's due.  I had it checked at the dealership and a mechanic and both said it's due. 

2. Clarinet for DK2 $770.  If it's not one thing with kids it's another.  As they get older there is more money out the door.  I've considered renting but $30/month adds up and within 2 years that will be the cost of the instrument.  Inflation is rampant.  I bought DK1 flute for $580 3 years ago and i believe it will last until 8-9th grade.  In which case I will be getting her a much nicer not beginner flute.

3. Furnace $15k but I'm going to apply next week for a credit card at 0% financing.  But that means we are paying $1k/month for the next 15 months and not saving that money.

4. Increased property tax bill.  The assessed value of our home went up $200k in 1 year.  Yay for that but boo because it means a much larger tax bill. I also suspect that it'll keep on going up rapidly for the next few years.

I'm so glad we paid off our cars last year and our only bill is our refinanced mortgage.  It does ease my mind so I'm a bit worried about the 0% credit card.  

What happens when you aren't paid?

September 30th, 2021 at 04:50 am

When you aren't paid what happens?  Thankfully for our EF nothing.  I logged in and moved the paycheck amount from our sink fund into our checking account to cover our mortgage and bills.  Days like today I am pretty grateful I took the lowest common option and did the refinance from 30 year fixed to 7 year arm.  As ridiculous as it sounds the extra $720/month still went to savings but it just feels like if we had to we could cover the $3100 easier tha $3800.  

But this non-payment is probably standard for a startup.  Yes they have money but it's outsourced and there was a problem proabbly because it was a 3 paycheck month.  I suspect this sort of snafu will happen when you outsource the work.  Just like how we are navigating our new helath insurance which isn't as comprehensive as DH's last job but better in many ways because it's a better network (blue cross blue shield versus aetna).  Aetna was the worse because no one took it.   

Because of this I think that we are definitely looking at spreading out the cost of the new furnace. I think that outlaying $15k in one go doesn't make sense since we may have to cover this type of mistake again.   If people wonder this is what an Emergency Fund is for.  To not stress out about covering your expenses.  I do think Dave Ramsey is correct in being gazelle intense about debt.  But I disagree about $1000 baby EF.  That wouldn't cover half of our mortgage payment. If it were me I'd probably have an EF of at least half a month of expenses plus my mortgage payment.  Otherwise I don't know what I would do if we had only $1000 cash.

My progress budgeting

September 24th, 2021 at 06:57 pm

So I've always struggled budgeting.  Even before with less money I've alway reversed budgeted.  Figured out what was important and what needed to be saved and then spent the rest.

This time I'm sort of doing it but also sort of tracking my spending.  I've been reasonable successful at tracking eating out and groceries which are the budget busters.  It's easy to track airline tickets, hotel stays, or big ticket one off spending.  It's even easy to track monthly kid activity.  But I've found that miscellaneous spending, eating out, groceries seem to get away very easily from me.   Plus before our income seemed to be a bit of a mystery with bonuses and stuff.

Now we are on a strict income only with taxes and medical and it's the same amount every time.  We are netting $5800/pay period which is biweekly.  This needs to lower around $5400/pay period.  That means 2 extra paychecks a year.  But it's easier to budget $11600/month than it is to spread it out. The biweekly paychecks I was thinking should probably go to savings so we automatically save $11600/year getting us close.  This year we've saved close to 40% of our income but it was an odd year for income.

$3150 Mortgage
$720 Robinhood (extra mortgage)
$3600 Spending
$1000 property taxes
$1000 sink funds/savings/travel
$1500 Roth/ESA

We've been pretty good at sticking to this.  The only small problem controlling the sink funds/traveling.  I'm not sure we'll be perfect but we are trying.  I've been trying to maximize not paying cash for anything travel related and using all our miles and points. 

We also decided to spend $15k on the A/C furnace.  We decided even if we stay 2 more years the people who buy it from us might think a house worth $1m+ should have a new a/c furnace.  I'm going to try to get it on a 0% CC for the next 15 months with a 2% cash back credit card.  Then we'll make monthly payments instead of using all of our sink funds right now.  

the market and my Adjustable Rate Mortgage

September 23rd, 2021 at 04:53 pm

So in June we refinanced from a 2.875% 30 year fixed rate mortgage to a 2% 7/1 adjustable rate mortgage.  Previously in September we had a 3% 7/1 adjustable rate mortgage that we were given a free fix rate when we were about to refinance.

So how's it been going?  Well we were paying in May $2035 in interest and $1808 Principal.  Now we are paying $1405 in interest and $1717 in principal.  We are saving $720/month in payments most of it interest.  I have saved it for 4 months and October 1st I'll transfer another $720 to our index fund VIOO.  VIOO is a small cap index fund. I thought something broad but risky.

Sadly we are actually down and losing 1.4% on VIOO.  But until we sell, refi, or pay off the house I'm curious if I can get ahead by keeping on investing the difference in payments.  Trust me I've been tempted to not save it but I'm curious.  We've been on a pretty "tight" budget and sticking to it has been hard.  But moving the $720 on the first of every month seems to be working.   Let's see how a year goes.  It's a dollar cost averaging strategy into a risky sector index fund.  But it's a low cost and broad sector index at the same time.

Travel is coming back

September 22nd, 2021 at 07:34 pm

Well at least for us.  I booked a ton of reservations.  It's interesting that I decided that 2022 is it.   Started with Christmas 2021.  We are going back to Hawaii. I booked using a combination of miles and points.  Then I booked our tickets in February 2022 to Mexico.  Using the travel companion fare on Alaska it was $1500 for the 4 of us on the only direct flight.  We also paid for today our friend's timeshare for $1800 for the week.  It's a very fancy resort and for $1800 we got a 2 bedroom suite.  That is huge considering that $250/night is not unreasonable nowadays especially for a 2 bedroom suite which technically can fit another family.  If we wanted to save money we could easily invite another family for $800 for the week.

Finally I booked a flight to Canada for DH's cousin's wedding.  I finally snatched up and used our united airlines miles.  So we booked 4 tickets for $12 each and 26k miles.  Considering we've been sitting on our miles for years and never earning or using them.  I'm glad to be over and done.  1 less account to worry about.   We basically now always fly hawaiian or Alaska mostly because we want to fly direct.  Flying direct is a premium always.  This is also why using our unused miles is so nice.  We get to use miles we don't earn anymore and we get the only direct flight considering alaska didn't have any direct flights!

I am so excited right now.  Last hold up is DH's passport.  He sent it off for renewal this month and they said 18 weeks.  That puts him at January.  But I think we should be fine by then.  

Can you feel the energy?  I think life is getting back to normal.

College is what you make of it

September 16th, 2021 at 12:21 am

My cousin's daughter is in her 2nd year at college.  She is going for free at a cal state college and living at home.  She had a 2 year tuition free scholarship.  Amazing.  So she's going to have 2 years of university for free and then transfer to a different UC or Cal-State and finish up.  So amazing.   She plans on being an elementary school teacher which as people know is not the best paying job but an essential one.  Since it's not high paying it's pretty amazing she's able to do it with minimal output.  This will mean she'll be further ahead when she gets out!

On the flip side I have a client paying for UC Davis $70k year out of state tuition.  I'm not sure what his kid is doing in their 2nd year as well. He has another child about to go and he's again estimating $70k, so he'll be shelling out $140k in tuition and living expenses a year.  

You can see how on both sides of the coin college can be as cheap or expensive as you choose to make it.  What will I do? I don't know.  But I'd like to believe that I'm being flexible.  I am on track to have 4 years saved at an in state college tuition/living expenses.  I am on track for about 2 years at a private/out of state school.  And I've saved both in ESA, 529, and taxable so there is a ton of flexibility on what the girls might choose to do.  I will admit seeing the $70k price tag gave me a bit of sticker shock and fear over what it might cost me.  If my kids went that route $300k seems a bit insurmountable.  We don't have the time now with 11 and 9 to save that much nor will we get there with what we saved.

Sink fund?

September 10th, 2021 at 07:33 pm

So I'm leaning more and more to a new furnace and AC.  Our furnace is 19 years old.  It will cost us around $13k all in (another estimate) with 15% costco cash back rebate.  Includes permits and electrical work all done and disposal.

I know it would be smarter to at least use the AC from the other person and pay only $6k.  But I'm not sure that's what I really should do.  We can sell it with a new AC and new furnace.  But the money.  Do we have it? Yes.  Do I want to spend it?  No. I sort in many ways want to put it on a credit card and pay 0% for the next year.  Unfortunately they aren't offering that right now.  

I have $11,500 in sink funds right now.  We've managed to cash flow everything.  The question is do we use that up?  Do we go with the $6k option?

sometimes i just wanna vent..

September 8th, 2021 at 11:52 pm

Nothing financial.  Nothing about finances but just write a vent.  Please read with a grain of salt that this is just me complaining. I've lead my DK1 girl scout troop for 4 years now. I have lead it solo for the past 3 years.  Even the 1st year I lead it (2nd grade brownie) I did everything and the co-lead showed up.  Since then we've done a rotation of parents signing up to stay and help but never lead.  Okay I was with the program but it's exhausting. I have always had 12 girls until this past year and covid. I started September 2020 with 8 girls and the parents were great.  But it was mostly virtual until around May 2021.  I had 3 girls drop/move away.  So I was left with 5 pretty dedicated girls. I had 2 that I lead to a Bronze award (yay! cheers!) and the other 3 contributed intermittently.

That being said with such a low number and hoping I could finally have help yesterday I met with another troop out at a playground for pizza to see if we couldn't run meeting in parallel or merge.  The other troop had 3 girls and 1 new girl.  We had previously been combined but due to high interest split.  

Well the girls got along great.  But the other troop leader and new "co-leader", I was happy at the thought of not leading anymore weren't really interested.  We discussed when we would meet and the answer was "whenever we feel like it."  Where we would meet?  Outdoors and then when the weather turns who knows.  It's too far in advance than tomorrow.  I said have we settled on how many times or how long or are we always masked and space?  The other mom said to me "i don't know about anything more than today."  It's too much planning.  She said it's not about earning badges, learning things, activities.  They just wanted time to socialize and get together and hang out.  A clear case of this was her thought that she had earned a bronze award badge for doing paint collecting, but hadn't bothered to read the requirements or process to do it.

I went home disappointed.  Fortunately I got a text saying we were way too different in expectations of running a troop.  When I had heard of her activities I thought that it's because she's low key. Instead a lot of activities were just watching movies at home, eating pizza, playing, no camping, no learning, no contributing to society. I get it, it's a social activity and the main purpose is to make friends.  But I sort of wanted something more.  An expectation of doing more.  

My husband gave me a hard time when I got home.  Yes I'm a little controlling.  But he also said truthfully there's a reason why people drop it?  And this totally fits the troop leaders personality.  Why didn't I see this?  I don't know but I am thinking maybe it'll be totally easy and manageable with the girls getting older and 5 girls who seem to really like it?  It's a big difference than babysitting those who don't want to do it.

A/C update

August 31st, 2021 at 09:55 pm

The HVAC guy from our neighbor gave us a couple options.

1.  $3k - install neighbor's 10 year old furnace, 5 year old a/c

2. $6k - install new furnace, 5 year old a/c

3. $15k - install new furnace and new a/c

DH and I are at a crossroads.  Our furnace is more thn 20+ year old.  We are on borrowed time.  We are planning on doing a/c and furnace, but unsure what to do.

Next week I get one more quote and then we probably need to make a decision.

thinking about a/c

July 13th, 2021 at 06:02 pm

DH and I were discussing what it would cost and whether we should put in a/c in our place.  We moved in 2017 and didn't do it when we did a major remodel of our house.  We had a furnace and I had a few HVAC guys come and talk to us.  They said our furnance was old and would have to be replaced within 5 years.  It was 20+ years at that time.  They said if it were them they would wait and do it later because we were spending a lot and why not just wait until it started to give problems then do everything at once.  Made sense right? 

I mean we had just poured in $50k in our place in cash, then we had $10k for the driveway coming up after we finished the renovations, and we ended around $60k for the renovations then we waited a year for the stuff to settle and poured the driveway.  During this time we totally forgot about the A/C.  Then last year covid happened and we built the shed that was around $20k.  So we've now sunk like $90k into our house. 

I will say every penny of the renovations I have enjoyed. I am so glad we did it as soon as we moved in and lived upstairs while we did downstairs and garage.  Even if we don't see a return on investment we enjoyed it that the $ for $ value of the renovations are worth it.

The question now is whether the new furnance with A/C is worth it?  I mean I don't know how long we'll be here so we probably won't get as much pleasure out of it as if we had done it back in 2017.  But at the same time we did save the $10-15k it'll cost us then for now.  On the con side we have less money now than we did then due to our circumstances.  The pro side is our house has appreciated a ridiculous amount in 4 years and we made back our renovations and more by a lot.  

So will this renovation pay off? I have a call into costco to get pricing on what it will actually cost us to do this replacement.

how to get a new car - it's easy

July 11th, 2021 at 12:31 am

Interesting thing happened today. I drove up and used my prepaid Toyota Sienna oil change packet.  It is synthetic and they had a deal of $300 for 5 oil changes at the dealership.  Cost about the same as going to a jiffy lube. Oil changes are expensive now!

Anyway I drive up and the guy comes to my window and say they'll be with me.  How do I like my car?  I say it's great I have no complaints.  Just got back from a roadtrip and planned it this way.  He says your car is very desirable.  AWD minivan. I say great.  He says they just redesigned the toyota and it's a hybrid. You would have saved a lot of money on the road trip. I say probably true. I'll get to that post tomorrow.  I say that's amazing.  He says would you like to trade in your vehicle?   I can get you in for only $200 a month or maybe even less.

I'm sitting there in shock. I'm like not really.  I can't have payments right now.  But he's like we can work with it.   I tell him but here's the deal I don't think you can.  I want the highest model with all the bells and whistles and leather and DVD player and hybrid.  He says you can afford it more than you know.  All of them come with hybrid batteries.  Nice the mpg is 36/38 city and freeway driving.  But a new car?  Another payment?  No thanks.

But it was crazy to see how smart the dealership was.  Asking about my car and telling me how much I liked it and how great the new car was.  I could easily see how it would be to want the new car.  I will admit for a second I was tempted.  But then I remembered. I just refinanced to afford saving easier. I have a paid for car for almost 1 year of no payments.  Wouldn't it be nice to never have payments again?

Spending, saving and more

July 1st, 2021 at 03:58 pm

Where do I start?  Well I guess our retirement is on track at $1.5M we breached the number, up $280k from the start of the year.  We completed our refi to $845k @ 2% for 7 years.  I saved June and July difference of $720 into Robinhood and have $1443.  I'm investing it into VIOO (small cap index).  It'll be an interesting experiment if I can significantly invest in VIOO and help offset the potential increase in rate.  Of couse that's using the assumption I keep the house that long or don't refi again.  We did with our numbers hit our FI before DH's 45 birthday so that's good.  And no we aren't going to do it though.  And interesting tidbit is we have saved since the beginning of 2021 $79476 and if we count last year's savings of $16k for Roth/ESA in january then we are at $95473 for the year. My end of year goal is $100k (so $6k or $22k).  That $22k seems like  a large stretch.  $78k is about 29% of our gross saved.   

Spending in June was pretty good.  $669.45 groceries, $435.92 eating out, $438.91 dog, $519.73 (current trip gas and alcohol), $245.93 Gas (went camping and clamming), $400.63 Utilities plus other categories $3668.  Not a terrible month.  I was budgeting aroudn $3600 so we are on track. 

I moved $9k to our brokerage today wiping out our sink fund.  So we have $8k property taxes and no sink funds.  Things I see in August are our auto insurance and kids activties we need to pay.  I would guess around $3k.  But we have $4k in our checking just sitting so I'm debating moving the next two paychecks $1000 each to sink or brokerage.  

I have to admit once things go to our brokerage they don't ever come out.  So it's basically gone like our retirement.  I think that's why I struggle with moving money to our brokerage accounts from our cash savings.


An update - it's been a busy 2 weeks of june

June 15th, 2021 at 05:50 pm

Where should I start?  Guess with the most interesting.  DH's company turned down the buyout.  They didn't want to go back and work for a Megacorp.  I was surprised but at the same time someone pointed out they left their soul-sucking jobs to do something they believe in. They made enough money already that making more money didn't seem the point.  I can't believe it.  I'm glad because my DH is happy and still moving forward.

Spending for May

Groceries $454
Eating out $473
Alcohol $242.50
Dog $831.59
Travel $1802 (paid for August VRBO)
Utilities $752
Kids Camps/activities $1502
Business LAL $2491

It was a very spendy month. So good thing we refinanced our mortgage last week June 10th. No payment until August 2021.  We are doing pretty well though with our spending otherwise.

EF $40k
Property Taxes $8k (done for 6 months ready for 11/1 Payment and insurance in August)
Sink $5000 (haven't had to touch yet)
Roth $2000 (already saved $10k this year moved it)
Robinhood $700 (my difference in refinance and old mortgage June $700 saved!)

I believe we managed to save $2k from last month and float all the extra charges without touching our sink funds which is what was part of the budget.  My goal is to pay our insurance without really touching the sink funds or property taxes in August (home $1200, auto $1000, umbrella $300) and then also still continue to save $700 7/1 and 8/1 and 9/1. I invested the $700 in small cap ETF Vanguard IWOO

Our networth was up in May by $3886/month.  The markets were down.  But we are up for the year $293469.  Also I did not move the needle on the value of our house.  It appraised by the bank lower for sure than what we could get and a lot higher than what we paid.  



Crossroads - choices

June 9th, 2021 at 05:06 pm

We are at a crossroads.  Unfortunately we are not able to control our crossroads.  What does that mean?  Well DH has been at a startup as you know.  We took a risk and it's paid off.  There is a serious offer on the table and it means quite a bit of money.  Life changing?  Yes.  We would have hit our FIRE number.  We would be completely able to Fat FIRE.  Combined with our current savings and we are looking at a 2x FIRE number.  DH would not RE because he doesn't want to.

But why the crossroads?  Because he doesn't want the offer.  He likes what he's doing and he wants to continue and maybe make more money.  He wants the risk.  He loves the job. But it's not up to him.  It's up to the group in the whole.  So it's not a one person decision.  The greater good.  I'm not sure how it's going to play out.

There are 8 guys.  I can see how difficult it will be since some will want to continue and others will want to take the security and guarantee.  There are few guarantees in life.  To know that we are financially secure is comforting.  But at the same time we didn't just sign on for this.  We signed on for the chance to do something big.  I don't know what will happen. I guess we'll know in a week or maybe even tonight.  

Fingers crossed.  Who knows what will happen.

Giving my dollars a job

May 26th, 2021 at 06:00 pm

It's taken about 3 months of DH's new salary for us to find our budget. I think I have it ironed out mostly.  This year we will projecting a refund of $10,158 because of an overpayment of social security and just overpayment.  I don't know how to adjust it because DH has a strange payroll. They do not do a w2 they do a deductions and number of people in the family.  Next year our refund should be $2200 but I'll do quarterly estimates throughout the year.  This year we just got back our refund of $7716 which I put into savings hoping to hit $16k by January 2022 to contribute to 2 Roth IRA ($6k each) and 2 Coverdell ESA ($2k each).

That being said I think we have a pretty accurate budget and here is how it is going.  DH is paid biweekly so we get 2 extra paychecks a year.  We do have medical, vision, and dental, but no 401k or retirement savings.  Because of the biweekly nature I am budgeting on 2 paychecks a month and planning on saving 2 extra paychecks which is what happened.  DH makes $5457/paycheck after taxes.  Total monthly income is $10,914 net.  We currently pay $3839/month mortgage, $10706/year property taxes ($411/pay period), $909.70 home insurance/year, $270/year umbrella insurance, and $1988/year auto insurance.  I budget $1000/month (2 biweekly paychecks) for property taxes and umbrella insurance.  Auto insurance is budgeted from sink funds.  

$10914 Income
-$3839 Mortgage
-$1000 Property taxes/insurance
-$800 Sink Funds
-$3600 Spending - transfer to other checking for paying CC
-$1675 Savings - but trying to do $2000/month savings because we should be saving.

Technically we should be savings $2400/month which would be closer to the 20% we need to save of our income with the 2 extra paychecks a year.  So we should actually be living on $2800/month and $800 sink and $2500/month savings.

Again like I pointed out the problem is our mortgage.  We are at 44% of our net income monthly on our house.  The refinance will bring us down to 38%/month and will basically make it so that we can save 20% of our salary for the next 7 years until we have to pay the piper.  So we are pretty much having a handle on our "budget".  Doing better than expected.  

Also we probably need to budget the $3600/month more.  I'm learning about that as well.  Here is the budget.

Auto $1988
Life DH $1098
Life LAL $243
LTCI $720 (new not yet started)
Kids Math $6000
Amazon $120
Costco $120
=$9596 / 12 = $796 ($800/month)

Budget $3600
Electric $200 (balanced billing)
Water $150
Internet $60
Cell Phones $90 (3 lines, 2 tablets)
Spotify $11
Sirius $6
Dog $500 (this varies wildly)
Cleaner $300
Yard $300
= $1983 for groceries, eating out, clothes, gas, and everything else including travel, etc.

So that's probably why my $ don't have a job.  We are still figuring out how to budget the rest of the $2k/month spending. I've found I'm able to cashflow the kids camps, travel, groceries, eating out.  Becoming conscious has made me aware of what I'm spending on cooking, eating out and just in general spending.  In february we started $1056 on groceries and $45 on eating out.  March we spent $820 on groceries and $112 on eating out.  In april we spent $589 on groceries and $212 on eating out, and in May thus far we've spent $431 on groceries and $184 on eating out.  So we've been able to go traveling and pay for 4 weeks of kids camps and airfare for the summer but it's about to get to the point where we might have to touch the sink funds.   If we can keep our spending down in the next month it should smooth everything over.

But i can see how not having my $ have a job hurts but at the same time I feel like I'm also only slowly curating a budget.  I'm still tracking spending and watching as well spend and capping it, rather than naming it and letting it evolve. 

Hard to use my sink funds

May 25th, 2021 at 06:09 pm

I am struggling with letting myself us my sink funds. I find it easy to save and live but then I find myself naturally cutting corners and living simply and then mostly able to manage without touching our sink funds.  But then like this month we have a lot of things I accounted for in the sink funds like kid's camps.  I charged $1500 in summer camps.  Why am I hesistaning to use the sink funds?  That is what it's planned for? I budgeted $800/month into sink funds and we have $4400 in there so we are on target.  Isn't that what it's for? Monthly expenses paid 1x a year that we know are coming.  Like summer camp or travel or extracurricular.  Much like saving for property taxes.

I am having trouble not maxing out the property taxes.  I know I should do what I planned like $500 a pay period.  But instead we have $5100 in there already for October 31st, 2021.  Plus that is almost enough to cover the car insurance and home insurance due in August which is also part of the budget annually.  So why I am being so paranoid?  I don't know.  I don't have an answer why I feel this need to put the "escrow" fund to be fully funded before sink or retirement.  I guess it makes me feel better to know that we aren't worried about it.  That sure we have June, July, Aug, Sept, and October, to save for the other things.  But then we have to get into the routine of saving for our property taxes and insurances.

Then there is our $7800 tax refund.  What do I do with it?  I was going to stash it into savings but should I use it for funding sink funds?  And then call it? I also have a high credit card stash I'm not sure I can pay because of our all our "sink" fund charges do I use it to pay it?  

I am back where I used to be 5 years ago.  Having a hard time spending money again.  When you worry about a budget even if it's a generous budget I can't help but feel a little constrained.  Worried that I am not saving enough. Worried that I should be doing more.  I can see how being mustachian can become an addiction.

How do you find the balance of saving and spending?

2020 Taxes a calculation error.

May 20th, 2021 at 05:07 pm

I made a slight error in our 2020 taxes and forgot a few things.  So I'm getting a refund of ~$7k.  That is unusual for us.  Usually we try to owe the government money. I would have preferred the money in our pocked but it is what it is.  Also this year 2021 I know we will get a huge refund more like $10k plus.  I don't know how to fix it either.  DH worked two jobs and with the startup they are just automatically take out the SS so we'll have over paid SS alone $8500.  Then a couple of other things and I think we'll be around $11k overage.  Also since he works for the startup and it's a weird no w4 form but they ask you number of people, deductions, and we qualify for the $3k child tax credit finally, that I am pretty certain that we will hit $10k.  Actually I think that we will be at $13k-$14k.  By my estimate from our withholdings we will be over around $6k but including the overage paid on SS more like $14k.  Since it's a startup using a seperate payroll company and a CEO who doesn't care and wants it simple as possible, we just have to roll with it.

It might even happen next year as well, but we won't have the overage SS at least.  That being said since I know it's being withheld and I'm planning on saving my $7k into our "sink" funds, I was thinking maybe I'll just earmark our overage taxes as savings.

How do you guys adjust what you owe or get back?  Do you normally owe? Or do you normally get a refund?  I like to be within $1000 of oweing.

Interesting spending pattern on groceries and things

May 13th, 2021 at 08:56 pm

So I started tracking some stuff in February with our new budget.  I found that in Feburary we spent $1056.29 on groceries and $45.56 eating out.  The kids were at home and DH was at home. Then in March DH transitioned to going into work and the kids went to school 2 days a week each opposite days of course.  They were all eating lunch at work and school for free.  We spent $820.79 on groceries and $112.72 on eating out.  Then in April the kids were off and eating at home but DH was at work but near the end of April they started going 4 days a week and getting a free lunch.  So now we're down to dinners only for everyone and lunches for and kids 1-2x a week.  So we spent $589.09 on groceries and $212.27 eating out (1 meal was $93 for a brunch outside on patio).  

But now may thus far?  We've spent $154.36 on groceries (all fruits, veggies, and milk) and $105.38 on eating out with $73.16 on 1 meal of burgers with DH's cousin.  So we've spent a lot on eating out.  And I still have a lot of food in the freezer.  For instance this week I made ratatouille which we had for Tuesday and Wednesday nights of dinner (with all my eggplant, bell peppers, zucchini, squash).  I've been eating leftovers for the weekday lunches as I type this.  My kiddos have school lunches.  Eating out I spent $11 on a baker's dozen bagels on Tuesday from panera.  That's been breakfast and into a lunch sandwich yesterday (wednesday they are home).  Plan is $10 pizza from dominos tonight and I have still a bunch of chicken, ground beef, potatoes, etcs to cook.  This weekend we will spend probably $100 on meat and groceries because we're hosting couple of friends for BBQ and making ribs.  I'm debating buying sashimi this weekend as well.  But it's half the month and I know we aren't hitting $1000 on groceries.  $500 seems like a reasonable number.  

That would put our average at

$1056+820+$589+$500 = $741/month on groceries

$45.45+ 112.72+212.27+ 200 = $142/month on eating out.  Sounds about right.

I wonder if I can lower our average on both?  My mom is visiting memorial day weekend. I'm sure we'll get takeout and stuff.  And I'm planning on making her steak and lobster probably so maybe our grocery bill will be pretty high.  

I spent $704 and $620 on summer camps last month.  I believe I might be able to cash flow it without touching the $4400 sink funds set aside.  I'm finding it a challenge to live on what we "budget" and save the sink funds and not use it for what it's been earmarked for.  If we do that we'd be saving 20% of our salary.  Guess it's worth trying.   When the refi goes through I plan on saving that $700 and investing it.  It will make our life a little easier.  But at the same time with inflation coming I find it hard to justify moving to an arm. The only palatable thing is that it caps at 7% over the lifetime of the loan, it'll be 7 years, and we will be a much lower amount owed and we could refinance to a conventional mortgage at that time.

Headache with consolidating funds

May 12th, 2021 at 08:19 pm

OMG I can't stand it. I am trying to refinance with Chase. I have to move money over to get the best rate. I also wanted to consolidate our accounts.  BUT turns out I can't move money around easily.  Why?  Because when I moved money last year to Merrill Lynch they got my name wrong.  I did not input it wrong so they obviously opened accounts not in the right name.  Sigh.  Can't move money electronically.  I am leaving Merrill Lynch because they have no branches.  I tried to deposit a 401k Rollover check and couldn't drop it at Bank of America.  I'm not sure why the hell there is no one working. I guess because of covid apparently people don't work in office.  Great.  No.

Why the hell have all these requirement to open accounts in office if you don't have bodies in office?  Why bother having branches?  I guess I'm frustrated with how difficult this all is.

Reallocating my portfolio

May 12th, 2021 at 05:57 pm

I made a substantial move and sold half of DH's VNQ (vanguard real estate REIT) we were holding in his Roth IRA.  I did this because I have been thinking about it buying WPC another real estate stock. I wanted to move back from $100k to $50k into each stock.   I wanted RE but I wanted a little more balance of commercial loans and overall RE.   I still would like to buy a rental but not right now.  We have too much going on.

Well the market is dropping and I'm debating putting more money in.  I just don't have as much as I would like right now.  I have $40k in liquid cash, plus it's $10k in sink funds. It's weird to see so much money that we are "Saving" in liquid cash.  Today was payday.  I have $5100 Property taxes, $4450 Sink, and $600 Roth IRA.  

I'm not sure what to use Sink funds for.  I was thinking kids lessons.  But if we can float it on our normal monthly budget i can save the sink funds.

Have you touched your investments?  Are you staying the course?

April spending, saving, and NW

May 5th, 2021 at 10:18 pm

We spent a lot in April. I don't know what happens but a lot just seems to crop up.  I will say that my suspicion has been since February that my DH eating lunch out and my kids too now 4 days a week eating lunch at school saves a boatload of money. It does.  We seriously don't seem to spend as much on food.

Groceries $589
Eating out $212
Alcohol $103
Dog $269
Travel $759
Gas Car $144
Utilities $708
Home Maintenance $1400
Personal Care $135
Auto $12
Home Goods $205
Office Supplies $27
Refi $500
Gifts $121
Misc $9.60
Services $390
Kids $948 - summer camp
Entertainment $93

While it's high I'm glad I'm tracking and we seem to be doing okay.  I am able to save everything.  I put $10k this month into the investment account so I have less in the Roth Account.  Guess it counts to my savings.

Roth $600

Property taxes $3100

Sink $4400

And our net worth went up but now down.  It's better to just say it's for the long term.  Anyway I am going forward with the refinance.  I think what I'm going to do is invest the $700 into the stock market.  Probably I'll just buy VOO and call it a day.  Dollar cost average and see what happens.  Maybe I'll buy some other stock. I just don't know.  If I were to buy a stock what would I buy?  Maybe a small camp might make sense.  So maybe VBK.  I think this will be a really interested experiment.  I'll track how DCA $700 into it makes and if it grows then I could be really far ahead with the arm. I will have $700/month for 7 years.  Of course the plan is to refi during that time again.  So the question will be when will it be worth it?  I think I'll look at refinancing when the balance of my loan is below a conforming mortgage and not jumbo

Fretting about my arm refinance

April 29th, 2021 at 06:46 pm

So I've been fretting about refinancing our mortgage.  It's a very good deal.  To save $700/month for the first 84 months is a good deal but it's beacuse it's less principal and less interest.  The cap is 7% over the lifetime of the loan.  But I am moving from a fixed rate 2.875% to a 2% ARM.  So the question is what do I do?  Being analytical my DH said to break down all parts of the refinance. 

First let's start with over the 84 months we will save $47,005.08 interest over that time.  That's a lot of money.  If we assume 5% interest after 7 years on the balance the difference in interest is $1253/month and it will be 38 months to break even at 5%.  This is assuming we do not refinance before the end of 7 years.  So we definitely at 10 years and 2031.  This makes things interesting.  I'm not sure we plan on staying in this house long term.

Second part of the equation is the refinance will bring us to a savings of $700/month.  What would happen if I actually invested that $700/month into and SP index fund or maybe even a riskier stock?  Using the 5% assumption after 7 years I will have $70,230.60.  That's a lot of of money to use for the higher interest.  In fact it buys me another 56 months before I will lost money if the average interest rate is 5% or higher.  That is 4.5 years and brings me to 2035.  

I guess it makes sense to do the refinance.  But I have to commit now to saving that $700 month and investing it.  Maybe this is the challenge? Every month I write about if it's growing and how it's doing?  I track my $700/month savings.  I am thinking maybe Robinhood and then buying fractional shares and just investing $700/month. What will happen?  

Want to weigh in?  I am sort of excited after writing this about the challenge.  

Savings and end of month Spending

April 29th, 2021 at 03:55 am

We spent a lot this month so far on everything.  I also did a rough breakdown of our 2021 taxes and we appear to be getting a too large refund of $10,158.  This is because DH is paying double SS and it will come back to us when we file.  I guess that takes care of me saving for Roth IRA next year. I don't know whether to count it as this year or next year savings.  Suggestions?

Groceries $533.20
Eating out $206.34
Alcohol $103.09
Dog $137.70 (will pay $250 at vet tomorrow)
Travel $759.03 weekend trip expenses of eating out and stuff
Fuel $144.81
Utilites $697.88 (water bill bimonthly and late)
Home Maintenance $1400.06 (yard, fence, Gutters)
Home Good $205.27
Gifts $121.89
Refinance $500
Services (cleaner/yard) $390
Amazon $105
Kids $898 (camp and extracurricular)
Entertainments $93 (bought a couple of living social paddleboard rentals)
=$6702 month.

What a very expensive month.  So I'm trying to run lean. But on the plus side our savings.

Moved $10k to Brokerage account this month and paid $5353 for our property taxes.

Roth IRA  $10,600 - moved $10k so $600 left in account.
Sink Funds $4450
Property Taxes $3100

With the refinance we are moving our payments down $700.  I am going to try and save it.  It will certainly be enough to cover our sink funds.  I'm not even sure I am saving the right amount for sink funds.  I guess at the end of the year I'll figure it out and move what excess we have.  My goal for the year was 20% savings with 15% to retirement and 5% savings.  That is $49,061 = 20%.  I currently have saved $53,633 so we have exceed that goal.  The 5% stretch is $61327.21 while the 10% stretch or 30% of our gross salary is $73592.65.  I wonder if we'll hit it?  $19959 is need to hit 30% saved.  If we count the tax refund of $10,158 I bet we would hit it. I have 7 months to save $20k.  

Either way I think we'll be successful.  We are getting on a budget and working it. 

FIRE with kids

April 22nd, 2021 at 06:44 pm

Can you be financially independent retire early (FIRE) with kids?  Yes I believe you can. I think the easy part is FIRE when they are young.  You can budget for health insurance, budget for living, travel, fun, etc.  But the unexpected/unpredictable part?  College.  I mean you can easily homeschool your children. You can say no to private schools.  But college or even trade school?  How do you budget for that?  

I guess if you are super FAT fire where you saved a ton like 5M by age 40 and saved $100k by the time you retired and your kids were 7 and 5 for each of them then no problem.  But I feel like there are a lot of people who "FIRE" who had nothing saved for their kids or they FIRE super lean.  Then they think we'll my kid can take out loans and live at home.  But what if part of the fire plan was downsizing the house and using that equity to help FIRE?  What if your kid doesn't go to college and instead just works and lives with you?  How does that affect the budget?  And you didn't expect to keep hanging on and living in your expensive home?  And expected to FIRE maybe abroad or relocate even domestically somewhere cheaper?  What if your 4 bedroom house you thought you'd move 30 miles outside the city instead of the great school district?

I think that kids can throw a wrench quickly ino the best FIRE plans.  I read a lot of blogs about FIRE.  But most don't have kids.  Most are couples without kids.  The few who do don't have kids as old as mine 8 and 11.  Their kids are younger and they haven't gone through college and after while being FIRE.  I do read about couples FIRE after the kiddos are gone or left for college or in high school.  I feel like by the time they are 16 or 18 you have a lot of question markets about college and future expenses sort of answered.  Like you know if they are going to college and how your investments did and if you are helping, if they need loans.  So a lot of uncertainty is gone.

I am curious since my kids are finally getting older and I'm thinking a lot about paying for college.  My DKs both have asked me if we have saved for college.  I said yes we're working on it.  My DH teased them though this week and said if the startup is an epic failure then we'll need their college savings.  But the truth is that I believe our kids will be fine.  We'll figure it out.  I am thinking it's time to start educating my kiddos on not just saving and speding but also investments and how they work at least for my 11 year old.

Do I want to budget?

April 21st, 2021 at 05:33 pm

Do I want to budget?  No. Do I have to budget?  Maybe.  Should I budget?  Yes.  But can I budget? Yes.  How does it work?  Well you are right now on this blog seeing an evolution of a non-budgeter. You will see if it happens or not.

Why?  Because there are a couple of things at play.  First off I have never budgeted. I hate budgeting. I keep a rough budget by "pay yourself first" and then spend the rest.  I never actually tracked categories but rather had I could spend $3500 on CC and that was it.  So a rough budget but I wouldn't be able to tell you categories.

Now I am trying to see where my money goes and how I spend it. I am keeping a rough budget in the sense that I am trying to curb my eating out and groceries.  But I know that many places say before you can keep a budget you need to track your spending for 3-4 months to get a feel for what you are spending on.  That I think is a key thing.  I have a general idea and rough feeling for spending I did.  But for us we are doing this because our income change dramatically and we need to live differently.  So I think this will be an evolution for us.  As we learn how we spend and rein it in becuase of our income.

Also now that we are taking over escrow and refinancing things are going to change more.  I dont' know if others struggled or worked this hard but I will say it's harder than it used to be.

Spending so far in April 2020...sold AG gift card!

April 19th, 2021 at 05:51 pm

No breakdown of groceries but a bigger deeper dive into our spending.  I so far put down at $500 deposit on our refi so that was unexpected. I also traded our American Girl $140 e gift card for $99.96 Home Depot gift card.  Unfortunately we got the american girl gift card last year from girl scouts. Well the store closed down during covid and we never had a chance to go and use it.  So rather than hanging I took the advice of everyone here.

Spending so far this month has been a lot. I'm a bit stressed out but what can be done?

Groceries $344.70
Eating out $174.60 (brunch was $93.90)
Alcohol $77.18
Dog $120.09
Travel $759.03
Gas $45.57
Utilities $557.31
Home Maintenance $600.06 ($200 gutters, Fence $345)
Personal Care $35.27
Auto $12.60
Home Goods $77.13
Gifts $121.29 (unsure if I am returing one to amazon)
Misc $509.61 (refi $500 deposit)
Services $180
Amazon $154.20 (mostly home maintence DH buys stuff for house)
Kids $778 ($610 camp, $135 piano)
Activities $80 (living social paddleboard rentals)
Clothing $99.15 (will return 2 out of 3 jeans)

Total so far $4726.11 for the month.  We have $800 for our mulch and stuff for our yard is on the books for next weekend.  Ugh.

Hope I keep spending under control the rest of the month.  I have a plans for maybe another $200 for groceries and no more eating out.  Since we are tracking our spending so closely it's weird how I predicted $100 for brunch and spent $93.09.  And how much it hurts now to see that 1 meal out for us which did last us until dinner and we had lots of leftovers, could cost $100.  

Maybe I should have a budget.  I should allow us to eat out a set amount.  The truth is that I am just trying to be "normal" and not tell my family the budget. It makes my DH feel constrained and he hates that.  He's hated it since the days of us making very little money.  Now he still makes 5x what we made and are back on a "budget".  I think it better being 20 years wiser instead to carefully watch our spending and not say budget but "spending" plan.  He'd tell you that he barely spends anything.  He buys nothing.

But the truth is that he spends a lot on the house and things for the house.  There is no budget monthly I'd say he's more an annual person.  That there is a certain amount of spending to be done on the house.  And this is why homes are money pits.  Kids are money pits too!

So I rate locked a refi

April 16th, 2021 at 03:18 am

So I rate locked a refi today with JPMC.  Did you know that I could qualify for a mortgage up to 43% of our gross income?  Yeah that's right. I think my mortgage is already too much for what we make and here we are totally being told that we could easily borrow way more than our current mortgage.  Um okay sure sounds like a plan.  No it really isn't.  

Currently we are at 2.875% for 30 year fixed with 26 years left.  Our payment is $3838/month + $1000 Property taxes/Insurance.  We are getting a 7/1 arm for 2% and our payment will be $3142 + $1000.  So we are saving about $700/month.  That will give us a bit of breathing room right now on our budget.  The actual numbers are our current loan is $2039/month interest and $1804 principal.  Our new mortgage is $1416 interest and $1725 Principal.  So we are saving $623 interest actually a month.  

Our closing costs are about $1500 out of pocket.  I'm unsure if it'll flex depending on when we close the loan. So a little more than 2.5 months of interest is our breakeven point. I think it'll be worth it.  

Savings for the year

April 14th, 2021 at 05:30 pm

I was saving money to invest in our Roth IRA next January but decided I might as well dump it into our taxable account now.

So far this year we've saved $23k of DH's bonus in feb.  We just didn't sell the stock we got.  Technically it was $34k of gross but $23k after taxes.  Now I moved $10k into our taxable account.  Assumign we make around $240k and need to save 20% we need to save $48k.  That puts us I guess at $33k unless you count the Roth and ESA contributions of $16k I did in January. 

Either way I'm just going to keep on saving and figure it out along the way.  This budgeting is a lot hard than it looks.  I'm still thinking I need to save at least $16k by january because I prefer to do a lump sum investing.  Maybe save $16k and call it savings from this year?

<< Newer EntriesOlder Entries >>