LivingAlmostLarge's Personal Finance Blog

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?

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.

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.  

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.

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.

Sink
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. 

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?

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.

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.

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.

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?

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
=$6869/month

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

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.  

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. 

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?  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.

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 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.  

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?

So I may not go out and spend money and it's super easy to do that during covid.  But I still find NSD hard.  Why?  Because I notice a lot of little things pop up here and there.  Like I have two medical copays that came in and I should pay today.  I already paid $610 for 2 summer camps for the kids today.  I also had to give a neighbor a check for $345 for our share of the fence repair.  So in one day I jsut spend about $955 without leaving my house and getting anything to show for it.  Yesterday I spent $54 at the vet for another blood test for the dog. 

So I haven't grocery shopped since Saturday when I spent $46 on veggies for the week. I am eating out of the freezer.  It's overly full because of our trip and we have too much bread so the kids and I are going to be eating sandwiches.  I also bought 1 week ago a $61 rib roast and it was enough for 1 meal (we invited our covid family over) so 4 adults and 4 kids ate the smoked bone in rib roast.  That brings our grocery total to $298.40 for the month so far.  The alcohol is $77.18, and the eating out is $26.69.  We plan on going to brunch on Sunday and I'm expecting $100 for that.  Then another $50 for veggies for the week and trying desperately to eat our freezer.  

I think what happened is that I overbought on meat last month because February we had used everyhing up.  Then I stocked up too much and now I don't need to buy meat for awhile. I also stocked up on toiletries and paper products and cleaning supplies so that will also be awhile.

That being said I wonder if I can ge back to complete no spend days.  Tomorrow DH is paid and I am deciding between moving $1000 to Property Taxes or Sink Funds or savings.  Unfortunately we have to wait until the next paycheck to put the rest of the money somewhere.

I don't know if others find it hard to plan spending for the year.  I guess because I don't have a straight budget plan yet.  I also am unsure how disciplined I want to be with "savings".  I definitely want to save for things like property taxes and sink funds but the retirement?  

So here's our basic budget and I need to figure out how to make things work.

$10914 Income

-$3850 Mortgage

-$1000 Property Taxes (Savings account)

-$725 Sink Fund

-$1500 Roth IRA

= $ 3839 leftover.  

That should be enough but I am worried it's not.  Mostly because it's supposed to cover our travel expenses and just overall expenses.  If we spend $800/month groceries and $200 eating out that leaves $2800 for utilities, gas, etc.  Right now it doesn't seem like we can get a handle on spending, but we'll have to see.

Sadly this month we are $298.40 Groceries, $26.69 eating out, $77.18 Alcohol, $120 Dog, $759 Travel, $45 gas, $557 utilities, $55 Home Depot, $35 personal care, $6.60 Auto, $77.13 Home Stuff, $112 Gifts, $180 services, $9.61 Misc, $154 Amazon (sound channel), $168 kids, $99.15 Clothing (will return 1-2 jeans) = $2781 to date for the month.  

We plan on going out to brunch on Sunday with friends so there is that.  Also we do have t osome shopping more for groceries.  I'm hoping to have many NSD the rest of the month.

Well so for the 4 day weekend we spent $759.03 total.  That includes gas, groceries, and eating out.  The VRBO our share was $710.  That means for four days we spend $1470.  Ouch.  Well that's how the cookie crumbles.  Mostly it was staying with people who spend like there is no tomorrow.  Like I told DH it solidified why I normally don't stay in VRBO with people.  First time and probably last time.  Our sleeping habits has always been the reason and it still was a problem.  We like to stay up late and wake up late and roll on out of the house late.  So I'm good.  We spent $562 on food for 4 days and came home with a ton of food that we would never have bought and wasted at that price.  It's fine I'm okay but I would not have been buying foil, saran wrap, paper towels, paper plates, etcs all stuff we paid top $ for from the grocery instead of bringing from bulk from costco at home.  Like I said I am not cool with wasting money or food.  Lesson learned.

So our spending for the month. This month we aren't doing as detailed grocery posts but I am tracking overall spending.  

Groceries $252
Eating out $26.69
Alcohol $70.92
Dog $66.09
Travel $759.03
Gas $45.57
Utilities $427.31
Home Maintenance $14.90
Personal Care $35.27
Auto $6.60
Home Goods $77.13
Gifts $75.57
Misc $9.61
Services $180 (cleaner $120, Yard $60)
Amazon $211 ($121 sound channel, $36 Birthday Presents, $54 Battery pack and chargers)
Kids $173.49 ($135 piano lessons, bike helmet)
Clothing $99 (3 lucky jeans will return 2 after they come)
=$2526.19, trying to keep our spending under $4000 for the month.

Our rough budget is
$10,900 Net Income
-$3843 Mortgage
-$1000 Property Taxes
-$1000 Roth IRA
-$750 Sink Funds
Leftover $4307

While saving the extra 2 paychecks a year. That's what we did with the extra paycheck.  Considering we are 8 days in and we've spent 58% it's not looking good.  Goal is to not spend more than $100 on groceries and I need to rein in DH from spending on amazon and online on crap he wants for shed and house.  We have another $100 next week for Dog Vet Visit.  And registering kids for a summer camp.

But I'm meal planning through the next week.  I bought $61 rib roast on tuesday that will be for Sunday.  I am making butter chicken tomorrow and pulled out my hambone soup to eat.  We are eating sandwiches for the next few days.  Monday I need to make 2 lasagna (giving one to DH's cousin when I pick her up from airport Monday night).  I plan on making japanese beef curry next wednesday with stuff we have.  I also have to make yogurt and beef keema next friday.  I'm thinking I just need $75 of fruits and veggies in the next week maybe.  I have so much bread right now that sandwiches are on the agenda for awhile for lunches for kids.  I also still have a lot in freezer to eat through.

So we went away this weekend and I haven't quite sorted out everything on that.  However I did manage to compile some.  So here is our spending for the month so far.

$252.40 for Groceries
$20.50 Eating out
$70.92 Alcohol
$66.09 Dog
$45.57 Gas
$427.31 Utilities (water, internet, xm subscription)
$14.90 Home Depot
$35.27 Haircuts
$6.60 Auto (windshield blades)
$77.13 Home Goods
$75.57 Gifts (Bought some stuff)
$9.61 Misc
$173.49 Kids ($135 piano lessons)
$71.56 Gas for road Trip
$494.79 eating out for trip/musuem/activities etc
Total $1841.39 so far for the month

So we are settling up the groceries for the VRBO with friends.  Personally I budgeted $1000 for the weekend and we will come in under.  I think the groceries and couple of meals out shared will be ~$250.  Also it doesn't include our share of the VRBO of $710 which I paid last month.  Personally I know we spent more on the weekend doing it with friends.  

I found it difficult to travel with one of the families and I won't be doing a VRBO again with them. I don't think we mesh well.  We haven't traveled together last summer in a road trip but we had our own rooms and kept food separate. I hadn't ever agreed to a VRBO before and now I know why I didn't.  They totally waste food and run up bills and don't care.  They have too much money and not enough time.  Even if we have money I can't stomach watching the food just get thrown away and wasted on such a large scale.  There is no scaling back excess.  I think it's better we keep things separate and try to separate out our eating.  

And example of the excess, the morning we left we got take out breakfast from a cafe they wanted to try.  LAL's family ordered 1 order of Eggs benedict came with side of 3 pancakes.  We shared that for 4 of us.  DH and I split eggs and kids ate the pancakes and fruit and yogurt at the VRBO.  2nd family (the shoppers) ordered 2 adult meals for the 4 of them and they mostly finished it.  The KUWJ family ordered 4 meals and threw away 50% of each meal if not more.  This is standard for them.  Even cooked meals they will serve their kids enormous portions then throw out whatever they don't eat.  There is no sensitivity that others probably want a portion.  I don't know that we can travel so up close and personal again.  I will also add that I realize I'm picky and this was my 1st and only trip we will be doing a VRBO with anyone again.  I suspect we'll only do hotels and keep things to ourselves.  

But otherwise it was fun.  FWIW we have traveled with Shoppers before multiple times and they are more along our lines of spending.  They do spend more than we do, but they are typically pretty thoughtful.  They realize they are traveling so they watch how they order so they don't waste food. They typically aren't just in excess of life and just throwing money around.  Everything is thoughtful.  Yes they spend money but they don't just waste it.  I can't explain the difference.  I

guess it's where they look for a good deal on a hotel "the shoppers" but the KUWJ just book the nicest place possible and to them $500-1000/night is normal.  The Shoppers will see $400 and be willing to ante up to stay but want to be sure it's a good "deal or value".  LAL's family?  $400?  No.  Don't want to spend that much even if we can afford it.  Goes against principals but will bend if we are traveling with other people to an extent.

Overall we had fun.  Next trip planned?  Camping at a family Camp May 21st Friday to Sunday.  Then a second camping weekend 6/4-6/6.  We are paying more than normal because we're "camping" in a cabin at a YMCA.  Basically renting a cabin they usually use for overnight summer camps.  Should be fun.  We are provided food and activities.  These are local camps and if our kids like it maybe they will want to do an overnight camp one day.

This month we are also booking 1 week of summer camp. 

So I spent some time teasing apart my spending.  In March as I tracked $820.79 Groceries, $86.82 cleaning, $167.14 alcohol, $112.72 eating out.  Total CC spending across 4 cards is $4586.27 for the month of March.  Bit higher than I would have liked.  

My year to date spending is as follows (1/1-3/31)

Travel $2438
Pet $3310
Groceries $2713 (not teased out the cleaning supplies and extras but I'll try to be better in the future splitting dog food, clening suplies etc)
Hobbies (ski gear) $1290
Restaurants $421
Gas $409 
Alcohol $308
Healthcare (lots of dental) $758
Gifts $889 (DK1 got ears pierced and nail salon)
Cell Phones $674 (bought 2 cell phones $135 LAL, $208 DH) and 3 months of plan
Home Improvement $460 (DH 100%)
General Merchandise (crap we buy from Amazon and online) $599 (this is mostly DH by the way)

April my goal is $750 for groceries, $100 alcohol and $50 cleaning supplies so $900 total.  And our overall spending under $3k on the credit cards including groceries.  So that will leave us with room to save.  It might not be possible with me needing to pay for a couple of summer camps.  

Of course I already blew it today....I spent $135.28 on groceries, $45.47 on gas, $9.61 at Dollar store, $14.90 Home Depot, $66.09 Dog Food and treats, $70.92 alcohol.  So we have started the month at $419.50 spent.  UGH!  Then eating out this weekend and gas for driving.  So I might be dying on the groceries already.  Or I can eat everything I have and be super cheap this month!  Nah. I want a rib roast and I have my eye on making beef wellington.  My pantry and freezer however are stuffed to the gills for some reason so I do need to eat what I've bought.

I realized I never responded to people's questions about our 2020 spending.  So I decided I would do it now.  First off Disneysteve asked how did you spend $22k on travel in a lockdown year.  Well first off when we travel I do not breakdown eating out or gifts, etc.  Traveling is everything, everything we buy to prep to uber to eating out to gifts, anything and everything that is not because we are at home.

Jan $1200 - 2 ski trips 
Feb $1915 - Hawaii, probably bought tickets in 2019
March $2637 - ski trip and booked couple of hotels
April $2353 - future hotels ( i wonder if I got this refunded)
May $2711 - weekend away was $1500 with $600 hotel, but also $1400 hotels
June $2727 - start of road trip and i can tell by activities and eating out no hotels
July $3886 - road trip and $517 deposit on January 2021 ski vrbo
August $0
September $0
October $0
November $3287 - tickets to hawaii and VRBO final payment $814
December $2025 - some ski tickets and all spending in hawaii from eating out, groceries etc
=$22847

Wait I found $8861 refunded by "travel" category of alaska, expedia, etc.  So I guess we spent $13986 on Travel for the year.  That looks better than $22k, but still $14k is a lot.

We spent $15727 on groceries with a refund of $1187 = $14540 for the year for a family of 4.  This I can answer.  I did not shop sales and I semi-meal planned in the sense I looked at what I had but I did  NOT look at a price book or flyer and instead I just cooked whatever I wanted.  I do not usually buy junk food (see this month everything) but I did buy mostly organic and mostly whatever I wanted. In March 2021 we did not do our normal sushi, seafood, and steaks once or twice a month food runs.  I will buy prime steak, lobster, and sushi at least 1 a month each usually friday nights and make it at home.  Also we had two additional adults for at least 6-12 meals a month (dinner).  DH's cousin and boyfried were eating with us most weekends to help build shed and I both bought take out and cooked for 2 adults more food and more booze. She also watches our dog when we travel so we usually pay for everything. 

And yes we buy expensive cuts of meat and seafood.  We are not food wasters by a long shot.  NOTHING really goes to waste.  We also do not buy processed foods either.  BUT we buy everything not on sale and on demand. I bought anything I wanted when I wanted it.  So I would walk into a store without a plan and throw things in the cart. I will decide I want to make X, Y, or Z and just buy what I needed to make it.  I didn't waste food.  We eat everything and I buy premium stuff in smaller quantities so I didn't waste anything.  But there was NO meal planning or prepping I just wanted mushrooms great I bought it.  I wanted pork shoulder or pork chops?  $8.99/lb no problem.  Sure $30/lb no sale for sashimi = no problem.   You see the problem.  We do once a week leftover night where everyone picks leftovers that isn't enough for a meal and then we eat it.  That's how we don't waste anything.  I make fried rice from old rice. I make stews and omelets or mishmash from leftovers.  So food isn't wasted but my food wasn't cheap to begin with and i never actually looked at the price and went "oh that's a lot." I just threw it in my cart.

I think I get this from my mom.  She said a woman once told her "you know you've made it when you walk into a store and buy what you want, when you want it.  Because you no longer look at sales."  And she does.  I sort of fell into this mindset.

Jan $1705
Feb $596
March $1715
April $844
May $1659
June $1504
July $1154
Aug $1257
Sept $1265
Oct $1922
Nov $1555
Dec $557

$13048 was spent on buying crap with $3894 refunded so $9154 spent actually.  What sort of stuff?  Amazon, target, walmart, etc.  Stuff for house, stuff for kids, etc.  I will try to be better this year.

$6290 on Restaurants with $240 refunded.  The breakdown you cans ee the lockdown definitely put a crimp on our eating out.  I think I've mentioned before we used to spend I know around $1k month eating out and $1k month on groceries.  Again I just bought take out when I felt like it.  No waste but eating out for us expensive because eating out is expensive for a family of 4 at "nicer" places.  $75-$100 is not hard to hit even takeout.  After march we ate outside 2x the entire time both times in september.

Janurary $757
Feb $787
March $695
April $310
May $483
June $289
July $356
Aug $618
Sept $648
Oct $315
Nov $597
Dec $441

So that's our spending. I definitely need to tease out our spending in general. I need to probably look at mint because personal capital is having problems.

But I also think I need to average out my spending since I'm becoming more aware.  The first two months weren't great but we're improving.  We had a goal of $950 for groceries, alcohol, and cleaning.  We spent $1100 but we were over our grocery part by $20.79!  Next month dare I try for $675 thrify plan?  Let's look at 2021 bigger picture first.

So I did go to the grocery store last night and I bought one last thing before the end of the month.

3/30 FM $14.90

Turkey Breast $7.11 (1.29/lb)

Pie Crust $1.79

Frozen Spinach $1.50 (4x$1.50 = $6)

= $14.90 Monthly Total $820.79!

Bringing out monthly grand total $820.79 for groceries for our family of 4 and with TONS of food in the freezer.  We spent $112.72 eating out for the month and $86.82 on cleaning stuff.  I plan on buying dog food, vitamins from costco later this week thinking Thursday or Friday for April.  I'm going to make a list because it's on sale and I have some backup under the sink but I like to have at least a 6 months supply usually.  We also spent $167.14 on alcohol.  We need to buy next month some champagne (mimosas for easter brunch) and vodka.

Today was DH's 3rd payday of March.  Very excited.  He got paid $5554.66 today and this is not part of our normal budget.  So what did I do?  Well I saved every penny of it.  I moved $5600 to our Roth/Savings Fund.  I also moved $1200 to our Sink funds, $1000 to Property taxes which we used to escrow and $6500 (check of $6488.78 escrow from JPMC) and tomorrow our mortgage is paid $3850.  

Our current balances

Checking Cap 1 $5309

EF $40k

Roth/Savings $8600 for year (on pace to save $16k, love to hit $36k for year)

Sink Funds $2400 (budgeting $720/month i'm a little short and might move more)

Property Taxes $8500 (on target and paying $5500 4/30)

BofA $6785 (earmarked for paying off Chase card below)

Chime $400 (with 2 $75 bonuses thanks for referral!) PM me if you want referral link

I owe $5700 on our chase card closing 4/6/21.  We are going away this weekend and I think we may spend $1000 on eating out for 4 days most meals.  I'm being a bit overly generous because I'd rather not feel bad for 4/3-4/6.  

Tomorrow I'll do a wrap up of spending for month and new monthly goals.  

Okay before I decide if I'm going out shopping tonight for a bit more groceries I am at $805.59 for groceries for the month.  That does not include cleaning supplies, toiletries, paper products, or alcohol.  So far we spent $167.14 on alcohol (1/6 keg, $22 beer, and $7 wine) for the month.  I spent $86.82 on cleaning supplies at costco like paper towels, tp, dishwasher pods, laundry, ziplocs, etc.  That means I am all in for $1059.55 for the month on "grocery" stuff.  But the actual grocery is going to be $805.59 plus I'm not sure what I am spending tonight.   I also spent $112.72 on eating out.

On March 2nd, I wrote i want to spend $800 for a family of four with $100 for alcohol and $50 for cleaning supplies. I went over budget on both those two categories, but I suspect it's because i won't buy as much beer or cleaning supplies for 2-3 more months.

I am at $805, so $5 over with a full freezer unlike end of February where i had no stockpile in pantry or freezer/fridge!  So I'm super happy.  I am debating buying tonight frozen turkey breasts with bone and salmon.  That is what I was looking for at the store. I am also going later this week to buy vitamins from costco for me and the kids since it's on sale till thursday.

So my grocery update 

3/25 Walmart $9.43 (happened to be in the area buying shoes)
Feta $2.54
Ricotta $3.42
Yogurt $3.47
= $9.43

3/25 Grocery $5.97
Rice Rolls $0.99
Italian spices $2.99
Onions $1.99 (6 lbs)
=$5.97

3/25 Grocery $10.94 on spices, lost receipt

3/27 Market $14.98
Salami $8.99 BOGO
Gouda $5.99
= $14.98

3/28 Safeway $3.49 Apricot preserve
3/28 FM $24.71
Ham $7.85 (.87/lb)
Ham $8.45 (.87/lb)
Beans $2.99
Carrots $3.49 (5 lb bag)
Celery 1.93 (.99/lb)
=$24.71

On 3/25 I stopped at walmart because I bought shoes on sale at road runner sports.  They were having a special 2x year sale and I bought 4 pairs of brooks adrenaline sneakers.  I only wear those specific line from that specific brand.  I have my exact size and I've worn them for 15 years?  I used to order them online when they went on sale and in 2019 they changed it. So at that time I bought about 6 pairs and they've finally worn out.  I know because I bought only 2019 multiple pairs and stashed them in my closet.  Any one who is a runner knows you just know exactly how your shoes wear.  These shoes in particular run $129.95 and if they go on discount and they happened to have my exact size then I would buy them.  I couldn't even wait to get to the car before I swapped out these new balance shoes i bought that were supposed to be comfortable but weren't.

So I got 2 pairs for $110 with 10% off so it was $220 for 4 shoes including taxes.  I thought a very good deal. Should last me 18-24 months.  Tomorrow I'll wrap up the month of spending. I think from now on in April I'll just track my grocery spend and spending in general but not in detail.

I've learned i can definitely live on $800/month groceries. I need to budget a teeny bit better.  I am hinking of spending another $30 tonight on salmon and turkey breasts. I also am planning on eating out dinner thursday or friday for $30 burgers.

DH and I got vaccines today.  Pfizer the 1st dose.  We were not eligible but we waited and we got extra doses.  The mass vaccine site this morning had 700+ unclaimed appointments today. So I was calling from 6 am to see what they would say.  I called multiple times and was told first no walk ups.  To well we have a standby list we call.  To well we have standby but we can't guarantee anything.   You just come and show up.  So then I decide that since there are so many "appointments/vaccines" what the hell? Sure it's an hour to drive there but I leave before nine and I get in line and wait.  Well turns out that when I'm in line they hand me a paper and say you are good to go.  I say great.  Can I have a second paper and make an appointment for my DH?  They say sure here's a paper. I do it and then make his appointment and then make it the same time as mine and then "reschedule" his appointment for him to make it later.

It's been happening to a lot of my friends.  Last week it seems like the supply went exponentially up and people aren't taking appointments.  So then last week my friend drove to a mass vaccine site and took her 18 year old senior daughter and when they got there they asked if she wanted it for her daughter?  She was like I don't even have her id.  They called her son at home and had him take a photo and wham they got a shot and instant appointment for an 18 year old!  She was like what?  She's the one who convinced me to stalk out getting a vaccine at these drive up mass sites.

Another friend and her husband have been randomly calling in the mornings and on friday they both got shots at the end of the day.  They had "cancellations" or something.  Basically the rollout and "waitlists" and getting people approved by phases is a load of crock.  No one i know who is "qualified" got an approval email.  Instead they just moved forward and got appointments.  Some are still in qualified "tiers" but waiting for email that has never arrived.  

So I felt guilty for a little awhile but then decided shots in arms?  Who knows?  But I'm going to say I said I wasn't qualified for it but they gave it to me anyway.  Technically we did qualify as "caregivers of a special needs child" and I qualified as an essential worker.  All my coworkers have gotten it.  But I haven't left the house so I didn't bother and figured someone else who needs it more.  Well I feel like we've hit this point where they are going to be wasting vaccines soon if they don't open up more tiers.

I found a rewards card from my job and I checked and there was $20 on there. I hate using these prepaid credit cards so I used it to pay my electric bill $20 so I wiped the card clean and don't have to worry about not using it or losing it.  I find it easiest to use them immediately and on something like a bill because trying to track prepaid VISA cards are ridiculous.

But I'm also going to try and use up all of our gift cards for restaurants and stuff this summer.  My goal is to be done with them so that if they go out of business or something we aren't out of luck!

Last year my DK1 sold 800 boxes of girl scout cookies.  She chose the American Girl experience which they gave us in the form of a gift card in lieu of the tea party.  Well turns out the store in our area shut down and we hadn't had a chance to use it. To say I'm annoyed is an understatement. I am unsure what I should do.  Should we try and sell it at a gift card reseller?  Should we divide it up (it's $140) to say $25 gift cards and give them as gifts to kids whose birthday's we go to?  

This is probably why it doesn't make sense to keep gift cards except maybe starbucks and target.  Where are those places going?

So I'm not a big proponent of the "latte" factor. I don't think that lattes add up to much.  Maybe they do when you have low fixed costs, big income, and spend more than you make.  But when you live pretty reasonably, aren't a big spender but can't make ends meet, there usually is a bigger picture problem.  Most often the culprit?  The house or the car payments.  Usually those are out of line with the income.  The rule of thumb is 28% mortgage, 32% for payment, taxes, insurance, interest, 40% all debt payments.  That means maybe you bought a 20% home but then you spen 20% of your monthly or annual income on car payments.  Seriously car payments add up fast!  Those two things can suddenly make the budget tight and make it difficult to save and difficult to get ahead.

So on to LAL, what can I say?  Our mortgage is 25.8% of our gross salary. So we check that box.  Our PITI is 32% of our salary so technically we check that box as well.  We have no other debts so we are at 32% total debt.  I was smart enough to stop carrying our minivan loan in September 2020.  But here I am feeling the pinch and dreading cutting our lifestyle and trying to save.  So how is it playing out?  Where are we going wrong?

I think we are going wrong because we are used to living on our salary and just saving the rest.  What I mean is prior we would just save the maximum for 401k, employee stock purchase plan, or after tax into 401k and then live on the rest of our salary.  Then the bonus cash and stock would go to pay taxes and savings.  First time in our adult working lives we don't have a 401k. 

That simple change mentally makes it harder to see our deposit and getting to spend it like we used to.  Before I knew we already had automatic deductions take out for "savings".  I also knew we were not planning on spending our bonuses or counting on them so it was easy enough to do a sweep into our savings account.  Usually I also paid a higher percetange of our bonuses in an estimated payment to the government because they never withhold enough for our bracket.   So now I probably need to automate $1500/paycheck (too hard biweekly to calculate) straight to Roth IRA/ESA account and see if we can't live on that.  I think that extra 2x/year paycheck needs to go to savings and I need to scale back how much from 2 paychecks we put into our monthly savings.   This is going to be a learning process again.

I'm not a very good budgeter or tracker.  I prefer the save first and spend the rest. I also prefer to have it taken out and see only what we get after taxes.   

But here is where we are shaking out wrong

Income 100% 

Mortgage PITI 32% $60k/year

Savings Retirement 15%

Short term 5% - this if my flexible

Federal taxes 10.32%

SS/Medicare 6.36%

= Leftover 31.32% leftover  - this should be enough. Works out to around $56k/year

I just am not sure.  I think I need this year to see if we really can save 20% and live on 31%.  It doesn't seem that far off from our prior spending, but we have to be more mindful and scale back our traveling.  Also I believe where I am having trouble is realizing that we are going to be paying a lot less in taxes.  

So our house isn't "unaffordable" but it definitely makes me feel tight.  Our current salary is $180k/year.  Our mortgage is $3800/month and $1000/month taxes/insurance.  We should be able to manage to save that 20% or $36k/year.  Our mortgage is currently $850k at 2.875% 26 years left.  According to the 3x rule of thumb we are at 4.72x.  Thus we are over.  We are also at the highest end of what you should buy and probably why we are struggling with saving 15% to retirement and 5% to short term.

If we managed to get out PITI to 25% that would give us a little more breathing space on the living expenses and still save 20% comfortably.  When we bought the house 4 years ago we were at 3.7x and 22.8% PITI off of base salary.  We were also approved for a lot more house but bought something we felt very comfortable with. 

When I agreed to this salary reduction in August 2020 I knew we were going to struggle a little at first.  We hadn't been budget constrained in a long time probably over a decade since before kids.  Mostly because we were usually very conservative with our housing and fixed costs.   This is a short term reduction.  If it doesn't pan out for DH in 2 years he'll go get a regular job.  No we can't guarantee what he'll make but if it's closer to what he was making we'll be fine.  So I'm not selling the house.  Should I? 

Maybe.  But in this case it's for less than 2 years and if we can manage without touching savings and even saving I think we sit tight and give it ago.  Now in 2 years if he looks for a job and can't find one paying what he's currently making then we reconsider selling the house.   I don't think long term I want to be in this situation.  But short term we can make it work.  Also if he was making $180k long term we'd have to reconsider moving elsewhere.  Because to me that's not enough to make it where we are. 

Where we live rents are higher than our mortgage running around $4000/month.  With the tax break 24% on $25k interest and $10k property taxes we are looking at "renting" our house for $27k/year and "saving by princpal paydown" $21-22k".  So to correctly assess our interest it's $2500/month.  The principal paydown can't be equated to rent.  So the tax break also has to correctly be assessed to determine if renting is better than buying.  For us no?  If we were buying now?  Well probably yes because to buy our house now our mortgage would be at least another $1000/month more and our property taxes an extra $2-3k/year.  So an extra $1500/month would definitely put it on par with renting if not a better reason fo renting.

Anyway that's how things are unfolding for us.  Guess it'll be an interesting 2 years.

It's hard to post your numbers on even a blog.  To post the failures and successes.  Even though we hide behind our screens there is still a feeling of awkwardness.  To have a feeling of embarrassement that you are spending so much.  Well at least to me.  It's probably why I hesitate to post certain things because I know I'm ridiculous.  But it's still way more than I would ever share IRL.

So anyway I started multiple "savings" accounts in Capital One.  Thought I'd give it a whirl.  I thought I'm going to do it. I'm going to try and save this year money.  Sounds ridiculous because we should be able to save.  But the truth is I don't know if we can.  We are going to struggle.  Living "austerely" to us when we haven't been on a spending "diet" or "budget" is hard.  We've gotten used to lifestyle inflation or creep.  It hasn't happened overnight.  It hasn't been drastic.  But it's happened.  How'd it happen?  Well our income went up and so did our lifestyle.  We hadn't changed some of our basic principals LBYM or pay yourself first.  But we "paid" ourselves first, maxed our 401k, maxed our Roth IRA, College, no bonuses for living but our income just went up and with it our lifestyle.  Last year I roughly calculated we saved 50% of our income.  But we had a lot of income.  We lived on about 25% of our income and 25% of our income went to taxes.  Sounds okay right?  Well now we're cutting back to that 25% and we need to save within it.  That's another post for another day. 

Anyway here's where we are and goals for 2021.  Who knew I'd have goals again so concrete?

Roth IRA/ESA $16k goal - $3k

Property Taxes  $12k goal - $1k ($6500 coming from bank) (4./30 and 11/1 due $5500, 8/30 Home insurance $1000)

Sink Funds $10k goal - $1k

That's all I got for now.  With an extra paycheck this month I'm planning on funding the property taxes and sink funds. I also have quite a bit of extra cash in our checking accounts so I'm going to try and move it into one of these savings accounts.  

Big picture goal is to save 20% of our income.  We have currently saved 20% this year of our income.  But 2022 we won't have a 401k to contribute just a Roth IRA and 2 ESA so $16k in tax deferred accounts.  That still leaves us short of that 20% salary goal, and I'm unsure if we can even hit that.  Though we've contributed to 2020 Roth IRA and ESAs, I'm trying to get the $16k cash for january 2022.  I'm also planning on shoveling into that savings account all exra money and seeing if I can get more after directly $1k and $800/monthly into Property taxes and Sink Funds.  This will be pretty tight to be honest.

Let's see what happens.  Next year DH's salary will be $180k flat.  20% is $36k.  $16k is earmarked to be saved.  $20k is what we need to save in order to hit 20%.  I guess that's another post about why I think it'll be hard.