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This & That

January 18th, 2015 at 08:08 am

I'll start with the minutiae because I have lots of catching up to do. This is what happens when I don't post for a week!

**I officially opened a Traditional IRA for dh yesterday. I will fund 2014 as I can. By April, of course. (We contributed to his Traditional IRA in 2-income years but converted it all to ROTHs in low-income years. Time to start his Traditional IRA from scratch, since our taxes are creeping up).

**Still waiting for investment forms to complete our taxes but hope to file this week. Refund should be about $3,200. I am going to throw that at dh's IRA and mostly be done with that. (The refund is due to funding Traditional IRAs versus ROTHs. We aim very breakeven on our taxes otherwise but this will be "flip a coin" territory for a while; to be decided for sure when we do our taxes every year).

{This $3,200 refund is his Japan trip money, as you may recall. It still is, but throwing it at the IRA will just mean less money to move around. I will keep $3,200 in savings that was earmarked for IRA. I don't know how much or when I will really need the Japan money}.

**Mr. Money Mustache blogged about his 2014 spending details and all I can say is: I BOW DOWN BEFORE HIM!

Mostly, his efficiency increase in 2014 was astounding. Whereas once I would compare our budget to his and be like, "Sure, that's where we are and will be when we cut out the mortgage and the expenses of working and yadda yadda". This year was, "Never mind. What the..."

I don't bow down to people lightly, that is for sure. But it's the only response I have to that...


The theme for 2015 seems to be "ONWARD and UPWARDS," for us. We might progress our net worth upwards from it's peak in 2005? (Depends on the markets, so lord knows). Cash is back to it's peak level. Our income is higher than it's ever been. It feels AWESOME!

I did get a raise. Woohoo! It was not a full $200 per month raise but that is what I will net after tweaking my taxes a bit.

Thank goodness for the raise because we had a lot of expenses creeping up.

--Health insurance creeped up, as it always does.

--Property taxes went up about $1k per year and so I added $100/month to our savings to cover that. (During most years our property taxes have gone down and offset other expenses, so I don't know that I have increased this monthly savings amount in like a decade??)

--I increased our grocery budget by $100/month. Which is also the first time I have ever increased that category (in like 15 years of marriage??).

So that's a lot of budget increases, for us.

I suppose that is more budget increases than raise. I lowered our cash savings by $100/month since our cash savings is robust. I split the difference and added $50/month to our long-term investments. I will move things around if we have to but I think it makes sense to shift some of the cash savings to longer term investments.

I guess overall that leaves us saving $50 less per month but I am fine with that - our savings rate is very high.

I also have a lot of buffer in the budget still. The $150/month I Was putting to long-term investments was a placeholder for my raise last year. If I can keep this at $200/month (new amount) then that is a nice buffer for future expense increases.

We also have an extra $200/month tax savings for any year we do a Traditional IRA instead of a ROTH.

That gives us a total $400/month buffer - I am holding onto this for future health insurance increases.

In addition to all the above, we have significant sources of other income. Most of which will likely go to savings. (I've been averaging $8,000 per year NET income with overtime and credit card rewards, in recent years).

& this is why our income will be so high this year. I am making a solid $15,000 LESS household income than last dh worked (my salary alone). BUT, we are also paying about $20k+ less in income taxes, so we are netting MORE with my paycheck. All the extra income just boosts our "net income" substantially. I am sure we are nowhere near our peak "gross income" level on two incomes. But on a net basis we should blow our highest income year out of the water.

**On a side note, I took a 10% cut in compensation in 2009 and so it is only this year that I am making as much money as I Was back then. With this raise, it puts me back where I left off. That is another reason for my feeling of moving onward and upwards.**

The crazy thing about the abundance this year is that there is absolutely nothing we want to buy. If I ever receive a large raise, or any raise above expenses, we wouldn't make any plans to spend it. We are very content.

After carefully planning and saving up the cash for every purchase it feels quite odd to have nothing left on our wish list. It certainly took a long time but we have made it through our entire list! (We topped it off by upgrading our phones and car stereos last year, and dh's home movie theater. The year or two before we had finished furnishing our home and replacing the old furniture that we did not like).

I mean like since the time of our very first jobs in our teens this is probably the only time we aren't saving up for something substantial and material over the long run. (Or a long list of smaller things that would take time to accumulate). It feels WEIRD!

I've personally never been a big fan of spending money on experiences. Both my hubby and I much rather buy something we can use and enjoy every day. But I will admit that maybe a lot of that has to do with being in the accumulation phase of life. I'd rather buy something I can use and enjoy and save the rest for a rainy day?

I do see our spending shifting with age and assets. If our house is furnished and our cars are new and we have everything we possibly want... That frees up a *lot* of money for other things. We are definitely throwing more dollars at vacations and shows and experiences. & it's certainly nice to be able to afford more than a budget vacation once in a while.

3 Responses to “This & That”

  1. FrugalTexan75 Says:

    Congratulations on the raise!

    I'm looking at ways of cutting expenses in my budget because once the 7% (retirement account 401a) starts being taken out of my paycheck, it's going to reduce the net by somewhere between $100 and $120 (depending on if I get the 2.25% raise I'm pretty sure I'm getting.) I want to keep my ROTH contribution the same and my other savings goals the same ... so have to find other ways to cut. I may have to lower the ROTH a bit, but I'm really hoping to be able to avoid that.

  2. rob62521 Says:

    I can understand why you needed to increase your grocery budget. Although the Feds claim we don't have inflation or much of it, so many things have really increased in price. I'm not buying any more than what I bought two years ago, and we are spending more.

  3. Dido Says:

    Congrats on getting to a place where you have a feeling of abundance. That is a very wonderful thing, both in and of itself and for the effects it has on decision-making: people who make decisions when they have a feeling of scarcity focus too narrowly and on the short-term. Another note from the psychology literature on the value of buying experiences: they don't depreciate and the memories last a lifetime. In terms of "buying happiness," the psych literature shows that experiential purchases give you much more bang for the buck than material ones.

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