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2019 Goals

December 30th, 2018 at 06:49 am

I decided to put up my 2019 goals on sidebar. Which are pretty much the same as 2018, except that my $12,000 salary decrease means that we will have to fund IRAs from other monies.

Our health insurance went up $50/month and I may have some more expenses with the third car, BUT I already lowered our expectations about funding IRAs, so just didn't want to cut back on any of our other savings. So I probably committed to saving at least $50/month I don't have, but I suppose I am presuming I will eventually get a raise to cover it.

Money that was going to taxable investments before, is now going to 401k. From a net worth standpoint, it's all well and good, but I am not thrilled because I feel like I need a bajillion dollars cash (teen drivers x2, braces x2, home repairs, etc., all in the very near future). "College savings" is accordingly on the back burner again, but I am okay with earmarking ROTH money (for college) during years we contribute 20%+ to retirement. Otherwise, it wouldn't make any sense to be so retirement heavy, at the expense of the rest of our finances, but everything is so "hell if I know," I'd rather err with piling up ROTHs.

I do also expect some side income in 2019, but will just be hoarding up cash to fund IRAs and to pay for big planned expenses.

2018 Goals

December 29th, 2018 at 06:42 am

I am just cutting and pasting so that I can update my sidebar for 2019 goals. I expect a $20,000 decrease in salary/wages/OT, and so 2019 numbers will be more muted. Though honestly, by the time you factor taxes/401k (allows me to contribute 9% to retirement while keeping our cash flow the same), and extra/side business income, I expect 2019 to probably be about the same (cash flow) as 2018 (which was a very flush year for us). The one big change is that we will be very retirement heavy, as a result, which I mentioned below.

2018 Goals

**Financial**

[/]$11,000 to IRAs 2018 (MAX)
...($6,090 @ 10/31/18)
...We save $900/month
UPDATE: I diligently saved $900/month until I decided to quit my job in August.
For 2019, I have to abandon funding IRAs from *my* income.
I took a $11,000 pay cut, so this is the obvious solution. We will max out our IRAs regardless; will fund with other income or assets.

On the flip side, I am contributing 9% to a new 401k (my contribution + employer contribution). My contribution is a complete wash with reduced income taxes. So I am able to contribute 9% to retirement without coming up with more money. This is very reminiscent of our early one-income years when I had 10% work retirement contribution and we just funded IRAs with other monies. In both cases, we were contributing 20%+ of our gross income to retirement and didn't have much left for other savings/investment vehicles.

We will be "retirement heavy" until I get a raise and/or MH returns to work full-time.


**NOTE: WE DID FUND OUR IRAS, BUT JUST NOT FROM MY INCOME**

[ ]$5,000 to savings
...($0 @ 12/31/18)
...$300/month, plus interest.
...Topping off with snowballs
UPDATE: Savings was up about $8,000. I funneled everything into cash this year in prep for job transition. But I ended up putting all this money towards a car purchase. The net result is -0- change to savings.

[ ]$9,000 to investments
...($1,500 @ 12/31/18)
...$250/month, plus snowflakes
...Will also invest tax savings ($2,000) when contribute to Traditional IRAs
...Will top off goal with snowballs
UPDATE: Due to job instability and substantial decrease in income, have only contributed 'snowflakes' to investments this year. Goal for 2019 will be to fund retirement instead. This is due to a combo of less income and more retirement space to utilize.

[ ]$3,000 to mortgage
...($0 @ 12/31/18)
...$3k per year to pay off in 20 years (from last refi); also ensures that we pay more principal than interest
...Funded with overtime
UPDATE: Will probably abandon this goal for 2018 and future. I am no longer working OT (new job) and was never paid for the OT I worked in 2018.

Goal savings rate = 30% of gross

**Actual savings rate = lord if I know. I am just so happy that I have been able to cash flow the insanity this year. Mostly, we funded IRAs and threw our snowflakes into investments. We did also throw about $1,000 into MH's 401k. Savings rate was probably around 15%.**

In addition, we save 100% of MH's (net) income ~ most goes to 401k/taxes.

**We only did the minimum for match this year because I expected employment upheaval. This is just a very small part-time/seasonal income, and was probably -$0- after you factor taxes, 401k contribution, and covering my unpaid time off work.**

2017 Goal Update

January 15th, 2018 at 07:15 pm

I am copying and pasting sidebar, to memorialize in my blog. Brief Commentary below.

2017 Goals

[X]$11,000 to IRAs 2017 (MAX)
...($11,000 @ 12/31/17)
...We save $900/month

[ ]$5,000 to savings
...($4,013 @ 12/31/17)
...We save $300/month, plus interest.
...Topping off with snowballs

[ ]$8,000 to investments
...($7,236 @ 12/31/17)
...$2,200 from monthly contributions; $2,636 snowflakes/snowballs; $2,400 tax savings
...We save $200/month, plus snowflakes
...Will also invest tax savings ($2,400) when contribute to Traditional IRAs
...Will top off goal with snowballs

[X]$3,000 to mortgage
...($3,225 @12/31/17)
...$3k per year to pay off in 20 years (from last refi); also ensures that we pay more principal than interest
...Funded with overtime

In addition, we save 100% of MH's income.


My goal has been to save 100% of MH's (take-home) pay. I think that's been a little hit and miss. But probably complicated by paying all of the income taxes out of my check (though we pay 6x as much tax on his income; my salary is almost tax-free and is why there is such a substantial difference). I know we have also been using to justify some splurges. Which I am totally cool and fine with. Just don't want second income to be going towards basics like housing and groceries, insurance, etc. Don't want to get used to it. We have always used the second income for more one-off expenses and larger purchases (while primarily invested).

I will have to re-evaluate with tax law changes and all that. I'll update my sidebar when I figure it out.

As to the rest, I fell about $1,500 short of savings goals. Considering we spent about $2,000 on random last minute London trip (over and above vacation budget), I think that pretty much sums that up. Considering we easily paid $1,500 less to go in 2017 (versus any other recent years) and we can now cross that off our list, it probably all evens out in the end. Which is why we take advantage of opportunities like this.

At the end of the day, I always find it hard to sweat these things when our assets are up substantially. I am happy with how 2017 turned out.

Financial Updates - 2017 Year End

January 6th, 2018 at 07:55 am

We did really well on net worth for 2017. Up $95,000 for the year. Our goal was to increase net worth by $50,000.

Mortgage: -$ 8,000
Home Value: +$25,000
Investments: +$62,000
TOTAL: $95,000 Increase Net Worth


Our savings rate was 30% in 2017. 25% of our income went to long-term investments and retirement.

If we paid off our mortgage, we'd be debt free and we would have $225,000 in investments. We'd have to cash out our cash and taxable investments to do this, as well as 2/3 of our ROTHs. We could leave college money and Traditional IRAs intact. I suppose it's feasible, but not wise. I don't think we would seriously consider this unless our mortgage was in the $50k range. & we wouldn't cash out (most of) our ROTHs to pay off our mortgage. So we have a ways to go. I just know that we will ponder more as this number gets bigger.

2017 was a very good income year for us. I mentioned last year that MH's income was offset by loss of other side income and that economically we were about the same as we were before, which is what I expected. (His income is more about getting a foot back in the workforce, more than any meaningful contribution to the household). But anyway, this year we had a banner year with the credit card rewards and I made tons of OT so our income (W2) increased by 6% this year.

Last year our W2 income matched our highest (two-income) year (2001). This year was a significant improvement and some forward movement. I know we have significantly more expenses in some regards (health insurance, kids) but we are also no longer saving up frantically for a house (with real estate appreciating faster than we could ever possibly save), so I'd say this "feels" the most financially comfortable we have ever been. I suppose we also have a wee bit more assets now than we did in 2001. (Net worth isn't drastically different because of the housing bubble and crazy home equity in 2001, but our investments are 15x what they were in 2001).

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My long-term goal has been to get to a point where our net worth increases by our expenses every year. I figured if we could do this in our 40s that we would consider "financial independence" at 50.

Of course, this would be an average of a $60k increase per year, since our annual spending is at the $60k level. But I am fine with aiming for $50k since this will probably be a more reasonable expense level when our mortgage is paid off (and kids are grown). Also, if we can achieve these net worth gains, I know they will just grow with time, as investments compound. All this to say, my goal for the next 5 years or so will be to grow our net worth by $50k per year. In 5 years I will probably re-evaluate and hope to push that goal up to $60k or $70k per year. Maybe averaging $60k per year, for this next decade.

It was nice to have a strong start for Year 1!

Estimate Net Worth Change for 2018 (Year 2):

Mortgage: Paydown $8,000
Investments: Contribute $8,000
Retirement: Contribute $11,000
Investment Returns: $14,000 (would need 4% gain)
Real Estate Increase in Value: $9,000 (would need 2% appreciation)
TOTAL INCREASE: $50,000

I don't get too hung up in the "year over year" changes, as I am more concerned about the next decade as a whole. Just to say that I more than well aware that the market can go the other way (been there done that).

I've updated sidebar to reflect this 10-year plan.

December Savings

January 1st, 2018 at 08:28 am

Received $50 bank interest for the month of December.

Credit card rewards:
--Redeemed $25 credit card rewards (cash back) from our gas/grocery card.
--Redeemed $70 cash back on Citi card.
--Redeemed $10 cash back on dining/gas card.

Savings (From my paycheck):
+$ 200 to investments

Snowball to investments (MH Paycheck):
+$ 600

Mid-Term Savings (cash saved for non-annual expenses/emergency):
-$ 500 Computer (for DL)

Short-Term Savings (for non-monthly expenses within the year):
-$ 720 Home Insurance
-$ 535 Disability Insurance
-$ 450 Flood Insurance
-$ 240 School Lunches (5 months x2)
-$ 215 Umbrella Insurance
-$ 115 Auto repairs
-$ 90 Dental
-$ 76 Medical

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December was a bit of a mess. Not sure what to do with that, but trying to summarize the way I usually do.

I abandoned saving anything. Not for any of the usual reasons (we didn't spend anything substantial on the holidays). But I was doing a credit card reward and paid ahead several large bills. It made my life complicated in December but I knew we'd have some extra cash inflows to offset. Usually it's just so much at the end of the year that I try to spread it out or pay bills closer to due date (though most the rest of the year I generally try to stay more ahead of the curve). So the outcome is we had a huge cash outflow in December, but I have got all the bills paid ahead and won't be cash flowing $2,000 in January and February. (I just looked at last year and saw I put off most these bills to January and even February last year).

It hurts for now, but we will quickly build up cash in the next few months.

I've been slowly getting further ahead on bills. The mortgage is paid one full month ahead. Credit cards are paid in full the end of every month. Getting these end-of-year bills tamed I think is the last stop for me. I am fully transitioned to just paying bills when I receive them (or even earlier in many cases). This is what I did in early adulthood, but with online bill pay and cutting our income in half, I would more and more just set the bills to pay on their due dates. (I liked that I could get the bill paid when I received it but could set the due date to later and utilize the float). With more means, I've been going back in the other direction. Rather than save more cash and into an emergency fund, I am giving us some space and buffer.

When sitting down and trying to get to December balanced out, I abandoned all savings for this month and used credit card rewards to cover bills. In the end I had $200 left in the checkbook, so I went back and put that $200 into investments. That was all we saved this month. We did receive enough cash for Christmas to cover the rest.

I did also throw an extra $225 at the mortgage. That was what I had decided at some point (to get below $159k), and I had enough cash to cover that.

I did also donate my work Christmas bonus ($200), per our annual tradition. I earmarked this sum entirely for the local animal shelters.

One other note: I believe that our flood insurance (FEMA) is the only bill I *have to* pay by snail mail. I initially held onto the bill because I wanted to throw it on a specific one-time credit card (for rewards) and then got lazy and ended up mailing it closer to its due date (maybe a couple of days before, but I remember it sitting here for maybe two weeks in the meantime). Wouldn't you know it? It got lost in the mail! (Which is precisely why I avoid snail mail for anything important; this is the second hugely important item to be lost in the past 2 months). Anyway, I think I got it squared away about 3 weeks later, but in the meantime my mortgage holder was freaking out I didn't have proof of insurance. & lord knows I did not enjoy going without flood insurance for 2 weeks.

So anyway, all this to say, I am paying that bill the minute I get it next year, or about 30 days earlier. Yeesh!

Big picture: I am about $1,750 short of sidebar goals for the year. (I've updated sidebar). This is equivalent to the amount we redirected to spontaneous Europe trip. I am fine and happy with how the year shook out. Our savings goals are always very aggressive, and I am okay with directing that sum to a once-in-a-lifetime opportunity.

EDITED TO ADD: I forgot that 50% MH's check went into his 401k, or $600. I guess in the end we invested more than I was thinking when I typed this up.

November Savings

November 29th, 2017 at 06:20 am

Received $49 bank interest for the month of November.

Snowflakes to Investments:
--Redeemed $50 credit card rewards (cash back) from our gas/grocery card. But... Paid annual $95 fee. I will subtract $95 from snowflakes/investments.
--Redeemed $83 cash back on Citi card.
--Redeemed $10 cash back on dining/gas card.

Other snowflakes to investments:
--$12 Savings from Target Red Card (grocery purchases)

Snowball to investments (MH Paycheck):
+$950

Savings (From my paycheck):
+$ 200 to investments
+$ 300 to cash (mid-term savings)
+$ 900 to IRAs

Mid-Term Savings (cash saved for non-annual expenses/emergency):
-$1,850 Medical Expenses
-$1,400 Home Maintenance

Short-Term Savings (for non-monthly expenses within the year):
+$1,300 to cash
-$5,300 Property Taxes
-$ 430 Life Insurance
-$ 349 Auto registration
-$ 30 Dentist

------------------------------------------------------------------

I mentioned in my last (monthly) post that these past two months would be a bit of a wash. Lots and lots of bills paid this month.

For the most part, all bills are paid for 2017. Any charges past this point won't be cash flowed until 2018. The only exception is if something comes up that has to be paid for in cash.

October Savings

November 5th, 2017 at 10:43 am

Received $52 bank interest for the month of October.

Snowflakes to Investments:
--Redeemed $25 credit card rewards (cash back) from our grocery card.
--Redeemed $61 cash back on Citi card.
--Redeemed $7 cash back on dining/gas card.

Other snowflakes to investments:
--$5 Savings from Target Red Card (grocery purchases)
--rounded up $2 for an even $100 snowflake deposit

Snowball to investments (MH Paycheck):
+$1,200

Savings (From my paycheck):
+$ 200 to investments
+$ 300 to cash (mid-term savings)
+$ 900 to IRAs

Mid-Term Savings (cash saved for non-annual expenses/emergency):
-$300 Trombone purchase

Short-Term Savings (for non-monthly expenses within the year):
+$1,300 to cash
-$ 85 museum membership (renewal)
-$ 275 auto insurance

------------------------------------------------------------------

I think this month will end up being the polar opposite of next month. I literally deposited $4,300 into savings/investments this month. We save about $4,000 in a month that MH works and that we don't have any one-off expenses. (Rare, because there's usually some non-monthly expenses). But I am also replenishing savings for pre-paying some big expenses for credit card rewards.

Next month: We've already racked up $4,000 in medical bills and home repairs (and includes some smaller expenses). Will pay property taxes for the year, so that's $9,000 outflow right there.

This is the 4th year that I am just pre-paying property taxes, by paying it all up front (the second installment is not due until April). This is just done from a simplicity standpoint. If interest rates ever rise I guess I can re-evaluate, but I think we are building enough wealth at this point in our lives that I'd prefer simplicity over a little extra bank interest. But I probably only feel that way because interest rates are only 1%.