"Productivity" must be in the air. It is definitely a fall thing.

**Counted kids' money today, and BM has a $50 deposit. It is so funny how crammed full his piggy bank was with $1 bills. Mental note: check his piggy bank more often.

For now, BM is the saver (he is like dh: likes his electronics, but hell if he would spend a dime on anything else. Seems totally disinterested in fads. Though, since dh gets so many games and books for free, he is content).

LM is more imaginative and could play with lint all day, but he also likes collecting little characters. He has been the spendy one. That being said, Grandma spoils him a bit, and as spendy as he is, he still had about $40 in his piggy bank. Go figure. (He doesn't get an allowance yet, so BM has much more dough).

**Dh and I discussed no-spend November. Well, I think it will be "low-spend November." We've spent our money for the year, pretty much. (Keep in mind - all our November bills are already paid, etc. Anything in December will mostly be charged, and paid in January).

Today I reconciled all our "savings buckets" accounts - spreadsheets - through the end of the year. In the end, I don't think we will have to touch any other savings (barring Murphy or unforeseen), but on the flip side I am upset that I have no money to add to the efund. Maybe next year!

We will end rather breakeven in short-term savings, and with $0 in the medical savings. $20k-ish in more long-term savings/efund.

I think short term savings needs a $150/month boost. That is where preschool money will divert to, mid-2010.

(Drats - and I forgot to account for possible $1k car repair. Might have to touch savings, after all. Won't beat myself up over it since short-term savings covered $2k body work on the van this year. I'll be lucky to have barely touched our "true savings," otherwise.).

**I've finished most of my goals for the year, but have completely ignored all my "house goals."

Until the month of October anyway.

This weekend I:

*Touched Up Paint
*Trimmed Trees (never done before)
*starting demolition on bathroom repairs.

Last one sounds fancy, but I am mostly just removing grout, old caulk, and cleaning for re-caulking.

The nice thing is I have all the time in the world for bath projects. I have quite a few areas to work on. Our bathroom has not been used for years, and so I will take my time on it. Once it is in working order, we can start work on the other bath. The perk to having 2 full baths. (My bath will be the most tedious - the only one with grout to remove. The reason being that it was falling out all over the place. I got all the easy stuff on Friday, and the rest will be a chore. Just where the tile meets the bottom of the shower. I have read that it should be caulked - where different materials meet - so that is what I will do. I read builders are bad about this detail, but it hasn't affected our other 2 tubs. I am just going to caulk over the other 2 tubs since the grout has held up. Phew!).

The only other frustration this weekend is that the door paint, which we had never opened or used, was all "curdled." We went by the paint store today, but it was closed. Doh! Builder gave us small 1/2 gallons of touch up paint, and wrote down the paint #s. Hopefully it will be easy to replace (though I am not terribly sure that it's the right paint to begin with?).

So all I was able to touch up was the walls, but they do look like a million bucks.

In the end, might have to pick a new color for 2 doors, and completely repaint them. Worst case, anyway.

Anyway, I was starting to think I might not hit any house goals this year. No idea where this motivation has come from, but I will take it!

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Enjoy it while you can. I don't plan to make "house repair" a hobby. I have actually been a pretty terrible procrastinator on this. Like, I rather not use the shower, than fix it!

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Dh earned his keep. He did minor garage door repair, changed air filters, and promised to repair a hole in the wall (from doorknob - pesky kids loosened the door stopper). Him and the kids helped me with the trees, too. Dh did the grunt work.

Oh yeah - I figured I'd attempt to remove our small, dead tree. It seemed wobbly, so I gave it a good kick. Well, that was all it needed! Dh ended up having to saw it up into smaller pieces. It was just too dry/brittle. But I was able to get all the live tree branches trimmed. Borrowed saw came in handy!

I also drug dh along on a home repair shopping trip. Though I ended up buying most of it online (cheaper).

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One thing to add: I puzzled over our grocery bill this month, since it was quite high, for 2 months in a row. & um, family was gone for ONE WEEK? I thought this month would even out since dh had stocked up on so much before their trip in October. (To be fair - I gave a fair amount of food away because dh cooked more like for 2-3, than for one).

Anyway, I swear the kids have asked for a snack about 100 times today!!!!! I think I can see the culprits! They usually do not eat light in the least, but I think keeping them well fed will be challenging for a while. They get this way with growth spurts. I can not imagine what it will be like to have 2 teenaged boys!!! With their metabolisms? Oy vey!! Glad I have time to save up for that - may need a second income. Or a Costco membership.

Definitely more good than bad!!!!

I read a report about local property tax assessments today. I can never remember all the dates, so saved me some homework. Was a reminder that assessment date was Jan. 1. Since we had a $325k appraisal at the time, other homes sold in that price range and that is exactly what our house assessment was, well, I didn't expect anything (assessment decrease) this year.

I was preparing to research home values on Jan. 1, 2010 and have my evidence in case the county didn't agree, next year. Hard to tell since nothing has sold less than $300k yet. BUT, some lower priced stuff sitting, etc. Who knows - was going to do my homework on Jan. 1, in case we could lower our taxes for NEXT year.

Anyway, property taxes in California - they can't go up more than 2% per year (or else no one could afford the taxes). Anyway, but they will go down to real value in a decline. Though in an uptick, they jump back to old levels. Homes are re-assessed upon sale.

Um, not sure state has ever had to reassess so many home (in decline). Definitely new territory - have read a lot of articles how this is a first. Current property tax laws not THAT old. From the 80s?

Anyway....

This is where it pays to live in a fancy neighborhood!

I almost fell over when I opened the bill (which did arrive today) and saw a $40k decrease in assessed value. Wahoo!!!!!

Makes sense when you consider the zip code as a whole. Our neighborhood can usually fetch much higher prices though.

So anyway, no complaints here!!!!!!

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What's the bad news? I use assessed value (home) to measure house value for net worth. Ugh. My net worth is going to take a large slide backward this year.

I am fine with that because I will just adjust it 12/31. & well, I think the assessed value is in line of what our house value is probably worth at this point. So I will go with it.

I know there is lots of debate if homes/cars should be valued for net worth. For me, I can't imagine not doing it. We have put almost $100k into our house, almost HALF our net worth. Of course I count that as an asset. For most of the time we have been homeowners, homes were more liquid than cars. Sell a property in a day with 100 offers? Easy. Obviously not the last few years. But it is the same with cars. Since we pay cash for them, it's not like our cash goes in a black hole. If I spent $15k on a car, it's a $15k asset, that does depreciate rapidly. But I do include these things to get a realistic net worth picture. (I do depreciate cars very rapidly, and I like the assessed value method for home, since the price does not rise rapidly that way).

This year will be a good year since we did good on net worth. I expect to break even with the backward house value slide. I can live with that.

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Anyway, $40k lower house value translates into a $400 tax break that I did not expect.

At the same time, my 4-year-old Dell laptop has been giving me a lot of grief. I have been too cheap to replace it, but it's been terribly slow this year, and the battery has been useless for about a year. (Our understanding all along was that it had a 3-year-life. Yup, that would sum it up).

I just happened to be having a gripe fest since my laptop would not do what I wanted it to do. I joked to dh we should get a new one with our tax savings.

Well, we are thinking of replacing it with a Netbook. There's some pretty decent ones in the $400 range. So we may go out and buy one this month.

I'll take a Netbook over a bigger property tax bill, any day.

Yup, jumping on the netbook bandwagon. I just need something for internet and Quicken. Minor photo editing. Dh thinks I can do it all on a cute little Netbook. Woohoo!

Props to Intuit. I only needed to remember my credit card #, name and phone # to access my Quicken download. Phew - I of course forgot my login! So that obstacle is cleared.

Leaning towards a HP Netbook. Dh has some homework ahead of him.

It's time for the annual update. We have officially hit 7 years on one income. Woohoo!

This was my update last year. Long but historical:

http://monkeymama.savingadvice.com/2008/09/06/six-years-and-...

Every year this anniversary carries less bravado. IT's less novelty and more "way of life," any more.

Plus, in less than a year, both kids will be in school for 6 hours a day. Working a job without never seeing each other and/or paying an arm and a leg for daycare will no longer be the obstacles to more income. IT will be like crossing the finish line!!!

The future brings many unknowns, so I am very glad that this is the case. I will feel much financial relief when dh is readily employable again.

I was discussing the FREE health insurance we just barely don't qualify for, for the kids, to dh. I mentioned how 2 $35k incomes hardly seemed a fair comparison to one $70k income and a choice for a spouse not to work. The two and black and white almost in comparison. Dh said, "Why? What difference does it make?" I said, "Um, because you could double our income very quicly, by returning to the workforce?" Duh!

Of course, I said many times, even in good times, dh has not been considered employable material. He applied for a slew of minimum wage jobs in 2005 and wasn't even considered for most. Which has been one big black cloud over what we thought was a very temporary situation. I can't imagine how the job market would treat him today!!!

SO I Wanted to post about 2 things. Where we were and where we are. & what dh's future plans are as we face both kids in school VERY soon. (I can't believe how fast this school year is flying by. I often catch myself saying, "Can you believe LM will be a Kindergartener, like tomorrow???" BEcause that is how it feels all of a sudden).

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I'll try to keep this part short. We are just trying to get back to our savings level at age 25, sad to say!!!

I took home $3400 per month. Dh took home $2500/month and we saved it all. That was 2002, when I first became pregnant.

We had about $30k cash in the bank.

I always put 10% of my pay to retirement. We usually put about 5k, or 10% of dh's pay, to IRAs.

In the grand scheme of things we were probably saving $20k per year, cash. Most of that ended up as a down payment on our current home. The rest to our modest cars, paid for with cash.

Since having kids we have moved backward, and are just trying to get back to this starting point.

This year was very fruitful. We refied our mortgage and now save $200/month on our mortgage payments. I VERY sad that our preschool closed, and that LM is stuck with only about 4 hours a week in schooling this year, but it has saved us TONS this year. We've kind of sped up the benefits I expected to see next year when done with preschool, etc. But it has made the year more trying in non-financial ways.

Today I take home $5500 per month. (Still short $400/month from our 2-income days).

Of course, this year dh had a banner year and will probably take home $1200 from ebay. Which is REALLY nice, I must say!

I save 10% of my pay to retirement.

This year, for the first time ever, we are funding our IRAs with current income. I have funded some with savings and gifts in recent years. This year we will hit $5k, from income, which is amazing.

$22k cash in the bank. GEtting there. Still in "catch up" mode.

We're saving about $5k per year to cash, which is ample going forward. We need to speed this up a bit until we "catch up." Then the excess will probably go to max out a second ROTH. It will be 2010 or 2011 when we are able to do so again, regularly, from income. Well, we have never put more than $5k to our IRAs, so that will be a first, and an improvement. & this year, already, we have exceeded our old retirement savings pace. Which is a nice milestone!

With the house in a very manageable state, retirement is really our priority going forward.

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Dh's plans? The world is his oyster, and as always, he struggles with direction.

However, he is bummed he can not really volunteer in the school this year since he has LM almost every minute of every day.

Next year he would like to volunteer a lot more at the school (which could possibly lead to low paying/flexible job opportunities). Though he'd do it regardless.

He has a minor in TV/film, which is really his "dream." He still feels he should probably update his education and that he should shoot for something higher paying. I don't particularly agree. I wish he would just follow his dream already!!!!

BUT, with the economy and all, and Kinder being such a transition year, he has talked about volunteering a lot more at the public TV station during the week. For now, he gives MANY weekends, and has many contacts there. But he wants to be very high profile and hope that it will help him get a job there eventually, when he is ready for full-time work.

I think he would LOVE working there, and it's very convenient. & I think a busy volunteer schedule would be good use of his newfound free time. Though if he told me he wanted a year to just do nothing, I wouldn't blame him. He has worked HARD the last 8 years.

In the meantime, one reason I Want to go heavy in cash is in case he returns to University. I don't think he will consider that until LM is settled in 1st grade. But better save those pennies just in case. We have a lot of public colleges in the area, so there will be many "affordable" oppurtunities. As the first time around, we have no desire to borrow for college. With any luck, we won't have to. Phew! IT's the kind of thing we are not sure we really want to invest in until the economy turns around. But dh needs any leg up he can.

I would hope that a return to school and/or a slew or volunteer work for his resume, will improve his odds of future employment. If the gap in his resume turned off minimum wage employers, I am not sure it will fare him well in his industries of choice.

Another idea would be do some temp work, etc. Which he will have TIME for. That would be for money only though. Really, a last resort. Though I guess worthwhile for skills and a foot in the door.

All things considered, we are easily looking at 2-3 more years on one income. But this year is nice as more options loom.

Net worth is up $27k, today.

Since my annual goal is $25k-$30k, that isn't half bad.

I am still at the whim of Murphy and the market for another 3 months though. No need to get too excited.

My cash is up $6k for the year.
Kids' Investments up $3k (2k market; 1k contributions).
Retirement is up $16k (about $11k contributions and $5k market).
Paid $2500 off mortgage - regular payments only.

That about sums it up!

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ROTHS

This year is the first year, probably ever, that we are contributing monthly, in order to max out a ROTH. My old method was to lump sum when I did my tax return (when they were deductible IRAs anyway. We just put away whatever made the most sense. & we have done less of that even, since having kids).

I am thinking ahead as January fast approaches. I can automatically contribute to my own ROTH in Jan, Feb, Mar, April and apply it to the prior year. I am trying to decide if we should plump as much as we can into 2009. (We still have a second, spousal ROTH, to consider). In past years I have done this, with dh's earning prospects so up in the air, etc. My goal was just to put as much as possible into the ROTHs, because who knows.

As we get on better footing, I am thinking of just letting 2009 go and focusing on 2010. Thing is, I think we can max out $10k for 2010. Certainly if we have 16 months to do it!

I had a thought about the flip side. The flip side is all we need is a $5k unexpected windfall, and we could regret not attempting to max 2009 first.

The thing is I also think the odds of $5k falling out of the sky, are pretty slim. Our parents are both facing their own financial setbacks, and even my employer seems to be facing financial pressures (a stark contrast to the abundance of the past decade. Not that I am worried about my job, but not expecting a huge raise or anything).

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I almost forgot to mention. I got a notice about some new push to insure children in our region (health, dental, etc). Sometimes the poverty guidelines for our area shock us. I know many would read my blog and not be impressed with our spending. But in the region, I knew very few families who could live as well as us on $50k, a few years back. (Though admittedly, we relied on savings a lot during that time).

In lower income times I look at the aid we were eligible for and often wondered about it. If we retired early, we'd be eligible for all sorts of aid. It always bothered me that those things tend to be based on income more than assets. It probably has come up a lot because we have settle for lesser income with small kids, and likely will in the long run as our assets grow enough to supplement our income, etc.

So anyway, I clearly do not expect to get free health insurance for my kids, but I look it up anyway. What is the income cutoff? about $70k for a family of 4.

Seriously???? My income is like $75k. I easily pay $5k a year for health insurance for the kids. It would be the same to ask for a pay reduction and to take the free health insurance.

Gah. Talk about tempting.

I know for the long run, I am much better off pressing on, and paying our own insurance. I won't sweat it. I mostly share because it amazes me that on my income we are so close to eligible for any kind of aid. It's absurd. The area is expensive and my income is below the household median, so that's how it goes.

I guess with time I realize these things are rather flawed. A family with 2 incomes who make $70k can be in a pretty precarious financial spot in an "expensive" area like this. But, one family living on one $70k income by choice. Should that same family be eligible for aid? Hmmmmmmm. The two aren't really the same, at all.

Anyway, I told dh that was good to know, if we ever faced less income or job loss, etc. It's good to know there are options, because health insurance is darn expensive! It's certainly been the biggest pain in our side, financially, the last few years.

I would probably be more outraged if we qualified for help. So I am rather glad we don't. Makes you wonder who is paying for this. We are, somehow. With our insane health insurance premiums, for one.

I mentioned earlier, that I was short a lot, in checking, for the month of September. Excess spending just kind of snowballed from my dad being in the hospital and everything, in the spring and summer.

I also said that I am making "pay myself first" a priority, and how it all seems to work out in the end. Not exactly worried about it!

Dh had a good sales run this month. However, a $50 items did not sell on ebay yesterday. He had a high minimum because it's the type of thing that can sell for too low, once in a while. I think he will easily sell it before the end of the month.

But assuming that doesn't sell, I currently face -$200 in the checking. Which is not bad. It was -$500.

Dh's family is big on cash anniversary gifts, so I won't be surprised if they give us $100.

The -$100, that will probably remain, will probably transferred from savings, as "emergency expenses."

Phew!

I will be so glad it wasn't the original -$500 or so I saw at the beginning of the month.

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Credit card bill for this month is rather benign. We are up to $1200, and I think all I have is $60 due for karate. That leaves about $250 for gas and groceries. We budget for about $1500 on the card, monthly. We pay EVERYTHING on the card.

We will take $500 out of savings for our beach vacation. I will probably transfer it over Monday, so that there is enough in checking for all the 9/30 payments (mortgage and health insurance). I'll probably be $100 short otherwise, as mentioned. Speeding up the transfer makes it easy. Actually, gives me another month to come up with $100. Now that I think about it, I may not need to transfer money from savings at all. Which is how it all snowballed in the first place).

I don't want to jinx it, but September has been rather low key. Phew! Even with our rather impromptu beach weekend, our expenses will probably be under $4k for the month.

I am not sure what October will bring. The rest of the fam is going to Florida (on MIL's dime). BUT I am sure there will be some expenses there. But, with them being gone, it will be pretty low spend here for a week. October can go either way. We already have halloween covered though, so that is good.

In November, we should probably get my car taken care of. It still has a potential $1k repair. November is just kind of slow at work and probably a good time to get it taken care of. I just needed some time after all the car repairs of August!

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I finally give up. One of the few things I spent any money on with my kids was their nursery. In the grand scheme of things it wasn't a lot, but I did spend in the realm of $200-$300 for the crib bedding and decor. I have been trying to sell it for a year at $40, $30, $20, $10. At $10-$30 I had PLENTY of interest, but just interest from a LOT of really flaky people.

So I give up. My posting expired, and to the donation pile it goes. Some charity comes by every other week or so, so I will set it out next time I get a pickup notice.

I guess not very many people want a sophisticated leopard print theme for their nursery. I LOVED it, and it was worth every penny. I had just hoped to get a little something for it. *sigh* Hardly spent so much on anything else *baby.* But most everything else was extremely re-saleable.

De-cluttering of the last year is complete! Yay!!!!! Now it is time to hit the closet, as I also mentioned. Time to go for another round! Hopefully I will have the motivation and energy while the family is gone. I am taking 2 days off work to enjoy the peace and quiet. Here's to being productive. (Fall gets me in the de-clutter mood, not sure what it is!) I assume true fall weather will arrive in October, and will help. Though even in this heat I have been eager to de-clutter.

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That's the long and the short of it. Boring can be good.

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We treated out last night since BM lost his tooth. Main reason being we have been encouraging him to wiggle out his "stuck" baby tooth. We had been promising frozen yogurt since his new permanent tooth already came through - many weeks ago. Spent $30 on fast food and frozen yogurt. Was a nice treat!

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I got a cheap tickets promotional e-mail, and perused airfare prices. Nothing tempting, which is good. I perused Vegas and Denver airfares, etc. But I looked at Kaui airfare for next summer, and almost fell over. Looked at spring and fall too. I think if I ever see $500 tickets to Kuai again, I will bite. They don't even sell tickets for September 2010 yet, though. But I'd go in May if I saw a good price. I can usually find cheaper tickets to Oahu. But I think Kaui adds a fair amount of cost. I barely saw anything under $800 per ticket. !! Though, yes, I saw $500 per person tickets, earlier in the year.

I will start keeping an eye on things and set up a price alert - maybe for May or September airfare. I didn't really want to decide anything until next summer. But it doesn't hurt to start pricing things. I think if I saw a good price I would nab it though. I got the Hawaii itch!

P.S. I found $500 RT tickets for May. But I will hold off. It was flying out of Oakland. Which works for me, to save $600!!! I think this is why we never spend much on airfare. We have 4 major airports at our disposal. Of the 4, one will usually have some pretty discounted airfare. You can never tell which one. Last time we went to HAwaii, starting in Sacramento was pretty cheap. As of today, that would be the most expensive starting point. Will see!

It was a nice surprise, but our net worth actually went up in August. Imagine that!

It went up from $219k to $219.5k. Even though we had over 2k in car repairs - paid in cash.

Year-to-date we are up $24.5k. Which only puts me $500 from my annual goal. (Goal to increase our net worth by $25k-$30k, at the least).

It doesn't mean much, we are still very at the whim of the market. The market is what saved our bacon is a spendy month.

Life resumes to "normal," I guess.

Took the car in for the AC yesterday, and assumed it may take a while. But, we already got it back!

After 10-days of being a "1 car family," we are very grateful to have 2 vehicles again.

Not sure if this is good or bad, but they couldn't find anything wrong with the AC. (Heck, it was working fine when we took it in). They drained the freon (had some moisture in it) and refilled it. It seems to be working much better.

Total cost? $100. PHEW!!!!! (I was worried this would be another $1k bill).

Of course, we will see if this fix "holds." But with summer nearing its end, if it doesn't "hold", not sure I care at this point. Either this is it, or we can survive until next spring.

Phew!

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I also was proud of myself. My parents found it important to teach me basic car maintenance. But, I don't remember getting much education on tires. I can change one, but that's about it.

So, historically, relative, friend, mechanic, says "OMG - you NEED new tires." & so we replace them.

Deciding maybe we need a better method, I have been trying to keep better track of the age of our tires.

Dh's tires are at about 50k miles so I was going to ask the mechanic's opinion. BUT, before we went over, I checked the treads myself. He had one bald tire (thing is OLD - might have been a used tire we bought a few years back - just kind of overlooked. Lord knows how old the thing is). Another tire was iffy. But the back 2 tires seemed just fine, which was actually rather surprising. But I figure this is my guess - I have NO IDEA what I am doing.

We had decided to just get the tires taken care of while we were carless all day.

So, mechanic agreed. Replaced 2 front tires and had a re-alignment. I am not sure how much life is left in the back tires. It's kind of nice we didn't have to replace 4 tires. BUT now it's just more work to keep track of it all. But I was proud of my own diagnostic.

I should probably just check the treads at the end of every summer. Now that I am getting the hang of it.

So, yes, about $250 spent on tires and alignment.

Obviously, a very expected part of auto maintenance!

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As we know all of our auto expenses, we can come up with a game plan.

I was rather surprised we only spent $500, to date, on car maintenance. We took the van in THREE TIMES already, but I guess it was all small stuff.

$500 + $350 AC repair/Tires = $850.

We budget about $1500 per year for regular vehicle repairs and maintenance.

For now, I think I am going to pull $1k from short-term savings, towards the van's door replacement. It puts us over $1500 YTD for auto expenses, but I have some wiggle room there.

I am going to pull the other $1200 from the medical fund.

The year is not over yet. BUT, ideally we will have enough in there to cover the Dodge's computer problems (estimates at $1k) AND ideally we won't need it for medical expenses.

Doing all this, we still have a chance to make it to $10k in our mid-term savings fund this year. I haven't touched a dime of the money I saved up this year (Current balance? $9000!).

So, worst case, we can always dip into that. I am just trying my darnedest not to!

I was paying all the bills (for August) and all that jazz. Read some posts/blogs, and thought maybe I should update my net worth.

The good news? Net worth is about $220k. I think this is most definitely, officially, the highest it has ever been. (Referring to backwards slide of 2008!)

This also puts is up about $24k for the year, and pretty much at our annual goal. Still at the whim of the market, and murphy, and everything else. Will see if we can hold on until year-end.

Oh yes, MURPHY!

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August has not started out well. I am too depressed to post about my stupid, avoidable, big expense, at right this moment. But I will soon enough - like this weekend.

Of course, I remembered we had the same kind of setback last year in July - with all of BM's presumably avoidable cavities. Yeah!

To top it off, I was updating our excel savings sheets and everything and was feeling a little better (looking at our mid-term savings - cash to be used for stupid expense - balance was higher than I remembered). But was reminded looking at all that, that August was our Murphy month last year too. July was cavities to the tune of $2k-$3k, but August was quite a few major expenses as well.

So what is it with summer? Ugh!

I know a lot of my real life friends think we are a little crazy, kind of no-fun saving fuddy duddies who just want to be rich or something. Honestly, my goal has never been to be rich; just to be comfortable. For that we seem to succeed. If not for the ambitious saving goals we could easily drown in all the "unexpected" in life. But instead, we shrug it off and move on. THAT is financial freedom.

We will shrug off our August setback and move on. But I will gripe a bit along the way.

So I am allowing myself one last happy, "Yay for 2009" post, and then I will whine about upcoming expenses on a later post... *sigh*

I'm still around, it's just been a little hectic.

The weather has been much more bearable around here. We came home Sunday reeking of garlic - think it's worn off by now.

Definitely had a spendy month, but was less expensive than I had expected. It's hard to care anyway, our savings is doing so well lately (knock on wood).

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Thinking towards long-term goals lately. I am starting to think we will hit all our "long-term" goals in 2010. Go figure! It depends, but exciting all the same.

I think we will have $30k cash in the bank by next spring. IT's kind of an arbitrary number. It's well over 6 months of "minimal" spending, so certainly an ample emergency fund. The arbitrariness is that we haven't had that much cash since we had our first child. So, um, it FEELS good.

We will be in that range next spring when LM is done with preschool. We have had a few different ideas what to do with that preschool money - $150/month. BUT, we are also saving $250/month for our medical deductible fund, and knock on wood, really haven't used it. As of next summer I would be happy to divert $250+ $150 per month, which is enough to max out our second ROTH (by the following April - meaning we can max both for 2010). I know max may increase, but just one thing at a time here. Putting away $10k per year is more than sufficient! THat's like 12% of my income, on top of the 10% we already contribute to retirement. IT's just too good a tax vehicle to pass up though.

Basically, as long as we are healthy we can max out the second ROTH.

With that, we can still continue to add about $8k per year to cash (which may cover the medical part anyway). I would like to contribute at that level until we have $40k cash. Of course, once we get there, might want to go one more year to $50k. Will see.

Which leads us to our next decision. As our cash balance grows, what do we want to do with the excess?

On one-income, I vote mortgage payoff. I am quite sure long-term investing would easily trump the effective 3.5% interest rate on our mortgage (after tax savings, etc.). BUT, for now life is simple. All our savings is in tax-deferred accounts and cash accounts. Life is very simple. To add taxable investments to the equation just makes me cringe when I think of all the work involved of managing it, and managing the taxes, etc.

Quite simply, paying off the mortgage is easy. IT keeps our taxes very simple, etc. So that is where I lean. Dh probably wants to save more for college. So we have much to discuss there.

If he returns to work it will be a very different ballgame. Our tax bracket will increase drastically. We will probably fund 401ks, HSAs, and 529s instead, to lower our tax exposure. For now, the HSAs and 529s give us no tax benefit, are not very flexible, and cost more than other savings vehicles. For now, I am not offered a 401k. But all these vehicles will save us a lot of taxes if our income increases.

If dh wanted to match his parent's contributions at $2k per year to college - for the kids - I think it's about the most I would really want to set aside. I'd rather start chipping away at the mortgage with any extra cash.

Which means, by end of 2010 we will probably have an ample 6 months' emergency fund, will be maxing our ROTHs (for a total 22% gross to retirement), and saving 10% income to cash. May be funding college. Any windfall could go to the mortgage.

Why so much cash? I'd like $15k for catastrophic emergency (& growing), $20k to replace both cars, and about $10k for home maintenance. Those are all the minimums I Feel we need - though they can overlap a bit. If we use the emergency fund I would gladly buy an old clunker instead, etc. That adds up to about $45k, eh? We tend to hoard cash, but just haven't had the income to do so in a while. I think cash is under-rated for the most part. Has kept our life simple. Will probably keep hoarding cash until we have a years' worth take-home pay in the bank. I have no issue with this if we are maxing out our retirement vehicles. The thing about cash is we can always change our mind down the road (invest it, put a chunk to mortgage, spend it, whatever). & as long as dh is not working, and not terribly employable, I think cash is extra important. IT would be kind of moot if he were working - I wouldn't see the point of hoarding so much then. Interest rates suck now, and have most of our adulthood, but I have managed to earn 5-6% many years on our cash. That time will come again. (I have a 5.5% CD at current - it expires later this year).

All this is probably way optimistic, but the direction we are currently heading in.

The possibility of meeting all of our aggressive savings goals on one income, is very exciting. My last long-term goal of current is to pay off the mortgage by age 45. In like 12 years? I assume dh will return to work to help meet this goal. It still feels like a bit of a pipe dream otherwise. But, who knows.

Really funny, but I ran into some old files on my computer.

I have said many times I am not much of a "budgeter." Not a strict one anyway. But, whenever life changes I tend to run up a budget to see where we are at and what our course of action should be. Thus, I am not terribly surprised that I found an old budget from 1999 (when I graduated college) and one from 2003 (when my first child was born).

In fact, I MUST have a budget from when dh and I first combined our finances - I will have to hunt it down (I am curious now). That's certainly the only time I remember making one, pre-2006.

Anyway, I only started using Quicken in 2006, and so I find anything prior to that is more of a guess - or reliance on scattered paper records, etc. SO, it was really interesting finding some old budgets. I decided to put them side by side (& will be interesting to add on in future years). I think it's interesting some of our expenses (like healthcare) have exploded, while others have stayed the same for a decade (landline?).





These all happen to be one-income years (1999, 2003, 2009). Dh was working in 1999, but we weren't living together or combining finances, etc. We got married and all that in 2000.

INCOME:

Obviously, my income has done quite well. Interestingly, my taxes have not gone up much over the years. Lots of tax breaks with the kids and the whole one-income thing. The mortgage helps too. I have never withheld more tax than I needed to!

EXPENSES:

Medical: Obviously, my medical insurance premiums look horrific. They are, but I am covering 4 people now, as opposed to one in 1999.

Dental/Disability: I now pay those privately, and save for those through "short-term savings." Dental cost way more, with 4 of us. Disability - I probably pay double that, these days.

Rent: This one is interesting. I rented a room in a nice home in a decent neighborhood, for about 5 years, through college. This is one expense I did not see increasing just because I graduated college. If I was single, would have stayed there a few more years, easily. Anyway, I have no doubt said, many times, that owning is cheaper than renting where I come from. Looking at this sheet, you wonder, "how?" Um, I had a room for one person. 2 wouldn't have been allowed. More importantly, it was a sublease from a renter who had been there MANY years. Our rent was rarely raised. The entire 3-bedroom house cost about $1600/month to rent and was a complete steal. (I had the most modest room and paid slightly less than 1/3. There was nothing modest about this room BTW - LOL - it was huge). Basically, I don't think it would have been possible for us to rent an apartment for as much - certainly not one with room for kids. So, my rent was cheap - but it wasn't very feasible to find cheap rent once we married - and we were always thinking ahead to when we had kids. BAsically, at marriage we were done renting with other people to keep costs down.

Mortgage: We have refied that down over the years. 8%+ down to 4.875%.

HOA: I was surprised to see our HOA fees used to be higher. I had completely forgotten. Dh reminded me that we used to pay more because few houses had been built when we moved in - they lowered it as people moved in, etc.

(The HOA on our old condo has gone from $250 to $400, monthly, in just a few years. So I daresay we have been lucky here).

Auto gas - I find my 2003 budget figure interesting. I used to drive home for lunch every single day. Gas was considerably cheaper in both 1999 and 2003. Am I driving more now? Not in the least!! Though my current budget figure is more forward thinking/inflation including. I rarely spend $300 on gas any given month. But, no doubt the expense has gone up.

Food - we have added a few mouths to feed.

Clothes - was always my big splurge

Gym - I used to get a good deal on 24 hour Fitness, through my work. These days we pay about the same for dh and I to go to the discount/no-frills gym. I didn't feel we could afford a gym when we had BM, but I guess I would have considered it if I knew there were such cheap options.

Landline - Back to old $25 now that dh let me drop call waiting. (I always had my own landline - for internet).

Cell - I had a cell (& internet) in 1999, but my parents paid for it. My dad had aol from way back, and I had an account many years. I just dialed up, of course. I don't remember when or why they got me a cell phone. I am sure I got my own plan sometime not too long after graduating college.

We've been able to lower our costs since, by adding our parents to our family plan, and sharing the costs.

Utilities - they have gone way up. No biggie renting with the roommates - they were never home. I was home even less - so our utilities were low. Plus we split them. Water was very cheap in San Jose - I was shocked at our water bills when we moved up here. !!

Cable - the first luxury we added when we married. I am surprised cost has stagnated. Seems like we have been paying more lately. But I think dh had HBO when BM was born. That probably explains it.

Gardener - a luxury we added in 2005 - LOVE it.

Preschool - a luxury we added in 2006, and which will entirely disappear in just one year. That will be divine.

Expenses Reimbursed - At my first job out of college, I made this budget before I got heavily into it. Truth is I spent a LOT more on driving and on eating out (part of the job) but was reimbursed handsomely for most of it. So I had a "reimbursed" category. I did spend a lot more on gas and food that first year or 2, but since it was reimbursed, guess it doesn't really matter. I was able to stretch my paycheck a lot further with all the extra money.

Car - I bought a $6k car around the time I graduated college, and paid it off in a few months. (My 20-year-old car had the decency to die 2-3 months out of college - phew). So it was one expense I kept very low. The auto reimbursements were quite high compared to my actual auto costs. Helped to bulk up my savings.

Savings - I was really surprised I seemed to take care in calculating semi-annual expenses in my 1999 budget. Shouldn't be surprised - I lived on a shoestring so long - no doubt I needed that planning. That pretty much sums up most of my college living expenses, etc., when I made far less money.

Obviously, my savings in 1999 was far simpler. (I was also surprised I had a 401k category - I wasn't able to contribute until mid-2000. Planning ahead I guess).

I have since simplified, since we have so many items to save for (property taxes, insurance, vacation, dental checkups, car repairs, and many other irregular expenses). I just put $1k per month away, for all that now. This is an area where a lot of our expenses have gone up, post-kids. We have lots more insurance, etc., than we did in 1999 or 2003.

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The whole point of sharing is to illustrate how much easier it was to live below my means immediately post-college, than it has been since having children, etc. To the YOUNG people.

I was NOT deprived in 1999 - I had tons more savings and disposable income than I do today.

I traveled a fair amount back then. It was just so cheap alone (You know, stay with friends, split hotel room) that it hardly warranted a mention in the budget. The thing I Struggle with these days is how so many things seem to cost times 4 (with 4 of us).

People all the time assume living so tightly in my youth sucked. The thing is, it paid off so quickly. The truth is I just wasn't much into material things. My life was very rich with people and experiences. The $6k car I bought was an immaculate, cute, convertible. Those were some fun times. "Deprived" is not the word I think of when I think back to my early 20s.

(It was easier back then because everyone else was young and broke too - not a lot of financial pressure! PArticularly with the exorbinant rents - none of my friends had much disposable income).

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Going forward? We've been trying to limit our regular monthly expenditures to the realm of $4000/month (indefinitely). We no doubt increased our expenses over the years, with mortgage and kids, but we don't really have any new "luxury" expenses on the horizon. Happy with where we are at. We are also pleased with our insurance coverages, etc., for the long haul. So basically, outside rising costs /inflation for our current expenses, we don't expect to add much to the expense column. (This holds true even if dh lands a high paying job - we'd just save it and pay off the mortgage. We'd be willing to help more with college. Boring stuff like that).

It helps that our biggest expense, the mortgage, is not going up. On the contrary, it has gone down with time, literally (refis) and inflation-wise.

It will be interesting to check back in 6 years and to see where we are at.

I've apparently worked my budget down to an "exact science."

I hesitate to use the word "budget" because I am not really into the whole tradiitonal budget thing. I would drive myself nuts accounting for all those overages/underages every month. & you might be surprised, but I do not care for a strict budget. I like that if I spent no money on gas or food, that I can go splurge on something else. I do not carry things over month to month. I guess I like flexibility and ease, over rigidity and complication.

So anyway, we had a good month and for whatever reason it popped into my mind that we really could save another $50/month. I just felt it would be very reasonable.

I opened my "budget" spreadsheet on a whim and looked it over.

Lo and behold - when LM started his new preschool I guess I rounded way up and allocated $200/month to that. Thing is, most months it's barely $150.

So subconsciously I am thinking I have $50 per month to spare, and in reality - I really do.

My goal for maxing out first ROTH was to put away $350/month and "wing it" on the rest - scrounge it up somehow.

This officially puts me to $5k per year, just based on $400 monthly contributions (well, the additional $200 will be easy to scrounge).

So, I am very pleased.

I would like to build up more cash savings, but I also think it's important to contribute heavily to retirement in this market. So I am kind of doing $400/month to each, for now. I certainly am tempted to put my spare $50 to cash, but I know we have had a good year and with a little patience will probably reach my cash goals within the year. So I will stay the course!

I whipped this up sometime when we were in preschool limbo and we had a few hundred dollars to spare every month. It's worked out well:



As a recap:

short-term "savings" are to be spent within the year (vacation, car repairs, property taxes, insurance, dental, swim lessoms, misc., etc. - everything that is not a regular monthly expense).

mid-term savings - larger expenses expected in more than one year - car replacement and house maintenance, orthodontia, etc. Car repairs for more than I "budgeted" would fall here too, as well as unexpected large bills, etc.

medical savings - we switched to a HDHP and save $250/month on premiums. We save the difference for deductibles and future rate increases.

I've kind of been honing this system for a while, and I am very pleased with it. Once honed, it's been a rather simple and effective savings system. Though we are saving much less than when we both worked, there is much more thought to the big picture. I think the thought makes up for the decrease in savings, in many regards.

Anyway, yes, I already increased my automatic ROTH contributions - starting with July!

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ETA: I do put everything possible on the credit card (for rewards, etc.). It is paid monthly, of course!

Everything not on the card can not be paid with credit cards - bah.

BUT I also worked on this spreadsheet to get an idea what my monthly credit card bills should be - since we recently switched some utilities over to the card, etc. IT can get kind of confusing though since I can put a lot of short-term expenses on the card. It usually runs closer to $2k, BUT I can simply subtract all the short-term items (they tend to be larger/obvious items) and just make sure the rest never tops $1500.

Net Worth is up $17k for the year, give or take maybe $1k, depending on stock performance today.

Cash is up about $7k. & is my main concern right now!

Retirement is up $8k (about $6k contributions and $2k gains).

Paid almost $2k off mortgage, this year.

That about sums it up.

Interestingly, our cash and investments passed the $100k mark. Not sure if they have before. That's a nice milestone! Depends on the day, but as of this moment, we are at about $100,500!

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Swim lessons - OMG. I bought goggles for the kids over the weekend. Apparently, LM Was not scared to swim - only scared to get water in his eyes. ????? Dh said he jumped in the pool and swam like a fish, during his lesson. (What a relief. When I was a kid I had to be pushed in and I was worried he would be the same way).

He told me his googles were "AWE-SOME!"

So, 4 lessons later, and LM can SWIM! He did so amazingly well. He has a second week of lessons in mid-July and I just asked if she had any more time in August. Hoping I can get him a 3rd week.

In fact, I am so amazed I am going to buy the kids' teacher a nice treat or pay her a little extra. She DESERVES it! ($50 for a week of private lessons was a steal!)

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Piano lessons have took a turn for the better. If I remember today anyway - to give lesson on such a busy day. BUT BM is LOVING it. I simply asked him to practice 5 minutes a day, but he has declared he would like to practice 1/2 hour - twice a day. Hopefully I don't kill his enthusiasm. Which is a big reason usually why parent don't teach their kids. I try to butt out of his practicing too. Practicing is for him and his parent - he doesn't need his teacher there too. Dh may learn something...

Not much to report, but I paid all the July bills (er, set them to pay on due dates) and updated my savings totals, to the left.

This year we have saved just about $7950. So, only $50 shy of my original $8k savings goal. Woohoo!

My goal has since been revised to $10k, but saving $400/month + interest, will get us there easily, by December.

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Our cash total is hovering around $22k-$23k, currently.

My goal is $30k cash (solid 6 months of income) before we will consider putting more into our IRAs. One maxed IRA is fine, for now. I expect by 2011 we will be maxing out both our IRAs. (Or likely, be able to max out 2010 during 2011).

So, definitely making some nice progress.

No plans to prepay a dime to the mortgage, until our ROTHs are maxed. Since our retirement is doing well, as is, I am excited to move on to mortgage pre-payments, etc. BUT, can't pass up the awesome tax benefits of the ROTH. I guess my big pie in the sky goal, for now, is getting to mortgage prepayments once again. Something we haven't particularly achieved on one income (of course, neither have we achieved maxing out IRAs, etc.). I guess it's ALL exciting.

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I guess, as a review, our goals are to:

1)Get cash savings back up to snuff
2)Max out ROTHs
3)Resume mortgage prepayments

In that order, yes.

More income means business to take care of.

I posted yesterday I received a nice bonus. The amount was somewhat unexpected.

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I decided to run my tax numbers again for the year. I was aiming for rather breakeven before the extra income kicked in. I plugged my numbers in our tax planning software and it wasn't good. Not only would we owe over $1k, but I was in AMT! HUH? I knew dh returning to work could push us into AMT, but not a flipping $5k raise. I finally decided that the AMT calcs were wrong - the software had not been updated for more recent tax law changes. I also did not see the Making work pay credit. So I took out the AMT and deducted $800 for the credit. This left us with a $500 refund from the Feds and $500 due to the state, estimated. Good enough for me. I am punishing the state, so that works (hell if I will take a refund from them - they won't pay it anyway).

I was rather pleased with this scenario. I assumed we had no medical expenses this year (beyond insurance/regular checkups) and that we gave nothing to charity, etc., etc. Odds are we will have more deductions. Dh's (ebay) income should be offset by the dependent care credit. So overall, I am happy with this. & we have a little extra cash in the bank if I screwed up my calculations.

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Lest you think I am all work and no play (harldy!), we actually went out on a nice dinner April 15th to celebrate the end of "tax" season and told my parents we would take them out to lunch Sunday. But we can fit this all out of our budget - why we just saved the whole bonus. All this was done and put into motion before the actual bonus arrived.

Reminds me, there is an excellent, albeit a little pricey, Indian cafe in our neighborhood. There is never many people there and it is rather small. We went there Wednesday and it was PACKED. I think that is a wonderful sign. We took dh's friends out to eat on a weeknight when they were here and our other favorite place was just jam packed. IT always is on weekends but it gets so quiet around here during the week any more. I don't know if it's a fluke or what. The food is excellent so I am glad they are doing well.

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It looked like our net worth was up considerably; higher than it has ever been (barely). So I looked at that today. Net worth today was $213k. We hit $212k late in mid 2008. So it's nice to move forward. But barely. Still pretty much at the whim of the stock market. But I do feel like we can make forward progress this year.

Our cash/investment assets are not quite at six figures yet. The rest of our equity is in our house - mostly what we paid off as the value still holds rather steady slightly above what we paid.

Most of that is rather up in the air. (Stock market and home values).

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CASH

We have always saved up a lot of cash. We wanted to put at least 20% down on our home. We wanted to have plenty of cash to supplement my income when dh stopped working, etc. & moving forward we would like to continue to pay cash for everything and to increase our "emergency" cash savings. I think 3 months' expenses suffice for our situation today, but I think this money should always be growing (interest, if nothing else).

Anyway, in the past decade we have mostly been ridiculed as far too conservative (and not investing every spare dime in the stock market). So it's been kind of interesting to read a multitude of articles lately about how cash is IN. Suze no longer thinks you can afford anything until you have 8 months expenses in the bank, etc. Basically, our thinking all along is becoming rather in vogue. & yes, I think it's little more than a trend.

I mentioned briefly in my last post that our goal was $30k cash in the bank. This actually does work out to about 8 months of living expenses. Suze would be pleased. The number mostly comes from the fact that we have hardly ever had less cash as adults. Having our second child changed things a bit. So it's where we want to get back to as kind of a minimum. & of course we would continue to grow our cash savings from there. But 8 months of living expenses is a nice goal. To start. I think our personal goal is more like a year, and growing.

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Finally, as I look at my compensation for the year I realize we are officially back to more of a 2-income level. I never expected to make so much on my income alone, so rapidly. Inflation has eaten at our earnings power over the last few years, but our income taxes have also decreased quite dramatically. I look forward as a result, to rapid savings going forward. In fact, I expect we can possibly do better than before because we are managing our assets better.

I at least know we can get through the next year. Once LM starts school next summer, dh and I will probably sit down and discuss our future more. Right now he is working on some film projects, trying to get them off the ground with his limited spare time. If things continue like this I wouldn't mind him taking a year or 2 to work on that stuff, when he actually has some considerable free time. (& the kids will still need him much). But from there, as the kids get older, he will probably return to school and/or seek employment to help move us along. Though we may be in a spot we won't need his income, it doesn't mean he doesn't want to grow professionally or build up his skills so he has more to fall back on if something happens to me. So yeah, we will have a LOT to figure out.

I am pleased that our current path will probably buy us a little more time to figure this all out. I have the feeling his main job will be staying home the first couple of years LM is in school. Though going back to college during those years may be a wise move. In our current position I don't mind giving him a solid year or 2 to work on his DREAM further. One would argue he has had almost 7 years to do so. But being in full charge of 2 wee little ones, and me making too little to pay for childcare most of that time, has meant I wouldn't exactly see it fair to say, "You had some time and you didn't make it." The elementary school years seem okay for that time - time to try to make it and prove he can make any money with his hobbies. Dh is still young enough that he has time...

I changed our retirement contributions around.

I made my last 2008 contribution on Monday. We maxed out 2007 due to a windfall but didn't even bother trying in 2008. But I always put as much as I can into the prior year. So if we were to have another windfall, or dh were to return to work, we don't let go of ROTH contributions foolishly.

Anyway, since January I have been contributing $350 per month to MY ROTH simply because it was the only financial institution I Could figure out how to make 2008 contributions to automatically, during 2009.

Dh and I view our retirement (As everything else) merely as "one." That being said, he does not work and I have a pretty awesome retirement plan at work. The only downside, and it is a big one, is that if something happens to me, dh only gets something like 50%. I didn't even necessarily realize this until rather recently when I updated my paperwork to add my children as secondary beneficiaries.

Anyway, so between those 2 factors, I think it is a priority to plump up his ROTH. I will probably get $8k in my work plan this year. We will probably only put $4k-$5k into the ROTHs. Seems fair that it should go to him. (In the meantime, life insurance makes up for this unfortunate fact).

That being said, my boss will retire in a few years and I can roll my work retirement into an IRA. So this is certainly not the situation forever.

I am contributing $50/month, going forward, to my ROTH. Just to keep it rolling. I am contributing $300/month to dh's ROTH starting in May. I just set it all up for automatic contributions. Since the last couple of years we have only been contributing around $100/month max, we have stuck to the "retirement funds" and "Total stock indexes." As I changed things around my $50 continues to go to a "retirement fund" and dh's contributions are 50% total stock index/ 25% international index / 25% balanced fund. We haven't bought much international since the market dropped, so it's good to jump back in at lower prices.

I read something the other day like those Retirement funds are risky. Some are down 50%! Well, sure, if you just contributed once, at the peak, and never looked back. Dollar cost averaging significantly smooths those bumps. My "retirement fund" is down 20% today. I have contributed every month since mid 2007. I became a fan of dollar cost averaging when I had my 401k at my last job. It REALLY helps when the market slides anyway. We've unfortunately contributed most of our retirement monies in 2000-2001 and 2007-2008. Great! Right before the busts. But the dollar cost averaging makes it manageable. The losses are significantly muted. Being able to continue to contribute while the market is in the toilet, does pay off in the long run. WE are literally about breakeven - the balance in our retirement today reflect the initial contributions we have put in the last decade. Which kind of sucks that we don't have gains - but happy to say we truly have not "lost" much.

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This year has been good to us. We met our 15% gross to retirement and 10% gross to cash savings goals in one fell swoop. I was hoping to meet these goals when LM garduated preschool. Our home refinance and his unplanned switch to a much cheaper school has made these possible about 18 months of schedule.

So I have been stepping back and looking at our startegy. My goals are clear. The best way to achieve them are not.

Maxing out the ROTH (basically, maxing out a second one) is clearly a priority. WE are still in a virtually zero tax bracket and we would be crazy not to take advantage.

Other goals are to save for college and to pay down the mortgage ahead of schedule. I will put up with a mortgage that is reasonable and cheaper than renting, in the short term. In the long run we are extremely debt adverse and want it paid off well before retirement.

I am worried about affording our health care, as usual. But besides those types of expected expense increases there is not a lot on the horizon. WE are very content with our "Wants" spending at present. I know dh wants more gadgets and we talk about more grand vacations when the children are older. But those things can wait for a second income or a big raise. In the meantime we are quite content. The nice thing for our wants wish list is most of them are one time expenses. Nothing we necessarily need a permanently increased income for.

I have personally been tempted to stop or greatly reduce ROTH contributions just long enough to get our cash savings up to snuff. It is TEMPTING!!!!!! IF we had $30k in the bank I think our current $5k annual cash contributions would suffice. But with the market in such a tizzy, dh and I decided to continue the ROTH contributions as is. We are instead nearing $20k in the bank, and so have a decent amount of cathing up to do. But for now we are optimistic we can max out one ROTH and get our savings up to snuff in the next year or 2.

As far as maxing out the second ROTH? If we can avoid using our medical deductible, we can max out a second ROTH, maybe in 2010. We could contribute that money to a HSA but I like HSAs about as much as 529s. Lots of fees and little flexibility. Which leaves me of the opinion that HSAs and 529s will be our friend when my spouse returns to work and we have more savings than we know what to do with (& when our income tax rates are higher). In the meantime? Not ready to contribute to a HSA or a 529. They make little sense for people in our situation.

Which leads me to thoughts on college. No one in my family has spent much on college, and prices are still quite reasonable in California. In fact, my parents did not save a dime of money for me for college and since dh's parents are huge college money gifters, my kids have about as much money as my entire college education cost (a whopping $10k) at age 3 & 5. IT's not something I particularly sweat, and is another reason I would not save TONS in a 529. BEcause you get penalized on the money that is not used for college.

I have been thinking about it and maxing out our ROTH would put us about 25% contributions to retirement. Clearly more than necessary (we have always put away 10% - 15%, since we graduated college). As long as we are in this position I have decided not to contribute more money to the kids. The one exception is I may contribute a little more so I Can diversify their funds a bit more. (Since every fund needs a certain minimum). Aside from that, the ROTHs will become triple purposed. They hold some of our cash emergency fund, they hold a decent amount of our true retirement funds, and now they will hold a decent amount of investments for college in the offchance our kids "must" go to Stanford or something along those lines. In the meantime, truth is, their college will probably be paid for by the grandparents anyway. So even if dh returned to work, not sure we would go the 529 route... I view it more as contributing to retirement, but I can still sleep well at night if I am REALLY wrong about the whole college thing.

Which means simply, after thinking about it, the only true goal we have once our retirement vehicles are maxed, is to pay off the house.

Dh's income literally went about 100% to our house when he worked (down payment). & I think we will resume this plan when/if he returns to work. Literally, take his paycheck and pay down the house. It's amazing to me what a huge difference a mere $5k a year in income could make. That would be quite a dent. But yes, I think we have come full circle.

I tend to be extremely idealistic so we shall see. One thing at a time...

I just wanted to share my thinking with my current goals. They always seem to be evolving as circumstances change.

I am excited. Maybe prematurely excited, but excited all the same. It's March 15th! The thing is, all of my Corporate stuff is due March 15th (Corporate tax returns) which is our bread and butter. The individual tax returns are really just a nuisance. Bah.

I know I still have another long month, and plenty of opportunity to earn lots of overtime. But I feel I can feel a sigh of relief today. (Even though most everything is on extension. At least, tehcnically, we have a few more months to worry about it all).

I have a few indivudal tax appointments next week, but then I will be done with those. I am tired of dressing up extra nice - dragging out the panty hose and suit jackets and all that. BAck to getting by with the bare minimum of dressing up. Phew! So I am excited about that too.

& strangely I feel pretty caught up. (knock on wood). I have to hound a few clients for stuff I am waiting on. I am sure quite a few tax returns will also arrive in the mail the next few weeks. Will see...

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Clients of note this week -

Another couple of ONE-INCOME families in the LOW six figure range who owed literally 10 times the tax we paid. IT's just craziness. 2-income families have it even worse, because they tend to pay in more social security as well.
But yeah, basically if I made another $40k income, it would be taxed in the realm of 50%.

Another older couple came in and said their young son was house hunting right now and things were selling lightning fast for multiple offers. So that was interesting to hear. THey said it was very troublesome because to gather all the paperwork and loan approvals to put an offer was pretty cumbersome anymore. & yet houses are selling so fast. People with more cash have the edge it seems, for sure. Sounds like could be good news for housing here.

A house behind us, that is clearly jinxed (been on the market most of the last 5 years - various owners) just went up for sale. Surprise surprise. 2 or 3 like it are asking $325k. That's what ours appraised for in November. We shall see. But things seem to be holding on. To be clear though - these are not the houses getting multiple offers. One small home down the street asked $210k and sold in a flash. That one I am still waiting to see what it sold for.

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BM asked us the other day how much money we had. We evaded the question. Well, we told him we had to save up for many different things and we have money in many different "buckets" so to speak. I asked him how much he thought we had, first. He said $3,000. I don't know if he thinks that is a little or a large sum. I think dh said, "We have enough to be comfortable."

I did mention paying for the house as a pretty big bucket and so he asked if the house was paid if I Would have to work. I said, "yes. We tried really hard not to get too much house and the house is not a lot of our bills - we would still need to work." He asked if we could EVER stop working. I said his grandparents were at the age where they were quitting work - to give him a frame of reference. & to say ideally we are aiming for the same age (about 60).

Dh of course pointed out my mom retired in her 20s. I said if you look at it that way, well dh is retired too. IT just struck me as funny that he hasn't quite grasped that we are in a pretty similar situation. Except I remember my parents struggling far more. I really doubt often if he will ever return to work. ANything of the full-time, "have to work" variety anyway.

Just funny conversation with kids. A lot of intelligent questions.

BM's latest thing though is he never wants to work. I have no idea where he gets that from! He just asked me the other day if you have to go to college to become a daddy. He's stuck on that (being a daddy) but if you ask him why it's because "everything else is hard work." Oh, poor naive kid.

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

I haven't got my stimulus yet - maybe with my paycheck Monday - I don't know. But our bills have changed enough this year I was playing with it - trying to see where we are at. I was looking at percentages - not necessarily the most helpful way to look at things. But it is what it is:

% of gross income:

16% Mortgage (well I guess it is still our biggest expense - but don't expect it to be - the biggest - forever).

12% short-term savings (Needs - property taxes, insurance, car maintenance, dental, etc.)

12% Health Insurance (close second, as far as expenses go)

12% Income Taxes/Social Security Taxes

10% Work Retirement contribution

7% Groceries/Household goods

6% Mid-Term Savings (for bigger purchases)

5% ROTH Contributions

4% Other (entertainment, extra-cirricular, dining out, stuff needed around the house, wants, etc.)

4% Gas/Auto (though most auto expenses are up in short-term savings - insurance, licenses, etc.)

3% Utilities (gas/electric/water/sewer)

2% Preschool

2% Phone/Internet/Cell (utilities of the unnecessary variety)

2% HOA/gardener (house maintenance expenses I guess)

2% short-term savings (wants - mostly vacation)

***Of biggest note, we lowered mortgage by about 3% of income, with our refi.

Preschool also went down by about 2%.

All of that has gone to increasing savings.

I don't think we are 50/30/20, per se, as far as wants/needs/savings. But I think we are closest we have been since having kids. Getting pretty darn close. IT feels good. It really is a good balance to strive for, for the long run.

I was just thinking the other say about mortgages and how one of our first mortgages was $1800/month (15-year term; much higher interest rate) and I Was thinking we would probably resume that payment when dh returned to work. & I thought, "Gosh. Our take-home pay today is the same probably as it was when we both worked last. Why does that $1800 payment sounds so insane right now?" Oh, could be the $800/month health insurance. $700 more monthly than we paid right before having kids. Yeah - that would explain it.

When I read "All Your Worth" I realized we had been so out of whack since our health insurance had started skyrocketing around 2004. So yeah, before kids $1800/month? No biggie. These days, it's hard to justify throwing any money at the mortgage over our $1100 payment. Boy do things change!

Bad news on the horizon - lots of laid off relatives (news this weekend). It's starting to hit the same old demographic.

I was telling my mom about how it seemed we knew at least one person per household laid off in the 2002 era. & that I Was susprised to not know so many with this new 10% unemployment rate in the state. (Though clearly the layoffs are starting to pile up. Could just be a matter of time). But in reference to 2002 I said, "Everyone was laid off, including us." My mom said, "What do you mean?" I said, "I mean when my husband was laid off in 2002." She didn't remember. She said, "I thought he quit."

I think that nails it on the head. Yes, he was laid off, after working shortened hours and many mandatory unpaid vacations, for about 18 months, in 2002. No one remembers because our savings and preparation made it smooth sailing. At this point everyone thinks it was planned that my spouse has not worked a day in 6 years. Um, NOT planned! But I must admit I am pleased that something that could be so devastating to a newly starting out couple, was barely a bump in the road for us. I am honored that people think we planned things this way. (Though often the same people would say we are lucky to have never had a hardship. Which is kind of annoying. Just because we were prepared didn't mean it wasn't a hardship).

I mean there was a good solid year in there he looked for work - if not longer.

I think this is why I am a true believer in saving. & when I have to roll my eyes when I hear the word "deprivation" as an analogy to saving. I feel like our savings has kept up from feeling deprived.

I'll put it this way - being prepared lessens the hardship blows of life. Indeed.

As for us, we don't dwell on the bad. If I think about it there was plenty of hardship along the way for us. But we don't dwell; we move on.

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Anyway, along the same lines, FIL will be laid off this summer (government, so lots of notice). He is just going to retire. Now there is a perfect example. Wasn't the plan, but they will make do. They seem surprisingly zen about the whole thing.

It looks like our parents will all be in a position to retire around 60. (Probably sooner, if not for the health benefit issues - my dad is 57 now and I think it's the only reason he is working full-time any more - for benefits). It's interesting to have a number (an age) for retirement. We always look to our parents as our baseline. They are moderately successful, and we seem to have it easier than them at this point in our lives (easier than they did at this age). I know we face very different parameters as well, but it's like. "Hey. Is retiring in our late 50s really out there?" Maybe not?

On the flip side, my parents seem well prepared. My impoverished grandparents were quite able to take care of themselves. My more well off grandparents have done quite well for themselves. Dh's family? His grandma really struggles financially (though not quite the same hardships my own grandparents faced) and we have offered to help out. His parents scare me. I don't think they had any good role models financially like my parents did. So I do worry about them, for sure. But in the short term they seem quite all right. (The panicked and cashed out their retiremet for one - so of course we worry).

Now if my dad told me tomorrow he was retiring, I wouldn't worry about him a bit. So it's a little different. His parents taught him how to save, for sure (purely survival) and my mom's parents were good examples for managing money. They seem to be managing their money a little better. I can't see ever worrying about them.

February went pretty well. I could even almost assume my savings plan was not too optimistic or aggressive (a problem I have - I tend to be too optimistic with everything) BUT February was a short month, so we will see how March goes.



AUTO - Only about $190 for gas (we budget $300). $140 on maintenance - had to clean something on the van (forget the name) and dh replaced windshield wipers on his car. That's about as handy as he gets - hehe. Since our gas was so little, we were able to pay the maintenance from the monthly budget (I usually reserve about $1200/year in savings for that). I don't think we drove anywhere this month (no trips to the snow or the Bay), which explains much!

CASH - Dh pulled out $40 cash for his ebay buying/selling business. (Basically took some of his profits out).

CHARITY - was a contribution to BM's school - their first fundraiser of the year (they seem to do okay - not a lot of begging for money - this was the first time).

CHILDCARE - about $220 for Feb/March preschool tuition. $50 childcare in-between preschools. $50 babysitting for a weekend date.

CLOTHING - I stocked up on work shoes because I actually found some in my size. Way too high heels. They don't make small heels in my size anymore, apparently. I don't know what the heck. But I stocked up while I could find anything. I had NO HEELS for about 6 months.

DINING - Well, we apparently ate out a lot. A few lunch dates with dh. A few cheap things and fast food, lunch date with a friend, met LM & dh for pizza one day, and we ate at the new Indian restaurant by my work twice. (Crazy horrid location - enjoying it while it lasts). But yeah, the appetizers get us there. We spent $20 on $5 lunches? LOL.

EDUCATION - Karate class for March

GROCERIES - squeaked under $500 budget.

HOUSEHOLD - gardener, and spent about $100 on CFL light bulbs.

INSURANCE - got some refunds on home insurance and disability insurance.

MEDICAL - $550 insurance premiums and $385 for the kids' dental checkup.

MISC - I bought a blanket, we went to the movies on our "date", and we went bowling 2 times. Well under budget here, which means we were able to buy my shoes and the light bulbs without touching our slush savings. Dh wants to stock up on printer ink in March.

(We generally try to stock up on stuff during tax season because we are too busy to spend money or go out otherwise).

PERSONAL CARE - LM & I got our hair cut

TO HOUSE LOAN - is just regular principal payment with mortgage.

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Other financial doings:

**Deposited $50 IRS refund in mid-term savings (IRS was slow to pay compared to state - funny enough). Also, deposited $550 state tax refund (I filed before February to be like one of the only people in Cali who got their refund already).

**Deposited $1k to short term savings. (& pulled $385 out for the dental bill).

**Deposited $250 to medical savings

**Deposited $250 to mid-term savings (will be $400 next month with new preschool)

**Deposited $333 to our ROTHs (Will be $350 next month with new preschool. Considering $416 per month with stimulus. We were only contributing $100/month in 2008).

**Earned $650 contribution to work retirement plan

**Earned a whopping $20 interest on cash

**Net worth still at a standstill. We seem to contribute to savings at the rate we lose money in the market.

Um, WOW!

We went to check out that preschool today and after looking at a handful of places with NO KIDS we ran into a highly profitable business woman. I assume anyway.

She has BIG shoes to fill in regards to our past preschool experience. But I think she has already exceeded them.

Very similar play-based philosophy, which is what we are looking for. But it is not a daycare. IT is actually a preschool, though in home, with all the bells and whistles of school. I don't think we care at all about the bells and whistles, but I think it will be a good transition for LM. Our kindergarten is intense.

Her market is the stay at home mom crowd. Probably the most reasonable rates we have seen (charges more per hour than our last place, BUT our last place had a $25 per day minimum for half days, so in the end this will be cheaper for half days). We'd probably have to get onto a waitlist if it wasn't for the economy. She runs 2 morning preschools (T/Th or M/W/F) and 2 afternoon preschools.

We'll start in the afternoons and will be wait listed for a morning slot. Morning is more hours and more importantly, LM is crankier in the afternoon. I mean, afternoon is nap time. So we'll see how it goes.

Not only is it only $36/week, for two half days, BUT she does not charge for field trip days, holidays, vacations, etc., etc. Um, okay. Our last lady was way too nice and would always let the kids make up holidays and such. As a prior business owner I think it is quite fair to charge for these things. People will walk all over you if you let them. But she was going on and on about the things she doesn't charge for.

Considering all the empty daycares and such we had seen, we ran the numbers and figured her full preschool was easily grossing six figures. BEcause it is FULL. About 50 kids all told; 12 kids per program. It's just interesting to me.

Don't get me wrong - I have no idea when this lady ever sleeps. !! She certainly works for it.

LM really liked her and I think she just about exactly fills the shoes of Ms. PReschool, except she is like if Ms. PReschool had 10 times the energy and became less daycare based. LOL.

He was going to preschool in a very modest home and now it is in like this McMansion. I guess that will be different to.

It seems like a good fit for LM, is very close to home, and costs little. So I am VERY excited about it. HE starts next week!

I am worried how we will fit into the mix. She kept going on about all the SAHMs though we were clear I worked and dh didn't. So, hopefully he will fit in.

(I know LM will fit in fine - hehe).

We do have to commit for the month, so this is the only difference. Our last place was no commitment. Though I think she said something about 2-weeks notice...

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I just upped my savings goal by $2k for the year because that is how much we will save with the switch. The savings will be a little less if he gets a morning slot, but we will cross that bridge when we come to it.

I am currently putting $333/month into our ROTHs. I am going to *up* that to $350 with the gas savings of this new, closer preschool. It will be nice to get a nice round figure. I also think it is very likely that we will be able to *up* this to $5k for the year. It's just not a priority as that would put our retirement at 16.25% gross. Our current goal is merely 15%. We'll surpass 15% a tad... $350/month = $4200 for the year. 15.25%.

I didn't mind the preschool thing for one more year, but with the economy and everything, it feels divine to save a little more cash in 2009. I can *up* my regular savings contributions from $250/month to $400/month, starting ASAP. Woohoo! I think it is a distinct possibility that we will hit 10% gross to cash savings goal, in 2009.

Our next goal after that is to max out our second ROTH. That goal still feels a mile away... But getting closer.

Every time my pay changes I look at the flow of bills and see if I need to move anything around. I also evaluate all of our savings contributions, etc.

So I came up with a rough new budget.

Because we pay so many of our bills on our credit card (just about everything we can), I don't have a lot going on in my checking account. This is pretty much how it goes:

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

+ 2757 (first of month)

-1400 Credit Card (groceries, gas, utilities, misc.)
- 300 Other/Utilities (Gardener, HOA, water, sewer, gas, electric)
- 500 Short-Term Savings
- 333 ROTH

+ 2757 (mid month)

- 550 Medical Insurance
-1100 Mortgage
- 300 Preschool
- 500 Short-Term Savings
- 500 Long-Term Savings

Of course, if anything else is due in any given month, we pay it from savings (insurance and taxes, etc.). Or any small cash amount that we can not throw on the card. Comes from savings.

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

I found the way I had it set up before, I had too much stuff piling up and due at the beginning of the month.

I decided the simplest thing to do was to begin to prepay the preschool payment at the end of the month. This is fair enough. I used to pretty much do this anyway, but had gotten into the habit of paying it with my paycheck on the first. But often I can't pay until like the 5th then. Which is fine, since I prepay the whole month (not required) there have been no complaints. But I think it will be simpler to just pay it on the 31st, going forward. I may have to pull a little out of savings for the first month, which is fine.

I have a built in "emergency fund" in my checking account. The credit card is not due until the end of the month and the mortgage is not due until the middle of the following month. But I just pay them all ahead of time, for simplicity. If I ever needed cash in an emergency that is an easy $1100, by delaying those payments to the due dates.

Anyway, I have been paying paying the credit card around the 20th, which is cutting it a little close for me. Never had a problem (knock on wood) but I look forward to re-arranging some things and paying that on the 1st again. As a result, I won't have to RUN to the bank when I get my paycheck. Phew. I prefer to not care so much about payday.

I can't put anything else on the card. (Mortgage, preschool, most utilities, etc.) Everything else that I can, I do. For rewards, of course. & simplicity though - it's just very convenient.

I was funding the ROTHs evenly every paycheck, but I am loading up one of our ROTHS for 2008 right now (the only one that will let me apply automatic savings to last year), and so figured once a month is fine. It probably makes sense with the current incarnation to switch to once a month contributions, indefinitely.

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This is the extent of my budgeting. We keep the card expenditures at $1400/month. (It will be more when we charge medical fees or dental bills, auto repairs, etc. These are all things we pay from savings).

So if the card is more or the utilities come out to more, it gives us pause. & we re-evaluate.

& of course we take all of our one-time expenses, add them up for the year, and divide by 12, to make sure we save ample amounts.

That is about the extent of my "budget." I re-evaluate it once a year. More often if we get out of whack. I don't like to spend inordinate amounts of time and effort on it. I don't like thinking about it every day. Kind of a PITA if you ask me. Our savings were very much on "auto pilot" when we both worked, our budget was strict, and we saved plenty. Never thought much about it. That is my end goal. Evaluating every month or quarter or year is fine. Every day is too much for me. As much as I love numbers I don't like to obsess over a budget, for sure. I was far happier when I didn't have to obsess so much, and I am getting there, slowly but surely. I think this year is going to be way more relaxed. Phew!

Of course, I mention we budget around $500/month for groceries and $300 for gas. Kind of rules of thumbs (actually, more like maximums). BUT if we have a cheap month elsewhere we don't mind going over a bit. We worry more about the totals than any one particular category too much. Definitely prefer that flexibility.

Just a little peek into my method of madness...

Just a quickie. Now that I have my compensation, I am figuring our savings rate for 2009.

I am not a fan of the "rules of thumb." They mean nothing to us in our situation. Since we pay cash for everything, we need a fair amount of savings. Since we don't have medical benefits, we need a fair amount of savings. Etc., etc.

But here goes:

Retirement - 15%
(5% ROTHs & 10% Employer)

Cash Savings - 4%
(9% when LM is done with preschool, 2010)

Medical Savings - 4%

Short-term Savings - 15%
(To be used within the year)

As such, 28% of my paycheck goes directly to savings, every month. 33% when we are done with preschool (Phew!)

Another 10% is added to my retirement account (more like a 401k than anything) annually.

(I don't necessarily consider the short-term savings as "savings." So take that out and the percentages are a more meaningful 13%/18%).

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This is probably ample, but we have 2 things at play.

1 - We rely too much on employer retirement plan. Given. Then again, I don't have medical benefits. The two are about equal, so I expect some day I can get similar pay and better medical benefits. & it's really moot if dh returns back to work, benefits or not.

But in the interim, our goal is to get to 10% into our ROTHs. We will have enough cash to do so when LM is done with preschool in 2010, so I am happy enough with that. We will probably divert that cash to other savings, BUT if I lost my retirement benefit, 10% minimum to ROTHS would be our goal. In the meantime we have some pretty big contributions to retirement while we are young, which means we could cut back more later if need be. With the plan to move forward again, of course.

2 - We have some catching up to do. Our savings rate was $0 for a few years when we had kids. Very planned. But though I feel we are in a pretty good spot, we still have some catching up to do!

& it just depends on Murphy really. We didn't need much of our medical deductible last year, BUT we used up all of that savings for unexpected dental bills in the end.

If we don't use our medical deductible this year, we can ideally shift that cash into our ROTH or into more long-term savings. That all depends on how lucky we are in 2009 though. Not exactly holding my breath.

Expenses anyway...



Allowances: We did better with our allowance this year. Technically we both get $50/month, or $600/year. I think dh did a lot better because he got so much used stuff and used profits from his buying/selling to buy his toys. But I toned it down a bit as well.

Auto:

Auto fuel was down $400. With gas prices we were way more mindful. Also, the van gets 20mpg and the subcompact gets 40mpg. We simply drove the subcompact more. I have been driving the van more the last couple of months to give that car a break. But yeah, was surprised we did spend less on gas. This does not count how many times dh's family slipped us cash for cash either - so we fared pretty well this year in this category. We spent $2800 on fuel.

Insurance was down $70. We spent $1500. (Liability insurance is really expensive in our zip code - terrible drivers).

Auto registration was about $250. Down $33 from last year.

Auto service went down $3. LOL. I guess we are consistent. We spent $1584. I put AAA here - $130. $667 on the 2005 van. It needed a new battery and a new windshield. Problems with the door locks and the window (as usual), and a diagnosis of a check engine light (was nothing). Also, 2 oil changes. Leaves $787 for the 2001 Ford. 2 oil changes, replace PVC pipe, replaced motor mounts, and a new battery. Oh yes, and replaced some brake lights. The Ford has almost 100k miles and has pretty much never needed a thing but new tires. So it was an "expensive" year for that car, but a long one coming. (Last year we paid so much because we had so many superficial problems with the van. Last year we only spent $150 to maintain the Ford).

Bank Charges: I was mortified to have a $3 overdraft charge. My Bad. LOL. I think it's a first.

Childcare: Well this was pricey! We spent about $400 on babysitting in 2008. About $400 more than in 2007. Was a bit of a splurge for us. The rest was preschool for both children. BM attended through mid-July so was a little longer than 2007, that both of them attended.

Diapers: last year's # was amount we spent on the cloth diaper service. (We used cloth but set them out once a week to be cleaned). This year we probably purchased disposables through mid-year. But something we haven't bought in many months. Hopefully, never again. Phew!

Dining: We splurged on this a bit more this year. One thing, dh and I have been having much more lunch dates and sate nights. So this is where we loosened up for 2008.

Education: This went up a bit as we paid for more school supplies and stuff for Kindergarten. Dh also took an Indian cooking class.

Entertainment: Blockbuster Online

Gifts: Guess we were more generous this year. Actually, I put my dad's fees for Family Camp here - we treated.

Groceries: They went up about $500. Since BM was done with preschool we had to buy a lot more food for him. (He was fed 3 days a week before, and he eats a LOT). We also tried a CSA service (organic produce delivered to our door from a local farm) for about 3 months. We just found it to be too expensive to justify for now. A goal of ours is to get a bike basket and do more produce shopping at the farms a couple of miles from our house. So you know, we could make a bike trip of it, and stock up while supporting the TRULY local farmers.

Household: About $1k for the gardener. We also spent about $250 to repair our fridge, and spent a fair amount on thermal drapes throughout the house. We bought a rice cooker and a broom. We also bought a carpet shampooer.

Insurance:

Disability $155 (down 30%)
Home/Flood $1273
Life Insurance $586 ($1.2 Mil coverage)

Medical:

Medical was interesting. We switched to a HDHP and were able to save $250/month, while taking on a $3k deductible. This limited our out-of-pocket to $3k though. Under our old plan we could have been on the hook for more.

Last year we paid over $8200 on medical premiums/co-pays and $565 at the dentist.

This year we spent $6972 on medical premiums and deductibles (including an ambulance trip to the emergency room), and $3300 at the dentist. LM had a consultation for mouth issues and BM had a pile of cavities. Both kids are also going every 6 months for checkups/cleaning now.

Misc: Guess we are consistent. Dh spent $800 or so on his new computer. One of our newer computers, the motherboard blew and it was not salvageable. We don't remember the last time a computer of ours expired before its time. We just donated some old computers from the 90s for example.

This category included swim lessons for the kids, movies, 2 shows/concerts, camping supplies, outings with the kids (zoos, museums, etc.), school pictures, re-size of my wedding ring, new workout shoes for me, etc., etc.

Personal care: This is just haircuts. We are low maintenance. The kids are old enough to handle beauty school so we saved a bundle. When they were younger we took them to Cool Cuts. It was just so much easier.

Taxes: Just property taxes

Utilities:

Water - our bill went down $17. They raised rates but we were offered metered water for the first time. I really expected to save more with the metering. But $17 is $17! Water was $1095.

We paid a little more for gas/electric because 2008 was our first full year on budget billing. All in all I think we spend less (had lower bills in 2008). But we have prepaid balances on both accounts. I wish they would just take our annual expenses and divide by 12. But they refigure every 3 months and end up way over-billing some parts of the year. It bugs me because we are so consistent and we did this to smooth out the bills. Though they are smoother than usual. Our gas bills run $10 in the summer and $100 in the winter. Now they bill us $20 - $40. So it is better. But I wish they would just bill $30/month all year, and be done with it. Gas/Electric was $1460.

Cable & phone is hard to separate. Our cheap cable company provided our internet and cable service. BUT they got bought out by Comcast. We switched to Dish which is a little more expensive, and DSL through our phone company. So I used to classify internet under cable, and now under "phone." So it is a little confusing. We are definitely paying more.

However, we used to pay about $80/month for cell phones, and now we pay $55. Mid-year our parents added on to our plan and now we all share our minutes.

All in all phone/cable was $60 cheaper than the prior year. (Oh yeah, we got a lot of discounts from Dish because of the TERRIBLE customer service. Dh has gotten them to lower our bills a few times. That helps). Cable and Television was $2200. For Land line, 2 cell phones, Dish, & DSL.

Vacation: This is the first year since kids we put vacation in our budget. We had room for the first time. We were aiming for $1500. We went to D-Land for a week and did Family Camp. This also included a minimal amount for our trip to Denver.

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In the end we spent $1800 more in 2008 than in 2007.

I can sum up the culprits as having 2 in preschool a chunk of the year (non longer an issue) and large dental bills.

We did spend a lot on fixing up stuff around the house; long overdue.

Everything else was rather consistent.

Roundabout goal is to limit spending to $60k annually. Much more feasible for 2009; certainly 2010 when LM is done with preschool. We also lowered expenses by $2400 annually, with our refi.

I did net about $66k this year. I did not include any income or payroll taxes in this analysis.

We had about $3k in other income. $1k interest, $500 credit card rebates, $1500 in ebay sales, rebates and focus groups.

We received that $1800 tax rebate, but we also owed the IRS a chunk for 2007 so was kind of a wash.

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We also doubled our ROTH contributions in 2008, from $50/month to $100/month.

We started the year with $0 in our mid-term savings fund, and ended the year with about $2k. I had wanted to save $5k. We saved about $4200, but had a lot of unexpected expenses during the year, which drained the account to about $2k.

Not our most spectacular savings year ever, but may just be our best year since having kids.

All in all, a pretty good year.

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ETA: I notice something large missing from my snapshot. For whatever reason, I usually include mortgage principle payments in my monthly expense snapshot, but I can not get them to show up here. What the heck? That's another $4k!!!! Am I blind?

Well, not as near $60k in expenses as I thought then. But that is my goal and I still see it as very feasible. I have to go figure this out now. It's driving me batty. MAkes you think, "What else is missing?"

I added my long-term goals to my sidebar. I am liking this new format - clear and concise. These are all things I have talked about at some point or another. But, yeah, now it's all in a little concise summary.

**Long-Term Goals**

[x] 15% gross to retirement
[ ] 10% gross to cash (mid-term) savings (This is more of a catch-up goal than a long-term goal. BUT the nice thing about over-saving cash is you can invest it later. As long as it is not spent on stupid things).
[ ] Max out ROTHs
[ ] Pay mortgage off by age 45 (before kids start college)

Those goals are in the order we would like to achieve them.

The following are some things we intend to spend our cash on:

[ ] Paint Exterior of Home
[ ] Replace Fence
[ ] Replace 2001 Ford with a Prius (ideally, 2013 or later)
[ ] Purchase a used convertible in the $5k range (To replace the one I gave up when we had kids! I had bought it like new for about $6k and sold it for $3k after BM arrived. I'd love a Toyota Celica - for power and fuel efficiency - Celica was my first car and is sporty and cute as a convertible. My last one was a Mustang - cute but cheap - not going the cheap route again. & it was actually a 4-cylinder so not bad on gas, but it sucked).

& my aggressive net worth goals, that I have mentioned many times before:

Increase Net Worth by 50% of expenses, annually:

[x] 2007 +$30k
[ ] 2008 +$0
[ ] 2009

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I am caught up enough at work that I worked no overtime this week and I have the entire weekend off. YAY!!!!

I'll do a Christmas update over the weekend.

Sure, if we waited a day we could have got .0125% less or something.

Eh.

You have to understand, we were waiting for a rate of 5% for about a year. & we beat our target. Of course we jumped!

So no regrets here. Actually, still super excited!

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Along the same lines, yes we have started over our mortgage like FIVE times. Yes. But our very first interest rate was 8.25%. So we went from 8, to 7, 6, and now below 5%. We've lowered our interest rate by 3.4%!!!!!

The ironic thing is if we keep paying our last mortgage amount ($1300/month) we will pay off the mortgage in 2030. Which is precisely 31 years from when we bought our very first home anyway. So what, we take one more year and we pay almost half the interest?

Anyway, home loan amortizations can be very complicated. I have analyzed it every which way.

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We have never paid points on a mortgage, or financed closing costs. We've never added to our loan in any refi. It's been almost 6 years since we last refied.

This one is different. This will be our last refi. EVER! (I know, totally what we said last time!) But I really think so this time.

We are going to finance the $3k points & $2k closing costs. We will pay $1300 cash towards interest and the appraisal (I draw the line at financing the financing). But that would have been our mortgage payment for the month. So we will only increase our loan by $5k.

If we did this every time we refinances, might not be the greatest deal, but I regret not paying points last time (rates were similar) and just being done with it all. Kind of an expensive lesson.

Though having waited, we will get a rate lower than 5%. So maybe it is for the best this way.

So I am comfortable with adding to the loan, because I believe this is the one and only time. & We just don't have the liquidity we used to, to pay cash for the closing costs...

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BTW, if rates dropped any lower than this, we would refi to a 15-year-loan. Probably. I think I can pretty confidently say we will never refi 30 years again.

But never say never, huh?

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As an intro to this section, we live in the state of California. We will be itemizing our deductions for a LONG time. We could itemize without the mortgage! Biggest itemized item? STATE taxes. Very high.

Anyway, so, considering the tax savings, the effective rate on our mortgage is going from 4.6% to 3.9%. If my spouse worked and our tax rate went up, the effective interest rate would be closer to 3% (because we would save more taxes - saving in higher tax rates).

Anyway, my savings accounts are paying more than that, even in this economy.

So, yeah, I am going to be much more open to leveraging that debt, with this new low interest rate.

I will definitely be changing my priorities a bit.

Also, fixed mortgages get "cheaper" with time (inflation). We have not experienced that so much because I make as much money today as we did combined when we got our first mortgage in 1999. & our expenses have way skyrocketed (health insurance primarily). So, we haven't necessarily experienced that in the last decade, but with lower interest rates, our mortgage payment has literally gone down - by $400/month - over the years.

Because I expect my income to go up from here, and our mortgage to shrink in terms of inflation, going forward, I am not big for any pre-payments right now. Another reason we are shifting our priorities a bit.

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So all that being said, I will not be very gung ho on the mortgage, certainly not the next 3 years. If ever. But I still want to have it paid at 45. I am thinking we will focus more on investing though, and trying to beat that 3% - 4% return. We may shift our goal to have the investments to pay it off by age 45. I don't know. This REALLY changes things.

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I think this refi will allow us to max out one ROTH next year. We have not put in upwards of $2k - $3k of our income into an IRA since before kids. (We have from savings or gifts; not from income). So this is a pretty big goal for us, and one I am excited to meet with this refi.

We really need some more liquidity, and it is kind of a conundrum. Look at those low stock prices!! But with the economy - I wish we had more liquidity!!

I *think* we will focus on the ROTH and snatching up cheap stocks this year.

I know we will have another $3k easy in 2010, from income, once LM is done with preschool. So I think we feel comfortable sticking with about $5k in cash/taxable savings next year, and aiming for more like $8k the following year, when LM is done with school. I think we can put it off for 18 months or so, and be okay. We do have an emergency fund in the interim, and all that.

So kind of what we are thinking. We'll see!

Excited to snatch up more stocks. Will put our retirement contribution closer to 17% (of gross income) - and - what a year to make a leap in contributions! With stocks so in the toilet. Buying cheap!

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Besides all that, work is CRAZY!!!!!!

More on that later I guess...

Just locked in a refi.

O.M.G.

Today has been a little melodrama.

Short version:

Tried to clock in 5% or less, at 1 point, all year.

We've paid enough off the loan this year ($4k - just regular payments) that 5.25% was starting to look attractive. Certainly 5.125%

Anyway, mortgage broker call and we discussed things.

He told me today he could lock in 4.875% with 75% loan to value ratio and 1.5 points. For various reasons this was actually a pretty freaking good deal. I had pulled a number out of the air though for appraised value (who knows in this market!?!?!?!?!) and so we decided no, then I told him to just let me know when he has a house value. As I ate lunch I started to think I Was crazy not to do it. To even cash out the money.

But I hesitated for a few reasons. Dropping home values. A general aversion to borrowing. We could have paid it right back, but then wouldn't give us the $200/month savings we were aiming for.

So anyway, just as I Was convincing myself to work on my dh tonight, and dreaming of what to do with borrowed money (pay for next car, max out ROTHs, plump up cash???????) the mortgage guy called me back.

House appraisal estimate $325k. (I had pulled $300k out of the air). Sure, sounds good, but how long will it last. Actually, glad it gives us some wiggle room. (Then again, what I Was afraid of. Not borrowing $250k!)

Anyway, not only that, but there had been a rate drop.

So I locked in 4.875%. No cash out - just to pay off our existing loan. NO more having to borrow MORE for the better rate.

Whee!!!!

Did I pay too many points? Will rates go down to 4.5% after all?

Who cares? My mortgage payment is going down $200/month.

We could resume old payments and pay off 3 years ahead of schedule. (3 years ahead of current mortgage payoff).

I ain't sitting around for 4.5% to materialize. No way!

Anyway, last time was s'posed to be the last time (2003, 5.75%). But history keeps beating itself.

It's surreal. Our very first loan in 1999 was $1500/month, 8.25%, borrowed $208k. (For a condo half the size).

Since we're financing all the costs, will be about $212k loan, 4.875%, $1100/month payments.

Pinch me!

Where I grew up you could not rent a studio apartment for $1100/month. In 1995. I have died and gone to heaven.

Anyway, send me good vibes. I do not want anything to screw this up!!!!!!!

I really like the 'goals in the sidebar' thing, so I decided to give it a whirl. I still have my long-term goals on a separate page under 'Goals'.

Plus, a lot of things flit through my mind and then I forget about them. This blog is becoming like my life organizer.

Financial is easy.

At minimum, want to put $5k to savings this year. Contribute $200/month, add interest, and the rest will be covered by credit card rewards and overtime.

ROTHS - $2500. I wanted to double our contributions to $200/month this year. We can scrounge up $100 to round up to $2500 for the year. (May not seem like much but it is double 2008 and quadruple our 2007 contributions. Slow and steady...)

Mortgage - I want to increase prepayments from $10 to $30, monthly.

Umbrella insurance review - had been meaning to get together with insurance broker after he sent me a note mid-year. So, something to work on in 2009. WE also WAY upped our home insurance coverage in 2006? with skyrocketing build costs. So I want to discuss with him replacement cost again. Wondering if it went down, though I want to be cautious and not lower it too much. If it's a significant decrease though... I just want to discuss further.

Close balance transfer credit cards. Just a chore I have been dreading. My personal experience is you have to talk to 10 people in "retention" and then they offer to give you the moon. Even for cards I NEVER use. They hold out to hope that you will cave and run up huge balances, I guess. But yeah, my personal policy is to close unused cards. This is particularly important to me with my recent bouts of ID theft. These are not cards I pay attention to and I may not notice fraudulent charges, etc. Better to close them. So I have closed a lot of cards before. I will report the outcome. (I look forward to a "we thought you'd never ask, it's taken care of" experience).

I think my mortgage is the biggest piece of my FICO pie. Whatever I do with the credit cards doesn't seem to make a difference to my FICO.

I usually sick dh on annoying customer service calls, but since the cards are only in my name, these are all on me.

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As far as the house... We made a lot of progress this year, but much more to go.

Fix Gutter - probably 2008. We just noticed a hole.

Have Trees Trimmed - been meaning to talk to the gardener - the trees are growing and some are pushing on the fence. Certainly before spring.

Plant Fruit Tree - this is dh's idea. We were told by the local nursery that February was the time to plant (tail end of winter I guess). I think we decided on a small apple tree. (I forget the name - but you know - the small ones. We don't want a GIANT tree).

Fix Tile/Sealing - long overdue. Some sealing repairs on some of the sinks. All of the tubs/showers. & the tile in the showers needs some repair (well, the grout. Sealing more than anything. We want to pay someone to do it right. I am not a fan of DIY). IT is so bad in the Master Bath that we have not used that shower in years. I doubt it will cost that much - just was more luxury than need before. (since we could just use the other shower). But I am ready to get it taken care of.

Clear junk from Master Closet - since we have done so much clearing out for 2008, I am making this my 2009 goal. I have a few odds and ends in there to get rid of.

Buy Mattress/Bedding for LM - maybe by summer. Will buy him a bed in 2010. Just spreading out the costs.

Paint BMs room - an idea. I think it would be a nice/frugal enough thing to do. Aim for next fall.

Price Stucco Repair - something we have put off a while - we believe it is cosmetic only (a crack). BUT I am curious to price it this year. We will paint so soon it may make more sense to do when we paint the exterior (2010?). I noticed a lot of painters offer repairs as well.

Price Security Screen Door - Our HOA is very picky but some of our neighbors have been getting them recently. I Think it would be awesome for security, and also for summer nights. The days get hot but the nights are very cool - so can save on AC costs downstairs with a screened front door. Get a breeze going throughout the house...

On a whim I priced some online today and they don't look that expensive. My dad could help us install it. BUT we have an extra large door. Any time we buy anything for the house it is always "custom order." So maybe we will price them this year and see when we can swing it. IT could be VERY expensive with the unique size. *sigh* Will also talk to the neighbors, see where they got their's.

With the foreclosures up, crime has been increasing, so I would consider buying this year and re-arranging priorities.

Along the same lines, we have put off other security upgrades that I think we should reconsider doing sooner rather than later. It's just not a safe time with the economy. Our city has been hit really hard.

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I don't have any other particular goals. We want to get BM into some organized sports. I want to bike ride more and read more. But nothing very large and exciting.

I think my goal is to take it easy. I am easily one who "does too much" and the kids really seem to allow me the luxury to step back a little. So I enjoy not having very many personal goals. & I am pretty happy where things are at!

Oh, I do want to make an effort to call my mom more with the webcam - maybe we can set up weekly scrabble dates or something. I have been trying to get our favorite card game set up online and if I can find the software I was thinking a nice christmas gift. We can even get my sister in on it (she lives on the east coast). Technology is just SO amazing... But yeah, we used to do scrabble once in a blue moon. We'll take what we can find online...

I also remember we seemed to get no weekends away this year - so I will add these to my goals.

Which reminds me of our vacation goals. Family camp again (maybe try the Sacramento one in Tahoe). Dh wants to go to the snow at least once. We need to take more advantage of the family cabin as well. AND we wanted to get season passes to the amusement park by where we grew up. It's where we spent our childhoods, and met too. They have a new waterpark. Parking is included in the season pass. We will get a LOT of use of passes. Kids are getting old enough to enjoy.

I got my gas bill and it was only $15. I was trying to beat $22, from last November.

Well, we accomplished this, BUT the bill ended 5 days sooner this year - on the 25th - for whatever reason. So it wasn't very comparable. I think we turned on the heat on the 24th. (It was a 30-day bill, but earlier in the season by a few days. Which could make all the difference).

Then again, we didn't host Thanksgiving last year so I cringed at all the cooking, laundry, hot water, etc. was used/done on Thanksgiving. Not sure it will help my next bill.

The number to beat for December is $75.
(Just trying to improve on last year).

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

I updated my totals to the left.

I just hit $2500 again in my savings account, after posting November interest of about $25. Woohoo.

I don't expect it to hold through 12/31. We have to hire someone to fix our gutters next week.

We saved $4200 this year (close to our $5k goal) but spent $1700 on stuff around the house. My goal was to save $5k BEFORE we started catching up on stuff. But broken computers and fridges had other plans. & then I figured what the heck, and started getting caught up on stuff around the house. (Stuff like thermal drapes). So failed spectacularly on my goal, but am not too upset about it. Still moving forward.

It's kind of amazing how things work out. We haven't saved up any money for stuff around the house in years. Low priority since dh stopped working and such. & things have been okay. Nothing broke around the house when we were broke. But this year we start saving for household stuff again and next thing you know we have thousands in unexpected bills. Kind of annoying, but just glad we had the cash for it all. Looking back we had a few lucky years, so it was bound to catch up with us at some point.

My goal is $5k to this fund in 2009. I hope to still have $5k in this fund come 12/31/09. About 50% funded by overtime and interest, and 50% funded by savings. So makes our goal to spend $2500 on home repairs in 2009 (expected) and have $5k going forward. If I get a bigger raise than expected, or any windfalls, this is likely where it would all go. So I would love to make a higher goal. But $5k is rather realistic at this point.

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I don't expect to add any more to retirement this year. So looks like we will hit 12% again. Mostly funded by employer. Goal is 14% for next year. Goal is 20% by 2010. (10% us & 10% employer). So, not hitting it too heavy in 2009. Just trying to move forward. 2010 should be an easy year to divert preschool tuition to retirement.

I'd probably rather focus more on cash savings at this point, BUT with the market so low, we want to take advantage and add more to our retirement next year.

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Mortgage - we paid off about $3800 this last year. Next year we will pay closer to $4500. Just regular payments, but considering adding $20/month next year.

It's starting to make a dent!

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I haven't looked at our net worth, but Quicken tells us most of our investments are down 30% - 50%. Eh. I'll look 12/31. It won't be pretty!

I depreciated our cars by $4500 this year. I figured since our net worth was in the toilet anyway... A good time to take the hit.

Depreciated dh's car by $500, to $2500. Could probably get $3k-$4k easy for it, the way gas prices have been. (It actually appreciated this year; it gets 40mpg freeway). But I figured to depreciate $500/year going forward. Fair enough. Rather aim conservative.

The gas guzzling van? Plummeted in value this year when gas prices were high. I estimated $12k last year (which is about what we paid for the thing in 2006). BUT I saw them going for $8k when we briefly considered dumping it ourselves. I am sure value has gone back up a bit, but gas prices can also shoot up again. So I figured I'd take the big depreciation hit this year. Will continue to depreciate that one about $1k/year, going forward.

Since the van is like half of my emergency fund (well, was) I tend to keep an eye on prices. So yeah, needless to say I was shocked to see it going for $8k for a time. Yeesh. A big depreciation hit for 2008, for sure.

& with gas prices rock bottom, I am currently glad we didn't dump it. Ask me again later...

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Short-term savings...

I looked at the last year to see where things landed. We have been saving $1k/month. $12k/year.

This is for known, regular, larger expenses (or for anything that's not monthly and regular). So I already know what this adds up to for 2008 - have received all the 2008 bills by this point.

Ended up spending about $13,500 from this fund in 2008:

$4595 Property Tax
$3545 Insurance (Auto, Life, Disability, Home, etc.)
$1550 Vacation
$1225 Dentist (regular checkups)
$1200 Car Maintenance/Repairs
$1300 Misc.

We will probably receive $1k for Christmas to plump up this fund a bit for 2009. Will add $12k again. (I figure we will add another $100/month come 2010, when we have more wiggle room).

Expect property taxes to be about the same next year. (California assesses very differently than most areas - based on purchase price - not volatile market values. So no chance of a decrease next year. It's based on January 1 and values overall are still higher than our assessed value. Not like prices will decrease dramatically by January 1).

Our auto insurance continues to decrease, as well as a lot of our disability and life insurance. BUT our flood insurance is going up something like $500 next year. I think it will all about even out.

Vacation - our plans for 2009 are well within $1500.

Dentist - will go up a bit since LM is now going every 6 months.

Car Repairs - a little more this year than usual, but dh's car is getting pretty old (near 100k miles and though it has pretty much never had any repairs, it is a cheapie car and we expect a lot more upkeep in the coming years), and my car just plain sucks. Always taking it in for door locks and windows and stupid stuff like that. So I expect the same or more next year.

Misc. - where we have room to work with. We put a lot of stuff here when we were squeezed by the cost of 2 in preschool. I think our monthly budget will cover more of this stuff in 2009.

So, will contribute $1k monthly for 2009 and will consider $1100 monthly in 2010.

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So yeah, just kind of an overall roundup for 2008.

Not a great year, but I am happy to be moving forward. Particularly in this economy.

I usually summarize all my expenses/savings together, but ran out of time yesterday.

So we spent a whole lot of money. What else did we do in October?

*Saved $1k to short-term savings

*Saved $200 to mid-term savings

*Saved $250 to medical savings & added $250 credit card rebate also

*Earned $26 interest (to mid-term fund). Good bye Balance Transfers; this amount decreased much as a result

*Deposited $100 to ROTH

*Earned $625 in work retirement plan

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*Pulled $1500 from medical fund for dental and medical bills.

Our deductible could push our medical fund to -$1500 or so, for 2008 expenses. But I figured it was a lot easier to stomach paying all those dental bills out of there, for now. Will tap mid-term savings later, if we have to. IF we ever get BM's ambulance bill, etc.

I guess there is always a slight chance we won't use our deductible next year and we can recover then. Who knows...

*I subtracted $150 from short-term savings for car registration. I did not pull any money out for other things (like life insurance) because fund is depleted for year. Will have to shift to the mid-term fund through 12/31. Need short-term for property taxes and home insurances (will be about $4k due in December).

We have been slowly adding more to this fund every year and are contributing another $100/month over Jan. 1, so I am happy where this fund is for the long run. I think $1k/month is the sweet spot, for now. But a bit behind, since we did not contribute this much when both kids were still in preschool.

Adds up to about $9k for all of our insurances and prop taxes, and about $2k for car repairs and vacation, and maybe $1k for misc. things throughout the year (like Christmas & subscriptions & vehicle registration, etc.).

*Pulled $550 for new drapes and Dec. 31 concert tickets, from mid-term savings. May need to pull a little more out for car service (would have been short-term otherwise) if it hits the card for October.

*Dh earned $125 at a focus group to pay for my ring resize.

& that's October for you. We took care of a lot of stuff. But November we hope will be low key. No "plans" for any bigger purchases or anything from savings.

Truth is though we have a lot of stuff that have been on the back burner for a while, and as our mid-term fund builds up, we are using some of it. I had preferred to wait until the balance was $5k to start touching it, but with all these dental bills and everything... I kind of give up. Maybe we should take care of some things and start over 1/1. Mid-term fund can easily be gone by then. But it is nice to get some stuff done around the house, etc.

There was a lot of talk of savings in the forums that I had been meaning to expand on.

For us, all of this was moot when we made a lot more income (both working). We saved the second wage in cash and trickled it into our ROTHs, and into our house, over the years. We always had enough cash for cars and for property taxes and the like.

I would probably have a more solid/aggressive investment plan next time around. Our loose plan if dh returns to work is to save up his salary for an entire year, cash, to bulk up a hefty emergency fund. & as a hedge if he decided to stop working again, or whatever. From that point on we would do 1/2 investing and 1/2 to mortgage. We assume all our tax-deferred options would be covered by my salary anyway. We could flip a coin which we rather do, so it's both. 50/50. To be re-evaluated with time.

Anyway, when money is flowing in way above your expenses, all that is easy. (To us anyway). We were never big budgeters or anything when we both worked. We just knew our limits.

But with money more tight (on one income) I find we have to do a lot more planning.

Our savings plans has various layers. If the bottom layer fails, the rest of the layers will collapse. It is something we have been working up to with time, and I feel will be pretty solid by the time dh is in a position to return to work. When we won't need it any more. Figures, huh?

*Layer 1 - Short-Term Savings*

The first layer is our short-term savings. For me, this covers every expense within the year that is not a monthly or semi-monthly bill.

We are currently saving $1k/month to this fund (up from $800). I think we are getting there.

This fund covers all of our insurances and property taxes (the bulk of it). It also covers vacation, regular dental checkups, car repairs, subscriptions, Christmas, vehicle license fees, etc. I am sure I am forgetting some things.

If this is not funded, we need to pull money from more long-term savings, to pay current bills. Not Good!

Anyway, our medical fund is along the same lines. Same kind of category. Our deductible is $3k annually and we will likely hit it every year. So we save $250/month for this as well.

As such, this is our first savings priority.

*Layer 2 - Mid-Term Savings*

Our goal is to add $5k annually to our mid-term savings fund. Temporarily we may raise this to $7500 because we have catching up to do. If we had done this all along, we would have maybe $30k in this fund today. (Have not had a lot of expenses lately, since moving here). So yeah, I feel we need to make up for some lost time, but in the long haul, $5k annually should suffice. (We have $3k today and might need it for dental expenses).

I primarily look at this as our new car and house maintenance fund. Other uses would be larger car repairs and stuff like orthodontic expenses. Just larger expenses that are farther in the future.

You could also call it our anti-debt fund. I think this is the kind of stuff the masses put on credit cards and HELOCs, and we just have no desire to do that.

Our one-income strategy was to buy a newer house that should need little work. That has paid off. We have put very little money into this house since we moved in 7 years ago. (Maybe $1500 for some bird proofing??? A new washer and dryer?) We also paid cash for a couple of cars since, so we saved up a lot before we had kids which carried us through a bit.

But for the long run, we will have a lot of house maintenance expenses (some we should be considering now - like painting and replacing the fence).

This fund would also cover furniture and appliances and all that as well. Stuff we just don't spend a lot on, overall.

*Layer 3 - Retirement*

This is the long-term stuff.

For now we are putting 12% to retirement.

We have actually averaged 12% over the last decade or so, amazingly.

My goal is to get retirement up to 15% on one income. With my employer match this could potentially be 25%. But I don't expect to have that extra 10% for the long haul.

15% of my gross right now just happens to be $10k. So maxing our ROTHs is my roundabout goal over the next couple of years.

Anyway, if all my other savings accounts are on track, the less likely I will need to divert retirement savings to bills, or to pull retirement money out to get out of a bind. So it is just another layer in my plan. It goes much better when all the other layers are taken care of.

*Layer 4 - Emergency*

I am not sure where to put my emergency fund in the layers.

I consider this catastrophic savings as we generally have enough savings for smaller emergencies, as is.

I guess the emergency fund would mean we wouldn't have to raid our other savings layers if we did face a large hardship. Ideally anyway.

I have 3 months living expenses in cash & I also could sell our second vehicle for another 3 months expenses (a no brainer if we faced catastrophe - the second auto would go). We also with time should have a fair amount in the mid-term savings fund to divert in case of emergency.

So this is some of my thinking with our emergency fund.

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Anyway, for now it is a work in progress. But we're getting there. I think once LM is out of preschool we will largely be there. (Can fund the second ROTH at that point, by diverting preschool monies).

I think largely, with the shift to one income, mid-term expenses were largely ignored in our household. This was okay because we had a huge efund going into this (trying to prepare for long periods of bed rest, potential medical bills, or a longer period of time between children, etc., none of which came to be). So we ended shifting a lot of that efund to retirement and mid-term expenses in the end.

The rest of our savings has been rather on track. I would have preferred to put more into retirement, as time progresses. But our health/dental expenses have increased by about $10k per year. So it's just kind of crazy.

On the flip side, a decade of 12% contributions are a pretty solid foundation for a 30-year-old's retirement. I do not feel behind in the least. Could have done better, but I think I will survive. It should only be up from here.

I'll show my expenses over the weekend - the credit card closes Friday.

As of today, I am up to $4890 expenses for September, which is quite reasonable. I like to think our expenses average $4000/month (regular and monthly). & the figure above includes $400 in dental expenses and $400 auto insurance and repairs.

Gas and Groceries were right on - $800. Though I am not sure if dh has to go to the grocery store the next 3 days. Probably, it seems it had been a while. So we may go over. I will encourage him to just get what we need. We certainly have enough food to last through Friday.

So everything was right on, or under budget.

Except one area we completely blew out of the water.

Dining out - $225.

Egads!!!!

LOL.

I almost fell over when I saw that one. I guess it adds up fast.

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I also just added all my interest for the month, to my savings spreadsheet.

& I remembered I will get $250 from the credit card (rewards) next week.

So my mid-term savings will hit $3k next week. Woohoo!

It will be short-lived. Too many expenses coming up.

I also was finally able to get my short-term savings back in the black. Yeesh.

I updated my totals on the left.

(Almost $5k in cash over efund? Eh, easy come, easy go... IT will be gone on a flash - most of the money is earmarked for large expenses).

Oh well, more on all of this later...

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Almost forgot, my CD matures next week and my 0% balance transfer is due this month. So this was my last month of $90 interest. That figure will drop to $40 interest, next month. *sigh* It was fun while it lasted though!

To help make up for it I am now saving $200/month. The interest was really nice when times were tighter. Easy money. But now I can pick up the slack (& improve on it).