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January Savings

February 10th, 2019 at 09:13 am

I am reviving my "monthly savings" posts. I abandoned last year because I knew I would just be in hoarding cash mode. Not very exciting. But in the end, I didn't have time for this, so probably for the best. Going forward, I should have time to keep up with these:

Received $67 bank interest for the month of January.

Snowflakes to Investments:
--Redeemed $0 credit card rewards (cash back) from our gas/grocery card.
--Redeemed $83 cash back on Citi card.
--Redeemed $10 cash back on dining/gas card.

Other snowflakes to investments:
--$5 Savings from Target Red Card (grocery purchases)
--$8 "Price Rewind" for washer/dryer purchase

TOTAL: $106 snowflakes to investments

401k Contributions/Match:
+$686

Snowball to Savings:
+$ 500 MH Paychecks
+$1,500 December work for old/forever employer

TOTAL: $2,000 snowballs to savings

Savings (From my paycheck):
+$ 550 to cash (mid-term savings)

Mid-Term Savings (cash saved for non-annual expenses/emergency):
-$0 No Mid-Term Expenses this month

Short-Term Savings (for non-monthly expenses within the year):
+$1,400 to cash
-$ 800 Home Insurance

TOTAL: $4,000 deposited to cash and investments

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I had been putting $300/month to savings and investing $250/month into taxable investments. I just combined these to "savings" for 2019. We are "retirement heavy" with more retirement space and new job situation. If nothing else, will eventually be redirecting that $250/month to our IRAs. Will abandon taxable investments, except for snowflakes.

I like to put snowflakes to either the mortgage or taxable investments, because it's a "small things add up" thing, and if we keep it in cash I have no problem not touching it, but at some point when you have an extra thousands of dollars laying around you will be tempted to spend it. So I always tie up snowflakes in things I won't touch. I am going to fund retirement regardless, so that leaves taxable investments or mortgage.

On the income front, I traded $11,500 reduced salary for $7,500 401k contributions/match and significantly reduced taxes. Just means we can fund 401k with $7,500, without reducing our cash flow at all. So I am really only short $4,000 net; $4,000 less going to retirement. I expect to easily make that up this year with raise/bonuses. (& I've already made that up with side income, but more long term I'd let to get my net salary where I left off, with just the one job).

I've also lost the OT, which we were throwing at the mortgage. So we will stop mortgage pre-payments for the short run. We may stop indefinitely. We just want to pay cash for our next home when we downsize and we have achieved that goal (we have enough equity to do so: $300,000+). But we don't want to make this move until our kids are adults and done with high school. For now, we would rather fund our IRAs, and otherwise hoard cash for college and a down payment on our next home (we expect to buy our downsize before we sell this home, the down payment will keep things more flexible). That's our plan for now, but I do expect things to change significantly in the next 5 years. It's a very loose plan, but just to explain why the mortgage will fall off our radar for a while.

We are doing well on extra cash/side income, but we also want to fund our IRAs (in addition to the above retirement savings). We have three cars now, both kids need braces, college is right around the corner, we have some home improvements to tend to, etc. Oh, and the down payment we want to work on. We are going to be in "hoard cash" mode with the extra income.

We've also already maxed out our medical deductible for the year. I don't expect this side income to really remain in our account very long.

P.S. If it isn't not obvious, our emergency funds remain entirely intact. I did not end up having any time off work, beyond what was covered by PTO owed to me.

5 Responses to “January Savings”

  1. rob62521 Says:

    I think you are wise to fund your retirement and pulling back on the extra mortgage. Hopefully home values will not drop.

  2. Dido Says:

    I've never thought about tracking these "snowflakes" and "snowballs" before on a monthly basis, but you inspired me to go back to January 1 and start tracking: $114 in "snowflakes" and $1,219 in "snowballs" in January (which includes HSA and FSA contributions--the FSA is of course very short-term savings but the HSA always has some amount to roll forward each year, and once I get the non-mortgage debt reduced, I'll be able to cashflow all of my out of pocket medical expenses from my paycheck and will be able to let the HSA accrue as a retirement fund for medical expenses--yet another reason for me to try not to have to retire until age 70.)

  3. Amber Says:

    Way to go! When do you think you’ll have the mortgage paid off? I love how you throw the extra at it.

  4. MonkeyMama Says:

    @Amber - not throwing extra at the mortgage right now. I expect we will pay off the mortgage when we sell our home in 5-ish years. I don't see any way we'd pay off sooner. Investing/retirement is our bigger financial goal. & getting our kids through college.

    It's kind of anti-climactic, but we don't want to keep our house once our kids are done with high school. So I don't know that we will "pay off" our mortgage in any traditional way. It will just be paid off when we sell.

  5. MonkeyMama Says:

    @Rob - It would be GREAT if home values drop. Lower property taxes (when we move). Less down payment to save up for. More of a buyer's market. I think that would be our preference.

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