Home > Archive: January, 2020

Archive for January, 2020

Kid Financial Update

January 22nd, 2020 at 03:37 pm

I received dividend 1099s yesterday so was able to complete our taxes. I just am waiting for tax software updates now. (I probably won't finalize until I take my tax update class, probably in another week. Make sure I am not missing anything).

Now I am focusing on the kids. DL(14) didn't have any stock sales last year so I should just be able to report his interest/dividends on my tax return. The taxes on that should be $0.

I tried to pull their 12/31 statements to confirm YTD interest income last night but it was +$9 which didn't seem right. I thought the statement was off and decided to deal with it later. Well, this morning I am going through all of DL's statements making sure they match my financial records. I had no idea that their "7% interest" credit union had also done a special dividend this year. +$9, which made the actual interest rate on that account 9% for the year. Wow! (They got a bonus $8/$9 from both of their credit unions).

DL(14) had $53 interest income this year. His allowance was $150 for the year and he deposited another $325 cash during the year. It's hard to say because we switched him from cash to electronic system mid-year when we opened his checking account. Some of that cash may have been accumulated allowance money or gifts from prior years. & clearly he had some cash spending because I know he made some purchases but nothing that came through electronically. But as it stands, he received $528 (gifts) and spent -$0-. 2020 will probably be more thorough in the electronic records since he will have his checking account for the entire year. & I believe he owes me $20 for birthday/Christmas gifts. Will see if he just hands me cash for that or if he needs to make an electronic transfer.

MM(16) will be much more complicated, with the jobs and everything. In fact, he told me he worked for my old/forever employer in 2019 and I didn't believe him (I didn't remember that at all). But in the end, I do have some deposits recorded. I just looked and I did not do a great job of keeping track of that. Unless maybe I threw his pay stub in my tax file. (Is very possible). I generally don't wait for W-2s, or want to make sure the W-2s are correct. I have all that info in Quicken somewhere, so I can probably use that if nothing else. Or maybe he has the pay stub and can produce it. I should probably just ask him.

I will start checking that his bank/interest statements match Quicken. He did his own taxes last year (with my help) and I think he can just do it on his own this year. Even if I sit down and go through it with him every single year, by the time he graduates college he should be more than competent to do on his own. In my house if you have a job, you can do your own taxes. So that is why he did his own taxes last year.

January Reset

January 19th, 2020 at 03:00 pm

Knock on wood, but the year is going well so far. More peace and quiet than I remember in *forever*.

I can't tell you what I am doing with this latest reset. Crossing my fingers that the tornado around me loses some steam? I'm trying to be more assertive with work hours? But... this only works when everyone isn't out with some emergency or other.

{I can't imagine what else I could possibly do within my realm of control. Which is why I am just at the point of crossing my fingers}.

MH has the month off, so I expect this is contributing to the peace.

I did "fire" one of my side clients. The feeling is mutual and it is all good. This leaves me with one remaining client. I am more than ready to move on and will be rid of them soon. But the workload is just about an hour a month, so I can give it a little more time. 12/31 is my hard deadline, not wanting to drag any more red tape into 2021.

Of course, *the* most exciting thing is that I am enjoying my first tax season off in 20 years. 🎈🎉🎈 I always worked several jobs in my teen/college years. Post college I have always had a busy/OT season. So... I have started semi-semi-retirement? Was a step down that I wasn't particularly planning or expecting.

A couple of weekends ago MH went to the Bay Area to help his parents with some things. I was not up to it whatsoever.

Last weekend we hosted a game night. In the spirit of trying to get out of "reactive" mode (just reacting to everything that is going on), this was our attempt to do something more proactive. When talking about it, we were pretty set on just setting a time every month with "no excuses". So when it turned out that MH already had a commitment on our first game night, I told him not to worry about it. & then I remembered why I never invite any adults anywhere, because they have to plan 90 days in advance or whatever. 🙄 Then MM(16) wasn't feeling well. But DL(14) pulled it through. He's definitely the most social and has always had a big group of friends. The played a lively game of Diplomacy. (I really didn't think anyone would play that with him. But the art school kids seem to embrace some of this stuff from a more theatrical standpoint). All I did was cook and clean all day Saturday (so behind on the house, and MH wasn't here to even run to the grocery store for me). But it was most definitely worth it. I enjoyed taking all that "work" energy of decades past (usually working Saturdays) and channeling it into my family and friends.

This weekend has been more of the same. I had an opportunity to do some unique charity work, so that was my big commitment this weekend. It was exhausting, but very rewarding. We also hosted all of our parents Friday night; DL(14) had another band concert. I am enjoying having the time for different things.

MH and I are going to Napa on another weekend. It sounds absolutely divine. It's such a short drive and we usually keep it very low key. Will probably do one nice dinner out and a hike. But MH's birthday is this month and I usually take off a weekend for that. So that will be more in the realm of our normal. I suppose it will be nice not having to cram and worry if I can really manage a Saturday off.

I do have a mountain of bad news, but it's sad to say that it doesn't feel like much because the pace has slowed considerably. Phew! I even made some comment a couple of days ago that 2020 was off to a much better start and MH looked at me like I was crazy. Fair enough, but these things are relative. His Grandma is very sick and we are worried about her. My Dad is going in for a biopsy next month. Etc., etc.

Edited to add: Things took a turn, back to emergency mode. We are rushing off to the Bay Area today because MH is so concerned about his Grandma. I am horrified by the idea of bothering her or bringing more germs, but it's what he needs to do so I will support him. (The kids and I will let her rest). I am still very grateful we had two weeks of calm and peace, before diving into the latest emergency. I think she will probably be fine. Her attitude has always been, "My arm is falling off? It's just a flesh wound." After hearing from "always completely hysterical in a medical situation" MIL we did skype GMIL and we both felt immensely better. She is clearly fine and shrugging it off. But we are being cautious because she is a 95yo with pneumonia.

Skip the Shopping Cart

January 12th, 2020 at 03:30 pm

I know I have shared in the past that I don't use the shopping carts at Target. Nor the baskets, most the time. If I can't hold it in my hands I don't need it. (Unless it's a very specific trip for more items or something larger). I have sometimes looked ridiculous and been asked if I need a basket, but it was worth not being tempted to spend more money.

So I felt, "Exactly!" when I saw this article yesterday:

Text is and Link is

There's a reason you can't leave Target without spending more than you planned—blame the shopping cart.

One of the very first shopping carts, invented in 1937, was simply a metal frame that held two wire shopping baskets. Eventually the design evolved to one basket, and the nesting capability was added for easy storage. The first shopping cart baby seats were added in the 1950s. For the next several decades, the shopping cart design remained the same—except when it came to size. The average shopping cart has almost tripled in size since 1975. From a stack of two hand baskets to the gigantic carts we see today, why the change?

Bigger Carts Lead to More Spending
There are a couple of theories out there as to why shopping carts have gotten bigger and bigger: wider shopping aisles and larger shopping budgets are leading people to buy more goods and groceries. But there could be a more subliminal reason: to trick the consumer into spending more. Marketing consultant Martin Lindstrom told Today that when the shopping cart was doubled in size in an experiment, shoppers would buy 40% more merchandise.

I had figured out that a shopping cart makes it way too easy to buy crap that you don't need. I had never really thought about how they make the carts bigger so that you can add more. It's kind of fascinating how much that works psychologically.

Skip the shopping cart next time. It really works.

Credit Card Rewards Tally 2019 (Final)

January 9th, 2020 at 03:31 am

2019 TALLY:

$550 Gift Cards (Citi, Moi)
$150 Bank Bonus
$ 70 Amazon Gift card (Amazon Prime, MH)

Other Rewards:
$ 29 Citi Price rewinds (RIP)

Ongoing rewards:

+$320 AmExRewards (6% cash back groceries/streaming services)

+$83 Target rewards (5% discount Target purchases; mostly groceries)

+$177 Visa Rewards (3% cash back fuel/restaurants)
Ended up also using for groceries in Q4 (3% cash back)

+$887 Citi 2% card (2% back everywhere - health insurance/medical is the big expenses that we charge, is more than our mortgage payments)

Grand Total = $2,266

I just want to add that historical figures below do also include bank bonuses. They just don't generally work very well for us so I do not utilize as much. (We did -0- bank bonuses in 2017/2018).

Year 2011 = $4,164
Year 2012 = $2,782
Year 2013 = $2,623
Year 2014 = $3,128
Year 2015 = $2,585
Year 2016 = $1,906
Year 2017 = $3,578
Year 2018 = $2,096
Year 2019 = $2,266

Total 9 Years = $25,128
***Mostly Tax-Free Income***

MM(16) also earned a $150 sign up bonus, a $10 credit for switching to paperless statements, and 5% back on gas for one quarter.

Note: I have been tracking since 2011 because that's when the rewards got CRAZY. We have always utilized cash back on credit cards. It's just been extra rewarding during the past decade.

***CAVEAT - I absolutely do not recommend utilizing credit card rewards in this manner, unless you are in full control of your credit card spending. We treat our credit cards like debit cards; only charging if we have the cash on hand already. We've never paid a cent of late fees or interest.***

Allowance Update

January 5th, 2020 at 05:16 pm

It's time... It's past time. Turning off the allowance for MM(16).

First I wanted to back up a bit. We started giving our kids a $2/week allowance at age 5, with the intention of them starting to learn about money. From that point on, if the kids wanted to buy something, most of the time it was, "You have the money, you figure it out." It's valuable to start learning these lessons long before you start having a bigger income to manage. Waiting until they got a job and started making $15/hour (a lot of money for a teenager) would be too late, in my opinion. Could be worse, but you miss a lot of learning opportunity if you wait that long.

I've posted before, but I really expected the $2/week allowance to increase over time. But my kids have been so frugal and careful with their money it never came up until DL was maybe 13 or 14 and recently asked for an allowance raise. (He hasn't spent any of it honestly, but he asked and I thought it was reasonable).

Both MH and I worked pretty steadily since age 15 and so I just always presumed we'd turn off these allowances once the kids turned 15 or 16 and got a job. The allowances have served their purpose. They are making 10 or 20 or 30 times as much with summer jobs.

In the end I had a miscommunication with MH. I could swear he was not down with turning off the allowance when MM got a job and when he turned 16? It's too small for me to care either way at this point. But... I don't even remember what conversation we had after that. But I put it on my calendar January 1 to turn off his allowance. (Lord knows I can't remember a single thing in the chaos of the last few years. No room whatsoever in my brain). I don't remember anything or why or when I even put this on my calendar. But I do remember clearing it up with MH that was not at all what he said or meant. He is now very much, "Why does he still have an allowance!?" I don't know, because I thought you wanted him to? So I am going to turn off that auto transfer today, saving us $3 per week.

I expect we discussed with MM(16) at some point but gave him a little notice. I put it in my calendar because I knew I would forget.

I suppose this makes the official cutoff age 16.5. It's worth noting if we want to be consistent with DL. (And... I put that on the calendar).

2019 Spending

January 5th, 2020 at 03:15 pm

I skipped the last couple of years, but will revisit our Top 5 and Lowest 5 expenses for 2019.

{I keep track of all our spending/accounts using software, so I still have meticulous records even if I have mostly put it on ignore the past couple of years}.

2016 Commentary:
I highlighted the vacation spending because we aren't big vacation spenders and these are very one-off type expenses. Our annual budget is only $2,000 for vacation, and is more in the realm of what I foresee spending the next several years.

On the mortgage, we made an extra payment (or two?) versus last year. We should be under the $7,000 mark on mortgage interest in the future. This is one of those expenses that is snowballing downward very rapidly.

Auto expenses include repairs/maintenance, insurance, registration, fuel. (We pay cash for cars; no car payments).

{I do have details on the autos, and I also track expenses per vehicle. For 2016: $1944 fuel, $1800 insurance, $278 registration, $803 repairs/maintenance}.

Medical expenses are insane, but our insurance has covered almost seven figures in medical procedures for my husband (before age 40). So, at least I know we get our money's worth, and it's very important for us to have high quality insurance. I am sure given different circumstances we would have just gone "cheap". It's been our biggest expense for several years, so is nothing new. It's been our biggest challenge with *one income* living, but we live so far below our means that we have been able to deal with it. But I know it's so glaring that I should address.

**I have not included income taxes because is not a large expense for us.**

The interesting thing about our lowest expenses is that it tends to be our more luxury spending. I am sure I have said it a million times before, but will say it again. We don't do without. We just are careful and rein in costs, and shop around. & prioritize what is the most important. So most of our "luxury" type spending ends up towards the bottom.

I expect our total expenses to be about the same for the next couple of years. We have some home maintenance ($$$$) to tend to. Starting to talk braces for both kids. So stuff like that will probably replace our recent vacation spending. These are things we also want to take care of while our income is high and before our kids start college.

2019 Commentary:
Not much has changed but we did bump "Vacation" off of our list, as expected. Travel is not something we highly value and I don't expect it to be a priority in the near future (if ever). I can't even imagine why we'd spend $9k on vacation. 2016 was a ridiculous year of over-paying for just a couple of domestic trips to D.C. Very one-off.

Medical tops the list as always, but was bumped up with the Orthodontia expenses. (It's a medical tax deduction, so I lumped ortho with our other medical expenses).

Groceries bumped up significantly with MM(16) doing track this school year. So that bump up is mostly adding track for 6 months, though may include a couple of years of increasing appetites (in between). 2020 will be interesting with the full year of track. I had bumped up my grocery budget to $850 monthly ($10k annually) in 2020 but I wouldn't be surprised if I have to bump it up more mid-year.

I think where we are at with this is we give up and only have to feed that kid for another 18 months at home. There was some talk of revisiting Costco at some point, but we keep coming back to that it's just not convenient whatsoever. (It doesn't help that everyone we know personally who raves about Costco spends a bajillion dollars on food). We would probably be smart to ask our parents to pick up a few things here and there. We had some $9 pizza on Christmas and I wouldn't mind having a few of those around, but then again we don't have any freezer space and we just don't feel like re-inventing the wheel for 18 months. Meh.

P.S. We did offer MM(16) to reimburse him 50% (in cash) of any "employee discount" grocery savings he can earn us if he can get a job at the grocery store we frequent. It's actually walking distance from our house and a very strong job contender. Depends how many hours he can get there. If he wasn't doing track, it would probably be a done deal.

Mortgage interest is snowballing downwards, as expected.

Without any big vacation expenses, Auto takes it place back at #5. It was our first year with three cars.

Haircuts bumped up because my kids are interested in hair cuts now. MM(16) actually took himself for a haircut the other day. & I don't have to drag DL(14) kicking and screaming any more. Phew!

We mostly make it a rule not to buy any subscriptions and are pretty conscience about refusing to be nickel and dimed for anything. (Man those little things add up!) But... MH needed to sign up for a newspaper subscription (online for $20?) in order to continue to participate in the newspaper rewards program. He always gets free movie tickets and show tickets. This was $20 well spent. He won several movie and concert tickets in 2019 and he won another Kindle Fire? He easily won $500 worth of prizes last year. Sadly, they ended their rewards program (last month?) so there is no more of that. He did not renew this subscription, accordingly.

This last item didn't make the Bottom 5 list but is worth mentioning. MH signed up for a movie pass type deal with a regional theater (the one closest to our home) and pays $20/month for unlimited movies. Truly unlimited. Talk about luxury spending (what is a very high priority for him) taking up very little of our budget. That's been awesome. Just like movie pass, he is still running up reward points with every movies he sees, so this deal also comes with a lot of free movie passes so I can tag along (about as often as I would want to, which is not a lot).


Some 2018 versus 2019 notes:

Car expenses went down by $1,200, though we added a third car. Some of it was MM(16) taking over the "third car" expenses when he turned 16 (mid-year). Most of it is switching to electric vehicle/fuel for my new/longer commute. & of course, we no longer have to pay for all that fuel to shuttle MM(16) around, so we had some cost savings there.

Grocery spending +$1,300 over last year.

Medical +$7,500 (+orthodontia) - clearly a one-off expense.

Professional Dues -$2,000. My employer (very unexpectedly) offered to pay and also reimbursed me for some 2018 expenses.

Misc. -$3,000
Not entirely sure what that is about, but we did consciously scale back on the show tickets and so on with my job change and salary reduction. Then again, I was making so much side income we had some "what the heck?" moments.

In 2018 we did replace our cell phones (ahead of expected job change and salary reduction) and bought a new washer and dryer. We did also buy a charger for the new car (an auto expense, I suppose). We did spend $2,300 on concerts and events: A few symphony shows, Iron Maiden, Weird Al, Sketchfest, Robot Wars, a musical, a book signing, and various smaller concerts and events.

In 2019 we did buy a (used) elliptical for almost $1,000 and a new TV and sound bar. But... LOL, we spent $70 on concerts and events. I suppose we took that very seriously that was the thing to go with my pay cut. I am actually surprised because I feel like we were pretty lax with all the side income I Was earning. This is also not completely fair because we spent $200 but it's offset by a $120 reimbursement from MH's friend for some concert tickets we bought (the year before).😁 We clearly had less bigger purchases and significantly cut down on the concert/event spending. It's just nothing I would have remembered, without seeing it in such glaring black and white.

I don't know that anything will change in 2020. My budget is pretty tight by the time I factored our actual grocery spending, tax increases, health insurance increases, etc. If we had some extra money I would like to go to the Symphony more, but the Symphony is expensive. It might be mostly on hold until our kids are done with college. Our art museum does some pretty amazing concerts for $10 or $20, so we will be creative and figure it out. We also do go to a lot of concerts and musicals (professional level) at the art school which is maybe why I don't *feel* much difference between the two years. & duh, we probably bought a lot of tickets in 2018 that we used in 2019.

2019 Goals

January 5th, 2020 at 02:37 pm

2019 Goals


[X]$12,000 to IRAs 2019 (MAX)
...($12,000 @ 12/31/19)
...Not entirely sure how we will fund this. Because my salary decreased by $12,000 this year, this was the obvious thing to give. It will have to come from gifts, MH's income, my bonus, and/or shifting money from taxable investments. Funding our IRAs is always our first priority, but just will not be funded from my salary.
UPDATE: For 2019, ended up funding with second job and MH's income.

[X]$7,000 to savings
...($7,175 @ 12/31/19)
...$550/month, plus interest.
...Topping off with snowballs
UPDATE: Goal Met. Even when I subtracted out major expenses paid with cash, extra to mortgage, etc., we somehow ended up meeting our savings goal. I definitely over shot. Some "over preparing" on our part.

[X]$1,500 to investments
...($2,033 @ 12/31/19)
...Funded with snowflakes
UPDATE: Goal Met. Did better than expected, but did it with the snowflakes.

[X]9% of my full-time income to work retirement plan
...This is the minimum for the match; I'd otherwise rather fund IRAs.
Note: Maxing out IRAs is additional 15% to retirement. This is very deja vu to lower income years. The last time we saved 20%+ to retirement was during our lowest income years. This is due to substantial tax savings and employer contributions (how I am funding the entire 9%). Plus, if we max out IRAs regardless, it's a bigger percentage of a smaller income.


[/]$6,000 to mortgage
...($3,370 @ 12/31/19)
...$3k per year to pay off in 20 years (from last refi); also ensures that we pay more principal than interest
...In years past I had funded with OT, but am no longer working at a job with OT. This is a placeholder because we skipped 2018. If we have a windfall of any sort, I'd like to pay down $3,000 for 2018 and $3,000 for 2019. For now, this is our lowest financial priority (expect to fund some home improvements instead during 2019, and tend to other expensive cash flow items first).
...2020 & Forward, our much bigger priorities will be college and down payment for next home ($$$$$). I don't expect to have any future mortgage goals (but to pay off when we sell in a few years).
UPDATE: 1/2 Goal Met. I ended up putting +$3k (2018 placeholder) as a stretch goal for 2020, and will be adding $100/month mortgage in lieu 15-year/lower interest refi. If MM(16) gets accepted to and chooses private college (likely), we will probably really and truly abandon future mortgage goals. For now, have more cash/income than we expected.

Some commentary from my original 2019 Goal Post:
Money that was going to taxable investments before, is now going to 401k. From a net worth standpoint, it's all well and good, but I am not thrilled because I feel like I need a bajillion dollars cash (teen drivers x2, braces x2, home repairs, etc., all in the very near future). "College savings" is accordingly on the back burner again, but I am okay with earmarking ROTH money (for college) during years we contribute 20%+ to retirement. Otherwise, it wouldn't make any sense to be so retirement heavy, at the expense of the rest of our finances, but everything is so "hell if I know," I'd rather err with piling up ROTHs.

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

All of the above is still true. It feels good to knock out braces ($$$$$) and is mostly why I worked second job 1/2 of the year. We don't borrow for things, we've always been creative and/or just make more money as needed.

College is still complete limbo, "Heck if I know." Somewhere between -$0- and six figures. Should be more clear in another 12 months. I could see just doing the 9% to retirement (work retirement plans with matches) if MM(16) ends up at private school. But it's too likely he will end up at our "cost pennies" alma mater, so I don't see the point of changing anything at this point. Could be drastic changes next year when we get out of limbo land.

Net Worth Update

January 1st, 2020 at 03:12 pm


Wow, what a year! My money worked harder than I did this year, for sure.

{We've many times had six figure real estate increases in a single year, but have never had these kind of stock market gains}.

It was a good year to have this win. I had taken a pay cut and we had some significant expenses. Which makes it all the more incredible how the year turned out.

I was just excited and wanted to make sure to crunch numbers first thing to see where we landed.

We paid down the mortgage by $9,000 and the rest was stock market contributions and gains. (If you are wondering why I'd rather invest than pay down my mortgage more rapidly, this is probably a good illustration. Maybe especially considering that we have also had many $100k+ gains with a mortgaged home).

Today we could pay off our mortgage and still have $340,000 cash/investments. For the first time, we could do this with only cashing out about 1/2 our ROTH IRA and all of our taxable investments. It's the first time we could leave everything else intact (emergency fund, kids' college, rest of retirement, etc.). I am not tempted yet, but honestly, if I had an additional $50k in investments, we could pay off our mortgage AND leave six figures in our ROTH IRA. At that point, I would probably be tempted. Especially with just cashing out at a peak. Taking the money and running. I've always said there is a tipping point. I just have never been so close to the tipping point. If my stocks go up $100k next year, I wouldn't rule it out. (We seriously considered doing this with our house in 2005, but we just missed the boat. We had literally decided to move and cash out our house, doing a second "moving to a significantly lower cost region" move, but the market started to tank before we executed the move. We clearly weren't the only ones who had this idea). I am afraid we are probably in "will just miss the boat territory" this time too. Will see...

P.S. I'd honestly rather the market go down and be able to buy stocks cheaper. While it's fun to see big numbers on the balance sheet, I don't think of this huge stock market run up during my prime working years as being terribly useful to my long-term wealth.

We need our net worth to continue to increase (on average) $50k per year to reach our Financial Independence goal at age 50.

Estimate Net Worth Change for 2020:
Mortgage: Paydown $7,000
Investments: Contribute $4,000
Retirement: Contribute $21,000
Investment Returns: $18,000 (would need 4% gain)

Our net worth changes never look anything like our estimate (it's rare any asset class actually has an average year). But, I go through this exercise just to make sure my goal is realistic and doable.

P.S. We will likely hit the $1 mil mark with our assets this year. Just $30k to go... That will be a very exciting milestone.

P.S.S. Good Riddance to 2019! I wish I was more optimistic about 2020, but it's shaping up to be very difficult. I can only hope for some space whatsoever to breathe and process anything that is happening.