Monkey Mama*s Monkey Money Blog

Okay, so I read this chapter Friday or something. (When did I Read it?). Maybe Thursday night. But it clarified a bit.

On the 20% savings it breaks down as follows:

10% Retirement
5% Prepay Mortgage
5% Future Dreams

Oh, if only it were that simple!

For one, 10% retirement seems a bit on the low side to me. Then again if they are saying 10% now, 15% later when mortgage is paid. Then, well, I guess that might make sense. But this was 10% of take-home pay, which makes it even skimpier).

5% future dreams? I guess. I think this is probably good. But I think there should be caveat in there that it also helps cushion your emergency fund, for the unforeseen stuff of life. This is the way I look at my life. Of course I want to save oodles of money for earlier retirement and future dreams. Reality is, something will probably come up. Life would have to go really well for a long time to cash in. But I don't know, maybe it keeps you going to have a dream. But for the most part seems the dreams of your life should come from the wants/needs section. The 30% wants. Why not save some of that for your dreams?

I also did not see any mention of the importance of saving for bigger purchases in this book. That since you are switching to a cash lifestyle, you need to start putting away for your next car, etc. (If this was mentioned I did not see it!). When you look closer at the dreams savings I think that is what it is amounting to. (Cars, college, weddings, etc. - these were examples in the dream section). I just think that the authors do a bit of a disservice painting this savings as "dream savings" when it is most likely going to pay cash for cars, repairs around the house, and orthodontia for your kids. You aren't suddenly going to be paying cash for vacations to Aruba if you save 5% for "dreams" and the rest for retirement. Sure, it will make life easier than it was, if you were in financial hot water. But this part of the book angles a little too much to "get rich quick scheme." You'll never have a money problem again! If you believe that, well, you have bought all the glitz of the book.

But I am glad the savings part was clarified. I was confused on that part in the first few chapters. 20% savings for what? Now I know...

I usually watch the market (housing) like a hawk but have paid little attention lately.

For one, there is less for sale than usual anyway (in our neighborhood).

So I was poking around zillow today and was rather shocked at how things are settled.

Our neighborhood has been so WEIRD. For one, big homes saw little trouble for a LONG time. Still plenty of move-up buyers, though obviously the writing has been on the wall a long time as the small homes have sat and sat, for about 2 years now. I am not even sure if any have sold. Some have been sitting for well over a year.

We had our home briefly on the market in mid '06. We would have taken $499k (wanted to make a lateral move in the area). There were 3 houses for sale for $600k. I thought they were absolutely insane and we priced around $525k at what seemed reasonable at the time. All 3 houses sold for $600k. 2 of them in less than 3 months. No houses sold for less.

Obviously that wasn't sustainable, but it was interesting all the same.

So I mentioned earlier our neighbor had to move for health reasons very quickly and wanted to sell fast. They took $490k in about a week and fled. I figured that would bring prices down, but no real signs of desparation in our neighborhood. Not a bigger price drop on the horizon. (wasn't $110k overnight enough?)

& then I saw on zillow today the bigger homes that have been sitting a while now with short sale signs and all that - well one of them I have noticed for a long while anyway - it is priced at $399k! Wow! & not a nibble. There is another one priced around $425k.

So it pretty much breaks down to this:

December 2006 - $600k price - sold easy (full price at that).

December 2007 - $399k price - sitting

33%+ price drop in the blink of an eye!

I have said a million times those people asking $600k were crazy idiots. What the hell do I know? They sure squeaked out in the knick of time. What luck!

So anyway, though most of me is not terribly surprised. I am still a little amazed. When the heck did this happen?

What happened is clear though. The last sellers in 2006 were not desparate in the least. One of them held out a year to get $600k. They were also rather "greedy." I am not sure most people in their right mind would care that much to have to get $600k. Or maybe there was some looming desparation there. I just don't know what their thinking was at all. I am just surprised it worked for them.

On the flip side, all we have is desparate sellers today. Thankfully not too many in our neighborhood. Yet. But enough... All it takes really is one.

WE locked in the base price of our house in mid-2001. $260k. The big ones were going for $270k. (Lots more space but we didn't like the layout, orelse we would have grabbed one of those - sure for $10k extra for a few hundred square feet!)

I know they were well into the $400k range by December 2002.

At $399k I swear we are back to June-2002. (& these are the big models).

I just didn't expect it to happen so fast. I am starting to think things will get a lot worse than I imagined.

As for us, I am not too concerned. There was lots of concern if we were getting in over our heads buying a $260k house in Sacramento in 2001. From the locals mostly. WHo did not fully understand that the alternative was 1/2 the house for twice the money in the Bay. I always said back then, I don't care if the house depreciates to 0. I just wanted to live somewhere that didn't cost an arm and a leg. & we were blessed to find that and still stay in the state and be close to family, etc.

PRetty much how I Still feel today.

It helps to have a reasonable mortgage and to have paid 30% down already. I just assumed we would never be upside down in this house though. I assumed that until about today. It is starting to get UGLY!

Wow, the tide turns fast.

I still feel pretty good though. My house's appreciation might amount to a hill of beans tomorrow BUT the houses we could not afford in 2001 in San Jose are holding strong at $800k+ today (from $500k in 2000). I'll take this any day. Appreciation was a nice side benefit I never expected. Sacramento had never appreciated like that before, and who knows if it ever will again. I know a lot of people who got out at the right time and made bank. We decided we didn't want to get out though, and I am just as happy with that decision today.

But in the meantime, yeah. I think I will just switched to assessed value for net worth purposes. I am not sure how long that will even be enough at this rate though. I have the house at $450k in Quicken which felt rather conservative like a week ago. $325k or so assessed. (I'll have to double check!) That's what I will go with for 2008.

We paid about $300k (in 2001) with all the upgrades & landscaping, and owe $210k today. So we've paid off a chunk, for sure.

I also was not holding my breath in the least that we could fight our property taxes anytime soon. Wow, at this rate our assessed value could possibly go down next year. That's crazy.

I still feel like this is only the tip of the iceberg so I am trying to brace myself now. The possibility of us being upside down on our house just did not cross my mind. Impossible. We bought before all this mess... I don't know. Not sure it will happen, but it suddenly looks a lot more plausible...

It was kind of nice to be blissfully unaware...

I think this is where my juxtaposition on house ownership lies though. 90% of me just does not care. In the least. Maybe more than 90% doesn't care. My house is my house. I think the only reason I have ever looked at my house like an investment, at all, is because how expensive houses are out here. HEll if I going to put $100k into a house and not make sure to increase the odds of keeping that $100k. Hell if I am going to sell my house for $600k and throw that money down the drain by not doing my homework on my next house purchase, etc., etc. But at the end of the day my house is really little more than a house to me.

I can't say I will lose any sleep over any of this. Just a bit of a shock factor today.

Outside my own little bubble though, this is certainly a wake up call to how bad it is getting out there .. Just, wow...

I made more progress on this book.

I liked the chapter on "wants" though I think it could have been more useful. Yes, it is important to spend money on wants. & on wants that you really want, not what other people want or what you think you should want. I think that is one thing that bugs me sometimes in the blogs/forums. Lots of crticisms of other people's "wants." If you are in the budget, who cares. If you are following the 50/30/20 plan, want whatever you want in that 30%. IT shouldn't be up to criticism. Everyone has very different wants.

I would have probably took it a step forward, in the book, and talked more about priorities. Make a list of what you think you want and then prioritize. When you realize you can afford a few things at the very top, the rest of the list seems to matter less.

I'm not personally on a mission to ALWAYS save more and more and more. I just want to be in balance. So I think this book is good in that regard. I am on a savings binge because we are out of balance. But if squeeze my wants too much, I'll just fall on my face or be miserable. No one wants that.

That's what strikes me as so wrong with Dave Ramsey. I really as a whole think he is a great motivator and very helpful to many. But I cringe when I listen to his show, people on rice and beans and working 3 jobs for a few years as they pay down their debts. Once they make that GREAT accomplishment you think they would relax and enjoy, even if for just a bit. Instead they all go on paying down their mortgage like a fiend. I think the overall concept is great; much how we live. But I think a lot of the wants are taken out of the equation. I often wonder how long until these people crash and burn. Seems to me if you pay off a mountain of debt and you can pay your bills and save, you should be able to enjoy a little.

Of course I could cut all the joy out of my life and pay off our mortgage in a decade. I just have no desire whatsoever to do that. I like to enjoy life too. Is the world going to end because I pay my mortgage at 50 instead of 40? No, but if I pay it off ay 40 I might just not enjoy a whole decade of my life at all. We'd tell the "kids, you know what, forget raising you, we have a mortgage to pay insanely early..." That just sucks. I Didn't have kids just to leave them in daycare and pay the mortgage before 40. IT just doesn't make any financial sense anyway when you look at the big picture. All that money is far better off going to retirement and compounding.

Balance!

Anyway, I think in the want section was the section on credit cards and paying cash. All I Can say, is different strokes for different folks. Gets very Ramsey-esque. I can assure you that I have never paid a dime to the credit card companies and that I don't stress out with a pencil and calculator every day or week as I use my card. Quicken tallies it for me and I always know exactly where I stand. Credit cards are VERY convenient. We've never gotten into trouble with them in the least. IT is very possible to use credit cards for a sound financial plan. So I disagree strongly with this section. I agree they CAN BE trouble, but having used cards for 16 years (& only getting more rewards with time) I don't have much to complain about. One look at those interest rates gurantees that I Would never spend a dime more than I had in cash. {To me it is the same as not overdrawing a checking account. IT really can be that simple}.

That's my credit card rant. If you can't handle the cards, then by all means, switch to cash. But it doesn't mean they don't have their place in wealth building.

Oh yeah, there was a long list of stuff not to waste your money on too. Stuff I learned from my parents (I mentioned before very blessed in that regard). Stuff you should have, like disability insurance & life insurance & wills (blessed blessed blessed).

The next chapter was all about debt and getting out. I completely skipped it. Never been there; so nothing to learn.

That was as far as I got. I peeked at the next chapter and it was also very Ramsey-esque. I wonder what came first. OR where this paradigm comes from.

*$1k emergency fund
*pay debts
*6 month emergency fund
*retirement
*mortgage

Sounds a little familiar?

Well I'll read more on that this weekend perhaps. They said 5% of your take-home should go to mortgage prepayments. I just don't think I am going to follow that advice either. & to be clear, I am all for prepaying the mortgage, in a way that makes sense, and flows with the big picture. Which is probably mostly what bugs me about standard financial advice. It might work for "most people", but loses all the nuances of what is also different about every person financially. I think I disagree with about every piece of advice out there to an extent, and am better off for it.

Which is why it is good to come to a place like this and think about things and learn from others. Realize there is more than one way to do things.

So yeah, the book started good, then it got all Dave Ramsey. Which is fine since my only real gripe with Dave is lack of balance. & this book adds balance to the mix.

Well I will read the chapter more in detail to see what it says. I'm almost through the bulk of the book. See what I think on the savings chapter... It's probably the chapter that inerests me the most.

What a Day.

I paid a pile of bills.

There were a few things in the back of my mind that needed to be paid, and I totally forgot to bring a check for preschool today. For one I have hardly been home all month so I feel all in a tizzy. (Unusual to drop the ball).

But I did call for my insurance amount due (also lost that bill - also very unusual). My agent said I could just mail it over there, and gave me the reduced amount with the new deductible.

I am also going to a friend's boutique tomorrow. Figure I might find something nice for my mom and should put a blank check in my purse. BUT could not find a check. Then I remember why I have not paid anything. Ran through all my checks and super lazy. I finally pulled out the new box I bought like a YEAR ago when I was "about to run out." Since then I just don't write many checks!

So I had to dig those out.

Checks:
Preschool $600
IRS $300 (Final Roth conversion taxes)
Insurance $900
Property Taxes $2300
Gardener $100
MIL $60 for Christmas

Paid Online:
Health Ins. $500
Credit Card $1750
Mortgage $1300

Nothing like writing out $4200 in checks to make you feel stressed financially. Or $7800 with the online stuff. Yeesh.

These were all due in December, and on top of all the little regular stuff I already paid.

Anyway, as I went to update our short-term savings in excel, the file went kaput. I swear since having children I have this eery 6th sense and I just asked dh last week to back up some of that stuff to CD. Of course he hadn't. Bah. I did find a July backup, but was disappointed I had nothing more recent. Then again the only thing that is really screwy is my allocation to efund and short-term savings (glad at times like these I don't keep a pile of subaccounts. Just too lazy really. But it's mostly in my head).

So most of my historic data is in there and some of the little details are lost, but who cares. I backed everything important up while I was at it.

Anyway, I knew we were even $12k in efund, give or take a few. & short-term savings is easy enough to start over 1/1. I think I started with $1k last year and did just fine. So I added up all our cash in Quicken and subtracted all the balance transfers still due back. I was just about smack dab at $12k. I expected to have a little more in short-term savings. Then again, I paid all the monster bills. So I am "lucky" I guess I had just enough. I am expecting $1k for Christmas to kick start next year. Disappointed that I need it. But I'll survive.

With the last big balance transfer I have so much in savings that I just transferred over $1300 to pay the mortgage before the end of the month (usually wait to the 5th - grace period). Anyway, need the tax deduction, since I just started doing that this year. I just realized I would only pay 11 months otherwise, and would screw up my tax planning. So that is squared away too. Will repay savings with my paycheck on the 1st.

I also wrote out the big checks due on the 31st from savings. So the interest can keep earning until the last minute. That makes it really easy. It's all ready to go and I will pop in the mail after Christmas.

Anyway, after that exercise I felt really stressed. I couldn't really put my finger on why and that is when I told dh that paying out so much money at once is stressful. Regardless if it is all saved. It still takes a lot out of you to fork over so much money I guess. For me I usually just pay the bills as they come in. Saving it all up to pay at once is not my style I guess. I don't want to do that again for a while.

I also continually remind myself only 9 more months of this whole preschool thing (2 in preschool which is insane). I am sitting here wonder why I even need to put a dime into retirement on top of my given 10% anyway. I should just let it go until preschool days are over in September.

I also voiced some of that to dh. I told him I know we had wanted to put our birthday/christmas money to our respective allowances, but I think we should just put it to bills this year. At least most of it. We'll see. & I reminded him we have no money to spare until September. Just none. I don't want to hear about anything about anything until then.

We were discussing that though because I thought well, school probably does start in August. So how many months do we pay for 2? 8? 7? Dh seems keen in pulling BM out in July so they can have some extra time together before school takes much of his time. IT is an idea, particularly since he could always drop in with LM once in a while, but then we don't have to commit to the whole 2 days a week thing.

So I'll just have to take a deep breath. Just 6 more months. I've said it before, but I certainly would never commit to this kind of expense if it weren't so temporary. So I am counting down the days until I can divert that money to savings. Indeed! & if I am going to stress for 6 months, then what's the point. I just need to get over it. The decision was made, it's what we want, we'll make it work. My frugal self is hyperventilating though.

So yeah, that's all the crazy financial stuff running through my head.

In other news, tomorrow I have a class all day and will spend the night with my parents. This weekend we are also going to the Exploratorium in San Francisco (really cool science museum). With the kids. Funny enough, they are having some chef building some kind of Arctic landscape with desserts or something. The woman looked awfully familiar. Turns out the last few times I visited my parents we watched these really neat challenges on the food network where they build these elaborate cakes and such. I recognized this woman from one of the challenges. I am so excited to see her work in person. How cool is that? Not what I was expecting or why we were going, but certainly a bonus.

Well, we survived our 2nd timeshare presentation. Hehe. & the reward was much bigger this time (3 nights hotel stay - only thing we got of value - vs. the $50 we got last time).

Last time I don't remember the place but the original price was $15k and they quickly dropped it to $5k when it was obvious we had no interest. That was about 7 years ago; I don't remember any other details. Not much to sell. We thought the idea of a timeshare in Vegas was just stupid. Place wasn't very memorable.

This time we visited the famed Tahiti Village.

They started out with people spinning a wheel and popping a balloon to win prizes (fabulous hotel stays in far away lands. All I could think was how much are those airline tickets? LOL. It always struck me that the hotel is always the CHEAPEST part of any vacation. Big whoop).

Then they had a video where everyone hooted and hollered at all the old Vegas strip hotels being demolished. (Woo, exciting... ???) and how the average room on the strip has gone from $50 to $400 a night or something. (*snort* - certainly not everyone pays that - yeesh).

At some point we took a tour of the grounds and a room, and they took us to the wall of fame where we could ooh and aaah over all the celebrities they had HIRED to promote the place. (Not sure the point of that exercise).

I guess this all was all s'posed to get us jazzed up and ready to buy!!!!

I have to hand it to them. This presentation was eons beyond the last. For one, the place is actually nice. Real nice. It is in the middle of nowhere, but they assured us the strip will come to them (& at the same time they were saying there was no more expansion allowed on the strip currently and why the strip is such PRIME real estate). I guess they figured everyone was too dumb to put 2 and 2 together. So strip is really prime, but they aren't? LOL. You can't have it both ways. It's prime because they can't come to you? But they'll come to you. It will expand and expand until it reaches Tahiti Village!!!

Anyway, they also really pushed that every one of their sales representatives was a real estate agent and that they were selling us real estate on the strip that would make us rich. I have to say it was a good sales tactic.

Of course knowing what I know about time shares, I just rolled my eyes. They jist of their presentation was that you own an actual piece of real estate and that Vegas land is worth $3 million or so an acre. & it's rising fast. & you better catch the wave. The rolling of the eyes comes from the knowledge that you can not GIVE those timeshares away. ANyone who thinks they will get their original investment back is dreaming.

The other essential part of their sales push was that Vegas is the best timeshare location and you can trade anywhere. I also don't buy that for a second. That was the one part that hit me as moronic on our last tour. Who in hell would buy a timeshare in Vegas? You obviously go to stay on the strip; to stay in the casinos/fancy hotels. & it is not hard to find a good deal on a nice room. So where is all this demand coming from?????

Plus Vegas is fun to visit once in a while. It's not somewhere to vacation 2 weeks of the year - which is what they were selling. 2 weeks! Hawaii is where you want to go vacation 2 weeks a year! Come on.

But they assured us that their Hawaii timeshares sold out in 8 years and Vegas is selling out in record time (Phase 1 sold in 6 months or something). It has beaten their wildest dreams!!! I don't believe a word they say for one. But if this is true, then people in Vegas are just stupider. Is all I could imagine. LOL.

Of course, they save the prices for last.

Oh, you will love this.

I already knew it was like $50k. So wasn't surprised. But otherwise I might have just fainted on the spot.

For the ever popular New Years Week (their first sell) the price was around $55k. At a 17% interest rate over 10 years or something (they don't bother checking your credit - just charge everyone a crazy rate). The payment was about $1200/month.

I was STUNNED. I mean that is about our mortgage and we know we live in the land of expensive. I can't imagine the average person would want to buy a timeshare that cost more than our mortgage? The only qualification is an income of $50k. & they want you to spend 1/3 of that on a timeshare!?! Oh my...

If nothing else I was surprised they didn't spread out the time, get those payments lower, and suck more people in with low payments. I think that was the angle they went with on our last timeshare. Then again they are selling out in record time!!!! Guess they figured charge 5 times as much and see who bites.

The regular priced one was around $750/month (still crazy). Oh, price tag was $48k. I think these were for 2 weeks a year, but lord knows, very confusing.

They just rushed through this part because it was clear we weren't going to buy. Got the hard sell guy to come let us go. He just dropped the price to $10k or so for once week every other year or something. We weren't interested and they let us go.

They actually kept us about exactly the same 2 hours they said they would. I Was disappointed it looked like some people escaped before we did though.

& so that was it, we survived.

Oh, as far as the hard sell. I honestly am not sure if there is any angle that would work for us. When you can see through all the smoke and mirrors there is little they can do. But I had to laugh because I did read that they tried really nasty things like telling you that you don't love your kids if you don't buy a timeshare. Anyway, grasping at straws, our "realtor" did start to go that angle, but didn't try very hard since we obviously weren't buying a drop of it. I wish I remembered exactly what he said, but like we OWE it to our kids to get them a timeshare and travel.

Whatever.

As for me, my travel background? My parents moved to the land of insanely expensive and MILEs from their family when I was first born. We drove to the mid-west once every 2-3 years when we can scrape the money to get there. To see family. Those were our vacations.

I went to Hawaii with my school band in high school and to Disneyland a few times with bands. My parents did take me to DL once too when I Was like 8. IT is the only "family vacation" I remember. It was very special because it was such a rare experience. I never knew what I Was "missing" so what did I care.

When I Was in college I was really broke but I would drive 2-3 hours many weekends to hang out with my friends who went to various colleges. We would drive to San Francisco, Santa Barbara, LA, Sacramento, Tahoe, Vegas, etc. and enjoy the cheapest of cheapest weekend vacations staying with friends. IT was FUN. I think that is why I really enjoy mini vacations. From my broke college days. Something that my parents did little of, that I enjoy exploring the state a little more. There is so much to see and do. But as such, I don't have any real wishes for travel. IT probably also really helps living in such a melting pot. As far as exploring different cultures and all that; there is so much in my own backyard anyway.

So when they did ask us how important vacation was to us on a scale of 1-10, my gut reaction was to put a 1. Seriously. Who cares. I can drive to monterey or Tahoe this weekend and enjoy a really nice time with a free place to stay. I don't need to go on big vacations. Dh comes from a vacation family, and even he put "3." Because it is so far down our list financially right now. Staying home with the kids is much higher on his list these days.

The other question was, "what were your last 3 vacations and how much did they cost?" I forgot our cruise but I had to giggle as I filled it out. Japan, Florida, Hawaii. All less than $500 (some $0).

I think the presenter got annoyed with us at this point. Like why were we wasting his time. (Um yeah, why were your sales people BEGGING us to come????) He said OBVIOUSLY vacations were VERY important to us. Because we didn't say no to all these FREE trips. *Whatever* LOL. I would be very happy not to go on a big vacation for a LONG time myself.

So that part was kind of annoying. Annoyed as he was, got us off the hook though. They couldn't find a sales angle for us, so spoiled and all. & seeing as my kids have been to Disneyland, Hawaii, Tahoe and Florida, all before the tender age of 4. I am not too worried about them. I think they will be okay that we didn't spend $50k + 17% interest on a timeshare. IT would have had to come out of their college money.... If they want to whine about their deprived vacation youth, I am SO not the one to whine too. Hehe. (& yes lord knows they will not remember any of these trips, which is much why I would have never taken them on our own dime).

Is it just me or is it just sound crazy how much they push the family angle on VEGAS timeshare?. Of course I am really skeptical how tradeable those really are. Of course I dream of taking my kids to Vegas for two weeks of year - NOT!!!! LOL. Their whole push was you could trade anywhere. I wonder how many people who bought out of guilt for their kids are stuck taking their kids to Vegas 2 weeks of every year. Well, they "owe it to them!!!" {Poor kids!}

I know, it's just the guilt factor.

Anyway, so that was that. We survived...

I started reading All Your Worth and my post about it is not showing up. So go read my last entry.

You know I started a Vegas post and never finished it. Too much business to tend to this week. It's crazy.

Anyway, yeah we had fun and we are back. More later... (I have to vent about those timeshares later - are they out of their minds?????? LOL. Was interesting. It was easy on us, but I had to share some of the funny, and insane aspects. They put us up in a nice room though and I would do it again in a heartbeat. Timeshares are horrible deals, but the "sit through a presentation for a free vacation" thing is not 1/2 bad. In this case it was THREE nights so the 3 hours "wasted" was hardly noticed. & we had REALLY nice accommodations).

Well, I got my books in the mail today (cashed out my Wish List since everything was on sale really cheap the other day and I needed to buy a few things for free shipping).

One book I got was "All Your Worth." I know this book is spoken of like it is the Holy Grail of personal finance. But I was raised with a very high level of financial literacy so most of these books almost bore me (as I have mentioned before). The subject is interesting, but rarely find these books terribly enlightening. (& I know I am BLESSED to already have known much of this stuff). Plus the 2-Parent Income Trap (same authors) bugged me quite a bit. I didn't really jive with it.

This book has my attention a bit though. & I really want to work through it because I think this could be a really good book to pass on to struggling friends. Because I identify with it so much. I could have never formulated such a book but it speaks well my unconscious spending habits.

#1 - First thing they say is no counting pennies here. Go for the big stuff. (Um yeah, that's me). Not only can it often make little sense but it can be really psychologically damaging. If you really struggle with budgets this book is for you. For sure. {I've always formulated and budgeted as a guideline but never particularly followed a strict budget. Just too constricting if you ask me. This book says, that's okay!!!! & I knew it was, but I think more people need to hear this!}.

#2 - This whole idea of balance. Well that is so "me" too. I always thought that was rather obvious though. Balance is important in all aspects of life. Of course it is the same with money. But I think they put into words well what I thought.

At first I was skeptical that the "50/30/20 rule works for most of the people most of the time." I was thinking all along, why would it? Personal finance is very individual; very personal.

But as I run through the #s and ponder it, it actually does make sense.

For one, I thought, well, this has got to be average over time. There is much time in our life where we saved little (college) and where we saved most of our income (2 incomes). & then there are times we saved little again (When we had kids). But as I ran through the #s I would say we have averaged around 50/30/20. I share this though to say I wouldn't get too caught up in the #s in one point of time. If you do go down to one income and can't save much, you would be best to save a lot beforehand, and plan to catch up afterwards. Etc., etc. The numbers should be kept in mind in terms of keeping balance; as far as never being too off balance.

For us, I had a goal in my mind to put 15% to retirement before I would consider letting go of 2 incomes on a permanent basis. The interesting thing with our other savings that would put us right at 20%. IT was my goal all along.

The other VERY interesting thing is I calculated our "needs." We're at about 60% today. The interesting thing psychologically is we worked really hard, unconsciously, to get that to about 50% of my income before dh stopped working. We allowed for a bit more (temporary), but quickly settled to 50% with raises and such. Anyway, when we had kids and our health insurance skyrocketed out of control, it is the one thing that stressed me out majorly. It has been the total bane in my side. Interestingly, it kicked our "needs" from 50% to 60%. Yeah, no wonder that is the thorn in my side. I knew we were out of balance. But I feel there is little I can do about that for now. Just hope it gets better when dh works again (if nothing else we can spread out to find better insurance through employment).

I've only read one chapter of the book thus far too, so bear with me too...

Anyway, at the same time, I didn't need to read the book to know we were out of balance. & we were already working hard on rebalancing.

I also had issue if dh did return to work. If he got a part-time job we could easily put 60% of his net check to savings and 40% to wants. (No need to up our "needs" at all). That would be quite an increase in lifestyle/wants. Yet we would be about 45/20/35. I was pondering how this would put us out of balance in the least. In the short term it wouldn't. I think we would be MORE in balance. Life would be simpler and we would be saving more. BUT I did ponder it a bit and realized I wasn't saving all this money to leave it to my kids. I think at some point if that was sustainable, we would cut back our working hours. Or we would retire early. Etc., etc. Eventually we would probably move back towards 50/30/20. I think there may be something to it. It really seems to be the "balance" point over the long haul.

Anyway, it's interesting. I'll try to read another chapter tonight.

Oh, and I was totally lost on the savings portion. (Only one chapter read thus far, maybe it gets clearer?). I really got the impression they were talking about 20% savings for retirement only. I got stuck on the stuff you save for the future that eventually will go to needs, wants, and maybe even retirement. Since most of it was rather long-term (5 year plus horizon) I just included it in savings. Maybe it gets clearer... Maybe I overthink.

I did find an exception to the 50/30/20 rule. When you are spoiled rotten by family. LOL. Without preschool, seriously, our wants are at 10%. & I am not sure they have ever been terribly higher. We did pinch so many pennies before kids. & probably even more since. I don't know. Does everyone need 30% wants? I like to think for one we are very happy with non-material things. I think some of that is true. I've never felt particularly deprived. But on the flip side, we get a lot of "wants" for free. Just look at our travel itinerary this year. Or how often we get to eat out for free. It's a pretty sweet place to be. It makes the 30% way too high for us, as an example. I am sure there is stuff in the needs section leaking over to the wants too. We don't "need" such a big house. So as much as I like to think the wants matter little, I think for us they are quantified in different ways. When you are spoiled rotten that # could go down. & hopefully the difference goes to savings. That is what we have been working towards...

I enjoy this blog - pretty interesting stuff once in a while. Local...

Anyway, how scary &/or depressing is this?

http://sacrealstats.blogspot.com/2007/11/craigslist-trolling...

Well, some of it is depressing. Much of it is just, "duh."

I have no idea what is up with the $1k energy bill either. Particularly since the weather here has been terribly mild until about LAST WEEK!

Lots of greed and materialism and luxury, for sure...

I am honestly surprised that no one I know has admitted to severe financial whoas. I know my co-workers are rather conservative and cautious. & my good friends. But plenty of neighbors and acquaintances who are clearly in way over their heads. They aren't talking... I guess I have some sort of morbid curiosity.

I also know quite a few people (like my co-workers, and some local relatives who don't understand how cheap this market is from our perspective), eyeing me the same way. We're young, we have a really nice house, and my spouse doesn't work. Must mean TROUBLE. Trouble or "rich". Or both. Wrong on both counts. Just planners...

So you know I could be entirely wrong. But perusing Craigslist is about what I expect from many people that I know. We'll see...

I am just curious how the whole thing plays out in the long-term, for the area. California is unique. We aren't even near where house prices were in 1999, 2000, 2001. It is unfathomable how people can be in SO much trouble. And real estate is still worth 50% more than it was 5 years ago. ???? Sorry to say this is only the tip of the iceberg for many, many, many people...

I know for one, most people assume we paid WAY more for our house than we did. Like the fact you could buy a pretty decent house here in the $100k range less than a decade ago has completely flown people's minds. IT's just, surreal. Does it take rocket science to realize it couldn't go up and up and up forever?

P.S. Still no one on Craigslist wants my ugly chair. Until my ugly chair is taken; not sure how desparate these people really are. (1/2 joking).

Kind of a boring month (phew...)

*Allowance I have to square away. Dh bought and returned some stuff along with Christmas stuff and not sure if those figures are right. I bought some clothes/books/CD. CD was for kids so will probably move that to misc.

*Auto - paid annual AAA dues & also squeaked in right at $300 for gas. I think we drove to San Jose 3-4 times and same for December. I don't intend to make many drives January - April. Phew. But still amazed we squeaked in the budget. I left it high for rising gas prices and such.

*Christmas - mostly kids and cousins. & stocking stuffers, etc. Phase 1 over. December = memberships and charity expenses.

*clothing = belts for BM, socks for me, a shirt to match BM's friends' gift - they like to wear matching clothes.

*Dining - actually were closer to our $30 budget this month.

*Groceries were rather on the high side this month, but below $500 budget. Included Thanksgiving dinner so makes sense.

*Insurance = flood & additional life insurance

*Misc. - we usually budget $150 but ebbs and flows for unexpected things and christmas and vacations and such. Tried to keep it low this month. Was just for gym, a trip to the movies, and to replace BM's melted mattress pad.

*Utilities have settled much lower with balanced billing, lower cable and newly metered water. Phew! Just got our November gas bill and it was under 1/2 of last years' bill. Thanks to mild weather mostly. I think our electric will edge upward because it was *off* for a while (charged too little) and gas will probably edge downward - with the balanced billing. (Next time they re-evaluate the monthly charge. We have separate gas & electric companies).

*Vacation - I don't have the totals yet. Will have later today. Will be another $100 at least.

Even so, with all the extra money we brought in November (focus groups and credit card rewards) we spent far less than we brought in.

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

I was looking at comparison reports to last year (something I didn't have enough data to play with before). It is really cool how much we have saved this year compared to last year. Will have to share that at year-end.

I really love Quiken. Shows exactly where all our money went all year, last year, etc. Since accountants tend to deal more with historical data I guess there is more of an excitement factor for me as I have more data to play with.

& I am up a whopping $140 for November!

Hey, up is better than down...

Up just under $25k for the year. Already posted I have little doubt that we'll hit $25k by 12/31. Will get a big retirement contribution and vest to 100% in less than 30 days. Now, that will be reason to celebrate!

Which might just put me up to $30k for the year, the upper end of my goal. The stock market decides the rest...

I woke up early and so was double checking on Vegas info this mornings. Bus is still cheap as I remember but they do have a monorail. Cost twice as much BUT I know of no other way to get across the strip in 10 minutes. Sounds like QUITE an addition. The Deuce was a big step up, and the monorail sounds even better. We'll see what we think in person anyway. Interesting to see how things evolve with time. (I had no idea they put in a monorail!)

Also was checking out all the buffet reviews and such. We are huge fans of the Spice Market Buffet (Aladdin) but I think this time we'll try Mandalay Bay too. Looks similar, but better priced.

We're staying on the north end of the strip which has the really cheap buffets. So a dinner there. & then we'll dine at Fremont Street and at our favorite Indian restaurant (also very near our hotel).

I pinned down more of a $180 budget for dining and about $60 for transportation (shuttle, buses, monorail). This assumes all the info I saw online was current (not so sure). Leaves $60 for incidentals, unexpected things, and gambling. If we adjust our budget to $300. Much more realistic but I am excited to try a new buffet, and that will be for quite an amount of food. Yes, we will have to hit they gym on our return. Though I am sure we will also do PLENTY of walking.

It seems like every time we go to Vegas we spend more money. But we also enjoy more. Gotta splurge once in a while I guess. WIll be fun...

Actually we have never stayed 3 nights before, so accounts for much of the cost. Eating out is such a budget buster when it comes to vacation. It just adds up so fast and is always maddening since it is so much easier to eat way cheaper at home. I mean $180 on food? At home that's 2 weeks of food for 4 of us!! I feel like food is always the vacation budget buster. But we are certainly splurging and enjoying in this case. Just what I always find is so pricey about vacation. The food will cost about as much as our plane tickets this time around...

Well, on a whim we decided to catch one show in Vegas. We did really good on our retirement and efund this year so we decided to take our December balance transfer interest and splurge.

I really wanted to see O (Which would be more pricey) but it was pretty much sold out. We decided to try Spamalot instead. A tad cheaper (though not much). I don't know, I am ready for vacation and the idea that "I wouldn't waste my money on a show" went out the window rather last minute. But we have been to Vegas quite a few times and never splurged on a show. IT will be fun.

So our budget looks something like this:

Vegas (4 days/3 nights):

Food/Gambling $200 (Already pd/use gifts)
Shows $150 (Paid with Interest)
Airfare $250 (Paid with cc rewards)
Hotel $0 (No cash but timeshare hell is "priceless" - LOL).
--------------------
$600
--------------------

Oh the $200 includes airport shuttle and bus fare too - the incidentals.

We'll see, it's our last hoorah before tax season and all that. I just want to REALLY enjoy. Mostly plan our budget for fine dining. If we end up over $200 I Won't sweat it much. Just all we need to spend to not dip into our checking account at all. On the other hand I figure we could splurge on 2-3 really nice meals and go cheap the rest of the time (fast food or a trip to the grocery store is just fine) and stay well within the budget. Certainly what we aim for.

Not one of our cheaper Vegas trips by a mile. But the ironic thing is gas is getting so expensive, I think our airfare may be cheaper than driving. Certainly if we took the van. Gas would have cost around $200 easy in dh's car. Not to mention wear and tear and TIME. I got the deal I wanted on airfare, but even if I hadn't it probably would have been worth $300-$400. I now realize as prices skyrocket before my eyes. Our airfare deal is looking better by the minute.

Southwest also changed their policy. You get to board in the order you check in. Already checked in for tomorrow's flight (& at the front of the line)! I am just not sure we will get the opportunity to print out our boarding passes ahead of time for the return flight, but will try.

Is it worth it to fly round trip for $125 each, to not get to sit next each other for a one hour flight? OF course it is. But I am optimistic dh and I may actually get to sit next to each other this flight. How divine. I am loving this online checking/boarding pass thing.

Our only obstacle now is staying healthy for tomorrow. & for the entire weekend really. IT would be nice, but probably too much to ask. (just usual kids and germs...).

Oh yes, and I Will have to tell you about Tahiti Village. I can't believe when people IRL seriously tell me to hold my ground or "BE careful because you get sucked in." LEt me tell you, I don't remember the last time I got sucked in by a timeshare presentation, by a car salesman, by a furniture salesman... Any salesman... I just giggle. Somehow I think we'll survive. (Just a hint. The reason we do well financially is we don't spend our money on stupid things. WE don't make rash purchasing decisions. We don't buy things we can't pay cash for. Etc. All things you have to do to buy a timeshare. We didn't need to read all the horrible timeshare stories to figure out it was a high pressure sales thing that made absolutely no sense).

I think I also mentioned people keep telling me they were "trapped" in these presentations for hours. You have got to be kidding me. Let them try to "trap" us - LOL. We do have legs. & cell phones to call a cab. & rights. The bus pass won't hurt either if we have to flee too early.

Honestly, for the most part I think we will go, be bored, and be one of the first to leave, with little incident. It's just so obvious we aren't buying it on any level they don't even bother trying. Has been our past experience.

& you would have to be crazy to think I Would actually tell them my real income. Teehee. Rule #1 - do not tell them your income. I figure the "spouse is out of work" card should keep them off our back. I remember last time we went to a Vegas timeshare presentation they were salivating when we said we were from Bay Are ($$$$$ in their eyes). I told dh, um, let's say our income is 1/2 what it was. The scary thing was how much they salivated over the $40k income or so I put down. Yeesh. This time you have to be over $50k. I am thinking $50,001 will work. $0 assets. Negative net worth? I don't know, maybe they will smell weakness if we lay on the negative net worth thing too thick though.

But yeah last time was a $15k timeshare and it made no financial sense in the least. We were staying at a hotel for $30/night. A NICE one. Why would we spend $15k on a timeshare???? Who wants to stay in a condo off the beaten path in Vegas??? This one will be even easier. They are seriously asking $50k for these things. IT's going to be 10 times easier to say, "Are you out of your mind???" I Think we can walk away from this one.

Anyway, dh likes to play psychological games with people so I think he is looking forward to it. I figure it is a small price to pay for 3 free nights stay, but we'll see how I feel afetrwards. LOL. I am sure it will be uncomfortable at best. Have to play nice... With dh by my side will be okay though. Last time we wasted a good chunk of a short trip on a timeshare presentation (For $50). This time we get 3 full days to enjoy, so eh. It won't be such a big chunk of our time at least. & more reward.

Well, I got my final balance transfer and so the grand total is $25k for the next 3 months. Then one of dh's has to be paid back. I will have $15k through summer and $10k through the end of next year. They still have not implemented 4% minimums so my payments are rather minimal (It's insane really - EASY money). I also have a 5.7% rate locked in on most of it. Let's just say I am very happy with the whole thing and am rather bummed that I want to cut up all the cards and let my FICO rest once all is said and done. Then again, maybe dh should apply for another one. I don't know. It will be hard to give up the easy money. We could probably take turns doing them to limit affects on each of our FICOs. Yeah, think I am HOOKED!

On the flip side, about $15k of it will be in my name; with this new transfer. I am not excited to see what this does to my credit score. Particularly since Chase does not report my credit limit to the Bureaus. Gah. I have been so busy with ID theft to bother, but I will try and see if I can get that fixed. It will help my FICO to see only 33% utilization instead of 45%. I also could ask Chase for a credit increase to help. But they still have to report it, all the same. Doesn't help if they don't report it anyway...

That's the cool thing about having a partner. We both don't have to borrow very much if we combine our efforts.

I asked for a credit line increase to $11k and they approved it instantly. I told dh I wish I asked for much more to improve my utilization ratio. But he knows me too well. He's like if you asked for more you would have borrowed more. Well, is that so bad? It seems they were slow to give me credit before so I did not ask for much. I get the feeling I could have asked for much more.

In other news, regarding the ARM thread I was looking up mortgage rates and was rather surprised. We used to have a 15-year fixed, before kids, and figured we wouldn't be opposed to that again down the road, BUT we figure 15=year rates will probably never drop below our 5.75% fixed again (not soon enough to be worthwhile anyway). Anyway, I was looking and Countrywide had a 15-year fixed for 5.25%. I have to say; it is tempting. Particularly since we have paid so much down since last time. I think our payments were $1800 before and would be more like $1700 in this case.

Anyway, with one kid out of preschool in a few months, it is an interesting thought to go this route.

However, I knew that those #s were fishy. It was not clear how many points there were and I already knew Countrywide requires impounds to get the best rates (no way jose - for many many reasons).

Anyway, so I found the fine print - 2 points and impounds required. Not the greatest deal after all. (To note, our mortgage was acquired with no points, and no impounds!). These days I wish we had paid down the interest rate a bit. Then again really not much to complain about.

Anyway, BUT interest rates are dipping again and so it may make sense some point down the road to switch. We'll see. Just something we have to keep an eye on. Not sure it would make much financial sense today anyway; but always hard to pass up a great rate. In much more shape to go back to that now than we have the last few years.

Of course if rates don't drop down I think our current 30-year rate is lower than (if no the same) as our old 15-year rate. I do like the flexibility of a 30-year mortgage (e.g. if one of us were sick or lost a job it is nice not to have a stressful payment) and likewise I don't think it is the best idea to up our payment considerably. Hope I don't get too tempted. We always figured when dh returned to substantial work that we would add $500/month to the mortgage and resume our 15-year amortization. We'd still have plenty to invest and play with as well. In the grand scheme of things it is a much better plan. But if rates drop to 5.25% with no strings, well, color me tempted. Give me 2 years and I'll be ready. (Interestingly interest rates dropped to the all-time lows right before our first child, so that is when we last refied. What are the odds they would do so again with our kids graduating from the insanely expensive years? Would be cool. But won't hold my breath. Already got pretty lucky once - hehe).

Of course when it comes to the great mortgage debate, this is why I like our 30-year so much. Much more flexibility. Sure if things are good we'll pay it off in 15 years. If we end up unemployed or disabled, I'd rather have the cash. win-win.

I am SO bummed. They had this spectacular "Holiday House" that timed all these lights to music. Anyway, I think it has been around a few years; but word really exploded about it last year. We went to see it 3 times last year (each time was considerably more crowded). So today BM and I discussed it on the way home, that we needed to get there early this year. So when I got home I looked up to see when it started. I did warn BM that they could be gone; because of cranky neighbors. Anyway, I called it.

Looked up the website and they just updated today - no show this year. I am so bummed, but I certainly don't fault the neighbors. IT wasn't the light or the noise but the traffic that made them cranky. Lord knows I wasn't going back there, close to Christmas.

Anyway, they are looking for a commercial location to setup next year. I don't imagine that would be hard to find. (Free spectacular light show that brings in too much traffic??). So I hope they work out something for the future.

Anyway, we were watching their videos from last year and they had one song from the Trans-Siberian Orchestra which is also very spectacular. On a whim I looked up the CD and was listening to some of the audio files on their website. LM just LOVED the music so I went to Amazon to add it to the wish list. Which is fine, except it was on sale for $8.99. Really not bad at all - eligible for free shipping. I also noticed all the books on my wish list were on sale for $4.99. So I bought 3 books and that. Of course I was short like 50 cents for the $25 minimum for free shipping. (Shipping is $6 or so). I was perusing stocking stuffers, but of course the $1 stuff doesn't apply for free shipping. Bah. I finally just bought another book I had my eye on. It was $10 though. Oh well. I'd rather pay $10 for a book than $6 for shipping.

I told dh if he wanted to wrap the stuff up for his family to give to me; whatever. Good deals. I can't complain!

I also downloaded credit card expenses - updated. We leave Wednesday for Vegas and so pretty much paid all our bills and bought all our gas and groceries for the month.

Credit card bill will be about $1350. Well in the budget, christmas and all. PHEW. Following some spendy months.

There is Vegas, but I am getting birthday cash and $130 refund of deposit from the time share company.

I think we can budget around $200 for eating out (mostly all we will spend money on). We'll use the credit and cash. We also figured we'd go to the movies (matinee I am sure. ).

Dh, very sweet, tells me today he wants to splurge on my birthday. I am like, and a trip to Vegas isn't enough??? He just said he wanted to go out to a nice dinner or something on the actual day. I just say, duh. We had already been talking all the places we were going to eat. Truth is, really, we just got to Vegas to eat!!!

In other new I am under a pile of mandarins. LOL. That is the fun thing about Sacramento. Is it city or rural? Becoming very city, very fast. Historically very rural (as is much of California really). So my coworker has an orchard of mandarin trees and she gave me 4 buckets. She said she'll give me 4 more next week. Gave one bag to each fam and will give one to preschool. Will keep the last. Kids love them.

I am always pawning off unwanted food at work and I have to keep remembering not to lug a back back to work. That is where they came from. LOL. But they disperse pretty fast between all our family and all.

Which reminds me, we don't have a garden and haven't really thought much about it, but dh wants to get an apple tree. Our main tree died (lord knows why). The one planned to block the sun in the summer and shed its leaves in the fall to let the sun shine in the winter. Anyway, the tree never got very far. Dh wants an apple tree. He said his parents had a dwarf tree and never got too out of hand. We'll have to plant one in the spring. Kids will love it.

Things have warmed up a bit here. Weather went straight from summery to wintery. It was a little crazy. It is settling on autumny. Much chillier than it was, but not freezing... Phew...

$20 challenge:

$9,261.87 - Balance 11/13

$ 145.00 - Interest

------------------
$9,406.87 - Balance 11/26
------------------

Well, received my bank interest today and know what the CDs will bring Saturday. So $145 for the month.

I just executed my last balance transfer so expect an easy $200 interest for December.

Which would put my challenge to $9600. & I have worked enough overtime to bridge the gap to $10,000. I do not know though when I will get paid. So we'll see. Nothing much else planned in that regard. If I save any gift money between here and January I might be able to make it. With birthdays and Christmas there is ample opportunity. The problem is I already have that money earmarked for other stuff. We'll just have to see... {My rule is if I deposit it in efund or retirement I can count gifts towards the challenge. Not if I need them for more short-term expenses).

Yes the challenge really encourages me to save more than spend. I expect next year to go much better. We got much farther on track, but haven't built up much of a car repair fund this year which was my downfall. I assume we'll get plenty of christmas money for that - to replenish short-term savings for the new tires and such. Otherwise it could have gone straight to retirement. So close... I don't expect next year to be an issue since we no longer have to divert so much cash to the e-fund. We are working on our car/house fund next year. Which hopefully means come NEXT Christmas we will have a windfall for retirement. I was hoping to be there this year; but little to complain about overall. We have made substantial progress.

He went out. He is not an early riser in the least but I woke up at 6am and he was nowhere to be found. "Oh lord," I thought. He went shopping!

He got home at 7am and said it wasn't very crowded.

Usually hits up Fry's and easily waits in line there all morning, but said no good deals this year. Well, nothing he wanted or was worth waiting in line for...

He bought a new razor scooter at Target for $7 cheaper than the one we already bought. (So $20 instead of the $27 we paid. Original price around $50). Probably not worth it alone, but they also had some PS3 guitar game thing at 33% off.

He said there was no line. (It was certainly crowded but he shopped fast!)

He also went by a game store that had "Hero Scape" - some kind of board game he has been all excited about but seemed too pricey - got it for $20 instead of $40 full price.

The kids are with Grandma so we are going to go wrap up the presents now. We got LM a train set and I will probably run to the Dollar Store next week for the stocking stuffers. Oh yeah, we also have a PILE of free books from Sholastic (3 boxes actually) and dh bought a few games that were $5 after rebate (something like that). So we'll wrap some of those. So though we wanted to keep it simple because the kids get so spoiled anyway, yeah they have a lot to unwrap from us... Since the books are from teacher grandma anyway (she has a so MANY unused points that we have to use this year...) I asked her to please take credit for all the gifts. I left the "from" line blank on all those while they work it out. I would love it if she put her name on all the gifts and didn't buy anything else. It gets to be WAY too much with dh's family. So I know this is really wishful thinking. But we'll see! {After further thinking I decided those games/books would go a long way for stocking stuffers. I might by them some candies or treats but I think we're pretty set for Santa. Plenty for grandma AND Santa with the 3 boxes!}.

My work is done. I just have a pile of checks to write in Christmas. & some things I can do online (donations and such). I am waiting until December to spread out some of the costs. The hard work is definitely done...

Here is to another "simple" christmas.

& yay to dh for saving some dollars. You couldn't pay me to shop today. LOL.

We have a quiet day with no kids which is really COOL! We might splurge on a Greek lunch out. I am looking forward to taking a NAP! I just love naps. I am sure dh would love to go to the movies, but with Vegas next week I told him we should rent a movie instead. (Plenty of free coupons from Blockbuster). He does have his theater screen you know. He seems content with that. I don't know why with the kids gone the urge is there to spend money. But lunch out will be really nice - and not too pricey. & we are going to stay in otherwise.

Oh yeah - and I need to hit the gym. I can not tell you the last time I made it to gym or aerobics. It's just been hectic. I think I can hit it Today & Sunday.

Well, um, I got the water bill today. Couldn't make heads or tail of it. For one, it is due today (but postmarked a couple of days ago). Well, okay then.

It also makes no sense how they charged us. But our metering took effect and our bill was $23 lower than our usual monthly bill. They are only charging us every other month for water I believe.

Anyway, so they showed we had $45 of water charges for the last TWO months, as opposed to the usual flat $45 they charge MONTHLY. Phew. Then they pulled some number out of the air to bill us. But looked reasonable since we already paid the flat water rate last month.

Hopefully the next bill is a little more clear.

This was before it started raining and we turned off the water outside entirely, so at this rate we might save more than I originally thought. Not bad for 2 rather dry/warm months. It has been unusually warm.

Well, Thanksgiving has evolved very strangely. I think I am going to go out to eat with my parents while dh does the crazy family thing. Long story.

I think his family is really freaked out about this turn of events, but we have a lot history of doing our own thing. I think they worry a little too much. It's kind of funny. We are totally cool with this arrangement. He has the kids. His mom is worried about how this "looks." I am just looking forward to peace and quiet. {I also have a long history of not caring what other people thing. who cares??????}

So mostly I am looking forward to a peaceful holiday. We are no longer hosting so it will be far more relaxing than I thought.

I worked a few hours today (hadn't planned to with hosting) and will probably work a bit in the morning or Sunday. I made up enough time I can use vacation time to go to Vegas next week.

Maybe I can even squeeze in some overtime in December, now that I am catching up for all this time off. Well, one thing at a time.

BM did tell me today he was thankful for our "house." That's what he decided at preschool. I asked him what in particular he liked about our house - or was thankful about. He said, "That we have a cat in our house." LOL.

Have a great Holiday!!!

Well, it's 35 degrees out (brrrrrrrr). & when I went to bed last night it was 65 & freezing.

When I woke up it was 65 downstairs. Considered turning on the heat but figured it's just dh today - we can turn it on when the kids get home in the afternoon. (Or he can turn it on but he likely won't). However, I need to shower today. I think the heat is going on upstairs. I am sure it dropped a few degrees if it is 35 outside, and no sign of sunshine today. It might be 60 up there for all I know.

Well, didn't quite make it to December...

I do want to look into thermal-backed drapes though. Our house is REALLY energy efficient, but downstairs in the room we spend most of our time has a wall that is ALL windows and it gets a bit of a chill sitting on the couch and spending time in this room. It will say 68 on the thermostat but fell chillier. So I think it would be a good investment for this room. We have heavy drapes in our bedroom window which seems to do the job. Maybe something for the kids' rooms since their beds are under the windows. Their rooms might be a little chillier. But it doesn't seem so bad either since they have small windows. It's the big windows, even though dual-paned, that keep this room a little colder than the rest of the house.

I think the drapes could make a big difference. I may be willing to settle for a true 65 degrees inside. Just not 65 while freezing my butt off next to the windows. We'll see...

I also got a $60 check for my jewelry. It's not challenge money.

I am in the green through the end of the month. Yay.

I noticed that I did not get a water bill (they are having a terrible time with this change over to metered). I am annoyed because I think they said they would only bill me for water once every 2 months, though they have other stuff to bill me. Since I have seen no bill I worry if they are going to start sending the entire bill every other month. The same month I get billed the same amount by the county (about $60. YEs the water/sewer charges are insane if you ask me). So I decided to transfer $65 to savings for the water bill. I will call and ask if they can stagger it out to the other month. It's annoying... Or I will have to transfer money over every month to prepare. I'd rather just get a $60 (or so) bill every month. MUCH easier!!!!!! OF course with the metered water that bill will go down!!!

I also got my HOA dues for 2008. They are not going up. This is 6 years and they have never gone up (only down). IT seems pretty across the board for all our bills this year. A good year. Not a lot of increases or surprises. Even our medical situation isn't too bad this year with a decent deductible option. There is a chance our overall expenses could go down there too (yeah, not holding my breath).

But yeah, the other benefit of getting in on the ground level of a new development. We got a substantial discount on our house & they way over budgeted our dues. So they racheted them down a bit and they will hold steady for quite some time I imgine. Until inflation catches up.

Well, got a surprise in the mail. My property taxes are due on 12/10 so I know I have to get that check ready. & yeah I am going to mail it on the 10th. With the GMAC checking account I can extend the days I earn interest by a few. (The last check I sent to the IRS - took them like 2 weeks to cash. Cool for me).

Anyway, so I got the bill ages ago and I have a reminder in Quicken, on and on. But I get this bill in the mail. I open it up and it looks just like the last property tax bill. Checking the date. "Strange," I think. Until I finally find the insert that explains it's an adjustment. Wondering why on earth it would be adjusted...

But then I finally saw they had an error on one of our bonds. We pay about $1k/year of bonds on top of our taxes. They call it "mella roos." Don't ask me why. They mistakenly charged us an extra $130 on our original bill for some kind of landscaping bond. ???? How in the heck would you know that is wrong? That is why I wonder. I will keep a sharper eye next year, see what's new and if it is valid (they keep adding school bonds and such as well - which I remember were voted in at least).

Anyway, so the $130 decrease is pretty cool but then they also extended our deadline by 21 days. Now it's due 12/31.

I figured it probably wasn't worth the interest saved, but calculated it and we will earn another $7 interest waiting to pay it on the 31st.

Well, I'm sold.

I guess they allow everyone more time because sometimes the bill gets adjusted upward. As for ours, I thought it seemed a little high. It had gone up 5%. (with the bonds. The valuation portion can only go up 2% max per year). So now it is only a 2% increase - no new bonds this year. Phew. That is the NICE thing about California. They got a handle on property taxes years ago.

I am also a complete dork and lost our home insurance bill. ??? All I could figure was it landed in the recycle pile. Yeesh. I have to call and ask for a new one. I can pay all my insurance bills online, but this one had an option to pay less with a new deductible plan AND it said I had to pay with a check. (Don't ask me why). I looked online where I figure I could get a copy of the bill. Well it says the amount, but no address, no new amount for the deductible (it says I should have that with my paper copy. Well duh). & it re-iterates that I have to pay it with my paper bill voucher, with a paper check. Yeesh!!!!! Why is this the ONE bill I lose? LOL

I will have to call today and get a copy. It's due at the end of the year. I have about $4k due between that, property taxes, and IRS and such. Yes, got it all in the bank; ready to go.

We have not turned on the heat here. I thought it was a possibility we would turn it on Thanksgiving for guests. BUT with all the body heat and cooking there will probably be little need, all the same. Anyway, what is it, the 20th? Can we make it to December with no heat??? I don't know... It probably helps we will be out of town the 29th. Dh's parents will be staying here to watch the kids but they have it in their head that we pay hundreds of dollars every month to heat and cool our "giant" home. (teehee). I guess she has said to my mom that our bills must be insane and my mom likes to toy with her so didn't say anything. I call my mom often to brag about my $7 gas bill and my $20 electric bills in the off seasons. Anyway, so she knows we aren't paying squat. But last time dh's fam was here they devised an elaborate plan to not use the air conditioning. (With windows and such). Because they assume we are energy hogs and never thought to open a window though it cools down considerably at night. (duh. ?????). Anyway, so we just play along. I just think it's funny. I should leave an energy bill sitting out in the dead of winter or something. Maybe they'd get the hint. Maybe while we are in Vegas. LOL

Anyway, so I wouldn't be surprised if they don't touch the heat in an effort to save us money. So yes, even with guests, it may be possible.

Or they may just turn it on and ruin our streak. Oh well. I guess the true question is if we can make it to the 29th. Hmmmm, 9 more days. I don't know. It's 45 out right now (probably the low for the night?). It's decent inside. 67 downstairs. Upstairs tends to get chillier, I don't know. But I know I can survive without heat today. Without a doubt. The sun is out so the house will heat up during the day. Yay!

9 more days... We'll see...

It is unusually warm. It really is. It's been nice!!!!

Well, I got it in writing that all those cards were fraudulent, except one. Still waiting on Macy's. I will call them, but I figure the second I call them is the second it shows up in the mail. So I am biding my time before I make the effort.

So pretty much all cleared. My credit report seems cleared up enough so I figure I would ask for a credit increase on my balance transfer card. I have around $5k borrowed and dh has $10k. But his will have to be paid off in a few months, and we get 5.7% until end of 2008. Definitely taking advantage. So I would like to borrow $10k when we pay off his. Or heck, might as well get it now... Before interest rates decrease more. I guess I could earn 4.5% in the interim, and then once dh's is paid I would figure I would be earning 5.7%.

Anyway I haven't borrowed on one card and I should also take advantage before they retract it, but they only have me $5k limit - "until I was a customer for 6 months." Blech. I was filing paperwork yesterday and saw they sent me that note 6 months ago.

So I popped online and applied for a credit increase. They asked me a gazillion questions - hard credit pull - small price to pay to make another $50/month without lifting another finger after applying.

So the card company called about 1/2 hour later. They are obnoxious and call all the time about buying their payment protection plans and all that and usually dh tells them to buzz off. BUT ever since my ID theft I have to take the calls, in case it is important. IT never is.

I grumbled as dh handed me the phone. Getting ready to say if they called me on more flipping time I am closing my card or something.

But alas, they were calling because they pulled my credit report and saw the fraud alert. Just checking to see if it was indeed me. I thanked them profusely. Yes, Citi paid attention. Glad to know.

Also when I applied online they said 7-10 days, but the guy was like, um yeah, you'll be approved within the hour... So yay credit report.

I should log online and check. Might as well do that balance transfer. Make sure the terms haven't changed.

I also shared all this to say I was really happy with the balance transfer process.

I was worried about universal default with the ID theft and was going to talk to WAMU about it, but then WAMU sent notice they are no longer doing universal default. Phew. It's been the only real hiccup. I worried how my bad credit report in the interim could affect well standing accounts. But I Was able to clean it up quickly enough.

But overall I have been really happy. I haven't even set up to pay everything automatically. I just pay the minimum balance the day I get the bill. I keep so on top of my bills it seems to work.

If I could do over again I would have made better notes when I took the BTs and when they were due. I know dh's is 9 months and I can see in Quicken when I got the check, but I didn't write all this down. Duh. As time passes, I am thinking, when is this one due? I went back and documented best I could in Quicken. As the time gets closer I need to pay more attention. I figure I will pay it a month or 2 early to avoid issue. I have no idea how the credit card company measures 9 months, and I am sure it is in their favor. So um yeah. I will be paying off dh's in February or so, and mine in June (Expires in July?). & I believe this new one is for a year but I will have to go refresh my memory. If it is for a year and I do it now, I can take full advantage of my 5.7% CD.

If I paid all these back it would leave me with about $11k in a CD and $1k in cash. My emergency fund anyway - we have some other cash... So I would like to string these out until my CD expires.

Once my CD expires and we pay all these back. That's it. Closing all the cards. Checking our credit. Laying low for a while... If when all was said and done and our credit scores weren't affected, I would do it again. But I am not going to have 10 open cards. I always close my unused cards. I just find it easier that way. My credit score is better for it I find.

I expect a bit of a blip on the score with all this borrowed money. PArticularly when I borrow $15k in my name through next summer. I don't mind taking the hit temporarily. But I would take the time to clean it up before I considered doing another balance transfer. I care less about it in the short term. But I care enough about it in the long run to not just do BT after BT after BT.

I think if dh and I both just borrowed $10k it was a good plan. Vs. one of us borrowing a large sum. So far neither of our scores have taken a hit. Maybe a hit, but they are still well over 750 so who cares. But I can't say borrowing another $10k will help my score any. But the cash has been really helpful in building back up our efund, and we'll take advantage for one more year.

I would be happy enough with the balance transfer process without the CD. But I always knew there was a risk interest rates would go down. BUT I just happened to have this 5.7% CD offer from my credit union right after I did my first balance transfer. Talk about luck. I can renew it at 5.7% for another 8 months comes March or so. Until my last BT expires. Just "perfect."

So yeah, my strategy until then is just save more cash. Then I will have to come up with a new plan for the efund. I am certainly not going to tie most of it up in a 8-month CD again. Was strictly for the balance transfers. Will have to evaluate some CD laddering options and such going forward. Who knows how things will be in a year.

Well, I think it is unusually warm for November. (Okay I KNOW it is - LOL).

But we have also not been very quick to turn on the heat. When it hovered between 63-67 overnight we didn't touch the heat to warm up for showers or anything. I do not think there is a day it hasn't risen to at least 69, which is what we usually set it at anyway. But we tend to turn it on the morning so we don't freeze in the shower. But it just hasn't been that cold.

Anyway, I am amazed. We usually are a little whimpy and turn on the heat more.

Then again it is REALLY warm. I took a shower last night and all my warm clothes were in the wash. I just threw on like a summer thing. I was warm. It was weird. So I just slept in it.

I woke up and it is 68 downstairs, which means it will warm up into the 70s throughout the day and I will be walking around in short sleeves and no socks. It's kind of warm.

Just bizarre weather...

I checked our gas bill and it was $45 last year for November. At this rate our bill will be no more than $15. We spend $35/month balanced billing. I think we will easily get it down to $30 at this rate. We turned down the water heater in the summer to lower the bill a few dollars every month. I also was checking past trends. We run the heat max December & January and tend to spend $45 in February and November. The rest of the year we don't need heat. So overall we don't spend a lot on gas.

Electricity costs about double. I have no idea how to get that down any further though. We just don't use much.

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

Well, I haven't heard the mice (assumed) that were keeping me awake the whole time the fam was in Florida. Dh had bought traps but I wasn't touching them with a 10-foot pole. I may be a willing accomplice, but I can't do the deed. We even discussed trapping them and setting them free somewhere. Yeah, decided against it.

But anyway, the neighbors cat, which did catch a mouse in our yard, and why I figure they are mice, has been hanging around on our roof, and I haven't heard a thing in a week or 2. Dh also found an area where it looked like they were getting in by the garage (we originally heard them in a wall downstairs) and so he lodged something in the "hole" to see if it would get disturbed. It's just loosely in there but hasn't been disturbed. No noises. Figured maybe the cat was paying off. Scared them off at least?

Then I woke up to scampering overhead the other night. "Oh GREAT," I thought. They are in the attic. (Though admittedly it could have been the cat walking on the roof now that I think about it. But I don't think it was).

I forgot to tell dh until I came home yesterday, so he set traps in the attic. We'll see...

We went up there yesterday. At least it looked clean. No piles of mouse droppings or anything. (I was imagining the worst). I didn't walk in, but between the opening to the attic and our bedroom is the heater and all sorts of ducts and stuff. Dh said he couldn't get over there and couldn't see much. But we didn't see or smell anything, so phew.

I doubt few people will fall into this exact situation. But a good exercise to help you think through some of these things. I think if you are healthy and single an HSA actually is a pretty good deal, especially if you are good at saving.

For a family with high medical expenses in a state that doesn't conform to federal rules. Blech. It gets a little better for us every year. But still not quite there. I don't think. I am trying to run through the #s though.

For starters, our medical expenses will be $10k this year. 7.5% of our income is about $5k. So everything we pay over that $5k (7.5% threshhold) is deductible on Schedule A. We also have a big mortgage and lots of state taxes. Obviously we itemize. So we get to itemize another $5k with our current plan. At a 20% tax rate between fed and state we save $1k on taxes. Our medical expenses are insane (mostly just insurance) but at least we get some tax break.

For 2008 you can put $5800 in an HSA, tax-free. For us that would only be a $870 saving. Because in California they do not recognize HSAs. We would lose the state tax benefit. & though we would put in more we would get a smaller tax break than we usually do.

OF course, our insurance premiums go down. But they go down about $3k/year if we take a $3k deductible. Basically if any one of the 4 of us goes to the emergency room this year, or breaks an arm, we're going to pay $3k out of pocket. I think the odds are very high. Which means we'll probably spend $10k on medical this year, as we usually do. Just happened this is the best deal offered to us this year (actually better than we were offered last year). Because our insurance plan is saying they are giving us more benefits and lowering our out-of-pocket max. So we'll take the lowered premiums, regardless. & save the difference for the deductible we likely will pay some point during the year.

We could put %$5800 in an HSA (which we could do if we put our saved premiums, vision, dental expenses, etc. Certainly don't have dental insurance and that is part of our $10k bill for the year). But we would get a smaller tax break than otherwise, and a more complicated tax return. (Which I prepare but it's a PITA, for sure!!!!! A factor that needs to be considered).

We could put the $5800 in throughout the year and earn the whopping 2%-3% returns most HSA offers (I certainly would not invest the money we would likely need in riskier mutual funds). & most the
HSas charge fees. $25/year at the minimum (which wipes out much of that 2% interest).

So in our case, since it looks like it is also a pain to pull money out of many of the HSAs (certainly not all - but the more convenience the more expensive the account is - keep in mind). If I am going to put in $5800 and use $5800 this year it makes little sense.

I would be far better off investing the money in our savings account, earning 4.5% and paying no fees. I am going to take it out as quickly as I put in, most likely. & still get to deduct $5k on my tax return and save $1k in fed & state taxes...

So this is my thinking here. There are a lot of factors at play here.

Now, if 12/31/08 comes around and we have not paid one dime of our deductible... (LEt me tell you, I am not holding my breath here). Then I would consider shifting the $3k deductible for '08 into an HSA. I am just not sure if it would do any good. We would not be able to deduct anything for itemizing then. So would I be better off keeping it in my bank account and deducting the $2k we did spend on dentists and such? (Itemize that deduction). At least I know I could grow the $3k easier, with less expenses. There is not a huge benefit there. The taxes saved on the $2k actual expense would be $400. Taxes saved on $3k would be $450. Plus it would greatly complicate things and we would pay STATE taxes on the interest it earned and pay fees to the HSA, etc., etc. We'd save $0 but increase complications GREATLY!!!!! I'd rather pull the money out of my savings account when I need it. No Hassle.

What if we go 2 years with no doctor visits and I could put $5800 into the HSA on 12/31/09?

In that case it might be a better deal. The more we save up the better deal it becomes.

It comes down to the fact that I expect the odds of that to be like 10%. Not in our favor. That deductible will get spent.

What if dh goes to work and suddenly our medical expenses are not more than 7.5%? Than the HSA would win hands down. We'd suddenly be in an atrocious tax bracket (as opposed to 15% state for now. If dh worked we'd be in AMT - you know the rich tax. Apparently the difference between 15% tax rate and "rich" is $20k income. In our case anyway...) So yeah, if he didn't have any decent benefits, then we can put away $5800/year easy, invest it, never touch it, take the stinking tax break. Pay our medical expenses out of pocket (wouldn't pay them out of the HSA because the whole point would be to take advantage of the tax-deferred. They are really not set up to let you easily spend it all every year. The point is to save for future).

Or if I get a huge raise and we start losing our ability to itemize. It might start to make more sense.

So yeah, that's what the situation is for us. There would definitely be some future down the road as I expect our income to rise.

For now all I see is a LOT of effort and PITA for a few pennies maybe saved. But we will definitely have to evaluate at the end of the year. The cool thing about HSAs is you have until 4/15, next year, to decide. I will probably do our tax return and play with it and if we come out ahead with the HSA I can fund it 4/15/09.

HSAs are getting better though. The first year I looked at these I think we would have saved $5k/year on premiums BUT they would only let you put $3k into the HSA AND our hospital had like a $10k out-of-pocket. It was lose-lose-lose. Couldn't even take tax advantage of the savings, and likely would get slammed with a $10k bill if any one of us broke an arm or went to emergency.

This year they say we'll save $3k on our premiums, can put $5800 into an HSA, and our max out of pocket is $3k. $5800 is about our out of pocket for all medical expenses besides the insurance so it seems pretty fair. It's getting better... But then you can see when you look closely there isn't a lot there on the HSA side. I am relieved our insurance is offering a better plan though this year. A much more affordable one. It benefits savers who have $3k in the bank and say sure. I know plenty of people who would think it's a great deal but don't have a dime in the bank and wouldn't save a dime. They'd sink fast. For us, it just may work.

& when dh returns to work we need more tax advantaged accounts. I'll take my IRA any day. But it works for people trying to limit income tax, who have a lot of disposable income. I think we will probably fund some of an HSA going forward, as my income grows or if we go to a 2-income household. We'll see...

I hope with time more banks offer HSAs and they get more competitive. I think that is my biggest peeve right now. Very few financial institutions seem to be offering them. They are expensive and the returns look lousy. But they also have far more choices today than they did 2 years ago. So basically for now I figure I have until 4/15/09 to fund it and I am going to hold out for some better deals.

Um, I change my tune. I am starting to see LITTLE in benefits of a HSA for us.

The nice thing is we can still take the reduced premiums. We will be better off to put the money (premiums saved) in our bank account and earn better returns.

The only exception will be if we do not use our deductible for the year. Then we could use the HSA for tax advantage. If not, there will be no tax advantage and we'll get crappy returns (if we spend it we can itemize the deduction). Heck, I might prefer to put it in an IRA if we do not need it. One big factor being the California nightmare where it is not tax-deductible for state. (& earnings are taxed for state).

I'll share more my thinking later. But this is where we land. I am starting to remember more why I never liked these things. They just make no sense in a situation like ours. We'll see... I have to think on it more. But it's where I am leaning. I was discussing it with dh and it occurred to me we would be better off without the HSA anyway. Sad but true.

But I am still relieved to have a more affordable insurance option. Phew.

Well, today is the day I dread every year. Got our new insurance premiums for 2008.

Um yeah, surprise surprise, up 12%. You know part of me was really wishing for a dull year. Could we have ONE freaking year of like a 5% increase? 2%? Is that too much to ask? Instead it was same old, same old...

Holy Hell.

Our old plan went up to $1k/month (the one we dropped last year. YIKES!!!!!

Ours went from $673 to $744 and is set to go up some ungodly amount when we turn 35 in 4 years. This will top our mortgage in no time. & I always thought housing was all we had to worry about out here. (Of course interestingly I have been perusing the ORegon plans and they aren't any cheaper. So much for moving to cut costs...).

Yeah, we can swing it. We've had much worse years. But forward thinking, it scares the crap out of me.

So I started looking at all the HSA/HDHP plans and such.

They actually have good options for once. I am wary if I am missing something. I researched those in 2006 and it was like our annual max would be $10k, but we could only put $3k in the HSA even though we would save FAR more in premiums. It just left us way over exposed and unable to save the difference and get any real tax advantage. The odds were very high we would pay more with the HDHP/HSA than with the insane premiums. So we stuck with the insane premiums.

Last year was about the same, though they made it a lot easier to contribute more to a HSA. But the plan really sucked.

They totally changed it this year. If we switch to a $1500 HSHP that qualifies for HSA, then all of our expenses will be down. Slam dunk.

Premiums go down just over $3k/year.

Our out of pocket goes down too. We didn't have deductibles before, but our out of pocket was something like $10k for the fam. All routine stuff covered with small copays, but emergency and hospital stays were astronomical (thank you emergency fund).

They seem to be saying on the other hand, that if we take the deductible, which is $3k for the fam, we will never pay a dime for anything else. We also get prescription coverage back. The most we would ever have to pay is the $3k deductible which they just skimmed off the premium.

Well, okay, then I am sold.

The HSA is just PERFECT. We can put in $5800 in 2008. $3k saved premiums. Around $1k for dental. & $600 I had budgeted for copays anyway. So, um, yeah, we'll just max it out. Pay all our dental and vision & drugs out of there too.

We really won't save much in the way of taxes. We already pay so much in insurance premiums that we get a tax deduction of around $4k - $5k anyway. So it won't make a huge difference. But a little one, for sure. Any wage increase lowers the tax deductiblity of our regular medical expenses anyway. So with higher wages there is probably a slight tax benefit. (Before we took it as an itemized deduction - portion over 7.5% income - which yes was around $5k last year).

Which pretty much means it is all a wash for us except that we will get to put away $3k every year that *if* we don't use, can grow tax deferred. I mean if we have ONE year where we don't use our deductible, we should come out ahead. Right?

So I have been pretty down on HSAs. I thought they REALLY sucked. But if you have a little money in the bank, and you get a deal like this... It's good. Sure as hell beats forking $750/month to the insurance company. Eeks. With 4 of us I wouldn't be surprised if we hit that deductible every year (broken arm? Car accident? Sick kid? Lord knows...). But, yeah. This is the first time the odds have been for the HSA. {This particular insurance company is obviously phasing out it's co-pay plans. They offer less and they cost more every year}.

Oh yeah, these premiums do not go up at 35 either. For now anyway. Which gives us some breathing room.

I have to figure out how/where I want to invest. Decision, Decisions. Starting with cash though eventually I Would like to put some in a balanced fund at Vanguard (if we build up any). I am not sure what the rules are, if we can have 2 accounts or what. More to look up. & I am trying to decide if I should divert a little of the efund to prefund it a bit Jan. 1. I don't know. LEt the money grow tax free and replenish the efund quickly. ??? IT's an idea. In case we end up using our deductible Jan. 1 or something. ANything can happen.

Well, much more to research.

ETA: Well, um the investment selections REALLY suck. I am thinking of just starting with State Farm since I already have some accounts with them. Looks like the best option thus far. $25 annual fee & 2%-3% interest. Yikes! Will do for now I guess. Not so enthused any longer. But if we start to build up some balances over the years I'd switch to one that offers mutual funds. I don't see much better in the way of interest rates except crappier banks and higher fees. lose-lose. Hopefully more banks will start to jump on the HSA bandwagon.

Seems some of them have you submit reimbursement forms for every expense (that is horrid since we would have them OFTEN). But State Farm at least gives you checks. Many give you debit cards but I wouldn't use. Not my thing. I'd probably put it on my card for the rebate and see if I could pay the card then directly from the HSA. Or if I have to write a check and use a stamp. Pricey all around... Yeah, not so happy now. I just don't want it to be a huge PITA to pay my medical bills. So no matter how you slice it, this really complicates things... Much research to do...

2nd Edit: Oh yeah and I forgot the stupid HSAa are NOT tax deductible in Cali. It really leaves us with little tax benefit here. I mean my 2% earnings will be tax free (Federal), but the fees will take a chunk. I am getting more annoyed by the minute. *sigh* I guess that means my earnings will be taxable in Cali as well. Not that Cali has huge taxes, but the bookkeeping for the difference is atrocious..

$20 challenge:

$9,186.87 - Balance 11/5

$ 75.00 - Focus Group

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$9,261.87 - Balance 11/13
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Um, dh went to a weird focus group today. LOL. It was about ice cream. But bizarre. (& no ice cream there either. Bummer).

But $75 richer for 1.5 hours of "work." Not bad. We aren't so disciplined this year as we are restoring our reserves, but if the focus groups continue to flow in, um, I think I might just earmarking them all for IRAs. I could see saving up a $1k easy throughout next year at the rate we have been going. Not bad.

They won't be so easy to drop everything at a moment's notice to watch the kids come spring either. So we'll see. But the rest of the year certainly a really good income stream. Beats minimum wage work he has looked at. I'll take this any day.

Oh I brought up the Thanksgiving thing to dh and he flipped out. My mom was not too keen either. Whatever. They love their Thanksgiving at home I guess. (No worries, I don't really do much - it's their thing). So much for that idea, but dinner at our house will be cheaper.

I did hear that 2 relatives are coming (through my mom - but dh's relatives). Yeah, thanks for telling us. As usual. I told dh to call and figure that out today. Is a week notice too much to ask for this stuff? Yeesh. Are we cooking for 6 adults? OR 8 or 10? It makes a big difference, don't you think? (I am still annoyed with dh's parents for switching their mind at the last minute to stay overnight before Florida. Fine with me if anyone was going to bother to tell me... So this sounds like more of the same).

As far as the challenge, I am fairly pleased. I never really mentioned much of it to dh and so I mentioned it over the weekend. I Said we saved close to $10k doing things "different." He didn't believe me in the least. LOL. It's funny. I'll break it out and show him when the year is over. IT is amazing how it all adds up.

I also am not stressing on the $10k thing. I would LOVE to make $10k. But um, if I think about it I know we have saved almost $1k easy (if not more) in saved gas and groceries this last year. We have changed our driving habits a bit and both our gas and grocery bills are down in times of rising costs. IT is a lot harder to quantify these results. But if my challenge only gets to $9.5k, I'll know we have done our part in more unquantifiable ways to bridge the gap of that last $500. I was trying to calculate gas savings with me just driving dh's car more but all I Could come up was like $5/month or something when I tried the math. I am obviously missing something big. Our gas bill has been on average $50-$100/month less than "usual." So I give up on trying to quantify it. Just have to take my word for it. (In general his car gets twice as good gas mileage and I have been drivibng it 2-3 days a week, if not more. Particularly on days I have to drive multiple places - preschool and aerobics and stuff). But dh used to HATE it when I drove his car and he has been better at allowing me to drive it - sometimes every day. The grocery savings is all him. I don't "do" groceries. He has also mastered the art of $50 groceries which saves us 10 - 15 cents per gallon by store. I Swear I don't know how he does it. The bill is usually $50.01 or something. LOL. & I tend to use them mostly in the van which holds twice as much gas. Yup, all that stuff adds up.

We haven't had to turn on the heat here. I can't believe it. Well into November.

On the other hand, we don't have a small baby this year and BM is content to run around the house in his shorts. (Takes after his father). We have racheted up the air and heat a bit more than usual in recent years having small kids around. Worrying if they are comfortable. I see a trend this year that we might lean towards keeping the house cooler. Suddenly the idea of keeping the house 60 doesn't seem so insane (we usually aim for 68). I think it is harder to justify 60 though when it just isn't that much colder outside though. If it were 30 outside, sure 60 would be divine. It's all I could figure why we are way too whimpy.

The weather has just been divine though. Coming from the land of "70 year round", Sacramento weather has been really hard for me to swallow. You can't step outside while the sun is out in the summer (though at least evenings are fair - phew). & spring may be okay but the allergy factor is horrendous. I stay locked up indoors. So October/November have been divine. It's been mostly in the 70s and we have been going for lots of walks. This is the weather I miss back home. If we moved to Oregon or something I just don't think I could handle it. I am weather spoiled. It could be a tie between the idea of moving so far from family and the weather, why we haven't made the move. I think the weather may factor even more.

Was hearing on the radio a while back - or maybe it was an article - weather is one of the smallest factors when you move. I cringed. When you come from the land of "70 year round" the weather will make or break you. It is clear to me I have to live in a southern coastal state orelse I may just melt. Hehe. Preferably west coast since I don't do humidity either. Ick.

Well, soon enough it will be cold and the heat will be running. Blech. It gets slightly colder here. Though I would say summer is 10 times worse than winter. But last year we did have some freezes. Lord I hope this is a sign of a milder winter. I don't do ice at all. For the most part I would say winter mirrors back home, but maybe 10 degrees cooler. I think I can handle it. But it is just one more season I can't walk outside. So that's a bummer.

Talked to the in-laws today and they do not want any of what we were getting them for Christmas. They INSIST. So I think I can adjust my budget downward to $500 (original $600). & I really wouldn't be surprised if it ends up being lower. But gives me plenty of wiggle room.

The main part of the gift was going to be a donation in their name anyway, which they do not want at all. I'll probably make the donation anyway. I might donate whatever we come under the original $600 number. We'll just have to wait and see.

So Christmas plans are under way.

I wanted to do all the purchases this month so I will have dh pick up the kids' presents and I will have to grab the stocking stuffers.

Leaves December for donations and checks, and such. Buying a zoo membership for the in-laws too. (They said they'll take that - LOL - can take the grandkids anytime and get discounts and other area zoos).

We'll also still get them a calendar of the kids - they love that. Will at least be a surprise.

MIL wans to be helpful by picking up a G.C. for me for great-grandma. It's not particularly helpful since I rather put it on the card and pay it in January. I don't even have the cash to write a check this month. She'll just have to wait. Cash really screws up my credit card budget mentality. Yeesh. On the flip side, our little talk went a long way to shoring up Christmas details. IT will be a simple year. I like it simple!!

I've come to the conclusion that one year of reorganization can make up for a few years of bad money management. If not "bad", at least less than stellar...

It's interesting.

Just thinking about it as I ponder our 2008 budget, and forward.

I recently came to the conclusion to relax a bit on retirement. I have been trying not to rely so much on my boss's contribution and that is certainly a worthy goal. But I realized, while pondering the budget, that 10% of my income (even a little more) goes to preschool. Which is rather temporary. & the reason I want to hit retirement so hard is less because we need it today, but more for future planning. So thinking about it in these terms I realized both the easies thing and the most sensible thing to do is to consider the preschool money as retirement money. It means we can contribute 5% easy to retirement come this September when we go from 2 to 1 kid in preschool. & then in 2 years we have the 10% contribution easy (total). In the meantime I get 10% from my boss too. Is there any reason to rush it otherwise? At expense of other goals? Not really.

Kind of like a lightbulb went off in my head.

Anyway, thinking in these terms and looking at our savings plan for 2008 I realized for the most part we on track to save 1/3 of my income. Even if 10% goes to preschool in the interim. Well, not for long!!!

I also realized that on another level if we save 1/3 of my income, we are still living on the same income we made before kids. How bizarre is that? I feel like we have really been living up to our income. & we certainly have much more/more cushier lifestyle than we did 5 years ago! Plus we have 2 more mouths to feed.

But um, nothing has really changed. We haven't lived up to anything. We have done a lot of cost cutting measures in order make it on one income. Wow! It is just bizarre to come to this conclusion. I feel like in the interim we have been living up to our income and I have been fighting it every step of the way. Well, maybe all the fighting has been working better than I realized!

I have been running the #s through my head because it doesn't really make sense. But I think when we had 2 incomes we felt we had a lot more room to waste money. PLUS we have done so much planning that we have far more assets to fall back on, which means we rely on the income a little less. We have newer cars (so less worries about replacement costs in the interim). The cash in the bank earns decent interest which means some of our savings comes from that. Etc., etc.

It's, interesting.

On the flip side, we used to pay a lot more of our income to taxes. So though I may be saving 1/3 of my gross pay in a sense, I also take home a much larger percentage of gross than I used to. & that probably counts for inflation and the extra mouths to feed and all that. To be fair - we aren't doing THAT great. LOL. The tax factor is huge...

Well, I am sure I am missing something. But it's kind of my "aha" moment. Maybe we aren't doing so bad.

Our savings looks something like this:

3% retirement
10% Preschool (to retirement eventually)
13% Short Term Savings (escrow)
7% Mid Term Savings (house/cars)
--------------------------
33% Gross Income Saved
--------------------------

I also understand a large chunk is for short-term savings (to be used within the year). But, um, I wasn't saving that before when we dropped down to 1-income. Nor when I received about a 50% raise over time. So it's all money I wasn't making or saving before. Now I am making it and saving it.

I still want to plump up retirement as much as I can, but am considering working more on cash reserves in 2008. With more cash reserves, we could more easily devote 100% windfalls to retirement. win-win-win. There is a bit of a psychological factor in it all. Of course the more we put to retirement now the bigger difference it makes. So it is a balance trying to figure out the best plan. But we're getting there.

On the flip side, the more cash reserves the laxer we feel on the budget. So part of me wants to put every last time I can to retirement. Forget cash. I guess the psychological factor can go both ways. & of course the more we put to retirement today, the easier it should be in the long run.

All stuff I have to think through. In the meantime it feels nice to think we are doing much better than we thought. BUT don't worry, I don't feel any more relaxed. The whole IRA max is really motivating to me. Because the more we put in there, the more is tax deferred. Which in the meantime encourages to try to save even more than the plan.

The other interesting factor is though my income has gone up so much, it shows little sign of slowing down. So saved raises will go a long way to get our percentages up in the interim.

I think my overall goal is that in about 3 years, when the kids are in school, I want to say to dh, "I don't care if you work." If he wants to buy new TVs and electronics and all that a faster rate, or if he wants to work on a career. He will have that freedom. (& I will largely say you want that stuff - you come up with the money). I want to be able to say that even if I no longer get 10% of my income from my boss in retirement that he does not have to work. He only has to work if he wants to go back to school or if he wants an elevated lifestyle. It's just one level in the path to financial freedom I guess. & I feel we are getting there quicker than I thought we would.

As stands it probably means I would hope not to need a second income in the least by age 32 (which ironically means by age 25 because that is the last time he worked anyway. But today we still think of it in terms as temporary. It has to crossover to a permanent thinking yet).

My goal is still not having to work full-time by age 40. Of course, if he decides to work and finds some success, I may be able to speed this up significantly.

It is interesting. Full blown retirement appeals little to me. I like working. But not "having" to work is certainly a different mindset - a worthwhile one.

In case you ever thought I was full of crap when I said it was clearly cheaper to buy our first home and why we were eager to buy so soon. On a monthly basis it was FAR cheaper than renting. (Keep in mind dh and I kept our rents down to $400/month combined through college and 1 year out as a means to save up a substantial down payment. He lived with parents and I lived with roommates in a more "rent controlled" situation. Th average studio apartment was $1100/month at the time. I rented a huge room in a big house in a nice neighborhood but roommate had been there for a long time and so my rent was very low for the 6 years I did rent).

Home #1:

"Your home purchase breaks even after 0.2 years.

This is based on your home's equity minus a 6.00% sales commission paid to brokers or real estate agents when you sell your home. It also assumes your home will appreciate at 3.00% per year and you have an income tax rate of 25.00%. If you cannot remain in your home for at least 0.2 years you should consider continuing to rent.

We calculated your breakeven point by examining how long it would take to create enough equity in your home to exceed the value of investing your cash on hand. We also accounted for differences in your monthly rent and house payments. If your rent payment is less than your net house payment, we add that monthly savings to your investment. If your house payment is less than your rent payment we subtract that amount from your investment. You may notice that on the schedule at the bottom of this report the investment value can be reported as negative. This happens if your house payment is significantly lower than your rent payment. It illustrates that if you continue to rent the extra cost of renting would, in effect, use up your cash on hand.
Loan Information

Your total monthly payment was calculated as $1,867.39. Your down payment was calculated as $50,000 and you had a home price of $260,000. This is for a 30 year mortgage at 6.000% in the amount of $210,000. Total closing costs for this loan are estimated at $2,000.00.

Your current monthly rent is $2,800. The expected inflation rate of 3.10% annually was used to estimate future rent and property taxes.

The rate of return use for investments was 10.00% per year a..."

Also note that that condo is worth today, a mere 8 years later, what the calculator projects it will be worth in about 2027 years. When you factor housing returns, it paid off even faster. You can argue housing is volatile, but the Bay Area has a long track record of large house appreciation. I don't expect it to be worth only $500k in 20 years, no matter what the market does. Unless the Bay Area becomes a waste land or something...

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

Our second house works out to be about the same though rents are considerably cheaper.

"Your home purchase breaks even after 1.2 years.

This is based on your home's equity minus a 6.00% sales commission paid to brokers or real estate agents when you sell your home. It also assumes your home will appreciate at 3.00% per year and you have an income tax rate of 15.00%. If you cannot remain in your home for at least 1.2 years you should consider continuing to rent.

We calculated your breakeven point by examining how long it would take to create enough equity in your home to exceed the value of investing your cash on hand. We also accounted for differences in your monthly rent and house payments. If your rent payment is less than your net house payment, we add that monthly savings to your investment. If your house payment is less than your rent payment we subtract that amount from your investment. You may notice that on the schedule at the bottom of this report the investment value can be reported as negative. This happens if your house payment is significantly lower than your rent payment. It illustrates that if you continue to rent the extra cost of renting would, in effect, use up your cash on hand.
Loan Information

Your total monthly payment was calculated as $1,647.61. Your down payment was calculated as $68,000 and you had a home price of $290,000. This is for a 30 year mortgage at 5.750% in the amount of $222,000. Total closing costs for this loan are estimated at $2,000.00.

Your current monthly rent is $2,500. The expected inflation rate of 3.10% annually was used to estimate future rent and property taxes. The rate of return use for investments was 10.00% per year after taxes."

It will also be worth what it is today in 25 years according to the calculator. I am not sure how much Sacramento as a whole will support higher housing prices. Curious myself. But um, future appreciation played no factor in our decision to buy. Our house already decreased in value $150k this last year and is still an easy $200k more than we paid in 2001.

If we rented the 2nd time we could have put $100k in the bank (at age 25). We still were better off buying. Even if we assumed the house only grew 3%/year.

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

I never said I wouldn't consider renting in retirement. When inflation is out of the equation. It would probably be the only way to enjoy all the money we earned on our house. Of course we intend to at least downsize in retirement. We really liked owning a condo and it was an interesting way to enjoy home appreciation while keeping costs down. (Or course we paid more for utilities, homeowners insurance and for homeowners fees in our condo. Property taxes were the same. & our current house is twice as big. So things aren't very apples to apples when you move hours away. We moved to limit all of these costs, which were ironically much higher in a small condo in an expensive city. I will take my big house any day. But a big house didn't stretch us - it was a way to simplify for us. Just an illustration how wildly these numbers will vary due to different factors. & why I get tired of hearing how bad big houses are. Our "big house" just might be our key to financial freedom at a very young age. ).

Well I haven't really been feeling well all week. I think I am in a bad cycle. I was sick and then that passed. But I was feeling on top of things at work. Things have been going well. But November is a really slow month in the sense I am barely going into the office. So being sick really screwed me up. So I have been feeling really stressed, and then sick too as a result. Vicious cycle. Of course I have been eating rather well. But I was feeling so crummy I resorted to brownies and soda (I am a stress eater for sure). Which didn't help the cycle. I feel like crap.

Dh actually had a boys' night out last night. In another city. So I was alone feeling crappy. It wasn't so bad but I couldn't make it to the gym as I had planned (limited weekend babysitting). & so it goes.

I feel much better today. It has been raining. I told the kids we could go for a walk today and look for worms and snails. I think I need fresh air, and a little exercise, more than anything. Will try to eat a little better today too. HArd without dh but he should be home soon.

Sometimes I wonder how I could even function without dh. But I did have fun with the kids. They were really good.

BM did a focus group yesterday and LM and I went shopping. I never go shopping, and have been really lazy but needed a few things.

I also needed some hose. I have been putting them in the dryer and have ruined about every pair. I don't remember them all expiring at once like this, so I think it's the dryer. I usually don't dry my work clothes but with our new dryer I have a dryer bag for the small items, so I have been just tossing the bag of hose in the dryer with other things. So one measure I can do to save money is stop drying those things. Yeesh. Live and learn.

I also had to replace BM's mattress pad which dh melted in the dryer. LOL. It was only $20 at Target. Not bad. I thought we had paid a lot more for the waterproof variety.

Oh you'd be proud of me. I was so good at Target. Got some birthday gifts for a friend who is usually quite generous. So spent around $30. & I got BM a really cool shirt while we were there. But they had the CUTEST monkey pajamas everywhere. I can't say I'd resist so well if I saw adult ones (I didn't look). LOL. But for the boys or even for Christmas for my nieces. Oh, I resisted. I have $20 off at Kohls and maybe they will have monkeys too. Will have to go check it out today. I forgot about Kohls in my shopping.

They also had those "little miss" t-shirts, which I think are so cute, at Target for $9.99 (I have only seen them like $25-$30 prior). But they were just of a REALLY cheap quality. I just couldn't bring myself to buy it.

& I know I'll survive.

I also don't know why I haven't been hitting the thrift stores of late. I don't know. For one, pants are such a chore for me to find in a right size, is a huge reason why. They don't always have rooms to try on clothes and I can waste a lot of money pretty quick buying pants in my size that don't fit in the least. BUT shirts are another story. & more sweaters and shirts do a lot more to mix up a wardrobe than adding more pants. Well dh picked up a few things and it inspired me. I just hate shopping so much. Why I avoid it... But um, I think next time I have the urge to go clothes shopping I have to make a pact with myself to hit the thrift store first. I should be able to find a few cute sweaters. & I am sure it beats the crap they sell at Target. (Oh I am quite sure. LOL). I used to buy more clothes there, but they just fall apart. It's great for the kids. Great and cheap. But for the adults, I am not so pleased.