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New part-time job

March 3rd, 2013 at 12:57 am

It's been over a month since I've blogged on here! Our first 2 months of this year have been good, financially speaking. We've kept to our budget each month and socked away extra money to our mortgage. And two months straight of contributing to our kids' college funds, and 15% to DH's 401k.

The biggest change is that I started doing freelance writing part-time and discovered there is a lot of work out there. I'm not doing anything glamorous, just writing for websites. But I made over $1000 in January and over $600 in February! Of course I have to pay self-employment taxes on those earnings, which are higher than normal...but I'm still thrilled with the extra cash!

Potential Layoffs

January 24th, 2013 at 02:13 pm

DH's company had a big meeting yesterday and the company announced that layoffs are coming. It's mostly going to be middle-level managers, which my DH is not. But, we are not panicked. For one thing, DH doesn't think he will be laid off since he's the only one that does his particular job.

But secondly, we feel prepared now for a layoff. We have our emergency fund in place. If DH were to get laid off, he would get about 4 months of severance pay on top of our 6 month emergency fund. Sure, money would be tight and it would suck, but we could probably make it 10 months without having to go into debt.

Two years ago, or even last year, I would have been more worried about potential layoffs. I highly recommend having an emergency fund, for peace of mind!

Keeping it frugal with the kids

January 24th, 2013 at 03:40 am

I was tempted to go to a train show this past weekend. Kids 12 and under were free, adults were $8.00. But when we read the flyer, it said there would be lots of booths with Thomas the Train stuff for sale, along with other train things. DH was the voice of reason and said we shouldn't go, because even though admission was only $16, the kids could pressure us into buying them things.

So we went to a park instead. And the kids had a lot of fun and never knew the difference, since I never told them we were thinking about a train show.

I do want my kids to experience things other than just parks...and they do. But really just for special occasions.

In less than 2 weeks we will be on our Disney Cruise...and that's a special occasion! I already pre-paid for our parking at the port and pre-paid our gratuities and a small amount for souvenirs in our onboard account. Our only expenses not yet covered will be gas to and from port, and some food for the drive.

Money saved/money earned

January 14th, 2013 at 02:25 am

We decided to completely cancel Netflix today. I just did it online. We were only doing the 1-DVD-out-at-a-time plan for $7.99 plus tax, but we figured out we could do it cheaper through Redbox. At most, we watched one movie a week. Plus, Redbox texts me coupons and free movie codes a few times a month. So we figured with Redbox, we can have our movie entertainment for $5 or less each month. I know, not a huge savings, but it's something.

Yesterday I got my updated Discover card in the mail. I haven't used my Discover card in years, and it just expired so they sent me a new one. As an incentive to activate it, they sent me an offer for $75 in cashback bonus if I spent $1000 or more on the card between now and the end of March. Since we charge a lot of things on our credit card and pay it off at the end of the month, I decided it would be worth the $75 to move some stuff over to Discover to get the extra bonus. Between gas and groceries for the next 3 months, we should have no problem hitting the $1000 mark.

A humbling experience at the grocery store

January 7th, 2013 at 04:59 pm

On Saturday I went grocery shopping at Aldi. It's a weekly habit, since the prices there are so cheap. If you've shopped there before you know that you have to pay with cash or a debit card only, as they don't accept credit cards.

I transferred some money from our main account to my checking account to cover my debit card transaction. Apparently I didn't transfer enough and my card was denied at the cash register. I took one thing out of the cart. A manager had to be called to void the item. It still wasn't enough. I had to take another thing out of my cart. Then it went through.

The line was building behind me and I felt like all eyes were on me. I was really embarrassed.

I wondered if people pitied me. We had the money, just not in the right account. But that got me thinking about people who don't have enough money and have to do this all the time. How do they feel? Do they feel embarrassed or shamed? Or are they used to it?

I certainly made me think.

College Funds for the Kids

January 3rd, 2013 at 10:41 pm

The grandparents gave us some money at Christmas to contribute to our kids' college funds. Sadly, the last time we contributed to their funds was last Christmas with money from their grandparents. In 2012 we made our emergency fund a priority. We are hoping to contribute a modest amount to each of our 3 kids' college funds monthly this year. Either $50 or $100 per kid each month, but it will depend on how DH's take-home pay shakes out when we see his first check of 2013 in a few weeks.

I should mention that both my parents and DH's parents helped pay for our college tuition. Both DH and I worked on campus during college, but the majority of our education was paid for by our parents without any student loans. We didn't realize at the time how lucky we were, but now as we see people struggle to repay student loans, we are so thankful for that gift from our parents. (We did each pay for our graduate school tuition years later--I took out a small loan but paid it off in a few years).

I really struggle with the kids' college funds for a few reasons. First, the calculators say that by the time my kids are college-aged, college will cost $150,000-$200,000 for an in-state school. For each kid. So we might be looking at $450,000-$600,000 total. Gulp. We have about $50,000 total saved so far, and over half of that has been from both sets of grandparents.

Second, all the experts say to prioritize saving for retirement. Which I totally agree with. Which is why this month we are back to 15% 401k contribution and extra principle payments on our mortgage, to put us in a good position when we retire.

I also feel like the cost of college is a huge guess at this point. I think at some point, if the costs keep rising at the rate they are, college won't be affordable for anyone. And maybe my kids will get scholarships, or go to community college for the first few years, which would cut the costs dramatically. The costs of college are just so unknown.

I did one of those online FAFSA guestimate calculators to see what our expected family contribution will be for college. It gave me an answer of $25,000 a year for my oldest. Which is basically the full cost of an in-state college with tuition and room and board.

I also struggle with just the balance of it all. Because sure, we could contribute more to their college funds if we didn't go on vacation ever again. But then we'd lose those experiences and memories, and our kids will never be this age again.

So I really hope that by prioritizing our retirement, paying off our mortgage early, but still having some fun memories along the way, we will free up some cash when our kids start college to help pay their tuition with current salary.

What are your thoughts on paying for college? Did your parents help you pay for college? Are you going to help your kids, and if so, how are you planning for it?

Changes for 2013

January 2nd, 2013 at 03:56 am

Woohoo, it's 2013!

Our emergency fund is in place. We paid all of our house taxes/HOA fees in December. We have paid off our February 2013 vacation. We have a small slush fund, car fund, and a vacation savings for the summer.

Our big goal this year is to pay extra principle on our mortgage. We are trying to pay off our mortgage early so that we can free up some cash to help our kids through college. Our plan is to pay off our mortgage in 8 years. It seems overwhelming and like it will take a long time. We have a goal of paying an extra $8244 in principle this year.

We already paid an extra $1000 from a bonus received in December. We will take $1000 from our tax return later this Spring and put it towards the mortgage. We already pay an extra $150/month with our bi-weekly automatic withdrawals. I will add another $300/month on top of that. Starting in September, I will have another $200/month on top of that because we will go a year without any preschool tuition payments. I'm cancelling our lawn service and I'll be doing it myself. Hopefully those changes will enable us to reach our goal.

Today, DH adjusted his 401k contributions back to 15% (we had lowered it to 7% in the back half of 2012 so that we could get our emergency fund in place).

We are also going to begin contributing to our kids' college funds, $100 each per month.

In December, I started a part-time job doing freelance writing online. I earned $400 in December (before taxes). I hope to earn $500 a month with that this year. Not much, but it's something!

Here's hoping for a great year! Good luck everyone on achieving your financial goals!

First big extra payment to the mortgage

December 14th, 2012 at 04:10 pm

The bonus check came last week. We paid off our Disney cruise and mailed a check for $1000 to our mortgage company for extra principle. Since we refinanced earlier this year, we've been rounding up our automatic payment and therefore already putting an extra $150/month towards the mortgage. But writing that check for $1000 was a little harder than I thought!

I think it was hard because we have such a long road to paying off our mortgage. Our plan is to pay it off in about 8 years. I've worked up a schedule by month to get us there. Sure, if we have any "extra" money floating around we might make it there faster. But I don't want to get too obsessed with paying it off early because I'm afraid I will start going too extreme on penny pinching and regret it. We also need to pay off the rest of our car loan (1.9% interest) and save up for another car.

I'm going to figure out what our 2013 extra principle goal is and have that to shoot for. Because otherwise it's just too overwhelming!

Yesterday I mailed off checks for our HOA dues and property taxes. So this is the first year that we've ended the year with all our bills paid (including our vacation pre-paid) and money in our emergency fund. Yay!

I Find It Odd....

November 6th, 2012 at 07:32 pm

Ok, I realize that everyone has their own philosophy on personal finance. And different degrees of financial responsibility. And I know that I am not perfect and have certainly made a lot of mistakes with my finances.

But...

I find it odd that when most people want something they can't afford, their first inclination seems to be to either go into debt for it, or ask other people for money. My perception is that those are frequently the first 2 choices, rather than try to earn extra money, or spend less money on something else that isn't a necessity in order to afford the new thing.

Several times a year we receive e-mails from friends/acquaintances for fundraisers for their personal things (adoptions, medical bills, summer camps). As we have 2 adopted kiddos and we know how expensive all the travel can be, we want to be supportive of others. But I find it odd that someone can be fundraising for something at the same time they are posting pictures of themselves on a big vacation, or consistently going out to eat, etc. Or posting on Facebook about the awesome cute outfit they just bought their child for $50 through Smockadot Kids while asking us for $10 to support their fundraiser. It just seems odd to me! (By the way, I'm talking about personal fundraisers for a family expense, not school fundraisers or mission trip fundraisers, etc.)

I feel like as a society we have become accustomed to think that certain things are necessities instead of luxuries, and many people don't even think about cutting back on those things in order to afford something else that might be more important.

I'm talking about things like vacations, smart phones, pre-school or Mom's Day Out programs for kids with a stay-at-home parent, designer clothes, dining out in restaurants, Starbucks runs....while those things might be nice to have, and maybe are a priority to people over something else, they are not necessities.

A friend just confided to me they might lose their house because they are behind on the payments. And just a few weeks ago I was looking through their wonderful vacation photos. Now I love a vacation as much or more than anyone else, but I can tell you that if we were in any danger of losing our house, the first thing we would do is cancel our vacation.

I just find it odd.

October wrap-up and Home Insurance

November 5th, 2012 at 08:02 pm

First the good news: I earned $102.21 on mturk.com during the month of October. That will be used as cash spending money while we are in Cozumel in February (Disney Cruise).

We are on track with our savings to have enough for our property taxes. With the Nov 15th paycheck we should be able to pay our property tax. Our HOA dues are due in January, so we will use some December savings to pay for that.

Now the bad news: We were about $160 over our October spending budget. And it's because my DH went to the dentist for his cleaning and they found a cavity. We have dental insurance, which completely covers cleanings every 6 months, but cavity fillings are not covered nearly as well. I'm looking forward to having our "slush fund" up and running by the end of this year so that it can cover these unexpected expenses.

At the end of December, we should have our emergency fund fully funded and a small slush fund. At that time, we will increase DH's 401k contribution to 15%. And we will start our new budget (which will include putting money aside each month for our property taxes/insurance and $100/month for each kiddo's 529 plan). In January we will also be starting extra principle payments on our house. It will be a tight budget, I hope we can do it!

Switching gears:
Today I called our home insurance company. Our premium has increased by $684 over the past 2 years. When we bought this house, the premium was $1060. Then a year later I switched insurance companies from AllState to Progressive (switched both auto and home policies). The net of the 2 was a savings of about $600 a year. But our auto was substantially lower and our home insurance increased. Then the next year, our home insurance increased a few hundred more dollars. And now it's at $1744.

I've been going through the paperwork and I noticed that our dwelling coverage seemed overstated, so I called Progressive to ask about lowering that. They told me it was an algorithm that could not be changed, but they went through all the facts about our house and lo and behold the dwelling number was high. So that change brought my insurance down for the year by $146. They are going to pro-rate the difference and send us a check for $75 since we are half-way through our policy.

But, I've done some online quotes from other insurance companies and those quotes are still coming in closer to the $1100 a year. I know if we switch our homeowners policy, our auto insurance policy will go up since we a discount for having both together. I guess I need to price out what the net difference would be in switching. I think our home insurance is still about $500 higher than it could be.

It seems like such a pain to keep pricing our insurance...does anyone do this every few years? Or do you stick with the insurance you have?