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Archive for July, 2009

Cannibalizing the future to make sure of the present

July 31st, 2009 at 07:48 am

I lowered my IRA contributions today to the minimum. I hate doing that but I don't want to put us in an uncomfortable position while DH looks for work (current contract ends in a month) and right now I want to hoard as much money as possible. (We are also lowering our allowance to as little as we can get by with which is officially a little more than half of normal).

My take away from this is that next year my goal will be an EF of at least 10k. 1-2k just doesn't give me enough leeway to feel comfortable. Not that 10k will be enough in the long run, it just works as a short term goal while I max out the retirement accounts next year. I will actually need to save up a lot of money because sometime in the next 4 years, I need to put a new roof on the house.

Bah, I hate having things up in the air. Speaking of which, I should get hubby to transfer his 401(k) to a rollover ira. He's paying higher fees for leaving it there then he would by having it in an ira.

Going to get rid of some stuff

July 29th, 2009 at 12:21 pm

The rest of this week and weekend I am going to working on selling my useless stuff on craigslist. We have a hobby that we have recently gotten out of, another one where we are switching equipment and a couple of things I just don't want/need anymore. Should make quite the pile. Hopefully all goes well and I get rid of the stuff quickly.

I have to admit, I am more motivated by the desire to get rid of things I am not using than by any amount of money I might make but I won't mind getting some money out of it, lol. Hubby has volunteered for fish tank clean out and I figure while he is doing that I will start hauling things from the basement that I want to sell, maybe even start taking photos and posting. I am definitely in my semi-annual spring cleaning mode.

Basic Progress

July 28th, 2009 at 09:49 am

So I updated my networth to reflect the August payments. I do this at the beginning of the month instead of the end because that's when I schedule my payments for the month. Probably won't be so quick in September because I can't be as sure of our income till Hubby has moved to the next job. I think end of August will definitely be the last for his current job thanks to the slowdown.

He's already had people calling about other jobs though so I suspect his downtime between jobs will be minimal. Either way, we are still in good shape.

Its hard to believe that we have had the house for 8 months now but the slowdown in home repair expenses has definitely been showing up. We still have a bunch of big projects to do once we are credit card debt free but they are all capable of waiting till then so we mainly just need to do little touch up jobs.

Was wondering when that would happen...

July 27th, 2009 at 07:30 am

So the Wamu credit card that was bought out by Chase is being closed by Chase. A little insulting despite being expected. They didn't like my amount of debt in comparison to limits, my number of bank cards (since when did we stop calling them credit cards?) or the recent opening of bank cards (I had opened 1).

I didn't have anything on the card and like I said, I have been expecting this for awhile simply because it was apparent that they didn't want my business (when credit cards aren't trying to shove balance transfer checks down your throat, you know you are in trouble). What actually surprises me is that Discover hasn't yet followed suit. That's okay, it saves me the trouble of having to cancel the card once everything is paid off (I had Chase once before for all of 3 months before I cancelled the card because I couldn't stand them. I would have never used that card for anything.)

I did laugh though having received that letter and then logging on to my Citi and seeing that they had raised my limit. Ah well, one more year will see the debt gone and then none of this will matter. It did encourage me to do my final balance transfer early so I don't have to be worried about being stuck with a nasty rate when the 0 ends.

Latest budget info for the curious

July 24th, 2009 at 10:52 am

Figured I should post my latest budget since I haven't done that in awhile. Did it in percentage format based on the lowest amount earned per month (since I refuse to plan based on overtime).

Expenses
Water Bill (now monthly) 0.3%
Electric/Gas Bill 1.0%
Gas for Car 0.8%
PITI 25.9%
Bus Pass 1.4%
Car Insurance 1.3%
IRA 8.0%
Short Term Savings 1.5%
Internet/TV 1.4%
Netflix 0.2%
Cash Items 29.6%
Student Loan 3.9%
CC #1 2.0%
CC #2 2.0%
CC #3 20.7% + any overtime

Oh, the amount of debt we have is 32.7% of our yearly income (the majority of which is at 0% interest). Which means if you are truly ambitious you can figure out the dollar amounts for everything, I just think percentages are more helpful.

Obviously the cash allowance is purely discretionary (groceries, out to eat, activities,home repair, etc) so that is what gets cut when I want to save more cash. We still can survive indefinitely on my income, still never pay just the minimums on credit cards (psychologically, I just can't do it) and the budget is extremely comfortable.

Which is why I am thinking we can cut back a little until we are sure of DH's next job. Which may not take long since he is already getting calls for new jobs. Better safe than sorry though. For those concerned that I don't have an EF fund listed, I keep a 1k cushion so that is already built in. The cash raiding is for expanding on that in case some big repair bill or some other nasty appears while our income is reduced.

Oh, should mention that the phone is not a monthly bill so is not listed. Short term savings covers that, any plumbing bills (1950's plumbing, I expect problems) and oil changes. I expect that it can cover a host of other random expenses too.

Time to pare back...

July 23rd, 2009 at 12:50 pm

DH's temp full time job looks to end at the end of August so its time to start squirreling away cash in case a new temp or permanent position doesn't immediately show up thereafter. I figure the more I can squeeze out of our discretionary budget, the better off we will be. Sides, if and when he gets a new job, I will be able to use the cash to pay off more debt.

I figure the rest of summer and fall can be spent on free activities like breaking down the junk pile in the backyard, pulling weeds, finishing painting my kitchen (yes I still haven't gotten beyond the first couple coats of primer), finishing my hallway (haven't even started that), installing the curtain holdbacks, sorting through the basement stuff and relaxing.

The only festival I still want to go to is the Taste of Colorado later this year and I have already saved out the money for that. Basically, we have caught up with all the expenses and with most of the splurges so we can just relax, cook some good food and stay home with some books and video games. Probably get a bunch of walks with the dogs in too. I am so looking forward to a relaxing stay at home weekend.

Sometimes I don't want quality...

July 15th, 2009 at 07:12 am

I know a lot of people are fans of buying quality items. I am too for say clothing or appliances/gadgets that I know I will use to death. But when it comes to furniture, I really hate buying quality. I like to change the look of my rooms and with all the moving I have done over the years, I tend to end up with a collection of furniture that doesn't necessarily fit in the next place. The problem with furniture is that even the cheap stuff lasts forever.

Most of the furniture I have owned over the years I have been able to pawn off on friends when I tire of it or move to a place it won't fit. I am currently staring at a very nice table that is huge and am wondering if my friend would like to have a table set. Somehow, I don't think she will want it thanks to it being so large (which is why I don't want it). Which leaves freecycle or craiglist for disposal. And right now I just don't have the time. Blah. Maybe Goodwill will want it?

I can imagine how much fun it will be when I finally decide to get rid of my current bookcases and replace them with matching larger bookcases (years down the road but getting rid of furniture seems to be a challenge for me). Just like down the road I will need to decide whether to get my 2 burgundy chairs reupholstered to a more suitable color (most likely since they are nice chairs) or get rid of them and get new (only if its impossible to reupholster them).

Course, if I declutter the house again, maybe my furniture won't bother me. The need to purge stuff seems directly linked to how much stuff is lying around (my library is overrun with tools and my covered porch is covered in landscaping stuff and my backyard has a pile of junk that needs to be disposed of). I suspect I will be tackling all of my problem areas long before I get rid of that table.

The challenge of an accurate budget...

July 13th, 2009 at 09:07 am

Still trying to get there. I have everything down except the spend money. Part of that is knowing how much I need during the summer for our continual house projects. So, I am upping that by an extra $100 per month which should be enough. In the winter it can go back down to normal levels but the summer tends to need a little bit more money for all projects we work on. At least we are definitely paying off debt and contributing to long term and short term savings. My goal is for us to have enough cash in hand to save up for some of the bigger projects that don't fit in the week to week budget.

I am not really trying to have a watch every penny budget, I just want to know in advance how much money will be left over each month for debt repayment. The past couple of months haven't included a short, short term savings category (ie meant to be spent in a couple of months) and we need that for a few of the repairs. I am also going to need that for plane tickets for my brother's high school graduation. Hopefully this modification will be enough to give us those amounts.

What are they thinking?

July 10th, 2009 at 08:39 am

Sort of a rant, more like a musing.

First up my father. The man who thinks you are doing okay if you don't have more than a year's salary worth of credit card debt. He commented the other day on the phone that he had thought we were going to get ourselves into financial trouble because of all our remodelling plans. (FYI, this came up because I was unemployed for a month but already had a job lined up). Really?

I suspect the problem is that he is now making a lot more than he used to which is closer to our income but since they have let their lifestyle expand to fit their income, they can't imagine how we can afford to do all this stuff.

Now if say disneysteve wanted to tell me that I was spending too much by all means, I would believe him (because we did go a little overboard, should have paced more) BUT I am pretty sure my father with his 2 car payments, a new garage and credit card debt has more debt at a higher rate than I do. (Though the garage should be at a cheap rate, he should have been nearly done with his mortgage). I also happen to know that I can pay mine off in a year or so. My father's response to my saying I can pay it off in a year? Well but you will always have bills. And with statements like that, he's worried I will bite off more than I can chew?

Then the inlaws. Nice people, they plan to have all their debt gone in two years. They struck me as being bipolar. I think in their minds, they know that we need to stretch things out to budget and keep expenses down but then they talk about all the things we need to do right now. No, they can wait and be paced. There is nothing with this house that is in need of immediate repair or replacement now. So I emphasize that we have already spent our budget for now and that we need to pace out the expenditures. Then they act like we are broke.

Is "budget" really that dirty of a word?

I get the impression that people are so used to their style of living that they can't even imagine that someone lives differently than they do.

For example with the inlaws. I think they were genuinely worried that our neighbors would think ill of us if we didn't fix all the outside things within the first month of living there. But then they live in a wealthy neighborhood. We live in a blue collar neighborhood and have received many compliments from the neighbors regarding the outside appearance of our house and yard.

In fact, most of our neighbors eagerly watch all we have been doing to fix it up because the previous owners had let everything go for awhile. A couple have even guessed from the speed of our repairs that we are professionals instead of blue collar. But the inlaws were extremely concerned with giving the neighbors the impression we were working on things. I suppose in the defense of the in laws I should point out that they never saw the place before they came out so they didn't realize how much we had already improved the place but still.

Don't they realize that you shouldn't attempt to lead spenders to spend more money than they should? They can do that well enough on their own.

People either assume we are rich because we don't have their expenses or they assume we are poor. There just doesn't seem to be a middle ground of comfortable.

Updates and guests for the holiday weekend

July 1st, 2009 at 12:27 pm

Updated the networth for all the scheduled July payments so now my debt is starting to go back in the right direction. DH and I have agreed that we won't do anymore large purchases until we are completely debt free and have saved cash for them. The new cash in hand budget is working out extremely well. Its really nice to not have to worry about going overbudget because you can see where you stand at any moment and the amount keeps us from feeling deprived.

The front yard is starting to come along. We decided that the stone path part will wait for next year and this year we will focus on the mulch beds and plants (we are using the cash allowance to buy these as we go along).

We will have a long holiday weekend because we took time off for the in laws visit. Not sure what we will be up to yet but we can figure that out as we go along. Guests used to be really damaging to the budget but since the new one is designed to afford gardening supplies or festivals each weekend, I don't anticipate going over budget.

This was the big mistake I have made with every budget, never any play money or at least never enough. No more. Considering our fixed expenses have never exceeded 27% of the budget, no play money just brought on the splurging. Including food and house repair/gardening stuff(because we categorize food as want not need aka ramen's cheap, brie and bread is not), we now spend 17% of the budget on wants. The rest goes to savings and debt payoff. Boy do I look forward to that being only savings. Oh and no, not all the fixed expenses are necessities (1% of the budget is fixed expense wants).

So tonight, one last strategic clean because tomorrow after work we pick up our guests. Hope everyone has a good weekend!