You are viewing: Main Page

Tax planning

October 5th, 2014 at 01:55 pm

I decided to try to get us some more tax money back this year by putting my husband's IRA contribution in a traditional instead of a Roth. Which is great but when I forecasted our taxes this year, it became clear that the last contribution to his IRA will have to wait until after I know exactly how much we made. We are in the phase out of the deduction so part of his 2014 IRA will need to be Roth after all.

Its a good problem to have and we still make a significant amount of money back from taxes, just shocking that we tripped it. I thought we would have more room this year.

Our variability in income has always proved a challenge in tax planning.

Checking in with an update

August 28th, 2014 at 02:04 pm

I transferred my husband's IRA to his 401(k) which has expense ratios that make Vanguard look expensive and transferred my IRA to Vanguard to lower my expense ratios as well. I will have maxed by 2014 IRA contribution by November and will have half my husband's contribution for 2014 in September, the rest of it will be in the beginning of next year or December depending on cashflow.

We have made progress with the food budget but there is still a lot of progress yet to be made. We have saved over $1800 YTD over last year's food budget but I still am struggling with being motivated. I suspect dropping this expense will also be a goal for next year.

End of May Update

June 1st, 2014 at 07:20 pm

April was on track but May was a big spend month for both food and miscellaneous expenses. June however is a new month and I will be aiming to get the food budget back on track (miscellaneous expenses hit a couple times per year and tend to take care of themselves, no shopping addicts in this house).

My brother is employed once more so I don't have to worry about that expense now.

Its looking like the auto loan will be paid in full at the end of August and then I can start on the 2014 Roth IRA contributions.

I still struggle with how much do I care about the food budget being low but even attempting to cut it has resulted in saving $914 this year so far. So I figure I will keep trying since its the easiest area to make a dent in and by far our most ridiculous expenditure. Sadly, all of that savings was ate up by my brother's period of unemployment. This, however, was my brother's final bail out for stupid decisions so further savings should go towards our actual goals.

End of March Update

April 4th, 2014 at 02:00 am

While we are averaging $900 per month on the food budget, it was up in March. April will see us focusing once more on keeping this down. I am okay with averaging $900 per month instead of meeting $900 every month but do not want us to start trending up.

Helped the brother out a little but gave more advice than money. His budget was a lot better than I was fearing which was nice.

We are still doing the daily breakfast shakes, have started adding more vegetables to them which is interesting. It helps to cut the sweetness of the fruit (why on earth people sweeten fruit smoothies is beyond me).

I appear to have essentially given up soda, which was more than I was hoping for when I cut back so I will take the victory.

Preparing for a Potential Setback

March 20th, 2014 at 01:51 pm

My younger brother may end up needing some financial help due to job loss and poor choices. I will be meeting up with him to discuss where he is and what his options are. As a result, I am taking a pretty thorough look at my finances to determine how much I can help if I decide to go that route.

I don't want to make it too easy on him but I am also not going to let him sink. It will probably be a combination of financial assistance and forcing him to make some hard financial choices.

Its a good thing that I had cut my expenses back because this could make cashflow over the next couple months difficult. We shall see.

Food budget update and dietary changes

March 8th, 2014 at 02:56 pm

Only spent $736 out of the $900 goal amount in February so doing much better than expected. I am not going to change the goal amount, however, as some months we may have a hard time staying under $900.

We have undergone a major revision to our diet which should be interesting long term. We do breakfast smoothies (plain greek yogurt, a splash of milk, massive quantities of fruit and leafy greens) every weekday morning. I have never eaten this much fruit in my life. I have always been big on veggies but never much cared for eating fruit but even I have been consistent in my breakfast smoothie (helps that I keep changing each day what fruit is in the smoothie). I have been doing them for 2 weeks, hubby has been doing them for 3 weeks.

Another revision I have made is that I am drinking unsweetened tea and water during the workday. So coffee (with its creamer and sugar) is only allowed in the morning (usually half a cup) and is not drank all day either. I think I am going to try giving up buying mountain dew for at home as well as I just ran out earlier this week.

During the transition from eating out a lot to eating almost exclusively at home, I made a lot of sweets, kept mountain dew at home and was willing to make some pretty high fat meals to ease the transition. The key was breaking the eating out habit. But since we are now used to eating at home, I have noticed that the high fat meals are getting rarer, the craving for sweets is diminishing (thank you breakfast smoothie) and we are eating a huge variety of vegetable based dishes (I have never been a bread and pasta fan so veggies tend to dominate in my house).

I think we still have a lot of changes to implement but I think we have made a tremendous amount of progress nonetheless.

This and That

January 30th, 2014 at 06:10 pm

My taxes have been filed (and accepted boy was that weird). Apparently I was part of a test batch sent early to the IRS, no early refund though, processing doesn't begin until the 31st. Don't much care either way, just glad I was able to check that chore off my list. First year I didn't have to do it in late February though because all the forms reached me early.

When I get the refunds, that will top off my 2013 HSA contributions and I will have finished that goal (my HSA contributions being after tax is the only reason we are getting a refund from the feds).

We are coming in under the $900 mark for our food budget for the month and we are coming in under the $1k mark for our vacation.

Since the markets have been down for a little bit, I took the opportunity to scrounge up another $1k in the budget for a 2013 Roth IRA contribution. Thanks to massive overtime and a lower food budget, we had the wiggle room. It wasn't one of our goals but I always make a point to add more when markets are down as a sort of game to increase my retirement savings. It would be nice to max my 2013 Roth contributions but I doubt I have that much wiggle room. Still, having accomplished the 2013 HSA, my 2013 Roth is the next up for savings prior to April 15th.

2014 401ks and family HSA (since we changed my insurance as of January) are already on autopilot for the max so after April maxing 2014 Roths for both DH and I and then upping our emergency fund will be our next priorities.

2013 Year End Review - Real Numbers

January 1st, 2014 at 02:18 am

Category Amount
Home $17,886
Food $14,951
Credit Cards $11,879
Shopping $10,601
Car $8,275
Student Loan $7,991
Brother $4,800
Health Ins $4,183
Utilities $2,555
Pets $2,152
Personal Care $1,867
Travel $1,063
Spent Total $88,203
Savings $35,698
Taxes paid $33,842

Retirement Savings 23.36%
Total Savings 41.29%

Amount spent in 2013 on obligations that don't continue = $25,556. This includes the brother category (money given over the year for transitioning to his own), credit cards, student loan and about $900 of health insurance expense because my new premiums are much lower.

1st category to explain is shopping. Way more vague than many people may like but includes most non-food household items and $6000 in big ticket, one-time purchases. As I am not particularly concerned about this category at this time, I feel no need to break it down further.

Personal care can be translated as massage and hair cuts. Travel is low because it only includes air fare, hotels and airport parking and we did mostly day trips this year.

Now the category I have been avoiding, Food. See that awful number up there? That is why my big project for 2014 is going to be averaging under $900 per month by year end. For the curious, I started this goal in December and came in at $805 for the month. Hold the applause though, my goal is to get that consistent and one month does not a pattern make. I managed low numbers at the beginning of last year as well and we had already sprung back up to $1400 per month by the time I decided to cut it again.

I use gross income not net for calculating the savings rates since we have pre-tax and post-tax savings. Total savings includes debt payoffs and disappearing obligations as this money is freed up for savings goals.

Cash Poor at the Moment, 2014 Goals Posted

December 10th, 2013 at 02:45 pm

Between paying off the student loan and paying for the large irregular expenses that come with this particular December, I have an upcoming week (a Mon-Thurs period) where we will have less than $500 cash on hand. Youch. Fortunately after that we will return to normal levels almost immediately afterwards but, until then, I will be watching the cashflow like a hawk.

I am actually starting one of my 2014 Goals early because I have completed my 2013 Goals and because starting this one now will help me afford one of my other 2014 Goals. I am going to start cutting our food budget. We currently spend about $1400. I would like that down to $900 monthly on a regular basis by next December. This is really my only low hanging fruit left. While I can definitely do one month of reduced food spending, its the "on a regular basis" part that will be challenging.

It's my Christmas morning, just setup the student loan payoff!

November 20th, 2013 at 02:27 pm

Its my happy day. I was able to schedule the payoff payment to my student loan to clear on Monday because we were able to peek at the paystub for this Friday's paycheck and its sufficient to allow the payoff. (I only get excited when I am setting up payments, not when they clear. That is because once I have scheduled a payment, I have moved on. Same as when I paid off the last of the credit cards as well.)

My student loan was never huge so you wouldn't think I would be this excited but I am. I have been paying on this loan for 8 years so I am thrilled to have it gone.

When I paid off the credit cards (0% aprs), it was sort of a let down because it just wasn't that big a deal by the time we made the last payment but the sense of victory I feel paying off my student loan is everything I could hope for. Probably because this goal was more in doubt as to whether we could finish it this year with everything else we had going on.


Homemade pizza finally a success!

November 13th, 2013 at 03:54 am

So pizza is one of the items I was still eating out. I had previously had "homemade" pizza twice in my life (I was a kid) and, as you can guess by my remembering them so clearly, they were awful. I think both had been made with a jiffy mix pizza crust and it didn't have any flavor and was not very pizza like. I am not particularly impressed with premade crusts either.

Recently, I decided to try making homemade pizza. DH grabbed a no rise recipe and we did a test run over a long weekend. 1st pizza was the too thick and dense crust but good flavor so the 2nd one we thinned the crust down and I was okay with that.

So we just did the pizza again after work but this time did it with more toppings and in personal pans. Because the pizzas were smaller we cut the cook time. Oh my goodness, they turned out perfectly. DH had figured the crust out, we made sure to keep the crust thin and we loaded up on good toppings. Way better than the normal carry out restaurants. May never order take out pizza again.

The fresh mozzarella was the only reason we made it to round 3 of pizza making because it was so fabulous it was worth the work to get the crust to play nice so we could eat more of it.

We even have pizza dough left so we are putting it in the fridge to rise for 24 hours for tomorrow's pizza.

Despite using high quality ingredients, we will still be saving money over take out pizza.

Contemplating 2014 Priorities

October 27th, 2013 at 05:46 pm

So I expect October to end at 82.39% increase in networth YTD (~187k networth). November and December of this year are as planned as they can be given the huge variable of income so I decided to turn to next year's priorities.

The for sure priorities include maxing DH's HSA and 401(k) and my 401(k). I would also like to max both Roths and my HSA. Looking at the yearly total on that amount however, is very intimidating. Especially since I would like to build up our cash reserves as well. That said, despite the scary yearly total, its really not much more than we were able to accomplish this year when you add in the debt payoff we did.

End of August Progress Report

September 3rd, 2013 at 02:00 pm

YTD networth increase: 68.75%

We also broke the six figure mark for the first time in our 11 year work history as of last Friday. I suspect this year will be a fluke and we will reach that number much later in the year for the next couple of years but it was nice for paying things off and ramping up savings.

Otherwise, not much to say. Everything is on autopilot and I will have to wait till the end of the year before deciding what I can and can not accomplish come the beginning of next year or even what I can accomplish this December.

Credit card debt officially gone, on to the next goal

August 15th, 2013 at 01:32 pm

The final payment posted today which was nice but at the same time anticlimactic since I had scheduled the payment 3 weeks ago.

My last real goal of the year is the student loan and that gets paid in full in November. Since we are using an already earned but not paid till November bonus to pay that, there really isn't much to do in the meantime financially.

So my current area of self improvement is eating healthier, a never ending challenge for me since I love food (both good and bad). As eating healthier tends to result in cheaper groceries and less out to eat, it does have a financial component but that is a side effect, not the end goal.

Finally hit a slowdown

August 1st, 2013 at 01:13 pm

DH's work has cut the overtime. It means a dramatic pay decrease for us and a slow down on goals but that was always temporary money in my mind so no big deal. We do get to sleep in more now. Smile

So the student loan will be paid off in November and the 2013 Roth contributions will moved to the beginning of next year. Credit card payment has been scheduled for early this month so that is completed.