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The Week In Review

August 6th, 2010 at 06:53 am

Financially, we had a mixed week.

With the accounts royally messed up by some combintaion of myself and the bank, we've had virtually no spending this week. We've managed to scrounge our meals out of leftovers and stuff in the freezer, so except for one trip to the farmstand, we've skipped grocery shopping for the second week in a row.

Unfortunately, while not spending is good -not spending because you're out of $ is bad. After a final accounting to confirm the bank didn't lose any $, I made the decision to start with a clean slate. I opened a new checking and savings account with a bigger bank, and we'll (hopefully) complete that transition next week. I'm excited about some of the features that come with these new accounts!

I secured a spot for my younger son at a new day care. The facility is not as nice, but the staff and the care seem good. Financially, we'll have a $25 decrease in our weekly payment. With the school changes starting in September for both boys, it looks like we'll be ahead about $688 a month.

Also, beginning this week, I began putting a modest monthly payment to my retirement account.

The first order of business is to make sure we're on track with our savings to meet our estimated tax payments. Next, we'll put together a savings plan to shore up the emergency fund and pay for summer day camp for my oldest -because for the first time, I'll need to pay separately for summer child care. Once that budget is in place, whatever's left will go towards CC debt.

I hope that in a couple of months I'll be able to post about some real progress on that debt!

Problems of Abundance

July 29th, 2010 at 10:38 am

My father, a far wiser person than I, tells me that I have "problems of abundance." Don't know what to do on Saturday because you have too many invites? Problem of abundance. Not sure which leftovers to re-heat? Not sure what to wear? Right - Problems of abundance.

Today, I have some unexpected problems of abundance. My husband's company stock is up -way up. We sold some last week, and now we're wondering if we should sell the rest of it. Partner equalization at the firm meant I got $850 'extra' dollars this week, plus payment for travel expenses, and I'm told I'll be getting an 'extra' $75.00 each month. Earlier in the month I recieved a partner distribution -something we are supposed to get regularly, but haven't been able to count on in the tough economy.

I am taking 1/2 the $850 and putting it away for taxes (I am responsible to pay my own taxes quarterly -no withholding), the remaining money is to be split between savings accounts (emergency fund, vacation and christmas). The $75.00 each month is going to go (for the first time in a long time) into my retirement fund. About half of last week's stock sale is being held for taxes, the rest will pay for our new front stairs. The partner distribution is going to be held for taxes.

I am feeling more confident than usual that at the end of the year we'll have held enough money back for taxes. (Because my stake in the firm changes every year, as well as my compensation, we can only guesstimate what we'll owe each year.) If there is 'extra' left over after we pay the government, we'll then probably hold half that in reserve for next year, and put half into our existing debt.

I hope I'm making the right decisions here - I know it's probably better to put some of our newfound $ to our existing debt, but I'm also aware that I need to add to the emergency fund (which was depleted by a series of car disasters), should be funding some kind of retirement, and putting $ aside for Christmas and a planned vacation in 2012 is intended to prevent us from adding any $ to our existing debt.

Problems of abundance. Thoughts as to whether this plan is unreasonable...?

Mad Men, Contractors and The Grand Entrance

July 27th, 2010 at 07:18 am

I think we've finally realized that no matter what the budget for the project is, we should add 50%.

Our house is a little over 60 years old, and we are the second owners. The interior looks like the set designers from Mad Med had a bad day - mutant pineapple wallpaper, lots of goldenrod, and a bathroom with 3 shades of peachy pink (that, by the way, cannot be color matched). Primarily for safety reasons, we've had to do some substantial work on the exterior of the house (although the improvements have all had cosmetic value)- and we have a great landscaper who has worked with us for several years doing the various projects piece by piece.

This spring, we realized that the fieldstone front steps were going to need work. (By work, I mean: were dangerous, falling apart, and might not last the summer.) While my husband talked about doing the work ourselves, I determined that 1) my husband would take forever to do it, if it got done at all; 2) he has no idea what he's doing 3) it would look awful and we'd probably be re-doing the stairs again next year; 4) having a contractor do the steps was cheaper than divorce. We got several quotes and called our go-to landscaper. He gave us a reasonable estimate and we scheduled the project.

In June, the steps fell apart -I blame the chipmunk who had made a cozy bachelor pad inside, although I think the 2 year old had also been taking pieces of the steps and throwing them into the "lawn." (And by "lawn," I mean dead grass that sits in front of the house.)

The landscaper arrived last week. Like any project at our house, he quickly realized that it wasn't going well and he was going to have to build new steps from scratch. This is not a surprise - all of our repair experiences with this house have been similar.

The good news is that the work will be finished today and the steps look fantastic. The bad news is that he's $750 over estimate. I agree with the changes to the project, (and that the price is fair) but it's not like I can just go get that $ off the tree in the backyard. It's thrown a bit of a wrench into the budget...

I have said throughout that I want to spend the money to do these improvements right, but it's a lot easier to say that than to write the check.

The 10 Month Slide

July 12th, 2010 at 09:39 am

As you can see, I haven't posted in about 10 months. We've been busy.

I wish I had posted, because I can see a corrolation between posting here and my fiscal management. Writing about what we're doing financially was (is) a great way to track our progress, feel accountable, and be able to see what is and isn't working.

On the financial front, we decided to stop the costly repairs on my car and bought a new sedan. I did a signficant amount of research, considered new and used cars, and I'm satisfied that we made the best fiancial decision for us. That said, I'm not overly enthusiastic about the monthly payment or the slight increase in car insurance.

We had some moderately expensive home improvements as well. The first was the replacement of a failed hot water heating system with a GE water heater, the second was taking advantage of the appliance rebates in June to replace our ailing refridgerator, and the third was the replacement of two toilets (circa 1960) with low flow water saving models. We're already seeing savings on the utility bill with the water heater, and I expect that this month's utility bill will showcase the lower water and electricity from our other two improvements.

Finally, for my confession, I'll admit that I had basically completely stopped monitoring our finances. Having Mint on-line is great - except when you never check it. I don't regret my decision to abandon doing all the fiances myself and by hand, but I am going to resolve to actually monitor things. Sadly, my wake up call came this morning when a credit card company called wondering where their payment was (ooops - forgot!) and while I did convince them to remove the fee, I've triggered the default rate. It's not a huge issue, because I don't use the card for purchases, but I'm dissapointed in myself.

We've got a couple changes coming up in the next few months: our oldest starts kindergarden (which means a slight reduction in daycare costs), our youngest gets bumped to a new room (another daycare cost reduction). First on my list is to shore up the emergency fund, and then take aim at debt elimination.

Anyone else expecting changes in September?

Falling off the Wagon

September 30th, 2009 at 06:27 am

I haven't written in a while - as you know, it's tough balancing a full time job, volunteer work, a family and a house.

When we find ourselves digging out, I also tend to discover that the budget has flown out the window. September has been a bad month. I spent more on coffee than I normally would, due in part to a toddler that has developed a sleeping problem. The tight schedule pushed grocery shopping to the end of the priority list, so we ended up getting take-out more often than I would like. I ended up going to the doctor and a specialist, so we got hit with two co-pays, and the co-pay for the trip to the ER with the toddler last month. My husband's lodge dues came up, the B.J.'s membership came up, and our membership to a local museum. Add to this an increase in day care fees, and the discovery that we owe two weeks of back day care (we pay by month, and I forgot that 2 months had 5 weeks instead of 4). To add insult to injury, we paid a babysitter so that we could talk to a kitchen remodel guy to find out what actually remodeling the kitchen would cost so we could start saving.

Oh, and we began refinacing the mortgage. Ultimately that will save us money, but it's added an extra layer of stress to an already dismal financial month. (And a modest and unexpected $400 fee.)

Just to add a little confusion, I stopped using Money to balance the checkbook and started using Mint. I'm still trying to figure out how to make that work for us.

Instead of wallowing in a sense of rising panic, I am determined to start fresh in October. We'll have to adjust the credit card debt reduction plan to reflect some charges to the card (like the refinancing fee), but we remain on track (mostly). The refinance is a good move, we're continuing to save for our goals and my husband put some hours in on his second job, which will certainly help the bottom line.

Hopefully, October will be significantly less exciting at our house.

Wedded Bliss

September 7th, 2009 at 01:21 pm

The wedding to end all weddings was this weekend, and it seemed to go off without a hitch. The bride and groom are happy as can be, my wallet is significantly lighter (thanks in part to the really expensive wedding bar) and we're all relieved to be done with the whole affair. The biggest hitch was that the hotel accidently reserved us for the wrong night and charged us a no-show fee and would have been happy to charge us again for the (so called) last minute favor they were going to do for us in giving as a room for the night we had actually reserved. We declined and headed to my nearby in-laws, where our kids were staying. Now I have to wage battle with the hotel and the credit card company.

In other news, upon arriving home we found that the kitchen floor has failed. Fortunately, it doesn't appear to be a drastic failure, and it's something we can live with for the time being. Husband wants me to consider making a homeowner's claim, but I'm not so sure. I suspect that the replacement of the floor wouldn't exceed the deductable, so I'm not inclined to make this our second claim this year.

We're starting now to look at our expected winter expenses, everything from winterizing the house and the fuel oil bill, to the outside projects that have to get done before the snow starts flying. Hoepfully, despite the increase in the day care fees, we'll be able to get a few things done over the next few months and then have a quiet winter.

Is Balancing the Checkbook Passe?

September 2nd, 2009 at 01:44 pm

I've been balancing the checkbook every month since I was in college. First on paper and then (thank goodness) with Quicken and now Microsoft Money. The process is tedious and since I've never found a bank error - somewhat useless. I have never used most of the features those programs offered, except for an occasional report for taxes or to clarify a particular set of expenses. I found the budgeting tools to be wildly inaccurate for us -either that, or I never managed to put in the information correctly.

Now I find out that the cutting edge in household fiscal management is to use free on-line services to manage your accounts and budgets. Pretty charts and graphs plus paid for advertisers suggest improvements to your existing financial strategy.

I've looked at mint.com and thrive.com. Is anyone using those services? Are they useful/dangerous/or just time wasters? Is there any practical reason to continue hand entering transactions into Money?

Home Sweet *&#@ Home!

August 20th, 2009 at 06:22 am

Unbelievably, I've now made it through 2 weeks of frugal living -and it wasn't even painful! Spending so far this week? $0.00.

Now, as I try to figure out how to manage the household finances more effectively, I'm realizing that one of the holes in our budget is the expenses associated with home maintenance. They know our kids at Home Depot, we're there so often.

I know we have some expenses coming up: pumping the septic system ($400), repairing a broken storm window ($100?), and prepping the house for winter ($50). Then there's our annual discussion of the horror of the dirt driveway. Every year I swear that I will not go another winter with that driveway...I'd also like to replace our 1950's toilets with low water versions ($300).

So, what's the best way to go about budgeting for a house that past its prime in 1962? Save for individual planned expenses? Just put the money aside every week and use it as necessary? Some kind of hybrid plan? Does anyone follow a maintenance schedule -and does it help with the budget?

The Plan! The Plan!

August 18th, 2009 at 07:24 am

My apologies to Fantasy Island. I used to love that show when I was a kid, although I suspect now that I had no idea what was going on during the episodes. At our house, I also suspect that we've been living on our own little Fantasy Island.

The first payments to the credit cards in our new reduction plan began today. At the current rate, our credit card debt will be paid off in 2 years.

I created a budget based on the payments we were already making to the lenders (which were greater than the minimums), so that the shock of our more focused frugal lifestyle wouldn't be derailed before we could appreciate some of the benefits. For example: I didn't cancel the cable/internet. I am leaving the cell phone plans alone at $30/mo for my husband and I. And, I have told myself that it is ok if I want to buy a coffee or have an inexpensive lunch out.

I also built 4 savings goals into the budget: the emergency fund, a Disney Cruise (for 2012), a Christmas fund, and a fund for a china cabinet. People would be absolutely right to say that we should be putting every cent into our debt reduction. The fact is, the all or nothing budgets haven't worked for us. My thought is that by building some of our wants into the budget, we'll have an incentive to keep to the plan.

If the debt reduction budget works out the way I've envisioned, we'll have extra each month -my plan is to put that extra towards the credit card debt.

We will continue to carry a heavy burden of student loan debt (my law school loans top $100,000), mortgage and car payment. I will start looking at those once we've paid off the credit cards.

Thinking about our financial situation is both frightening and empowering. I know how we got where we are, and I'm trying very hard to stay positive and focused on where we are going to be.

Weekend Recap

August 17th, 2009 at 06:46 am

Yay! My second frugal weekend was a success. I think it's getting easier -or maybe I've just had a run of good luck!

Total for the weekend? $70.00.

I am on my own with the kids this week, so I headed to Wal*Mart, coupons in hand, for frozen veggies and easy to make semi-prepared meals. I know the semi-prepared meals aren't the cheapest option, but for us, they are more practical this week. Total grocery bill for the week (including two lightsticks): $70.00.

The kids played in the backyard and their wading pool, and Saturday evening's entertainment was "Return of the Jedi," (DVR'd from a week ago) and two light sticks. Sunday we headed off to the grandparent's house for lunch, and the central AC.

We are on-track for a great frugal week!

Friday Recap - My First Frugal Week!

August 14th, 2009 at 11:51 am

What a week! Spending is up slightly at our house -but we're still on track for a good week. Last night was a pizza night. Fortunately, I had figured we'd be eating out one night a week, and the leftovers made a good lunch.

Today I had a latte and bought a fruit cup for my son for us to share while we listened to the music festival during my lunch break. He ate all the cantelope, I got the grapes, strawberry and pineapple. $4.00 for the fruit; music and sunshine: free.

The recap looks good -and I notice that I'm thinking more about the bottom line before I hand over the cash.

This weekend and all next week I'm on my own with the kids. My husband is away managing a week long DeMolay leadership camp. The financial upside is that while my husband is trapped in the woods, he's unlikely to use his debit card. Should be a nearly spend free week.

I don't have much of a weekend plan - besides the flower show at the park on Saturday. I am hoping good weather will let me put the kids in the wading pool, where they will happily wallow for hours.
My goal: spend less than $20.00 for the weekend.

Death and Taxes- mostly the latter.

August 13th, 2009 at 06:16 am

Making partner 2 years ago was very flattering. As a practical matter -it's been a financial headache. I don't make significantly more now than I did as an employee, and as a law firm partner in the U.S., I am considered self-employed. No income tax is taken from my paycheck. I am expected to make estimated quarterly payments to the government. Our firm estimates the amount of money we are likely to take in for the year and guesstimates a weekly paycheck amount. Adjustments are made as the year progresses. Quarterly disbursements to the partners are supposed to make up your quarterly tax payment. I understand that the system generally works great.

Last year, I went for three weeks without pay. (Work was slow and our clients, perhaps because of the economy, stopped paying their bills. There was a lot of hand-wringing at our house.) The quarterly disbursements were not enough to cover the tax liability. I put the money into a savings account and did the best I could with the quarterly tax payments. In a last minute save, the firm was paid by a client, my share of which went to cover our tax liability. Our long-awaited family vacation was cancelled.

To cover ourselves this year, I've been withdrawing an amount from every paycheck to cover my estimated income tax and putting it into our E*Trade savings account. Any disbursements I receive also go into the account. My plan is to have covered all the taxes, plus some, by the end of the year. The money will continue to accrue intrerest until April, when I'll send a check to the government. Whatever is left will either stay in the account as seed money for next year, or we can pull it and use it to pay of debts.

I have no idea if this is a good way to handle our tax issues or not. We're still not meeting the quarterly payment minimum, but last year the interest on the account covered the penalty +, so I'm not too concerned.

If you're self-employed (or even if you aren't), how do you manage paying the tax man (or for other large yearly expenses)? Any hints, tricks or tips?

No Weekend Hangover (of the fiscal kind)

August 10th, 2009 at 08:42 am

My first fiscally responsible weekend was -well, we survived!

Saturday morning the kids and I went to grandma and papa's house, where the best in-laws in the world fed me breakfast and gave lunch to the whole gang. Then it was off to an afternoon birthday party, where we had dinner and I ate my share of cake and ice cream, and also finished off the kids' share of cake and ice cream. Score one for the budget, zero for healthy eating.

Sunday, my oldest played outside while I weeded, and then we all went for a walk in the local state park. We had a nap and I amused myself by rearranging the furniture. We ate all three meals at home, and topped it off with homemade ice cream! (This is also not good for the healthy eating score, but the ice cream is sooo rich, I only ate a tiny portion, which should be worth something)

Lest you all think this was easy, I had to squelch my first instinct of running to the mall for entertainment at hour 2 of the kids demanding the TV and me telling them no, and I was thinking of some rather unhappy endings for the Star Wars droid that couldn't help getting lost in the playground mulch, but we all made it, and we did have some fun!

Total budget outlay: $16.00! (YAY!)
Bonus: We got a reimbursement for $500 worth of materials purchased on our credit card -which I had forgotten we had done, which gives the debt reduction plan a nice boost!

The Dreaded Weekend

August 7th, 2009 at 06:44 am

The weekend is our family's budgeting nightmare. When it comes to the weekend, I am weak. After fighting with everyone all week (no, you can't have that, we're not going out to eat, and no, there's no money put aside for that), I lose my resolve over the weekend in exchange for a few moments of peace.

Before the kids were born, we lived simply, but we were out every weekend -shopping, going to museums or the movies. Even after the kids, I find we're still going out on the weekends, and whenever we leave the house - we spend. I never manage to get the kids fed before we're out, so there's always snacks and lunches, and sometimes dinners out. Every other weekend or so, we go for breakfast at a local diner. (Why, I'm not sure- the kids are not great about eating in places with actual utensils) Every weekend there's some new home related crisis involving multiple trips to the hardware store, and for some reason, the kids always need shoes. We start out with the cash method, but by the end of the weekend, that's gone and we've used the debit card too.

I'm resolved this weekend to keep the expenses down - especially since we transferred a good portion of the discretionary funds into savings accounts this month. I'll report on Monday as to my success (and failures)! Any advice on how you handle the weekend is appreciated!

Saving - Effortlessly! (Almost)

August 5th, 2009 at 06:44 am

A few weeks ago I discovered, thanks to the New York Times, Smartypig.com. This on-line bank has a goal-based savings account. With a $25.00 intial deposit into a savings account goal, Smarty Pig will set up an automatic withdrawl from your account of choice, based upon the goal amount and date you set. I get to watch the little piggy bank graphics fill up, while I save effortlessly.

Smartypig has an average interest rate of 2.75%, which is impressive, when compared with my local bank's .02% current rate. Smartypig will also convert your completed goal funds into gift cards and give you some extra $ for doing so.

You can alert friends and family to your saving goals, and they can contribute too. (I'm trying to figure out how to encourage grandparents to go this route for the kids -but I don't want to offend them, and I know they love giving gifts to the kids!)

We're saving for Christmas, a china cabinet, and a Disney Cruise for 2012. My plan is to start with a couple shorter term goals and one long term one and see if the SmartyPig system works for us.