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05
Dec 2008

Financial Goals For 2009

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This year – for the first time ever – we met all of our financial goals for the year.  This makes us all the more motivated to stretch further in 2009 and see what we can do.   Here’s our list:

  • $5000 into my IRA
  • $5000 into my husband’s IRA
  • $5950 into our HSA
  • $200/month into our car savings account
  • $300/month into our solar panel savings account
  • $100/month into our son’s 529 plan
  • $100/month into our emergency fund
  • decrease our mortgage principal by $20,000

The first seven things on the list are pretty much just a continuation of what we’ve been doing.  We put $5000 into each IRA this year, and put $5800 into our HSA (the IRS increased the limit for 2009, so we will increase the amount we contribute).  We have been putting $100/month into our emergency fund for two years, and have been contributing to our solar panel fund, our car savings account, and our son’s 529 since the middle of 2008. 

It’s that last item that will be a stretch.  I am not sure if we’ll be able to reach that goal, but what’s the point of setting goals if you know that you can get there easily?  Having such a large number in our minds will force us to live very frugally next year.  And even if we don’t get to $20,000 (I can’t even type it without swallowing hard), we’ll be a lot closer to owning our house by this time next year if we make this a major focus for 2009.  Right now our total mortgage balance stands at $154,861.  If we live very frugally (which we’re pretty good at), I think we can make a major difference in that number over the next year.  We won’t be spending much of anything on things that aren’t on the goal list, but that’s ok – we like it that way.

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Category: goals  11 Comments
03
Jul 2008

Since I Didn’t Take Any Vacation Time…

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I got my final paycheck from the library yesterday.  It was a good one, because I had more than 200 hours of vacation time saved up, and they cashed that out on my last check.  After taxes I ended up with over $2000, which is a good windfall.  Over the last year, I didn’t take any vacation time at all – I worked every shift I was assigned, and I also volunteered to be the person who goes in and empties the book drop and checks in books on holidays.  Every single holiday for the last year.  So instead of having to take vacation time for holidays, I was getting paid to work.  I did that because while I was pregnant, we weren’t sure if I was going to quit my job or not.  If I hadn’t quit, I wanted to have plenty of vacation time saved up for maternity leave and to be able to take days off to stay home with our baby after I went back to work.  Since I decided to quit instead, I just got a check for all the vacation time.  Makes all those holidays when I went in to empty the book drop seem very worth it now!

Anyway, I put $1000 of the money into my Roth IRA.  That’s the first money I’ve put into that account this year.  We plan to max it out, so we still have $4000 to go, but it feels good to have made a start.  The rest of the check will be going into our HELOC.  I’m really looking forward to getting the HELOC balance under $20K, and I’m hoping that will happen within the next couple months.  This will help.

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Category: Debt, goals, HELOC repayment, savings  3 Comments
09
May 2008

Babies and Money

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We got our $1200 economic stimulus payment today.  We put the whole thing into our HELOC, since we have decided to make the HELOC a priority for the time being.  We’ve already maxxed out the HSA and my husband’s IRA for the year, and instead of moving straight to my IRA, we’ve been focusing on stashing some extra money in the HELOC first.  We’ll probably do that for the next few months, and then go back to our original goal list and tackle my IRA in the fall.  Paying off part of the HELOC principal was part of our goal list for the year anyway, we’ve just changed up the order of things.  We decided to work on the HELOC for now because the money is very liquid in that account.  Hopefully we won’t need it for anything, and can just pay down the principal on the loan.  But if we do need the money, the HELOC is linked to our checking account, and we have instant access to the money.  We have our ING account emergency fund, which is up to about $1600, and of course there’s the HSA in case of a medical emergency.  But with a brand new baby, it would be nice to just have some extra money in the HELOC just in case. 

I called our health insurance carrier to add our son to the policy, and it’s going to be $158/month.  Ouch.  We were expecting about $100 – $120.  But our policy has a family deductible, which we already met this year when my husband had knee surgery, so if our baby does happen to need anything medically for the rest of the year, we don’t have to pay anything for it.  So the HSA money should be safely locked up at least until next year. 

I’m going to start checking out college savings options, and I hope to have a 529 plan set up by next month.  We don’t plan to fully pay for college for our son, since we think that it’s important that the student have a part in the financial outlays of getting an education.  But we do plan to put aside $100/month from now until he graduates from high school, which should make at least a dent in whatever college costs in 2026.

So for the time being, our expenses will increase by $258/month for sure, just for insurance and college savings.  After that, we don’t anticipate a huge amount of additional expenses for now.  We have everything we need and then some as far as baby stuff goes.  Our homemade diapers are working great, we won’t have any additional medical expenses until at least 2009, and we’ll be staying far far away from Babies R Us.  If the last few days are any indication, our other expenses should go down for a while, since we’ve barely left the house since he was born.  Our already small entertainment and eating out budget will probably actually get smaller for a while, since it’s so much easier to just stay home and have family time.  And since all we want to do it sit and stare at him, that works just fine.

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Category: baby, family, goals  One Comment
10
Apr 2008

Cross The HSA Off The List!!

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We maxxed out our HSA today.  $5800, done and done.  That feels so good.  A whole lot better than shopping sprees and dinners out.  We maxxed out our HSA last year too, but we did it in the last week of the year, and it was a struggle.  I much prefer having it done in April!  I got the idea to focus on one financial goal at a time from NCN.  I remember reading about how he tackles each goal until it’s finished and then moves on to the next, and I decided to give it a try for our goals this year.  So ever since the first of the year, we’ve put everything we could scrape together into the HSA.  There’s been a little trickle devoted to other goals – we pay a little extra each month on our mortgage; we put $100/month into our ING account for emergencies, and we put $200/month into my husband’s traditional IRA.  I like the automatic nature of these payments, and they’re small enough to be manageable, while still big enough to make a difference at the end of the year.  So we kept those, but put everything else into the HSA.  I would move money into the HSA as soon as we got paid, so that we weren’t tempted to use it on anything else – if it’s not there, you can’t spend it.  Anyway, it feels great to be finished with the HSA for the year.  And we shouldn’t have to take any more money out of it, since we’ve already met our health insurance deductible for the year. 

Now we can move on to my husband’s traditional IRA, which is our second goal for the year.  Since we put $200/month into it automatically, we only have to come up with another $2600 to max it out for the year.  Our tax refund should get deposited tomorrow, and we’re planning to put $2600 of it into the IRA.  That will be two of our goals met for the year, within 24 hours of each other.  The refund is obviously not a normal part of our income (and not something I want to make a habit of – I’m hoping to get back to our usual refund of a couple hundred dollars next year), so it almost feels like cheating to hit the IRA goal so soon after the HSA.  But I suppose we could be going to the mall tomorrow night to buy a big screen TV instead of putting the money into the IRA…

I’m debating where to go next… we had planned to start working on my Roth IRA as soon as we maxxed out my husband’s IRA, but with the baby due next month, part of me wants to pad the emergency fund a little more instead (we’ve only got about $1500 in it, which is a lot less than a month’s worth of expenses for us).  Maybe we’ll deviate from our one-at-a-time method and work a little on both for a while. 

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Category: goals, savings, taxes  2 Comments
11
Mar 2008

A Little Extra Money To Put Towards Our Goals

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Our insurance business is doing really well lately.  After four years of working on our website, my husband’s efforts have paid off, and the website is ranked number one on google for the keywords he targets.  Business has been good, although we’ve both been busier than ever…

A happy result of all the extra business is that our paychecks and dividends from our corporation will be higher this month than they have ever been.  So what to do with the extra money?  Since we laid out our financial goals for the year back in December, we don’t even need to wonder about what we’ll be doing with any extra paychecks.  We’re still working on goal number 1, which is to max out the HSA, so that’s where the money will go.  And once that’s finished, we’ll be moving on to my husband’s IRA… I suppose if we managed to max out the HSA and both IRAs and put an extra $5000 into our HELOC before the end of the year and still had extra money (not likely…) we could look for other things to do with it.  But since we have such concrete goals that are already a bit of a stretch for us, there isn’t any temptation to go on a shopping spree when we happen to end up with more money than we expected in a given month.

It’s definitely helpful for us to have our goals so clearly laid out, and to have them be such a large percentage of our total income.  For us, this works much better than just saying “we’ll save as much as we can” or something like that. 

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Category: goals, savings  2 Comments
27
Feb 2008

Plugging Away At Our Goals

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We had a prenatal visit today – everything’s still going really well with the pregnancy, and the days seem to be flying by.  We paid another $1000 to our midwife – we only owe her another $650, which we’re scheduled to pay in mid-April.  I remember when we were thinking about having a baby and we knew that the midwife’s fee would be $3000.  That’s a lot of money for us, and we knew we’d be paying ourselves, since health insurance doesn’t cover home birth expenses.  But by putting whatever we could into our HSA throughout 2007, and then really focusing on the HSA this year, we’ve had the money in the account each time we’ve had a payment due, and it hasn’t felt like a strain on the budget. 

I’ll be putting another $500 into the HSA tomorrow, which will bring our total contribution for 2008 to $3200.  That’s more than half way to the maximum allowable contribution, and we’re only two months into the year.  It’s still a strange feeling for us to be able to talk about maxxing out things like our HSA and IRAs.  During the years we were in debt, that was never a possibility for us – it was a stretch to put $200/month into our IRAs back then.  We did max out our HSA last year, but just barely – I think I made the final contribution after Christmas.  This year, it will be nice to have it done in the spring so that we can forget about it.

Having our financial goals laid out in black and white is very helpful for me.  I met some girlfriends on Saturday for a day of shopping and girl talk, and we had a great time.  I spent $15 on lunch, $8 on a gift for my husband, and 68 cents on a folder to hold our tax receipts from 2007 (it cost about $6, but I had a gift card worth $5.20 that I got when we returned a Christmas gift we didn’t need).  I walked around with my friends for an entire day at a major outlet mall without buying anything.  It helps that we were in clothing stores all day and I’m almost seven months pregnant – so I couldn’t have tried anything on even if I had wanted to.  But I really didn’t want to.  I have a closet that is jammed with clothes, and I really don’t enjoy shopping for clothes unless I’m in a thrift store.  In a mall, all I can think about is how much money I would be wasting if I were to buy anything.  I was thinking instead about how good it would feel to make a $500 HSA deposit this week.  I got the best of both worlds – I was able to spend time with my friends and still have money to put towards the goals that we’ve decided are priorities for the year.  And I’d much rather have a maxxed out HSA than a few new shirts.

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Category: goals  One Comment
24
Jan 2008

A Good Month for the HSA

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I just put another $800 into our HSA.  That’s $2000 so far this year – only $3800 to go until we max out the account for 2008.  We’re trying to really swing for the fences with our financial goals this year.  We made the HSA priority one, and I’m hoping that we can have it maxxed out by April.  Then we can move on to the IRAs.  Putting $2000 into the HSA in one month is a huge stretch for us.  Right now, we’re left with $324 in our checking account.  I’ll get a $650 paycheck from the library on the 30th, so that will help, but for now, we’ve put just about everything into the HSA.  That’s fine with us though – it forces us to be ultra-frugal with what’s left over.

$2000 is more than 40% of our take-home pay for the month.  And we also had our automatic contribution of $100 to the emergency fund and $200 to my husband’s IRA this month.  So we’re definitely living the “pay yourself first” rule.  I know that we can’t be quite this aggressive every month, but it feels good to get the year started with a savings bang.  And it will be great to have the HSA maxxed out early in the year and not have to think about it until 2009.  Now to just keep up the momentum…

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Category: goals, savings  3 Comments
18
Jan 2008

Personal Finance In A Less-Than-Stellar Economy

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All is takes is a quick glance around the internet to see that the financial outlook these days is not as rosy as it has been for most of this decade.  The doom and gloom crowd is predicting a full blown recession, while the more optimistic folks say that there will just be a bit of an economic downturn.  Nobody is predicting 2008 to be a booming year for the dollar, housing market, or finances in general.  So for all the personal finance people out there, does all this economic rumbling change anything about the way you spend or save money?

For us, I think we’ll keep right on doing what we’ve been doing.  I don’t see us hiding gold bars under our bed anytime soon (but I can’t tell you where I live, in case we change our mind…) or selling everything and moving to Australia. 

We’re going to keep plugging away at our emergency fund, and keep focusing on our main financial goals for 2008 (we just put $1200 into our HSA this week, which is a good start toward the $5800 allowed for the year).  We’re going to keep paying extra principal on our mortgage every month, working towards our goal of paying it off by 2018.  We’re going to keep paying off our credit card every month.  We’ll keep the bulk of our assets in the stock market, because we’re in this for the long haul – most of what we have is in IRAs and can’t come out for more than 30 years anyway.

When I read about economic instability, the sagging dollar, and the mortgage industry mess, I’m very glad that we worked so hard to get ourselves out of debt over the last few years.  I’m glad that we got a fixed 6% mortgage when we bought our house, and aren’t stuck with an ARM.  I’m glad that we didn’t refinance and take cash out since we bought our house.   And I’m glad that our frugal habits are so ingrained that they are second nature to us.  It provides a sense of comfort, knowing that we can get by with very little. 

I hope that 2008 turns out to be a good financial year.  Nobody wants to see the stock market decline or the dollar dwindle any further (except maybe all the people with gold bars hidden under their beds…)  But I’m comfortable knowing that we’re on the right track for long-term success, and that our living expenses are currently well below our means.  So we’re just going to stay on the same course we’ve been on for the last few years.

What about you?  Does all the financial pessimism in the news make you nervous?  Are you changing any of your short-term financial goals or plans because of the current economy? 

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Category: goals, investing, savings  4 Comments
11
Jan 2008

A Good December

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Yea!  I’m back on line after being down for a few days.  Technical computer problems give me a rash, but luckily there wasn’t anything I needed to do.  Bluehost was down, and I just had to wait for them to come back up.  So now I can write to my heart’s content about the stuff that’s been swirling around in my head.

Our credit card billing cycle ended yesterday, and I’m stoked about how we did.  Our goal is always to be under $1000/month on our credit card.  We put just about all of our expenses on that card, so it’s a good measure of how well we’re keeping spending under control.  (the only stuff that doesn’t go on that card are utility bills that can’t be paid by credit card, and Costco purchases which go on AmEx). 

Our total bill is $2436 this month.  But $1200 of that is for my husband’s MRI, which is being paid with HSA money.  I’ve already transferred the money out of the HSA and into our HELOC, where it will sit until the credit card bill is due.   We had already accounted for taking $3000 out of our HSA this month to cover his knee treatment, so all is good there.  We’ll have to take out the other $1800 when he has his surgery in a few weeks.

So that leaves $1236 in actual spending for the Dec 10th – Jan 10th cycle. 

Last week we had to renew my husband’s gym membership.  We’ve consistently used the gym at least four times a week for almost four years now, so I’d say it’s a good use of money for us.  My membership is free with my library job, but we pay $350/year for him.  It would be more expensive if we paid monthly, so we always just pay for a year at a time.  We think it’s money well spent.

So that means we spent $886 on other stuff.  All our expenses – including Christmas dinner that we made for my family – came in well under our $1000 budget for the month.  I’m excited to see how low we can keep our credit card this month, since we won’t have Christmas or the gym membership renewal to deal with.  My plan is to put $2000 into the HSA this month, since maxing it out is our first goal for 2008.  I’m going to do that as soon as we get paid next week, and then we’ll just have to make do with what’s left.  I get three paychecks from the library this month, so that will help.

Anyway, I’m feeling good about how well we did in December, and inspired to do even better this month.  Putting $2k into the HSA next week is going to put a strain on the budget, but it will put us a lot closer to achieving our goals, so it’s worth it.  I’ll let you know how we do.

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Category: goals, savings  One Comment
02
Jan 2008

Blogging Inspiration

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2007 was my first full year of blogging (I started in the fall of 2006), and as much as I enjoy writing my own blog posts, I also love reading everybody else’s.  Since I started blogging, we’ve paid off our non-mortgage debt, opened an HSA (and fully funded it in 2007, which is the first time we’ve ever fully funded any savings account!), opened a Roth IRA, contributed faithfully $100/month to our ING emergency fund throughout 2007 (without taking anything out of it), and saved more than 20% of our income in 2007.  Many of these goals were set after reading blog posts from other pf bloggers who provided the extra motivation I needed to get moving.  In many cases, all I needed was the little push to set things up, since a lot of our financial milestones were met through automatic funding of accounts. 

I love reading about other people’s accomplishments – and setback too, since they make the accomplishments seem that much sweeter - and finding myself redoubling our own efforts after being inspired by people I only know through the pf blogosphere.  It’s one time when keeping up with the Jonses is good for us all!  If you max out your IRA and tell me about it, I’ll be that much more inspired to to the same with mine.

So here’s a shout out to several bloggers who made big strides during 2007 – and here’s hoping that 2008 is ever better!

Being Frugal is starting 2008 with a positive net worth for the first time ever.  What a great feeling!

Tricia has paid her credit card debt down to under $17,000 – quite a journey, considering that it started at over $37,000!  I’m looking forward to seeing how low that number gets in 2008.

Paid Twice paid off nearly $10,000 in debt principal in 2007.  Snowflaking at it’s finest!

Mrs. Micah has done all sorts of good stuff.  I am inspired by her desire to create full-time work from a patchwork of jobs and freelance work – keeps life much more entertaining and flexible that way.  Her goal is to be earning $2000/month from a variety of sources by April, and I have no doubt that she’ll do it.

SavingDiva had three big financial goals and she more than exceeded two of them and came within $1.52 of meeting the third (I’d call that close enough!)

Patrick had a 43% increase in networth (!!) even though his wife left her military job and their income dropped by $20,000. 

TBH left her job to concentrate on freelance writing (a feat made much easier by her long-term commitment to living without consumer debt – proof that it pays to live below our means), and has also fought back against cancer this fall- her blog always inspires me. 

These are just a few of the bloggers that I find impressive, inspiring, and motivating.  Thanks for keeping the bar high!

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Category: goals, other bloggers  10 Comments
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