I'm still paying ourselves back on a few negative categories:
- household repairs (the remainder of the restuccoing project)
- medical unforeseen
All other categories are positive. Some have money in them because they're building up for annual purchases (like the camp category and our HOA fund. Also F's camp fund and the fund for the pool we join each summer.
And then there are categories with a lot of money in them; I'm afraid to transfer the balances to the negative categories, and I have no idea why. I mean, if some emergency came up, then those would be negative categories instead, right?
- Utilities has $228 in it. I want some money in there for winter when the bills are higher, but even in winter, our bills are under $115, and I have a budget of $95, so I don't need to keep that much in there. Spring bills are about $50 and summer bills are under $30.
- Auto registration has $93 in it, and we pay about $40 in March for one car and $50 in December for the other car... we put in $10 per month. Quick math problem... we can take out $73 and still have enough built up for both December and March.
- $58 in Entertainment; I put in $50 per month and this covers our netflix subscription plus any fees to museums, etc., but I doubt we're going to do much since school starts Wednesday and we have soccer every weekend.
- $128 in Gifts for Others - We'll probably spend some of that at Christmas, so maybe I should keep it in there, but I put in $31 a month, so that will build up more
- $97 in pets - yes, there could be an emergency, but then this could be the negative category. That's what the emergency fund is for, right? All of our pets have a ton of food and treats, and both just went to the vet for well exams, so no expected expenses for the rest of the month.
Viewing the 'Budgeting' Category
I'm still paying ourselves back on a few negative categories:
I just paid off another $20 toward mortgage principal. It's not a lot, but every little bit helps, right?
We have 3 years (best scenario) until this is paid off entirely. Worst scenario is 5 years. I should be feeling really positive, but I am just antsy!
Just to remind myself:
- We have put $300k into this house
- All but $62,310 is paid off
- That is our only debt
- We are living on last month's income
- Our house is worth about $500k
- Three years ago F was 6 and starting private school; it seems like yesterday! So three years will go by quickly (that actually is sort of sad!)
Because we live on last month's income and because I have several sinking funds and because we have an account specifically for car replacement (in 3 years or so), it looks like we have a lot in the bank. But that money is all spoken for. It is not for paying down our mortgage.
What if we took that car money and just wiped out like a third of it, though? Then it would take 8 months to pay it back in. I guess this is my plan for the end of the mortgage.
I bought Turbo Tax yesterday and started plugging things in (even though I can't finish our taxes because I haven't gotten all of our tax forms; I still know the amounts).
Now I'm slightly depressed because it appears we didn't withhold enough (Federal Withholding) from our paychecks. At least I think that's what's going on. I put in my W2 info and there was a big refund. Then I put in D's W2 info and we owed money. So I took out my W2 info, and it was a refund again. Then put it back in and we owed. Which says to me: we withheld enough if just one of us was earning, but since we earn very close to the same amount, we need to withhold about $30 more federal and about $12 more state per pay period.
I've adjusted my payroll for February (too lazy to do this for the last half of January). And now I make about $100 less a month. So... that's not good, right? I've also adjusted my monthly business distribution to give ourselves back the $100, but this feels like I'm not really facing the problem.
Next year is going to be more challenging since we will own our house in Dublin outright (although it seems like mortgage interest at this point is a very small deduction off the Dublin house rents received). Also D is making more, but I'm not sure his W2 will reflect that since he 6% of each paycheck will come out before taxes for the employee savings plan (it's matched).
I am definitely going to do a 2015 Trial on Turbo Tax, but I am wondering if I also need to finally have an accountant do our taxes.
I've been using YNAB for all of 7 days, but it's already helping me stay within budget.
I had to buy some supplies today (consumables)
- sale on bodywash and lotion at sprouts (it's their 25% off vitamin and body care extravaganza) - I made sure to check prices against amazon first
- and I also bought D's face sunscreen and some vitamin D3 on Amazon
But... I didn't go over this month's budget on supplies because I checked available budget first in YNAB. (I sound like an advertisement).
I also had to buy a dimmer switch for our new LED lights (also Amazon). I'll install it myself when it arrives. Dimmer switches are pretty easy to install. We put in 6 lights that are 4 w each (24 w total). They replace 210 w of lighting that we use all the time, so I'm pretty happy! This is well within "small appliances" which is where I put stuff like this in our budget. No plans to buy anything else so the rest will flow over into next month.
In a few minutes we're heading over to the indoor soccer place (it's just an old building on a college campus that is used for indoor soccer). I am crossing my fingers that they have the heaters going; last week they didn't and I was so cold! F was running around, and she wore a hat and gloves. I'm taking a blanket in the car just in case! The weather says 27 deg but feels like 15. I know that's warmer than it is where most of you are right now - so stay warm!!!
I am thinking of switching from Moneywell to YNAB in the new year. It might be sort of irritating and complex in the beginning but here are my reasons:
- I haven't been really tracking properly (shifting money and tracking all accounts including savings) because it's sort of difficult in Moneywell
- New year with new budget is a good time to start a new program
- YNAB closely aligns with how I budget already so it should be more intuitive
- I want to be able to use my phone and YNAB has what appears to be a really good ios interface
The only thing is... I do sometimes have negative categories when I'm paying something back over several months. I'm not sure how YNAB looks at that. I suppose I could set up a debt account and track it that way, lowering the debt each month.
Do any of you use YNAB? Do you like it? Is it worth the money?
I had to go to the chiropractor today (that's the bad news - picked up the vacuum cleaner while twisting - ouch!). The good news is that the last time I was in, I paid in full but they submitted the claim to insurance. So I had a credit. I didn't have to pay for this visit.
The other bad news: I have to go back tomorrow. But the other good news is that I've had a version of this low back pain for a few weeks but very mild - the vacuum cleaner incident just brought it out. So now at least it's being addressed.
I'm pretty irritated that the medical category was way over this year. Even with insurance, it's just a fact of life. I'm budgeting better next year because I know that D will do his allergy shots.
I have a very low prescription cost, and I'm wondering if the doctor can give F a prescription for her allergy medicine even though it's not a prescription medication. It would cost half as much as we pay now! Also, I take omeprazole for acid reflux; if I could have a prescription for it instead of having to buy it I'd save a ton!
That is on my financial to-do list for next year... check with the doctor about medications!
Last month's income decreased by 15% compared to the same month last year (that's because D started his new job last year and he collected income from his previous business for the previous month - about $1500 extra).
But our expenses were 49% lower than last year.
Our savings was 3% lower (because we put last year's extra income into savings).
Knowing D now has an employee savings plan at work and that he'll be getting a raise, we've been working on the 2015 budget. I set the budget based on last year's expenses as well as anticipated expenses (had to increase a few categories including home repair since we hope to restucco at some point and medical - D needs allergy shots).
Since the employee savings plan is before employment taxes, I'm not sure how to calculate our savings rate. I was just going to add that amount to what we're saving. I'm trying to keep my 50-30-20 formula.
Have you re-jigged your budget for 2015?
I'm pretty happy about September. We made $6335 net (that includes our salaries, $21 in side income and a gift from my mom for our anniversary).
We spent $4138 and saved $1165 (IRAs, school savings, mortgage principal, car savings). That leaves $1032 (which will go toward the Big Medical Expense - I covered it with savings, but I'm paying myself back, and as of Oct. 1, we are now back in the black in the medical category - yay!!!).
Our income is 1.5% lower than last year (D had a side project last year that added income in September, but August was way less; now his income is stable).
Expenses are 9% lower than last year.
Money put into savings is 53% higher.
And now the really good news: D just got a raise (effective Jan. 1); it's $2400 more a year (gross). I figure about $140 net a month. He is also eligible for his company's employee savings plan. It's a matching plan, so now we need to figure out what to do.
We currently contribute $400 to his IRA each month, after tax money. The employee savings plan is pre-tax money. There are a lot of unanswered questions (which I listed for him so that he can ask): up to what amount do they match? Where does the money go (Fidelity? Vanguard? something else?) Is there an option to put it into an IRA? A Roth IRA? If so, how do the taxes work in that case?
I've done some reading on employee savings plans, but I'm not sure I understand the tax implications. It is not a 401k. It is not a SEP or Simple.
We'll make decisions about the $400 and the new $140 once we know more.
Does anyone have experience with an employee savings plan?
When I analyze the year so far, we're over budget by about $1700. (The way I do this is to use numbers for last year for the remaining months, which gives me an overall year to look at, but it means I still have August through December to "correct" things).
The $1700 is still less than the surprise medical bills I had in the Spring, which means that we're working on getting those paid for by shifting other budget items, and that makes me feel good. Basically, those medical bills account for the budget bust for this year.
So I looked at how August through December might go in order to make a plan.
Obviously, and easy way to get the budget back in order would be to stop contributing to our IRAs for two months, but I don't want to do that; we have money in the bank (EF) and so we don't need to do this. We can whittle at the $1700 instead.
So, the plan:
- limit cash for D to $40/month
- don't buy any new yarn (knitting budget down to zero)
- maybe skip the Nutcracker this year (just talked to F and she is very willing to make a less expensive substitution)
- F has a lot of new clothes from Grandma, and her winter coat fits and so do winter boots, she has the next size up on soccer cleats, so I don't think we need much for her clothing budget this winter.
- work on grocery costs (don't have to reduce much from last year)
When I do this in my excel spreadsheet, I end up with a $3,000 surplus! Yeah!