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!
It's 10 pm, and I am sitting here with my laptop while D heads back to F's friend's house. Her friend is having a sleepover birthday, and F wanted to stay, but she sounded conflicted. The friend's mom, who is a good friend of mine, just called to say F wants to be picked up.
For the record, I think 9 is too young for sleepovers. (Even though this particular family is fantastic, and I know the kids won't stay up too late).
So I have a few minutes to write a little bit.
Friday was popcorn day at the bank, so I made a deposit (rent check from my office sublet) and paid down principal on our mortgage ($169). And got the popcorn, of course, which I gave to F after school for a treat. Bank popcorn is the best! And we're now in the $72k's on our mortgage. As usual around this time of month, I play all sorts of games with the mortgage calculator. But really you just have to keep chipping away at it. I am putting this out there, though: I want to own our house by October 2018. I will be 52 years old (that's 4 1/2 years from now).
I also found out last week, that my second office sublet, the one who doesn't get a parking space and has just a desk in the main area (but pays very little for the desk) is leaving as of the end of May. I like having the extra money in the business, but it's not a lot, and I figured that I might figure out someone else at some point.
And just a few hours later, I got a call from my friend K. She's an architect, too, and she was calling because she's designing a porch for a house in a neighborhood where I lead the architectural review committee. K works out of her house, so I immediately said, "I don't know why you're calling, but you need to come share the office with me and A!!!" (The guy who sublets the one of the other office spaces is our mutual friend, A, and, yes, he's also an architect).
She hasn't committed yet, but pretty much said yes! I am so relieved, but mostly happy to have K there - she is close friend, and a great person. But we also are like a support group for each other.
We did well in April despite a car repair. Since I am saving for when my big medical bill arrives, I will try to do even better next month, particularly on the food budget. This is for a family of three people, one dog, one cat, two birds.
House (mortgage, utilities, etc) = $1558
Food = $664 (I budget $800)
Auto = $739 (yes, way high! And I need tires this month!)
Pets = $60
Medical = $74
Personal = $285 (but this includes D's new shirts, $90)
F = $883 (includes private school tuition)
Gifts = $119 (over budget)
Family Entertainment = $33
Household (includes all furniture, supplies, remodeling) = $54
Travel = ($487) this is a deposit, not an expense (came from credit card statement credits)
Total spending = $3981
Total savings = $1260
Total incoming = $6983 (some of this will go to fill "once a year" categories)
- continue working on the food category (this can be sort of hard since I have dietary restrictions, but I've been consistently lower than the budget amount; new goal: stay below $700)
- save some money for the tires I need
- we now have plenty of pet food, but it's time for Colin's annual cat vet visit, so this should be at budget in May
- personal category should be low in May
- gifts may be high since F's birthday is coming up - I'll make a list and determine what can be be from grandparents (they always send checks and say "buy something")
- no travel planned, and in fact just found out that over Memorial Weekend F will be in a soccer tournament, so that'll be a frugal weekend
With the remainder of the Big Medical Bill looming (I've paid $500 so far which was the deposit), I decided to analyze our budget to see where I can cut to help pay for the bill over six or eight months rather than dip into savings. I'm basically paying myself back since I have the money to pay for the bill. I am looking for about $350 each month.
In the process I found out some things about our budget...
Here's a breakdown:
- Home (mortgage, utilities, repairs) - $1677 (27%)
- Food (both dining and groceries) - $890 (15%)
- F (tuition, clothes, supplies, camp, piano, soccer) - $1042 (17%)
- Auto (servicing, repairs, registration, gas) - $265 (4%)
- Travel (this is carried forward for future trips to visit D's family) - $301 (5%)
- Medical (doctor, dentist) - $200 (3%)
- Personal (cash, clothes, knitting, haircuts, life insurance) - $177 (3%)
- Household (supplies, appliances, etc) - $119 (2%)
- Family Entertainment - $95 (2%)
- Gifts - $85 (1%)
- Pets - $75 (1%)
- Savings - $1200 (20%)
And my analysis:
- Home category is usually lower because I carry the monthly amount set aside for repairs forward. I currently have $770 set aside for repairs. Don't really want to dip into this
- Food category also usually (much) lower by about $190. I could plan less expensive meals and get that to $200 or $250 - that amount doesn't need to carry forward, so I can put this toward the medical bill
- Stuff for F is a category where I usually seem to go over (which I guess gets absorbed by the food category. I need to rein in that spending!!
- Auto - I need two new tires, so can't really "steal" from this category
- Travel category is carried forward so even though spending for about a year is low, we spend in one big wad (plane tickets) about every other year. I can't use overage from this category, otherwise we won't have enough when we need to go to see D's family in the UK every other year
- Medical - maybe I need to increase the savings in this category in the future
- Personal - I can't limit D's spending, but this has been lower than projected in recent month by anywhere from $20 to $120, so I can definitely use some of the savings here to pay for the medical bill
- Household - I think I can actively reduce this category, too. It's been lower than expected in recent months, and I've been carrying the balance forward.
- Family Entertainment - I carry forward money for the summer pool membership here, which I just paid. Also stash money here for winter nutcracker tickets. I don't want to mess with this too much, but maybe a little for the short term.
- Gifts - This tends to be accurate over the full year (also gets carried over all the way to Christmas when it's really important that the money is in here!) so even though we're spending very little out of this category now, we will in key months - November for Christmas, May for F's birthday in June, also birthday gifts for F's friends
- Pets - Also pretty accurate over the year although recent months have been lower, so maybe a little from here would be ok.
- Savings - NOT messing with this - that's what I'm trying to avoid! This includes paying down our mortgage, car savings, school savings and our IRAs.