August 2016 Progress

We’re Packing Five Months of Finance…

Into a single post.  I’ll probably switch to doing these quarterly now for reasons that I’ll get to in a bit.  Let’s just say it’ll be fine.

There’s been a lot of financial goodness since the March update.  At the end of March, we were down to three outstanding debts:  mortgage, car loan, and personal loan (credit card balance transfer).

As of today, we only have the mortgage!  Hooray!  Of course, this has had a couple of mental side effects.  First, the Debt Paydown Projection spreadsheet is getting a little boring.  I’m not saying this is a bad thing, but it’s no longer occupying a constantly opened browser tab.

Second, I’ve been in debt payoff mode for the past two years and that has been my main focus.  Now I think it’s time to shift gears into asset building and figuring out what my actual Financial Independence numbers are and the timeline to reach them.  New goal!

Notable Events

April, May, June, and July were pretty much business as usual.  I made the regular payments on outstanding balances.  Nothing to see here.  The real magic happened in August.

ESPP – My ESPP shares were purchased on July 31 and I sold them on August 1.  This was a great period for ESPP.  There was an approximate $34 difference between the purchase price and my sale price which resulted in an 85% gain on the six month period.  I took home around $14k which went straight towards payments.

Bonus – Due to some extra effort (read super long hours and extra travel) at the end of 2015, I was awarded 110% of my bonus for the period.  This yielded around $10k after taxes.

I used the additional income to make an $8k payment to the car loan (Gone!) and a $5800 payment to the personal loan (Gone!).  The rest went into savings, investments, and a new puppy (I know, I know).

All that being said, here’s where we are now.

Current Goal Status:
Financial goals:
  • Reduce overall outstanding debt (including mortgage) by 15%.
    1. Debt reduction for the period went from 7.56%  to 16.08% which puts us on track for a 16.84% overall reduction for the year.  Beautifully sitting above the 15% target.
  • Make contributions to investments (taxable and retirement) of 15% of salary.
    1. We have contributed 12.06% of our income to investment accounts including 401k, 529, ESPP, and Brokerage.
    2. This number dropped a bit from last month due to the large influx from the ESPP sale and bonus.
    3. I’m currently working on analyzing the additional free cash flow to decide where I want to allocate it.
  • Eliminate outstanding credit card debt.
    1. Outstanding balances eliminated in Feb.
    2. No interest accrued on revolving balance this period.
  • Eliminate remaining student loan debt.
    1. We were able to eliminate this balance with our income tax refund.  No more student debt!
  • Make a contribution to an IRA.
    1. No progress here… yet!
  • Generate revenue from a new income stream.
    1. No progress here… yet!
Expense Goals

Expense goals in Feb were not much better than January.  Still, it was a little better:

  • Meet the $800 per month grocery budget
    1. The only month this worked was June.  The rest of the months have been over $1000 which is where I’m now setting the budget.  It’s just more realistic (due to a number of factors).
  • Reduce dining out to $400 per month (2015 – $600)
    1. April was actually mostly on track with $433 for the month.  The other months have averaged around $900.  I’ve updated the budget on this one to $800/month.  A little depressing, but also realistic given the current situation.
  • Reduce entertainment/alcohol to $250 per month (2015 – $435)
    1. Ummm… Also not happening.  Budget adjusted to $600/month.  This includes babysitting expenses.
Personal Goals:
  • Meditate at least three days a week
    1. I fell off the wagon after our Appalachian Trail hike in June.  Goal for September is to get back to a routine.  Summer totally blew up my routine.
  • Take walks at least three days a week
    1. The only time this has happened have been on the travel weeks for work.  Also on the list of things to get back to now that the weather is getting nicer (Really, nobody wants to go out walking around Atlanta in the middle of summer).
  • Spend at least seven days camping
    1. Done!  Spent a week on trail in June as well as the annual camp Alumni weekend.  Looking forward to more this Fall.
  • Go kayaking at least one time
    1. Almost!  We rented a ducky and went down the Nantahala river the day after we got finished with the AT section.  It was a close second and I got to hear the voice of the river so I’m content until I can convince one of my old paddling buddies to buy another boat.
  • Take one family vacation
    1. St. Augusting was amazing, but April seems so long ago.  I may need to add ‘take one personal vacation’ as a goal too.
Net Worth Update Q2

net worth Q2

Assets:

  • Up 2.98% in Q2
  • Up 3.92% since Q2
  • Up 10.58% year-to-date

Liabilities:

  • Down 1.36% in Q2
  • Down 8.38% since Q2
  • Down 1.36% year-to-date

Total Net Worth

  • Change of +7.31% for Q2
  • Change of +15.21% since Q2
  • Change of +44.70% year-to-date!
  • Since Jan 1. 2015, Net Worth has more than doubled at 106.82% increase (counting the assumed value of the house)!

net worth graph

August Summary

August was a great month for financial progress.  There have been a few domestic challenges over the course of the summer, so I’m glad for school to be back in session and for getting back into the routine for a bit.

I’ve got a few upcoming home repair challenges where I need to figure out a good plan so that we don’t undo the progress that we’ve made.  I have a few ideas that I’ll be running by the community in the near future.

Over the next month I plan to keep the blog moving with more personal posts as opposed to mostly finance oriented.  I’ve got a few ideas that I hope will be well received.  Until then, everyone take care and #getoutside.

Cheers!

-cb3

Friday Thoughts

A Quiet Rainy Morning

I’m in a somewhat reflective mood this morning, so I wanted to take a few minutes to jot down a few of the things going through my head.

After the kids were off to school, the dogs were fed, and the house quieted down I sat down at the computer to review the August financials.  Next Tuesday I will have a post up with the latest updates.

To be completely honest, I sorta got distracted from that when my phone popped up a notification from Google photos with suggestions to go back and look at last year.  I ended up in the gallery from our AT backpacking trip this summer (which wasn’t last year… again, distracted) and though about how I still want to get a post up about that trip.  I may have to break it down into a series.

IMG_20160616_091514068

The other thing I’m working on this morning is learning about Bullet Journals.  I saw a friend mention this in a FB post the other day and I decided to check it out.  I’m not always the most organized person (please don’t look at my desk) so if I can develop some new habits it can only be positive.

The West coast will be coming online soon and I will need to dive into my day job.  I realized that I haven’t meditated since sometime in June.  I need to get back to that.  Having some minutes of quiet reflective time during the day is extremely helpful considering the current frenetic pace of life.

With that in mind, I’ll leave you with about 20 seconds of peacefulness.  This is from one of the watering spots on the Appalachian Trail in North Carolina.  I have fond memories of the cool clean water that comes out of the mountains.

Cheers!

-cb3

A Brief Moment on the Dock

The Best Job I Ever Had

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A few too many moons ago, I took the best job in my life.  I wouldn’t know it at the time, but I recognize it now.  It’s a state of being and a mindset that I hope to achieve again one day soon.

I recall having moved back home from my second attempt at attending a University and wallowing around my parents house that Spring trying to figure out what to do with myself.  My grandparents happened to be visiting and my grandmother was looking through the newspaper (the internet was still a relatively new thing) at the Classified ads.

She looked over at me and asked, ‘You enjoy camping, right?’.  Sure, I had been a Boy Scout and spent my share of nights in the woods.  However, I was more of a computer nerd these days.  There was even the white pasty skin to prove it.

“Why don’t you go be a summer camp counselor?”

I was skeptical, but I called the next day anyway and applied for the position.  Besides, I didn’t really want to spend the summer as a cook.  The interview went well and a few weeks later I was packing my stuff for the summer and moving to camp.

He’s Not Going to Make It!

Driving up to camp and getting out of the truck on that first day, I can remember feeling like I had wandered into a club where I wasn’t a member.  Maybe it was those first day on the job jitters or maybe it was the way all of the staff seemed to already know each other like they had been doing this for years.

I quickly learned that I wasn’t the only new person as the two weeks of staff training passed.

Of course, there were a couple of old timers (even though I was technically the second oldest staff member) that joked around about whether I’d make it to the end of staff training.

In those short two weeks, we came together as a team.  Inside jokes were formed, shenanigans were pulled, and memories created.  The next eight weeks of camp lead to more of the same.  By the end of it all, we were less of a team and more of a family.

What It Meant to Be There

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How could I not love this life.  I spent my days in the outdoors on the side of a lake teaching children how to love it as much as I did and playing while doing so.

I learned how to white water kayak.

I learned how to rock climb.

I got to go swimming every day.

There was a zip line and water slide.

All of my meals were provided

I had a neat little cabin with no AC and a metal roof.

The kids were (for the most part) Awesome!

I made friends that I can go for years without seeing and we can pick up like it was just yesterday.

All of these things became a part of who I am.  We were isolated out there in out little bubble world.  News from the outside rarely made it in to camp.  We didn’t have TV.  We didn’t listen to the radio.  I went entire summers without checking email.

This agreed with me very much.

Going Back for More

Needless to say, this made an impression on me.  I wasn’t the same person that I was before my grandma happened to find an ad in the paper.

I chose to go back to work at every weekend opportunity they would give me over the next Fall and Spring.  The next summer, I was probably one of the first to submit my application.  I ended up working at camp for three more summers after the first.

Eventually, it got to the point where I was getting a bit too old to go back.  Life was changing and I was feeling the need to ‘grow up’ some.  Rent needed to be paid and I had an offer for a full-time job where I wouldn’t be able to take off for the summer.  I hadn’t studied in the right field to pursue a career in camping, so I jumped back into IT to pay the bills.

The Best Times Pass Too Quickly

The new (much) larger paychecks and the desire to finally finish school kept me distracted enough to balm the ache of not being at camp the next summer.  There were a few folks around town that would get together regularly from the old staff and that was good enough for a while.  As with everything in life, eventually it all changes and we ended up going in different directions.

I did end up marrying the girlfriend from my last summer.  That was ten years and two children ago.  I’ll save those stories for another time.

This past weekend was the annual Alumni weekend at our old camp.  It didn’t happen for a long time, but this was the fourth year.  We jumped at the chance to get back up there and reminisce.  There were a few familiar faces and some dear friends.  We sat around until way too late both nights rehashing the same old stories that we tell every time.

During the day, we took the kids around camp to do all of the activities that we enjoyed so much.  My son did the water slide forty or fifty times.  It was awesome.  Paddling, swimming, climbing, archery, and hiking around.  It’s all still there.  It’s all just as beautiful as it ever was.

My heart longs for it as I sit here behind all my screens staring at my work stuff.  It’s hard to focus.  I need to ditch this and get back there.  Soon.

The best part, though, really is seeing my children becoming a part of this.  I know it will be a part of their lives too.  That helps me to be content.  Maybe they can find a way to hold on to it longer than I did.  Maybe my life can be that simple again too.

Cheers!

-cb3

Dusting Off The Blog

Where’d We Leave Off?

Last time we talked, I was sitting at the beach about to take the kids swimming.  It’s hard to believe it’s been over three months since I sat down to write.

The financial progress was going well and we used our extra income to pay off another loan and go on vacation.  The vacation went really well and was mostly relaxing.  I only got one work call the whole week that we were away and it turned out to be very easy to solve over the phone.

We set our sights on finishing out the school year and looked forward to a hiking trip on the Appalachian Trail in June.  This would be our first full vacation without children in almost 10 years.

Why the Time Away?

There have been several reasons for the extended absence.  I could blame it on work getting busy (which it did), end of school year activities (which we had), or a host of other inconveniences that have occurred.  The reality is, however, that my heart just hasn’t been in it.

I’m sitting with a lack of motivation at the moment that’s due in part to some imbalanced in my marriage.  I’m torn with how much to share on the topic, but my wife and I have some extra challenges that make things difficult at times.

Having a set of goals and working really hard towards them and then realizing that your partner isn’t on the same page can really suck the wind out of the sails.

So, I took a step back to focus on that.

Some of the Challenge

You see, as with any relationship, there are areas where we see eye to eye and then there are some areas where we have completely different outlooks and world views.

She is very much a live for today type of person.  I worry about and plan for the future.  What’s interesting is how it reverses when it comes to going on adventures.  She plans the trip details and packing list and checks everything off.  I tend to throw things together-ish and rush out the door.  We complement each other well in these areas.

We’re raising two children together.  It takes a lot of time and energy and can be quite frustrating but overall, I think we’re doing an OK job.  We also complement each other in our family management skills.  She teaches independence and respect for one’s environment (including tidying up skills) while I’m the more patient nurturer.

Other areas of our marriage have been non-existent for a couple of years now (for some very good reasons).  In this, there is frustration for both of us.  Life has become very business-like at times and I feel that it’s starting to take a toll.

Now, normally I just dive into the next task that needs doing and wouldn’t  bother her with any of it.  She sees right through me.  She says it’s the way I carry myself, the way I don’t smile often.  This is not the way I want to be.  It’s not the way I used to be.

We’ve been asking a lot of questions of ourselves and each other lately.  What do you want in life?  What makes you happy?  Why aren’t you doing those things now?

So, What’s Happening Now?

Obviously, there’s a lot that needs work.  I need to focus on being more open about how I’m feeling by being honest with myself as well as my partner.  I know that I am not comfortable at this point in my life and change is necessary.

The blog will continue to be an outlet but I may shift focus to more writing about the things I’m doing to bring happiness back into my life.  There will still be some finance updates along the way, but maybe more quarterly than monthly.  My next post will be an exercise in discovery of the things I find fulfilling and that are a source of joy for me.  I also promised to post about the AT trip, so I look forward to that.

Please pardon if I’ve over shared.  I”m not here to be a complainer.  This is simply my life at the moment and I want to be transparent.  It’s better for all of us.

Change begins Within

Peace

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March 2016 Progress

 March Madness

Kinda feels that way anyway.  I’m not sure what exactly happened, but we seem to have been a lot more scattered this month and much less disciplined.  We’re hoping to recharge with a little trip to the beach and come back ready to be a little more focused.

We hit another milestone this month with the final payment sent to Mrs. C’s student loan.  We started the year with five outstanding debts on the paydown tracker and now we have three.  That spreadsheet is starting to get a little boring.  I think I’ll keep it that way!

Current Goal Status:
Financial goals:
  • Reduce overall outstanding debt (including mortgage) by 15%.
    1. Debt reduction for the month was 7.56% which puts us on track for a 16.63% overall reduction for the year. Paying off the student loan balance puts us ahead of our goal!
  • Make contributions to investments (taxable and retirement) of 15% of salary.
    1. We have contributed 12.59% of our income to investment accounts including 401k, 529, ESPP, and Brokerage.
    2. This number dropped a bit from last month due to the large influx from the tax refund.
    3. Since we have more free cash flow each month, I’ve increased the amount going to the investment account by $100/month.  I’m confident that I will be able to increase this again this year as well as making a lump sum contribution later in the year.
  • Eliminate outstanding credit card debt.
    1. Outstanding balances eliminated in Feb.
    2. No interest accrued on revolving balance in March
  • Eliminate remaining student loan debt.
    1. We were able to eliminate this balance with our income tax refund.  No more student debt!
  • Make a contribution to an IRA.
    1. No progress here… yet!
  • Generate revenue from a new income stream.
    1. No progress here… yet!
Expense Goals

Expense goals in Feb were not much better than January.  Still, it was a little better:

  • Meet the $800 per month grocery budget
    1. We actually did this.  March grocery expenses came to $738.  Not keeping up with meal planning and actually making it to the grocery store seems to make this an achievable goal.
  • Reduce dining out to $400 per month (2015 – $600)
    1. Ok, so highest dining out month yet.  We spent $924 on restaurants.  I kinda beat myself up on this topic earlier this month, but it’s been a crazy month all around with ‘life’.
  • Reduce entertainment/alcohol to $250 per month (2015 – $435)
    1. This was our highest month for entertainment as well at $548.  We entertained more, had date night twice this month and hit our last hockey game of the season (The Preds make the playoffs, then I’m heading to Nashville for a game!)
Personal Goals:
  • Meditate at least three days a week
    1. I meditated 16 days this month.  Consecutively!
    2. I owe part of this to the Headspace app.
  • Take walks at least three days a week
    1. Down to about 45k steps this month.  Between the cold early in the month and now extreme amounts of pollen, I’m not getting outside as much as I’d like.
  • Spend at least seven days camping
    1. Nothing this month, but plans in place for June and confirmed a trip to Cumberland Island, GA in October.
  • Go kayaking at least one time
    1. Still Brrr (the water still is anyway).  Not yet.
  • Take one family vacation
    1. I’m posting this from the beach.  Shh!
 Net Worth Update for Q1

Capture

Assets up 3.33% in Q1

Liabilities down 7.51% in Q1

Total Net Worth change of +17.04%

March Summary

Even with the frenetic pace of life and a frustrating amount of dining out this month we had a positive cash flow of $870.  With the extra buffer in cash flow, I also set up an additional recurring monthly transfer to our taxable investment account.

Right now, the kids really really REALLY want to head down to the pool.  It’s 65F here at the moment, but it’s sunny and they have unstoppable determination for some swimming.  My guess is that it’ll be a short adventure.  Stay tuned.

Cheers!

-cb3

Spring Has Sprung

One of my Favorite Times

wp-1458852483425.jpgThis time of year, as the leaf bids begin to pop on the trees and the early flowers are blooming is very enjoyable to me.  After the slightly negative tone of my last post, I wanted to focus on the positive and share a bit of what brings me joy and piece.

There’s a certain feeling that comes with the signs of new growth, longer days, and warmer air.  It’s nourishing to my soul and reassuring that life continues.  There’s the buzz in the air of the early pollinators beginning to go about their business.

wp-1458852499788.jpgI take solace in an early morning walk around the garden with a cup of coffee.  The warmth of the cup is a perfect balance to the cool but not cold air.  As I browse through my meager bonsai collection and garden beds, I look for the changes from one day to the next.  Things start to move quickly and I don’t want to miss any of it.

The Comfort of Routine

wp-1458852464306.jpgDuring the morning tour, I mentally take note of the chores that need to be done.  Most days I will need to water after I finish my coffee.  Sometimes my attention is caught by a pest taking up resident and I will need to come back around and spray during the evening.

The bonsai also require that I keep up with fertilizer and make sure that I’m rotating out the organic packets on schedule for optimal health.  I will also need to inspect the wiring on a regular basis to make sure that it’s doing its job and not beginning to cut into the bark of the tree as the branches swell from growth.

wp-1458852491814.jpgI’ve been told that this routine looks a bit ridiculous to the casual observer.  Mrs C’s friends have gotten a kick out of it.  That doesn’t bother me in the least.  The simple mechanical nature of it is almost meditative for me.  You see, plants are very easy going if you treat them right.  There’s not a whole lot of stress here.  It’s the diametric opposite of what I do for my day job.

Growing for the Future

One of the other key aspects that I enjoy about the bonsai hobby is being able to think generationally.  Some of the great masterpieces in Japan have been cultivated for decades and even centuries.  These trees are often cared for by multiple descendants of the same family.

wp-1458852458659.jpgEach year for the past few years, I have been starting seedlings with the intent to cultivate them as bonsai over their entire life.  It’s very humbling to know that this may even exceed my own lifespan.  With some species that I grow, I may never see them as mature bonsai.

Tying it Together

As I got close to finishing this post, it occurred to me that this type of cultivation is very similar to the work we do with personal finance.  We’re not always growing it for right now.  Sometimes, we’re not even growing it for us but for the next generation.

Today, I am focusing on appreciating life.  Despite the clouds of yellow death pollen.

Cheers!

-cb3

We’re Addicted to Convenience

I’m not proud of some of the items in this post. It’s not very frugal and slightly counter-productive but if I can’t be honest about it, how can I make progress?

1180slIt’s an Easy Trap

I’ve had this theory for the past couple of years that occasionally comes up in conversation with my wife or friends.  This theory is probably not an original idea that I had, but I can’t for the life of me remember a source to credit.

This is the idea that there are times when we chose to abstain from responsibility and have someone else do things for us whether it’s necessary or not.  We do it purely out of want.  I like to call it convenience addiction.

What Exactly is the Trap?

The trap is a little different for everyone, however I believe that it’s 100 percent mental. We convince ourselves that we should spend money to have someone else provide a good or service that we are entirely capable of providing for ourselves.

For us, the most common traps are food related. We dine out too often. We order pizza.

Sometimes it’s not food related.  I’m perfectly able-bodied and can take care of the lawn and yard work. That didn’t stop me from hiring a lawn crew to maintain the front yard.

Housekeeping is the other big one for us. It really doesn’t take a huge amount of time and effort to keep things clean. Yet here we are with a bi-monthly housekeeper to come in and do the deep cleaning.

How Do We Fall Into It?

Most of the time we let ourselves believe that the day has just been too much. We’re too tired to cook or clean. We’re stressed and just need to get out of the house for a change of scenery. We got caught up in weekend activities and didn’t get the meal planning and grocery shopping done. You get the picture.

Sometimes we, as partners, try to smooth things over for the other having a rough patch or down day.  Oh, I’ll just order a pizza since she’s not feeling well and I’ve had to work all day (I admit, I’m borderline Enabler in this regard).

These are just a few of the ways that we justify falling into the trap. I think on some level that our society conditions us to allow these rationales. What’s worse is knowing full well that we’re getting trapped and still allowing it to happen.

Why do we do it? I think the biggest reason is because it’s comforting. Having someone take care of us feels good. We do live in a very compressed stressed out society. Having one less chore feels like a win. Here’s the kicker, and the dangerous bit, for us… We can technically afford it.

Dodging the Pit

Here’s the tricky part.  How the hell do we keep this from happening?  Honestly, I’m not so sure I’ve got it figured out but I’ve got a few ideas.

  1.  Stop making excuses – Plain and simple.  We just need to quit excusing ourselves and allowing for poor behavior.  This part will take work since it involves breaking bad habits.
  2.  Establish and stick to a routine – We need to establish exactly when we’re going to do things like grocery planning and shopping and always do it then (with the exception of holidays and vacations, of course)
  3.  Have a fall-back plan for the routine – If for some reason the primary person responsible for a task can’t accomplish it, then we need a backup already planned out.  Coming up with an alternative on the fly allows for wiggle room and slippage.
  4.  Hold each other accountable – This is an area where I think we have some imbalance.  I tend to be more on the lenient/accommodating side (that’s a whole other story) and I think that puts me in a position where I take on more responsibility than I can handle which leads to more stress which leads to more convenience acceptance.

Really and truly, I know this isn’t something that gets fixed overnight.  It will take effort and I’m sure it will be one of those two steps forward one step back deals.  Regardless, right now it’s costing us money and potentially delaying our escape from the corporate rat-race.  This past week has seriously highlighted that fact and I almost dread doing the month-end analysis.  I think we can do better.

What do you guys think?  Who else has been trapped by convenience addiction?

Cheers!

-cb3

Can We Afford It?

Thinking Back

With all of the progress that we’ve made since the beginning of 2015, I’ve been doing some reflecting about how we got into the hole we were in and what’s changed about our approach to expenses.  Planning for our upcoming vacation put a few things in perspective as well.

danger deep excavationI’m not saying we’re perfect and we’ve got it all figured out.  There are still some challenges that we face on a weekly basis, but for major purchases (excluding things like houses and cars) it’s completely different.

We Really Need a…

Inevitably in life there comes a time when you really need (or want) a… something.  Maybe it’s a new dining set, or a replacement laptop, or it’s just time to get the heck out of town and take a vacation.  Whatever it is, it’s probably going to be an expense that you haven’t planned and don’t have a budget for.

The next part of the story is the bit that’s changed for me.  Presented with the need (or want), we have to figure out if we can (or should) afford it.

How it Used to Go

Once upon a time, in the not too distant past, being faced with a new unexpected expense would result in a simple check of the credit card balance.  It was simply a matter of whether we had the available free credit to handle the balance.

That was it.

It was a mistake.

There was never a thought for what that additional balance would mean to our finances.  If the credit was available, it was easy to think that we could handle the expense and things would work themselves out in the long run.  Oh how naive I was.

The New and Improved Way

Now we have several questions to consider when faced with a sudden expense.  I like lists, so I’ll lay the process out like that (though a flowchart may be in forthcoming if I think about it).

Here we go:

  1. Do we have cash on hand in the savings (not the emergency fund) to deal with this?
  2. If not, do we have the free cash flow in the next month to absorb the cost of the expense?
  3. If not, is it acceptable to accrue interest on this purchase if we can’t pay it off in the grace period and how much interest would that be?
    • I do want to say that I don’t plan to answer yes to this question ever again, but sometimes things happen (and that’s why we have an emergency fund)

If we get to point number three and i’m looking at an expense that’s more of a want than a need, then I have to say no.  We can’t afford it.

Also, let’s face it, some expenses come with emotional attachment as we experienced last year with one of our pets.  It was very difficult to say no because of the emotional impact to my wife.  However, having the list of criteria to go through logically made us really take a look at the impact of the decision.  In that case, we had extra money coming in soon enough that we could afford it.

It’s a Simple Exercise

If you have a handle on your monthly cash flow and budget, then this is a very easy exercise to do when faced with these kinds of decisions.  It can help take the emotion out of the equation and help determine the course of action in a thoughtful way.

For us, emotional impulsive spending is how we dug ourselves into a hole.  Getting out of that hole takes discipline and logic.

Cheers!

-cb3

The Taxes are Done, Dude

Filed Away

Another tax season has come and gone for the Canoe Dock household.  I filed a couple of weeks ago and the refund check cleared this past Friday.  I always get a little paranoid when I click the submit button and worry that I’ve goofed something up.  Our Next Life had a great post about emotional responses to taxes.

shutterstock_45292546We Got a Refund

The good news is that we were able to claim some of the daycare expenses since my wife worked some in 2015.  This helped put a little more back in our pockets.  I thought about claiming my home office since I work from home, but thought better of it since I’ve read that it can be a red flag for audits and since I occasionally goof off and work on personal projects in here.

The bad news (and I used to think this was good news) is that we got a large refund of approx. $6500 from Federal and $1700 from State.  In the past, we would have been overjoyed to receive what was perceived to be a windfall and would have immediately made plans for a vacation or project.  Now, I have a much better understanding that I have overpaid on my taxes and could have put the free cash flow to much better use and potentially have reduced some interest accrual.

This year, I anticipated the refund and already had a plan for the money.

How We Used the Refund

First and foremost, I allocated 70% of it to debt reduction and knocked out the last student loan with a $5500 payment!  Boom, no more student debt.  That loan has been with my wife since 2001 from her first degree.  It was from a larger private school so it hung around longer than her second degree which we paid off a couple of years ago.  This frees up $125/month in cash flow.

Second, we put around $1000 toward furniture in the living room.  This is something that my wife has been wanting to do for a long time (have at least one “adult” room in the house) and it did a lot for mental health to complete the room.  I console myself with the fact that the win was bigger than the extra expense.

Finally, we tucked away around $1500 into the savings account in anticipation of our beach trip in April.  I don’t plan on spending that much on the trip since the housing is already paid and we only need to worry about driving, meals, and tourism.  It’s very nice to know that the trip expenses are covered.  The leftover $200 went to the investment account.

What Needs to Change

Obviously, I’ve learned a lot about personal finance in the last year and I believe that I need to optimize my W-4 to reduce the amount of taxes being withheld.  There shouldn’t be a huge difference in income this year, so I plan to adjust it based on that projection so that we receive little to no refund.  I wouldn’t even mind if I had to pay a little.

For now, I’m looking forward to the extra positive cash flow each month as well as getting the garden set.  I can almost taste the fresh tomatoes!

Cheers

-cb3

 

February 2016 Progress

 Month of Highs and Lows

February certainly wasn’t an easy month.  We lost a family companion that had been with my wife for almost fifteen years.  You can read more about that here if you like.  The grieving process definitely had an impact on the weekly routines so I knew our budget would be a little out of whack.

We had two blocks of extra income this month with ESPP shares being sold and my bonus for the second half of 2015 arriving.  The extra money was mostly put toward outstanding debt, but some was used to cover the costs of our DIY project, our upcoming trip to Florida in April, and of course the additional vet bills.

To top it all off, I got a cold on the last day of the month.  Gross!

Current Goal Status:
Financial goals:
  • Reduce overall outstanding debt (including mortgage) by 15%.
    1. Debt reduction for the month was 4.41% which puts us on track for a 8.76% overall reduction for the year. Paying off the last credit card balance with the bonus was a huge boost!
  • Make contributions to investments (taxable and retirement) of 15% of salary.
    1. We contributed 15.83% of our income to investment accounts including 401k, 529, ESPP, and Brokerage.  A portion of the bonus is also put toward 401k and ESPP which puts us on track.
  • Eliminate outstanding credit card debt.
    1. The interest for the balance transfer card did show up on the Feb. statement and cost us $58.82.  I am OK with this since I thought it might happen originally and also because the balance is eliminated!
  • Eliminate remaining student loan debt.
    1. The only progress this month was the regular payment leaving a balance of $5600.
  • Make a contribution to an IRA.
    1. No progress here… yet!
  • Generate revenue from a new income stream.
    1. No progress here… yet!
Expense Goals

Expense goals in Feb were not much better than January.  Still, it was a little better:

  • Meet the $800 per month grocery budget
    1. Grocery planning/shopping  went to hell this month.  Over budget by $350.
  • Reduce dining out to $400 per month (2015 – $600)
    1. Over budget by $140 this month.  This is $50 lower than last month.
  • Reduce entertainment/alcohol to $250 per month (2015 – $435)
    1. This one is also over budget by $200 this month.  While it’s down by $65 from last month, there were extenuating circumstances this month that called for a few more distractions.
Personal Goals:
  • Meditate at least three days a week
    1. I managed one day this month.  Again, things got a bit unraveled this month.
  • Take walks at least three days a week
    1. Down to about 50k steps this month.  Not as good as I would have liked.
  • Spend at least seven days camping
    1. Nothing this month, but plans in place for June and maybe October.
  • Go kayaking at least one time
    1. Still Brrr.  Not yet
  • Take one family vacation
    1. Only five weeks until we go!
DIY Project Update

At the end of six weeks into the project, I have around 75% of the ceiling complete.  We also went and picked out the new sofa from Ikea.  We wanted something a little nicer, but didn’t want to spend a lot on it.  Finally, two new light fixtures arrived.  We switched from the old spot light type to a new hanging fixture.

wp-1457016426843.jpg

Even after two weeks or so of no progress, it’s starting to come together and I expect to have it completed in the next two weeks.  We still need some chairs and a coffee table.  Hopefully we can find a creative way to accomplish that without a lot of additional expense.

 Spring is for Growth

On a final note, I’m really looking forward to March.  It’s the time of year where things start growing again.  I’ve been doing the pre-Spring maintenance work on some of my bonsai and I can’t wait to start seeing leaves and flowers emerge.  It’s also time to play in the dirt and get the garden planted.  I have around 80 tomato plants started.  I will get fresh tomatoes in abundance this year!

Cheers!

-cb3