Category Archives: Expenses

Where Has the Time Gone?

January 19, 2016 cb3 Leave a comment

Almost Two Weeks?!?

Hard to believe that I haven’t made a post in twelve days. Life sure went into overdrive in a hurry. The full-time job is back to requiring it’s regular load of hours. The kids now have an additional evening activity (swim lessons: extra expense but necessary). We’ve also decided to tackle a little bit of DIY renovation.

Background on the Renovation

Before I get into the meat of this post, I want to set the stage a bit so you understand our current situation.

We’ve currently been living in our home for around six years and most of the furniture either came from our apartment or was hand-me-down. We have some antiques from family, some craigslist items, and some stuff that came with the house. The last time we bought new furniture was the dining room set in 2008.

We also have two small children and three dogs (at one point it was four). Needless to say, the sofas are starting to show the abuse they’ve received. It’s been mostly OK, but when we came back from holiday visits we found a large rip in the top of the ottoman and a lot of stuffing had been pulled out (Jack Russell’s love to pull stuffing out of things).

It’s time for some replacements.

And That Leads To…

“We should fix up a least one room in the house to look nice”. Yep, the first thing through my mind was dollar signs. My wife even said as she laid out her idea that she could tell I was only thinking about how expensive this was going to be.

There are two bits of good news. First, we had prepared for this a bit by asking family members to contribute to furniture instead of buying Christmas gifts for us. Second, I’ve laid out the financial projection for the year and I know that I can spare around $1500-$2000 and still make my goals (if everything goes according to plan). If we’re really good about keeping the monthly budget, there may be more room.

The plan is to put up a plank board ceiling in the living room. It’s a cathedral ceiling and I estimated around 400 sq ft. Based on the material she wants to use, that should cost me ~$650. We’ll also need about $50 in paint. The second part is to put together some in-wall book shelves (which i’ll probably just hang with French cleats). I haven’t estimated the cost of materials there, but I think we’re still OK.

Bonus

We had a slightly serendipitous moment last weekend while having dinner with friends. I almost didn’t go along but was glad that I did. One of our friends just moved in with another and had a load of stuff in a storage unit. He needed help moving the bunk beds to their condo. He also mentioned that he had an almost new leather sectional with recliners that he wanted gone. Since we were in the market, I said I’d take a look.

The couch wasn’t a good fit for the living room, but we also had a dingy old couch downstairs in the den and this one was a perfect replacement. I asked how much he wanted for it and he gave it to us in exchange for the use of the truck and not having to pay for the storage unit anymore. Basically, it was free!

Getting Messy

I was lucky enough to have MLK day as a holiday and made use of the three day weekend by getting started on the DIY. We went and picked up the planks for the ceiling and paint on Saturday. Total cost of materials so far is $660.

We spent part of Saturday and Sunday painting the planks. We did 180 total one at a time. Once we got a rhythm going it really wasn’t too bad. I think we spent around five hours on painting.

Yesterday I took advantage of the project and ran some speaker wire along the ceiling in preparation for some wall-mount room speakers. I know there are a lot of wireless options out there, but I still prefer a wired speaker to the receiving device. Call me old school.

I also managed to get a few planks up so that we could make sure we liked the color and that the hanging technique was going to work out. We’re going right over the stomp ceiling with the planks without scraping any of the drywall clumps off. I’m using construction adhesive on the back of the planks and a couple of brads from a finishing nailer.

Off to Work

It’s time to go focus on the day job. Hopefully, I can get back in a routine and post regularly. I’ve got to keep you guys updated on this project. We’ve got another lead on a friend that is downsizing and maybe we can score a couch for the living room on the cheap.

Cheer!

-cb3

Expenses, Goals

December 2015 Progress

January 1, 2016 cb3 2 Comments

Happy New Year!

Welcome to 2016. December ended pretty much as we expected. Work was luckily quiet for the last week and I was able to take a couple of weeks out of the office for the holiday. We took it easy at home for the most part but did travel for a few days to visit family and friends.

It almost didn’t feel like the Christmas season with all of the warm weather and crazy amounts of rain that we had. Getting into a festive mood was a little difficult but we managed to push through it and made some good memories for the kids. Hopefully, we’ll see some cold soon… at least for a little while.

Current Goal Status:

Reduce overall outstanding debt (including mortgage) by 10%.
1. At the end of December, overall debt reduction is 10.6%. We met the goal for the year!
Make contributions to investments (taxable and retirement) of 10% of salary.
1. Combined saving in investment accounts totaled 10.37%. We met our goal for the year!
Eliminate any monthly interest payments due to credit cards.
1. December returned us to a no interest month. That finished the year with 8 of 12 months having no interest accumulation.
2. The $2200 remaining on the credit card was eliminated by the proceeds from the RSU sale.
3. Our last remaining credit card balance of $7180 is on a 0% interest promotional offer card that runs out on January 22. I’ll need to figure out how I’m handling that. There will be a follow-up post on this topic.

Total expenses for December climbed to $8763 which was right in the middle for the year. Net cash flow after paying off the credit card balance was still pretty good at ~$800.

I’ve already posted my Goals for 2016 which I may update to include a couple more personal goals for the year. We’re also talking about making some repairs/changes to the house which could affect that. More on that later.

Hear’s hoping that you have health, wealth, and happiness in 2016.

Cheers!

-cb3

Expenses, Movies

The Force was Strong

December 21, 2015 cb3 Leave a comment

Pricey Gratification

Last night, I took the family to see Star Wars: The Force Awakens. I’m not going to go into any details about the film, but I will say that it was everything that I had hoped it would be. We plan to see it again soon… for a couple of reasons.

This is the first time that the kids have had to stand in line prior to going in the theater. We arrived about an hour early but the line wasn’t too bad. We managed to get the seats we like. I did relay to them that I remembered standing in line for Empire Strikes Back when I was around my daughters age and what a special memory it was. She didn’t seem impressed, but I hope they’ll look back on it fondly.

It’s a good thing that I tucked away a little of the money from the RSU sale for a special occasion. We bought tickets for a Regal RPX showing and, my goodness, there was a little sticker shock. For two adults and two children, the cost of seats plus the Fandango fee was ~$68. Whoa! That’s almost twice what we pay for a conventional showing. If it had been any other film, I’d say it wasn’t worth the up-charge.

Throw in snacks and beverages (oh, they server beer and wine here now too) and we hit over $100 for the evening. Next time, we’ll be a bit more restrained and I think it will just be the two of us for a date night.

Intensity

As far as the film goes (no spoilers here), it was a little more intense than the original three. My eight year old daughter is a bit sensitive and I think there were a couple of sequences that we kinda of rough for her. She handled it well, however, and we talked about it when we got home.

Out four year old boy, on the other hand, was a champ. He was a bit obsessed with the TIE fighters getting shot down as I don’t think he realized they were the bad guys (Admittedly, he has a strange affinity for Darth Vader, so maybe he’s on the Dark Side).

All in all, everyone had a good time and we thank J.J. Abrams for providing exactly what the Star Wars universe needed.

May the Force be with You

-cb3

Expenses, Goals, Investing, Strategy

2015 Year in Review

December 18, 2015 cb3 Leave a comment

As we wind down 2015, I wanted to take a look back at the Goals for the year and how we did. I’m also going to talk about what went well, what didn’t, and a few of the surprises along the way.

This may be the first year of my life that I’ve ever been able to view my financial health holistically. It’s also the first time that I’ve ever written down financial goals for myself. I’ve tracked every dollar each month as well as goal progress along the way. Sitting down and Drawing My Picture has been a powerful tool indeed.

Financial Goals 2015

I started the year with three pretty basic and achievable goals.

Reduce overall outstanding debt (including mortgage) by 10%.
Make contributions to investments (taxable and retirement) of 10% of salary.
Eliminate any monthly interest payments due to credit cards.

In 2014, I had only managed to reduce my overall debt by a little more than 2%. Not wanting to spend another 49 years working on the problem I set my sights on 10%

I also wanted to continue to contribute to investments at least a little. I had a general idea of how much I would be making over the course of the year and what my previous year’s total spending was so I also set a 10% goal (pre-tax included) here. I did reduce my 401k contribution and increase my ESPP contribution to help generate some extra income for debt reduction.

Coming into 2015, I had pre-existing credit card balances of approximately $20,800. Towards the end of 2014, I had done some balance transfers to 0% offers so $12,300 of that total was not generating interest and $8500 was. Tackling the $8500 was my top priority since it was costing me an extra $180 per month in interest.

I’m happy to report that at the time of writing, all goals have been met for the year. Debt reduction is at 10.65%, investment contributions are at 10.38%, and I only paid interest on a credit card four months out of the year. I thought I had eliminated interest after March, but the extra Vet bill led to a $38 charge on the November statement.

Year-End Balance Sheet

Let’s take a look at the balance sheet for the year. I’ve intentionally left out the cash accounts (Checking/Saving) since these have relatively low balances and will fluctuate a bit by year end.

The ‘Other Assets’ listed is the estimated value of our house according to Zillow. I hesitate to use it in the balance sheet since it is an estimate and not a very liquid asset at all. Asset value increased by 7.53% this year which is mostly due to contributions and an increase in estimated home value.

The remaining $7180 of credit card debt is sitting on a balance transfer card with a 0% introductory rate that will expire sometime in January. I need to review the terms of the transfer and make a plan to deal with that before the interest starts. I do have an ESPP coming up on Jan 31 that will eliminate the balance if everything goes according to plan.

Overall Net Worth increased by 44.32%. That’s a really incredible number to see, but it makes sense when you look at the fact that I’m both adding assets and decreasing liabilities.

Cash Flow

This is the first year that I’ve tracked Cash Flow. I can say that I was very surprised to see the numbers at the end of the year. It’s eye-opening (and slightly alarming) how much money is going out the door. Here’s a summary (Income and Investments include pre-tax contributions to retirement accounts)

I’m confident that we can lower expenses next year. Right away, I know that we’ll be spending around $6000 less on outstanding credit card debt (~$13000 this year with $7180 remaining). We also had two larger purchases of a replacement laptop ($3000) and a Vet bill ($4000).

It’s possible that I can be a little more aggressive with my goals for 2016, but I don’t want to set myself up for failure so I’m still working on finding a balance. We may also be able to fund a family vacation next year which will help with the mental health aspect for the rest of the family (I think I’ve only taken 5 or 6 days off this year).

The slightly alarming bit is the fact that our total income included bonuses and RSU sales. If it hadn’t been for that, we may have ended up adding to debt instead of removing it. I need to get us to a point where we’re not dependent on extra income and everything can be handled by regular salary.

Expenses We Can Control

There are a few areas of expense where I know we can make a difference. I tallied up the monthly average for variable expenses and found the following items are over budget on average:

Pets and Electronics both have outliers that are skewing the average. Both should be much lower next year. The top item is basically anything we buy at the grocery store. We’re only slightly over budget on that but if we can cut it by 10% that’s around $1000 in savings.

Dining out should be half of what it is. One of the key challenges for us is having a weekly menu and getting the grocery run done. If we can make a better effort to be consistent there then we can easily cut this in half and save $3500 or so.

Entertainment and Alcohol includes things like movies and hockey tickets as well as trips to the package store. I’m cutting back on the craft beer and will be re-focusing some hobby time to brewing again in 2016. Honestly, I’d like to see this number cut in half too but a 10-20% reduction will be great.

Combine those reductions with the unexpected expenses and credit card payoff and we could reduce expense by up $18000. Stretch goal would be to make it under $100000 total expenses for the year, but we are still in debt reduction mode so I’m not as focused on that.

2015 – Year of Success

Well there you have it. As of right now, it looks like I was able to meet my financial goals for the year. Woohoo!

I’m looking forward to 2016 and will be updating my goals for the new year in a few days.

Cheers!

-cb3

Bonsai, Expenses, Lifestyle

Bonsai Class – Pine Workshop

December 14, 2015 cb3 Leave a comment

A Little Background

I’m pretty sure that I’ve already mentioned my major hobbies on the site. Growing things, in particular bonsai, is one of my core activities. There are a couple of reasons why I’m drawn to this.

First, it is the antithesis of what I do for a living. The organic natural processes help me balance out a life that revolves around technology. Second, it gets me outside for little bits of time each day. This is especially important since I started working from home a few years ago. Finally, it requires discipline and patience. This is counter to how my brain typically works, so in a way it’s a type of mental exercise to help me perform better in other areas.

Why I Needed This

The workshop had a very reasonable price of $55 which I had available in my discretionary fund (my wife and I each have personal checking accounts separate from the main account where we funnel a set amount of money each month for fun). It also involved about six hours away from the house which was harder to do without feeling guilty due to the amount of time that work has been requiring the past couple of months.

Eventually, my mental health needs won and I reserved my spot. Being able to unplug for a good portion of the day and focus on learning something that didn’t involve computers was a huge relief. I was long past due for a little time for myself to re-establish balance.

The Class Itself

This class was centered around Fall maintenance work on Japanese Black Pine bonsai. The discussion did reach other topics such seasonal work for Spring and Summer as well as fertilization, but mostly we focused on the Fall work.

The first thing we did was to take a look at our trees and work on removing any old needles from the previous year’s growth. These are fairly easy to identify by the position on the branch and the fact that the color is starting to fade and may be yellowing.

After the old needles are clear, we can take a look at the new growth that developed during the summer and prune any excess shoots down to a pair. Ideally, we want a pair of shoots of equal strength that are sitting side by side instead of top to bottom.

Finally, we can get in and perform any wiring necessary to develop that shape of the tree. There was an afternoon session on wiring, but I had other obligations for the evening and needed to get home. I had already participated in the wiring class a couple of years ago and feel like I have that under control.

What I Took Home

Well, I didn’t take home another tree! It was tempting, but it’s really not a good time for me to make the kind of investment that it would take to get the kind of tree that I want next. Most of my trees are what I consider project trees. It will be several years before any of them are show worthy. Eventually, I’d like to add a bigger specimen that is mostly refined and just need minor adjustment and maintenance. That can be a costly endeavor, so for now it’s on the ‘one of these days’ list.

I also came home with a greatly reduced stress level. I wasn’t worried about email or work the entire time I was out. It also prepared me for a laid back night out with the family to the local minor league hockey game! Fun times.

Cheers,

-cb3

Expenses, Goals, Investing

Quick RSU Update

December 9, 2015 cb3 Leave a comment

A little more at Vesting

The RSU vested on December 1st and came in a little higher than the $3300 that I calculated. I had based the number of shares to be held for taxes on the previous cycle. However, this time around the stock price was lower so they didn’t hold as many shares.

Total gain after the sale was around $3700.

Divvy it Up

I kept the allocation that I had build based on the previous estimate and used the extra for debt payoff:

$3000 went towards outstanding debt including the remaining $1550 balance from the Vet bill.
$500 went into my individual brokerage account at Personal Capital.
$200 will go towards a family outing for the holidays

Back on Track

This puts the current debt reduction projection for the year back up to 10.65%. Barring anything unexpected happening, I believe we will meet the 10% goal for the year.

Over the next couple of weeks, I will be setting up my spreadsheets for next years cash flow and debt reduction projections. I’ve already started jotting down a few new goals that I want to add for 2016.

Cheers!

-cb3

Expenses, Goals

November 2015 Progress

December 1, 2015 cb3 2 Comments

Happy Holidays!

November was, to be honest, an ass kicker on the full-time job front. I had even started a slight rant post that I’m not sure I’ll finish. Regardless, it makes the sound of financial freedom even more appealing and I was exceptionally thankful for a few days of downtime over the Thanksgiving break.

The week leading up to the holiday I was traveling for work to Ireland. It was my first trip out of the country and while I didn’t have a whole lot of time for tourism, I did get to see the Jameson distillery in Middleton. Of course, that lead to a little extra personal expense as I purchased a few gifts for family. I’ll use some of these as Christmas gifts, so it won’t be a huge overage as I’d be spending the money anyway.

Other than the travel expense on gifts, there wasn’t anything unexpected this month. Groceries, restaurants, and entertainment/alcohol were back up this month due to holiday events. We still managed to keep it under control and none of the categories were the highest of the year.

Current Goal Status:

Reduce overall outstanding debt (including mortgage) by 10%.
1. At the end of November, overall debt reduction is 9.15%. We put extra towards the Vet bill to help recover. Year-end projection is currently 10.03% so it look like we’re back on track.
Make contributions to investments (taxable and retirement) of 10% of salary.
1. Combined saving in investment accounts is now at 10.19% which is still below the 10.71% high in September. I’m still on track but may be able to bump this a little at year end.
Eliminate any monthly interest payments due to credit cards.
1. November broke the streak and I paid $38.03 in interest on the card holding the Vet balance. This brings total credit card interest to $386 for the year. I don’t anticipate any interest in December.
2. Of the $3200 balance increase from veterinary surgery, ~$2200 remains on the card. I have an RSU vesting today that will eliminate this balance.

Total expenses for November rose to $8031 which was still the second lowest of the year. Net cash flow was slightly positive at $423.

Looking forward to the gift-giving season, we’re working on setting a budget for gifts and making sure we have a checklist of each person before we start buying. We’re also looking at using the points on our Chase Sapphire card on Amazon to offset purchase costs. I don’t believe we’ll use them all and we don’t have any travel planned for first half of next year where we could use the points.

-cb3

Expenses, Personal Finance, Tools

Drawing a Picture – Part 2

November 5, 2015 cb3 Leave a comment

The next part of the picture is just as important, if not more so, as the balance sheet. It wasn’t until early this year that the concept really clicked with me. Sure, I had used a budget for years but this put things in a new perspective.

Cash Flow

The cash flow statement is the simple picture of the amount of money moving in to your finances (income) versus the amount moving out (expenses).

First we list our income for the month with one type or source per line and add them up. That gives us Gross Income.

Then we take all of our expenses and list them with one category or source per line and add them.

Finally we subtract the expenses total from gross income and we arrive at our Net Income for the month. If this number is negative, it means we spent more money than we made. Warning! If the number is positive, then we’ve made money for the month. If we have positive cash flow we should look at how we’re going to put the surplus to work.

Always have a plan for allocating surplus cash. Otherwise, it can disappear. For example, right now my plan is to put any surplus cash to work paying down outstanding debt.

A Note on Credit Cards

It can be especially easy to spend more than you make with credit cards. They’re easily available and credit limits can creep up beyond what you can handle.

Before I looked at my cash flow, I didn’t realize that I was falling farther into the whole because I was always able to make more than my minimum payment each month. What I wasn’t seeing was the fact that I put more on the card that month than I paid. Floating along like this for five or six years with regular credit limit raises led to quite a deep hole. At the worst of it, I think we had around $28k on cards. All generating interest!

Looking at the Categories

Now that I look at all of my expenses each month by category, it’s much easier for me to see what I can do to improve my situation. I can now see if we’re spending too much and where we need to cut back. Of course, some expenses are fixed. I actually break my expense list down into two sections: fixed expenses (mortgage, loans) and variable expenses (groceries, restaurants, fuel).

The Canvas

I like to use spreadsheets for most of these tasks. Google Sheets is awesome because it lets me access my data from anywhere without having to install software. There are also some handy Sheet Templates for budgets and cash flow. You could also track your cash flow with online tools such as Personal Capital or Mint.

Good luck and keep an eye on those expenses!

Cheers!

-cb3

Expenses, Goals

October 2015 Progress

November 1, 2015 cb3

Relief!

October came and went without any major unplanned expenses. It felt good to see my weekly Personal Capital report showing a nice smooth expense chart and approximately $4900 lower spending than the last month (which is what I expected without the car and vet bills from last month).

We do have an outstanding balance remaining for the vet bill so the Goal for debt reduction is off track. I expect to pay it off with an RSU that is vesting on Dec.1. More than likely I will pay a little interest on this since the bill is due before the stock vests. Based on my calculations it will be around $50 which is less than it would cost to transfer the balance to my Chase Slate card.

Current Goal Status:

Reduce overall outstanding debt (including mortgage) by 10%.
1. At the end of October, overall debt reduction is 7.77%. This dropped from 8.69% last month due to the outstanding vet bill. Year-end projection is currently 8.87% if we don’t clear that bill.
Make contributions to investments (taxable and retirement) of 10% of salary.
1. Combined saving in investment accounts dropped to 10.06% from 10.71% last month. I made a withdrawal of $900 from a taxable investment account to cover the truck bill.
2. Unless we need to withdraw more to cover an unexpected expense, this goal is still on track.
Eliminate any monthly interest payments due to credit cards.
1. We maintained $0 in credit card interest in Oct. for a seven month streak.
2. Of the $3200 balance increase from veterinary surgery, ~$2400 remains on the card. We will be able to reduce this a bit more before the bill is due on Nov. 19th. As I mentioned earlier, we may pay a bit of interest on this.

Total expenses for October fell to $6969 which was the lowest of the year. Net cash flow was positive at $2028!

Dining out and entertainment/alcohol expenses were both second to lowest for this month. I am continuing my commitment to cut back in those areas for the remainder of the year but may make an exception for the holiday season.

Getting closer. Cheers!

-cb3

Expenses, Goals

September 2015 Progress

October 8, 2015 cb3

As discussed in my previous post, we had a significant extra expense this month in the form of a major vet bill. On the one had, I’m happy that my wife was able to give the gift of sight back to her beloved pet. On the other, I’m a bit embarrassed since this might be the single most 2%, privileged, or frivolous thing I’ve purchased. I would never be able to explain such a thing to my grandfather. He’d laugh and call me a knucklehead.

On top of that, we saw our highest outflow for food/household items in September at $1149. Dining out was also high at $600. There was also some repairs needed for my truck and that cost me an unexpected $900.

Goals are still mostly on track, but we may see a small interest charge in November. Here’s how we stand:

Reduce overall outstanding debt (including mortgage) by 10%.
1. At the end of September, overall debt reduction is 8.69%. Still on track.
Make contributions to investments (taxable and retirement) of 10% of salary.
1. Combined saving in investment accounts is 10.71% of income. This includes 401k, IRA, ESPP.
2. This may be impacted by the additional cost of major vet surgery. My wife agreed to use her savings for this procedure, so I may have to draw some out of investments to cover or face an interest charge.
Eliminate any monthly interest payments due to credit cards.
1. We maintained $0 in credit card interest in Sep. for a six month streak.
2. We added approx. $3200 to a card with a $0 balance to pay for the vet surgery. I have an RSU grant coming in Dec that will cover this, but we may be faced with a month of interest before that money is available. I’ll calculate the estimated charge and see if it’s worth pulling out of an existing investment before we get charged with interest.

Total expenses for September were $12,241 with the addition of the extra vet expense. With no additional income in September, this put us in the red by $3880.

I need to recommit to live a little more frugally for the rest of the year. I personally am cutting out alcohol until the holidays to help reduce expenses. I also need to help solve the grocery planning struggle so that we can consistently plan meals (Planned meals definitely helps combat dining out)

Here we go!

-cb3