Expenses, Lifestyle

Dark Cloud Cover

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Seriously, sometimes when it rains it does indeed pour.

Last month we had some unexpected expenses.  I spent a little more on a new laptop for my wife than I really needed to.  However, the extra cost is worth the mental relief of not having to be her IT support.  I also need to make sure she has the resources she needs to continue her work for the next several years.

We also had car maintenance and ended up buying a new set of tires.  This month, it seems to be my truck’s turn.  Luckily, this one is paid off and I rarely drive it more than 10-15 miles per week.  The engine light came on and luckily it was only a couple of faulty sensors.  However, with that and the regular oil change and tire rotation, I’m looking at another $1000 expense.  At this point, I’m still willing to put around that much per year into maintenance since I know I’ll get another 5-10 good years out of it.  It serves it’s meager purpose.

Finally, there’s the touchy subject of pet healthcare.  My wife is an avid dog lover.  Her first is a 14yr old and was here before I was.  I married into this so to speak.  Unfortunately, she has cataracts and is mostly blind.  This is starting to require a lot of help getting her around the house and yard.  My wife discovered that there is corrective surgery and is passionate about pursuing it.  This is estimated to cost around $4200.  According to my cash flow sheet, we’ve already spent $4063 on pets care so far this year.

This is an incredibly touchy subject.  My wife loves the dog and would do anything for her.  She has her own savings and is willing to use her money to pay for it.  I do count that savings as part of our family net worth, so I feel this is a setback to my goals for the year.  However, she has promised to use her part-time income to pay back the saving.   While I wouldn’t make the same decision, I completely understand why she is willing to do so.

Mr. Money Mustache had a somewhat poignant post about this topic right as all of this came up here: http://www.mrmoneymustache.com/2015/09/07/great-news-dog-ownership-is-optional/

While I did marry into this situation, it’s definitely something that most folks don’t think about when jumping into pet ownership.  Something to consider.

-cb3

 

Expenses, Goals

August 2015 Progress

Well, August hit like a freight train.  There were a couple of whammies this month in the form of my wife’s car needing new tires and her laptop dying.  We also had our anniversary dinner where we splurged a little and I had a work trip to Vegas and spent a bit extra on a dinner with friends.  Needless to say, our expenses were elevated.

Luckily, and I do realize how fortunate I am, we got a bonus from work that, combined with proceeds from an ESPP sale, made up for the extra spending.  If I hadn’t know that the bonus was coming in, I probably would have been a lot more conservative this month.  Even though we’re focused on cutting back, it’s hard to not spend the extra.

Here’s how we did.

Goals:

  • Reduce overall outstanding debt (including mortgage) by 10%.
    1. At the end of August, overall debt reduction is 7.71%.  Still on track.
  • Make contributions to investments (taxable and retirement) of 10% of salary.
    1. Combined saving in investment accounts is 10.55% of income.  This includes 401k, IRA, ESPP.
  • Eliminate any monthly interest payments due to credit cards.
    1. We maintained $0 in credit card interest in Aug. for a five month streak.

Total expenses for August were $14924 which was the second highest compared to Feb, but the difference being in Feb we made a $6200 payment against outstanding credit card debt.

Also, with the bonus we were still net positive by $2300 for the month.  That money got divided between debt and investments.

We’re going to really buckle down and try to have a couple of calm months before we hit any holiday spending.  I’m confident since I’m still on track for my goals, but it would be great if we could accomplish a little extra!

 

Cheers!

-cb3

 

Expenses, Goals

July 2015 Progress

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July was a very interesting month for the family finance.  We had one planned extra expense in the form of a vacation and one unplanned expense in the form of veterinary surgery.  First I’ll give a quick goal update and overview and then talk about how we planned for the vacation expenses.

Goals:

  • Reduce overall outstanding debt (including mortgage) by 10%.
    1. At the end of July, overall debt reduction is 7.15%.  Still on track.
  • Make contributions to investments (taxable and retirement) of 10% of salary.
    1. Combined saving in investment accounts is 10.36% of income.  This includes 401k, IRA, ESPP.
  • Eliminate any monthly interest payments due to credit cards.
    1. We maintained $0 in credit card interest in July for a four month streak.

Total expenses for July were $8305 which was $36 lower than June making it our lowest expense month of 2015.  I had to double check this with the vacation and vet bills, but we really buckled down and almost eliminated dining out (except for during our travel, which I’m breaking out into travel expenses).

The trip was a combined work/vacation to California.  I had to go out for an onsite session so my airfare and hotel for the week was covered.  The family’s flights were mostly paid with Skymiles so their airfare was around $600 total and was paid in June.  We extended the stay for four nights past the work engagement which gave me a three day weekend with the family.  We got to see Muir Woods, Half Moon Bay and top of Mt. Tamalpais.  Total personal expenses for the family were around $1100.  Not too bad.

The unexpected vet bill was around $450.  We have an older pure bred small dog that just turned 14, so I guess unexpected is not really accurate, but we didn’t have it budgeted.

All in all, it’s remarkable that we still hit the low mark for expenses on the year.  We’re also not paying childcare expenses during the summer since both kids are home, so that does help balance things out.

We also just got an ESSP purchase on July 31 which will help clear some more of the long term debt.  I’ll write that up in another post.

Cheers!

-cb3

 

Expenses, Goals, Lifestyle

The Great Grocery Cycle

One of our biggest challenges is controlling food cost.  I believe that this is an area we can improve.  The struggle is around consistent meal planning an trips to the grocery store.  It’s easy to neglect because there is a convenient alternative available (dining out).  This is likely a common occurrence amongst our peers (though I’m not sure everyone considers it a problem).

We budget $800 per month for groceries and household supplies.  I also budget $240 per month for dining out.  That’s around one restaurant trip per week for our family of four (sit down type as we rarely do fast food).  So far this year, we should have spent $4800 on groceries and $1440 on restaurants.  Instead, we’re currently at $5300 on groceries and $4200 on restaurants!

One would think that if we neglected grocery runs and dined out instead that we would see groceries come in under budget.  What happens though, is that by not having a weekly meal plan we end up doing on demand grocery runs to pick up things for the next day or two.  This leads to inefficiency and a propensity to buy impulse items.

We definitely dine out much more than we should given our budget.  It’s very easy to fall into the trap of convenience when we’re both tired from the day and unprepared for dinner time.  It’s even easier when we know we can afford it.  The problem is that we’re throwing away money that we could be investing in our financial freedom and getting closer to our canoe dock lifestyle.

New 2015 Goal:  Cut the dining out expenses in half.  $2100 or less.

Here we go!

-cb3

 

Goals, Personal Finance

2015 Mid-Year Update

So, I have to be better about posting regularly.  It’s been over a month.  I bet you see that a lot.

I wanted to get an update out about how we’re doing mid-year compared to the goals I set out earlier.  I’ve been keeping track of my monthly cash flow for the past three months and back filled it for the first quarter.

Here are the financial goals and our corresponding status:

  • Reduce overall outstanding debt (including mortgage) by 10%.
    1. At the end of June, my overall debt reduction is 6.68%
    2. Based on interest calculations and assumption of sustained payment amounts, we’re on track for 9.66% reduction by year end
  • Make contributions to investments (taxable and retirement) of 10% of salary.
    1. So far our combined saving in investment accounts is 10.83% of income.  This includes 401k, IRA, ESPP.
    2. I got a small raise on July 1st and increased my ESPP contribution by another 2% to balance the addition to the paycheck.
  • Eliminate any monthly interest payments due to credit cards.
    1. We paid $348 in interest in Q1 which was residual to the last account that held a balance.  It was paid off in February
    2. We paid 0$ in interest in Q2!  This is the first time in my adult life that I haven’t paid credit card interest!  Crazy that I let it go this long.

I also want to note that June was our lowest expense month of the year so far even with an unexpected $636 dental bill.  This was accomplished primarily through limiting dining out and being more careful about grocery planning.

Cheers!

-cb3

 

Goals

Goals for 2015

It’s about time that I lay out my goals for the year.  These have been loosely floating around in the back of my head, but I suppose it’s good to get them recorded so that I can measure against them.

First, financial 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.

Now, maybe that seems like I’m going easy on myself.  I know there are a lot of of hard-core bloggers out there that would be more aggressive.  That brings me to the goals for the blog:

  • Highlight the story of a mid-career guy that has spent the last 20 years “doing it wrong”.
  • Catalog the steps I take to get out of the situation with a wife and two children in tow.
  • Maintain everyone’s mental health while achieving a canoe dock state of being.

There is a lot of content out there for young folks just starting out and what they should do to avoid the traps and become financially free.  There is equally as much, if not more, content for folks that are getting close to a traditional retirement.  But what about those of us that are stuck in the middle?  That’s what I hope to discover.

Cheers,

-cb3

 

Tools

Getting Organized

I wasn’t completely disorganized in my financial life, but I knew we could do better.  This is an area where I’m always challenged.

Several years back, a friend had recommended Mint.  Setup was easy and linking my accounts worked pretty well.  This gave us a general view of things and I set up a budget and some goals for paying off debts.  It was nice for a while, but I never really felt like it made an impact on our behavior.  There wasn’t a clearly visible trend-line for me to track and the budget became more of a suggestion than a hard rule.  Oops, we went over on groceries again!

Last Fall, I decided to try out Personal Capital.  Again, setup was easy and most of the accounts worked*.  This had exactly what I wanted.  Net Worth and Cash Flow graphs are right there on the home screen.  I now had a better graphical representation of how things are changing over time.  This suits the way my brain works.

In my next post I want to talk about learning to understand cash flow and how i’m adding that to my view of our financial health.

Cheers,

-cb3

 

*There is an issue with Associated Credit Union 2-factor that makes me re-authenticate every time but PC is aware of the problem and stated that it will take a code update on their part to fix

 

Personal Finance

Flashback to 2014

First, I want to back up a bit and give a summary of last year.

We started the year out with around $236k worth of outstanding debt including our mortgage.  Here was the breakdown:

  • $181k mortgage
  • $18k car loan
  • $28k credit cards (Holy Hell!!!)
  • $9500 student loans

The credit cards were an interesting build up of several years with a lot of small purchases and the occasional big ticket repair.  I was always paying more than the minimum, but I had never put together a spreadsheet to track purchase + interest.  I wasn’t even keeping up with the amount we were adding!

So, finally, in August I started putting together a nice sheet to track our overall debt and projected payoff for the year.  Once I had it all laid out, I could clearly see what the interest was doing to us.

I was able to transfer around $13k to a combination 0% introductory offers from our bank and Chase Slate.  These both expire at the end of 2015 which I projected to be achieveable.

Another $10k was moved into an unsecured loan from the bank with a low interest rate.  Not ideal, but way better than the rates we were paying and predictable.

By the end of 2014, we had only reduced our overall debt by 2.8%.  It was a step in the right direction, but I feel we can do better.  I do NOT want to spend the next 20 years working on this!

-cb3

(currently feeling angry about getting there yet determined not to let it happen again)

 

About

What is this Canoe Dock?

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Not only is the canoe dock a physical place, it’s also a frame of mind for me.

The place is a small concrete dock located on a lake in East Tennessee.  I got to spend several summers enjoying it during my tenure as a camp counselor.  It’s one of my favorite places on earth.

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The frame of mind derived from this place, for me, is an almost Zen state of being.  It is a sense of well being and rightness.  Worries and stress melt away even amidst the chaos of summer activity.  The tranquility derived from late night swimming under the starts is amazing.

It’s been a long time since I was able to experience that on a daily basis.  Now I work a full-time career, am married with two children, and have all of the bills and stresses one derives from living the typical mid-class American life.

Last year, I began reading several blogs such as Mr Money Mustache, Retire by 40, and Financial Samurai… and I had an epiphany.  I can do better!  I can unburden myself from a lot of the stress and rediscover my Canoe Dock state of being.

The first step is getting control of my finances. This blog will server as a way for me to document the journey, track my goals, and discuss the challenges that we face along the way. I’m a bit A.D.D. as well, so I’m sure I’ll chime in with other interestes as well. Here we go…

-cb3