Spring Has Sprung

March 24, 2016 cb3 Leave a comment

One of my Favorite Times

This 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.

I 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

During 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.

I’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.

Each 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

Expenses, Lifestyle

We’re Addicted to Convenience

March 21, 2016 cb3 6 Comments

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?

It’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.

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.
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)
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.
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

Expenses, Strategy

Can We Afford It?

March 10, 2016 cb3 2 Comments

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.

I’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:

Do we have cash on hand in the savings (not the emergency fund) to deal with this?
If not, do we have the free cash flow in the next month to absorb the cost of the expense?
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

Expenses, Goals, Personal Finance, Taxes

The Taxes are Done, Dude

March 8, 2016 cb3 6 Comments

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.

We 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

DIY Projects, Expenses, Goals

February 2016 Progress

March 3, 2016 cb3 1 Comment

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.

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