Showing posts with label Budgeting. Show all posts
Showing posts with label Budgeting. Show all posts

Friday, November 1, 2013

Debt Accountability - Our Debt as of November 1, 2013



It's that time again... Time to confess to the world what my family's current debt situation looks like. As you may recall from my posts in August, and September, we have the following debts, and our ultimate goal is to be debt free. Our first step in doing so is to pay off the debts in Group A, which will then allow us to work on an early pay off of the remaining debt in Group B (our mortgage).

Group A:
A Student Loan (Natural maturity of March 1, 2015)
Credit Card 1
Credit Card 2
Home Equity Loan (Natural maturity of June 1, 2017)
Car loan (Natural maturity of May 15, 2016)

Group B:
Land Payment (Paid in full September 2013)
Mortgage (Natural maturity of July 1, 2039)


Unfortunately, I missed posting our progress as of October 1, 2013, but I was a little stressed out when I woke up that morning only to find myself on furlough due to the Federal Government Shutdown.

So, how did we do at reducing our debts in Group A in September and October? Honestly, we didn't do very well at all. I'm quite dismayed comparing November 1st's figures to that of September 1st. I was hoping to have made greater strides at this point.

In August our total debt owed for the accounts in Group A totalled ($24,531.17).

The value of the debts in Group A, as of September 1, 2013 was ($23,557.45)

The value of the debts in Group A, as of November 1, 2013 is ($23,467.43)

We paid down our debts by a severely deficient amount of $90.02 in the past two months. While it is forward progress, it's not nearly as much of a change as I would have like to have seen.

In reviewing our accounts I can see that there were a couple of things that played into the small reduction in our debts over the past two months. In September we took a small family vacation, and that reduced the amount of funds we had that month to put towards or debts. The memories that we made with our children during that weekend out of state are far worth the monetary expense though. October brought forth the furlough, which caused a pinch in our budget prior to being reimbursed for the time that was missed at work. I was fortunate in the fact that we were reimbursed, and it had no affect on the payment of our bills. In October we did a small home improvement project that involved resurfacing our deck, again this reduced the amount of funds we had available to pay down debts; however, it preserved our deck and will hopefully prevent us from having to replace the deck in the next few years.

I'm already anticipating that December and January will have little progress as we head into the holiday season and requisite shopping/gift exchanges.

Monday, September 30, 2013

The Threat of Government Shutdown - What it means to me...



As the minutes tick by today, we come closer and closer to the threat of a Government Shutdown. Nationally, this is a scary possibility with ramifications that spread from coast to coast. Personally, as an employee of the Federal Government, it's a terrifying possibility. Should the Senate and the House not come to an amicable conclusion within the next 13 hours and sign a bill funding Government activity, I'll be placed on immediate and indefinite furlough. My fate is in their hands.

If Government Shutdown does occur, I won't be at work tomorrow, or perhaps even the next day. My return to work rests solely in the hands of Congress. The last Government Shutdown, in 1995, resulted in a 21 day furlough!! I pray, that in the event that the shutdown becomes reality, that it will be for a much shorter term.

In the meantime, I'm in a full blown panic mode. If we're furloughed I won't be paid for those days during shutdown. Even one day of shutdown would have a grave affect on my family. Our expenses would remain the same, and our monthly income would be reduced. Our mortgage would still need to be paid, our daycare contract requires that we pay even if our children are not there, our insurance premiums would still be due, and our real estate taxes don't just disappear because the government is shutdown.

In the immediate future we would be okay. Our pantry is stocked, we have food in the freezer, and thanks to my compulsive need to NEVER run out of household essentials, we could survive for a few weeks without needing to go to the store. However, what happens if the furlough lasts 21 days as it did in 1995? Three full weeks without pay would be detrimental!

I'm keeping my fingers crossed that my fears don't become a reality, that Congress will find a resolution and in the very least sign a Continuing Resolution that will give us level funding until a "real" budget can be passed.

Tuesday, September 3, 2013

Debt Accountability - Our Debt as of September 1, 2013



It's that time again... Time to confess to the world what my family's current debt situation looks like. As you may recall from my post in August, we have the following debts, and our ultimate goal is to be debt free. Our first step in doing so is to pay off the debts in Group A, which will then allow us to work on an early pay off of the remaining debt in Group B (our mortgage).

Group A:
A Student Loan (Natural maturity of March 1, 2015)
Credit Card 1
Credit Card 2
Home Equity Loan (Natural maturity of June 1, 2017)
Car loan (Natural maturity of May 15, 2016)

Group B:
Land Payment (Paid in full this month!)
Mortgage (Natural maturity of July 1, 2039)


We're making the final payment on our land this month, and as of today's payment the loan is PAID IN FULL! WOOHOO!! Excuse me while I celebrate that milestone for a moment! WOOOHOOOO! With that debt paid off, the only remaining debt in Group B is our mortgage, which has a natural maturity of July 1, 2039; however, with the small amount of extra money that we have included in every payment (about $23/month), we've already cut that maturity back to October 1, 2037. Ideally, we'd like to have it paid off well before that time though.

So, how did we do at reducing our debts in Group A last month? Not quite as well as I had hoped, but we still made progress.

In August our total debt owed for the accounts in Group A totalled ($24,531.17).

The value of the debts in Group A, as of September 1, 2013 is ($23,557.45)

We paid down our debts by a meager $973.72, but it's forward progress so I'll take it!

Thursday, August 29, 2013

925 Ideas to Help You Save Money, Get Out of Debt and Retire A Millionaire So You Can Leave Your Mark on the World... - An eBook Review

925 Ideas to Help You Save Money, Get Out of Debt and Retire A Millionaire So You Can Leave Your Mark on the World...

By, Devin D. Thorpe

Amazon Kindle Price: $0.00




This book is large compilation of articles written by Devin D. Thorpe for Familyshare.com. The reviews on Amazon were mixed, some people seemed to love the book, while others seemed to find it useless. Since the book was a free kindle download, I didn't set my expectations high, but I figured for the price I had nothing to lose. After reading through the first few articles, I was impressed with the content of the book. The 177 pages of this book are divided into the following segments:

Your Family
Frugal Living
Your Home is the Centerpiece of Your Financial Future
Your Car is Just Transportation
Your Money
Managing Your Career
Increasing Your Savings
Entrepreneurship
Getting Out of Debt
Saving for College
Planning for Your Ideal Retirement
Investing Tips to Get the Most Out of Your Money
Leave Your Mark on the World


Each segment of the book is comprised of multiple articles relating to that segment. Some of the articles were pertinent to my life, and some weren't. The titles of the articles are clear and indicative of what you will fine within the text, and the content is concisely written. In many cases, the articles follow a progression, for example there are a series of articles written regarding saving for retirement; these articles are broken down by the age of the reader. If you're a 30-something, then the article about saving for retirement in your 30's is suiting, but you may not be interested in the article about saving for retirement in your 50's.

The author offers sound advice on a broad spectrum of personal finance topics. While I don't believe that you'll become a millionaire simply by reading the articles in this book, I do believe that there is helpful information in this book regardless of what your current financial situation is. I definitely recommend reading through this, and seeing what you can learn from the articles. I'm quite certain that there will be at least something of value in here for everyone, and since it's free you really have nothing to lose by checking it out!


Friday, August 23, 2013

Flexible Spending Accounts


Does your employer offer Flexible Spending Accounts (FSA’s)?  If they do, are you participating?  If you aren’t you should!  Let me explain what they are, and why they are beneficial:

What is a Flexible Spending Account? 
An FSA is an employer sponsored account that allows you to be reimbursed for qualified expenses on a pre-tax basis.

What are the different types of Flexible Spending Accounts?
FSA’s typically fall into two categories: Health Spending Accounts, and Dependent Care Spending Accounts. 

How do Flexible Spending Accounts work?
Signing up:  Enrollment in FSA’s is limited to the beginning of each calendar year.  Prior to the start of the calendar year, there is a period of open enrollment, during which time you can sign up to start your FSA.  Aside from this annual open enrollment period, you can only start an FSA if you have experienced a qualifying life event (such as marriage, birth of a child, divorce, death of a spouse, etc).

At the time of enrollment, you determine the annual amount of funds that you want held from your wages pre-tax to be applied to your FSA (For Health FSA’s the maximum limit is currently $2,500/year, and for Dependent Care FSA’s the maximum limit is currently $5,000/year).  The amount of the allocation that you choose will then be divided by your pay frequency (if you are paid weekly your allocation will be divided by 52,  if you are paid bi-weekly your allocation will be divided by 26, etc.).  This amount will then be deducted from your wages pre-tax, and applied to your FSA.

When you have a qualifying expense, you then submit a claim and documentation that the claim was paid out of pocket, and you are reimbursed from your FSA.

What expenses are considered qualifying expenses?
Dependent Care FSA:  Any expense incurred for the care of a dependent child under the age of 13, or a child of any age with a medical or mental challenge that causes them to be incapable of self-care, or care of a dependent adult in adult daycare.  In order to be considered a qualifying expense, this care must enable you to work, and the person receiving the care must be claimed as a dependent on your tax returns.
Examples: Daycare for child(ren), adult daycare, in home care of dependent

Health FSA:  Any medical expense that you incur that is not covered by your health insurance, and is an acceptable medical expense as defined by the Internal Revenue Service, may be counted.
Examples: Co-pays paid to doctors, dentists, surgeons, hospital fees, hearing aids, wheelchairs, prescription drugs (for a more detailed list, please see the IRS link above)

How do you know how much money to put into your FSA?
This is an important step to think about, because FSA’s operate on a “Use it, or Lose it” methodology.  If you contribute more to your FSA than you use, any remaining funds are lost.  It’s important to carefully consider your needs for the upcoming year before deciding on your allotment.
To determine the amount that you want to allocate to your FSA, make a list of all expected allowable deductions for you and your dependents as well as the costs associated with each.  Use this to gauge how much money you want to contribute to your FSA.  Always err on the side of caution, and if in doubt go with a lower amount.  You don’t want to lose funds by taking advantage of this program.
Dependent Care Example:  If you pay $100/week for your 4-year-old to attend daycare while you work, you would calculate out your annual expense as $100x52, or $5,200.  In this case you would want to take the full $5,000 allotment that you are allowed for a Dependent Care FSA.
However, if your daycare expense is subject to change because your child will be attending school, you’ll want to take that into account, and reduce your allocation accordingly.
Health Example:  If you pay $50/month in copays for prescription drugs, you would calculate your annual expense as $50x12, or $600.  You may know that you’ll also have other expenses for the year as well, like prescription glasses for your child, or dental visits that aren’t covered by your insurance.  You would then estimate those expenses and add them to your known expenses, and use that as a basis when deciding how much to allocate to your Health FSA.
How do you save money by having these expenses paid via FSA?
Let’s say that you have a household income of $50,000, and you pay $5,000 for daycare.  Of your earned $50,000, 25% [$12,500] goes to tax obligation (Federal Income Tax, Social Security, and State and Local Income Tax).  That brings your earnings down to $37,500, now subtract the $5,000 that you  pay for daycare, and you’re now at $32,500.
Using the same numbers, and allocating $5,000 to a Dependent Care FSA.  Your income is reduced to $45,000 by allocating $5,000 pre-tax to the FSA, your 25% tax allocation is now $11,250.  This leaves you with $33,750.  By allocating to an FSA, you saved $1,250!!

Now, when the open enrollment period for FSA’s comes around this fall, make sure you take advantage, and remember to err on the conservative side when you are estimating how much you want to allocate.  It doesn’t pay to lose money by over allocating.

Thursday, August 1, 2013

Debt Accountability - Our Debt as of August 1, 2013



What better way to force myself to face our debt head on, than to expose my debts to the world? So, now you, my friends, and anyone who may have stumbled upon this blog will know what our current debt situation looks like, and ideally will be able to track the progress we make in paying off our debts. At this point, we have the following debts that we are working to payoff:

Group A:
A Student Loan
Credit Card 1
Credit Card 2
Home Equity Loan
Car loan


Group B:
Land Payment (Will be paid in full in September 2013)
Mortgage

For this exercise, I'll only be focusing on our debts in Group A. Our goal is to payoff our smaller debts in Group A, after which we'll then focus on reducing the debts in Group B. Since our land payment will be paid in full in September, the only item that will be remaining in Group B will be our mortgage. Our mortgage is set up as an automatic payment, and we've already included additional funds towards that every month. As other debts are paid off, we'd like to increase the amount of extra payments that we are making towards our mortgage.

Confession time... The value of the debts in Group A, as of August 1, 2013 is ($24,531.17)

Due to the fact that the credit cards have the highest interest rates of any of the debts listed in Group A, we'll be focusing on paying those off first while making the regular payments on the remaining debts in the list.

Thursday, July 18, 2013

How a Call to the Phone Company Saved Me Money!

Perhaps you've read other resources that recommend contacting your utility companies in an effort to get lower rates?  Have you tried it? 
I had previously tried calling our phone company (through which we have a bundled phone and internet service plan), and after speaking with a rather unfriendly customer service representative about my account, I was told that there was nothing she could do about my current rates.  Feeling defeated, I hung up the phone and assumed that the person that I had spoken to was correct.

When I received my bill last month, I opened it with dread, knowing what the amount of the bill would be.  Disheartened, I turned to the last page of my phone bill, and immediately called their customer service line.  This time my call was answered by a very friendly and helpful customer service representative who was more than happy to review my account with me, and offer me options to reduce my bill.

By making this one simple call, I was able to reduce my phone/internet bill by $26/month!!

It doesn't always work, but it doesn't hurt to try, and this time it paid off.  I'm quite happy that I attempted to negotiate a lower rate after my first failed attempt.  That one phone call, and five minutes of my time will result in an annual savings of $312 for my family!

Tuesday, July 2, 2013

Online Budgeting with Mint.com

Online budgeting has never been easier!!



Have you heard of Mint.com?  If you haven't, I highly recommend that you try it out, and here's why:

What is Mint.com?
Mint.com is an online budgeting site, but it's more than that... Mint.com gives you a realtime look at your finances via a secure internet connection.  It allows you to set up your budget and your goals, tracks your spending, tracks your goal progress, alerts you when payments are due, and gives you up to the minute accounting of your net worth!  All of this in one little website!!

How does it work?
While the setup is a little bit daunting, it's well worth the effort.  You provide Mint.com with your financial information (please note, this includes usernames and passwords for your various accounts), and it compiles all of that information in one place.  It shows you the balances of all of your cash accounts, and compares that to the balances owed on your loans, credit cards, and other obligations.  You can also input your street address, and it will calculate the value of your home and include that in your net worth. 

What are some of the benefits?
Mint.com auto-categorizes your spending based on transactions.  If you use your debit card and make a purchase of $100 at a local grocery store, Mint.com automatically recognizes the grocery store chain, and deducts that $100 from your grocery budget.  If Mint.com doesn't know how to categorize a transaction it alerts you so that you can update that information, allowing more accurate reporting.

Aside from alerting you when a transaction needs categorizing, Mint.com will also alert you when the balance in a checking or savings account gets low, or if you have an upcoming bill due.  As well, Mint.com will offer you savings tips and ideas based on fees that you pay on your current accounts.  Ultimately, bill paying, and account choices are yours to make, but Mint.com makes it easier for you to see what your options are.

Mint.com Mobile
Not only can you access Mint.com via computer, but it is also available as an app for both Android and iPhone!  You can have access to all of your account balances at your fingertips at all times.

You no longer have an excuse for forgetting when bills are due, or inadvertantly overdrawing your checking account, Mint.com has your back on these things!  The greater advantage of Mint.com; it's completely free!  The longer you use the system, the more intuitive it becomes.  It begins to recognize your spending patterns, and allocates the transactions to the appropriate categories with more accuracy.  It's a powerful site, and a wonderful tool for keeping track of you spending and finances!