Saturday, January 24, 2015

2014 – A Year in Review

Ready for a little snooping into our current finances? We’re kicking off 2015 with a full disclosure on how we did last year. We made some good moves in 2014, but there were a few things that never came to fruition. Budgets are always a work in progress and we feel we are doing a decent job with our funds. The blog was pretty quiet this past year, so here’s a rundown of how we put our money to use. 

Major Promotions

The biggest news was that Mike got promoted this summer! He went from a Program Coordinator to a Program Director, a big step that boosted him from an hourly wage to a salaried position. This utterly changed our finances as he received what amounted to a $10,000 annual increase. The promotion also cemented him with a career path in human services for intellectual disabilities. Even beyond his current company, there are many opportunities at the city, county, and state level available to him, much less the entire country if we felt like moving (which we decidedly do not). After so many years of being unemployed and transitioning out of the military, it is amazing to finally see Mike have a rewarding job that is completely in line with his skills and personality.

Small Raises 

No title upgrades on my end, but I did receive a 4% raise in October. Dare I complain about an extra $80 a month? No, but it wasn’t enough to alter anything really. Just a little extra dough to satisfy groceries and gas.

Cars Paid in Full 

We killed off the Mazda loan!!! Trust me, that thing would NOT die meekly. We threw an extra $2,000 on it in 2013 and were confident we could take out the remaining balance in the first quarter of 2014. What a joke! We had so many car repairs last year that we never put an extra cent on that damn loan. We’ve had this bill since 2011 and have been making payments of $203 a month (original balance $10,000, interest rate 3.49%). We just let the autopayments run their course and the last one came out in November. 

Student Loan Progress  

It’s no secret we have massive student loans. My three loans have been active since I graduated in 2008, but progress has been slow and depressing. 2014 was the first year that we started putting extra on those suckers. Rather than increase monthly payments, I dumped extra money into a savings amount. Why? So I could plunk down one massive payment at the end of the year, having collected interest on it, and get the psychological satisfaction of sticking it to the loan companies. 

I tried to do that 52-week challenge (the one where you put $1 in savings at Week One and work your way up to $52 at Week 52), but I hated it. It would work nicely if we got paid weekly, but it was awkward with our bimonthly checks. I also didn’t like how the amount varied each time. I stopped a few months into this strategy and reassessed – what was it that I really wanted to accomplish in 12 months? The answer was to have $1,000 to put on one of my loans. So I did some quick math and determined that equaled $40 every paycheck. This was much easier to slide over every payday and it was rewarding to see the balance increase so quickly. 


We were also in a position – for the first time EVER – to move one of my teaching paychecks entirely to this account (I get paid $1550 per class after taxes). That income is always a bonus but not dependable as I’m never guaranteed to have more classes (yay adjuncting). In the past, we’ve always used any teaching income as an unexpected windfall, filling up holes that our regular income couldn’t satisfy. With the new safety net of Mike’s promotion, we could “spare” those monies for debt reduction. It is supremely satisfying to be able to take income I earn because I have a Masters and put it on the debt that I had to take out to get the Masters in the first place. We had hoped to do this years ago (I’ve been able to teach college for over 6 years now), but such is life and bad economies.

So, with the boost of the one teaching paycheck and the steadfast monthly savings, I plunked down $2,200 on my biggest loan (which also has the highest interest rate at 6.8%). It only took that loan from $22,000 to $20,000, but it felt SO GOOD. It also kicked my monthly payment down from $165 to $105, which I’m ignoring, of course, and will continue to pay the $165.

Saving for a House Down Payment 

We have been renting since 2006 and I don’t want to think about how much we’ve shelled out in almost a decade. The fact is and remains – our monthly rent could satisfy a mortgage, but not the yearly maintenance that a house requires. Most advice articles say to budget 3-4% of your home’s worth for repairs. Even on a modest house in Iowa of $100,000, that’s $4,000 you need in case the basement floods or the furnace breaks. That’s the part, much less the time needed for home ownership, that we don’t feel we can take on. We’ve also never had the extra funds to set aside from a down payment. Most banks want anywhere from 10% to 20%, which is definitely out of reach based on our yearly income and debt obligations. But we also don’t want to be in a position down the road where we are ready for a house but don’t have a down payment. Even with a VA loan, which doesn’t require a down payment, it’s good to cut any amount off of your loan total. 

We decided that even if it takes us another 5 years to be ready for a home, we want to have a down payment ready to go. We ended up taking the same approach as the student loans and have been reserving $40 a paycheck. Mike also got a little bonus near the holidays so we moved that over too. After 12 months, we have just over $1,500 hanging out. A good foundation to build on.

Healthcare Decisions and the VA

You might know that the VA has been a wreck for some time and recently went through some sweeping reforms. It was so bad that Mike hadn’t been seen for TWO YEARS. His health plan through work is so awful that we didn’t consider it for a moment, but we had begun to seriously talk about adding him to my plan just so he could get some basic care. This was one of the reasons we were trying to work so hard on the Mazda loan, so we could free up that $200 to cover the switch to a family plan. But miraculously, the VA got their shit together, got Mike in for a checkup, and has been ordering a slew of needed tests. All at no cost. As is fucking promised. For right now, we’ve suspended the idea of adding him to my plan as he’s getting the care he earned.

Retirement Savings Never Happened

We are keenly aware that our greatest financial shortcoming is no retirement savings. I hate it but feel like there’s very little we can do about it right now. My company has virtually no match for a 401K and Mike’s is fairly laughable. Despite dismal options, I resolved that we would remedy this situation by my 30th birthday. You know, start a new decade on the right financial foot. Well, April came and went and it didn’t happen. I pushed back the deadline to Mike’s birthday in July and that also passed. Then I waited to see if my raise in October could help out. But nothing in 2014, even Mike’s promotion, made us feel confident about dedicating a portion of our income to retirement. 

I know, we were saving up a total of $160 a month for student loans and a house down payment – we really didn’t have extra to spare? Extra wasn’t and isn’t the problem. If something comes up, I can suspend those savings goals at any time. When you start those 401K contributions, that’s it, there’s no saying “not this month.” You don’t see that money until 65. 

But honestly, it’s not numbers – it’s psychological. I just can’t trust to let go of my money like that and I have a hard time seeing investing as anything but a form of gambling. I know these attitudes are hurting us in the long run and I’m looking into ways to resolve this before we turn into an example of what not to do. I am seeing if my company’s investment firm offers classes or if I can sit down with an advisor who will give me a 101 overview. There are always books at the library, but I’m not so confident this is something I can teach myself with no foundation at all.

Good Things on the Horizon

One of the things I’m proud of is that Mike and I talk about finances each month. I may go in and pay the bills, but we sit down together and go over those credits and withdrawals. We also do this at the end of each year, mainly with student loans. Glasses of wine were definitely had after this last analysis (Mike’s student loan is now active and we will have four payments totaling $750 each month, deep breaths), but we’re still charging ahead with reducing them as much as possible. Can’t wait to share our other goals and strategies for 2015!

What was your biggest financial positive in 2014? 

Saturday, October 4, 2014

Financial Stress and Surprises

Why is it that fall surprises me each year? There's always a part of me that's sad the warmth and sunshine of summer is diminishing and gloves, hats, and scarves must reluctantly be pulled from the depths of the closet. Mike and I succumbed to watching a movie last night wrapped in a blanket (which the cats were all in favor of). The weather forecast even has the dreaded F word in it this weekend - flurries.

This year has been nuts on our financial front. Let me attempt to recap months of what we've been up to!

2013 Progress 

I never gave a summary for last year, but we called it The Year of the Car. We had my Mazda 6 and our 1999 Ford F150 truck. Given its age and gas mileage, we wanted to replace the truck and began saving to buy a used vehicle. Mike got a promotion last summer from a floater to a program coordinator, so one of his paychecks satisfied rent, the other went into savings for the truck replacement. We were shooting for the end of the year - Christmas basically - to save up enough. We were aiming for $6,000-8,000 so we weren't buying a junker we'd have to upgrade in only a few years.
Clearly photos stolen off the internet and not our actual cars, but these are the models
Well, it turned out a coworker was selling her Subaru that summer for almost EXACTLY what we already had in savings. Mike grew up with Subarus and I learned all sorts of things about brand loyalty, lol. I had reservations about buying an older car (2001), but it was in good shape and the previous owners had taken good care of it. Mike may also have pulled a Puss-in-Boots and given me a pleading look ... We plunked down $3,800 for it, immediately spent $800 replacing the timing belt (which we knew going into the purchase) and the water pump.
Add some rust on the rear panels and this is what we've got
Having unexpectedly bought a car ahead of schedule, we had to revisit our savings goals. We decided the Mazda loan, which is a monthly payment of $200, needed to be squashed. We continued saving Mike's checks as before and were able to put $2,500 on the loan at Christmas. That effort cut the remaining balance in half - totally felt awesome!

January - August 2014 

We had such nice goals laid out for this year (looks wistful). With about $2,000 left on the Mazda loan, we figured we could kill it off within a few months. Hahaha ....  

First there was the vet visit in January. We took the cats in for their routine appointment and found both of them needed dental work. $750 out. But the cats are getting older (they're 8 this month!) and we hadn't had any big bills in our entire time of having them, aside from the initial neuter and front declaw.

As most of you experienced, we had a super bad winter. Once the snow melted from the cars, we were flabbergasted to find a HUGE crack in the Subaru windshield at the very bottom near the heating element - it ran almost the whole length of the windshield! Complete replacement, no insurance help - $300

That was followed by taxes. We owed $300 and it was about $200 to file at H&R Block.  Pffft.

I also needed a new bike. I was hoping to make my old one work, particularly with having lost so much weight and being stronger. Alas, my cruiser model was cumbersome and sucked all of the joy out of biking. New hybrid bike (after discount for trade-in) - $300.

Well past having bought the Subaru, we still needed to sell the truck. To remedy a check engine light (didn't want to scare off potential buyers), we took it into Firestone (never again). They "repaired" a hose and did an oil change - $300 and a block later, the check engine light turned back on. I should have turned around right then and there and make them fix it for free ...

Only a few weeks later, we took the Mazda in for an oil change (to a local shop with mechanics we trust). Because they're awesome, they told us the tires were going bald. Clearly Mike and I have been too busy to deal with car maintenance, which left both of feeling quite bashful. Upgraded from summar performance to touring tires so the damn thing will actually drive in the snow - $525 for four tires. 

At the beginning of the year, I unexpectedly won a trip from my company for our version of employee of the year. It was a very generous package where I got two plane tickets, two nights in a hotel, and an extra day of vacation. We chose Vegas and scheduled the trip for May so we had time to save up. I meticulously planned out everything and budgeted $800 for our share of food and entertainment. I even allotted $5 a piece to put in the slot machines so we could say we gambled, lol.$HomepageHeroImage$&crop=12,1039,4938,1682&anchor=2481,1880
We stayed at the Mandarin Oriental, which is the middle building with the fan on top
It was almost perfect except that I had been waffling on getting show tickets, the only reason being that they weren't in the budget and I was getting worried about how much we were spending in the first place. We weren't expecting to take a trip on this scale this year so it hadn't originally been in the plans to devote this much on vacation fun. But I eventually caved in and bought discount Cirque du Soleil tickets for $200 - best decision ever! It was breathtaking and magical and everything people rave about. Trip total: $1,000.


Later in the summer, Ajax, whose interest in human food never wanes, decided to vomit 12 times in an hour. Rushed him off to the vet and after much testing, determined he probably ate something off the floor and got sick. But between x-rays, fluids, antibiotics, and the exam, that set us back $400. We love our cats, but we sweep our kitchen now a lot more.

In that six-month period, we put ZERO extra money on the Mazda loan. Sigh ...

Good news, we were able to pay for all of those unexpected expenses largely out of pocket. Sure, we put some bills on the credit card a few days ahead of payday and then immediately took care of the charges, but none of these required us to go into debt.  We tried to keep this in mind and be thankful about our financial situation rather than disappointed we set what seemed like a reasonable goal and were never able to work on it.

August 2014 

Midpoint of the year and if our finances hadn't been turbulent enough, Mike got a significant promotion at work. He had only been a program coordinator for a year, so we weren't thinking about the next level quite yet. But a position for a program director opened, he was volun-told to apply for it, and got it! It was whirlwind, we had many reservations, we tried our best to not get excited about the implications, and then had to shock ourselves into reality when Mike landed a salaried position.

What was his pay raise, might you wonder? $10,000.

Ok, that's a projection, because it's oddly hard to compare your hourly rate (which includes overtime) to an annual salary. What we know is that his typical hourly check without overtime averaged $850 (so around $1700 a month). After his raise, a single pay period is a static $1,200.  \That's about a 30% increase in funds.

It makes our heads spin. Seriously. The promotion happened in the middle of August, so September was the first month we've been at this new income level. We're just trying to get a feel for it before we make concrete goals.

For example, our bad car luck has continued. We were going to gleefully use Mike's first check to kill off that resilient Mazda loan. But we had to first take in the Subaru for a check engine light. $750 later, we got the oxygen sensors replaced and new CV boots, which resulted in an alignment on top of that. And we're told our brakes have 10% and 25% left on them, meaning we need to take care of those before winter driving conditions are here. 

Looking Ahead

Even though I'm all for taking openly about finances, our new situation makes me a little self-conscious. I don't want anyone to think we're all of sudden rich or swimming in a ton of disposable income. 

We have some serious financial deficiencies we need to remedy with Mike's income:
  • Neither of us has retirement savings started. I know, not good, keenly aware of that. I made a vow to myself that by the time I turned 30, I would have that figured out. Well, I turned 30 in April, Mike turned 31 this summer, and time is ticking.
  • Mike needs to be on my health insurance. He has access to the VA, but you've seen the headlines and they won't see him for anything but near death. He deserves preventive care and since the VA can't deliver at this time, we need to do that through my private plan. While he's already on my vision and dental, he's overdue for both. New glasses and hopefully just a cleaning need to be scheduled stat.
  • The damn Mazda loan. As of today, October 4, the balance is $297.42. Seriously, so frickin' close!!!!!! 
  • Mike's student loan is currently in deferment. Now that he has a regular schedule (no evenings!), he can look into resuming his schooling. But in case he doesn't or there's a complication, that loan will come into play in December. Its payment would be $250 a month (prior to salary adjusted payments, which we haven't explored yet). It was one of the reasons we were in such a rush to take care of the Mazda loan, as prior to the promotion, having an additional $250 monthly payment would have really hurt us.
We have some big discussions ahead of us about making sure we remain on solid footing. In addition to retirement planning and healthcare, our student loan debt situation is a big drain on our budget (over $400 a month for mine, not including the one Mike has in deferment). We also have a (loose) 5-year goal of buying a home, which means saving for a down payment. And sometime in the future, there will be a point where our cars need to be replaced again. Hopefully not in the next 5-7 years, but you really never know.

Having spent so many years with financial insecurity, we take NOTHING for granted and never want to become compliant about our money. If one of us got laid off tomorrow, we would be in a scary place, just as you would. The best we can do is keep a tight eye on our budget, be aggressive with debt, and minimize unplanned expenses. 

Sunday, April 13, 2014

A 30th Birthday Weekend Getaway

Why would anyone be sad about leaving their 20s behind?!

This is the question I asked myself as I turned 30 last week. While I haven't seen a notable difference in the first days of this new decade, I am more than ecstatic to be another year older and wiser.

To be fair, there were a lot of good things that happened in my 20s. I had a ball in college, became friends with people I consider my family and are still an active part of my life, I earned two degrees, I started teaching college, we got married, I got a new job, we moved to a city that we profoundly love, we became DINKS for the first time, and Mike and I went to Jamaica twice, among numerous other adventures around the country.

You know what else happened? Mike was stationed overseas for three of the last ten years (yay long-distance relationships ... ), we had the longest engagement in the history of mankind (and even a patch when we weren't together at all), we struggled with finances, we struggled with career decisions, we had crappy cars that broke down, we lived in even crappier places, we acquired large sums of student loan and credit card debt, I had health problems for years on end, and Mike had a tough run without a job for a long time (being SINKS sucks).

Who would be tearful about saying sayonara to any of that?

Not me. Like the proper old fogies we are, we celebrated my birthday tucked away in a cabin alongside the Mississippi. In peace and quiet. And flippin' 40-degree temperatures and a few stray snowflakes. In April.

Country road along the Yellow River
I never knew I had a winter birthday (though my mom says it snowed when I was born), but we preserved with my plan to hike most of the weekend. We made our way two hours north to the booming metropolis of McGregor and Marquette, Iowa, with Prairie du Chien right across the river in Wisconsin. I love this area and my heart belongs to the Mississippi. I was hoping the grass would have at least turned green, but alas, spring is quite tardy in Iowa this year. We came here in October and it was much warmer then!

The Natural Gait

We stayed at a place called The Natural Gait. Nestled into the hills along the Yellow River, they offer cabins and campgrounds. Their main business is the Ion Exchange, which grows native wildflowers and seeds. We've yet to be on their grounds when everything is in bloom, but they literally have acres of prairie!

We stayed in their smallest retreat, the Kouple's Kabin. It's perfect for two people and best of all, it has a kitchen! With all of my food issues, traveling is a stressful proposition if I have to rely on restaurants and other people's good intention for meals. I've found that renting a place where I can cook my own food GREATLY eases my mind.

These were from this fall, but you get the idea!
We explored a little more of our host grounds this time around. They have an "Indian Cave" at the top of one of their bluffs, which I'm told they hold music concerts in during the summer. We pulled ourselves up the side with the assistance of a rope while gingerly stepping around deer poops. Totally worth the effort to see the river valley and watch three hawks gliding in the wind.

Spot the bird of prey
Later in the evening, we walked along the lane you see below and listened to the frogs croaking, saw a herd of deer grazing, made friends with two farm cats, gave some horses a few scratches, heard a woodpecker drilling into a tree, and even saw the red twinkle of Mars rising. Love being able to properly see the stars!

Pike's Peak / Point Ann

Due to the lack of greenage, we skipped going to Effigy Mounds. They were closed this fall when we went because of the government shutdown ... one of these days we'll make it ... So we opted for Pike's Peak instead. You really need to check out this state park if you haven't! There are tons of trails, camping if you are inclined, great views of the Mississippi, a few Native American Mounds, and even waterfalls.

We explored the Point Ann trail, which starts at the base of McGregor and takes you to the top of the bluff (500 feet up). So glad we packed sweaters and hats! You get quite the hike with the incline of this path, but I liked the extra challenge. Lovely panorama too.

Vacation Meals

Normally I'm quite frugal with our groceries, but when we go on a getaway like this, I "allow" myself to make upgrades. Like getting a brand of local milk, a block of whatever fancy cheese catches my eye, a more expensive brand of chocolate, and organic chicken. I spent $70 on food purchases, but that got us two dinners, two lunches, two breakfasts, plus snacks and treats. Certainly better than eating out and much safer for me!

One dinner consisted of roasted bacon-wrapped turkey fillets (courtesy of the HyVee meat case) sprinkled with Penzy's Northwood Fire seasoning. Paired with a variation on this roasted potatoes recipe. I seriously make these once a week! Used a jalapeno bbq rub and jalapeno havarti (the original is tasty on its own).

The other was an adaption of this chicken and zucchini dish. I make this with herbes de province, all lemon juice instead of broth, yellow squash, and chicken chunks. Boursin cheese has such an amazing flavor (drool). The picture doesn't make it look too appetizing, but trust me, this is in our regular rotation! Paired with sauteed apples in pomegranate juice.

The Yellow River

The high point of our trip was walking down a county lane along the Yellow River - we simply had to walk out our front door. It was a perfect Sunday morning walk, the temperature flirted with being 60 degrees, and the song birds were chipper.

Costs and Benefits

Since I haven't posted much in the way of finances lately, let's talk about costs. First of all, we have a savings account dedicated to travel. Sometimes it's filled sporadically with $20 here and there. Sometime it's filled with a mission when we know and are planning for an outing. Occasionally one of us comes into a bonus situation and we immediately declare it "fun money" and set it aside.

End of story - you should budget for vacations. Particularly if your life is a little more bearable when there's a retreat scheduled on the calendar. Everyone needs a trip they can look forward to and not worry about paying for.

This was a pretty minimal vacation, considering that our main entertainment - hiking - was totally free. We even visited several antique shops and came out empty handed. Not so much with Eagles Landing Winery - have to support the local economy :)

Cabin rent (two nights + tax)   $256.80 
Food                                       $68.73
Gas                                        $51.25
Winery (two bottles)                $22.47

It's still a little weird to think that it cost us $400 to escape for 2.5 days. I almost feel like I have to justify it.


What's your ideal vacation?