I've been thinking about some things I want to get accomplished before seriously saving for the hard goals. I think we can do it over the course of 3 paydays.
1. Save enough cash to pay for a handicapped ramp for the back porch. This is a premade steel one that is easily removable so we can take it to our next home. It will cost about $1000.
2. Pay in cash for a driver's ed class for my son. We haven't been able to find the time to teach him to drive and I need him to be able to drive. This will cost $750 (possibly with tax so might be closer to $890 if there is).
3. Buy new shoes for everyone who needs them. That's at least me and DH. DS might need a pair, too. DD is good. Buy jeans for DS who has lost a lot of weight. This is contingent on the stores reopening their changing rooms, because he is the sort who must try pants on as he has a long crotch to waist ratio. This is a line item in the budget, though, under clothing.
4. Save for our September getaway by the sea. This will be as we go along, $200 a month.
Our hard long term goals are:
1. Bump retirement from 5% to 7%. This will compensate for if they have to carry through with stopping the matching due to covid belt-tightening. Will start in July.
2. Save to get the Emergency Fund up to 3 months of income. I know Dave Ramsey says expenses, but I feel safer with income. I don't think he accounts for medical insurance costs if you become unemployed. For this I will need a total of $19,650. We currently have $8821.90 in the EF. We need to come up with $10,828.10. I think we can do this by the end of December, possibly the end of January.
3. Once we have saved 3 months income, bump retirement up to 10%.
4. Simultaneously save for the down payment and 6 months EF. I'd like the ratio to be $1500 a month to the down payment fund and what is left to go to the EF. I am not entirely sure what that amount will be with retirement contributions at 10%.
5. Once the Emergency Fund is at 6 months expenses, bump retirement to 15% and put all remaining funds toward the house down payment fund. Eventually I would like to have saved enough for our house to have a mortgage payment that is only around $1500 a month. That means we will have to save for longer, but I don't want to be stretching every month for $2000 mortgage payment. I want to have a reasonable payment with cushion. We can do $2000, but then we'd have to be tight with the budget and I would like to be a littler bit looser.
6. Save hard core for the down payment. I am playing with the idea of just saving up enough to buy a house outright. It would mean living here a lot longer, but the payoff could be worth it. Not sure how much longer mom is going to live, though, since she is 80. It might be longer than it would take to save up that much money.
If we just save up for a down payment with the idea of a mortgage, I think we will need about $120K for the house and land we want with a reasonable mortgage. That is about six and a half years to save. So all told we are looking at 7 years to get where we want to go. Which really seems like forever. But DH ought to get some raises during that time so maybe not that long. Who knows, though. They are on a wage freeze during covid. He didn't get the raise that should have gone with his promotion and even the merit raise that should come in July won't happen for anyone. That doesn't mean he won't eventually, just not now.
Although MIL does give us money from time to time, so maybe any of that that doesn't go towards medical can also be saved towards our goals and make us achieve them faster. I don't count on that, though.
Viewing the 'Goals' Category
I've been thinking about some things I want to get accomplished before seriously saving for the hard goals. I think we can do it over the course of 3 paydays.
I moved our stimulus payment to the Emergency Fund and also one of the accounts finally posted interest so I am adding that as well.
$4405.64 Balance Forward
+2400.65 Amount Added
$6806.29 New Balance
I am now over the one month of income mark in the EF by $257.05. To reach my mid-term goal of two month's income, I need to save an additional $6292.19. My short term goal is $7500 and I have to save $693.71 to reach that. The next short term goal will be $10K.
Of course, those are all goals, which we can only maintain if DH continues to work. So far he seems pretty safe, but that doesn't mean it will remain so. We are saving as much as we can starting with Friday's paycheck. If DH ends up getting furloughed at some point his employer will continue to pay their portion of medical for two months. But he is pretty vital to keep the company going, so as long as the company doesn't fail I think we will be okay. It really depends on how long this quarantine business lasts.
DH only had to work one week at 32 hours. They are allowing 40 hours this week. So this paycheck will have the hit on it, but that is okay. I've planned for that loss of income.
$5000.00 Balance Forward
-1000.00 Payment Made
$4000.00 New Balance
With the amount of overtime DH is getting, I think we will have this paid off in April, instead of May or June like we had figured at the beginning of the year. He got 15 this week which will be on the next paycheck and will get at least 10 this coming week, maybe 15 again, which will also be on the next paycheck.
I really hope the overtime continues for a while after that, too, because then we can get our three month's of income saved up for. We are about $1600 shy of one month's income. I know some people save for expenses, but I would rather have income. So that is $14,600 we need to save, which I will just round to $15,000.
With 20 hours of overtime per paycheck and keeping our takeout budget under control, we could save $1500 a paycheck, or 10 paychecks until goal. Without it, we could save $1000 a paycheck, or 15 paychecks. Either way we would have it this year, either by August or the end of October. And then we can finally start seriously saving on a down payment for a house, while slowing working towards getting the EF to six month's income.
And DH may get a raise in July. I don't know. When he got his last raise they said he wouldn't get another one before July of 2020, which would be 18 months from his last one. That doesn't mean he will get one, but his boss told him they wouldn't be able to ask the higher ups for one again until then. I am hoping there will be one, since he's really made himself invaluable. His boss says so and so does his boss's boss.
I will be glad when we can move out of here, but it will take a couple years of hard savings, so maybe by the end of 2023 or start of 2024. My eldest sister is going to move in when we move out so mom won't be alone. And so might one of my middle sister's sons. Actually he might move down here for a job and take up residence in the attic, which has two bedrooms and a storage area long before that. It has no heat, but he can use a space heater. The internet doesn't reach up there and it is only wired for 2 prong outlets and not very many, so it is not ideal, but beggar's can't be choosers.
These are my to do lists for the next couple weeks. I will likely get all of the financial ones done this week and hold off on the more physical activities until next week. I am finally able to drive today to go to the doctor. I still have a full head and runny nose and exhaustion, but the worst from having the flu is behind me. I spent a good ten days in bed. That was the worst flu I've ever had and I am behind on everything.
1. Get ready for taxes
--gather my Youtube/Google income for DH
--gather my hobby income for DH
--gather my Thrive income for DH
--gather the interest income for DH
--gather the charitable donations paperwork for DH
2. Medical Fund Bank Account Spreadsheet
--Bring up to Date
--Balance against bank account
--get proper receipts to submit for the orthotics
4. Prepare the March Budget Spreadsheet
5. Reminder second half of vacation payment is due March 2
1. Grocery List
--go through flyers to check sales
--check online for digital coupons
--make meal plan
2. Go through onion storage and throw out any bad ones
3. Go through squash storage and throw out any bad ones
4. Check potatoes for sprouts or bad spots
--throw out bad ones
--set aside sprouted ones for quick use
5. Garage Chest Freezer Inventory
My two main goals for 2019 were to pay down debt and to to lose weight. Unfortunately I yo-yo'd all over the place with my weight and still haven't gotten my act together. But on the debt pay down I excelled. I had planned to pay off $12,000 this year, but ended up paying off $16,000. I exceeded my goal by $4000. This is the first year in a long time that I have felt like I was making serious progress.
My goals for 2020 are:
1. Lose Weight and Go Back to the Pool.
2. Finish paying off the $9000 we owe by June. Sooner if possible.
3. Save $12,000 to the EF from July through December. That will put our EF close to three months of expenses. It will take one more month than I have in 2020 to get it there unless we get a windfall (and MIL has been giving us quite a bit).
4. Up retirement savings to 7% in July. Once the EF is met, I'd like to up it to 10%. There is also the possibility of a raise. When DH got the last one, they told him he wouldn't be up for another one before July 2020, so here's hoping he gets one even if it is just COL.
5. If I hit the EF amount before the end of this year we will be able to start saving up for a house. That will be a long process, though. We ought to be able to save $24K a year once the EF is up to snuff. The way house prices keep rising we need at least $75K for a down payment of 20%, but if we want breathing room in a mortgage payment I would want to double that. So we'd be at this for 6 years, maybe.
Used to be you could buy a house for $350,000 and now it is more like $450,000 to $650,000. This is just in the last five years. I would love to move to a low cost of living southern state once we retire. Just not one with crocodiles, snakes, and scorpions. The warmer weather would be better for my health.
Another option we might consider is to save up and buy a piece of land, then save up and put in a well, then save up again and put in a septic system. Once that is done, we could get a construction loan with the new, improved price for the land as collateral and build the house. We can still get land for about $35K for an acre in some parts of the county that are not too far from where DH works. A well is about $40K and septic is about $30K. Having it ready to go though, will increase the value of all of it from $105,000 to $150,000. Anyway it is something to think about as we get closer.
As per usual, I have come down with something a few days after our visit to the ER, a nasty stomach bug. I am on the way back up, though, so fortunately it isn't going to be some long, drawn out thing. My food is staying down today and my head feels better, and I finally woke up feeling well-rested. My tummy is still a little tender, but I think by tomorrow I will be okay. I am supposed to be beta testing a finance thing for someone, but haven't been quite up to it yet. Maybe tomorrow.
We have five days to go until payday. This will be DH's first paycheck as a permanent employee and will have two weeks on it. I have set up my budget for August with two bi-weekly pay periods instead of weekly pay periods. The first week will have 15 hours of OT on it and the second week will have 6. DH was so tired after spending Thursday night in the ER with DD, so I told him if he was too tired to stick it out, not to. OT is nice, but not at the expense of his health.
From now on he is only authorized to get 10 hours of OT a week. He won't be able to set up the 401K until after he gets his first automatic deposit, so the paycheck on the 24th will start the 401K contributions. We have decided to start them even though we haven't paid off the debt yet. We both feel like we are already too far behind on retirement to wait, even though Dave Ramsey says to wait until the debt is gone. It is messing too much with my security issues not to start it up and DH also wants to do it.
I am having DH run the numbers for me on how much to contribute. We are debating 5% and 7%. 5% is how much the company matches. 7% is the break even point on taxes. I just need to see what the end numbers will be. Then we can make a decision and I can do the final tweaks to the budget. The August budget is going to be weird and not be able to follow the budget template, but from September on it'll be set for the rest of the year.
DH will be getting what amounts to a 12% raise, but it is because our insurance premiums will be so much lower in September. He is not getting an actual raise, although his boss did try and says he will try again in 6 months. It will feel like a raise. Also in 18 months another guy is going to retire and his boss says he wants DH to take over his position which would be a promotion and likely a raise with the increased responsibility.
We will not increase our level of spending, though. All extra money will be put in the 401K and to pay off this last debt. Once the debt is gone, then the debt money will go to an EF of 3 months of expenses. Once we hit 3 months expenses, we will split that portion in half. One half will continue to build the EF until we hit six months of expenses. The other half will go towards a down payment fund for a house.
Once the EF hits six months of expenses, we will adjust our retirement savings to 10% and the remainder will go into the down payment fund. We may be saving for some time as I don't want to have a mortgage of more than $200,000.00. I really would prefer $100,000.00 mortgage, but that is not practical where we live.
If MIL gives us the $13K a year, we will fund a spousal Roth IRA with some of it and the rest will go into either the EF if we are still building it and then the house down payment fund.
I probably should start a sinking fund for a vehicle replacement. Right now our vehicles are in excellent condition. The 2011 Sienna has only just hit 40,000 miles. The 2007 Tacoma has a lot more miles, but is in great repair, so I think we have many years to go. But when something does go, we will want to get something nice, a used car in the $20,000 range or less. I reckon the Sienna will last another 15 years, but the truck might not. With Toyotas, though, as long as you keep them up, they last a very, very long time. Both will need new paint jobs, the truck first, and then eventually the van.
I'd like to take a vacation at some point, too. We haven't been on one in several years. So that should likely be one of our sinking funds as well. Hopefully, we will be able to achieve all of these goals in the next six years or so. I would like to get out of here sooner, but I just don't think that is to be.
_200.00 Medical Fund
_200.00 Grocery Envelope
__50.00 Household Envelope
_441.41 Auto Payments
_100.00 Laptop Fund
__50.00 Car Maintenance Envelope
_600.00 Monster Mom Loan
$1888.36 Total Money Out
I did not budget all of the money out this time as there are a couple of things we need to purchase off of Amazon. I'll be using the debit card there for the first time. I'm not quite sure yet how much we will be spending, so I left plenty of room. After we buy our things, I will allocate what is left to another category.
The Medical Fund is currently sitting at almost $600. I want to get it to $2000 and then I will stop contributing $200 weekly deposits, though when it drops down below $2000 I will start them up again. I have a ways to go before I get there and of course I'm taking out any medical expenses as we go. $2000 is the amount the new deductible will be on the insurance that starts in September, so I'd like it available to us so we don't have to scramble when we start on deductible number three for the year.
$5936.61 Starting Balance
+_100.00 Amount Added
$6036.61 New Balance
Insurance Sinking Fund:
$200.00 Starting Balance
+100.00 Amount Added
$300.00 New Balance
$100.00 Current Balance
My goal for the EF is to try to get it built to $7000 by the end of the year. If I contribute $100 a month, then that will cover $800 of that and then I'll just need to come up with $163.39. Since I bank all my youtube income and my Thrive Life income except the $10 a month it takes to run my website, that should be doable.
For the insurance sinking fund I'd like to contribute $100 a month. I am not sure how much it is going to cost to insure two vehicles. I think it will be more than $100 a month, but the truck will only carry liability and uninsured motorists and we will get a multiple vehicle discount.
We just paid the policy for the van in March, so I'm not sure how much additional we'll need. Once I see what the new policy will be, I can adjust the sinking fund accordingly. We like to save up and pay six months at a time, not pay monthly. Up to now I have been saving $80 a month, but I did fund this account some with some of the tax refund.
I don't know if I will be able to contribute to the college fund by any significant amount. DS knows he is going to have to work a few years to pay for college, but if I can save enough to help at all, I'd like to. I hate the fact that we can't pay for college. Several years ago we could have cash flowed it, but all those years of high taxes and a sucking economy hit us hard. Follow that with the 10 months of unemployment in 2016/2017 and we don't stand a chance with our current income. If DH can pick up a higher wage job than his current one, we still have to spend years rebuilding what we lost.
I won't feel comfortable until we have a $30,000 Emergency Fund and a $80,000 saved for a down payment.
On the writing goal I am at 6160 words so far this week. I have two more days to hit 10,000 words. I'll get that easily the way things are going.
I have met my step goals every day this week. The diet is back under control again.
I haven't posted since the 22nd. A lot has been going on. My son had his wisdom teeth out and it really knocked him for a loop. Everyone had to pick up the slack and it was a lot of slack as that kid does a ton around the place. It cost $1250.20. They gave us a 12% discount since we had no dental insurance.
We finished transferring soil into the garden beds that need it. About 2/3 of the bee balm we transplanted made it. I've got my tomatoes planted now. I've finished my garden plan and have decided I am going to plant bush beans this year instead of pole beans. I've been having trouble with my shoulders, so picking above my head will hurt. By putting them in 2 foot tall raised beds, I can just pull up a chair to pick them instead of kneeling on the ground.
Normally I prefer pole beans because they go a lot longer, but if I plant now, I can get two crops of bush beans in this summer. I went with Provider green beans. They are a high yield bean and they had organic seeds available locally. If I had to order it would have been a toss up between Providers and Contenders, since they have the highest yields. With pole beans I usually do Blue Lake or Kentucky Wonder. Or blue coco for fun. It is a purple string bean that turns green when you cook it. I'm mostly going for yield this year, though, because I need to can a lot.
I am going to grow my zucchini and cucumbers vertically on stakes instead of letting them sprawl all over the place. There is a place in the front yard that gets good sun on the edge of the deck. I just have to keep tying them up as they grow. This gets the plant off the ground, making it less susceptible to powdery mildew. It also allows for something that usually takes up a huge amount of space to be grown in a more compact area.
I'm not sure I'll be able to grow any potatoes this year. The ground is just not prepared for it and it is more work than I can do on my own. Maybe if I grew them in barrels or grow bags. We'll see. We have 3 old water barrels that could be cut in half. But I can buy potatoes fairly cheaply from the no spray garden when it is time to can them, so if I can't plant any, that'll do.
My big goals for the garden are to can enough green beans and tomatoes for the year. Maybe even enough tomatoes for two years, which I've done before. I picked good, local producers this year, so as long as we don't have a cruddy growing season this year (last year's was awful), I should make it just fine with what I planted.
I've been writing. I've written 5000 words in the last two nights, so I think the writer's block is over. It would be nice to get this novel finished. I have a much better idea of where it is going now. It's like a veil has been lifted. I haven't finished a novel in four years, so I am very happy with myself that it seems to suddenly be going so well again.
I know I haven't done any payday updates in a while. I'll start again on Friday. I just don't have the energy to go back and write everything up. No big deal. It's just for my benefit anyway. I doubt anyone is really just itching to see the state of my budget every week! Today is the first no spend day in ages.
Well, I've got a free hour before I need to get back in the garden again, so I am going to work some more on my novel. My goal is to write 10,000 words this week and 45,000 by the end of the month. If I keep up the rate I'm going at that should be easily doable.