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Posts tagged with: saving for a house

Ashley’s February 2016 Budget Update

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There’ve been some changes to the ol’ budget this past month. Check out what we spent and saved in February:

 

 

Place Amount Spent
Rent 1200
Down Payment Savings 2155
Electricity 283
Water 61
Natural gas 163
Cell Phones (2 lines) 89
Cable/Internet 97
Car Insurance (now comes out of rainy day funds)
Trash 35
Preschool 1163
Gift-Giving 381
Personal Maintenance 8
Restaurants 175
Entertainment 147
Groceries 695
Gasoline 74
Household Goods 68
Clothing 36
Postage 15
Rainy Day Savings 3175 (minus deductions, see below)
Savings Goals 775 (minus deductions, see below)
Debt Payments 1261
Total Budgeted $12,056

 

Comments:

Down Payment Savings ($2155): Notice that I created a new account called “Down Payment Savings.” The goal is to get to $10,000 by summer time. We’re planning to start house-hunting around May, with hopes of closing by August (our current lease is up in August, though we can go month-to-month if needed). This savings goal will heavily impact the first half of our year’s budgets since we need to save heavily at the beginning of the year.

Electricity ($283): I posted previously about our outrageous electric bill (our gas bill was high, too). Fortunately, this has gone down. I’ve already gotten the bill for March and its over a hundred dollars than February’s bill. I discussed in my post possible reasons for the sky-high bill. I took active measures to correct those issues and it looks like it paid off big-time!

Car Insurance ($0):  After this month, I’ll be removing this line item from our budget. I wrote earlier about how I changed our insurance to be paid in full for 6-month chunks of time so we could save some big money. For this budget update I wanted to just remind readers of this budget change. Moving forward, I’ll be setting money aside monthly for car insurance as part of our “annual fees” rainy day savings (part of our Capital One 360 savings account).

Gift-Giving ($381): This number is really deceiving. It does include 3 birthdays and 1 house-warming gift (for a total of $181 spent on gifts), but the other $200 is actually a charitable donation I made so I could get Arizona’s tax credit. Every year since I’ve started blogging we’ve been making similar donations (this donation was for a school, but we also donate to a children’s nonprofit organization we support). The donations cover our state income tax liability and it’s great because we get to support these organizations we love. It’s a win-win. As a side-note, I’m very curious to see what our tax liability might be for 2015. Last year we ended up owing big time! This year I was better about making realistic sized estimated tax payments, plus my new full-time job takes taxes out of my check. So I’m hoping we’ll end up breaking even, but we’ll have to wait and see.

Personal Maintenance ($8): This is just for a box of hair dye. Operation cut/color-my-own-hair is still going strong. In full disclosure, though, I’m planning to get a professional cut/color prior to cruise 2016 (which will come from my cruise savings).

Entertainment ($147): Part of this ($65) was from renewing our family’s membership to the zoo. I struggled with that decision for a bit because we don’t go nearly as often as we used to now that I’m working full-time (we used to go nearly every week!). But I did the math and realized that we’d literally only have to go three times to make the cost worthwhile (without membership it would cost us $28 per visit). We still go about once per month, so I opted to go ahead and renew. The rest of the spending was from a date that hubs and I went on. As promised, hubs and I are planning to do about one date per month this year (in the past 2 years we rarely ever had date nights). So expect this category to be a bit higher this year in compared to previous years.

Groceries ($695):  I’ve consistently over-spent in this category every single month since I started working full-time. Our old grocery budget (before full-time job) was $500/month. When I started working I initially increased the budget to $600/month. I’ve struggled hard to try to make that cut-off, but to no avail. I attribute it to buying more prepared foods and not cooking fully from scratch as often. But, honestly, after 7 months now of battling this budget category I think it might be time to admit that I just can’t hit the $600-mark. I still don’t want to be spending as much as I did this month on groceries, but I may increase my budget to $650. It’s a simple time management issue. I’m working on it, but I’m not perfect. Sometimes I’ve gotta buy a rotisserie chicken from the grocery store for dinner, you know? That’s just how it goes.

Household Goods ($68): This includes laundry soap, toilet paper, and some new flower pots and soil. I should post a picture of my chive plant soon. It’s seriously out-of-control! The biggest I’ve ever seen!!!

Rainy Day Savings ($3175): I’d deposited $3175 into my various rainy day funds (though some money was also withdrawn from these accounts.) See below:

  • 3-6 Month EF: $1,000. My goal is to get to $5,000 for now (about 1 month of expenses). Eventually I’ll want to raise it up further, but that’s it for now.
  • Car Repairs fund: $400 (though I withdrew $195 for a new tire and will withdraw the other $200 soon to repair the weird car flap thing that broke on my car the week after I paid it off).
  • Birthdays: $50
  • Health: $425 (though I withdrew $74 for a doctor’s visit and prescription after my kids got pink eye. I was able to save money because I only paid for one doctor’s trip and one prescription, but it was enough for both kids. Our pediatrician is awesome this way because she’ll often look at both kids, even if I’m only there for one of the kids).
  • Annual Fees: $1000 (though I withdrew $918 to account for 6-months of car insurance)
  • Pet Expenses: $250
  • Girls’ College Savings: $50

Savings Goals ($775): $775 was deposited but there were also withdrawals. See below:

  • Savings for 2015 Roth IRA: $275
  • Cruise 2016: $500. I also withdrew $1276 from my cruise fund to make our final cruise payment and buy a couple cruise-related items (e.g., a snorkel set and beach stuff). I’ve got a post that talks more about how much money is still leftover and what I plan to do with it, planned to post later this week.

Debt:  I gave a full debt update here.

Final Thoughts:

This was a really high-income month for us! We were able to save a TON of money! Between the house downpayment, the rainy day savings, and the savings goals we put basically $6,000 toward various savings (though, to be fair, a lot of the “rainy day savings” were immediately spent. Example: nearly a thousand for car insurance, another couple hundred for car repairs, etc.) Even with some of these larger expenses, I was very pleased with how well we did! As I’d mentioned in my debt update post, we’re right on track (ahead of schedule, really) with our debt payments in order to reach out $30,000 goal for the year of 2016. And in regard to the house downpayment fund, we’re right on track with that as well. We’ll need to keep putting about $2,000/month toward the down payment fund to reach $10,000 by June. It will be tight, but I believe it’s doable. Finally, I mentioned in this post how we had a bit of extra money. A lot of that ended up being routed toward rainy day savings funds. But we also put just over $300 into our “last month’s income” account inside of YNAB’s budget software. It’s just a tiny amount, but it’s the beginning. I can’t wait to build back up that buffer so that we’re always living on last month’s income. It was a fantastic feeling of peace to have that extra money (in addition to an EF). Can’t wait to get that feeling back! Little by little. It will happen. : )

How did you do with budgeting last month? Do you have any problem areas in your budget? How do you deal with them?


Financial Priority List

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One of my new favorite things to do since signing my first full-time employment contract is to run numbers over and over again to determine our new debt-free date. 🙂

As a side-note, I ran across an old notebook from last summer (August 2014) where I’d written projected debt-free dates and was slightly heartbroken to see I’d originally hoped to have my car loan paid in full by January 2015. Crusher! Still about 15 grand to go on that one (latest debt update here). But I’ll be hitting it hard once the paychecks start rolling in.

Regarding pay, however, things are still a bit up in the air.

A reader who works in HR commented a couple weeks ago to say that I probably need to receive official permission from my new job to continue working at my online teaching job. I really hadn’t thought anything of it because I know lots of professors who adjunct teach at a community college on the side of their full-time professor gig. But as this is my first full time position and I absolutely do not want ANYTHING to jeopardize it in any way, I called HR to be safe. At first I got a casual response, “I don’t see why that would be an issue but I’ve never had the question before. I’ll check with someone else and call you back.”

So I go the rest of the day thinking I’m A-Okay until I get the call. Even though my part-time job can be completed at nights and on weekends, will not interfere in any way with my new position, and is only adjunct teaching (no additional responsibilities, etc.), the employee handbook has a little section stating that any employment for any other university or college MUST be approved by the department head AND college dean. Ouch.

I’m still hopeful about the situation. I really don’t think it will be a big deal given the parameters of my online teaching job (specifically that it can be completed any time so it won’t cause any impairment to my new day job, and it’s a simple adjunct position). BUT the bottom line is I have to ask for official permission to continue working for the online job and, if I’m told no, there goes my hopes of making serious progress on debt repayment.

Let’s step back a sec and talk numbers without actually talking numbers. Just follow me.

My new full-time job pays about 50% more than my current part-time online teaching job.

BUT

After running the numbers of all the deductions to be taken out from each paycheck, which are substantial (including: health, dental, vision, retirement, money for a flexible spending account for childcare expenses, taxes, etc. etc. etc.) I’m only going to actually be netting an extra couple hundred bucks a month. Soooo, practically the same monthly pay for my full-time job as what I make at my part-time job.

Of course, my money will stretch a lot further at my new full-time job because, unlike the part-time job, I won’t have to deduct funds monthly to pay my own taxes and health insurance. I’ll be paying for (part of) childcare with pre-tax dollars to save some money there. I’ll be paying for health care with pre-tax dollars to save some money there. I’ll be saving money toward retirement where previously I’ve saved nearly nothing. And so on.

But when you just look at the bottom line…. being able to keep my part-time job effectively doubles my take-home salary. So obviously I’m hoping I’ll be able to do that.

Cross your fingers for me. I meet with the department head the week of the 20th (exact date TBD) so I’m hoping to bring it up in our meeting and have it be no big deal.

In the meantime I have a just-for-fun list of financial priorities along with some projected dates.

Financial Priority List

  • September 2015 – Add $4,000 to Emergency Fund. With hubs’ no-income month of May and the fact that much of my paycheck was sucked up into an overdue tax bill, we basically lived on our EF for the month of June. We do have a little left (just under a thousand), but I’d like to beef it up to the $5,000 mark. If we put some aside in August and some in September, we’ll hit that goal. It’s tough to put so much toward savings instead of debt but I feel really strongly that we need to have a solid EF, if for nothing more than my own psychological well-being.
  • December 2015 – Pay off remaining car loan (approx. $15,000). This is still a bit of an aggressive goal, but as long as I’m able to keep both my jobs I think there’s a really good chance we can still pay off our car before the calendar year is over. I CAN NOT WAIT until this loan is paid because it will signify reaching the consumer debt-free mark – a huge milestone in my mind.

And here’s where things get controversial….

After the car is paid off, I definitely want to start paying more toward my student loans. But instead of diving full-force into paying off these loans with the gazelle intensity that I’ve tried to have for all of our other consumer-related debts, I want to split my priorities a bit. I still feel very strongly about paying off these loans as quickly as possible (especially the unsubsidized loans; and I plan to continue doing balance transfers to save some interest where possible, too). That being said, however, there’s something else I feel really strongly about too.

Home ownership.

No, we aren’t looking at places today. No, we don’t even know what the next year may bring (examples: (1) my dad’s scary health issues, and (2) I’ve still been in talks with the out-of-state university where I did my not-an-interview earlier this year). But all that being said, once the consumer debts are paid in full I think it will be important to start saving more aggressively for an eventual down payment. At this point I don’t know specifics (no idea the amount per month we’ll save versus the amount put toward student loans every month), and I really do want to stress that I want my student loans gone ASAP! I hate dealing with them every month. I hate the amount of interest they cost me. I hate their drama. I hate that they’re this huge, scary, black hole of debt on my credit report. So in no way am I suggesting that I’ll only pay minimums or drastically reduce debt payments. No way!

Look. It’s never been a secret that I really want to put down roots somewhere. I said it in my very first “Meet Ashley” post that I wrote when I interviewed to be one of the bloggers here. It’s important to me. The American dream and all that jazz. And the older my kids get, the more I want it.

I’m sure I’ll be talking more about this as time moves on. But for now, we’ll just say that I’ve got these two concrete goals (restock EF by September, and consumer debt-free by December), and then we’ll have to do some reassessing at that point. Either way, 2015 is shaping up to be a pretty kick-butt year in terms of debt repayment. Full throttle ahead!