End of the Month Reflection

It’s April 30th, and time to look at the month that was and the month that will be. Not that I actually do this every month, but I am today.

Early this month I made the decision to sell my house and buy another. I’d been waffling for months, worried that I wouldn’t be able to find something in my price range that I’d want to buy, so I went out with my agent to look at a few houses. They were all in good shape, soothing my concern that they were affordable because something was wrong, and so I’ve started the process of getting my house ready for sale.

I made $145 at the beginning of the month for a company I occasionally do work for. They’ve mentioned bringing me on for more projects in the near future but nothing’s happened.

I usually budget $50 for eating out but extended it to $100 this month. Partly because I knew I’d be busy and would be cooking less and partly because my youngest brother helps me out in exchange for fast food. So a lot of the extra is really a house expense. I might keep the budget the same in May.

I spent money on clothes! I budget $20/month but haven’t spent on of that until this last weekend, $30 for water sandals and $12 at the thrift store for 4 shirts. I’m one of those women who doesn’t like shopping and will only buy clothes after I’ve identified a need. I want to get a couple more button down short sleeve shirts so I’ll hit the thrift store again sometime in the next few weeks.

I made one large purchase, a new vacuum. It took me 6 months to pull the trigger on that $150 purchase. I don’t need the sleep on it rule, I need a “just do it” rule. Now that I have it I wish I had done it earlier, this thing is way better than my old one. The old vacuum was listed on Freecycle and was promptly picked up by its new family.

I saved $1100 in my DP fund (it used to be for the down payment, now it’s for house projects) and $450 went to my Roth. This was also my first full month of withholding for my job and I’m putting 6% into my 401k and $50/paycheck into the HSA.

My sleep disorder really hit me this month making everything more difficult. It’s finally getting back under control which means I should be starting May off right.

May will be all about the house.

I want to get my house listed this month. Which means deep cleaning the entire house, packing away the “clutter” and getting those projects finished off. I’ll definitely be hiring a handyman for some of those projects just so they get done faster, and possibly better. I might hire a service for some of the cleaning as well and will probably have the carpets professionally cleaned. Or maybe I should just call my mom and sister-in-law, they’re both almost fanatical cleaners… The clutter packing is all on me but I really don’t have all that much. I still need to send some of my instruments to my mom’s so they don’t “clutter” the living room and will be out of the way and safe from the whole house packing madness that will occur later.

After my house is listed it probably won’t take long to get a contract. Once I have that contract it will be time to start looking for my next (and hopefully last) house while I start to pack everything. I’m excited and yet nervous about this. I get nervous with any big change and have learned to push through it anyway but it’s probably part of the reason it’s taking me longer than it should to get some of this stuff done.

While my house is on the market I’m going to need to do something with the dogs while I’m at work. One option is to pay my youngest brother to take them out during showings, but he isn’t sure if he wants to do it. If he says no I’ll talk to my next door neighbors to see if they can help. Worst case I’ll put them in doggy day care, which isn’t cheap but they enjoy it.

My side projects will be taking a back seat this month but I’ll still work on them when I have the time, including this blog and an Android app I’ve been working on. The nice thing about these projects is that they’re totally digital which means they won’t make a mess in the house which will be exactly what I need when the house is on the market and I have to keep it in show room perfect shape.

I need to start getting my paperwork together for the loan pre-approval. Very, very tedious work.

I don’t have a posting schedule planned. Now you know why.

Is your May going to be crazier than mine? Let us know!

Blowing the Budget. On Purpose

Budget – “an amount of money available for spending that is based on a plan for how it will be spent,” according to Merriam-Webster. When I make a budget, I don’t want to budge from it. That’s the plan, let’s stick to it. But sometimes things happen and sticking with your budget is more about being stubborn than smart.

I’m getting ready to sell my house, which means completing all those little projects that I haven’t gotten around to yet. Nothing major, painting the kitchen is probably the biggest, just lots of little things to really get the place touched up to get a good offer. I have a savings bucket of $500 for paint and other materials. I planned to do it all myself with some help from my youngest brother on the weekends.

Unfortunately my sleep disorder has been flaring up which makes getting to work hard enough. Working on the house after I get home? Not happening.

And so I’m caving in and hiring a pro for some of the tasks. My mom’s happy, she’s been after me to hire someone for a while. I’m not so happy, I enjoy working with my hands and really take pride in my work. I also like saving money. My mom’s position is that it will be done quicker and I’ll be contributing to the economy, which is true. I’m finding the prospect of working with the handymen more stressful because it’s something new. At least when I was doing it I knew what to expect.

I’ll be pulling the extra money out of my savings for the new house if I don’t just cash flow it, so it isn’t an issue of not having the money. It’s an issue of not wanting to spend the money.

But budgets aren’t set in stone. They’re guidelines that can be crossed if the situation warrants it, and this is such a situation. If I don’t spend the extra money I’ll either have to wait longer to put the house on the market or settle for a lower price. If I do spend the money I will recoup the expense and more at sale, I’d guess around $5,000 minus the cost, and I’ll be able to get listed before the summer rush, or at least at the beginning.

I could work through the exhaustion but I know from experience that when I’m that tired I get sloppy, it takes longer to do even simple tasks and I can only do it for so long before I crash. My mom’s right, it’s time to just get this stuff done and move on. Even if it blows my budget.

Where I’m At

Yes, I ended the title with a preposition. Sue me.

As I said in an earlier post the first step to getting control is figuring out what you have. Here’s my answer.

Note: Although I’m posting anonymously I might decide to reveal my true identity. Also, I’ve given the link to a few friends so some of the readers know who I really am. Therefore I’ve decided to be vague about certain details as I figure out where my comfort zone for disclosure is.

I’m not earning six figures but I do make a decent living, especially since I don’t have kids.

In savings I have $10,000 emergency fund in case of layoff, injury, furnace explosion or other emergency. I also have a few savings buckets for upcoming purchases, house projects and vacation. Finally, I have a few thousand set aside for a purchasing a new house. The down payment will come from the equity of my current home, this cash is for paint, flooring and other repairs that need to be done. Or things that I just want to do to the house.

For retirement, I have a Roth IRA and a brand spanking new 401k. I also have a TSP from a previous job. As I mentioned before I don’t have full access to this account because I lost the PIN. There isn’t much in there, less than $1000, but I still need to make a firm decision on what to do with the money.

My debt includes about $80,000 of mortgage debt at 5.5%. I haven’t bothered to refinance because I plan to sell before I’d recover the cost.

My student loan balance is around $21,000 at interest rates between 2-6.5%. I have automatic payments that include an extra $60 above the minimum and sometimes drop in to make non-scheduled payments as well. I’m on the standard 10-year repayment plan and all my loans are federal. I’m on a stashing cash phase right now, once I’m done and the house thing is settled I’ll be ramping up my efforts on paying these down.

I still owe $10,000 on the car at 2.7%. I round up the payment to the nearest hundred because I like round numbers but otherwise haven’t made any early payoff efforts on this.

I’ll discuss my debt more in another post.

When I look at my balances I think I’m doing okay, but could be doing better. I’m the kind of person who likes having a large savings account, it’s like a security blanket to me. I’d also like to start investing outside of retirement accounts but want to build up my on hand cash first. Add in the whole “I’m selling my house and buying another” thing and I really want to have cash reserves “just in case”.

I’m okay with my debt. School was a great investment, I’ve enjoyed my house and have really lucked out with the rising property values, and although I could have been smarter with the car I have no regrets. Again, more on my debt and attitude towards it in a later post.

According to Mint.com, my net worth is $70,000. Most of that is home equity.

When I look at my balances I mostly see wasted years. I wish I’d done more in my 20s, even a little more savings in an IRA could’ve been a nice boost… but for a variety of reasons I didn’t, and considering the short time I’ve actively been dealing with my money I think I’m doing okay. Rome wasn’t built in a day, and neither is wealth.

Do you know where you’re at? What do you think about it?

Excuses I Made Not To Save For Retirement (and why they were lame)

Like many adults, I didn’t start saving for retirement until I was in my 30s. For my first several years of adulthood I just didn’t think about it. I had no idea what a 401k was and while I knew the math behind compound interest I didn’t think to apply it to retirement. I worked jobs that didn’t offer retirement benefits so I didn’t get any exposure or encouragement to think about life 40 years down the road.

Then I started working for the federal government and after a few months I had a Thrift Savings Plan (TSP), the federal job equivalent of a 401k. I think there was even something of a match. But I didn’t take it. I had excuse after excuse and here they are:

I can’t afford it. Yes, I could have. And if I couldn’t then I needed to reevaluate my budget.

I don’t want to lock the money away. Once I realized that yes, I could afford to contribute I was terrified of needing the money and not having it accessible. I put the money in my savings account instead, even though I already had a few thousand for an emergency fund.

It’s too early to think about retiring. It’s never too early to start saving for the future.

I have no idea when I’ll retire, or where, or what will be happening. Doesn’t mean I couldn’t have saved a few bucks for it.

I don’t know what to do with it. I remember looking at the investment options and being completely confused. I knew nothing about investing, managing risk, any of that, but instead of doing the research I just left it alone then forgot about it.

Everything’s in flux right now. Of course things were in flux, things are always in flux. Every time life settles into a stable pattern something comes along to disrupt it – a job change, a move, even a new hobby – all the more reason to be putting something away.

Huh? Wait, whah? After I left that government job and started earning more money I realized that it was time to start saving, sort of a now or never type situation. Unfortunately I was working as a contractor with no access to an employer’s plan and was completely lost trying to figure out what to do on my own.

Eventually, I did figure it out. I opened up a Roth IRA in 2012 and although I didn’t max it that first year I did put in close to $400/month. But then I got stupid again and when I set up automatic contributions last year I set the amount for $200/month even though I needed $450/month to hit the max. Why? Because things were in flux and I was thinking about selling and buying a house. I wanted to have more cash on hand during the transaction in case I needed it for repairs, closing costs, etc. But when I decided to wait another year, I kept my settings as they were.

The fact is I still don’t like locking my money away for “someday”. I still worry that some opportunity or emergency will arise and I’ll need that money now. Except, I do have savings outside of retirement in case of such emergencies and opportunities, and family history suggests that I could live 20-30+ years past 65, so not only do I have no excuse for not saving but I have a darned good reason that I should. So I am saving for retirement. I’m easing into it instead of doing the really smart thing and maxing out my 401k this year, but I’ll get there.

If you’re hesitant to save for retirement I recommend you start with something, even $50/month. If you can’t do $50, do $25, or $10. If you have a 401k with a match, contribute the minimum for the full match so you aren’t giving away free money. When you realize that you can handle that amount, bump it up. Keep bumping it up until you can’t. If you’re even more scared of locking your money away than I am, use a Roth IRA where you can at least withdraw your contributions whenever you want, or use a taxable investment account. If you have massive amounts of debt go ahead and take care of them first, but you don’t have to be in a perfect financial situation to start saving for retirement.

Taking Control Step 1: Where are you?

I’ve been working on getting a better handle on my money for over a year now and it’s still a work in progress. Okay, so personal finance is never actually done, but I haven’t mastered my money just yet. Even so I’ve been making progress and here’s what I’d consider to be the place to start.

The first step to take control of your finances is to look and see what you have. Getting a grip on what you have is the financial equivalent of telling GPS to center on your location and you can’t go anywhere without knowing where you are. Just ask any mapping software for directions and they’ll want your current location as well as the destination.

Knowing where you are means knowing:

How much exactly do you have in retirement savings?

How much do you have in cash, checking and non-retirement savings and investments?

How much do you owe, and to whom? What are the interest rates?

If you have bills that you haven’t opened, now’s the time to look. Don’t be afraid, they don’t bite, and even if the amounts are as bad as you’re imagining they’ll only get worse. Seriously, your imagination is probably creating more stress than the knowledge possibly could.

This is also the time to track down old accounts that you no longer use including credit cards, bank accounts and retirement plans from former employers.

If you don’t already, look at your recent pay stubs. How much do you earn before and after tax each pay period? What all is deducted from your pay? If your pay is variable, do you know what your average income is per pay period? If you work for yourself you already be on top of your income, but if that isn’t the case it’s time to get busy.

Finally, make sure you have access to all of your accounts. For most this means a user name, password and website address for logging in through the web. It could mean a phone number to call, or a branch to visit. The point is, if you want to know your balance, make a payment or withdraw money, can you?

I’m failing on that last one. I have a retirement account from an old employer. I have the account number and receive periodic statements in the mail, but in order to make changes to the investment allocation or fill out the form to transfer it to another account I need a PIN. I requested that PIN over a year ago, it promptly came in the mail, then I set it aside to deal with other things. Is that piece of paper in the file folder I should have put it in? Is it buried in the stack of filing that’s been piling up for months? I don’t know right now and need to make it a priority to either find it or request another.

Once you know all of your balances add them up. Now you have a nice big picture of your money.

I have a spreadsheet where I track the balance of all my accounts individually along with a total of all savings, a total for all debt, and a grand total of savings minus debt. I add a new row each pay period with the updated amounts, giving me a running total. With a quick glance I can see just how much is in savings now, or I can study the progress I’ve made since I started tracking it. I haven’t been perfect with my tracking so there are a couple of gaps but it’s still a nice window into history.

If this is the first time you’ve done something like this were you surprised by the totals? Are you in a better place than you thought, or worse?

If you already knew the answers, great! Go get a cookie.

The Real First Post

Hi! Welcome to my brand new blog. It’s so brand spanking new that it has absolutely no meaningful content! I hope to change that soon, and in fact have a few posts already written so I can get this going quickly, but here’s the fluff.

This is a blog about taking control of your finances. It’s about spending, saving, investing, retirement, dealing with debt, and pretty much any other topic that’s discussed in the personal finance world. It’s about taking the time to really deal with your money so that you control it, not the other way around.

I haven’t been perfect when it comes to money. I started late to save for retirement. I didn’t graduate from college or start my career until I was thirty. Many, many years ago I learned what it was like to have collection agencies call you. Fortunately I learned that lesson when I was young.

I’m naturally a frugal person. Sometimes I’m too frugal and cheap out when I should invest more into something. In starting to take control I’m learning to spend more on the things that matter while saving money on the things that don’t. That’s still a work in progress.

Why “Masters” and not “Mistresses”? Or “Masters and Mistresses”? Because anyone can master a subject but saying that you’ve “mistressed money” just doesn’t make since and it’s too long to say both. Yes, I’m a girl. You readers are ok with that, right?

Expect to see some changes to the layout and blog features in the next few weeks. Or months. I’m new to this WordPress thing and I didn’t want to wait until I got the layout perfect before publishing something.

Right, so that’s my disjointed ramblings for today, join me tomorrow for ramblings that are hopefully a bit more on point.