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Archive for March, 2015

Low Spend Weekend

March 30th, 2015 at 05:37 pm

This was a low spend weekend for us. Mostly because almost everyone was sick at some point of it. Actually the way it went was DD2 was sick mid to late last week, DW, late Friday through about noon yesterday, DD1 late Saturday through this morning, and DS1 just this morning. So far I've escaped it, as has DS2.

Thankfully we didn't have much planned, and the weather was too cold for the sap in the maple trees to run.

DW did get paid for her freelance work. I still can't remember for sure how much the check is, but it's more than $6,000, and less than $7,000. We may have come up with a solid plan of how to best use it, but the sickness took precedence.

Something kind of funny happened Saturday. As I mentioned, thinks were shut down in the woods, because of the cold weather. But, a gentleman did stop by our house to buy a half gallon of syrup. In-season, out inventory is kept in the woods. So, I met him down there, and in the course of our transaction, I asked if he was from the area. He said no, I'm from "between to towns that are six, and fifteen miles from here, respectively".

It made me chuckle, because about eight years ago, before DW and I moved back here, we were at my Grandma's for a garage sale. DW asked one of the visitors if they were from around here, and DW got a very similar answer, "No I'm from a town about 20 miles away".

Any of you who have followed my blog for any period of time know that I'm from a rural area. And, I moved away to college in 1991, and moved back here in 2008. So, I removed myself from the local culture for a while. But, I don't know what it is about the area that makes people think that a town 20 miles away is "out of their area". Is that true for a lot of other parts of the country? Would I think the same thing if I had never moved away? It's just one of those things that makes me scratch my head.

"Business" Planning

March 23rd, 2015 at 03:00 pm

I've mentioned several times during the past that my family operates a maple syrup "business". I use the quotes because it sometimes seems morel like a family hobby than a business. But, it is a business in every technical sense of the word. My mom and dad file schedule F farm income with their 1040. The business is registered as an LLC, and we purchase and sell goods in an attempt to make a profit.

Mind you, the most we've ever grossed is about $14,0000. And production is limited to about March 1 through April 10 or 11 usually at the latest. That's why it seems more like a hobby. Maple syrup production doesn't consume every waking moment of my life.

The business is profitable. I've not looked at a profit/loss statement in about five years, but my mom and dad have handed DW and me a check for anywhere between $1,000 and $2,000 each year since we returned to the business eight years ago. That money doesn't come close to paying for the time we invest. it's well below minimum wage. But it always comes in handy from a personal finance stand point. I'll always look at our maple syrup pursuit as a business/hobby.

As a business, there's very little depreciation. The arch - the structure that holds the fire and the boiling pans, center of where the sap is boiled down to syrup, was installed 50 or 60 years ago. There are two pans that sit on top of the arch. One of them was replaced 5 or 6 years ago, and the other, the "back pan" is at least 25 years old.

We have five old stainless steel dairy bulk tanks that hold our sap prior to boiling. They are the size that would have been used on a commercial dairy farm in the '70s or '80s. The cooling units don't work anymore, but the physical structures are in fine shape, and they do a great job for us. My dad says he's never given more than a gallon of syrup ($52 current value) for any of the tanks.

There have been some major, and expensive upgrades made in the past 10 years. We've had tubing installed. What that means is that all of the trees are now connected by hollow plastic tubes that are connected to a vacuum pump. Now we don't have to drive a tractor all around the 9 acres of woods, and walk from tree to tree to collect the sap. We flip a switch, and the sap is collected for us. Of course the tubes and vacuum require their own maintenance.

We bought a filter press. The filter press does a great job of filtering and polishing the final product before it's canned. And the most recent addition is the reverse osmosis unit. The RO removes 40% of the water prior to boiling. The concentrated sap boils down much more quickly, and requires a lot less fire wood.

These three upgrades have allowed for labor efficiency. The current labor force is strictly family - my mom and dad, DW and me. And, increasingly my 12 year old is helping out.

This brings me to my point of my post. The tubing was installed 10 years ago. The expected life of tubing is 10-15 years. It's starting to need to be replaced.

There are four tubing mains, or branches in our woods. A main is its own stand-alone tubing unit. My question is, do we replace them all at the same time, or do we replace them one at a time over the course of four years? The mains aren't equally sized. One of them services more trees, or really more tap holes than the other three. One of them services relatively few tap holes, and two are somewhere in the middle.

My thought is that we replace the biggest main this year, and replace one each year largest to smallest. That seems to me the most efficient and effective way to allocate our sparse resources. There's also a lot of credence to getting the job done in one year, and being done with it.

Either way, I thing that this year it's time for DW and me to forego our $1,000 - $2,000 annual draw, and start putting some of our own skin in the game.

15%

March 18th, 2015 at 12:49 pm

We filed our income tax return several weeks ago. In fact we've already received both our state and federal refunds.

But, I was looking through our Turbo Tax documents again yesterday and I noticed that this year we fell into the 15% tax bracket for the first time in many years.

I got a small raise last year, I think it was 2.1%, and DW was paid for half her freelance project, I think around $5,900. That was enough to push us into the 15% tax bracket. We still didn't pay any federal income tax - with 4 child tax credits, and carry-over adoption credit, our effective tax rate was still -7.19%.

In fact, this might be the first time we've ever been in the 15% tax bracket as a married couple. Back in the dual income, no kids days we were in the 28% tax bracket, and DD1 was born (DW quite full-time out-of-the-house work) at around the same time as the Bush II tax cuts, and the introduction of the 10% tax bracket.

DW will be getting the other half of her freelance project income in the next few weeks. That probably means that we'll slip into the 15% tax bracket again this year. It sure doesn't seem to have made a difference in monthly cash flow.

FFA State Convention

March 13th, 2015 at 05:35 pm

DD1 competed in Jr. High public speaking at the FFA state convention yesterday. She competed against eight other students from around the state, and placed fifth. We are very proud, and happy for her. She did the absolute best job that she could have done. Considering all the students who started out at the district level five weeks ago, she ended up doing better than about 95% of them.

I wouldn't be truthful, though, if I didn't say that I was hoping she would have placed higher. I watched the competition, and I honestly had her placed higher. Of course, I'm her very biased father. Of the eight, six did a very good job. The 7th and 8th placed kids did a good job, too, but there was a clear delineation between their performance, and the other six.

Of the top-finishing six, they can be put into two broad categories - those who were highly polished, with exaggerated gestures, etc. I'd call their presentation more of a "sales" type presentation. The others, including DD1 spoke in more of a conversational tone, and I would call their style more "educational". The judges clearly preferred the polished, sales type of presentation. Either way, we are proud of her accomplishment, and from the pic DW sent me after placements were announced, DD1 is very happy.

The Dean of the college of Agriculture and Natural Resources at Michigan State addressed the convention. He made a very exciting announcement. What the Dean said was that FFA high school seniors who complete a curriculum in agri-science and win an FFA state degree will receive six general credits from MSU - six free credits before they even start college!

I wasn't able to participate in FFA, so I'm not exacly sure what a state degree is, but according to DW, our kids would be very likely to earn an FFA state degree if they participate fully in FFA. About 150-200 high school seniors earn a state degree each year.

That's great news! Six credits is about 1/3-1/2 of a semester. At the 2015 price of $440 a credit, that's a $2,640 value, not including the savings in time. We'll definitely be adding that to the long list of goals as it relates to our kids.

Now for the not so great news related to the FFA convention. DW and DD2 were headed out to do some pre-convention shopping. Read that as DW had nothing to wear to convention. She was driving through town, on her way to another town that has a mall. A lady driving beside her was switching lanes, and didn't look, and smacked right in to our van. No one was injured, but there is quite a bit of damage to the van, including a bent axle, which of course leaves the van completely unable to be driven.

The insurance adjustor looked at the van yesterday, and we hope to get his report today, or hopefully by Monday.

This could only happen in a town the size of our small town, but the accident happened kitty corner from, and about 200 feet from the police station. They were also 300 feet from, and equidistant in opposite directions from our insurance agency, and the other driver's insurance agency.

Cashed in coins

March 11th, 2015 at 01:16 pm

I cashed in my coins yesterday. If I'm remembering correctly, I last cashed coins in sometime during the first week of November, so about 17 weeks ago. The total came to $46.98, so about $2.76 per week.

I kept $40 out as cash, and applied the $6.98 toward my pickup loan. The previous loan balance was $901.01, $0.81 went toward interest (last paid March 1), and the remaining $6.17 went toward principal.

I must have cashed coins in a little more frequently 4,5, and 6 years ago, because it seems like I'd get $20-$25 each time I cashed them in. Lately I've been cashing them in, and getting between $30-40 each time, and +$45 this time. I'm a little bit less desperate for cash now, and that's a good thing.

Since the credit union where I cash in the coins is also the same place where we have our vehicle loans, I've always applied the change to a vehicle loan. In the past, I had always applied just the change to the loan - or if I had cashed in $23.68, I applied only the 68 cent to the loan. Now, I'm only taking the multiple of $10, and applying the rest to the loan. Another sign that I'm a little less desperate for cash.

What I really should start doing is to try to accumulate less change. $2.76 per week isn't really that much, but when it accumulates to almost $47, it kind of is a lot.

My (depression-era-raised) grandfather used to carry a change purse in his pocket. I was always horribly embarrassed when he would, at a snail's pace, count out the exact change for a bill at a parts dealer or gas station.

But, as far as that goes, I do a lot more transactions with a debit card or credit card than Grandpa did, so I have fewer opportunities to accumulate change.

Really, a few bucks a week change accumulation is not a big deal. At all. But, it just seems that it would be better if I didn't accumulate much change.

A glimpse

March 3rd, 2015 at 09:10 pm

Any of us who have spent very much time in the SA forums have seen the back end results of someone over-extending themselves on a new car purchase and loan. Today I got a glimpse at the front end.

I have a cousin. He is very different from me in many ways. He is married. Some things I can tell you about him and his wife include:

He has declared bankruptcy at least once. I'm pretty sure he has declared bankruptcy at least one other time.

Before they were married, his wife lost a house in foreclosure. His dad pulled a little switcheroo where he bought the house after foreclosure, for a very reduced price, and sold the house back to them on a land contract. I'm pretty sure they're behind in paying dad back.

Between the two of them, they have five kids at home, and one out of the house.

Today, in just the last hour or so, his wife posted the following on FB, that my cousin bought her (her words) a 2015 Mazda 3 s Grand Touring. I looked. The base price for the car is $28,385. I've never owned a brand new car in my life.

Apparently the car she had been driving had no heat. I don't begrudge her having a car with heat. It's just that you can but lots of cars for well less than half that that are very reliable, and have heat.

I also don't want to make it sound as if I'm Mr. Financial Perfect. Obviously I've made financial mistakes in the past. Clearly I continue to stumble. But, I try to learn from my mistakes. I like financial security. I don't even know what I'd do with a 28K car. I doubt I could pay the insurance.

I've been shaking my head at my cousin for years. And, I really shouldn't give two toots how he spends his money. It's just that I know how this story is going to end, and it's not going to be good.

In the past hour, 61 people have "liked" her post, and 26 people have commented on it, all congratulatory in some form.

I won't "like" it, and I'll keep my comments to myself (and the SA community) (and my wife, later).

Good Grief!

March net worth update, and other stuff

March 2nd, 2015 at 02:32 pm

March net worth is $231,991.

We received our federal tax refund on Friday. It was funny, because Friday was also pay day. I logged in to our bank account just to make sure that my paycheck had been deposited, and the balance was a lot bigger than ought to have been. Surprises are nice sometimes.

The net worth figure doesn't reflect the refund at this point, except for the extra I paid against my pickup.

Do you remember that freelance project DW has been working on? The one that she wasn't paid for so long? The final report is due this Friday, so she's working this week to complete it. She put it off when she wasn't getting paid, and the winter has been busy enough, especially with snow days thrown in, that she has kind of waited til the last minute. But, I'm sure it will be finished on time, and done well.

This time, we'll know that it will take a long time to receive the final payment, and we'll plan accordingly. We're both reasonably confident that the payment will be made, and if I remember correctly, it will be somewhere between 5.8 and 5.9K.